Oser Communications Group

Gourmet News June 2015

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BY RICHARD THOMPSON Retailers looking for any supply increases or price stabilization for Italian olive oil are most likely not going to find it this year. The dismal 2014 harvest of Italian olive oil lowered levels of pro- duction and increased costs to re- tailers and consumers from a combination of conditions that have no immediate solutions and probably won't be resolved in the near future. David Neuman, CEO of Gaea, North America, LLC and who has worked previously with Lu- cini Italia has seen problems with Italian oil harvests for years and sees the industry working on BY RICHARD THOMPSON The specialty food business is growing, both in terms of sheer sales volume and increasing pen- etration of specialty foods into conventional grocery stores. That leaves specialty foods retailers with more competitors, but they're also sharing a bigger eco- nomic pie. Specialty food sales reached $109 billion dollars last year, hit- ting record levels, taking a 10 percent bite out of the total share of the food market. In the last three years, specialty food sales jumped nearly 20 percent while sales for all foods grew only five Specialty Foods Have Mass Market Appeal Continued on PAGE 8 BUYERS GUIDE: Condiments SEE PAGE 31 UPDATE: Summer Fancy Food Preview SEE PAGE 17 UPDATE: Charcuterie SEE PAGE 27 Continued on PAGE 10 Continued on PAGE 18 percent. "Specialty food is not only growing – it is taking away share from the total food mar- ket." said David Browne, Market Research and Retail Analyst at market research firm Mintel. "While the natural channel is the fastest growing overall, roughly 80 percent of natural food prod- ucts came from mainstream re- tailers." Although specialty food stores are capturing a percentage of this growth – sales at specialty food stores increased by more than 40 percent between 2011 and 2013 – the majority of con- sumers still prefer to shop at mainstream chains, which have responded to shifting consumer tastes by adding specialty prod- ucts to their inventories. Karin Gerlach, Communication Spe- cialist at Fry's Food Stores, has watched the chain add to its or- ganic and natural food product line for the last couple of years. "One thing Kroger did was intro- duce our corporate brand 'Sim- ple Truth'," said Gerlach, "That is geared towards healthy op- tions like grass-fed beef and all natural chicken. The line runs throughout the entire store." Mainstream grocers are push- ing into the specialty foods space by redefining "upscale" and offering specialty food op- tions with a "better for you at a price you can afford" strategy. Each of the four largest na- tional chains – Wal-Mart, Kroger, Target and Costco – has introduced organic or specialty food product lines that they're selling at new lower prices. "One of the things we have been doing has been lowering costs on organics and natural food options, so if a customer is looking for cage-free or organic milk, they are priced lower to FDA Says KIND Bars Not Healthy Olive Oil Supply Plagued by Olive Quick Decline Syndrome, Flies, Rain borrowed time. "Every single year there's a problem," Neuman said, "Every year there are good har- vests and bad harvests, but south- ern Italy is getting pummeled [by Olive Quick Decline Syndrome], and the last harvest was like a per- fect storm. Too many combina- tions that came together." So what is plaguing Italian farmers and oil producers on such a dismal scale? Basically, every- thing that could harm production is happening all at once. Italy had a terrible rainy season last year and olive flies had in- fested compromised crops, but the Olive Quick Decline Syn- drome (OQDS), a bacterial infec- tion that withers and desiccates the tree shoots, is now spreading across the province of Lecce, leav- ing Italian officials unsure on how to resolve the problem. First reported at the end of September 2013 by the Italian government's Plant Health Direc- torate in Malta, OQDS was al- ready considered an epidemic in the Italian province of Lecce, with more than 8000 hectares of olive orchards affected, but a declara- tion that OQDS was responsible for olive tree deaths was deferred pending further study. The Italian Trade Commissioner BY MICAH CHEEK With California, Italy and Spain facing risks to olive oil produc- tion, Greece is poised to make gains in the American olive oil market, says David Neuman, CEO Gaea North America. Greece has so far avoided drought, olive flies and the transmission of Xylella fas- tidiosa, the pathogen that is in- fecting olive trees in the Apulia region of Italy. While the crush- ing, bottling, and storage capa- bilities of Greece are high enough to take up lost Euro- Continued on PAGE 10 Greek Olive Oil Seizes Opportunity pean sales, the biggest obstruc- tion to increasing production is the traditional attitudes of olive farmers, according to Neuman. Greece currently exports 79 percent of its olive oil to Italy to be bottled by Italian companies. As a result, Greek olive produc- ers have made their processes based on volume rather than quality. Greek farmers make greater profits by leaving olives on the tree longer to produce more oil as well as using tradi- tional transportation and stor- age methods that hurt the olive's eventual oil quality. "Greece has an opportunity to modernize its thinking," says Neuman. "If the farmers pick earlier, flavors will be more intense, fruitiness will increase, and shelf life will in- crease. Better oil can be branded and sold for a premium." A change in farming practices could result in lower yields with a higher quality level, which could be marketed as a Greek product rather than being sold to Italy. While only 4 percent of BY RICHARD THOMPSON KIND, LLC was served a warning letter by the FDA for mislabeling its products and is now facing nu- merous class-action lawsuits after the letter went public. KIND is just the latest in a swarm of law- suits to allege false advertising with regards to mislabeling claims, most notably "all natural." In a letter sent to KIND in late March, the FDA accused KIND of mislabeling on four specific bars – Fruit & Nut Almond & Apricot, Fruit & Nut Almond & Coconut, KIND Plus Peanut Butter Dark Chocolate + Protein and KIND Plus Dark Cherry Cashew + An- tioxidants – on which the FDA says KIND used the terms "healthy," "low sodium," "no trans fats" and "good source of fiber" incorrectly. The warning letter was the re- sult of a routine product check, according to Noah Bartolucci, Strategic Communications and Public Engagement, Food and Drug Administration. The FDA would not comment why the KIND bars were picked off the shelf. "We carry these out period- ically, consistent with the agency's charge," said Bartolucci, "but honestly, it varies." VOLUME 80, NUMBER 6 JUNE 2015 n $7.00 RETAILER NEWS n Bring Your Own Bag Policies Change Shopper Behavior PAGE 13 SUPPLIER BUSINESS n Specialty Oils Offer Opportunity for Retailers PAGE 14 SPECIALTY DISTRIBUTORS & BROKERS n Rare Edibles Feeds Dallas Culinary Scene PAGE 15 NATURALLY HEALTHY n Gluten Free Mixes and Blends Offer Unexpected Options PAGE 16 SMALL ELECTRICS n Electric Can Openers PAGE 34 News ..............................................6 Ad Index .......................................35 Smorgasbord ................................35 www.gourmetnews.com G OURMET N EWS T H E B U S I N E S S N E W S P A P E R F O R T H E G O U R M E T I N D U S T R Y ®

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