Big Turkey Goes Wild

Dan Mitchell — Mon, 23 Nov 2009 19:05:27 +0000

Slate has republished an interesting "Explainer" from last year detailing how producers of turkey deal with an unusual market: where nearly one-fifth of their product is sold to be consumed on just one day. Big Turkey, which includes Butterball, Cargill, Hormel (HRL), and Sara Lee (SLE), plans for the season by freezing birds (relatively easy) or, to meet the demand for fresh birds (not so easy), by planning more than a year in advance for Thanksgiving and buying eggs for breeder birds from the two top suppliers, Hybrid and Nicholas.

Obviously, a fair amount of guesswork is involved. This year, that guesswork might have been slightly off, as the industry is beset with a surplus. Northwest Arkansas Newspapers reports that turkey prices are down by 18 percent to 20 percent. This is true despite production cutbacks of about 9 percent.

Meanwhile, Reuters reports that the overall cost of a Thanksgiving dinner is down about 4 percent this year. Much of that is thanks to the ongoing plunge in dairy prices, with milk down from last year by 92 cents a gallon, to $2.86. Reuters puts the average price of a 16-pound turkey at $18.65, or 48 cents less than last year.

Why Restaurant Owners Are Exploding

Dan Mitchell — Fri, 20 Nov 2009 19:19:29 +0000

Restaurateurs are going through hard times. So hard that some of them are starting to lash out, either at their customers or at their own employees.

In Bethlehem, Pa., two college students received what they said was terrible service at the Lehigh Pub. That establishment, like many others, tacks on an 18 percent "gratuity" to every bill for large parties—in this case, six or more. The two students, who were with four friends, refused to pay the tip, and were arrested.

As Larry David hilariously pointed out in a recent episode of Curb Your Enthusiasm, such gratuities are gratuitous. They shouldn't exist, and waiters should be tipped according to the level of service they provide, no matter how large the party. That, after all, is the operant idea behind tipping.

From what the college students—Leslie Pope and John Wagner—said about their experience at the Lehigh Pub, the waiter deserved nothing. They had to fetch their own silverware and napkins while their waiter was out smoking. They had to ask the bartender for soda refills. They waited more than an hour for their meals.

The bill, sans the "tip" of $16.35, came to $73.87. The Lehigh Pub took the money but then called the cops, who arrested the two for theft of service.

"Gratuity is thanking you for your service," Pope told the Lehigh Valley Express-Times. "You can’t give us terrible, terrible service and expect a tip."

According to the NBC affiliate in Pennsylvania, the restaurant offered to comp the meal itself, but the couple refused, apparently on principle. Dan Jaffe of the DUI Attorney blog wrote: "On what planet does the logic of offering a $73 dollar comp, which was declined, justify going after the couple for paying the $73, but then refusing to pay the 'required' $16 tip?"

Since news of the arrest broke a few days ago, people poured onto the Lehigh Pub's Yelp page to give bad reviews. As of this writing, there are 381 reviews with an aggregate rating of one star. The overwhelming majority of those came since the arrest, but earlier ones, written by people who had actually dined there, rated the place anywhere between terrible and mediocre.

The couple have pending court dates.

In terms of sheer rage, however, no restaurateur beats Vadim Ponorvsky, owner of Paradou in New York's meatpacking district.

Gawker got ahold of an e-mail Ponorvsky sent to his employees, berating them with abusive language and threats for not collecting enough e-mail addresses from diners. Presumably, he wants to spam his clientele, which just makes the whole thing that much more insane. (Who wants their waiter asking for their e-mail address?)

The language in Ponorovsky's lunatic rant is probably too blue for my editors to accept, or else I would paste in some of the e-mail here. But check out the Gawker post and feel the rage. It's really quite something.

Publix Creepily Videotapes Demonstrators' Kids

Dan Mitchell — Thu, 19 Nov 2009 17:00:11 +0000

Barry Estabrook, who wrote the "Politics of the Plate" column before genius magazine consultants persuaded Condé Nast to pull the plug on Gourmet last month, has launched a blog called … Politics of the Plate.

At Gourmet, Estabrook "gently but tenaciously informed pleasure-seeking readers about issues like the brutal economics of dairy farming and the ecological consequences of mindless fish-eating," writes Tom Philpott at Grist.org.

It looks like Estabrook will be doing the same thing on his blog.

For instance, his latest post is a chilling account of Publix Super Markets in Florida videotaping the children of members of the Coalition of Immokalee Workers who were demonstrating in front of Publix stores. The coaltion is fighting horrible conditions for tomato pickers in Florida, including, in some cases, de facto slavery.

Publix operates more than 1,000 supermarkets in the Southeast. The coalition has managed to get many large food retailers and restaurant chains to join its Campaign for Fair Food, including McDonald's (MCD), Burger King (BKC), and Whole Foods Market (WFMI).

But not Publix. The campaign's members agree to buy tomatoes only from growers that have given pickers 1 cent more per pound than they had been earning and that don't engage in human trafficking (slavery).

Maria Brous, the head of media relations for Publix, told Estabrook that the company has "a long-standing policy of not intervening in labor disputes."

She also admitted that the company had videotaped the children of demonstrators. "I think it's unfair to claim that we did anything inappropriate," she said. "The children were there as part of the event."

Creepy.

Can Anyone Swallow Cadbury Debt?

Dan Mitchell — Wed, 18 Nov 2009 18:54:54 +0000

Bloomberg News reports that Hershey and Italy's Ferrero are both "evaluating their options" for whether and how much to bid for Cadbury, the British confectioner for which Kraft Foods has made a hostile bid.

This is all happening "amid skepticism the companies will be able to outbid Kraft," according to Bloomberg. The Wall Street Journal, meanwhile, reported late yesterday that Hershey and Ferrero have been talking for weeks about making a possible joint bid to best Kraft's $17 billion offer.

That idea is also drawing skepticism.

The issue for all the circling companies—and this includes Kraft—is financing. Hershey is controlled by a charitable trust that owns 31 percent of the company, but 80 percent of its voting shares. Some analysts say that the trust would have to relinquish control and create a single class of stock in order to make a bid. That seems like a remote possibility, but Hershey, which for now is the manufacturer and distributor of Cadbury products in the United States, does not want to see Cadbury in the hands of a giant U.S. rival.

