Research reports page 2

IDDBA's What's In Store Profiles Consumer Life-styles MADISON, WI - - According to The International Dairy*Deli*Bakery Association's* (IDDBA) "What's In Store" annual trends report, the 1990s saw the growth of dual-income households slowing to a rate of approximately 0.5%. Single-earner households are now growing at an annual rate of 1.8%, compared to the 1980s, when their growth rate decreased by 0.2% annually. With more women opting to stay at home, households are gaining more time than money.

America has always been thought of as a "melting pot," where all cultures would assimilate into one many-faceted culture. Now, according to Gerry Fernandez, president of the Multi-Cultural Foodservice & Hospitality Alliance, our culture is more of a "tossed salad," with each culture wanting to retain its cultural identity. One characteristic of all ethnic groups is their strong brand loyalty, much more so than other Americans.

FOOD BARGAIN

Americans may not realize what a bargain food is in the United States. Income earned in the first 40 days of 1999 was enough to, on average, pay for the entire year's worth of food. Compared to statistics from the USDA and the United Nations, populations in many nations spend a greater percentage of their income on food: those in the U.S. pay 10.7%, compared to nearly 15% in France, 17% in Italy, 24.5% in Mexico, and 27.5% in South Africa.

Even though consumer concern about the economy is at its lowest level since 1984, several tactics for controlling spending were described by a Better Homes & Gardens consumer panel. Most, 66.7%, used shopping lists, 65.7% used coupons, and comparison shopping was used by 64.8%. Avoiding convenience stores was cited by 54.5% and 52.1% limited visits to foodservice outlets.

An area of couponing growing in importance is Web-based coupons. Though Web-based coupons had low distribution in 1997 (0.001% of all coupons distributed) their redemption rate was 5.6%, considerably higher than that of traditional paper coupons. Approximately 60 million Americans have Internet access and women, especially, have found supermarket Web sites with coupons attractive.

FOOD SAYS LOVE

Is grocery shopping a ritual behavior to express emotions such as love, care, concern, obligation, resentment, and frustration? Daniel Miller, University College, London, England, thinks so. In his study, "A Theory of Shopping" he suggest retailers consider making the atmosphere less sterile and efficient and more emotionally compatible for those shoppers who see grocery shopping as an act of love rather than a chore.

For the past four years, the $20 billion natural products category, encompassing food, beverage, and personal care products, has recorded double-digit growth, and predictions are for the strong growth to continue. Seniors are looking for specific health benefits from products. Baby boomers, who make up the largest segment of natural food shoppers, are willing to experiment with natural foods.

The latest diet fad is protein, supposedly tailor-made for today's snacking society as a quick, nutritious energy fix and a way to lose pounds in the process. Author Laura Fraser, in "Losing It: False Hopes and Fat Profits in the Diet Industry," says fad diets typically go through four-year cycles of growing interest, popularity, then scorn. Typically it starts with a diet book with a doctor's endorsement or authorship, then women's magazines pick up on it. Fraser foresees the next diet focus on avoiding sugar and a return to calorie-counting. Thousands of books on that method were sold * in 1913.

The booming functional foods market hit $175.1 million in 1997 and is projected to reach $314.1 million by 2002. The FDA is struggling with the problem of how to categorize and regulate these products. The problem arises when the boundaries between "additive" and "supplement" are blurry.

The biggest news in the supermarket industry, as well as the food industry in general, is in mergers and acquisitions. There were a record-setting 808 divestitures by food and food-related companies in 1998, with activity up in 16 of 27 categories tracked. Food processing firms were responsible for 198 transactions, a 20% increase over 1997. "Clearly, we'll reach the point where American companies will start to look overseas for acquisitions. They will do so because targets of opportunity that have been so rich here will decrease, so at some point, Americans will need to look overseas. It will become more of a global world," Tim Hammonds, Food Marketing Institute president and CEO says.

SELL BY OCCASION

Consumers and life-styles have changed dramatically in the past ten to 20 years and the grocery shopping experience, by and large, has not, according to an Andersen Consulting, Chicago, IL, study. Solution selling, selling by occasion rather than category, is the way to accommodate those time-pressed, stressed-out shoppers, according to Andersen Consulting.

With the more extensive products and services desired by consumers and the high cost of real estate, some stores are building up, like the two-level Harris-Teeter store in Atlanta, while some go down, like a New York City A&P, in which the main shopping area will be two levels beneath its street-level bakery. Elevators and escalators move people and carts between levels. The Vermaport cart-conveyor system is an escalator that moves the carts up right alongside the people. It can move 12,000 carts hourly and is twice as wide as a standard escalator. This system is used extensively in Asia and Europe, but Dominick's in downtown Chicago will be the first U.S. installation.

HIGH TECH

Consumers are making the move to the electronic payment options, rather than cash or check. Use of checks has decreased from 49% of transactions in 1994 to 45% in 1997, while debit cards use increased from 5% to 13% in the same period.

According to the U.S. Department of Commerce, Internet traffic is doubling every 100 days and electronic commerce is expected to reach $300 billion by 2002. On-line grocery retailers are divided into two categories: full-service grocers and specialty sellers. Full-service grocers face challenges of costs and logistics of delivering perishables to a limited audience. Specialty sellers are expected to pass full-service grocers in Internet sales. One other option, still in limited operation and distribution, is on-line shopping services run by the supermarkets themselves.

Revolutionary shopping cart designs are being introduced. Using transmitted radio signals, several manufacturers showed carts which provide shoppers with information via the shopping cart. Another cart, equipped with a multimedia display on the handle activated by a frequent shopper card, will talk to shopper about specials in the store and can also answer pricing questions. Reusable "shopping boxes" are a popular option in Europe, eliminating the need for "paper or plastic." Their use has been incorporated into cart design, as has the use of recyclable beverage crates in Europe.

The smart card is another technological wonder, the size of a credit card, with an embedded microprocessor chip. This chip stores all sorts of information about the card holder, cash value, and data retailers can use to track frequent shopper behavior. Unfortunately, all new equipment would be needed at financial institutions and at the retail end in order to make use of the card's capabilities.

SELF SCANNING

There are two types of self-scanning systems being used today. Using one system, customers shop, then go to a dedicated self-checkout lane and scan each item themselves. Payment is at that station by credit or debit card, or at a separate station for other types of payment. Or, the customer shops, each item is scanned with a hand-held scanner. As the scanner is returned to its rack, the total is tallied and a receipt is issued, which the customer takes to a payment station. Security concerns have been addressed in several ways. The scanning systems have a database which compares weight of the product with its barcode and the stores themselves have instituted various versions of spot-checks and security cameras. Retailers say they have had few problems and have found, "a refreshing degree of honesty among shoppers."

Scanning and UPCs may someday be a distant memory with the advent of the technology devised by ICL, a Reading, U.K.-based firm. Electronic article tagging works with a chip embedded in product labels. A cart-full of items can be rolled through a tunnel that reads the chips, tallies the bill and presto! - checkout is done.

David Small, computer whiz at MIT, Boston, MA, discovered the laser normally used for precision cutting plastic could be used to write on food. The laser-etched type can be as small as newspaper print, and can print on uneven surfaces. Many opportunities are seen with messages written on produce. "educational" snack foods, and Kraft Foods is exploring personalization of cakes and buns.

EQUIPMENT THAT COOKS

Touch-screens on the front of a prototype refrigerator from Electrolux (Sweden) will be able to tell the consumer if they have the needed ingredients inside for making a particular recipe, if supplies are low on certain products (and send messages to pick some up), send E-mail, and leave messages.

The Joseph Co., Laguna Niguel, CA, has developed Chill Can, a beverage can that, at the touch of a button, can chill itself from 70 degrees to 40 degrees in two minutes.

