'Guess it's true that, "Nobody doesn't like Sara Lee!"

Apparently, the North American Foodservice division of Sara Lee holds the No. 1 spot in the frozen bakery and liquid coffee categories in the foodservice industry and Sara Lee plans on keeping it that way.

According to a recent update, Sara Lee Corporation intends to zero in on international beverage activities and on sales in North America. Sound familiar (...recall Pepsi Co. and Dr Pepper Snapple Group)?

Developing markets in India, Russia and Brazil are also attractive prospects for the brand (think sugar sales and consumption).

In addition, Hillshire Farm (who doesn't love Lit'l Smokies?), Jimmy Dean (the No. 1 breakfast sausage in the US) and Ball Park (the No. 1 hotdog in the US), subsidiaries of Sara Lee, are also presenting opportunities for growth.

The company has also embarked on a business plan for cost-savings, called "Project Accelerate," which aims to furnish greater than $250 million a year by 2011.

Changes will likely be made in the following areas to move with the times and consequently, mimic the times:

• SG&A reduction (Selling, General and Administrative Expenses)
• supply chain optimization (process of getting product to consumer)
• LEAN initiatives (to improve manufacturing efficiency)
• business process outsourcing (need we say more)

Seems like the No. 1 will be "cutting the fat," and they don't mean out of their beloved cheesecakes.

Is it possible that these changes may point to more outsourcing of manufacturing to Asia, accompanied by the loss of more American jobs?

Nevertheless, Branda C. Barnes, CEO of Sara Lee, feels that, "these strategies will deliver shareholder value."

Barnes further supports the company's position by highlighting Sara Lee's gain in net sales and operating income as it grows in the current economy, clearly good news for food distributors nationwide.

With such up-to-the-minute business strategies, Sara Lee is positioning themselves to deal with the many challenges--and opportunities--in the food industry, including fluctuations in pricing and the availability of raw materials and food ingredients.

And, with such a diverse brand portfolio and a presence in about 200 countries worldwide, it's no wonder Sara Lee continues to grow.

We've seen it in the fashion industry, the IT field, and the pharmaceutical industry, and now we are seeing it in the food industry.

With so many US and European companies relocating manufacturing plants to Asia these days, the following information may not be that surprising.

British sugar and sweetener company, Tate & Lyle, announced today that they will be closing the sucralose (a.k.a Splenda) facility located in McIntosh, Alabama, to produce sucralose only in Singapore.

Based on some recent scientific advancements, the facility in Singapore will be able to manufacture the product more efficiently, with a 25% increase in yields, meeting global product demands in a timely fashion at reduced costs.

Tate & Lyle CEO, Iain Ferguson, told reporters,

"This has had the effect of significantly increasing our production capacity to the extent that, for the moment, we can now meet demand from just one of our two plants."

The Alabama facility will retain a small number of employees and be able to restart production of sucralose within a few months if necessary. Still, the move will result in the loss of 50 US jobs.

The decision also comes after analysis of the global economic climate and demand for Tate & Lyle's products like sucralose, starches and ethanol.

According to an update in Rueters, Tate & Lyle has issued two profit warnings this year and the stock has lost over 36% of it's value over the last year.

The company feels that it's difficult to predict the outlook for 2010 in the face of the prevailing economy, so they've acted to ensure future success. Quick cost savings are anticipated as a result of the facility closure.

"We have recognised an exceptional charge of £97 million in the 2009 financial year reflecting the impairment of the carrying value of our McIntosh plant.

"Anticipated cash costs of £60 million associated with this decision will be paid over three years and recognised as an exceptional charge in the year ending 31 March 2010.

"These cash costs are expected to have a three year payback resulting from the reduced operating costs of having a single plant", CEO Ferguson added.

In addition, an international ruling last month now permits other countries, like China, to manufacture and market low-cost imitations of sucralose sweeteners.

Let's hope for T&L's sake that these less expensive alternatives to sucralose sweeteners are also "cheaper" in taste and quality.

The USDA just announced that they'll be changing domestic sugar allotments for 2009. Import quotas will remain the same.

