Product and Prototype by liuhongmei


									                                 Table of Contents
Company Information
     Michalencho Farms                   pg 2
     Zerega Pasta

Product and Prototype                    pg 3

Description and History of Sorghum       pg 4

Description of Pasta                     pg 7

Processing                               pg 8

Processing Concerns                      pg 10

Food safety                              pg 11

Pasta and the Low-carb phenomenon        pg 11

Diabetes                                 pg 15

Treatment options                        pg 19

The world of sorghum                     pg 21

    Farmers                             pg 25
    Fifty50

Financial Management Plan                pg 26

Balance sheet                            pg 27

Start up/Operating budget                pg 28

References                               pg 29

Michalenko Farms
Farmers in New Jersey grow corn but they are frustrated by the deer that come by
destroying most of their crops, or sometimes the lack of enough water to give a good
product yield hence they are turning to grow sorghum. Sorghum is not affected by crop
pests as much as corn and it helps stop and prevent soil erosion. Sorghum may be
considered as “the miracle plant” and has more if not the same benefits as corn and at a
better quality. Sorghum can grow in any condition i.e. in both low and extreme
temperature conditions. It has numerous uses that include production of ethanol,
production of wallboard for the housing industry, production of biodegradable packaging
materials especially because “it does not conduct static electricity thus can transport
electric equipment” ( Sorghum seeds cost
$60 for a bag that plants sic acres of land while a bag of corn is $150 and can only plant
three acres.

The company that we are working with is called Fifty50 Foods. This company is based in
Mendham New Jersey. Gary Russell who is the president of the company, and Pat
Gawdun who is the vice-president founded it. Gary Russell is a diabetes patient of type 1
diabetes of the past 30 years. Pat Gawdun is a registered dietitian and was a chairman of
the American Diabetes Association, New Jersey affiliate. They began this company in
1992 with 3 products. They realized that there was a need for foods for diabetics that
tasted good. They took this idea and made a company that donates half of its profits to
diabetes research. Their initial donation was $15, 000 and now they have donated over
$8,000,000 to diabetes research. They have a website at and can
be contacted via telephone or mail at 973-543-6115 or PO Box 89 Mendham, NJ 07945.

        Fifty50 Foods currently has many different products available. Those include
cookies, wafers, spreads, chocolate bars, peanut butter, sandwich cookies, peppermint
paties, crispy nuggets, snack bars, syrup and piecrusts. Their chocolate bars include five
different varieties, milk chocolate, almond, crunch, fruit and nut and dark chocolate. The
cookies include flavors such as chocolate chip, hearty oatmeal, coconut, peanut butter,
fudge brownie, and butter flavored. Their wafer cookies are flavored in vanilla,
chocolate, chocolate raspberry and strawberry. There are many flavors in their spreads,
including strawberry, grape, apple, orange, raspberry, blackberry, apricot and peach.
Their peanut butters are found in creamy and crunchy varieties. There are three varieties
in sandwich cookies, vanilla, chocolate, and duplex. The hard candy comes in assorted
and island fruit, starlight mints, butterscotch and crème. The cookie bars are found in the
same flavors and varieties as the cookies. The snack bars are found in milk chocolate and
peanut butter. The syrup is made in two varieties: maple and blueberry. Many of the
products are Kosher certified also. The only exclusions to this are the piecrusts, syrups,
peppermint patties and crispy chocolate nuggets. This company does have a lot of
products currently on the market, but they do not have a baking mix like the ones that we
are going to be making. Our product will make a great addition to their already extensive
product line.

History and Description of A. Zerega’s Sons, Inc.

        Zerega is America‟s oldest commercial pasta manufacturer, being founded by
Antoine Zerega in 1848 Brooklyn, New York. Today Zerega is a privately held company
with manufacturing plants in New Jersey and Missouri. Zerega is a major supplier of
pasta products to food processors, distributors, and restaurant chains throughout North
America. Zerega specializes in producing custom pastas to meet the needs, be they
processing, storage, or novelty, of their clients. Among the custom pasta products that
Zerega produces are pastas made to be included in frozen or dried products, as well
unique pasta shapes ( Zerega has had some limited
experience with making non-wheat pastas. In addition to acting as our co-packer, Zerega
will advise us in formulating a sorghum pasta product.

