Reasons to be Optimistic About Food

I'm glad Sara Lee chose Hillshire Farm over Wonderbra.

By Dave Fusaro, Editor in Chief

A couple of things have come up in the past month or so that renew one's optimism about food manufacturing. All are chronicled in this issue.

In our annual Manufacturing Trends Survey (p. 29 in the magazine, or click here for the web version), amidst all the charts and graphs about food safety initiatives, labor and energy management is one that's a little bit off the subject but perhaps the most important. "Do you anticipate changes in production in 2005?" we asked. The answer was encouraging: 70 percent predict an increase of at least 5 percent (about evenly split between increases of 10 percent or more and increases of 5-9 percent). Only 2.4 percent predict a decrease this year.

Our opening news page trumpets, "Sara Lee becoming a food company again." The story chronicles the "transformation plan" for this food industry giant, which is No. 8 on our Top 100 list even without the apparel lines - which, by the way, are being sold or spun off.

Sara Lee could have gone with Hanes underwear or Playtex bras or Kiwi shoe polish - all well-known brands in their categories. In fact, Sara Lee is the largest company on our Top 100 (based on food sales) that remains so diversified (Unilever and Procter & Gamble are not far behind). They're all reminiscent of a time when it was believed there was safety in diversification. But where is Borden now? I'm glad Sara Lee, which started as a sugar, coffee and tea distributor, chose Hillshire Farm over Wonderbra.

Positive, too, is the new CEO. While Brenda Barnes has only been with Sara Lee since July, she's proven herself in 22 earlier years with PepsiCo, most recently as president and chief executive officer of Pepsi Cola North America. Before that, she held a number of senior executive positions in operations, management, sales and marketing at various PepsiCo divisions, including Frito-Lay. Her association with the beverage giant ended in 1998. While some might think the intervening years away from food and beverage as a liability, I think her experience in hotels, sporting goods and even Avon Products will only help her think outside of the box ... or package.

One would hope that this renewed focus on food means great things are ahead for Sara Lee. Actually, the company already is proving that with the recent launch of a line of breads that perfectly captures the intent behind the new Dietary Guidelines for Healthy Americans (see Rollout). Earth Grains Extra Fiber is a line of three fortified whole-grain breads with added folic acid, vitamin D and calcium. Those three nutrients, whole grains and fiber - that's hitting for the circuit.

While I'm sure they required a concerted product development effort, it doesn't look like rocket science, either. It's just an example of an enlightened, speedy company hitting a trend or a need as it arises, not after it crests. We still get weekly news announcements of new low-carbohydrate products. All I can do is shake my head.

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