Ipsos-Reid Grocery Digest VOL.47 NO. 30 July 24, 2003 Reading Time: 14 Minutes PEOPLE JOHN BAILEY JOINS SLEEMAN BREWERIES THE WHAT’S ON REPORT 07/21 Sleeman Breweries Ltd., Guelph, ON has appointed John Bailey as managing director of its Quebec operations, effective April 11. He succeeds Guy Letourneau who has left for other opportunities. Bailey is a 20-year industry veteran, previously with Molson Inc. as vice president marketing. JEAN-YVES MONETTE REPLACES FORTIER AS VAN HOUTTE CEO THE WHAT’S ON REPORT 07/21 Van Houtte Inc., Montreal, QC has appointed Jean-Yves Monette as president and CEO replacing Marc G. Fortier, who is “moving on to new challenges after successfully refocusing the company.” Monette also becomes a member of the board. Monette has more than 30 years of experience in the food business, including 15 years in the coffee industry. He joined Van Houtte in 1994 as president of the Coffee Group and most recently was executive vice president and president of coffee operations. INDUSTRY NEWS CANADA: UNILEVER TO CLOSE MARGARINE FACTORY JUST-FOOD.COM 07/24 The Canadian unit of Anglo-Dutch consumer products giant Unilever is to close its margarine factory in St John’s, Newfoundland, with the loss of 17 jobs. The company said its would transfer production to a plant in suburban Toronto at the end of next March, reported the Canadian Press. ONTARIO PORK OFFERS PROFESSIONAL WEB SITE THE WHAT’S ON REPORT 07/21 A new web site designed for cooking professionals has been created for the Ontario Pork Producer's Marketing Board at www.porkpeople.com/foodservices. Jim Vidoczy, director of marketing at the board said, “Professionals will now be able to have all pork related questions answered as they relate to the foodservice industry.” The site offers recipes such as grilled butterflied tenderloins, orange coriander kabobs, osso porko, pork pad Thai, and salsa schnitzel and include preparation video clips. All recipes are by Ontario Pork executive chef and chief nutritionist Bruce Thompson. Weekly News Bulletin Editor: Dorothy Kilpatrick P: 416-324-2900 ext. 4409 F: 416-324-2865 email@example.com NOTE: THAT NO EDITORIAL CORRECTIONS ARE APPLIED TO PUNCTUATION, STYLE AND CONTENT OF SOURCE PUBLICATIONS. Page 2 Ipsos-Reid Grocery Digest July 24, 2003 EAST GETS A TASTE OF BARGAIN BEEF THE EDMONTON SUN 07/24 Cheap Alberta beef is heading to central Canada so that southern Ontario consumers can buy hamburger meat for less than $1 a pound. Calling the campaign BeefEast, Alberta beef producers plan to sell six truckloads of frozen lean ground beef in the area surrounding Toronto Jul 25. It's an effort to force retailers to lower beef prices in the mad cow aftermath. "We hope to motivate these eastern retailers to sell beef cheaper than they have been," Rick Paskal, an Alberta feedlot owner, said from Guelph, Ont. "We are desperate. We've got to move this product and we need 20 million consumers in Eastern Canada to help us out." Dozens of Alberta beef producers who are co-ordinating BeefEast plan to continue shipping cheap beef to Ontario and Quebec until more retailers there get on board and sell cheaper beef. Beef producers claim retailers have been buying cheap beef since mid-May when one Alberta cow was discovered to have mad cow disease and international borders closed to Canadian beef. But it is only recently, after producers sold cheap hamburger in the Calgary area, that most Alberta retailers have been offering beef at discount prices. Those prices still haven't come down in most stores in other parts of the country. John Scott, president of the Canadian Federation of Independent Grocers, disputes that Ontario and Quebec retailers are getting their beef cheaper since mid-May. "Certainly, retailers are taking no more margin than they were before," said Scott, who represents 3,800 grocery stores across Canada. "Nobody wants to charge the consumer one penny more than they have to." LOBLAW PROFIT JUMPS; TO EXPAND NON-FOOD SALES YAHOO!FINANCE 07/17 Loblaw Cos. Ltd. said its profit rose 22 percent in the second quarter as supermarket sales increased 9 percent, and said it will sell more non-food items such as computers and children's clothes. "We are going to sell more non-food