Ferrero is privately held, and so is freer to make strategic decisions. It likely could land the financing, but the debt load would be enormous and there are reports of dissent within the family over whether to go forward.

Kraft would not have trouble putting financing together, but Moody's Investors Service has issued a note warning that while the company's size and healthy cash flows would make it able to "tolerate higher leverage than most of its peers," there nevertheless are "limits."

Buying Cadbury could cause a one-notch drop in Kraft's bond rating, Moody's said. That's not bad, but it would hamper the company's ability to make further acquisitions. And in the event of a bidding war for Cadbury, Kraft could see its rating decline further.

Kraft is still swallowing Groupe Danone's cookie business, which it bought two years ago in a debt-financed, $7.8 billion deal.

If Hershey and Ferrero—the maker of Nutella spread and Kinder chocolates—were to team up for Cadbury, a major motivation would be to save on input costs. One analyst quoted by Bloomberg went so far as to say that the companies "would gain good control of the cocoa market."

Why Cadbury is Like California

Dan Mitchell — Tue, 17 Nov 2009 18:26:04 +0000

According to the Italian business newspaper Il Sole 24, Ferrero, the family-owned maker of Nutella spread and Kinder chocolates, might try to buy Cadbury (CBY) out from under Kraft Foods (KFT), which has mounted a hostile bid for the British confectioner.

So far, Ferrero's not talking, according to the New York Times' DealBook blog, which had someone who speaks Italian read the article, which states that the family is divided over making an offer for Cadbury.

Before this latest news came to light, DealBook published a column by Andrew Ross Sorkin, the Times' mergers-and-acquisitions reporter, arguing that Kraft's hostile bid "is an example of how shareholder democracy can go wrong."

British takeover laws basically bar Cadbury's board from taking action to hinder Kraft's bid. In the meantime, big chunks of Cadbury shares have been snapped up by hedge funds, whose main interest lies in seeing the company sold soon and taking a quick profit, Sorkin says.

The Cadbury board can't take a poison pill, can't stagger board members' terms, can't change the date for a shareholder vote, or do much of anything else that American boards do to try to block hostile bids. "In other words," Sorkin writes, "England is as close as any country gets to a true shareholder democracy. Any bid gets put to a vote, and all the board can do is offer an opinion.

Sorkin says that, as a result, most of the takeover experts he's talked to call the deal "a fait accompli."

The British system has its merits, as several of Sorkin's sources tell him. But it has downsides—in this case, the fact that "short-term shareholders" (the hedgies) "can end up determining the long-term fate of the company."

Sorkin isn't weighing in here on whether the deal would be good or bad for Kraft, only on whether such direct democracy is a good way to make long-term strategic decisions.

One might draw a parallel with the state of California and its love of voter initiatives, which give an impulsive, impassioned, self-interested citizenry so much power over such things as taxes and marriage rights—often to the detriment of the state's long-term health.

Presented By:

Tue, 17 Nov 2009 18:26:04 +0000

Big Food Woos Mommy Bloggers

Dan Mitchell — Mon, 16 Nov 2009 20:05:04 +0000

Food companies like Nestle (NESN) and Pepsico's (PEP) Frito-Lay are wooing "mommy bloggers" (and some daddy bloggers) with lavish trips, meetings with third-tier celebrities, and assorted swag. Some parent bloggers (especially the ones who are offered—and take—the freebies) think it's just fine and of course they're not swayed by the practice. Others are appalled.

The Los Angeles Times reports that Frito-Lay flew blogger Andrea Deckard of the Mommy Snacks blog from Ohio to Los Angeles to meet model Brooke Burke and Mel B. of the Spice Girls. There she was pitched on the company's snack ad campaign. Deckard and 16 other bloggers were also treated by Nestle to a trip to Hollywood where they were feted and also brought up to date on that company's snack products.

"In return," the Times reports, "Deckard and her virtual sisterhood filed Twitter posts raving about Nestle's canned pumpkin, Wonka candy and Juicy Juice drinks."

"People have accused us of being corporate shills," Deckard told the Times, which reports that she's been on several such trips. But "it's not like I sold my soul for a chocolate bar."

Nope. She sold it for lots of free trips and other goodies, such as the Omaha steaks that Nestle was nice enough to send to her family while she was being whisked off to Hollywood.

"Some companies are even offering free kitchen appliances, vacations, groceries and enough fruity snacks to feed a neighborhood's worth of kids," according to the Times.

This situation is nothing new, of course (though that doesn't mean that all readers know all about the practice and treat what they read with appropriate skepticism.) But some bloggers told the Times that food companies have recently gone wild bestowing freebies. Among the other companies doing it recently: Starbucks (SBUX), Yum Brands-owned Taco Bell, and Kraft Foods (KFT).

Often, it isn't what the bloggers write about that's a problem. It's what they don't write about. Mommies and daddies shouldn't expect Deckard to warn them off of making any unwise purchases. In her blog's disclaimer, she promises to provide "honest opinions on anything and everything I write about." But she adds that "you will not likely see a review or product spotlight that is negative. I don’t have time to write about the many positive topics or products in life, so spending a lot of time writing about something I don’t like is highly unlikely." She also bluntly refers to the freebies she gets from food companies as "compensation."

Likewise, Christine Young of the blog From Dates to Diapers "has a closet full of free baby products she never liked," the Times reports. "She hasn't mentioned them in her blog."

She says: "My business is not to bash companies. My business is to create buzz for the products and services we enjoy."

In a post revealing that some bloggers don't quite understand the objections people raise to this kind of stuff, Young gave space to her husband, Ray, to lash out at the Times article and the criticism it has brought. "Do you think Tiger Woods’ endorsement of Nike or Buick diminishes his name or their brands because he’s paid millions of dollars to pitch them?" he asks.

Well, no, Ray. Because Tiger Woods is a golfer, not a blogger who purportedly gives parents sound, independent advice on what to buy. His golf game is not diminished or compromised at all by his endorsements. And his golfing isn't subject to a test of its credibility. Your wife's "advice," on the other hand, is bought and paid for—and so, is compromised.

Starbucks' Via Boils Over

Dan Mitchell — Fri, 13 Nov 2009 19:16:33 +0000

Are baristas and customers growing annoyed by Starbucks' (SBUX) "hard-sell" tactics for Via, the new instant-coffee product?