A microwave food package will be encoded with cooking instructions; the consumer passes the code area past a scanner in the microwave oven. The oven is then automatically preset as to cooking time and power level, taking into account the size of the microwave oven. The oven will also have a Web communication panel, so customers can question the manufacturer if necessary. The manufacturer has the potential to use the panel for marketing, advertising and research.

A paper sheet product used to cover foods is said to control the growth of Salmonella, E. coli, Staphylococcus and Enteritis vibrio, all organisms that cause food poisoning. The Wasaoro TN Sheet, developed by Carex, is made with Japanese wasabi horseradish and karashi mustard.

Visit the International Dairy*Deli*Bakery Association's* Web site, www.iddba.org or call 608-238-7908 for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 36th year, IDDBA specializes in promoting the in-store dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

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Contact: Roberta Rush IDDBA PO Box 5528 Madison, WI 53705

rrush@iddba.org tel: 608-238-7908 fax: 608-238-6330

Date: 12/14/2000

News

IDDBA NEWS FLASH

Celebrating Holidays and Cultural Events Very Important to Hispanics, IDDBA Research Shows

Madison, WI - Eight in ten (79%) Hispanics say it's important to celebrate holidays and cultural events related to their heritage-this includes 54% who say it is very important, the International Dairy-Deli-Bakery Association's™ (IDDBA) research, "The Hispanic Consumer: Attitudes, Buying Behavior, and Purchase Drivers."

By origin, those most likely to say celebrating holidays and cultural events related to their Hispanic heritage is important are Mexican Americans (80%), Cuban Americans (87%), Puerto Ricans (84%), Central Americans (81%), and South Americans (79%). Caribbean Islanders and European Hispanics rate the importance of these types of celebrations somewhat lower (67% and 61% respectively).

As one might expect, foreign-born Hispanics are more likely to rate these types of celebrations important than are U.S.-born Hispanics (85% versus 75%). Hispanic heritage celebrations are rated more important by younger Hispanics (those under age 50) than by older Hispanics.

Hispanic Holidays

September 16 is Mexican Independence Day-it is celebrated with great fanfare in Texas and California. Cinco de Mayo (May 5) is celebrated around the country by Hispanics and non-Hispanics alike. Celebrating is usually accompanied by a full meal. It is unusual for Hispanics to have a birthday party where only cake is served. As one San Antonio focus group participant notes, "We don't serve just the cake and punch like the Anglos. You get a plate lunch and seconds."

Hispanics Prepare Traditional Foods for Holidays and Cultural Events Related to Their Hispanic Heritage

Hispanics love celebrating and celebrations always involve getting together with friends and family and Food. As one San Antonio participant remarks, "It's a matter of getting together and when everyone comes to my house you have to [serve] something that shows you appreciate when they come. We make some fajitas and make other food." Focus group participants agree that they tend to celebrate more than Anglos. Not only do Hispanics celebrate events related to their heritage and traditional American holidays (such as, July 4t h and Labor Day), but many are likely to celebrate St. Patrick's Day and even some Jewish holidays. As one Cuban focus group participant noted, "If there's a reason to throw a party, we usually throw a party." Another participant in the same group talked about her special bakery orders for St. Patrick's Day and Easter.

"When St. Patrick's Day is coming up, we order…green bread. They put some kind of dye in there, and the Easter bread, then the rainbow colored bread. It is nice to have that option." [U.S.-born, Miami]

Eighty-three percent (83%) prepare traditional Hispanic foods for holidays like Christmas Eve and Cinco de Mayo. At least eight in ten Hispanics of all origins except South America and Europe prepare traditional Hispanic foods for holidays. Those under age forty are even more likely to prepare traditional Hispanic foods for holidays (although about three in four of those aged 50 or older also prepare traditional foods). Hispanics in the Midwest are somewhat less likely than those in other regions to prepare traditional foods on holidays.

One of the biggest events celebrated is Christmas Eve. Focus group participants pointed out that Hispanics place a greater emphasis on celebrating Christmas Eve than do Anglos. They are likely to prepare a huge traditional feast, then open presents, and then go to Midnight mass. Tamales are particularly popular around the Christmas holidays. Focus group participants listed some of the traditional Christmas Eve dishes.

o Puerto Ricans are likely to serve pasteles, which are similar to tamales stuffed with ham, pork, and various spices then wrapped with green plantain leaves. They also serve roast pork with arroz con andules (rice with green beans).

o Cubans are likely to serve roast pork, black beans, white rice and yucca.

o Columbians are likely to start off with a chicken soup with special yellow potatoes (Ayogo)

o Mexican Americans are likely to serve tamales, Buñuelos (crispy tortillas topped with cinnamon and sugar). Menudos (spicy cow stomach) is usually served on New Year's.

Mexican Americans also celebrate Mexico's Independence Day on September 16th San Antonio focus group participants usually serve fajitas for this celebration.

On New Year's Eve, Mexican Americans in Texas cook a very spicy soup made with cow stomach called menudos. San Antonio participants say this product is readily available in supermarkets. It can be found in the meat department in a package or in a can.

A Majority Would Like Supermarkets to Sell Prepared Traditional Hispanic Foods for Holidays

Eighty-three percent (83%) of Hispanics prepare traditional Hispanic foods for holidays. While these traditional foods are very important to them, Hispanics like others in this country would like to find less time consuming ways to get the dishes they enjoy. It should come as no surprise that 58% would like supermarkets to sell prepared traditional Hispanic foods for various holidays. Among Hispanics living in the Midwest, who are less likely to find a wide range of Hispanic products at their chain supermarkets, a whopping 69% would like supermarkets to sell traditional Hispanic prepared foods at their service delis.

Recommendation: There is a market for dishes linked to Hispanic celebrations. Offer traditional Hispanic prepared dishes for holidays. Link the dishes to these celebrations.

Quinceañeros are Popular Celebrations for Hispanics

One of the traditions in many Hispanic cultures is to have large-scale celebrations for girls when they reach their fifteenth birthday. These celebrations are called Quinceañeros. The magnitude of these events can be gleaned from some of the quotes from the focus groups.

"It's as expensive as a wedding." [U.S.-born Hispanic, Miami]

"We mostly cater it. We rent a hall. Usually you're in a banquet hall." [U.S.-born Hispanic, Miami]

"It's a rite of passage for the woman." [Foreign-born, Miami]

For Mexican Americans in San Antonio, barbeques featuring brisket and chicken are standard fare for Quinceañeros.

Unfortunately, focus group participants do not rely on supermarket delis to help cater these events. This is because they do not think supermarkets are able to cater events of this magnitude. According to these participants supermarkets are looked to for catering services for small events like baby showers. As one foreign-born Hispanic in San Antonio notes, "I don't think of the supermarket for Quinceañero, that's more for a little party. A little get-together."

Sixty-one percent (61%) of Hispanics have attended at least one Quinceañero in the past two years. Almost three in ten (28%) have attended three or more such celebrations in the past two years. Twenty percent (20%) of Cuban Americans and 16% of South Americans have attended five or more.

Two-thirds (68%) would like supermarkets to offer catering services for Quinceañeros. Among those subgroups more likely to want supermarket catering are those with young children, those under age 39, and those with incomes between $20,000 and $50,000.

Recommendation: Evaluate whether your store can provide catering services for these events. If so, publicize this service.

Birthdays are Always Celebrated

A birthday isn't a birthday unless it is celebrated with a cake. Ninety-five percent (95%) agree that they celebrate birthdays of family and friends with a cake-this includes 80% who strongly agree.

Recommendation: Birthdays are big. Offer regular and extra fancy gourmet cakes for birthday celebrations. Photo cakes are also important.

The complete 104-page research study is available from IDDBA. The cost is $395 for IDDBA members and $795 for non-members plus shipping and handling. Call IDDBA at 608-238-7908 for more information or to order.