items, like we do in our super centers in Western Canada, and are planning to do the same in the eastern Canadian market," said Jeff Wilson, vice-president of investor relations at Loblaw. "We are talking about (President's Choice house brand) home products and we will continue to roll out more products in our stores: pharmacies, medical centers, fitness centers, kids' clothes," he told Reuters. Loblaw said it earned C$182 million, up from net earnings of C$149 million, in the same period in 2002. Revenue rose 9.2 percent to C$5.8 billion from C$5.3 billion, with same-store sales increasing 5.8 percent. Loblaw said it not contemplating any acquisitions. "We are not looking for any acquisitions. We see opportunities for organic growth," Wilson said. Loblaw said it opened 12 corporate and franchise stores during the quarter but closed eight. Page 3 Ipsos-Reid Grocery Digest July 24, 2003 LOBLAWS UNION SETS SUPERSTORE WAGE CUTS THE TORONTO STAR 07/19 The union representing thousands of workers at Loblaws stores in Ontario has agreed to wage and benefit concessions at new superstores in exchange for automatic recognition as Canada's largest grocery chain prepares to compete with Wal-Mart. The United Food and Commercial Workers union held meetings across the province this week to notify members of the deal it signed with Loblaw Cos. Ltd. on July 11 after months of negotiations. Some members applauded leaders of their local for meeting head-on the threat of the non-unionized U.S. retailer. Its entry into the Canadian grocery market is widely seen as imminent. Local 1000A president Kevin Corporon said the deal makes the best of a difficult situation. He said Loblaw told the union in December it planned to build all new stores under the Real Canadian Superstore banner, a move that would allow it to hire non-union staff. But Loblaw wanted to attach its old brand name to the new superstore banner, which is a fixture in Western Canada but unknown in Ontario. That plan required the union's agreement because of successor rights, Corporon said. The company told the union it would negotiate only if union leaders agreed not to hold a membership vote, he said. Without an agreement to recognize the union in the superstores, Corporon said, workers at conventional stores would have lost jobs as the company shifted operations to the new, low-wage format. So, the local's divisional officers voted to give leaders a mandate to reach a deal. Under the deal, top wages at the new superstores would range from $10 an hour for part-time general merchandise employees to slightly more than $20 an hour. Top wages at conventional stores range from $13.50 to more than $22 an hour. Superstore employees would also have fewer benefits, work more Sunday shifts and get fewer weeks of vacation. Loblaw has also asked locals representing workers at its Fortinos and Zehrs stores in Ontario to agree to concessions at the new superstores. THRIFTY FOODS INSTALLS CASHIER EXCEPTION-REPORTING SYSTEM SUPERMARKET NEWS 07/24 Thrifty Foods, Vancouver Island, BC., an 18-store chain, has installed a front-end exception-reporting application to reduce cashier theft, Aspect Loss Prevention, supplier of the system, announced. Aspect, Bloomington, Minn., markets a loss prevention solution, Elite LossPREVENTION, that Thrifty has selected. "We needed an exception-monitoring software that ensured our ability to customize it. Aspect is very easy to customize," said Bruce Thompson, risk manager for Thrifty Foods. MAPLE LEAF'S PROFIT MINCED BY CONTINUED MEAT OVERSUPPLY GLOBE & MAIL 07/24 Maple Leaf Foods Inc. saw its second-quarter profit sliced to pieces because of a continued meat oversupply across North America and a weaker Japanese pork market. Profit was hurt as well by the restructuring of a meat processing operation in Atlantic Canada and a labour dispute at a bakery distribution centre in Quebec. (Cont’d) Page 4 Ipsos-Reid Grocery Digest July 24, 2003 MAPLE LEAF'S PROFIT MINCED BY CONTINUED MEAT OVERSUPPLY (Cont’d) The impact of a case of mad-cow disease in Alberta pinched the results only slightly, as did the declining value of the dollar against its U.S. counterpart, the company said. For the three months ended June 30, Maple