Manufacturing News

FE TechFlash Vol. 2 No. 4

April 4, 2006
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The US government did not break trade law during the recent mad cow crisis, but applied international rules creatively to minimize trade distortions to the cross-border beef and cattle industry, according to "Mad Cow: A Case Study in Canadian-American Relations," a new report from The Fraser Institute.

US Not Protectionist on Mad Cow



"The complaint frequently heard by Canadians that the American process to re-open the border amounted to a stealth form of protectionism is not borne out by the record," said author Alexander Moens, senior fellow at The Fraser Institute and professor of political science at Simon Fraser University.

In May 2003, the discovery of the first indigenous Canadian case of Bovine Spongiform Encephalopathy (BSE), commonly called mad cow disease caused a major disruption in the industry. The sudden border closure as a result of that case dealt a devastating blow to Canada's cattle industry.

Careful rule-making on the part of the US Department of Agriculture has paid off for Canada. Since the US announced its decision to partially re-open the border, three more Canadian BSE cases have been found but have not affected trade.

"The fact that nearly half a million cattle under 30 months were exported to the US in the second half of 2005 suggests that the Canadian-American trade in cattle and beef will likely return to its high levels before the BSE crisis struck," Moens noted.

Mad Cow Disease on the Wane Worldwide

Cases of BSE worldwide are declining, according to the UN Food and Agriculture Organization (FAO), and have been dropping at the rate of some 50 percent a year over the past three years.

In 2005, 474 animals died of BSE around the world, compared with 878 in 2004 and 1,646 in 2003, and against a peak of several tens of thousands in 1992, according to figures collected by the Paris-based World Animal Health Organization.

Only five human deaths resulting from variant Creutzfeldt-Jakob Disease, believed to be the human form of BSE, were reported worldwide in 2005. All of them were in the United Kingdom.

FAO thinks a tracking system that allows animals to be identified from birth to shopping basket is vital. This has been adopted across Europe but has yet to be implemented partially or fully in a number of other countries.

Supermarkets' Share Shrinking in Food Retailing

Major demographic, lifestyle, and technological changes are creating a fertile environment for the re-invention of the food retail milieu, according to The Future of Food Retailing, a new report from market research publisher Packaged Facts.

Supermarkets continue to see their share of the market fall into the hands of warehouse clubs, natural food chains, C-stores and even restaurants. According to Packaged Facts, food-focused retailers' share of groceries and consumables has plunged from 73% in 1998 to an estimated 51% in 2005.

Supermarkets have not been completely remiss in responding to retail and consumer pressures. Many have added in-store eateries, well-promoted organic and private label choices, and "smart carts," evidence that the future of food retailing is already happening. "Lifestyle stores" are taking off, and more then 50% of retailers have invested in leading-edge technology systems, such as biometrics (finger print and iris identification) and self-checkout to speed the shopping experience.

Improve Your Shelf Appeal

Did you know that once a consumer picks up a product from a store shelf, there's an 87 percent chance that he or she will buy it?

Packaging that is more appealing, functional and easier to stack on store shelves catches the consumer's eye, according to a report from IPL Packaging.

But it's not just consumers driving packaging changes. More than ever, retailers and wholesalers are providing the catalyst for change

Most processors know that with round containers, only 12-15 percent of the container is facing the shopper. With a square container, there is a far greater percentage of customer-facing product, creating a billboard effect that allows the shopper to view about 75 percent more of the package. In addition, the smaller the container, the more dramatic-and critical-the billboard effect becomes.

The growing number of wholesale clubs has had an interesting impact on the food industry. The oversized, large-quantity items that are the staples of these stores were once targeted almost exclusively to commercial establishments such as hotels and restaurants. However, with these items now available to the everyday shopper, the same issues that apply in a supermarket apply here as well. A customer buying a two-gallon container of mayonnaise still must be visually "courted" the same way as someone buying a 12-oz. container.

Food manufacturers are also concerned about branding. As a result, containers that are large enough-and functional enough-to be re-used are highly sought after. For example, a large cookie container can be used as a pail when washing a car. With this re-purposing, the product's label continues being displayed, and the cookie manufacturer gains increased advertising.

Dryer's Grand Ice Cream Named Plant of the Year

Nestle SA didn't just buy an ice cream company when it acquired Dreyer's Grand Ice Cream: it added a management team with a talent for creating a world-class manufacturing facility. View the full story.

Giant Steps in Plant Floor Control

Many leading food manufacturers recognize the need for an improved and more global infrastructure, which requires a shift in the design, selection and deployment of automation systems. View the full story.

Drawn to Purity

Rare earth magnets eliminate tramp metals for Traditional Medicinals, an herbal tea manufacturer. View the full story.

People, Plant & Industry News

Jacqueline Heslop McCook joined ConAgra Foods as chief growth officer and executive vice president, international. In this capacity she will explore international business opportunities. Previously she was president and CEO of The McCook Group, a consulting firm that advises consumer-oriented companies about strategy development, branding and innovation.

Waters Corp. purchased the food safety technology business of VICAM, which produces single-use food safety kits that test for the presence of mycotoxin and microbiological organisms in food products. The kits are used by growers, processors, regulatory agencies and food company laboratories for regulatory compliance testing of foods and beverages such as peanuts, coffee, corn, grain/feed, milk, pet food, spices, beer and wine/grape juice.

Coors Brewing Co. is investing $24 million to expand its Virginia packaging plant. The company also plans to build a new $190 million brewery near the packaging plant in the Shenandoah Valley and will close its brewing and packaging facilities in Memphis.

ABB and Tetra Pak have signed a global purchase agreement for worldwide implementation of ABB's automation products. The first contract is for System 800xA Extended Automation. Other future contracts may include instrumentation, motors, drives and low-voltage products.

Eriez, a manufacturer of magnetic, vibratory and metal detection equipment, is expanding its plant in Erie, PA. The expansion will add 24,000-sq.-ft. high ceiling space to the existing 100,000-sq.-ft. facility. Construction will begin this spring and be completed by November.

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