Now in its 37th year, The International Dairy-Deli-Bakery Association, Madison, WI, specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video training programs, management tools, an annual trends analysis, and a member directory of key industry contacts.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please call if you would like an e-mail version E-mail: rrush@iddba.org

Date: 10/16/2000

News

IDDBA NEWS FLASH

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush: 608-238-7908

Madison, WI -- Cheese is a popular food with Hispanics. It is considered to be very nutritious ? 91% believe cheese is a good source of calcium.

This statistic is from the International Dairy Deli Bakery Association'sTM (IDDBA) recently released study, "The Hispanic Consumer: Attitudes, Buying Behavior, and Purchase Drivers." Telephone interviews and focus groups were conducted with 1,000 Hispanic consumers by Dr. Rosita Thomas, president, Thomas Opinion Research.

Focus group participants say they usually find the types of Hispanic cheeses they want in the dairy case rather than at the service deli.

Hispanics like eating cheese in sandwiches ? 62% say they often eat cheese in sandwiches, 27% say "sometimes," and only 11% rarely or never eat cheese in sandwiches. Over four in ten (42%) often use cheese as an ingredient in cooking; another 38% sometimes use it and 9% rarely or never use cheese as an ingredient in cooking. Similarly, four in ten (40%) often snack on cheese and 34% sometimes snack on cheese. One quarter (25%) rarely or never snack on cheese.

Sixty-two percent (62%) often eat cheese in sandwiches. Those most likely to often eat cheese in sandwiches are: * Cuban Americans (71%) and Puerto Ricans (68%). * Those born in the U.S. (66%) significantly more than foreign-born Hispanics (57%). * Men (65%) significantly more than women (59%). * Hispanics between ages 18 and 59 more than those age 60 or older. * Those with children in the household (65%) significantly more than those without children in the household (58%). * Those earning more than $35k (70% or more). * Those in the South (67%) and Midwest (66%) more than those in the Northeast (57%) and West (58%).

Forty-two percent (42%) often use cheese as an ingredient in cooking. Those most likely to do so are: * Mexican Americans (46%). * Those born in the U.S. (46%) significantly more than foreign-born Hispanics (38%). * Those in the West (47%), Midwest (45%), and South (44%) more than those in the Northeast (28%).

Forty percent (40%) often snack on cheese. Those most likely to do so are: * Cuban Americans (45%), Puerto Ricans (43%), South Americans (45%), and European Hispanics (46%). * Those born in the U.S. (44%) significantly more than foreign-born Hispanics (36%). * Men (43%) significantly more than women (37%). * Those who live in the South (44%) more than those in the Northeast (36%) and Midwest (35%).

Purchasing Preferences for Cheese?Chunk, Sliced, or Shredded

Hispanics most often buy chunk cheese (48%) or sliced cheese (41%). Only eight percent (8%) most frequently buy shredded cheese.

Those who most frequently buy cheese in chunks are: * Mexican Americans (55%), South Americans (55%), and Caribbean Islanders (52%) * Those whose primary language is Spanish (58%) more than those whose primary language is English (46%) * Those who live in the West (63%)

Those who most frequently buy sliced cheese are: * Puerto Ricans (62%), Central Americans (47%), and Cuban Americans (45%) * Those whose primary language is English (44%) more than those whose primary language is Spanish (30%)

Those who most frequently buy shredded cheese are: * Cuban Americans (16%) and Central Americans (12%)

Types of Cheeses Purchased

The most frequently mentioned cheeses purchased by Miami focus group participants are: * Monterey Jack * Jalapeno Jack * Provolone * Mozzarella * Swiss * Muenster * Queso Blanco?a white cheese usually found in the dairy case * Queso de Pera?a cheese shaped like a pear that is peeled; usually for snacking * Benalito?smoked white cheese (used for snacking) * Papa cheese?eaten a lot by Peruvians * Gallo Azul?comes in a ball; used for sandwiches

San Antonio focus group participants believe the best cheese for making enchiladas is one called asadaro or ranchero. This cheese crumbles easily and melts into a very creamy sauce.

Other cheeses mentioned by these participants include: * Asarero * Panela * Cemo * Ranchero * Cacique products (cheeses and sour creams)

San Antonio focus group participants claim Mexican cheeses are less salty than those they tend to find at American-style chain supermarkets.

Cheese Preferences

Telephone respondents were asked to name cheeses they would like to see in their service delis or dairy cases. Yellow American (13%) and Swiss cheese (10%) were most frequently mentioned.

Recommendations: Since cheese and brand names are both very important to Hispanics, sell the brands that they like. Make sure a wide variety of cheeses are available. Set up a suggestion box asking consumers for recommendations for specific brands and types of cheeses.

Now in its 37th year, The International Dairy*Deli*Bakery Association, Madison, WI, specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video training programs, management tools, an annual trends analysis, and a member directory of key industry contacts.

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Roberta Rush IDDBA PO Box 5528 Madison, WI 53705 rrush@iddba.org tel: 608-238-7908 fax: 608-238-6330

Date: 11/14/2000

News

IDDBA NEWS FLASH

Consumers in the Bakery: How to Get Them to Buy More

Madison, WI - You need reliable data in order to predict product movement and customer purchase behavior. Understanding why customers buy is the key to getting them to buy more.

The International Dairy - Deli - Bakery Association's™ (IDDBA) research publication, Consumers in the Bakery: Who, What, When, Where, and Why They Buy and How to Get Them to Buy More, focuses on in-store bakery product preference, dietary attitudes, purchase location, and customer satisfaction. The study compares changes to an IDDBA benchmark study by the same name completed in 1995.

The Study Shows that Consumers appear less health conscious in 1999 than in 1995.

- Seventy-two percent (72%) read nutritional labels-down from 78% in 1995.

- Sixty-six percent (66%) agree that they hear so many things about what is good and what is bad that they don't know what to believe.

- Seventy-eight (78%) believe you can eat anything as long as you do it in moderation-up dramatically since 1995 (52%).

- Consumers are less likely than in 1995 to do the following-decrease fat, decrease cholesterol, decrease calories, increase exercise, or increase high fiber.

- Consumers are less likely to say they have purchased and will continue to purchase low-fat, fat-free, reduced-sugar, or sugar-free bakery products.

- Four in ten consumers (42%) say they have made an effort to decrease carbohydrates. This question was not asked in 1995.

The cost is $395 for IDDBA members, $795 for non-members, plus $7 S&H. Call the IDDBA Education Department at 608-238-7908 for more information or to order.

Visit the International Dairy - Deli - Bakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please call if you would like an e-mail version Phone: 608-238-7908; E-mail: rrush@iddba.org

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Date: 11/14/2000

News

IDDBA NEWS FLASH

FOR IMMEDIATE RELEASE

Consumers in the Deli: How to Get Them to Buy More

Madison, WI - Have you ever wondered how current supermarket deli shoppers stack up against shoppers from five years ago? The International Dairy - Deli - Bakery Association's™ (IDDBA) research study, Consumers in the Deli: Who, What, When, Where, and Why They Buy and How to Get Them to Buy More, can answer your questions and help you plan effective marketing strategies. Using the 1994 IDDBA study by the same name as a benchmark, researchers compared purchase patterns, product preference, dietary attitudes, and lifestyle trends.

The results show which products are increasing and which are declining in sales and customer preference. The study covers attitudinal changes on Home Meal Replacement, new product trends, purchase drivers, and favorite shopping venues.

FREQUENCY OF IN-STORE DELI SHOPPING

Consumers are stopping at the in-store deli more often. Consumers shop at an in-store deli an average of 2.5 times a week-up dramatically from 1.2 times a week in 1994 and 1.1 times a week in 1990. The percentage of consumers who shop at in-store delis more than once a week has climbed from 17% in 1994 to 28% in 1999. The percentage who shop once a week has remained steady at 38%. The percent who shop one to three times a month has declined from 38% to 30% and the percent who shop less than once a month has declined from 7% to 4%.