Leaf's profit plunged to $1.8-million from $22.6-million the same period a year earlier. Sales slipped to $1.26-billion from $1.28-billion. Michael McCain, president and chief executive officer said the company was not affected much by the case of mad-cow disease or bovine spongiform encephalopathy. Maple Leaf is not a big beef processor, although sales have dropped for rendered products, Mr. McCain said. Shipments of rendered products and animal feed into U.S. markets have been squeezed, he said, and sales of beef feed in Alberta were also reduced. Mr. McCain said the company continued to show strong gains in "value-added" bakery and branded fresh and processed meat sales. For the six months ended June 30, profit dropped to $7.8-million from $39.5-million. Sales rose to $2.51-billion from $2.50-billion. In the second quarter, meat sales declined to $718.7-million from $751.1-million a year earlier, primarily because of lower prices in the domestic and export markets for pork. Losses from operations of $8.5-million included a $3.5-million pretax gain related to the windup of a defined-benefit pension plan for hourly employees. That compared with operating earnings of $14.7- million last year. Maple Leaf pork increased the volume of hogs processed by 4 per cent in the quarter. However, dollar sales dropped as a result of lower fresh meat prices because of the continued oversupply of meat in the market, the company said. Bakery sales in the quarter grew 9 per cent to $314.1-million from $287.3-million. FOLGERS CANS COFFEE CAN FOR ITS BEANS NEW YORK POST 07/22 Folgers, the U.S.'s largest coffee purveyor, is retiring its metal cans starting in September, and replacing them with a high-tech plastic container that keeps ground beans airtight. The money savings of the switch is "insignificant," said Folgers spokesperson Tonia Hyatt. "It's for consumer convenience. We tested the new container against the metal one, and people don't want the metal cans anymore." The new plastic container doesn't need a can opener and is opened by a pull-off seal. An air-tight lid clamps onto the container, allowing ground coffee to be poured out through a one-way valve that protects freshness. Folgers doubted that customers would miss the metal cans for their varied uses, from paint-brush cleaning to storage of odds and ends. "The new container is even better suited for re-use, and won't have any jagged metal edges, and goes into the dishwasher," Hyatt said. Page 5 Ipsos-Reid Grocery Digest July 24, 2003 KRAFT MISSES ITS FORECAST, WILL CUT SOME PRICES THE CHICAGO SUN-TIMES 07/17 Shoppers who recoiled at Kraft Foods' price increases on cookies and crackers earlier this year will get a reprieve. Kraft announced it will cut prices on some of its products and spend more money to advertise others to try to stem falling sales of its most important, high-margin products, notably cheese, crackers, cold cuts and coffee. The moves are designed to reverse worrisome trends underlying what Kraft executives called a disappointing second quarter, in which profit rose less than the Northfield-based company's own forecast. Kraft is finding it tougher to fend off cheaper store brands, especially in a weak, job-scarce economy. Kraft also suffered when its Nabisco unit's "Chips Ahoy Warm 'n Chewy" cookies suffered disappointing sales. For reasons a Kraft spokeswoman could not explain, the cookies had to be pulled off the market for a short period in Canada, where there were problems with the microwave instructions. The company also was hurt because of the financial woes of some of its customers, including Fleming Cos. and Kmart. Kraft now expects volume growth of 2 percent this year, lower than its already-shrunken estimate of about 3 percent. Earlier this year, Kraft had raised wholesale prices on some of its cookies and crackers, including Oreo and Ritz, by about 3 percent because of higher cocoa and wheat costs. Most of the price increases amounted to about 7 cents a package wholesale. For the second quarter, Kraft reported its net income increased to $949 million, from $901 million, a year earlier. Sales rose 4.4 percent to $7.8 billion. Among a few bright spots were strong sales of Uh- Oh Oreos, Capri Sun Sport drink and Altoid breath-freshening strips. KRAFT EYES ACQUISITIONS TO BOOST GROWTH REUTERS.COM 07/16 Kraft Foods Inc. will continue to look for acquisitions to boost growth, its co-chief executive said. Kraft Co-Chief Executive Betsy Holden said the food maker will "continue to look for both tack-on and larger acquisitions that can help accelerate our (sales) growth." KRAFT SLIMS DOWN KIDS MARKETING MARKETING MAGAZINE 07/14 Kraft Foods has promised to cut the fat. The Northfield, Ill.