FOOD
INDUSTRY
BUSINESS
ROUNDTABLE

The Sampler Email Newsletter
September 2004



Welcome
Welcome to another issue of the FIBR Sampler, an electronic newsletter that keeps you connected with FIBR and regional food industry issues. Tell your friends and colleagues to sign up for this e-letter by filling out the information at www.fibr.info. However, if you do not wish to receive future issues of the Sampler, you can be removed from our mailing list by sending an email to list@fibr.info with REMOVE FIBR in the subject line.

Topics covered in this issue--

• 2004 HACCP Classes - Open for Registration
• The Low Carb Craze: Here to Stay? Or a Passing Fad?
• FIBR Companies to Participate in Feasibility Study
• Proposition 72 - This Vote Affects Business
• Members In The News
• Food Industry Calendar of Events
• Don't Forget to Join FIBR!

2004 HACCP Classes - Open for Registration!

For all of you who have been patiently waiting for the Food Safety with FIBR Training Institutes 2004 session - it's here! The 8-day training session is scheduled from October through December. Space is limited to 50 people, so don't delay, register today!

This multi-subject program is designed to improve the proficiency and knowledge of business owners, managers and employees by helping companies implement quality-oriented systems of production for different food products.

The FIBR Training Council, a collaborative effort among industry, regulatory agencies, academia and consultants, will provide a curriculum on GMPs (Good Manufacturing Practices), SCPs (Sanitation Control Procedures and HACCP (Hazard Analysis Critical Control Points). This year's group of trainers includes:

• Masaaki J. Hori

  Supervising Food and Drug Investigator, California Department of Health Services, Retired

• Melissa L. Calicchia, M.S.

  Senior Technical Director, Food Safety Solutions, Inc.

• John N. Pesce

  Operations Manager for Food Safety, Felbro Food Products

• Akiko Tagawa

  Environmental Health Specialist IV, County of Los Angeles Department of Health Services, Environmental Health, Consultation and Technical Services Unit.

• Kenny Yee

  President, Wing Hing Noodle Company

FIBR is excited to present this diverse and experienced corp of trainers. If you are interested in joining the FIBR Training Council as a future trainer, please contact Yvette Nunez at 213/763-2520 ext. 227.

At the end of the program, participants will have a HACCP plan (or an updated plan) for their company and will receive a Certificate of Completion from FIBR for the entire program.

Who Should Enroll?

Business owners, senior officers, QA/QC managers and production supervisors. Many business who have participated in the program, send new groups of employees each year because of the dramatic results they have seen in those who have completed the program. Joel Friedman of the Mikawaya Company said "We not only learned the do's and don'ts, but also how to think, plan and create food safety and quality control programs."

What are the Objectives of the Program?

To develop and implement GMP's, SCP's and HACCP. These essential quality-oriented systems are vital in today's food processing industry - everyone is looking for food safety assurances and many companies now require third party audits. Cheryl Cartwright of the Westar Nutrition Corporation said of last year's sessions "This program covered an intimidating issue, but the instructors made HACCP understandable and implementable."

What are the Benefits of the Program?

Just ask Cathie Flanigan of Flanigan Farms, Inc. who found cost savings as an unexpected benefit, "FIBR's food safety program resulted in cost savings for our company and engaged our employees in actively helping each other implement even higher standards of quality and service." Mike Page of La Mexicana Foods told FIBR "I was able to reduce my workers' compensation costs as a result of the HACCP plan I put together from my participation in the program."

Unexpected benefits like cost savings, improved vendor relations and new contracts are inevitable when your company has successfully completed the program and implemented your HACCP ready plan. Along with a Certificate of Completion from FIBR, participants will leave with an understanding of the importance of voluntary regulatory compliance with regulatory agencies and improved knowledge of the science behind food safety laws and regulations.

What is the Cost?