Some are, according to BusinessWeek. "This is the most stressful promotion I have ever experienced, and I've been with the company for seven years," a barista wrote on starbucksgossip.com. And a customer wrote: "Please no more high-pressure Via sales pitches. It's annoying ... it's completely out of line with Starbucks' vibe."

Others are posting similar complaints on the company's own mystarbucksidea.com. One customer wrote: "DON'T try the used car salesmen approach on us drip coffee drinkers to order Via when there's a perfectly good pot of brewed coffee sitting behind the barista."

As BusinessWeek notes, Via is too new to gauge its success. But if the company is in fact hard-selling to the point of annoying both customers and employees, it could be a signal of desperation.

On the other hand, nobody goes online to note how not-annoyed they were during their latest visit to Starbucks.

Have you noticed baristas taking a Glengarry approach to selling Via? Let us know in the comments.

Here Comes the Long-Lasting Apple

Dan Mitchell — Thu, 12 Nov 2009 17:48:22 +0000

Scientists in Australia say they've developed an apple that can stay fresh at room temperature and, if refrigerated, can last for months.

The apple for now is called RS103-130, but I think it's safe to assume they'll come up with a catchier name for it. The fruit's developers (that sounds weird, doesn't it?) say taste tests indicate that it is "the world's best apple."

We shall see. But in the meantime, long-lasting apples sound like a good idea. So it's unclear why whomever tweets for the Atlantic's Food Channel called it the "Unnecessary food innovation of the day … Shudder." Unless it's just a reaction against "frankenfoods."

The Low-Cow Burger Boom

Dan Mitchell — Wed, 11 Nov 2009 20:42:51 +0000

When there's a recall of ground beef, people change their habits. But many of them don't stop eating burgers—they just take their business to smaller, more local producers. That is, if you believe that the anecdotal evidence collected by Laura Vozella of the Baltimore Sun represents an overall trend.

Vozella flatly says that whether "driven by illusion or good sense, demand is growing for nonindustrial burgers."

She offers little to back up that assertion, but there's no question that at least some people are determined enough to eat burgers that they'll switch to smaller operations when they're frightened by a recall of industrial beef. One farm store in Frederick County, Md., told Vozella that after the latest recall of industrially produced, E. coli-tainted ground beef, sales leaped more than four times the average.

The reason: Many people believe that because packages of industrial ground beef each contain the meat of hundreds or thousands of cows, it is more likely to be tainted than beef from small, local producers, which generally use the beef of just one cow per package.

Besides farm stores, some consumers (and restaurateurs) buy from butchers and gourmet shops that grind their own beef, or else they grind it themselves.

Of course, meat can also become tainted in a small shop or at home. But critics of industrial meat say that long supply chains, the blending of beef from different cows from different countries, the speed of production, and the horrid conditions at animal feedlots make it much more dangerous in general.

The meat industry, of course, denies that its products are less safe. Janet Riley of the American Meat Institute told the Sun that she didn't "quite understand the logic" behind the assertion that blending more cows into single lots of beef increases the possibility any given lot would be tainted. But she didn't say what was illogical about it. If you have three cows -- from anywhere --and then add three more, the possibility that one of them will be diseased goes up. That's simple logic. It's possible that other variables, such as safety procedures, might lower the chances of tainted beef hitting the market, but the logic still holds up.

She also noted that large beef processors have on-site inspectors. Which is true (and we see where it has gotten us), but in a way, it belies her underlying point. Big beef producers have on-site inspectors because they need them. Tiny farm operations don't. [Update, Nov. 12: In the comments below, Bob Waldrop of the Oklahoma Food Cooperative says that small operations do indeed have on-site inspectors. I don't know the details of this, or how the inspection procedures compare to those employed at large processing plants, but I will try to find out, and report back.]

None of which is to say that Big Beef is all bad. Industrial beef is generally cheaper, it feeds a lot of people, and it employs many thousands. But producers need to be monitored better and held to account when they make people sick. And when their spokespeople make disingenuous statements regarding the industry's smaller competitors, they need to be called out.

Diners Still Demanding Cheap Eats

Dan Mitchell — Wed, 11 Nov 2009 19:20:39 +0000

A new study by the financial consultancy AlixPartner doesn't bode well for the beleagured restaurant industry. Diners are still seeking bargains. And even if traffic goes up, spending won't. Not anytime soon.

As reported by Nancy Luna, the Orange County Register's Fast Food Maven, consumers plan to spend an average of just $11.49 per restaurant meal over the next year. That's 20 percent below what consumers were planning just last March, when we were already mired in a deep recession.

When diners do decide to eat out, they go for the deep discounts being offered by desperate restauranteurs. And they'll sacrifice quality for value. Thanks to the long recession, consumers have "have recalibrated their spending expectations based on the now-ubiquitous $5 sandwich and the $10 meal," said Adam Werner of AlixPartner.

And, he added, "restaurants that aren’t marching in the promotions parade risk being left behind."

Are you listening, Andy Puzder, CEO of CKE Restaurants? No, I didn't think so.

Thanks in part to promotions and discounts, traffic is up fairly substantially (except on the high end, where it is way down). The number of people who dined out at least once a week over the past year is up 11 percent, according to the study. But diners are walking in with tight fists—same-store sales are generally flat or declining. And total spending will fall by 3 percent over the next year, AlixPartners forecasts.

Kraft Goes Hostile for Cadbury

Dan Mitchell — Mon, 09 Nov 2009 15:21:02 +0000

Kraft Foods (KFT) has gone hostile in its bid for the British confectioner Cadbury (CBY), sticking to the original bid of $16 billion it made in September.

While some analysts think Kraft might still bump up its bid somewhat, it is unlikely to go high enough to satisfy Cadbury's management, which has clumsily reacted to the bid since it was proffered.

One disappointed holder of Cadbury shares, fund manager William Hobbs of Barclays Wealth, told Bloomberg News this morning that anything less than about $26 billion "is still a pretty chunky discount to what we could get."

Except that nobody other than Kraft has expressed an interest in Cadbury so far, and there are few potential competing bidders out there. What Cadbury holders "could get" might be not much more than Kraft is offering right now.

Acquiring Cadbury would make Kraft the world's biggest candy maker, larger than Mars.