-based manufacturer says it will cut down on portion sizes and develop more nutritious products. Kraft also says it will halt in-school marketing to children. "We're distinguishing it from vending," says Michael Mudd, Kraft Foods' senior vice-president of corporate affairs. "So what we're talking about is product promotion, contests, book covers, posters, sponsorships and programs in schools with a selling intent and marketing message-all of that, we're going to stop." Page 6 Ipsos-Reid Grocery Digest July 24, 2003 HERSHEY CONTINUES ‘VALUE-ENHANCING STRATEGY’ ADAMS BUSINESS NEWS 07/18 Continuing its “value-enhancing strategy,” Hershey Foods Corp. is introducing items, eliminating and divesting others, relocating production lines and realigning its sales organization. Hershey says it expects these actions to result in a net charge of approximately $17 million this year. Rich Lenny, Hershey president and CEO, says the initiatives “are the latest steps in our value- enhancing strategy. The sale of non-strategic brands and relocation of certain manufacturing lines will further streamline the supply chain, ensuring proper resource allocation against our growth opportunities. Realigning the sales force provides us with superior category selling capabilities and improved coverage at retail.” On the new product front, late this year Hershey will introduce Hershey’s S’mores, a candy bar form of the traditional campfire favorite, incorporating graham crackers, marshmallow and Hershey’s milk chocolate. Hershey will also debut Swoops, potato chip-like chocolate slices in four flavors that will be packaged in recloseable “on-the-go containers.” In addition, Hershey will reportedly add another variety of Kisses, said to be produced in Hershey, PA, after the company relocates Kisses with Almonds production to its Oakdale, CA, facility. Production of Skor toffee bars will also move from Hershey, PA, to the company’s Robinson, IL, plant, according to industry sources. Lenny provided no details on Hershey’s sales force realignment or which items the company is eliminating. DANONE RETURNS TO A PROFIT BUT IS HURT BY STRONGER EURO WALL STREET JOURNAL 07/24 Danone SA swung back to a net profit in the first half after having taken a massive charge a year earlier, but the food and drink maker's operating profit slipped 1.1% on the impact of the stronger euro and weaker consumer-goods markets. The food and drink maker said net profit was €402 million ($454.3 million), reversing last year's €630 million loss. Danone said operating profit slipped 1.1% to €787 million, down from €796 million, as it soaked up the impact of the stronger euro. Danone said revenue in the first half slipped 7.5% to €6.62 billion from €7.15 billion a year earlier. Excluding the effect of the stronger euro, Danone said revenue would have grown 7.2%. Danone's biggest operating segment -- fresh dairy products -- again contributed the lion's share of the company's operating profit, rising 2.9% to €425 million. But its drinks business turned in a more impressive 13% increase in operating profit to €270 million, while cookies and crackers generated 3.9% less in operating earnings at €124 million. Danone didn't provide separate figures for the second quarter, but noted like-for-like revenue growth slipped in April-June to 6.6% from 7.8% in the first quarter of 2003, reflecting the impact of the severe acute respiratory syndrome outbreak on Asian operations as well as the stronger euro. Page 7 Ipsos-Reid Grocery Digest July 24, 2003 PEPSI INTERVIEWING CHIMPANZEES FOR $1 BILLION GAME SHOW ADVERTISING AGE 07/21 Pepsi-Cola Co.'s big-stakes Pepsi Play for A Billion game show hits the WB on Sept. 14, awarding what could be the largest lottery pot in