Product and Prototype

        Fifty50 Foods, in conjunction with New Jersey sorghum grower Tom
Michakenko and pasta products manufacturer, A. Zerega‟s Sons, Inc., will be developing
a pasta product made with whole grain brown sorghum for people with diabetes. The
body digests pasta made with refined flours as simple sugars. Whole grain pasta is a
better choice for people with diabetes, as they have difficulty absorbing relatively large
amounts of simple sugars found in pasta over relatively short time spans. Whole grain
products remedy this problem because they contain mostly complex carbohydrates that
take the body longer to absorb. While many types of whole grain pastas are available,
such as those made from whole wheat, spelt, buckwheat, brown rice, soy, kamut, and
quinoa among others, no pasta currently utilizes sorghum.
        Sorghum is a commodity of particular interest in New Jersey where wildlife has
destroyed a significant portion of the corn crop. Brown sorghum can be grown with good
yield in New Jersey and has proven to be left relatively untouched by wildlife until it is
already ripe, greatly lessening the time the crop remains in jeopardy. In contrast, deer go
after corn during all stages of its growing process. As development in New Jersey
continues to increase, wildlife will become an increasingly serious problem for farmers as
more and more animals are pushed to the few rural areas remaining. Until now Mr.
Michakenko has been selling his sorghum to birdseed manufacturers. Being able to sell
sorghum for the manufacture of a value added product like pasta offers Mr. Michakenko
and other New Jersey farmers frustrated with crop losses to wildlife a more profitable
incentive to grow sorghum.
        Interest in sorghum pasta, among other products designed for diabetics is likely to
be strong and growing. Unfortunately, diabetes is a nearly epidemic disease in the U.S.,
with some 5.9% of the population already diagnosed. The American Diabetes
Association (ADA) forecasts that diagnoses of the disease will continue to climb in the
coming years (Hollingsworth, 2002). Additional popular interest in sorghum might also
be generated by the results of research investigating the health benefits of brown sorghum
by Dr. M. Rafi of Cook College, Rutgers University. Results indicating sorghum‟s
benefit to people with inflammatory diseases such as diabetes has already been

demonstrated, but is currently the intellectual property of Rutgers University. Therefore,
people with diabetes should welcome a new pasta option employing sorghum.
        Sorghum pasta also has the potential to appeal to people suffering from Celiac
Disease, which is better known as gluten intolerance
( Recent studies estimate that 1 out
every 133 Americans have Celiac Disease. Gluten proteins are only found in wheat, rye,
and barley. The only way currently known to manage Celiac Disease is to eat a strict
100% gluten-free diet
( Sorghum pasta
would offer another pasta alternative to sufferers of this disease. However it is not clear at
this point if gluten or some other wheat derived, and therefore gluten contaminated,
ingredient will need to be added to the sorghum pasta in order to give it desirable process
and eating qualities.

Description and History of Sorghum

         Sorghum (Sorghum bicolor (L.) Moench) is a cereal that can be classed according
to its utilization. Grain sorghums have been cultivated to maximize the quality and
quantity of their kernels. Sweet sorghums or sorgos are selected for the sugar contents of
their stems and are used to make molasses-like syrups. Broomcorns and grassy sorghums
have been used for brush manufacture and forage respectively (Martin, 1970). Grain
sorghum, the class of interest in this project, can be further divided by pericarp color.
Polyphenolic compounds are responsible for this color. The four commercial classes of
tannin sorghum are: sorghum, yellow, white, and mixed
“Food sorghums” are defined by the National Grain Sorghum Producers as those varieties
that contain a white berry, with a tan glume (modified leaves) and are grown on a tan
plant, and are referred to as White/Tan/Tan sorghums
( However this project seeks to
work exclusively with brown sorghum, as this is the variety that Tom Michakenko has
been growing and whose health properties Dr. Rafi has been investigating. Table 1,
below shows the macronutrient, mineral and selected vitamin content of sorghum (Duke,
1983; Wu Leung et al, 1972).
Table 1-Nutrient Content of Sorghum
Composition Quantity per 100g of Grain
Water                12g
Fat                  3.7g
Carbohydrates        72.7g
Fiber                2.2g
Calcium              22mg
Phosphorous          242mg
Iron                 3.8mg
Sodium               8mg
Potassium           44mg
Thiamine            0.33mg
Riboflavin          0.18mg
Niacin              3.9mg

        Sorghum is comparable in nutrient content to other grains, which makes it a
reasonable alternative to them from a nutritional standpoint. Table 2, on the next page,
compares sorghum to barley and maize (Gebhart and Thomas, 2002; Haard et al, 199;
FAO, 1995; and Wu Leung et al, 1972). With both nutrient deficiencies and advantages
present in each grain in approximately equal number, it is difficult to call any of the three
grains nutritionally superior. It should be noted that neither Table 1 nor Table 2 were
constructed using the brown sorghum variety that will be employed in our product, and
are therefore just estimates.