Cadbury management swiftly rejected today's hostile move, noting that Kraft's offer has actually dropped in value as its stock has fallen since the initial bid. That sets the stage for "what could be a lengthy tussle for control of the British confectioner," as the Wall Street Journal put it.

Cadbury Chairman Roger Carr said his company's board "emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all."

Whether the deal goes through now might depend on "hedge-fund investors who have piled into Cadbury shares during the past two months," the Journal notes. "Such investors tend to have a shorter investment horizon and may be willing to sell out for a quick and relatively small profit."

The offer puts a 26 percent premium on Cadbury, based on its market price on Sept. 4, the day before the initial bid was made.

The Doughnut That Dare Not Speak Its Name

Dan Mitchell — Fri, 06 Nov 2009 18:23:59 +0000

It's a bad sign when the product you're selling is so awful that you can't bring yourself to name it.

Chicago Tribune reporter Monica Eng asked Kimberly Schwabenbauer, dietitian and marketing manager of Super Bakery, about the doughnuts her company sells to the Chicago Public Schools for its breakfast program. Schwabenbauer "made it clear that she doesn't like to use the d-word when referring to her company's product: a round, sweet, cakey pastry with a hole in the middle."

When she absolutely had to say 'doughnut,'" Eng wrote, "she prefaced it with 'quote unquote.' "

Now, quote-unquote doughnuts are not in themselves awful. In fact, at their best, they are wonderful things, though they should be consumed with extreme discretion. These particular quote-unquote doughnuts, though, are being sold as a breakfast staple to public-school students in Chicago. Parents, however, might not know about the centrality of doughnuts to their kids' most important meal of the day. School menus identify them by their brand name, MVP Breakfast.

"City school officials did not respond to questions about why they use such an unrecognizable term on the menu," Eng wrote in her examination of the sugary meals served in the CPS's meal program, which by her account seems to be woefully mismanaged, and not only because of the "nutritionally fortified" doughnuts. Also on the menu (and always available): Pop-Tarts, syrup-drenched waffles, and sugary cereals like Froot Loops.

Until this year, Super Bakery wasn't so frightened of calling a doughnut a doughnut. Before it became MVP Breakfast, the product was called Super Donut.

More States Raise Beer's Strength

Dan Mitchell — Fri, 06 Nov 2009 16:46:35 +0000

State laws boosting the maximum allowance of alcohol in beer are becoming a trend. Alabama and West Virginia have raised the cap to 13.9 percent from 6 percent, according to USA Today. Mississippi and Iowa are considering similar measures.

It's not totally clear what's behind the trend, but it seems to have particular momentum in the Southern states.

The average alcohol content of beer is 4.65 percent. A 14 percent level is nowhere near the 40 percent that is typical of many types of hard liquor. On the other hand, imagine filling up a pint glass with Jack Daniels and chugging it down. (OK, some of us don't have to imagine it.) Wine contains an average 11.45 percent alcohol.

There are plenty of critics of the trend, of course. David Rosenbloom, president of the National Center on Addiction and Substance Abuse told USA Today that the higher the alcohol volume, "the faster you get drunk and the longer you stay drunk."

Which is true, all other things being equal. But are all other things equal? The big brewers probably won't boost the alcohol content of their major brands (since it would alter the taste, and also possibly draw loud criticism). Such laws mostly affect craft brewers, by allowing them much more freedom on the kinds of beers they can produce. For instance, they can add more malt, which generally yields more alcohol.

Drinkers of craft brews, in very general terms, aren't out to get as wasted as they can, as drinkers of Bud or Miller High Life often are. And anyway, given all the high-alcohol hooch out there, if somebody wants to get drunk fast, they have many better options than relatively expensive craft brews.

Chuck Hurley, CEO of Mothers Against Drunk Driving, said that the group's top concern is that the brews are "properly labeled so people understand it takes fewer beers to become intoxicated." Can't argue with that. I'd sure like to know if a beer I ordered contained 16 percent alcohol, the level allowed in Vermont.

Kellogg Drops Immunity Claim

Dan Mitchell — Thu, 05 Nov 2009 22:00:48 +0000

In case you missed the news, Kellogg (K) announced on Wednesday that it would "phase out" claims on boxes of Rice Krispies and Cocoa Krispies that the cereals boost children's immunity to disease.

"It's a cold environment for food marketers trying to make health claims," Advertising Age concluded, perhaps somewhat prematurely, given that plenty of foods still claim, for example, that they are low in fat while not mentioning how high in sugar or calories they are. Maybe better to say it's a cold environment for truly insane health claims like this one.

Kellogg is reacting not only to widespread media ridicule, but to threats both explicit and implicit from government officials. But the company says it's doing it "given the public attention to H1N1" (which is sort of beside the point).

To save face, Kellogg continues to insist that "science shows" that the addition of a few vitamins "helps boost a child's immunity." The company's statement, like the initial label claim, made no mention of bananas or carrots and how much better they are than Cocoa Krispies as vitamin-delivery vehicles.

Why Eating Tainted Beef Is OK

Dan Mitchell — Wed, 04 Nov 2009 19:01:30 +0000

Did you know that ground beef that has tested positive for E. coli is allowed to be sold after it has been cooked and processed?

I didn’t, until just now, and though the idea squicks me out a little, it turns out that it really isn't a big deal. After all, processing removes a lot of stuff that can't and shouldn't be sold to the public—that, in part, is what processing is.

That didn't stop ABC News from presenting this information in a highly sensationalistic way, leaving out crucial details and trying to tie the practice to the most recent E. coli scare, though there is absolutely no connection between that outbreak and the practice of cooking tainted beef before sale.

Does the Agriculture Department rule allowing this practice increase the possibility of people getting sick from the once-tainted beef? ABC News doesn't say. It doesn't even address the question.

But it turns out that, almost certainly, the practice has never resulted in single case of illness.

The Chicago Tribune caused a bit of a stir in 2007 when it published an article about the "E. coli loophole." But that article at least addressed the details of the matter, and put it into its proper context. "Cooking the meat," the paper reported, "destroys the bacteria and makes it safe to eat." And: "There is no evidence that 'cook only' meat has directly sickened consumers."

"Cook only" means that when a processor discovers tainted beef, it is removed from the supply chain for fresh beef to be sold for other products such as pre-cooked hamburger patties and meatballs. Some is sold to food processors for use in other products.