history. "No one has to live in a house together," said a Pepsi Cola North America spokesman. “No one has to eat bugs and no one’s getting married but someone will win a million dollars.” They will, however, have to match wits with a chimpanzee. Hopefuls from May 1 to Aug. 15 are screwing caps off bottles of Pepsi Cola, Mountain Dew and Sierra Mist, checking the code under the cap, entering the code online and awaiting notice. Shortly before the show's 8 p.m. start, the 1,000 selected contestants will pick a random six-digit number, of which there are 1 million possibilities. Meanwhile, a chimpanzee will be given six one-digit numbers to arrange into a single six-digit figure. The primate's number (the $1 billion number) will be kept secret, though the 990 players whose numbers are not the 10 closest to the chimp's will be eliminated. Show host Drew Carey will tell the 10 left standing that one of them is furthest from the monkey's number. They can either walk away with an undetermined sum of money or take their chances that they could advance to the $1 billion round. The process will be repeated eight times for eight contestants, each of whom will give their number to a remaining player. When the panel is down to two, the players will be told they can take a consolation prize, likely to be in the $100,000 range, or stick around and play for $1 million. If neither leaves, the player with the number closest to the monkey's wins $1 million, and the other likely nothing. The $1 million winner would keep that sum and win another $1 billion if his or her number exactly matches the monkey's. The format isn't finalized, but other contestants -- not among the 1,000 -- will be able to compete to win other non-cash prizes, such as an around-the-world trip on promotional partner UAL Corp.'s United Airlines, prizes from new partner Marriott International and other items. The network already has sold several 30-second spots to marketers besides Pepsi, which is devoting millions to marketing Billion and Pepsi Smash. OLD-SCHOOL KODAK HIT BY SWITCH TO DIGITAL CAMERAS FINANCIAL POST 07/24 Just five years ago, digital cameras made up less than 1/20 of camera sales at Broadway Camera in Vancouver, while traditional film cameras comprised more than 95% of sales. Now, store owner John Low estimates digital models take make up more than 4/5 of the pie. Digital is replacing film, and it's a trend that is killing Eastman Kodak Co. The Rochester, N.Y.-based company said it would cut up to 6,000 jobs after it posted a 60% drop in second-quarter profits as camera and film sales remained weak. Profits declined to US$112-million, from US$284-million during the same period last year. Revenues grew slightly to US$3.35-billion from US$3.34-billion, but the growth had more to do with a favourable exchange rate than with increased volumes. Excluding the benefit of foreign exchange, sales declined by 6%. Kodak chief executive Dan Carp said that Kodak has to "get on with the reality" that the consumer film business will be in constant decline as the use of digital cameras continues to grow. (Cont’d) Page 8 Ipsos-Reid Grocery Digest July 24, 2003 OLD-SCHOOL KODAK HIT BY SWITCH TO DIGITAL CAMERAS (Cont’d) Mr. Carp said the company now expects digital to slow film sales in the U.S. by 8% to 10% this year, higher than an earlier forecast of 4% to 6%. Kodak is in the midst of a retrenchment, cutting costs and realigning its business as it searches for ways to expand its business as the film industry shrinks. Kodak said it plans to cut between 4,500 and 6,000 jobs, or between 6% and 9% of its global work force. Meanwhile, the company is reorienting itself away from the traditional film and photographic paper business toward its more profitable digital camera business and medical imaging division. During the last quarter, digital camera sales grew 65% and broke-even for the first time. Kodak is also counting on continued growth in sales at its Picture Maker kiosks, which allow digital camera users to pick and choose the images they want to have printed at special kiosks, and increased demand for its special inkjet paper, which allows digital users to print their photos on their home computer. CADBURY COUNTS ON