The Golden Arches has announced an increase in dough this quarter, and they're not talkin' about quarter-pounder buns.

Still, it's great news for food ingredient manufacturers and distributors.

In the face of the current recession, McDonald's leavened a 3.5% increase in profits for the first quarter of 2009. According to data published in Reuter's, first-quarter income rose to $979.5 million ($0.87 per share) versus $946.1 million ($0.81 per share) last year.

On top of that (and they're not talkin' ketchup, pickles and onions), the world's largest hamburger chain claims that sales trends this month are proving to be as strong or better.

Despite the increase, share prices haven't changed much, holding steady in the mid-50's.

To further digest how the recession affects the fast food industry, Reuter's also states,

McDonald's and some other fast-food restaurants have benefited as a global economic downturn has sent customers to lower-priced fare, including the company's Dollar Menu items.

Seems like the Dollar Menu was a good call.

Even though the dough increase won't leave you wondering 'where the beef is', sugar, salt, and other ingredients remain in demand by McDonald's.

In response to the current recession, one company is trying something different to "sweeten" sales.

Dr Pepper Snapple Group has decided to increase its marketing budget to a heaping $300 to $400 million, to inspire folks to drink more of their beverages.

Reuters hails this as a brave move since forecasters see "overall U.S. advertising spending dropping by 8 to 10 percent, the steepest decline in more than two decades."

Head of marketing, Jim Trebilcock, says media will include TV, print, and Web campaigns.

The action comes after research firm, Nielsen, produced data from a study done for the company detailing advertising spending patterns from the early 80's, when our economy was in the last economic downturn.

Trebilcock states,

"We wanted to find out what were the brands that were successful in '83 and '84, coming out of the recession? What did they do differently than others during the middle of the recession? Uniformly, the thing that came back is they didn't retrench. They reinvested."

And it seems like sugar is more of a commodity than ever since the company is also investing more in renovating Snapple. Dr Pepper Snapple plans to replace the high fructose corn syrup with sugar, a plan similar to many of the major beverage companies lately (see previous entry regarding sugar and PepsiCo).

With the exchange of HFCS for sugar and a marketing reminder to consumers that the teas are brewed from black and green tea leaves, Dr Pepper Snapple Co aims to reverse sliding sales by marketing to the "all natural" mindset popular with consumers today.

With all this consumer driven reformation in the food and beverage industry, it's only "natural" that a change in sugar supply and price is near.

Soft-drink lovers rejoice!

According to an article published in January about beverage industry plans, Pepsi Bottling Ventures (PBV) will soon begin distributing new versions of soft-drinks Pepsi and Mountain Dew, named Pepsi Throwback and Mountain Dew Throwback, respectively.

The launch is scheduled for this month, April 2009.

Each is formulated with genuine sugar, rather than High Fructose Corn Syrup (HFCS), a member of sugar's sweet extended family.

In addition, the packaging will have stylistic graphics with a retro and holistic appeal. This new "flavor" is marketed at younger consumers and intended for a rebirth of the carbonated beverage.

Paul Finney, senior vice president of sales and marketing, is optimistic.

"We have very high hopes for the new package graphics, promotions and advertising plans. With the solid base of Pepsi consumers here, we believe the changes will create new excitement for the brand and help us get carbonated soft drinks growing again."

PepsiCo. claims the beverages will be closer to their original formulas.

Still, closer does not imply exact.

Maybe this taste difference will be attributed to the sugar source. It's not stated whether PepsiCo. will be formulating with sugarcane or sugar beet and what affect this will have on taste.

Either way, marketers at PepsiCo. are very excited about what these changes may hold in store for the brand.

Soon, Americans will have the an "old school" soft drink to go with their 80's music playlists.

Need a dash of salt?

Dow Chemical Co. plans to sell the stock of Morton International Inc. to German chemical company, K+S Aktiengesellschaft, one of the world's leading suppliers of salt products and plant care chemicals. Historically, Morton is North America's largest salt producer. Sales topped $1.2 billion in 2008.

The announcement about Dow's salt sale, came immediately after the completion of Dow's acquisition of chemical maker, Rohm and Haas, purchased just days ago for $16.5 billion. The deal positioned Dow as an advanced material and specialty chemical giant.

According to Dow Chairman and CEO, Andrew N. Liveris, "We are pleased that we reached an agreement with K+S at an attractive value in such a short period of time."

The sale situates Dow for success with its de-leveraging plan to reduce bridge loan debt of $13 billion from the Rohm and Haas purchase, to about $7.5 billion. It's expected to finalize in the middle of this year at an anticipated price of $1.68 billion.

Liveris also states,

"This sale puts us ahead of schedule on our de-leveraging plan post the close of the Rohm and Haas acquisition. It is the first of many steps designed to deliver on our clear and measurable plan to build value for our shareholders."

Additional actions taken by Dow since January 2009 include:

• renegotiating the bridge loan terms
• reducing dividends
• negotiating favorable terms of the Rohn and Haas transaction

How might this affect salt sales in the US?

Here's a savory thought... as with most acquisitions, prices are likely to change in a pinch. Even pennies on the pound can add up. It may be wise to stock up until the "salt" settles.

Great news for snack manufacturers and snackers everywhere.

Tate & Lyle has just "thickened" its starch portfolio with their latest starch product, X-Pand'R SC.

According to an article from Bakeryandsnacks.com,

"The X-Pand'R SC starch is the second to boast a clean label in the company's X-Pand'R range of starches as the company looks to follow the trend for natural foods."

X-Pand'R SC is yet another example of what T&L does particularly well, produce the finest quality products while answering the demands of consumer needs... and at present, people are asking for more "natural" food snacks.

The first starch in the X-Pand'R series, X-Pand'R 612, affords a "crispy, crackly texture, and firmer bite," explains Ryan Schuering, Tate & Lyle Product Manager.

X-Pand'R SC starch was developed to maintain the crispy, but bestow crunchiness, too.

Other claims include:

• lack of artificial additives, which clearly addresses clean label ingredient demands
• mouthfeel of fried food, minus the calories accompanying fats and oils
• non-sticky property, which enables faster manufacturing of sheeted snacks

So if you're in the business of delivering natural snacks with crunchy goodness, or just eating them, another product is at your fingertips.

Change of plans for farmers for the upcoming growing season.

According to an article in WSJ, soaring fertilizer and seed costs, and sluggish demand for crops are forcing farmers to idle millions of farm acres this spring.

This will reduce much of the nation's major crops including the biggies like corn, wheat and cotton.

Preliminary data released by the USDA from a March 2009 Survey, reveals the planting forecast as follows:

Planting Forecast 2009 (v. 2008)
Crop	Acreage (in Millions)	Change from 2008
Wheat	58.6	down 7%
Corn	85.0	down 1%
Cotton	8.81	down 7%
Soybean	76.0	up 0.4%

As you can see, the planting area for wheat, corn and cotton crops have been reduced considerably, with wheat and cotton being cut the most.

Also, not taken into consideration at this point, are the adverse effects of inclement weather.

This means exactly what you think for crop futures prices. Trading has already been impacted with bushel prices jumping almost $0.50 in some instances. The USDA predicts food inflation of 3-4% this year (although still down from 5.5% last year).

And, what's in store for consumers?

Higher prices on the nation's major food brands from meat and produce to packaged foods and beverages. The effects are simple... If corn is more expensive, starch prices and all related products and services are bound to change.

As the growing season approaches, more accurate details will be revealed. The USDA plans to survey farmers again in June regarding actual plantings.