Table 2- Comparison of Sorghum, Barley, and Maize
                    Sorghum Barley     Maize
Available CHO%            62.9    55.8       63.6
Energy(KJ/100g)          1610    1630       1660
Thiamin                    0.33      0.19      0.38
Riboflavin                 0.18      0.12       0.2
Niacin                      3.9       4.6       3.6
Calcium                      22        29         22
Iron                        3.8       2.5        3.4
Amino Acids(g/16g)
Lysine                      2.7       3.2        2.5
Threonine                   3.3       2.9        3.2
Met & Cys                   2.8       3.9        3.9
Tryptophan                    1       1.7        0.6

        The polyphenolic compounds mentioned earlier as being responsible for the range
of sorghum colors also have an important impact on nutrition from sorghum. While many
polyphenols are of interest because of their benefits to health as possible antioxidants,
others such as tannins are considered antinutritional factors. Brown sorghum contains
particularly high levels of tannin (Wall and Blessin, 1970). Tannins are polymers of five
to seven flavin-3-ol units, whose principal antinutritional effect is the binding of divalent
elements such as iron, limiting their bioavailability. Tannins also interfere with protein
digestion and give the grain a bitter taste (Serna-Saldivar and Rooney, 1995; Dendy
20001). Flavones and anthocyanidins were among other polyphenols found in sorghum
grain. Aside from polyphenols, sorghum also contains carotenoids now recognized as
important for eye health. Carotenoids are condensed isoprene units. Sorghum grain
having yellow endosperm contains the carotenoids; zeaxanthin, lutein, and β-carotene
(Wall and Blessin, 1970). It is not clear if the sorghum to be used in our product will also
contain these beneficial carotenoids compounds.
        Due to its ability to grow in drought prone regions and adapt to tropical
conditions, sorghum is one of the major cereal grains of Africa and India, the areas of its
origin. Today, 55% of all sorghum production is taking place in Africa and Asia. The
U.S. produces an impressive 29% of world sorghum, with production centered in Kansas,
Texas, Nebraska, and Missouri (Rooney and Serna-Saldivar, 2000). However, in contrast
to sorghum production in the developing world, which still takes place largely on a

subsistence basis, the vast majority of the sorghum grown in the U.S. and in other
developed counties is used in animal feed.
        Traditional African and Indian uses for sorghum grain include both fermented and
unfermented foods. Sorghum meal is boiled into porridge that may be allowed to
gelatinize so that it can be cut and eaten as a finger food. Sorghum is fermented into
beers. A range of flatbreads, some of which are made with fermented batters, are also
among the traditional sorghum products enjoyed (Dendy, 2001).
        Throughout the twentieth century, beginning with the impetus of wheat-flour
shortages during the First World War, research has been directed at sorghum, among
other cereal grains, as a substitute for wheat. In this historical context, sorghum has been
experimented with as an element of composite flour; that is as a blend of wheat and other
flours, made up to give similar processing and product characteristics as the an all-wheat
original. The high molecular weight glutenin proteins, that give wheat dough its
characteristic visco-elastic and gas holding properties, are absent in sorghum (Taylor et
al., 1984). Therefore sorghum is only expected to be able to comprise a maximum of 30%
in wheat/sorghum flour mixture for the purpose of baking leavened bread (Dendy, 2001).
        Information about experiments with sorghum pasta can be found in a special
report titled “Sorghum and Millets in Human Nutrition” from the Food and Agriculture
Organization of the United Nations (FAO). The results of these experiments indicate that
pasta made solely of sorghum without the addition of any other grain or additive is
unlikely to be successful. A summary of the research reads as follows:
       “Pasta products (noodles) such as spaghetti and macaroni are usually made from
       semolina or from flour of durum wheat or common wheat or a mixture of both.
       Wheat has a unique property of forming an extensible, elastic and cohesive mass
       when mixed with water. Sorghum and millet flours lack these properties when
       used alone.
               Sorghum is inferior to wheat for making pasta, both because it contains no
       gluten and because its gelatinization temperature is higher than that of wheat.
       Miche et al. (1977) made pasta from mixtures of sorghum with wheat. They found
       that to obtain products of good cooking quality it was necessary to add some
       gelatinized starch to the sorghum flour before extrusion. The pasta quality is
       influenced by the quality of both the sorghum flour and the starch. White sorghum
       is preferable for pasta products as its colour is similar to that of wheat flour. A
       composite flour consisting of 70 percent wheat and 30 percent sorghum produced
       acceptable pasta.
               Noodles made with 20 percent prove millet flour were acceptable (Lorenz
       and Dilsaver, 1980). The reduction of flour mass during cooking (cooking loss) at
       this level of addition was similar to that of wheat noodles used as a control.
       Cooking loss increased with 40 or 60 percent millet flour. Faure (1992) made
       pasta from mixtures of sorghum, millet and wheat. He found that the quality of
       the pasta was strongly related to the characteristics of the flour that was used and
       particularly to the way the flour was dried. There should be less than I percent ash
       and I percent fat in any material that is used. Proper hydration is necessary.
       Regrinding and intensive shearing during mixing and extrusion improves
       hydration. It is difficult to hydrate large pieces of corneous endosperm.