BOTTLERS TO HELP REVIVE ITS 7UP SALES WALL STREET JOURNAL 07/24 Independent bottlers have the "commitment and hunger" to turn around 7Up's declining sales and boost the U.S. beverage business for Cadbury Schweppes PLC, the company's chief financial officer said. The British candy and beverage company reported an 18% decline in profit for the first half of 2003 and attributed the weak results partly to a slowdown in the U.S. beverage market. Cadbury, the world's No. 3 soft-drink company world-wide behind Coca-Cola Co. and PepsiCo Inc., has struggled with distribution for 7Up after the biggest Pepsi bottlers dropped the lemon-lime brand earlier this year in favor of PepsiCo's Sierra Mist. Cadbury said these changes resulted in 7Up sales falling 16% in the first half of the year. David Kappler, Cadbury's finance chief, said that independent bottlers have shown a "commitment and hunger" to expand 7Up sales that wasn't possible in the Pepsi bottling system. Last year, Cadbury saw its soft-drink market share in the U.S. fall 0.6 percentage point to 15%, as its two biggest brands, Dr Pepper and 7Up, lost share. Cadbury reported that net profit for the 24 weeks ended June 15 declined to £185 million ($295.6 million or €260.9 million) from £226 million a year earlier. Overall revenue increased 15% to £2.70 billion from £2.35 billion a year earlier. Mr. Kappler also said Cadbury was not looking to expand its presence in the bottled-water market because growth is slowing in the category and profits are being squeezed by a three-way price war involving Coke, PepsiCo and Nestle SA, primarily in grocery stores. Cadbury offers a water brand, Deja Blue, to bottlers to fill out their product lineup, Mr. Kappler said. "It's not a top marketing priority for us," he said. "I'm not sure the profitability of that market is going to be terribly exciting going forward given the number of competitors in there." Page 9 Ipsos-Reid Grocery Digest July 24, 2003 INTERNATIONAL FINDUS UP FOR SALE WITH €700M TAG FINANCIAL TIMES 07/19 Findus, one of Europe's best known frozen food brands, has been put up for sale by its Swedish owners, with a price tag of around €700m ($790m). Findus, which sells everything from frozen Swedish meatballs to French bread pizzas, employs around 3,000 people, and sales in more than 20 countries generate around €800m of turnover a year. MERGERS, ACQUISITIONS & JOINT VENTURES PANGEO SELLING HEALTH PRODUCTS BUSINESS, PLANT TO JAMIESON GLOBE & MAIL 07/22 PanGeo Pharma Inc. has reached agreements to sell its natural health products business and a Vancouver manufacturing plant, as the Montreal-based drug developer begins to sell assets while it restructures under bankruptcy protection. PanGeo announced that it will sell its Quest and Wampole branded vitamin and herbal lines to Jamieson Laboratories Ltd. The deal also gives Jamieson PanGeo's manufacturing operations located in Vancouver. SMITHFIELD FOODS ACQUIRES CHEF M.J. BRANDO'S GLOBAL CULINARY SOLUTIONS; FORMS SMITHFIELD INNOVATION GROUP CANADA NEWSWIRE 07/18 Smithfield Foods, Inc. announced the acquisition of Global Culinary Solutions, Inc.and the formation of the Smithfield Innovation Group to develop new products for customers in retail, club store, and food service channels. Global Culinary Solutions is an integrated food product development, manufacturing, and marketing company headed by Michael J. Brando, a certified master chef with over 30 years of experience in culinary arts. Chef Brando will assume the role of president of the Smithfield Innovation Group. RESEARCH/MARKETING RESEARCH MAJORITY IN FAVOUR OF GMO PRODUCTS FINANCIAL POST 07/21 According to a survey of 139 chief executives and leaders of small and medium-sized Canadian companies, 59% were positively inclined toward foods containing genetically modified organisms (GMOs) because they involve using science to improve the shelf life, quantity and value of food. At the same time, 37% of respondents said that genetically modified foods should be heavily regulated or prohibited because they are not yet proven safe. (Cont’d) Page 10 Ipsos-Reid Grocery Digest July 24, 2003 MAJORITY IN FAVOUR OF GMO PRODUCTS (cont’d) The survey results of the Financial Post/COMPAS poll