PRIMARY REASON FOR SHOPPING AT IN-STORE DELIS

Convenience, convenience, convenience-it is the most frequently volunteered reason given for shopping at in-store delis. Forty (40) percent offered convenience as a first response to the question of why they shopped at in-store delis. What a dramatic leap since 1990 when only 6% mentioned convenience as the primary reason for shopping at in-store delis. By 1994, this response rose to 30% and now it has jumped to 40%. Cold cuts/lunch meats/meats is the second most frequently mentioned reason for shopping at delis-mentioned by 21% of these respondents (up from 14% in 1994).

The cost of the study is $395 for IDDBA members, $795 for non-members, plus $7 S&H. Call the IDDBA Education Department at 608-238-7908 for more information or to order.

Visit the International Dairy- Deli - Bakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

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CONTACT: Roberta Rush Phone: 608-238-7908; E-mail: rrush@iddba.org

Date: 12/14/2000

News

IDDBA NEWS FLASH

Food Borne Illness Bacteria Strains Increase, according to IDDBA Annual Trends Analysis

Food Borne Illness Bacteria Strains Increase, according to IDDBA Annual Trends Analysis Madison, WI - The International Dairy Deli Bakery Association's™ (IDDBA) What's In Store 2001 annual trends analysis reports that, taken together, Salmonella, Listeria, and Toxoplasma account for more than 75% of deaths from food-borne illness. However, 81% of food-borne illness cases are caused by undetermined agents.

The Center for Disease Control estimates that the number of food-borne illness bacteria strains has increased by over 100. As the baby boom generation grows older, it pushes the average age of the U.S. up, making a larger portion of the country more susceptible to food-borne illness, the CDC also notes.

Top 10 worst food safety offenders

In 15,475 confirmed cases of food-borne illness, the Centers for Disease Control and Prevention determined the top ten most likely foods to cause an illness: 1. Mixed dishes (e.g., casseroles, sandwiches, burritos) 2. Greens/vegetable salad 3. Turkey 4. Fruits & vegetables 5. Beef 6. Fish (not shellfish) 7. Juices, beverages 8. Eggs 9. Protein salad 10. Ham

Consumers better at handling food

An Audits International study, first conducted in 1997 and followed-up in 1999, found that two-thirds of home cooks had a situation in their kitchens that could lead to food-borne illness in 1999. However, in 1997, 96% did. Of the major violations, cross-contamination happened in 31% of respondents' kitchens, 29% of cooks failed to wash their hands, and 29% failed to chill their leftovers properly. What are supermarkets doing to protect their customers?

Supermarkets and restaurants were conspicuously absent from the list of sources of food safety information, according to the Audits International survey. Seventy-three percent of respondents noted television as a source; 63% received information from print media; 21% received information through word-of-mouth; and 3 -- 5% received food safety information from schools, doctors offices and other sources.

It seems that the occasional booklet stuffed in a random bag is not getting the job done. More aggressive methods may be necessary, such as the T-sticks distributed on meat packages at Publix Supermarkets, Lakeland, FL. The T-stick is a disposable thermometer that can be attached to a package. Meat and fresh product departments throughout the country are beginning to sell both single-use and professional-grade thermometers along side their products.

Giant Foods, Landover, MD, has developed a "What to do when the power goes out" flyer which tells customers which foods can be kept, and for how long, in the event of a power outage. The publication was so informative, according to a Giant consumer affairs representative, that it was distributed by the Red Cross during a major storm.

Wash your hands and your money…

For years, paper money has been thought to be a possible medium for bacteria that may cause food-borne illness, but what about coins? At the University of Georgia, scientists exposed coins to E. coli O157:H7, finding that the bacteria lived up to 11 days. On some cooking surfaces E. coli survived between four and seven days.

…but don't wash your food

Washing meat and poultry products does not help remove bacteria. According to Food Safety Issues, a supplement to the Food Institute Report, washing raw meat and poultry may even promote the spread of bacteria to other food products. Likewise, washing eggs is not recommended because they are washed and coated with mineral oil before they are packaged. Washing the eggs increases the risk of cracking the shell and contaminating other products. The only way to completely disarm bacteria in these products is to cook them to recommended temperatures.

Produce, however, should be washed to remove dirt and bacteria, especially since much of it is eaten raw. Rinsing produce with water (some fruits and vegetables may be scrubbed with a brush) is sufficient as detergent may cause damage. Irradiation approved by the FDA

Irradiation of raw red meat products is now legal, thanks to the publication of a final USDA rule. Ground beef, steaks, and pork chops can be irradiated to greatly reduce E. coli O157:H7, Listeria, Salmonella, and Campylobacter. Secretary of Agriculture Dan Glickman notes that irradiation is not a substitute for food safety, however. Once irradiated, raw meat is still subject to spoilage and should be treated with the same caution as non-irradiated meat products.

All irradiated meat products will be labeled with the radura symbol, including processed meat products which contain irradiated ingredients. Restaurants will not have to display the symbol for dishes that contain irradiated meat, but unpackaged product signage would have to include it.

Currently, irradiation is only allowed for products that are refrigerated or frozen. A group of 30 industry trade associations, health organizations, and academic and consumer groups is working to allow irradiation of ready-to-eat perishable foods --- a segment which the National Food Processors Association (NFPA) in Washington, DC estimates to be $277.5 billion. There has been no ruling at this writing.

Irradiation may not become widespread for some time, according to the NFPA. Machinery costs make irradiation in-house difficult for most processors. There are several companies who specialize in irradiation, but shipping food to and from their plants adds to production costs. All in all, irradiation will probably add two to five cents per pound to most foods.

The 177-page What's In Store 2001 book contains chapters on Consumer Life-styles, the Bakery Department, the Dairy Department and, the Deli Department. There are 75 tables, a reference contact list, and a key word index. For more information or to order a copy of "What's In Store 2001," contact the IDDBA Education Department at 608-238-7908. Copies are $99 for IDDBA members and $399 for non-members.

Visit the International DairyoDelioBakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please e-mail if you would like an e-mail version E-mail: rrush@iddba.org

Date: 12/14/2000

News

IDDBA NEWS FLASH

Hispanics are Less Calorie Conscious than Anglos, according to IDDBA Research

Madison, WI - Hispanics are less calorie conscious than Anglos, according to the International Dairy-Deli-Bakery Association's™ (IDDBA) new research, "The Hispanic Consumer: Attitudes, Buying Behavior, and Purchase Drivers." Fifty-seven percent (57%) of the 1,000 Hispanics surveyed nationwide agree that Hispanics are less calorie conscious than Anglos-this includes 33% who strongly agree.

Those most likely to agree with this statement are:

o Those whose primary language is Spanish (80%)

o Cuban Americans (65%)

o Central Americans (68%)

o Caribbean Islanders (64%)

o Females (65%)

Hispanics are Less Calorie Conscious than Anglos

Strongly Somewhat Agree

Agree Agree Total

% % %

Total 33 24 57

Origin

Mexicoa 33 26 59

Cubab 36 29 65

Puerto Ricoc 34 16 50

Central Americad 33 35 68

South Americae 31 29 60

Caribbeanf 32 32 64

Europeg 27 16 43

Interview Language

Spanish 57 23 80

English 27 25 52

Gender

Female 40 25 65

Male 25 24 49

Letters in superscripts following a percentage indicate that the percentage is significantly greater than categories in the left column with corresponding letters.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please e-mail if you would like an e-mail version E-mail: rrush@iddba.org

Date: 1/18/2001

News

IDDBA NEWS FLASH

FOR IMMEDIATE RELEASE

Hispanics Eat at Home More often than Anglos

Hispanics Eat at Home More often than Anglos, according to IDDBA Research Madison, WI - In a study of Hispanic consumers commissioned by the International Dairy-Deli-Bakery Association (IDDBA) and conducted by Thomas Opinion Research, two-thirds (67%) of respondents agreed that Hispanics eat at home more often than Anglos-this includes 45% who strongly agree. Surprisingly, the demographic breaks show that agreement with this statement is not a function of income-those with high incomes are just as likely as those with low incomes to agree with this statement.