       Desikachar (1977) prepared noodles by extruding boiled sorghum dough through
       a press and then steaming and drying it. In China, sorghum noodles are made
       using a special device” (
        A recipe, authored by Marilyn Schoof, for sorghum noodles containing xanthan
gum, corn starch, and eggs was suggested on a sorghum flour company website
( Again, the recipe is indicative of the high likelihood
that many additives will be required to sorghum pasta that can be processed and is good
tasting. This recipe is of particular interest as it does not involve adding gluten, a step
which compromises the gluten-free appeal which a sorghum pasta otherwise has. Recent
research at Purdue University has been conducted with the purpose of making sorghum
pasta. However, that research has concentrated on developing a sorghum variety with
greater protein digestibility; an issue that this project will not seek to remedy

Description of Pasta
        While pasta is a food that most people associate with Italy, the earliest records of
pasta making actually come from China in 3000 BCE. Italians are the world‟s best pasta
consumers per capita, eating 30-35 kg per person per year. However pasta is also a
popular food in the U.S., where a 1996 estimate calculated U.S. pasta consumption to be
equal to a single strand of spaghetti long enough to wrap around the earth‟s equator nine
times (Brockway, 2001).
        Pasta is a cereal product traditionally made with durum wheat (Italy) or rice
(Asia) flours. It is made mixing flour (typically after the wheat has been milled to
semolina fineness) with water to form unleavened dough. Spinach or tomato powder can
be added to the dough for a variation in color and flavor. However other coloring and
flavoring agents such as herbs and spices are currently used as well. Adding eggs varies
the dough texture. The dough is then molded by rolling it into sheets and cutting it into
strips or by extrusion. Extruding pasta with a single screw extruder allows for the
creation of the myriad hollow centered shapes all of which originated in Italy. The pasta
pieces can then be cooked by boiling in slightly salted water to produce fresh pasta or
dried to be rehydrated at convenience. Long pasta is dried differently than short pasta
pieces (Brockway, 2001).
        Good pasta should have some elasticity and a “firm bite” referred to as “al dente”.
The pasta should not become sticky or leak starch when it cooked. Because pasta has
been traditionally made from refined flour, the preferred color of pasta is pale yellow
(Brockway, 2001). However pastas made from whole-wheat flour or from other grains
take on a variety of different colors.


