In the Know
Caffeine FiendsAccording to the Specialty Coffee Association of America (SCAA), American consumers enjoy more than 300 million cups of coffee every day, with Starbucks likely seeing the bulk of this business, considering its 7,800 U.S. locations are hard to miss. However, a Columbia News Service report notes, “The number of specialty coffee retailers has tripled over the past decade. An estimated 14,000 cafés now dot the American landscape, not to mention the 3,300 coffee kiosks open for business and the 2,500 coffee carts parked in malls.”
These establishments combined for more than $11 billion in sales in 2005, says the SCAA, a rise of more than 14% over the previous year. Mintel International predicts the increases only will continue for the near future, topping $18 billion by 2010, as quick-service restaurants improve their coffee offerings. Dunkin' Donuts is adding more upscale varieties; McDonald's recently debuted premium coffee, as did Burger King last fall.
The Columbia News piece notes the allure of “milkshake-like concoctions,” a la Starbucks' Frappuccinos, to young customers in particular. Sans the bitterness of coffee or espresso and often topped with whipped cream, these may be more appetizing to youngsters, but the article warns the caffeine is still present.
So, what problems might this present? No evidence proves the urban legend saying caffeine will stunt youngsters' growth, but Cyrus Rangan, MD, medical toxicologist at the Children's Hospital of Los Angeles, says there may be consequences of consuming these beverages rather than something more nutritious. “We don't have any evidence that growth is going to actually be stunted,” Rangan told Columbia News. “If it is, it is probably more dietary-related than anything else. Ingesting caffeine at the expense of other appropriate drinks like milk, which has calcium and can actually help growth, may potentially have that effect.”
While caffeine may have a bit of a bad reputation, Australian researchers find it may be beneficial to winning an argument. The study by Queensland University of Technology discovered a dose of caffeine helps the consumer process information and increases “the extent to which we listen to a persuasive message.” In addition, researchers say the caffeine also put people in a “better mood.”
Give It UpWhen the economic going gets tough, what is the first thing consumers are willing to sacrifice? According to an online survey by ACNielsen, U.S. consumers abandon takeout meals first when making budget sacrifices. The market research group conducted the survey in the wake of news that the cost of living is rising faster than income and, in the process, discovered a degree of unanimity among the world's consumers about belt-tightening.
Around the world, out-of-home entertainment, spending on new clothes and upgrading technology are the foremost means of cost-cutting. The November 2005 poll of 23,500 respondents (regular Internet users from 42 markets) did find North American consumers unique in preferring to cut down on takeout meals (66% of Americans and 70% of Canadians prefer that route, as opposed to 44% of consumers worldwide).
Regardless, ACNielsen notes, Americans are not exactly embracing cost-saving strategies or, if they are, are “spending any saved funds almost immediately.” The U.S. Commerce Department recently noted American consumers in 2005 spent more than they earned for the first time since the Great Depression.
As Tom Markert, chief marketing officer with ACNielsen, explains, “In the U.S., the enormous amount of takeout food we consume, the billions we spend on out-of-home entertainment and, as the world's largest user of energy, these three areas may be the big-budget numbers that can be reduced without too much lifestyle compromise. Based on the country's negative national savings rate, however, any money saved by U.S. consumers is probably simply spent in other areas.”
Only 42% of U.S. consumers would switch to less-expensive grocery brands, an option preferred by a far greater number of European consumers (57% of French, 52% of Portuguese and 51% of Austrians), which ACNielsen attributes to the rising power of “hard-discount retailers in Europe.” Though the U.S. trails Europe, it is still well above the global average of 35%.
The U.S. also was far and away ahead of Europe in using coupons as a cost-saving strategy. While the global average stood at 19%, 42% of U.S. consumers recognize the value of coupons, to make it the world's clear leader.
“The U.S. consumer clearly recognizes coupon usage as a meaningful cost-saving strategy,” Markert notes. “Both manufacturers and retailers of consumer packaged goods have long leveraged coupons to build trial, volume and store traffic, but it may be time to hone the marketing messages about coupons, to stress the impact they can have on overall cost savings for household budgets.”
For the entire ACNielsen report, visit www2.acnielsen.com/ reports/documents/ACNielsen_MoneySavingMeasures_ April06.pdf or www.acnielsen.com.
THE IN BOX:For daily industry news updates, see the homepage of www.PreparedFoods.com and www.NutraSolutions.com.
