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Tyson-Hillshire Merger: An Antitrust Concern?

PigsIowa Senator Chuck Grassley and a number of meat industry observers have called for close antitrust scrutiny by the U.S. Dept. of Justice of Tyson Foods’ announced purchase of Hillshire Brands. While scrutiny of mergers is always a good idea, does this merger really pose a threat to markets or is this simply a knee-jerk, pro forma complaint about change?

In any antitrust matter, the primary concern is defining the relevant market. In this case, both the output and input facets of Tyson’s and Hillshire’s businesses would be of concern.

The two companies both sell meat products but I think it would be difficult to argue that they sell in common markets. Hillshire sells, almost exclusively, further processed, branded items. Tyson does some of that, especially in its chicken business, but it sells far more fresh, unprocessed wholesale pork and beef cuts, many of which go to companies just like Hillshire. Keep Reading

U.S. Supreme Court Paves Way for More False Advertising Disputes

Minute Maid Pomegranate Blueberry Flavored Blend of 5 JuicesOn June 12, the U.S. Supreme Court issued an 8-0 ruling in favor of Pom Wonderful in a longstanding false advertising dispute against rival beverage company The Coca-Cola Co. The Supreme Court held that competitors can bring Lanham Act claims like Pom Wonderful’s challenging food and beverage labels regulated by the U.S. Food and Drug Administration (FDA).

At issue in the case was Coca-Cola’s “Pomegranate Blueberry Flavored Blend of 5 Juices,” which is 99% apple and grape juice. Pom Wonderful (Pom), who has a competing pomegranate-blueberry juice blend, sued Coca-Cola. It alleged that the juice’s name and other labeling features were misleading under the federal Lanham Act—a statute that allows competitors to sue based on the false or misleading description of goods (15 U.S.C. § 1125(a)). Keep Reading

Resurgence of Food Irradiation

Radura symbol

FDA requires that irradiated foods bear the international symbol for irradiation.

Except for those within food companies that are having their products routinely irradiated, we haven’t heard much about food irradiation over the last decade. However, recently there seems to be a resurgence of press articles and even government approvals related to irradiating food. What’s going on?

In the 1980s, the U.S. Food and Drug Administration (FDA) made a significant step by approving the irradiation of spices (more accurately, dehydrated aromatic vegetable substances) to a maximum dose limit of 30 kGy and fresh food products to a maximum dose limit of 1 kGy. These two applications are very different from one another and require different equipment. Furthermore, one is for perishable product and the other is for non-perishable product, requiring different product handling and logistics. Keep Reading

The U.S. Organic Food Market: From Niche to Mainstream

Infographic courtesy of Walmart

Infographic courtesy of Walmart

The U.S. organic food market has grown significantly and changed dramatically since its birth during the 1970s as a counterculture movement. Its growth rate slowed during the recession then rose back into double-digits in 2011. In 2012, organic food sales for at-home consumption totaled $26.3 billion (Wohl, 2014) and comprised over 4% of total U.S. food sales for at-home consumption (Greene, 2013). Produce and dairy products are the dominant categories, accounting for 43% and 15% of total organic sales in 2012 (Greene, 2013), respectively. The Nutrition Business Journal is projecting that the organic food market will exceed $60 billion by 2020 (Wohl, 2014).

According to the Hartman Group, health concerns are prominent in consumers’ reasons for buying organic foods and beverages. Six of the top 10 motivations were (in descending order): “safer for me,” “avoid pesticides,” “avoid GMOs,” “avoid growth hormones,” “for nutritional needs,” and “safer for my children.”

In 2012, mass market retailers, such as Walmart and Target generated 46% of U.S. organic food sales, while 44% of the sales were attributable to natural and specialty retailers. After being sold to Whole Foods in 2007, the former natural foods chain, Wild Oats, has reinvented itself as a food processor providing high-quality products that are affordable and easy to shop for. Its current organic product lines include canned beans and tomatoes, condiments, cookies, milk, vinegar, pasta sauce, grains, nuts, soups, spices, salads, and pre-packaged sandwiches. Now, Wild Oats is partnering with Walmart to supply a subset of these products to the big-box retailer at reduced prices. Meanwhile, Target has re-organized its displays by aggregating certain natural, organic, and sustainably-focused products to make it easier for consumers to find such items (Wohl, 2014). Keep Reading

Nutrition Facts Label Changes Mean New Challenges and Opportunities

Nutrition Facts labelThe U.S. Food and Drug Administration (FDA) published proposals to update the design and content of the Nutrition Facts label (NFL) and associated serving sizes on Feb. 27, 2014. Two factors driving the FDA changes are undeniable: consumers’ expressed desire for the labels to be easier to read and use; and outdated nutrition science and food consumption data that supported the 1993 regulations.

Consumer research shows that more than half of food shoppers are using nutrition labeling (IFIC, 2013; Todd, 2014). Even so, within the first years of use of the NFL, 70% of consumers expressed the need for the labels to be easier to read and use (Kristal, 1998; FMI, 1995). Evolving nutrition science, including new Dietary Reference Intakes (DRIs), updated nationwide food consumption data, and up-to-date comprehensive, evidence-based Dietary Guidelines recommendations warrant changes. Keep Reading

The 2014 Farm Bill Crosses the Finish Line

The multiple year journey to farm bill reauthorization is closing in on the finish line. The trip to final passage stopped at the “dairy cliff,” took a fork in the road splitting off food support programs, and visited the rocky hills of farm program reform. Despite the detours, we’ve arrived. After one public meeting and dozens of closed door negotiations, the Senate and House of Representatives conference committee in January finally bridged the divide and reached agreement on a new five-year farm bill.

Keep Reading

What’s In a Name? Plenty if You Call It a ‘Drink’

Recently, the FDA released a long-awaited final version of its guidance regarding the differences between beverages and liquid dietary supplements. The “Guidance for Industry: Distinguishing Liquid Dietary Supplements from Beverages” had been promised over the course of the last two years as part of the ongoing dialogue between certain U.S. Senators and Congressmen and the FDA. So, now that it is out, what does it mean?

Of course, it is always important to remember that FDA guidances are not the law, but instead, reflect the FDA’s current thinking on the subject. That being said, while guidances aren’t law, they are instructive on how the FDA is likely to act regarding the topic and it is generally advisable to follow the guidance if a company does not want to run afoul of the FDA. Keep Reading

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