Planting through Storage
         Tom Michakenko plants about 300 acres of brown sorghum which yields
anywhere from 8,000 to 30,000 bushels per year. Weather conditions are the key
determinant of yield; sorghum is favored by dry and hot weather. For example, in 2002
his yield was 20,000 bushels but in wetter and colder 2003 the yield was only 8000
bushels. Mr. Michakenko plants the sorghum the last week in May or the first week of
June, when the ground temperature is most likely above 60ºF. Sorghum is a crop that
favors heat and grows fairly slowly, so planting in as soon as the ground becomes warm
enough is important. Mr. Michakenko tills the soil with a chisel plow made by John Deer,
and then uses a disk manufactured by Kraus to replace the soil. He prefers the chisel plow
over no-till methods because it uses fewer herbicides and helps prevent soil erosion.
         Sorghum has the advantage of requiring less fertilizer than corn. Mr. Michakenko
uses a fertilizer that is 22 lbs.nitrogen/100 lbs. fertilizer, 11 lbs. pot ash/100 lbs. fertilizer,
and 22 lbs. phosphorous/100 lbs. fertilizer. The fertilizer is applied at concentration of
300 lbs. /acre. Corn would require three times this amount.
         The sorghum is harvested sometime after Thanksgiving. It is best when the
sorghum has dried in the field to a 20% moisture content, however this not always
possible. Mr. Michakenko uses a 160ºF dryer to reduce the moisture content to 15% or
less, as this is the minimal dryness requisite for safe storage. The dryer dries at a rate of
about 1000 bushels per hour. Mr. Michakenko uses a combine to harvest the sorghum.
The combine collects the sorghum grains and clean the sorghum with air to remove some
of the chaff. Currently, because he sells the sorghum, Mr. Michakenko employs no
further sorting or cleaning processes for his sorghum. Mr. Michakenko would need to
purchase a chaff removal machine if he was going to mill sorghum for human
         The sorghum is stored in metal storage tanks kept below 60ºF, a temperature
below which insect pests are unable to thrive. The tanks are cooled with a fan and are

         Sorghum flour is usually processed in two ways. The sorghum can be
degerminated, a process in which the pericarp and germ are removed prior to a reduction
of the endosperm, using a degerminating machine. The other approach involves using
strait roller milling to break open the kernel and scrape the endosperm from the bran. For
our whole grain product in contrast, the sorghum kernels need only to be reduced to
particulate size suitable for pasta flour, without having to worry about removing the
pericarp and germ. This reduction can be accomplished with an attrition mill with a 24-
inch rotor disk, according to Munson Machinery Company, Inc., which performed
milling tests on sorghum samples grown by Tom Michakenko. Mr. Michakenko intends
to purchase milling equipment, so as to become both the grower and miller of the
sorghum to be used in our pasta. The machinery company priced this mill at about
$33,000. The company suggested feeding the mill with an upstream metering device such
as a hopper with a 6-inch rotary valve. The milled flour could then be collected with
another hopper placed downstream from the mill. The additional machinery‟s cost was
estimated to be $5000.

        Pasta Production
        To make the pasta dough, the sorghum flour will be mixed with water in a mixing
chamber. Any other ingredients such as flavoring agents should be added at this point so
that they will be homogenously distributed in the product. The dough is mixed by two
counter-rotating shafts until it holds together as a solid lump when tested by hand
(Brockway, 2001). It is not clear at this point if our pasta will be formed by rolling and
cutting or by extrusion. If extrusion is to be used then a die must be selected that will
yield the desired shape of our pasta. The extruded pasta is cut by rotating knives as it
exits the die. It is most likely that our product will be extruded as rolling and cutting
methods are not used very often according to Zerega national accounts manager Judy
Kahn. Long pasta is dried by in a predrier to reduce its moisture 25% w/w (the moisture
content of the wet dough is estimated to be 70 kJ/kg) (Brockway, 2001). The remainder
of the drying procedure for long pasta is as follows:
        “The moisture in the long pasta is removed in three drying stages. In the first
stage the pasta is equilibrated for 1.5 to 2 hours at 55ºC at 95% relative humidity. The
second stage takes 4 to 6 hours when the pasta is kept at 55ºC but at 83% relative
humidity. The pasta loses around 18% w/w moisture during the second drying stage. In
the third stage the remaining moisture is removed over 8 to 12 hours at about 43ºC at
70% relative humidity. The dry long pasta is allowed to cool to ambient temperature
before being packaged” (Brockway, 2001).
        In the first stage of short pasta drying the aim is to reduce the moisture content to
between 20% and 25%. The rest of the drying process is described as follows:
        “The second and third drying stages are carried out in driers in which the pasta
spends about 3 to 3.5 hours. The first drier is set at about 60 to 66ºC at 75% relative
humidity, and the moisture in the pasta shorts is reduced to between 17% and 18% w/w.
The pasta then travels to the second drier set at about 43ºC at 70% relative humidity and
the moisture in the pasta is reduced to between 10% and 12% w/w. The dried short pasta
is allowed to cool to ambient temperature before being packaged” (Brockway, 2001).