Compare our prices to other programs available from private firms and universities. Most average a cost of over $500 per participant for a two-day session and only cover one area of quality-management systems. FIBR is offering a comprehensive 8-day session which covers all three quality management systems: GMP's, SCP's and HACCP. At our highest rate, (which assumes you are not a FIBR member and wait until after the early registration deadline of September 15th), your cost is only $100 a day! Here is a breakdown of the fees:

Registration costs cover two employees per company, although you may register as many employees as you wish. FIBR believes that the best results come when more than one employee participates in the program, as it builds team spirit and collaboration. However, we do understand that for a variety of reasons, some companies can only send one employee to the training at any one time. Therefore, we are willing to make some exceptions to the 2 employee rule. If you are in this situation, we will allow you to send one employee at the rate of $900 regardless of membership status.

The registration fee includes all classroom materials, complimentary continental breakfast and afternoon snack. To register fill out the registration form below and mail to: Food Industry Business Roundtable, 520 W. 23rd Street, Los Angeles, CA 90007 Attn: HACCP Session 2004 or fax your registration to: 213/763-2729. If you have any questions, please contact Yvette Nunez at 213/763-2520 ext. 227.

Registration Form, 64KB [PDF] Click on the link to download.

The Low Carb Craze: Here to Stay? Or a Passing Fad?

Tortillas, Pastas, Beer, Bread, Ketchup, Chocolate, Doritos, Coke, Salad Dressing, Wine, Mac ‘n Cheese, Cereals…all carb-loaded foods to be avoided if you are on the Atkins or South Beach Diet, right? Not if you look in the right aisle of the supermarket!

With an estimated 10 million Americans participating in low-carb diets, it’s no wonder more and more low or no-carb products keep popping up on supermarket shelves. A recent survey by Reuters found that 25 percent of food and beverage manufacturers in the U.S. and Europe are actively developing low-carb products. Thousands of new products are expected in the next year and supermarkets are building whole new sections for customers watching their carbohydrate intake.

Increased consumer demands at Wild Oats Markets’ 100 stores have prompted the creation of a low-carb shopping guide on their website called “Counting Carbs – the Natural Way”. The guide offers information on popular low-carb diets, a sample shopping list and a list of products that have less than 5 net carbs per serving. The low-carb craze can even be seen in restaurants and fast food chains, where bun-less burgers and special low-carb menus are becoming the norm.

Atkins expects to have sales of more than $100 million this year and Carbsense, a small manufacturer out of Oregon has managed to get their line of products distributed in all 50 states since just April of this year. Carbsense Vice President of sales and marketing Kevin Dalrymple said “I’m absolutely amazed, my job has been so easy. If I introduce our company and send samples, the deal is done.”

But is the trend over? According to ACNielsen, more than 17 percent of U.S. households include someone on a low-carb diet. However, that same report, which surveyed 10,000 American households, found 19.2 percent of those surveyed reported that their household include someone who used to be on a reduced-carbohydrate regimen but isn’t any longer. And many promoters of higher-carb products expect their sales to be strong. Sara Lee, for example, has seen some of their new noncarb-reduced products have double-digit increases in sales and buyers include people on low-carb diets. And according to Tim O’Connor of the U.S. Potato Board, potato sales in 2003 were 2.6 percent more than 2002. And even though french fry sales have been a little soft, they too are beginning to recover, according to O’Connor.

Further, the airline industry doesn’t seem too worried about the low-carb craze either. Although American and Northwest Airlines now offer low-carb menus for their passengers, not many other airlines do. There has also been a trend of several multi-million dollar campaigns being launched by manufacturers of higher-carb food products. For example, the potato industry has responded to the low-carb craze with a $4 million advertising campaign and the Idaho Potato Commission launched their own $2 million campaign which highlights the health benefits of potatoes, such as no-fat and high vitamins. Citrus growers put in $1.8 million in advertising after orange juice consumption fell 5% last year. Even the National Pasta Association in the U.S. is sponsoring a conference whose focus will be strategies to compete with the low-carb movement.