I'm at least as squicked out by the notion of pre-cooked hamburger patties as I am by the idea that beef once contained E. coli but no longer does.

As the Tribune reported front and center, the "cook-only" rule is problematic, but not because the once-tainted beef itself will make anyone sick. "There is no evidence 'cook-only' meat has directly sickened consumers," wrote the Trib's reporter, Stephen J. Hedges. "But some inspectors said the practice conceals significantly higher levels of E. coli in packing plants than the companies admit. That's because companies that find E. coli are allowed to shift that meat immediately into 'cook-only' lines, without reporting it to the USDA."

The medical-industry newsletter Lab Business Weekly reported at the time that the "cook-only" procedure "not only makes perfect sense microbiologically, but it has zero impact on the public's health."

But none of that made it into ABC News' reports. Good Morning America presented the "loophole" in an offhand fashion on Monday while anchor Chris Cuomo was talking with the network's medical reporter, Dr. Richard Besser, about the recent outbreak of E. coli that has killed two people and sickened at least 28 others. But the beef in that case was raw when it was sold, and the outbreak has nothing to do with the "cook-only" practice.

Neither Besser nor Cuomo said so, however, leaving the impression that the "loophole" may have been responsible for the outbreak. Cuomo simply remarked, "You don't have to be a doctor to be bothered by that!"

On Wednesday, Dan Childs of the ABC News Medical Unit riffed on the GMA report in a Web post. "The issue of cooking and reselling formerly tainted beef comes to light as another E. coli scare has now spread to 11 states," Childs wrote, before adding that, oh, yeah, "…the meat in this new case was fresh ground beef, not pre-cooked meat that had been repackaged."

Straining to the breaking point to connect these two unconnected ideas, Childs wrote that "while the wave of illness could indicate a need for greater efforts to catch bad beef before it gets to consumers, many may not be aware that thanks to a U.S. Department of Agriculture regulation, at least some of the meat they eat may have tested positive for E. coli contamination at one time – and been sold to them anyway after processing."

Besser, by the way, just joined ABC News in September. He previously was a director of the Centers for Disease Control, where he headed the government's communications team during the initial outbreak of the H1N1 virus.

Presented By:

Wed, 04 Nov 2009 19:01:30 +0000

Be Patient, Food Activists (But Keep Pushing)

Dan Mitchell — Tue, 03 Nov 2009 17:27:21 +0000

It is the job of activists to never be content, even when things are generally going their way. In that light, Paula Crossfield's critique of the Obama administration's food-policy initiatives seems reasonable enough.

People who were "hoping for deep improvements in our food system can point to only a few successes, while other policies that could lead to food insecurity are brewing in back rooms," she writes on her blog, Civil Eats.

Crossfield figured it was time for a one-year review, though it is a year tomorrow since Obama was elected. He took office only slightly more than nine months ago.

Is that really enough time to expect "deep improvements?" No. In fact, it would take two full Obama terms to even begin to transform the food system from one based on oil, monocultures, and industrial production into one based more on environmentally sound practices, crop diversity, and smaller, more local supply networks.

After ticking off the good and the bad—Obama's choices for various positions in the Agriculture Department and elsewhere that she either lauds or finds appalling (and she's pretty much correct in her assessments)—Crossfield notes all the great stuff Obama said during his campaign about transforming the food system, and how he has fallen short. And she concludes: "Maybe candidate Obama spoke out on food issues with the greatest of intentions, but didn’t realize the scale of the task at hand."

That might be true of many of us.

What Obama, and many of us, also might not have understood well enough is just how powerful the food lobby is. Unfortunately, the people who run our food system now will have to be part of the solution for changing it. That means some of them will have to be included in the administration's plans, including being appointed to some positions. That's how Obama operates. It also means it's going to take a long time and a lot of effort. It might help for us all to keep reminding ourselves of the eight years of inaction that only ended nine months ago.

Crossfield does end on a hopeful note:

"Despite my harsh critique of Obama’s first year in food system reform, one takeaway is that no matter the business on the President’s proverbial plate, he can be engaged about the actual food on our collective plates. It might take a team of skilled community organizers to keep showing him the movement. But once convinced, President Obama and his team have proven they will act."

Wegmans' Price War Against Itself

Dan Mitchell — Mon, 02 Nov 2009 17:51:18 +0000

Wegmans, the East Coast grocery chain that—like many grocers across the country—has been engaged in a price war with competitors, has taken a novel approach in a new ad campaign: comparing itself to itself.

A year ago this month, Wegmans announced that, despite its then-fast-rising costs, it would lower prices on many of its products. In Sunday newspaper inserts yesterday and on in-store signs, the 70-store chain notes that many of its prices have remained low and even dropped. And it put numbers to its claims, telling consumers how much various items cost then compared to now.

In some cases, the price drops have been dramatic. Wegmans' prices for pork and milk have fallen by 26 percent over the past year. Bread is down by 20 percent. Beef is 17 percent cheaper. Of course, it has gotten far easier to lower prices as commodity costs have fallen.

Wegmans is a private company—one of the biggest in the country—and so is less prone than its publicly traded competitors to price products with quarterly profits in mind. Above all, it wants to hold on to customers and retain market share. With this move, coming as it did just as the economy was imploding, even as costs were shooting up, the chain likely lost money. It claims that consumers have saved about $20 million.

It will be interesting to see what the chain might do if commodity and fuel costs soar again. We have to assume that if it raises prices in the future, it won't run similar comparison ads.

San Francisco Goes After Crazy Cereal Health Claims

Dan Mitchell — Fri, 30 Oct 2009 17:06:10 +0000

When the "Smart Choices" program suspended operations in the face of warnings from the Food and Drug Administration that it would investigate the program's claims that, for example, Ritz Bits Peanut Butter Chocolatey Blast crackers were good for you and your kids, health advocates cheered. Twitter was all atwitter with virtual high-fiving.

But the suspension of Smart Choices didn't stop insane label claims. Far from it. For example, Kellogg's (K) Cocoa Krispies is still claiming, in giant letters emblazoned across the box, that the sugary cereal "[n]ow helps support your child's immunity."

In this worrisome time of virulent viruses, such a claim is likely to give some parents the wrong idea. But really, at any time, such a claim is at best amoral and at worst sinister.