        Pasta is typically packaged in one of two ways: in a paperboard carton or in a
flexible film bag. While the carton is traditional, the flexible film package is gaining
popularity especially for gourmet pastas, a category to which sorghum pasta may belong.
Paperboard cartons may be made of recycled paperboard, solid unbleached sulfate (SUS),
or solid bleached sulfate (SBS), the latter two being made of virgin pulp. Recycled
paperboard has the advantage of being cheaper but also contains more rejectable
materials such as metal. Metal detectors at the end of the process line would reject the
heavily contaminated cartons, leading to more product loss. Flexible film packaging is
made with saran-coated polypropylene. Puncture resistance can be conferred to the film
by laminating with low-density polyethylene. At this point we do not know the type of
packaging Fifty50 Foods will favor.

Processing Concerns

        There are three major concerns involved in growing sorghum: fungal growth,
attacks by wildlife, and weather conditions that are adverse to sorghum growth (Dendy,
2001). Mr. Michakenko is not worried about any of these concerns and has taken no steps
to remedy them because his previous crops have all yielded more than enough sorghum
that could be used in any value added product. In other words, the supply of sorghum will
not be a limiting factor in this project.

        Problems may be encountered with reducing the grain to fineness suitable for
pasta flour. Semolina, the flour from which most wheat pastas are made, is very finely
milled; flour particles are required to be 500 microns or less by definition (Brockway,
2001). An attrition mill with a 24-inch rotor disk may not be able to adequately reduce
the particle size. According to Munson machinery, increasing the size of the rotor disk
will increase the fineness of the product but will be more costly. We will need to judge
what milling standard will be sufficient for the needs of our product through trial and
error in prototype development.
        For safety reasons, it is crucial to keep the flour contained throughout the milling
process. Allowing flour to saturate the air is an explosion hazard and a detriment to the
respiratory health of workers in the milling room. To contain the flour exiting the mill a
pneumatic collection receiver, a device that collects the flour with a vacuum and drops it
into a containing drum, will need to be purchased. The PME Corporation, a handling
equipment company, can be hired to facilitate correct processing set up and equipment

        Mr. Michakenko intends to purchase flour sacks for the storage of the milled
sorghum. As with the unmilled sorghum, keeping the temperature below 60ºF will be
crucial for maintaining insect free flour.

Pasta Production
        Whether or not a mixture of whole grain sorghum flour and water will prove
suitable for making pasta remains to be seen in prototype trials. However, because gluten
plays such an important role in making wheat pastas extrudable and giving them their
characteristic mouthfeel, it seems unlikely that a gluten-free grain like sorghum will be
good subsitute (Brockway, 2001). Adding wheat starch, wheat gluten, or egg white may
be necessary to give our pasta elasticity and a protein matrix for extrusion. We will
consult with Judy Kahn of Zerega, to find suitable additives that yield the desired
qualities to our pasta.
        It is important to mix the pasta dough under vacuum because incorporating air
into the dough makes the pasta weak and brittle. Although the abrasiveness of sorghum
dough relative to a wheat pasta dough in not known, the extruder should be cooled to
about 45ºC, as the heat generated by friction can damage the pasta (Brockway, 2001).

Food Safety
         At 25% w/w moisture microorganisms are unable to grow. Commercial
pastas are usually dried beyond this point to 10-12% w/w moisture content
(Brockway, 2001). Therefore sorghum pasta should be safe as long as it is kept dry.
However it will be important to keep production conditions sanitary so that spore
contamination, which coupled with abuse of the product, can result in food-born
illness. Current Market Conditions

         The customer, Fifty50 Foods, would like to use the sorghum grown by the NJ
farmers to create new foods suitable for diabetics. The cost of type 2 diabetes related to
overweight and obesity in 2001 was estimated at about $98 billion.
( idea categories suggested
were meal-replacement beverages, nutritional bars, baking mixes, and pastas.
Concentrating on pasta narrows down the category but opens up all sorts of choices in
product development. ACNielsen reports that in 2003, $1,251,817,664 was spent on dry
pasta, down only 0.1% from last year, mostly due to the effects of low-carb diets.
         The census reports that New Jersey spent 3.29% of the United States total
expenditures of groceries, which was $472,357,365. The average market value of
agricultural products sold per farm ranged from as low as $27,000 for Huntedon County
to as high as $526,000 for Union county farms.
( There are 9,101 farms in New
Jersey as of 1997, which is 0.5% of total U.S. farms. The population of New Jersey was
8,484,431 in 2001, 9th in the US, and of those people, 538,906 were working farm-related
jobs. Ag services and forestry totaled to $119 million in 2000, and crops were $648
million. (