The original values, established by the USDA, anticipated that domestic producers could market their total 2008 crop, but the agency also felt that additional sugar supplies would be needed to satisfy domestic need in 2009. The upshot was establishing corresponding import quotas.

After additional analysis of the market, the USDA has readjusted the values and states,

"This reassignment will substantially increase the available supplies of domestically produced refined beet sugar... Before the reassignment, the marketing allotment program was preventing several domestic beet processors from marketing all of their beet sugar production."

By shifting allocations, processors with greater supply will be able to distribute sugar and better market their beet sugar production, making up for processors who can not fulfill their allotments.

The reallocation however, doesn't change the overall beet sugar allotment of 8,925,000 tons deemed necessary for domestic consumption in September of 2008.

The current numbers are as follows:

	Original Allotment (tons)	Revised Allotment (tons)	Allotment Reduction (tons)
Beet Sugar	4,850,738	4,652,665	198,073
Cane Sugar	4,074,262	3,512,752	561,510

If you do the math, there's deficit of 759,583 tons. As required by law, this sugar will be provided by imports.

"The surplus allotments were allocated to imports that were already expected under the latest World Agricultural Supply and Demand Estimates (May 12) report; thus, there will be no increase in projected raw sugar imports due to the reassignment,"

the USDA said.

In addition, adjustments are continuously made throughout the year to accommodate changes in the market and ensure enough of the commodity is available for domestic consumption... so future reassignment are foreseeable.

Seems like this action is sure to help shelter US companies from the current supply and demand issues surrounding global sugar consumption (see previous posting) and buffer sugar prices so that the food industry can continue to purchase sugar at fair rates.

As part of an Everglades restoration project, the South Florida Water Management District (SFWMD) plans to acquire 72,500 acres of land from U.S. Sugar to reestablish the natural flow of water in the Florida Everglades.

For decades, much of the land has been farmed for citrus and sugar crops by U.S. Sugar, the largest producer of sugar cane and refined cane sugar in the nation.

U.S. Sugar produces roughly 10% of the total domestic sugar supply. It's also one of Florida's major orange and orange products producers.

To the delight of environmentalists, who charge sugar growers with depriving the land of water and polluting it with fertilizers, U.S. Sugar is eager to move forward with the acquisition. [See a map of the sugar crop land in the Everglades.]

The effort will generate revenue for restoration and both boards have agreed on terms.

Senior vice-president of public affairs at U.S. Sugar, Robert Coker, said in a statement,

"Our board approved the revised acquisition approach implementing [Florida] Governor Crist's bold vision for our property... While the vision and goal remain unchanged, the economy dictated this more affordable approach."

Under the original terms from June 2008, nearly all of the land was to be purchased for $1.75 billion.

Under new terms just agreed upon, U.S. Sugar will retain the facilities and only the land will be sold.

The cost: $1.34 billion.

Some of the terms of the sugar crop land negotiation include:

• SFWMD will acquire the first 72,500 acres for ~$536 million with a 10-year option for the remaining 107,500 acres.


• U.S. Sugar will continue to farm the property through a 7 year lease that has the the option to be extended.


• U.S. Sugar will lease back the sugar cane land for $150 per gross acre (3x the original lease amount) for the initial 7 year period.

According to SFWMD executive director Carol Ann Wehle,

"The lease would generate $40 million in revenue... This strategy allows us to take hold of an unprecedented opportunity for restoring America's Everglades with a fiscally responsible hand."

The deal also ensures that U.S. Sugar can farm for another decade and develop plans for the future of the sugar industry in the US.

"The New York Sugar Dinner is one of the most prestigious, social and business events in the world sugar calendar. It brings together players from the most relevant areas of the business - beet and cane growers, processors, refiners, brokers and traders from all continents."

And... this sweet gala took place in the Big Apple last week.

According to dealers that attended, the mood this year for the sugar commodity is bullish, a direct result of the global credit situation and supply and demand issues.

Sugar mills in Brazil, the world's top producer and exporter of sugar, are experiencing financial difficulties... a consequence of the global credit situation.

The result: price increases for sugar.

Supply and demand issue discussions focused around India, the world's largest sugar consumer and major producer.