Hispanics pride themselves on their cooking abilities

As one Miami focus group participant noted, "I prefer my home cooking to any restaurant. You name [the restaurant], not one is better than my house." The national survey results bear out these focus group insights: Hispanics like to eat at home. However "eating dinner at home" does seem to be a function of having children in the household-those with kids are more likely to agree with this statement than those without.

The following exchange in a Miami focus group illuminates this point.

Male: "Americans go out to dinner more."

Female: "Oh yeah, we'd rather sit at home [and eat] and drink a case of beer."

Female: "It's not just salary-wise. We have a lot of kids usually."

Another Miami focus group participant notes:

"See, what I'm saying is …that we hardly ever go out to eat. Unless it's at somebody's house."

How Frequently Hispanics Cook Dinner at Home

Hispanics cook dinner at home an average of 5.6 times a week! Slightly over half (53%) cook dinner at home every night.

"On the weekends I cook all day. On the weekends, I don't come out of the kitchen." [Foreign-born, San Antonio]

No Hispanic subgroup cooks dinner at home fewer than five times a week. However, people of Mexican, Cuban, and Central American origins cook dinner at home significantly more on average than those of South American, Caribbean, or European descent. Foreign-born Hispanics tend to cook at home slightly more on average than U.S.-born Hispanics (5.9 times a week versus 5.5 times a week).

Larger households and those with children are more likely to cook at home than smaller households and those without children. For example, those with six or more in the household cook dinner at home an average of 6.9 times a week. Those with children in the household cook dinner at home an average 5.8 times a week compared with 5.3 for those without children in the household.

Change Over the Last 5 Years in How Often Dinner is Cooked at Home

Hispanics suffer from the same time constraints as other Americans-two working adults trying to run a household. Focus group results indicate that while Hispanics are eating at home more than Anglos, they are increasingly serving fewer "made from scratch" meals. Participants say they buy heat-and-serve items from their service delis and from supermarket freezer sections.

Six in ten (63%) say the average number of times they cook dinner has not changed over the past five years; 20% say it has increased and 16% say it has decreased. Those with Central American and Caribbean origins are most likely to say the average number of times they cook dinner has increased over the past five years.

Those in households with six or more are most likely to say the average number of times they cook dinner has increased over the past five years. Younger Hispanics (especially those between 30 and 39) are the most likely to say they are cooking dinner more now than they did five years ago.

- 30 -

CONTACT: Roberta Rush Please e-mail if you would like an e-mail version E-mail: rrush@iddba.org

Date: 1/18/2001

News

IDDBA NEWS FLASH

IDDBA Offers Consumer Research Two-for-One Sale

Madison, WI - For a limited time, the International Dairy-Deli-Bakery Association™ (IDDBA) is offering two of its most popular convenient meal solutions/home meal replacement consumer research studies for the regular price of one. The need for convenient meals continues to increase. Understanding the consumer's mindset is key to understanding the competition's success and to creating compelling reasons for shoppers to take a closer look at what the supermarket offers.

Convenient Meal Solutions/HMR Strategies for Top-of-Mind Impact research was conducted for IDDBA by Technomics, Inc. and looks at successful supermarket meal programs and analyzes their strengths and weaknesses. The best practices strategies become a blueprint for proven actionable ideas and tactics for successfully competing in the home meal game. Use the supermarket success stories, data on consumer expectations, real deliverables, and reality-based concepts as a jumping off point to analyze your own strategies.

IDDBA commissioned Frederick Schneiders Research to conduct a study on The Non-supermarket Meal Consumer: Who, What, When, Where They Buy and How to Get Them to Buy More. This study looks at the competition and reveals why consumers don't think of supermarkets as "destination locations" when they're hungry. The successful retailer understands that the real objective isn't just "what's for dinner?" That only takes care of one meal, one night. The real objective is to fill the shopping basket, not just the stomach.

The regular price for each study is $395 for IDDBA members, $795 for non-members, plus $7 S&H. Now you can purchase both studies for the regular price of one. Call the IDDBA Education Department at 608-238-7908 for more information or to order. Two-for-one special expires February 30.

Visit the International Dairy-Deli-Bakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

- 30 -

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please e-mail if you would like an e-mail version Phone: 608-238-7908; E-mail: rrush@iddba.org

Date: 12/14/2000
Time: 10:44:38 PM
Remote Name: 208.28.51.171
News

IDDBA NEWS FLASH

IDDBA Research Reveals Hispanic Consumer Shopping Patterns for the Dairy Case

IDDBA Research Reveals Hispanic Consumer Shopping Patterns for the Dairy Case Madison, WI - Hispanics shop at supermarket dairy sections 2.2 times a week on average, according to the International Dairy-Deli-Bakery Association's™ (IDDBA) new Hispanic consumer research. Eighty-eight percent (88%) shop at the dairy case once a week or more with 43% going 2 to 7 times a week.

Frequency of Shopping at Supermarket Dairy Sections

Every day 6

2-6 times a week 37

Once a week 45

1-3 times a month 9

Less than once a month 3

Don't know *

Average times per week 2.2

*=less than 1%.

Dairy Section Shopping Frequencies -by Demographics

Those shopping most frequently in the dairy section are Puerto Ricans (2.5 times a week), Mexican Americans (2.1 times), Central Americans (2.4 times) and European Hispanics (2.1 times). While there is no significant difference between Foreign-born and U.S.-born Hispanic in the average number of times they shop in the dairy section, those who are Spanish-language dominant are more likely than those who are English-language dominant to shop in the dairy section more frequently (2.5 times a week versus 2.2 times a week).

Those in large cities or small towns tend to shop in the dairy section more than those in the suburbs or those in rural areas.

As one might expect, those with children under age 18 shop in the dairy section more frequently than those without children in the household (2.3 times a week versus 2.0 times a week). Likewise, those in larger ho useholds (4 or more) shop in the dairy section more than those with fewer people in the household.

The Importance of Brands

Eighty-six percent (86%) often or sometimes buy national brands at the dairy case, 75% often or sometimes buy store brands, and 68% often or sometimes buy Hispanic brands. Only 2% rarely buy national brands, 6% rarely buy store brands, and 10% rarely buy Hispanic brands.

Frequency of Purchasing Various Brands at Supermarket Dairy Cases

Some-

Often times Rarely Never

National Brands 44 42 10 2

Store Brands 32 43 17 6

Hispanic Brands 27 41 19 10

Visit the International Dairy-Deli-Bakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please e-mail if you would like an e-mail version E-mail: rrush@iddba.org

- 30 -

Date: 10/16/2000
News

IDDBA NEWS FLASH

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush: 608-238-7908

IDDBA's New Research Reveals Product Variety Drives Sales to Hispanics

Madison, WI -- Do American-style supermarkets understand the needs of Hispanic consumers? The jury is still out, according to the International Dairy*Deli Bakery Association'sTM (IDDBA) recently released study, "The Hispanic Consumer: Attitudes, Buying Behavior, and Purchase Drivers." Telephone interviews and focus groups were conducted with 1,000 Hispanic consumers by Dr. Rosita Thomas, president, Thomas Opinion Research.

Obviously supermarkets located in cities and states with majority Hispanic populations are going to fare better than those located in areas with smaller Hispanic populations. Across the board, only a third of Hispanics strongly agree that American-style chain supermarkets understand their needs; another 37% agree somewhat. However almost two in ten (19%) do not think American-style supermarkets understand their needs.

Focus group participants in San Antonio and Miami agree that American-style supermarkets are now caring more about their needs. They attribute this to their large numbers and to the fact that non-Hispanics are beginning to discover and enjoy ethnic foods.