Pasta and the Low-carb Phenomenon
        With the growth of the low-carb diet in American consciousness, the market has
shifted to accommodate. High protein foods like fresh meats and eggs are on the rise,
while foods high in carbohydrates like breads and baked goods seem to be taking a hit.
Nutritional bars have seen unprecedented rises in popularity, especially those of the high-
protein, low-carb variety. Companies that are making allowances for the low-carb trend
can capitalize on the phenomenon and increase sales.

        Some 96% of households consume pasta, according to Simmons‟ (New York)
National Consumer Survey (NCS), with 93% favoring dry pasta. Complete packaged
dinners and mixes registered a distant second (63%), followed by canned/jarred pasta
(59%). However, these usage patterns are not carved in stone, as 96-97% of households
consuming either complete packaged dinners/mixes or canned/ jarred pasta also use dry
packaged pasta.
        Pasta consumption is more likely in households with children, where usage is
particularly high for complete packaged dinners/mixes (73% in households with children,
as opposed to 57% of those without) and canned/jarred pasta (69% of households with
children versus 53% of those without). Shelf-stable pasta, such as Campbell Soup‟s
(Camden, N.J.) Franco American SpaghettiOs and ConAgra‟s (Omaha, Neb.) Chef
Boyardee Beefaroni, is popular among demographic groups, especially as lunch or after-
school snacks for children.
        Furthermore, several studies have shown U.S. consumers are eating more meals at
home. While reflecting any of a variety of socio-cultural and economic factors, this trend
could prove positive for pasta and pasta-based meal products. Considering 71% of
respondents to Mintel research say they do not have enough time in the day, the
convenience inherent in many such pasta-based meals could bode well for the segment
and for the category as a whole.
        For the first time in four years, the Grain-Based Foods Share Index declined in
2003, slipping 5%. Similarly, though the S&P Food Product Index rose 3.55% from Nov.
30, 2002 through Nov. 30, 2003, that performance trailed a 13% increase in the S&P 500
Index and a 10% increase in the Dow Jones Industrial Average during the same period.
For all of 2003, the Dow rose 25%.
        Although Fifty50 Foods markets its products towards diabetics, they would also
be of interest to the many people involved in low-carb diets like the Atkins Diet and the
South Beach Diet, among others. Sorghum is currently the staple grain for many
countries in Africa and some in Asia, and while there are recipes available for pasta made
out of sorghum, few if any companies mass-produce and distribute it. Since sorghum is
being explored as a carbohydrate source that has less effect on the glycemic index, it
could also be marketed as a lower impact carbohydrate for those on low-carb diets.
        The low-carbohydrate segment will comprise 40 percent of the weight
control/nutrition category in 2004, according to Chicago-based Information Resources
Inc. data. Sales in the category have increased by more than 10 times compared to last
year. ( Many market
analyses and magazines have been concerned with how low-carb diets are affecting the
food industry, and some of the information from them has been compiled below.

                          Have you or any member of the household
                           ever been on a low-carbohydrate diet?
                    Yes, someone currently is, but not in the past.        8.3%
              Yes, someone currently is, and has been in the past also.    8.9%
                No, no one currently is, but someone has in the past.     19.2%
               No, no one has ever been on a low-carbohydrate diet.       63.6%
                       Source: ACNielsen Homescan Panel*Views Survey