* Virginia Dare opened new product development laboratories at its Brooklyn, N.Y., headquarters.
* Well's Dairy recognized David Michael & Co. with its first Supplier's Innovation Excellence Award.
* Main Street Ingredients added Phil Blanchard and Carla Dewey to its sales team and promoted Eric Rogich to assistant plant manager.
* Grain Processing Corp. named Jeff Laughlin as technical sales representative for food, pharmaceutical and personal care products.
* Sargento Foods Inc. announced the promotion of Brian Kaufman to engineering director of Natural Cuts and the hiring of Michael Lieber as senior sales manager in the Great Plains and Rocky Mountain regions.
* DSM is investing an estimated 10 million euros ($12.6 million) on a new plant in Xinghuo, Shanghai, China, that will use semi-continuous technology developed in cooperation between its technology engineers and food technologists. The plant is expected to be fully operational by April of 2007.
* The Wm. Wrigley Jr. Co. named Martin Schlatter vice president and chief executive officer.
* MGP Ingredients Inc. named Nathalie Reiling director of human resources at the company's Kansas City, Kan., facility. MGP Ingredients also announced changes in key plant operations and engineering management positions: Roger Schmidt has been named general manager of MGPI's production facility in Atchison, Kan.; Todd Scheer succeeds Schmidt as general manager of the Kansas City plant; Asif Malik is now general manager of the company's Pekin, Ill., plant, succeeding Dave Wilbur, who assumed the new role of corporate director of special projects; and Gordon Working is now in the newly created position of corporate director of distillery process engineering.
* Dr Pepper/Seven Up announced 7UP is removing all artificial ingredients and will be made from 100% natural ingredients, with its sodium amount reduced by nearly 50%.
* Bravo! Foods International Corp. will launch Trix, Cocoa Puffs and Wheaties flavored, fortified, extended shelflife milk drinks under a five-year trademark agreement with General Mills Marketing Inc.
* A new book entitled Sustainable Protein Production and Consumption: Pigs or Peas? purports that human consumption of more vegetable proteins than animal proteins would positively affect: sustainable energy production, sustainable water use, biodiversity, human health and animal welfare.
* A Gallup poll found 42% of overweight adults enjoy eating “a great deal,” down from 56% in 1989.
* Kraft Foods named Jeri Finard executive vice president of global category development.
* Kerry Ingredients hired Christopher Warsow as research chef—new business development, and named Andrea Logan as its new research and development technician for the chilled and frozen desserts initiative.
* Ocean Spray appointed Rob Beams to the position of vice president, agricultural supply development.
* Some 39% of women say they like to cook, according to a Gallup survey, down from 35% in 1989. Men, meanwhile, are increasing their enjoyment of cooking by an even greater amount; 34% of men now enjoy cooking, compared with 25% in 1989.
* According to a Gallup poll, 59% of Americans admit they eat more than they should, and 55% say they eat more junk food than they should, most often because it is convenient.
* John F. Saucier joined Corn Products International Inc. in the newly created corporate officer position of vice president of global business and product development, sales and marketing.
* Hormel Foods Corp. is spending $78 million to acquire Valley Fresh Foods Inc., which has annual sales of approximately $68 million.
* Luke Kazmierski and Cristina Munteanu joined GTC Nutrition as quality assurance and regulatory affairs specialist and food applications specialist, respectively.
* Mars Inc. has entered into an agreement to acquire Doane Pet Care Co., a private-label manufacturer of dry pet food. A third party will purchase Doane's European business.
* Famed, formerly bullet-riddled rapper 50 Cent has joined a campaign to prevent childhood obesity by improving high school students' eating habits. The campaign is sponsored by Glaceau, a company partly owned by the entertainer. Student chefs from across the country will compete to create the most “nutrient-rich” cafeteria lunch recipe, with the winner receiving a $100,000 college scholarship. For more information, visit www.freelunchmoney.com.
* Cadbury Schweppes PLC plans to spend $200 million over the next two years to purchase independent bottling groups in the U.S. and will purchase the 55% stake it does not already own (to take full control) of the Dr Pepper/Seven Up Bottling Group.
* The Wheat Foods Council added Lynn Holly as communications director.
* Hain Pure Protein Corporation is launching FreeBird, a new brand of organic chicken, following research designed to learn more about consumer preferences, including panels that ranked possible brand names with respect to key product attributes.