"I think American chains care about Hispanic consumers. I mean the food you find ? Hispanic, Oriental foods, ready-made, from scratch pastries. I'm surprised how much you can find* now." [Foreign-born, Miami]

"Well for the most part, I haven't really seen it as much as focused as it is here in Miami. It's really focused in Miami creating a *Latin flavor." [Foreign-born, Miami]

"They're getting better at caring about Hispanic consumers. For a time, we were really totally ignored. . . . I've been in the neighborhood for ten years, for a long time there were virtually no Hispanic products over there." [U.S.-born, San Antonio]

"I think there's a lot of crossover. A lot of people who are not Hispanic are trying all these foods and *.so HEB's changed a lot. Even their names are becoming Hispanic. It used to be just HEB, now it's HEB El Central." [U.S.-born, San Antonio]

"At HEB, I never feel like it's an Anglo store. I feel like it's Hispanic because*I find whatever I'm looking for. . . . I never feel that it's a Gringo supermarket." [Foreign-born, San Antonio]

Increase Variety of Hispanic Products

Sixty-one percent (61%) agree they tend to buy Hispanic products over American-made products if they have a choice?this includes 32% who strongly agree. More than seven in ten Central Americans, South Americans, and foreign-born Hispanics agree with this statement. The availability of Hispanic products is a major decision driver for those who primarily shop at Hispanic supermarkets?where 91% agree with this statement. Focus group participants point out that quality and to a lesser extent price (rather than "Hispanic brand" or "American brand") drive purchase choice.

"If I'm going to buy black beans, I'm most likely going to get one of those brands that specifically have Cuban seasonings." [Foreign-born, Miami]

Focus group results indicate that Hispanic products found in Hispanic supermarkets are not necessarily more expensive. In fact, sometimes they can be less expensive than in American-style chain stores.

"Since they are more Mexicanized, they do have Mexican food at lower prices and a little bit more variety. Plus, it's not crowded." [Foreign-born, San Antonio]

Others argue that catering to Hispanics has sometimes been done begrudgingly instead of voluntarily. San Antonio Hispanics point out that not all supermarkets in that city cater to Hispanics.

"They've grown to have to care about Hispanic consumers. . . . They don't really like it because you can see it. But they have no choice. Money talks." [U.S.-born, Miami] "I think they limit us as to what we can go and buy at the store*I think they've improved a little bit, but they still have a long way to go. I don't think they have enough variety as far as I can tell. . . . The other day I went to look for mole and they only had two kinds." [U.S.-born, San Antonio]

Several note that the variety of Hispanic product offerings varies dramatically from store to store and from one area of town to another. Some focus group participants find it easy to get requested products from their American-style supermarkets, others report difficulties.

"Well, I've gone to supermarkets and asked for certain things and they tell me, "Oh, we don't get it because the chain doesn't have it."?meaning, it's an American chain and not a Spanish chain of supermarkets so they won't carry it." [U.S.-born, Miami]

"I was raised on the west side of town where we'd go to HEB, Handy Andys, La Fiesta and all those little markets. We could choose whatever we wanted to. And now I live in the northeast part of town and it's very different. (I can't find every thing I want.)" [U.S.-born, San Antonio]

Focus group participants also believe American-style chain supermarkets do not conduct market research when determining which products to continue or discontinue. They become frustrated when they get used to buying specific products and then suddenly the product is no longer available ? as seen by the following exchange in the U.S.-born Miami focus group.

Female: "I found this mole, which is like this Mexican food, and at Publix, it was great. It's called Tex-Mex or something, and it was wonderful. But when I went back, they said they don't carry it."

Female: "No, they don't carry it anymore."

Female: "I had the same thing happen with enchilada sauce."

Female: "That is what I don't like about some stores, they have something for like a little while, and then they don't carry it."

Male: "There was a product they make in New Jersey, and they were selling it here, it was called Sips it was a guava mango cooler, and I used to buy it by the boxes. Suddenly, it was gone and the manager kept on telling me it doesn't sell. How are you going to tell me it doesn't sell, when I buy it by boxes, you know?" [U.S.-born, Miami]

San Antonio focus group participants also wish their supermarket carried the tools needed to make traditional foods, like tortilla presses.

"I like making corn tortillas*Sometimes I just want to press them. I know my mom got a presser at Handy Andy. I asked my husband do they have that at HEB and he said 'no'. My husband had to come all the way over to the west side to buy me a grill for the tortillas." [U.S.-born, San Antonio]

Visit the International Dairy*Deli*Bakery Association's Web site, www.iddba.org, for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 37th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video and CD-ROM training programs, management tools, an annual trends report, and a member directory of key industry contacts.

- 30 -

Roberta Rush IDDBA PO Box 5528 Madison, WI 53705 rrush@iddba.org tel: 608-238-7908 fax: 608-238-6330

Date: 12/14/2000
Time: 10:42:42 PM
Remote Name: 208.28.51.171

News

IDDBA NEWS FLASH

IDDBA's What's In Store 2001 Annual Trends Analysis Reports Private Label Sales Statistics

IDDBA's What's In Store 2001 Annual Trends Analysis Reports Private Label Sales Statistics Madison, WI - The International DairyoDelioBakery Association's™ (IDDBA) What's In Store 2001 annual trend analysis reports that milk was the largest private label category in both dollar volume ($6.4 billion) and unit volume ($2.8 billion) for 1999. It was followed by cheese, fresh bread/rolls, fresh eggs, refrigerated juices, butter, lunch meat, and yogurt.

Private Label magazine expects private label sales to increase between 7% (drug stores) and 18% (mass merchandiser outlets), depending on the outlet, in 2000. In fact, the vast majority of supermarket executives (89%) think private label food sales will go up in 2000. Supermarkets are expected to see a 7.7% increase in 2000.

In an attempt to lure skeptical shoppers to private label products, 98.2% of respondents to a Private Label magazine survey use in-store displays. To communicate the quality of the products, 93.8% use on-package guarantees, and nearly the same number (92.7%) use shelf signs. In 1999, 34.9% used Web pages to promote their products, while in 2000, 48.2% of respondents indicated that they used their Web sites to promote their private label products.

The Private Label Manufacturers Association (PLMA) says that store brands tend to appeal most to large families and families with low incomes. In an attempt to appeal to a more broad base of shoppers, Kroger (Cincinnati, OH) is rolling out three tiers of private label merchandise --- good, better, best, if you will. As more mergers take place, private label can take advantage of economies of scale, add more products, and lower the price. This strategy could pose a serious threat to mass merchandisers, but Craig C. Albert, a research analyst with Sanford C. Bernstein & Co., New York, NY, thinks that it ultimately won't because retailers will not buy into reduced margins on private label products. According to Merrill Lynch, the average difference in gross margin between a national brand and a store brand is 10 points (34% vs. 24%).

But what about private label in an increasingly global and on-line world? A store is a store, in bricks and mortar or in clicks and mortar, and private label has the same image either place, says the PLMA. However, on-line shopping hasn't stabilized enough to tell whether private label will make a mark on the on-line world. And, with companies like priceline.com and others which allow consumers to name their own prices, national brand prices could go down, perhaps to below private label prices.

Private label manufacturers and retailers can take heart, however, if Europe is an indication of where the U.S. is headed. The top five countries which posted the greatest private label growth in 1998 were in Europe, and several less-developed countries in Latin America and Eastern Europe showed strong private label growth, according to ACNielsen, Schaumburg, IL.

Northern Europe has the largest private label presence, at 24.4% penetration, according to ACNielsen. North America follow at 18.7%. At only 1.4%, Eastern Europe had the most dismal private label presence. Latin America also had a poor showing, where huge markets such as Brazil and Argentina had only 1% each. The U.S. private label penetration is 13.4%, says ACNielsen.