And Dennis Herrera, San Francisco's city attorney, is having none of it. He wrote to Kellogg this week demanding that the company substantiate the claim, lest he "seek an immediate termination or modification of the advertising claim."

"I am concerned," Herrera wrote (pdf), "that the prominent use of the Immunity Claims to advertise a sugar-laden, chocolate cereal like Cocoa Krispies may mislead and deceive parents of young children."

Herrera, it should be noted, is thought to be considering a mayoral run in 2011. That doesn't mean he's wrong, of course, but does the city really have power over label claims on consumer products?

According to Marion Nestle's Food Politics blog, Herrera might rely on the city's unfair-competition laws to try to force Kellogg's into substantiating its claims. So far, though, the city attorney has made no specific legal threats.

The ridiculousness of the immunity claim first drew big attention in July, when the Wall Street Journal's Shirley S. Wang noted it on that newspaper's Health Blog. Kellogg hasn't yet responded to Herrera's letter, but back then, company spokesperson lamely defended the claim by saying that since the levels of some immune-strengthening vitamins were boosted from 10 percent of the recommended daily value to 25 percent, the claim is justified.

She also said there were studies backing up the claim, so Kellogg's pretty much has to turn something over to Herrera or else look even more foolish.

The FDA's recent promise to investigate label claims wasn't aimed just at Smart Choices, however, and claims like the one made for Cocoa Krispies may be challenged at the federal level anyway. In fact, you can pretty much bank on it, given that the FDA has already taken on General Mills (GIS), which claims on labels of Cherrios that the cereal lowers cholesterol.

NYT Blogger's 100 Waiter Don'ts

Dan Mitchell — Thu, 29 Oct 2009 20:15:51 +0000

(Note: Since the word "waiter" does not in any way connote gender, I'm going to use it here to refer to both male and female waiters. I think everyone should do this, and the word "waitress"—like "stewardess" and "actress"—should be expunged from our collective vocabulary. And I don't even want to talk about "waitron." Who's with me?)

I love this list of 50 waiter don'ts, written as it is from the perspective of a patron, even if some of them seem overly fussy. "Veteran waiters, moonlighting actresses [Hey!-ed.], libertarians and baristas [baristasses?-ed.] will no doubt protest some or most of what follows," writes blogger Bruce Buschel. This is only the first half of a list of 100, with the rest coming next week.

A few of my favorites from the first set:

No. 5: Tables should be level without anyone asking. Fix it before guests are seated.
No. 11: Do not hustle the lobsters. That is, do not say, "We only have two lobsters left." Even if there are only two lobsters left.

No. 21: Never serve anything that looks creepy or runny or wrong.

No. 32: Never touch a customer. No excuses. Do not do it. Do not brush them, move them, wipe them, or dust them.

No. 38. Do not call a guy a "dude."

I disagree with a few of them, such as No. 18: "Know before approaching a table who has ordered what. Do not ask, 'Who’s having the shrimp?' " Sure, that's the ideal. But even though I've never worked as a waiter, I know it's impossible for a person, especially in a big or busy restaurant, to keep dozens of orders straight all the time. Asking who had what isn't really so annoying to diners, is it? And it's certainly better than getting it wrong and plopping the wrong dish in front of someone.

Also: "Do not announce your name. No jokes, no flirting, no cuteness." I agree that overly talkative, cute, or bubbly waiters can be irritating, as can their asking whether everything's OK more than, say, twice. But if someone is genuinely funny or charming, I appreciate a little banter. Of course, these things are in the eye of the diner, and it's up to the waiter to intuit whether any particular diner is game, so playing it safe doesn't hurt either.

Farthest Distance From a McDonald's: 107 Miles

Dan Mitchell — Thu, 29 Oct 2009 15:02:17 +0000

Picking up on, and quickly dismissing, all the "McDonald's is pulling out of Iceland" media hype of a few days ago, Katherine Glover, Bnet's food-industry blogger, grew curious about how ubiquitous McDonald's really is.

Frighteningly so, at least in the United States, judging by the map she found. It depicts an America blanketed nearly completely by Golden Arches. "McDonald’s really is everywhere," she wrote, "if one defines 'everywhere' as 'within 107 miles of anywhere' (or 145 miles by car).

The map, a depiction of the density of McDonald's (MCD) outlets, was created by Stephen Von Worley, who writes the blog Weather Sealed. He wanted to know the farthest one would have to travel to get from on outlet to another.

"This endeavor required information," he wrote in a post titled "Where the Buffalo Roamed," "and the nice folks at AggData were kind enough to provide it to me: a complete list of all 13,000-or-so U.S. restaurants, in CSV format, geolocated for maximum convenience."

His finding: "Between the tiny [South] Dakotan hamlets of Meadow and Glad Valley lies the McFarthest Spot: 107 miles distant from the nearest McDonald’s, as the crow flies, and 145 miles by car!

(Update: To clarify, Von Worley here was referring to the spot that is farther away from any McDonald's than any other spot. That location -- the most remote from a McDonald's -- lies between those two South Dakota towns, neither of which has a McDonald's. The 107 miles is not the farthest distance between two McDonald's outlets -- it is the farthest anyone would have to travel to get to a McDonald's within the lower 48 states.)

He even plots the global coordinates of the Big Mac-free zone.

Geekily cool stuff.

Former Exec: Busch HQ Is Like a "Frat Party"

Dan Mitchell — Wed, 28 Oct 2009 17:10:15 +0000

It turns out that the beer company that recently ran an ad campaign about how great it is to "get it in the can," and that has for decades relied on hot babes in bikinis to peddle its gassy brews might—get this—allow a "locker room and frat-party atmosphere" to pervade its corporate headquarters.

That is how Francine Katz characterizes the situation at Anheuser Busch-InBev's (ABI) offices. Katz, the former vice president of communications and consumer affairs, has filed a gender-discrimination lawsuit against the brewer. Katz, as the Wall Street Journal puts it, "for years served as the company's public voice against critics."

The lawsuit claims that male executives are paid more than women, and that men are routinely given preference for top jobs. Katz specifically charges that the man who previously held her job was compensated subtantially better than she was.

Busch, of course, has denied all the allegations, adding that Katz should have taken her complaints to an internal dispute-resolution program that she had agreed to as part of her employment.