Apparently this past year, India's consumption increased to 23 million tons after yielding a crop of only 15 million tons, clearly not enough for domestic demand. The previous year's crop was nearly double with 26.5 million tons.

This changed India from exporter to importer, draining global supply and hence, driving up sugar prices.

Also, the International Sugar Organization (ISO) escalated their prediction of the 2008/09 global sugar deficit to 7.5-7.8 million tons this week. The estimate is up from a prior calculation of a 4.3 million ton deficiency.

In addition, sugar futures hit a near-three year high of 16.03 cents per pound on Tuesday.

Sterling Smith, senior analyst for brokers FuturesOne in Chicago, said,

"there may be a pull-back in raw sugar prices to 14.75-14.25 cents per lb. as the market retreats from its peak, but that the sweetener could regroup and march toward 15 and possibly 16 cents per lb in coming months."

Jonathan Kingsman, dinner attendee and manager of Kingsman SA, told Reuters,

"Price is the best fertiliser... These high prices for sugar are giving extremely high returns for producers around the world and they will be looking to expand."

Perhaps this increased revenue will enable growers to expand their crops and prevent a major price increase in the upcoming season. It will be interesting to see how the supply and demand relationship levels out in the future.

In the meantime, it seems like a good idea to stock up on sugar, as this commodity is likely to become pricier.

New data was released about the dietary benefits of fructose. Contrary to other studies, this compelling research labels fructose as a favorable component of the diet.

Fructose, a low glycemic index sugar, occurs naturally in fruits, vegetables and honey. It is often mistaken for high fructose corn syrup, which contains fructose and sucrose (table sugar) in nearly equal proportions.

PRWEB summarized details of a 2008 report by biochemists, Geoffrey Livesey and Richard Taylor, on fructose consumption with the following quote,

"moderate fructose consumption (50 grams or less per day) had no negative effect on the body and may even be beneficial. High doses of pure fructose (100 grams/day or less) had no effect on body weight."

Another recent analysis communicated by Dr. Bernadette Marriott, Senior Scientist for Abt Associates, detailed that,

"average fructose consumption across all age groups is approximately 49 grams per day, which is well below the 100 gram threshold found by Livesey and Taylor and at a level they report may provide benefits."

Lastly, in the New England Journal of Medicine, scientists conclude that weight management stems more from calorie consumption than calorie source. A trend dating from 1977-2004 shows an 18 percent increase in overall calories in the US.

From this data, they evaluate that since fructose imparts such sweetness to foods compared to other sweet sources, less is needed, resulting in calorie savings.

So to summarize what we can savor from these studies, some benefits of fructose include:

• low glycemic index
• not associated with surges and dips in blood glucose levels
• may be beneficial in weight control

Thus, fructose (consumed in moderation) is "unchained" from the stigma as a main culprit of weight gain and metabolic disease.

It will be interesting to see how these and subsequent reports affect marketing and sales. Considering the controversy around carbohydrates these days, getting some "sugar" for fructose is pretty sweet.

In an effort to decrease the incidences of heart disease and stroke in the US, public health agencies are requesting voluntary compliance with the reduction of salt content in restaurant and processed foods.

In typical NYC trendsetting fashion, the campaign is being championed by NYC Mayor Michael Bloomberg and NYC Health Department Officials. This massive collaboration with public health agencies, health organizations and food industry leaders has been in the works since 2005.

The initiative aims at cutting salt intake by "at least 20 percent over five years" and is modeled from a plan currently being carried out in Britain. Other countries on board with their own programs include Ireland, France, Australia, New Zealand, and Finland.

According to an article concerning the salt initiative,

"The prospect of government intervention bothers some, and some critics note that not everyone is sensitive to salt."

Still, others feel that this intervention is the responsibility of public health agencies.

Regardless, when the public speaks, big business listens.

Many food manufacturers have agreed and are voluntarily working on strategies to accommodate the change in product formulations. Campbell's Soup, for example, already plans to offer more than 90 lower sodium soups by fall of this year, including their famous tomato soup.

So don't take this with a grain of salt... we've already seen the reformation with trans-fats.

It may be wise to start evaluating how this salt measure may affect business, especially if salt is a major player in your manufacturing or distributing company.