European supermarkets tend to be more consistent than their counterparts in the U.S., some say. Thus, European retailers are able to create consistency in their private label.

U.S. retailers may not be bringing European models to their stores yet, but some are beginning to employ new tactics. Several chains across the country are publishing magazines which promote their store brands. These magazines, such as Goodness from Kroger, are more than just store circulars --- they include substantial articles. Each issue of Kroger's publication also contains as much as $14 in private label coupons. Safeway, Pleasanton, CA, is even teaming up with upscale Sunset magazine as a sponsor of "The Tastes of Sunset Show" each year.

Still, Burt Flickinger III, managing director of Reach Marketing, says that retailers should invest more in their private label programs. In the U.K. and in Canada there is much more devoted to sampling, couponing, direct-mail marketing, and other advertising. If companies invested 5% of their private label profits into these programs, they would reap the benefits, according to Flickinger.

One of the biggest measures of a supermarket is perishables, according to the PLMA. The perishable departments have not yet reached their full potential for the sale of private label, the association says, and so private label perishable sales can be expected to increase in the next few years. As the quality of perishables improves throughout the country, private label manufacturers and retailers must add value to their products through packaging, presentation, or through obvious better quality. Organic products also hold potential for the private label market. As federal standards take effect, certified organic private label products can spell quality --- and that can spell profits, said the report. In the 1970s, the white-label generic programs dominated the private label market. Perception today is that quality is much higher. As recently as 1994, private label sales were made primarily to upper-income households, who tended to be better-educated and were aware that store brands didn't carry the same costs of advertising and promotion. The trend turned around by 1998, however, and private label products once again appealed more to lower-income households.

Spectra Marketing in Chicago found in a study that if a national brand and a store brand product are both on special, the national brand tends to sell better. Also, the study showed that private label sales are inconsistent across stores, which indicates that separate evaluation is necessary for each market.

Hispanic private label

With private label appealing to lower-income households, with median Hispanic-American household income lower than average, with mean Hispanic-American household size higher than average, and with the Hispanic-American segment, on average, spending more of its disposable income on food, it stands to reason that private label Hispanic products would sell well. Couple this with the fact that the U.S. population in general is consuming more ethnic foods, Hispanic and other ethnic private label is a sure winner

According to Information Resources Inc. (IRI), Chicago, IL, Hispanic private label foods showed significant increases in 1998. Twenty-two percent of sales in the Mexican food sector were private label, accounting for 16% of dollar sales. That is up significantly from 1994, when unit share was 14% and dollar share was 11%.

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush Please e-mail if you would like an e-mail version E-mail: rrush@iddba.org

Date: 6/29/00

News Flash

FOR IMMEDIATE RELEASE CONTACT:

Roberta Rush 608-238-7908

IDDBA's What's In Store 2001 Annual Trends Report Focuses On Retail Supermarket Data and Trends

The International Dairy-Deli-Bakery Association (IDDBA) is offering substantial pre-publication discounts on its annual trends report, What's In Store 2001. The report focuses primarily on retail supermarket data and trends.

IDDBA reviews over 3,000 sources each year, saving What's In Store readers thousands of hours of research and reading time. The report includes over 200 pages of facts and trends to give industry professionals a competitive advantage.

The report contains trend information on consumer life-styles, international, bakery department, cheese overview, dairy department, deli department, supermarket food service, and perishable service department. The book also features a key word index and information on sources and references.

For information on the book, pre-publication discounts, or IDDBA membership, call IDDBA at 608-238-7908 or e-mail to iddba@iddba.org. Orders must be received before September 1 to receive the discounts.

Visit the International Dairy-Deli-Bakery Association's Web site, www.iddba.org , for the latest information on IDDBA's research, education, public affairs, and other industry activities. Now in its 36th year, IDDBA specializes in promoting the dairy, deli, and bakery industries. Member companies enjoy many benefits and services including the annual seminar and expo, leading-edge research, video training programs, management tools, an annual trends analysis, and a member directory of key industry contacts.

- 30 -

Roberta Rush IDDBA PO Box 5528 Madison, WI 53705 rrush@iddba.org tel: 608-238-7908 fax: 608-238-6330

Date: 10/16/2000

News

IDDBA NEWS FLASH

FOR IMMEDIATE RELEASE CONTACT: Roberta Rush: 608-238-7908

IDDBA's What's In Store 2001 Reports Bakery Department Growth Increase

Madison, WI -- Although the growth rate for in-store bakery sales has slowed from recent years, it is still increasing as sales hit $12.93 billion in 1999, according the International Dairy*Deli*Bakery Association'sTM (IDDBA) recently released What's In Store 2001 annual trends report. The department's contribution to the supermarket's margin, sales and profits remained steady with its 1998 performance.

Though supermarkets remain the dominate bakery source for consumers, 90% of sales are attributed to the in-store and commercial aisle bakery, the market share is threatened. Why? Because consumers are showing more willingness to forgo the supermarket's convenience when they feel they can get better quality from the "out of the way" independent retailer, such as the neighborhood bakery. These retailers are finding that shoppers are willing to pay for higher quality products.

The labor shortage remains a major concern for both in-store bakeries and independents alike. With fewer skilled bakers and generally fewer "bodies" available for hire, bakeries are using labor saving production methods and equipment to make up for the lack of staff. In-store bakeries are using other options, where possible, with hopes that self-serve display cases, customer-friendly packaging and the outsourcing of product might help them maintain service and merchandising standards with fewer employees.

The more successful in-store bakeries are also progressive merchandisers. Bakery location, packaging and cross-merchandising are some of their keys to putting more product in the cart.

In-store bakery sales rise to $12.93 billion

In-store bakery annual sales increased close to a quarter of a billion dollars in 1999, reaching $12.93 billion for a growth rate of 1.5%. This reflects a much slower trend when compared to the 1998 growth rate of 6.1%, 1997's 5.1%, 6.7% in 1996 and 5.5% in 1995, according to Supermarket Business' 18th Annual Bakery Operations Review. This translates into an in-store bakery weekly sales average of $9,907 compared to 1998's $9,796, 1997's $9,650, 1996's $9,420, and $8,943 in 1995.

Progressive Grocer's Bakery Update 2000 reports a more favorable growth rate in 1999 of 8.3%. This is a considerable leap from 1998's 4.8% and 1997's 4.6% and nearly matches 1996's 8.5% gain. They report total bakery sales in 1999 as $7.60 billion compared to $7.02 billion in 1998, 1997's total of $6.70 billion, and $6.40 billion in 1996. Progressive Grocer's figures don't include self-service sales.

In-store bakery's contribution to store margin, sales and profit holds steady

According to Supermarket Business, the in-store bakery department's contribution to supermarket gross margin in 1999 was 54.5%, up slightly from 52.5% in 1998. This compares to 56.3% in 1997, 52.3% in 1996 and 51.2% in 1995. Progressive Grocer reports average gross margins at 51.5%, down from 1998's 52.5%, 1997's 54.5% and 53.0% in 1996.

Bakeries contributed 3.3% to total store sales in 1999, identical to the 1998 figure, which was up slightly from 3.1% in 1997, 2.9% in 1996 and 1995, and 3.0% in 1994, according to Supermarket Business' 18th Annual Bakery Operations Review. Department contribution to in-store profits came in at 6.1% in 1999, also identical to 1998, and compared to 6.0% in 1997, 5.9% in 1996 and 5.8% in 1995.

Breads and cakes lead bakery department sales

With the Wheat Foods Council expecting the annual per capita consumption of bread to reach 60 pounds in 2000, up from 52 pounds in 1993, bread sales look to remain a major portion of bakery department sales.

