Only one-third of consumers expect their financial situation will improve this year, and 37 percent of frugalistas are trading down with less expensive brands, according to the survey. Only 15 percent plan to spend more in discretionary categories, and only the most optimistic (10 percent) say they will trade up in brands.
Private label penetration in the supermarket has grown from 15 percent before the recession to more than 18 percent of total sales in 2010. As the economy improves, private label sales are expected to remain strong, and branded consumer packaged goods may find it difficult to regain lost market share.
"The new frugality that consumers reported last year -- one that requires trade-offs between price, brand and convenience -- has become dominant and ingrained behavior in several categories," says Nick Hodson, partner with Booz & Co. "Consumer products companies and retailers need to monitor and understand the evolving behaviors of different consumer segments and respond to each, category by category. Going back to business as usual is not an option."
A safer food supply?
We started to write about the new Food Safety Act a year ago. Slightly different versions of an FDA and/or Food Safety Modernization Act were passed by both houses of Congress late in 2009. Bipartisan support and a sense of urgency over then-recent food safety issues seemed to ensure its swift passage into law.
Then health care, the economy and a host of other issues got in the way of reconciliation of the two bills. Even after those issues were cleared, amendments banning bisphenol-A (BPA) and exempting small farms and small businesses from the act complicated things for what became Senate Bill 510. So did Sen. Tom Coburn's (R-Okla.) threats to kill it, based apparently on the facts that it (kind of) does increase the size of government and does require new funding.
It got approved and reapproved and tossed between both houses since Thanksgiving but, long story short, it now seems destined to become law. President Obama had not signed it as of our pre-Christmas press deadline, but he promised he would.
Perhaps the biggest point in the act is one that shocked most Americans: The FDA did not have the authority to order a recall of suspected tainted food. That loophole is no longer the case.
"The legislation has a variety of new changes that will improve the safety of the food system from farm to fork," says Bob Gravani, professor of food science at Cornell University and current president of the Institute of Food Technologists. "Four elements of this legislation are critical to protecting the food supply for generations to come:
- "Product Tracing — The U.S. Food and Drug Administration (FDA) will be required to establish a comprehensive product tracing system to track the movement of food products effectively from farm to point of sale or service. As IFT pointed out in a report issued to the FDA, a product tracing system would make it possible to identify the source of foodborne illness outbreaks earlier as well as contain the outbreak faster.
- "Performance Standards — In order to continually reduce the risk of contaminants in foods, the Secretary of Health and Human Services will identify and determine the most significant foodborne contaminants and develop science-based guidance to assist food producers. As a result, action levels (performance standards) will be set in place to encourage the food industry to strive toward a safer food supply.
- "Third Party Certification — Designated imported foods will now need to be certified by a third party with expertise in food safety and under the oversight of the FDA. This will enable the FDA to maximize resources and increase the number of product inspections to better ensure the safety of imported foods.
- "Preventive Control Plans — Food manufacturing facilities will be required to develop and implement written plans based upon science that evaluate hazards that could affect the safety of food; identify and implement preventive controls; monitor the performance of these controls; and maintain records of such monitoring."
The Centers for Disease Control estimates that each year roughly one out of six Americans (or 48 million people) gets sick, 128,000 are hospitalized and 3,000 die from foodborne diseases.
New Dietary Guidelines
Another last-minute piece of regulation was the 2010 Dietary Guidelines for Americans. USDA and HHS were rushing to finish the final document by the mandated year end, so we haven't seen it yet. But it should mirror last summer's draft, which suggested slashing sodium, reducing fats and added sugars and upping Americans' intake of plant-based foods.
The 2010 Dietary Guidelines Advisory Committee (DGAC), made up of 13 nongovernment nutrition experts, had been holding public hearings since October 2008. In June 2010, it published its recommendation report, which included four major findings to improve the dietary health of Americans:
- Reduce the incidence and prevalence of overweight and obesity of the U.S. population by reducing overall calorie intake and increasing physical activity.
- Shift food intake patterns to a more plant-based diet that emphasizes vegetables, cooked dry beans and peas, fruits, whole grains, nuts and seeds. In addition, increase the intake of seafood and fat-free and low-fat milk and milk products and consume only moderate amounts of lean meats, poultry and eggs.
- Significantly reduce intake of foods containing added sugars and solid fats; reduce sodium intake and lower intake of refined grains, especially refined grains that are coupled with added sugar, solid fat and sodium.
- Meet the 2008 Physical Activity Guidelines for Americans.
The committee recommended a gradual reduction in sodium intake to 1,500mg per day from the 2,300 mg recommended in 2005, as well as limiting dietary cholesterol to less than 300mg per day (with a further goal of less than 200mg per day for persons at risk for cardiovascular disease or type 2 diabetes). The reduction in sodium was foreseen, as nearly every leading food processor already has announced reformulations that take sodium out of their processed foods.