"Trained as a lawyer," the Journal says, "Ms. Katz for years gave interviews to TV and print reporters defending the company's advertisements and products against critics who accused the brewer of encouraging irresponsible or underage drinking. She also directed the brewer's efforts to promote responsible behavior, such as picking a 'designated driver' before a night of drinking."

Ah, but she did most of that before the Belgians came. After Busch was taken over by the Belgian beer giant InBev last year, Katz' duties "were materially reduced," she says in the lawsuit. Still, she benefited in one way from the acquisition, to the tune of $12 million in stock and options.

Katz started working for Busch in 1988, just as spokesdog Spuds MacKenzie was barking his way across the commercial airwaves, exhorting frat buffoons to party down. Spuds also seemed unnaturally attracted to female humans, and they to him.

Jeremiah McWilliams, beer-business blogger for the St. Louis Post-Dispatch, notes that Katz led Busch's efforts last year to defend itself from critics of Tilt, the caffeine-and-alcohol concoction that a lot of people said was aimed at underage drinkers. Under pressure from 11 state attorneys general, Busch reformulated the product to remove the stimulants.

Michael Pollan and the Hummer-Driving Vegan

Dan Mitchell — Tue, 27 Oct 2009 15:15:30 +0000

It sounded like such a great, simple way to illustrate how much environmental damage is wrought by our meat-heavy diet. "A vegan in a Hummer," Michael Pollan declared on Saturday, "has a lighter carbon footprint than a beef-eater in a Prius."

Sadly, it isn't true, as Pollan has since acknowledged.

Pollan made the statement during the PopTech conference. He used the false Hummer example to support a true claim: "Our meat-eating is one of the most important contributors we make to climate change."

The Hummer example, though, is what got the most attention, spreading as it did across Twitter and the blogosphere. Unfortunately, it served to undermine the point Pollan was making.

Reuters blogger Adam Pasick cited a 2005 paper by Gidon Eshel and Pamela Martin, then of the University of Chicago, published in the journal Earth Interactions. The scientists examined the relative carbon footprints of plant-based and red-meat diets and concluded that a heavy meat-eater diet creates about two tons more carbon dioxide per year than does a vegan diet. They also compared the carbon footprints of the Toyota Prius and the Chevy Suburban (which is comprable, mileage-wise, to a Hummer). The difference is about 4.67 tons per year, they concluded.

Eshel told Pasick that Pollan's statement was "emphatically wrong" and "not even close." He wasn't happy about having to say so, since he's as concerned as Pollan is about meat-eating's harmful environmental effects.

Pollan himself later asked PopTech to remove his mention of the (very) hypothetical vegan Hummer driver. And he wrote to Pasick, saying, "I don’t feel comfortable defending it" because it is "much more important to keep the focus on the central thrust of the environmental case against eating industrial meat, which is not in dispute and certainly does not stand or fall on the case of the vegan Hummer driver."

Pollan will no doubt be much more careful in the future to vet his examples. In the meantime, though, the anti-Pollan forces in the industrial-food industry have some fresh ammo.

Eshel took to the comments section of Pasik's post to say that "You cannot be an environmentalist, you can’t even remotely claim to be anything but a selfish lunatic, if you drive a Hummer." But, he added, "You CAN be a meat eating environmentalist. You will have to work extra hard in other fronts, but it’s not impossible."

Or you can follow the advice of commenter Organik, who wrote: "Of course there’s nothing wrong with being vegan AND driving a Prius, which is my personal environmental choice."

Market Proves Unripe for Dole IPO

Dan Mitchell — Mon, 26 Oct 2009 15:50:51 +0000

Shares of the newly public Dole Food (DOLE) continued to sink on Monday, further supporting the opinion that the company probably should have waited a bit longer before emerging from six years of private ownership.

There's just too much debt—$1.9 billion—on the company's books, and the recovery just isn't strong enough yet for investors to feel good about Dole's ability to pay it off and return some profits to shareholders.

That debt came from the $2.5 billion private equity deal that took Dole off the public market six years ago, when leverage was still seen as a positive on Wall Street. It isn't any more—at least, not yet.

That's especially so for a company like Dole, which operates on the slimmest of margins. Sales have been down, though they can be reasonably expected to pick up as the recovery expands and shoppers again become attracted to pricier brand names in the produce aisle.

But that hasn't happened yet, and in the meantime, a huge chunk of profits is going to pay off debts. In the first half of this year, Reuters reports, Dole's operating income was just $131 million, even as it was paying $74 million in interest expenses.

The company's debt is four times its earnings, more than 50 percent higher than the leverage at such Dole competitors at Del Monte (DLM) and ConAgra Foods (CAG), notes the New York Times' DealBook blog.

The numbers from Friday's IPO tell a sad tale. Shares started trading at $12.45, the IPO price of $12.50 (which was already well below the expected pricing range), and they've stayed down ever since. Late Monday morning, shares were trading at $12.18, down slightly on the day.

Days before the IPO, there were already signs of trouble. Analysts—many of whom had previously liked the plan to go public—were wondering about an unrelated $300 million convertible debt offering that majority shareholder David Murdock was planning.

The bond offering came at the same time as the IPO, though since the bonds aren't Dole's, but rather Murdock's, it is technically not related to the Dole offering. But the timing was enough to cause confusion.

Dole is also dealing with an IPO market that might not be as ripe as many analysts had expected. Reuters notes that of the 16 U.S.-listed IPOs since Labor Day, 10 are trading below their offering prices, and several of those, like Dole, are priced below their expected ranges.

Vermont Brewer Slays Monster

Dan Mitchell — Fri, 23 Oct 2009 17:32:27 +0000

From the Insane Trademark Claim file: A tiny brewer in Vermont will continue to market its Vermonster barley brew, and it has agreed to never market any energy drinks, which it never intended to do.

So both brewer Rock Art and its tormenter, Hansen Beverage (HANS), which makes the popular Monster energy drink, have written large checks to lawyers, only to revert to the situation as it had been.

Hansen sent a cease-and-desist letter last month to Rock Art, claiming that Vermonster is too similar to Monster. People would confuse the former, a barley-based wine, with Hansen's liquid kiddie-speed, the company claimed, apparently with a straight face.

Ah, lawyers.