emerged as part of a series of questions about the current trade battles between Canada, Japan and Europe over the safety of Canadian beef and genetically modified foods. Among the key findings included a whopping 96% of respondents who declared that Canadian beef is as safe or safer than U.S. beef in the wake of the recent controversy over mad cow disease. As a result, 65% agreed that Japan's ban on Canadian beef is not the result of concerns over public safety, but rather an attempt by that government to promote its own domestic beef interests. Only 18% of those surveyed disagreed with the suggestion that Japan may have a hidden agenda for its trade ban. Similarly, 65% of Canadian business leaders surveyed agreed that the European Union's ban on genetically modified foods produced in Canada has little to do with medical or health concerns. Instead, they believe the sanction is part of a larger protectionist strategy designed to prop up heavily subsidized domestic agricultural industries. However, 20% of respondents disagreed with that interpretation. The full technical report and data are available at www.compas.ca. ACNIELSEN AND YAHOO! INTRODUCE ONLINE MARKETING TOOL FOR CPG INDUSTRY PROGRESSIVE GROCER 07/21 ACNielsen and Yahoo! announced the launch of Yahoo! Consumer Direct, Powered by ACNielsen, a new service that enables consumer packaged goods companies to reach consumers more effectively online and directly measure the offline sales impact of such efforts. Members of the ACNielsen Homescan consumer panel have chosen to participate in the program, granting permission to allow their offline purchasing to be analyzed in conjunction with their activity on the Yahoo! network. Yahoo! and ACNielsen then use findings from the Homescan panelists to find groups with similar demonstrated interest trends among Yahoo!'s monthly visitors. The Consumer Direct team then works with CPG clients to communicate to those consumers via customized online media campaigns, using a range of solutions from Yahoo!'s media and promotion suite. Lastly, the ACNielsen Homescan panel is used to evaluate the campaigns' ROI, including metrics around the impact on retail sales, brand loyalty, and more. FOOD SAFETY RANKED AS MOST IMPORTANT CONSUMER ISSUE IN CANADA THE WHAT’S ON REPORT 07/21 Food safety is ranked as the most important issue of the day by 88% of a new Canadian network of influential, informed and involved Canadians. The result comes from the 500-person Public Interest Network (PIN) created by the Consumers Council of Canada (CCC), Toronto, ON to “identify consumer issues that are set to become more contentious in the future.” Peta Lomberg, PIN project leader at the CCC, said, “The fact that the PIN has identified food safety as its number one consumer issue should be seen an early warning signal. Since the volunteer members of PIN are in tune with key consumer issues and are actively involved in their communities, it is our experience that they are ahead of the public opinion curve and their views will become more widely held in the future.” (Cont’d) Page 11 Ipsos-Reid Grocery Digest July 24, 2003 FOOD SAFETY RANKED AS MOST IMPORTANT CONSUMER ISSUE IN CANADA (Cont’d) Among the respondents: 40% have little or no confidence that the food they eat is safe; 68% have little or no confidence that genetically modified food is safe; 71% are not sure that the federal government has been communicating effectively on emerging health issues like mad cow (63% for the provinces). According to the CCC, “diminished consumer confidence in food and water safety means that loyalty to Canadian food producers, processors, distributors and retailers [including restaurants] is jeopardized and those who do not demonstrate safe practices risk consumers responding with their feet.” ADVERTISING HE LIKES IT, HE LIKES IT A LOT MARKETING MAGAZINE 07/14 An obnoxious Scottish man scouring bars for beer crimes is being dubbed the pride of Nova Scotia. The character is Alexander Keith's new "ultimate Keith's ambassador" and he's the star of the "Pride of Nova Scotia," the first television ads from the brewery's new agency Downtown Partners in Toronto. The campaign includes three spots where the Scottish character berates