And it’s not like low-carb products are cheap to produce. Most use a relatively expensive isolated form of soy protein instead of flour. This, of course, is reflected in the price the consumer pays at the supermarket or at many of the specialty dot com food stores springing up all over the Internet (i.e., lowcarbsuperstores.com, low-carb.com, synergydiet.com). But as processes continue to improve and the demand continues to grow, these costs are expected to go down.

So even with headlines like “Low interest in low carb” and “Carb-counting Already Considered Passé by Many” (New4Jax.com), many think carb-conscious Americans are here to stay. Just consider that since 2000, 816 new carb conscious products were introduced into the marketplace, according to market research firm Productscan Online. And NPD Group Vice President Harry Balzer reported that a recent study by NPD Foodworld showed the consumption of high-protein breakfast foods like eggs, bacon and sausage is at a 10-year high. Even at this year’s Fancy Foods Show, the demand for these products was evident – where low-carb, no-carb and sugar-free products could be seen everywhere.

Sales of low-carb branded foods surged $815 million, to $1.13 billion in the 12 months ending June 13, 2004, according to market research firm Information Resources Inc. So the jury is still out, and you have to be the judge when it comes to your particular business. But consider this, even the “low fat craze”, that was considered the hot buzzword for food companies in the 90’s, has scaled back in terms of new product development. However, the low-fat food category still represents around $5 billion in sales. Trends may come and go, but one thing is for sure, consumers want to find good tasting alternatives that won’t change their lifestyle, but help them lose weight. So, like low-fat products, low-carb products may be here to stay.

FIBR Companies to Participate in Feasibility Study

FIBR members should have received a memo in August regarding a feasibility study to investigate the possibility of forming a group insurance plan for workers’ compensation coverage.

Dave Schwerdtmann from Dodge, Warren & Peters has been contacting companies about the study. Please respond to his phone calls. If you did not receive the memo and you are interested in learning more about the group insurance proposal, please call Dave at 310/463-3594 or e-mail him at dschwerdtmann@dwandp.com.

Proposition 72 - This Vote Affects Business

The FIBR Legislative Committee has been looking into the issue of California Senate Bill 2 (SB2) which was signed into law as the California Health Insurance Act of 2003 by then Governor Gray Davis last October 5th. Arguments for both sides are strong and can be divided into two categories: pro-business and pro-labor - although both sides will argue that it is not so black and white. The debate has prompted Proposition 72 which is, in essence, a reincarnation of SB2. A vote for Prop 72 is a vote for SB2. A vote against Prop 72 will eliminate the law SB2 created. The purpose of this article is to educate you about the facts and to let you decide for yourself. What is good for your business, your employees and the health care crisis California now faces? Regardless of who you vote for President, how you vote for Prop 72 will affect your business one way or another.

Just the Facts:

An estimated 6.7 million people in California have no health insurance, with about 70 percent of those being the working poor. In an attempt to address this issue, the new law would require employers to either buy insurance for their workers and dependents or pay a health care fee that would go into a state fund. Employers who select private insurance can apply to the state for a credit against the fee by demonstrating that they pay at least 80 percent of the premiums for insurance coverage that meets the state's requirements. Employees would be required to contribute up to 20% of the cost of the fee or premium charged to the employer.

This current law would be phased in over time and have different requirements depending on the size of your workforce. Employers with 200 or more workers would either pay into the state fund or pay for 80% of the premium costs for workers and dependents. For this group, the effective date is January 1, 2006.

Employers with 50 to 199 workers would also be required to pay into the fund or pay for 80% of the premium costs for their employees, but not their dependents. The effective date for this group would be January 1, 2007.

Currently small businesses with 20 to 49 employees are exempt unless a partial state tax credit is enacted. Under the current law, businesses with fewer than 19 employees are completely exempt.

Arguments for Proposition 72

Visit the website www.yesonprop72.com and you will find a section called Myth vs. Fact, Quick Facts, a July, 2004 report by the California Medical Association on how Prop 72 will relieve the strain of California's emergency rooms, and of course a media center, ways to make contributions and how you can take action. The following arguments also appear in support of the Proposition:

Safeguards Private Health Insurance

19 million Californians currently get private health insurance from their employer. Under Prop 72, employers can keep the same coverage paying as much as 100% of premiums. Employees get the added security of knowing that employers cannot pay less than 80% of premiums and must maintain preventive care, prescription drug and major medical coverage.

Extends Health Insurance to More Working Families

Under Prop 72, another 1.3 million Californians - workers and their families - will be able to see their own doctor, rather than rely on emergency rooms and clinics. Prop 72 is an important step in making sure that everyone has access to affordable health care.

Taxpayer and Business Protections

California taxpayers pay $4.6 billion annually to cover ER and other health care bills for the uninsured. By extending health insurance to 1.3 million Californians, Prop 72 will save tax dollars and help relieve the burden on emergency rooms.

• Businesses benefit from a healthier, more productive workforce.
• Small businesses are exempt (including 93% of all restaurants and retailers).
• Levels the playing field by taking away the unfair competitive advantage some large corporations have because they don't provide insurance to their employees.

California Families will Save Money

The average family in California already pays nearly $2500 annually in premiums (KFF/HRET California Employment Health Benefit Survey). Opponents of Prop 72 estimate that 72 will cost the average family up to $1,700 per year. Even by the opposition's own estimates, Prop 72 will save money for the average family right now.

Who is Supporting Proposition 72?

The Yes on Prop 72 website cites some 160+ organizations representing health care consumers and providers, including doctors, nurses, seniors, patients, and working families. Among this group are the California Medical Association, the California Labor Federation, the California Nurses Association, Worksite Wellness Los Angeles, the California Teachers Association and the AFL-CIO.

Arguments Against Proposition 72

Visit the website www.noprop72.org and you will be transported to www.stopthehealthtax.org. The group who helped put SB2 on the November ballot are Californians Against Government Run Health Care. On their Website your will find a copy of Proposition 72, a "Get the facts" section, How Prop 72 Affects You, a newsroom section and of course how you can join the coalition, make a contribution and spread the word. They also have their own study about the affects of the proposition called "The economic impact of mandatory health insurance coverage on Californians" which was conducted by the Los Angeles County Economic Development Corporation. The following arguments against Proposition 72 also appear on the site:

Prop 72 is a $7 billion tax increase on California businesses, public entities, non-profit groups and the workers they employ.

This law would force employers to pay an estimated $5.3 billion in taxes to fund a massive new state bureaucracy that would provide health benefits. Workers, whether or not they want or need this coverage, would pay an additional $1.7 billion out of their paychecks.

Prop 72 will make California the only state in the nation to impose an expensive new healthcare tax on employers and employees at a time when many struggling businesses are just starting to rebound from the weakened economy.

According to the Los Angeles County Economic Development Corporation, Prop 72 would cost businesses with 200 or more employees $6,803 per employee per year to cover the employee and his/her dependents. Smaller employers would pay $2,482 to cover each employee.

Economists say that businesses will be forced to drastically raise prices for almost every product and service we use to pay the billions in new taxes.

Prop 72 will put government bureaucrats in charge of our healthcare system.

An un-elected state board will determine the taxes we'll pay and the health benefits that will be mandated under this scheme. The board will not be accountable to the public.

The board will review private coverage and determine if it meets the state requirements.

The board will determine what doctors fall under the state plan and what procedures are covered.

Prop 72 will not reform health care

Real reform would contain medical costs -- not increase taxes to create a huge new government program.

The law does not contain any controls for skyrocketing health care costs.

Some companies that now offer private healthcare coverage will drop their private insurance and opt for the state-run program.

Californians could lose their ability to choose the health care plan that meets their family's needs and end up paying more for less healthcare coverage under Prop 72.

Patients may have no choice in selecting their doctors and face longer waiting times.

Doctors may face more delays in payment for their care.

Prop 72 is a poorly written law

Governor Davis signed this law two days before he was recalled.

Politicians in Sacramento passed this measure at the last minute without the opportunity for meaningful public input, analysis and review.

Non-profit groups, schools, local governments and others were never asked how SB 2 might impact their ability to serve the public.

Who is Against Proposition 72?

When we first began researching SB2, it seemed that every Chamber of Commerce in California has come out against the proposition including the Los Angeles Area Chamber of Commerce, the California Chamber of Commerce, and the San Diego East County Chamber of Commerce. Quoted supporters on the No on Prop 72 website include the California Restaurant Association, the California Retailers Association, Goodwill Industries of Long Beach & South Bay, the California Chapter of the Association of American Physicians and the National Federation of Independent Businesses.

Now that you have all the facts in front of you and links to arguments on both sides, we hope you will analyze the effects of the proposition on your business, your workforce and their families. No matter which side you are on, this is an election where your vote can really impact your business, your employees, and all Californians.

FIBR is interested to know how you feel. If you would like to share your thoughts, please do not hesitate to send us an e-mail at ynunez@fibr.info. Your opinions and thoughts are important in helping us better serve our members and the Southern California food processing industry.

Members In The News

Akiko Tagawa, a member of the FIBR Training Council has just been promoted! Akiko will be leaving her current position of Environmental Health Specialist IV at the County of Los Angeles Department of Health Services Environmental Health unit and will join the L.A. County Department of Health's Organizational Development and Training unit as Assistant Staff Analyst! Way to go Akiko!

Capitalizing on its previous successful track record of providing capital to the food processing industry, Los Angeles LDC is scheduled to close a $10 million real estate loan fund in mid September 2004, announced Michael Banner, President and CEO. He added that "our 504 ACE Fund Loan Fund2004 will be available in mid October 2004 to fund real estate loans to qualified FIBR members and other local businesses." Moreover, "the 504 ACE Loan is a direct result of our work with family-owned businesses that need higher leverage - up to 90% of value and the sophistication of a lender who understands the dynamics of the food industry as well as we do".

The 504 ACE Loan Fund will provide real estate loans ranging from $250,000 to $1,500,000 with competitive rates and terms. In addition, the fund can participate with other lenders in a junior position - up to a 90% loan to value. For more details, please call Ron Lowe at 213-362-9117, or contact him via email at rlowe@losangelesldc.com.

Food safety expert Jeff Nelken was featured on Inside Edition report which aired on July 23, 2004. The story's focus was on bad produce that had been disposed of and was then retrieved and sold to the unsuspecting public - Jeff's expertise helped to address the food hazards of this behavior.

Hiro Watanabe of Red Shell Foods shared his excitement about a recent visit to Honolulu to visit his brother - to his surprise he found both his Miso and Sesame Soy salad dressing at both of Honolulu's Foodland and KTA Supermarkets!

Congratulations to Henry Leong of Quon Yick Noodle Company on his successful work during his term as President of the Chinese Chamber of Commerce - in July of 2005 he will hand over the reign to no other than FIBR's Kenny Yee of Wing Hing Noodle Company! That's the community spirit guys!

FIBR President Mark Roth of El Burrito Mexican Food Products is happy to report that the Nielsen Report has listed his Soyrizo product as the #1 refrigerated soy product in Southern California - and El Burritos's Soytaco is coming in strong at #20! How can you top that? How about your product being featured on Veg T.V. where television personality Jane Valez-Mitchell showcased Soyrizo as her favorite soy products and used it to demonstrate how to make Paella! Keep producing that great tasting food Mr. President!

If you have "Member News" to share, please contact Yvette Nunez at 213/763-2520 Ext. 227 or email her at ynunez@fibr.info. We want to share in all you do!

Food Industry Calendar of Events

If you know have information about events that would be of interest to the food processing industry, please e-mail the information to info@fibr.info. If after review of the information FIBR feels the event is appropriate for our calendar, we will gladly list it on our website.