Vermonster owner Matt Nadeau told the Associated Press that "the new power of traditional media, combined with social media," were in part responsible for getting Hansen to back off.

"Nadeau said he had been told by five trademark attorneys that he could probably win in court," the AP reports, "but that fighting for the name would likely bankrupt him."

So he took to the Internet, posting on Facebook, YouTube and elsewhere, eliciting media coverage. Once word got out, stores across the Northeast pulled the energy drink from their shelves in protest.

Ultimately, Vermont's independent U.S. Senator Bernie Sanders stepped in, and the "deal" was reached.

And you have to love the senator for saying this: "Any person who would get confused by the two different products and names should probably slow down a bit, and lay off energy drinks."

And this: "The American people are getting tired of the greed and recklessness of large corporations, which use their size and power to push individuals and small businesses around."

It's hard to know for sure, since Hansen's isn't talking, but its motivations may have something to do with its future business plans. The company has a distribution agreement with Anheuser-Busch, and Nadeau told the Atlantic that a Hansen lawyer told him that the company is planning to enter the booze business.

Could Hansen be planning to make an even more boneheaded move by marketing an alcohol-blended energy drink under the Monster brand? If so, it is sure to bring down the wrath of state attorneys general, who have moved against such products at least twice before. One of those products was marketed by Anheuser Busch before it was pulled from sale.

A Diet of Sweet Nothings

Dan Mitchell — Thu, 22 Oct 2009 17:03:22 +0000

There are reasons why Florida is the country's capital of scammers, spammers, and other assorted sleazebags. A chief one is the state's homestead exemption, which allows debtors to keep their homes even when they have judgments entered against them or when they declare bankruptcy.

This could explain in part why so many fad diets seem to be created there. Not that the diet creators are necessarily thinking of the homestead exemption when they come up with stuff like the "cookie diet," but in a culture of sleaze, such schemes just seem to arise naturally.

I will now make the obligatory statement—"diets don't work." It's been said millions of times, and yet it never seems to get through to the sorts of people who fall for whatever they hear on daytime television, unless what they hear is "eat sensibly and exercise."

And if diets don't work, surely Dr. Siegal's Cookie Diet doesn't work. But that didn't stop people like Christina Kane from trying it. Kane served as the anecdotal lede in the New York Times' look at the Cookie Diet on Wednesday. She has, according to the Times' Abby Ellin, "tried everything from the grapefruit diet to Atkins, with no success.

"Then she heard about Dr. Siegal’s Cookie Diet, which involves eating six prepackaged cookies a day, plus one 'real' meal—say, skinless chicken and steamed vegetables."

Why would she fall for such a transparent scheme? "I thought, 'That diet looks so incredibly easy,' " she said.

Oy gevalt.

She's lost 40 pounds. She will gain it back. But in the meantime, she'll be paying $56 a week for a daily handful of cookies and some crackpot advice.

Dr. Siegal's Cookie Diet (note how he follows standard practice by putting "Dr." in the name) limits calories to between 800 and 1,000 a day. But—and of course this is the selling point—you get to eat cookies!

It's hard to call Dr. Siegal's Cookie Diet a "fad," since it's been around since 1975. But it only recently went national, first when he took it online in 2006, and then when he started selling it at Walgreen's and GNC (that stands for General Nutrition Center, which is ironic since the cookies, like many other products sold there, contain few actual nutrients).

Siegal told the Times that he expects to take in about $18 million in sales this year. That's due in part to "celebrity" endorsements from the likes of Kim Kardashian, Jennifer Hudson, and Kelly Clarkson.

Oy gevalt.

And now there are knockoffs, like Smart for Life (more irony!) and the Hollywood Cookie Diet. Smart for Life costs $279 for a 35-day "kit."

"The popularity of cookie diets is hardly surprising in this culture of quick fixes," Ellin writes. "Who wouldn’t want to exert the minimal effort to get long-lasting results? Who wouldn’t want to lose weight by consuming something verboten on most diets?"

Well, sure. But the real question is, why haven't people learned that these desires are impossible to achieve?

John Nemet, who manages a Smart for Life store in Westbury, N.Y., thinks that the cookies he peddles shouldn't be called cookies because "it denigrates them." The company is run by a guy named Sasson Moulavi. Can you guess where he's based? That's right, Boca Raton, Fla. Smart for Life expects to take in $82 million to $95 million in revenues this year.

By the end of her account, Ellin gets around to the truth of the matter, quoting critics of these sleazy scams who note that cutting calories by such a large amount and relying on nutrient-free foods can lead to all kinds of health problems—"potassium deficiency, gallstones, heart palpitations, weakened kidney function and dizziness."

And of course, they don't work in the long run. Unless you change your dietary habits for a lifetime (eat smaller amounts of healthier foods) and exercise, any weight you lose will surely come back.

The cookie peddlers all say that their cookies aren't just cookies. They are "specially formulated" in some way. Siegal's supposedly contain some sort of secret ingredient—an amino acid—that he says curbs the appetite.

Siegal includes a supply of multivitamins in his product "to take care of any deficiencies that might arise."

Presented By:

Thu, 22 Oct 2009 17:03:22 +0000

Archives

Big Turkey Goes Wild

Why Restaurant Owners Are Exploding

Publix Creepily Videotapes Demonstrators' Kids

Can Anyone Swallow Cadbury Debt?

Why Cadbury is Like California

Presented By:

Big Food Woos Mommy Bloggers

Starbucks' Via Boils Over

Here Comes the Long-Lasting Apple

The Low-Cow Burger Boom

Diners Still Demanding Cheap Eats

Kraft Goes Hostile for Cadbury

The Doughnut That Dare Not Speak Its Name

More States Raise Beer's Strength

Kellogg Drops Immunity Claim

Why Eating Tainted Beef Is OK

Presented By:

Be Patient, Food Activists (But Keep Pushing)

Wegmans' Price War Against Itself

San Francisco Goes After Crazy Cereal Health Claims

NYT Blogger's 100 Waiter Don'ts

Farthest Distance From a McDonald's: 107 Miles

Former Exec: Busch HQ Is Like a "Frat Party"

Michael Pollan and the Hummer-Driving Vegan

Market Proves Unripe for Dole IPO

Vermont Brewer Slays Monster

A Diet of Sweet Nothings

Presented By: