Healthy outlook for food & beverage companies

The food and beverage industry leads all other industry segments when it comes to weathering the economic downturn, with 49 percent indicating their companies are “thriving and growing,” according to McGladrey’s fifth annual Manufacturing and Wholesale Distribution Survey. The survey asked leaders of US-based manufacturing and wholesale distribution enterprises to provide perspectives on the current state of their companies and industry and the strategies they are implementing to sustain or grow profitably in the coming year.

Of the 1,601 respondents included in the final survey analysis, 124 companies (about 12 percent of the total sample) represent the food and beverage industry.

Ninety-one percent of food and beverage respondents report being very or somewhat optimistic about growth prospects for their companies, a 20 percent increase from the 2009 survey. Ninety-one percent of the food and beverage companies responding are privately held; 37 percent are manufacturing only, 31 percent are distribution only and 40 percent have a combination of manufacturing and distribution activities.

The survey also found:

• When compared to all industries, food and beverage companies are more aggressive about introducing new products and analyzing customer/product profitability.
• The percentage of food and beverage companies that say working globally is part of their business strategy increased from 64 percent in 2009 to 75 percent in this year’s study.
• This year, 16 percent of food and beverage companies say they will invest $10 million or more in capital projects (up 10 percent from 2009).
• Two-thirds of the respondents expect price jumps in raw materials and energy.

Because food and beverage companies weathered the recession better than most industries, their hiring needs over the next year are not so great. However, companies that are hiring are seeing skill shortages for entry-level, supervisory, quality control, sales and warehouse workers.

“The emphasis on introducing new products and analyzing customer/product profitability reflects the critical balance food and beverage companies must strike between developing profitable products to meet fast-changing consumer tastes while accurately forecasting sales,” says Cristin Singer, RSM McGladrey partner/managing director.

For more information and to download the report, visit McGladrey’s website.

More than 100 food safety reports were submitted to FDA’s new electronic portal, the Reportable Food Registry, in the first seven months of operation. The Registry speeds identification and investigation of potential health hazards in human food, animal feed and pet food industries.

A report summarizing the Registry’s first seven months of operation (September 2009 -March 2010) finds that it logged 125 primary reports-initial reports about a safety concern with a food or animal feed (including food ingredients)-and 1,638 subsequent reports from suppliers or recipients of a food or feed for which a primary report had been submitted from both domestic and foreign sources.

Two notable reports first identified through the registry prompted the following:

• A February 2010 recall of hydrolyzed vegetable protein (HVP) without any report of illness-More than 1,000 industry reports specifically for products containing HVP resulted in the removal of 177 products from commerce.
• A November 2009 recall of products containing sulfites but not labeled as such-More than 100 reports regarding the inadvertent use of an ingredient containing sulfites in two nationally distributed prepared side dishes that were not labeled as containing sulfites resulted in their removal without any reports of illness.

Among the 125 primary reports, Salmonella accounted for 37 percent of hazards, undeclared allergens or intolerances accounted for 35 percent and Listeria monocytogenes accounted for 13 percent. Among the 11 different commodity categories involved were: 14 animal feed or pet food, 12 seafood, 11 spices and seasonings and 10 dairy products.

“Industry is increasingly detecting contamination incidents through its own testing, and FDA access to this information permits us to better target our inspection resources and verify that appropriate corrective measures have been taken,” says Michael R. Taylor, FDA deputy commissioner for foods. “Ensuring that the American food supply is safe is a top priority of the FDA, and the Reportable Food Registry strengthens our ability to help prevent foodborne illness.”

As the global economy rebounds, demand for US products is growing. According to the United States Department of Agriculture’s Foreign Agricultural Service, US agricultural exports are projected to top $104.5 billion in 2010, an increase of $7.9 billion from last year. President Obama’s new National Export Initiative seeks to double the amount of US exports over the next five years.

Exporters of food and agricultural products can take advantage of this momentum. The four non-profit State Regional Trade Groups (SRTGs) will accept applications for the 2011 Branded Program, a reimbursement program designed to help small businesses offset the costs of promoting their food and agricultural products overseas.

The Branded Program can reimburse US companies up to half of their international marketing expenses for items such as advertising, traveling and exhibiting at international trade shows, in-store promotions, changes to labels and packaging, and more. Program participants must be businesses classified as small according to Small Business Administration guidelines or agricultural cooperatives. Products eligible for Branded Program promotion must contain at least 50 percent US agricultural ingredients and be labeled as “Product of the USA.”

To apply, companies can submit a pre-qualification worksheet to the SRTG that serves the region where they are headquartered.

For more information, see the table below.

 

Region	Group	Contact information
Midwestern states	Food Export Association of the Midwest USA	Web; Joe Yotti, 312-334-9200
Northeastern states	Food Export USA - Northeast	Web; Antoniya Gospodinova, 215-829-9111
Southern states	Southern US Trade Association (SUSTA)	Web; Deneen Wiltz, 504-568-5986
Western states	Western US Agricultural Trade Association (WUSATA)	Web; Ann Buczkowski, 360-693-3373

Pilgrim’s Pride Corporation has received formal approval from the US Department of Agriculture to resume exporting chicken products to Russia. The USDA approved exports to Russia from Pilgrim’s processing facilities in Boaz, AL; Russellville, AL; and Dallas, TX. All three plants have resumed production of poultry products for Russia.

In July, Russian officials signed a formal policy agreement with the US outlining new processing requirements for domestic chicken that is exported to Russia. Earlier this year, Russia had banned all US chicken that had been processed with chlorinated water. Under the new requirements, US chicken companies can replace the chlorinated rinse with cetylpyridinium chloride, peroxyacetic acid or hydrogen peroxide. Pilgrim’s Boaz and Russellville plants were converted to peroxyacetic acid earlier this year.

The USDA FSIS has compiled a new supplier list that was sent to the Russian government. It is based on the Russian-approved list that was in effect December 31, 2009. As soon as suppliers appear on the new FSIS list, they are eligible to begin shipping to Russia.

By 2015, Del Monte Foods Company will reduce sodium by at least 20 percent across its branded portfolio of vegetable, tomato and broth products that contain added salt. This initiative will include Del Monte Foods’ top consumer brands Del Monte, S&W, Contadina and College Inn.

 

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PPM Technologies Inc. recently completed a reorganization, and will operate as PPM Technologies LLC.

 

Martin Brothers, Inc., supplier of equipment in the ice cream and food processing industries, achieved ISO 9001:2008 quality registration.

 

Applied Industrial Technologies acquired the assets of UZ Engineered Products of Cleveland, OH.

 

SPX Corporation completed the acquisition of the Anhydro business, a Soeborg, Denmark-based global supplier of liquid concentration equipment, powder processing solutions and dewatering plants and equipment.

 

Iconics received the 2010 Microsoft Windows 7 ISV Partner of the Year award.

 

RedPrairie Corporation, a productivity solutions provider, appointed Carol O’Kelley to the position of chief marketing officer.

 

Amcor Rigid Plastics acquired Ball Plastics Packaging Americas.

 

Applied Industrial Technologies acquired UZ Engineered Products, a distributor of fasteners, fittings, lubricants, electrical components and other MRO products.

 

The Electrical Equipment Company of Richmond, VA, USA has become the Cognex Corporation’s 400^th channel partner.

 

Cargill sold one of its two grain elevators in Viking, Alberta to Providence Grain Group Inc.