beer drinkers for offences against Keith's, including inadvertent spilling, dropping a bottle and running out of Keith's. NEW PRODUCTS LECARB DAIRY DRINK INTRODUCED YAHOO!FINANCE 07/17 SouthWest Foods in Tyler, Texas, a division of Brookshire Grocery Co., has introduced LeCarb Dairy Drink, a reduced-lactose milk alternative and the first low carbohydrate drink of its kind. LeCarb Dairy Drink uses the science of membrane technology, to remove most of the lactose from regular whole milk. Wholesome ingredients like milk proteins and calcium are then added back to fortify the product before it is slightly sweetened with Splenda. Lactose has been reduced 70 percent in the LeCarb Dairy Drink and LeCarb Low Fat Dairy Drink, with LeCarb Chocolate Dairy Drink offering an 80 percent reduction. SUCK IT UP; 7-ELEVEN(R) INTRODUCES EDIBLE SLURPEE(R) CANDY STRAW YAHOO!FINANCE 07/21 The hottest new product at 7-Eleven® is a straw. It's a functional straw ... and the first-ever edible one. Similar in appearance to red licorice candy, but with a hollow center, the pliable Slurpee® Candy Straw hardens when used to drink a Slurpee and is available in two flavors -- Sour Strawberry and new Blue Raspberry. Made by The Foreign Candy Company, the new Slurpee Candy Straw is part of the Mega-Warheads RIPS candy line. Page 12 Ipsos-Reid Grocery Digest July 24, 2003 DEL MONTE CATERS TO THE PET SET WITH NEW PRODUCTS THE WALL STREET JOURNAL 07/22 The U.S. market for dog and cat food has been growing steadily and is worth about $12.5 billion, according to the Pet Food Institute, a Washington, D.C., trade group. The point hasn't been missed by Del Monte Foods Co., which late last year acquired H.J. Heinz Co.'s pet food brands as part of a larger deal between the two food companies. As a member of the Del Monte family, the former Heinz brands, which include Kibbles 'n Bits, Nine Lives, and Snausage, are getting the corporate equivalent of an extra scratch behind the ears. "The Del Monte merger has been critical to unlocking the potential of these products," said Todd Lachman, managing director of Del Monte Pet Products. "Now, we have more resources and management attention. We are able to support our business at much higher levels." Del Monte also is in the process of making five additions to its current line-up of pet food and pet treats. Shipping now, the products will have national distribution by August, he said. The San Francisco company is introducing Kibbles 'n Bits Homestyle, an extension of its popular dog- food brand that includes food pieces with the appearance of cooked chicken. As with the original Kibbles 'n Bits, Del Monte will promote the new style, which comes in three bag sizes, on the merits of its good taste. Television advertising will break next month and will be similar in style to the Kibbles 'n Bits commercial that began airing last month. In the Kibbles 'n Bits TV ad, an Australian Shepherd, aided by the magic of computer-generated animation gets up on its hind legs and breaks into an energetic dance when it gets its dinner. The commercial is part of a "multi-million dollar" campaign. Hoping to repeat the success of last year's Scooby Snacks Biscuits, Del Monte is bringing to market two new products, Scooby Snacks "Far Out" Snacks and Scooby Snacks "Stuffers" that will again tap the popularity of Scooby Doo and his pal Shaggy. All of the Scooby Snack products attempt to encourage dog owners with kids to buy more pet treats and get kids more involved with their pets. This is because research shows the vast majority of pet treats are given to pets by owners who don't have children. Since about 40% of all pet-owning households have children living in the house, the market is underdeveloped, Lachman said. All of the Scooby Snacks line-up has packaging that reinforces its "kid appeal" with suggestions for games kids can play with their dogs. Pounce Caribbean Catch, a soft, tuna-flavored snack, is on its way for felines fancying a tidbit or two. “Cat owners don't use pet snacks as much as dog owners do," Lachman admitted. "It has to do with the finicky nature of the cat." While 80% of dog-owning households give treats to their pet, only 42% of cat-owning households do, Lachman said.