White and variety breads and rolls have dominated in-store bakery sales again, accounting for just over $3.96 billion (30.6% of sales), according to Supermarket Business' 18th Annual Bakery Operations Review. White bread and rolls picked up nearly a 5% share of sales over 1998 figures, while variety breads and rolls lost 3%. Custom-decorated cakes, decorated cakes, and layer cakes contributed $4.31 billion in 1999, or 33.3% of sales. Sales of bagels, croissants and muffins increased slightly over 1998 figures, at 7.8% of sales, or $1.01 billion. Cookies lost a significant share of sales, dropping to 4.5% compared to 1998's 7.7%; dollar value was $582 million. Yeast-raised donuts remained steady, representing 7.9% of sales or $1.02 billion. The share of sales from cake donuts decreased from 3.9% in 1998 to 1.5% in 1999, representing $194 million. The share of Danish sales dropped by almost half, from a 3.7% share in 1998 to 1.5% in 1999, to $194 million. Pies had 7.1% market share, $918 million, a decrease of 0.2%. Sweet goods dropped in share to 4.6% in 1999 from last year's 7.6% share, for sales of $595 million.

Bakery sales supported by co-branding

Co-branding trends have boosted sales as seen in their increased popularity among coffee shops, bakeries and independent retail stores in single locations. The American Institute of Baking, Manhattan, KS, found that private-label and specialty confections were key ingredients in rising sales. Private-label goods have the highest growth rate in the entire food industry.

In the supermarket industry, according to the Private Label Manufacturers Association and Information Resources Inc., figures from the year ending January 2, 2000, show that private label refrigerated baked goods had a sales increase of 4.6% over last year and generated almost $16 million. This represented a 28.19% dollar share in this category. Private label frozen baked goods saw an increase of 4.3%, representing sales of over $31 million and a dollar share of 9.65%

More supermarkets boast in-store bakeries

According to Supermarket Business, 1999 offered 25,100 in-store bakeries for customers shopping in supermarkets (82% of supermarkets have in-store bakeries). This reflects an increase of only 90 new or remodeled units compared to 1998's increase of 1,073, a 587-unit increase in 1997, and 300 new units in 1996. In-store bakeries have increased in number by 8.9% in the last five years (from 23,050 in 1995).

Progressive Grocer's Bakery Update 2000, reports that approximately 69% of all supermarkets have service bakeries, the same percentage reported last year. Actual numbers of service bakeries totaled 21,700 in 1999, 21,100 in 1998, 20,900 in 1997, and 20,500 in 1996.

They're bigger too!

There are not only more of them, they've gotten bigger too! Supermarket Business reports the average bakery department in 1999 occupied 1,920 square feet, an increase of 20 square feet since 1998. These numbers compare to 1997's 1,875 and 1996's 1,850 square feet. In contrast, figures tallied by Progressive Grocer show the average service bakery department's size at 1,570, just 10 square feet smaller than 1998's average size. Again, Progressive Grocer's figures do not include self-service bakery.

Supermarket Business also reports that the sales per square foot of the bakery department brought in $5.16 in 1999, a one-cent increase over 1998 and an increase over 1997's $5.14, 1996's $5.09, and 1995's $4.95.

First-in-traffic pattern preferred for bakery

Supermarket Business reports that, in 1999, retailers preferred a first-in-traffic pattern location (75%) for the bakery department (a 1% increase over 1998), followed by last-in-traffic pattern (20%), a 3% decrease from 1998, while 5% preferred "other."

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Roberta Rush IDDBA PO Box 5528 Madison, WI 53705 rrush@iddba.org tel: 608-238-7908 fax: 608-238-6330

Date: 11/14/2000

News

IDDBA NEWS FLASH

IDDBA's What's In Store 2001 Reports Dairy Management Trends

Madison, WI - Processors want retailers to practice category management, according to the International Dairy - Deli - Bakery Association's TM (IDDBA) recently released What's In Store 2001 trends report.

A recent survey by DMI showed that 53% of processors polled indicated that dairy-aisle category management is practiced by less than half of their customers. They further said they'd like to see retailers organizing dairy around consumer-oriented plan-o-grams that take into account menuing or meal occasion; allocate more space for "true" dairy items; and set up secondary locations for select, high-volume products.

"Finding enough refrigerated space to showcase new convenience products is a challenge, and one that's imperative for today's grocer to meet," said John Kramer, president of a co-marketing agency, J. Brown/LMC Group, Stamford, CT. ". . .they're going to have to reallocate space to those products and brands that make the most sense or are driving the most profit," said Brown. "That's part of what the scanner data and frequent shopper data is going to uncover."

About 66% of managers say they have dairy case merchandising input

In a recent DMI survey of 20 supermarket dairy case managers, about two-thirds of respondents say they enjoy some important decision-making when merchandising their refrigerated case. For another

35% of managers, headquarters tells these professionals how dairy products are to be displayed and promoted.

Price feature was the number one way that dairy products are promoted with 90% of managers saying they use this method, about 77% said they use displays and 60% use cross-merchandising with nondairy products. The dairy categories that receive the most promotional support are butter and cheese. Milk was fifth on the list.

As more and more dairy case products need to "skinny up" to make room for more new products like organics, managers worry about where to merchandise it all and say that less shelf space and out-of-stocks are the two biggest concerns in their day to day work. As these decisions are made managers must keep in mind what products bring high true-profit margins.

New study supports dairy/weight loss connection

At the November 1999 annual meeting of the North American Association for the Study of Obesity, study findings from Michael Zemel, Ph.D., found that increased consumption of dairy products was associated with a lower risk of obesity. The study found that fat reduction occurred among all adults, especially women when low-fat dairy foods were eaten each day. Women that ate three servings of low-fat dairy products per day were at the lowest risk of becoming obese. Dr. Zemel found that a diet high in low-fat dairy causes fat cells to make less fat and turns on the body system to breakdown fat, which translates into a significantly lower risk of obesity.

Generic ads more effective for milk than cheese

According to the USDA Annual Report to Congress, the federal dairy promotion programs generic advertising for fluid milk is much more effective in increasing demand than generic cheese advertising.

If the two promotion programs had not been in effect during the 1996-98 period the following would have happened: o Fluid milk consumption would have been 1.8% lower o Cheese consumption would have been 0.3% lower o Total consumption of milk in all dairy products would have been 0.8% lower

** The average all milk price received by dairy farmers would have been 5.1% lower (73 cents per hundredweight)

** Commercial milk marketing by farmers would have been 0.7% lower [52]

The consistent increase in food consumed away from home has had a big impact on increasing per capita cheese demand, the report noted. For fluid milk demand, it's the percentage of population under six years old. After peaking in 1993, the decline in population under six years of age has had a very large negative effect on per capita milk demand.

According to The 1997 Dairy Max Retail Validation Report, if supermarkets use the following steps to reduce out-of-stock (OOS) rates they can boost profits by: o Not filling in holes when stock is completely depleted. o Training labor to monitor dairy inventory o Allotting more time when ordering products to ensure accuracy o Issuing priority stocking for fast-moving items o Alerting management to warehouse and DSD issues.

One success story was Brookshire Grocery, Tyler, TX. They recorded an 18% improvement in the in-stock rate of dairy department items during the busiest shopping time, due in part to leaving shelves temporarily empty. They were better able to do timely, accurate reordering which brought them closer to true category management practices the study concluded.

"There are some district managers who just want the cases to look good," said Pat Rheel, assistant manager of Dairy Max. "They bring over an adjacent product to fill up the hole." As a result, reorders can be delayed. Leaving the space empty "is a way of assuring an out of stock product is reordered," she said.

The study substantiated a direct link between sales and OOS rates. A retailers' sales jumped 2% when the average dairy case OOS rate was reduced by 6%. Likewise, sales in individual product categories rose 5% when their OOS rates were reduced.

The average supermarket shopper finds 8.2% of the store's fastest-moving items OOS. This OOS rate results directly in two-thirds of a retailer's total lost sales over a one-year period, as well as a corresponding 3.1% reduction in the amount consumers spend annually in each store

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