Food Business News - Jul 12, 2005 - (Page 1)

FoodBusinessNews July 12, 2005 NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Maple Leaf's Michael McCain announces major expansion Portable foods market shifting into overdrive 15 Less is more - the rationale for s.k.u. rationalization 24 Gylcemic index - the next big thing? 34 MARKET WATCH NAPLES, N.Y. - Food makers have become adept at creating new portable food products. According to Datamonitor's Productscan Online database of new products, the number of new food products launched in the United States that had the word "go" in the name of the product or in supporting advertising or labeling more than tripled from 134 in 2001 to 504 in 2004. Impressively, these ranks now include a growing number of foods outside of traditional snack foods. Yogurt, soup, fresh fruits and vegetables recently have weighed in with contributions to the portable food trend. Furthermore, according to Datamonitor, eating-on-thego occasions in the United States are set to rise from 124 billion in 2003 to 137 billion by 2008. "Consumers are eager to increase leisure time, but face longer from technologies like cell phones and e-mail that have blurred the traditional line between work and home," said Tom Vierhile, executive editor of Productscan Online. "Commuters in the U.S. make an average of four journeys per day. So, when it comes to creating new food products with hit potential, one vital factor for success is creating Continued on Page 16 General Mills: An end to great expectations? Diesel fuel prices reached an all-time high last week. Ahead of the 2001 acquisition of The Pillsbury Co., General Mills, Inc. executives suggested the $10 billion acquisition would turbocharge sales and earnings. Stephen W. Sanger, chairman and chief executive officer of General Mills, said adding the Pillsbury business would add at least one percentage point to the company's top-line growth rate and one to two points to its earnings per share growth target. Announcing financial results June 29, Mr. Sanger said fiscal 2005 (ended May 29) marked the end of the transition period following the Pillsbury integration. Investors who expected this new chapter for General Mills would be accompanied by forecasts of stepped-up growth were sorely disappointed. Instead of growth rates one or two points higher than in the past, Mr. Sanger announced new targets beneath pre-Pillsbury growth rates. "We think General Mills is well-positioned to deliver low single-digit growth in net sales, mid single-digit growth in operating profits, and high single-digit growth in earnings per share," Mr. Sanger said. Reacting to the forecast and to the company's Continued on Page 28

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Food Business News - Jul 12, 2005