Interest in low-carb foods is showing up in many product categories tracked by
ACNielsen, with numerous inherently high-carb foods showing sales declines, and many
low-carb and/or high-protein foods showing sales increases.
Category                    $ Volume 52 Weeks     % Change Unit Volume 52 Weeks % Change
                             Ending 12/27/03     vs. Year Ago Ending 12/27/03    vs. Year Ago
  UPC-Coded Fresh                 $1,455,070,624      -10.0%         616,487,939       -0.5%
    Instant Rice                     $168,716,903               -7.3%                 79,081,545   -8.2%
       Cookies                     $3,952,221,554               -3.0%              1,839,733,156   -5.5%
Refrigerated Orange                $2,775,978,467               -2.8%              1,065,593,625   -3.8%
        Cereal                     $7,392,859,148               -2.8%              2,639,184,589   -3.6%
  Bulk & Pkgd Rice                   $345,887,109               -2.8%                180,243,608   -4.9%
Dehydrated Potatoes                  $327,399,290               -1.7%                207,447,944   -3.2%
Regular Carbonated                 $9,627,176,585               -1.6%              7,032,454,375   -5.9%
      Dry Pasta                    $1,251,817,664              -0.1%               1,226,950,326   -4.6%
    Fresh Bread                    $5,968,111,699               0.8%               3,560,171,929   -2.5%
     White Bread                   $2,193,724,865              -2.7%               1,606,057,827   -4.7%
     Wheat Bread                   $1,534,492,378               8.6%                 873,092,765    4.0%
         Eggs                      $2,582,606,064              18.5%               1,755,042,495   -0.2%
    Meat Snacks                      $296,291,368              15.9%                 105,405,534    7.6%
         Nuts                      $1,816,889,004              11.0%                 679,318,275    8.8%
        Bacon                      $2,053,173,928               9.8%                 664,851,904    0.5%
  Diet Carbonated                  $4,436,008,585               7.5%               2,828,559,820    1.0%
 Frozen Unprepared                 $2,741,383,541                7.4%                483,469,026   7.7%
    Refrigerated                   $2,442,661,205                4.9%                914,996,409   3.9%
 Refrigerated Sliced               $3,513,513,039                3.8%              1,528,018,819   1.1%
       Cheese                      $8,360,854,279                3.1%              3,424,008,592   4.0%
    Frankfurters                   $1,773,948,565                2.0%                873,631,825   0.5%
 Source: ACNielsen Strategic Planner, Food/Drug/Mass (excluding Wal-Mart) Channels Combined

        Data from ACNielsen Strategic Planner show that while beer sales have remained
steady, the increase of low-carb and light beers has fueled the category. The egg category
has spiked by 11% in dollar volume compared to prior year, and the fresh meat
department has exploded over the past two years with increases of 16% in 2003 and 35%
in 2002. Other strong increases have occurred in the deli department, nuts and
dietetic/sugar-free candy (+64% in 2003, +35% in 2002). Less dramatic, but still
noteworthy, were steady dollar volume increases in categories like packaged meat and
cheese, which are staples in high protein diets [See chart 1]. On the flip side, categories
such as cereal, cookies and baking products have seen a sharp decline, including
decreases in cookie, muffin and bread mixes, and yeast. Fruit juices have also been
affected, with the total category sagging by 2% and categories like apple juice and
cranberry juice experiencing double-digit decreases. Diet colas and carbonated beverages
have seen growth, whereas their regular counterparts have shown declines [See chart 2].

         Atkins and other low-carb diets are beginning to re-shape the image of healthy
food in the U.S., impacting different categories in the process. In the past two years
alone, more than 800 new low-carb products have been introduced to the market,
according to ProductScan information published in the Atlanta Journal Constitution. And
there is no slowdown in sight. With diabetes also on the rise (an almost 30% increase
from 1997-2002), low-carb diets have more validity and have become even more popular
with Americans. From ice cream to beer and bread, consumers are searching for low-carb
versions of the foods they love. Healthcare organizations are affected, too. Obesity
accounts for 26% of total healthcare costs, and being overweight can have negative health
risks, including diabetes. These factors may be contributing to over-the-counter
healthcare product purchases. Products like dietetic candy, appetite suppressants, insulin
syringes and blood/urine/stool test products showed substantial growth during 2002.
          A look at Mintel's Global New Products Database reveals the success of product introductions with
nutritional claims. For the fourth year in a row, there has been a significant decline in some, notably in
those that make claims about what has been removed from products (such as fat, calories, salt, etc.) Of
the ones noting omissions, only Reduced/Low Sugar has shown an increase, and that is a substantial one.
In 2001, there were 320 products with the claim, and that went to 484 in 2002. The 50% jump attributed
in part to the increase in the incidence of adult-onset diabetes, but it is noted that only a few are
promoted as being for diabetics or suitable for a diabetic diet. They simply note the no sugar/low sugar,
making them have broader appeal. (


        Diabetes is a condition that is found to be on the rise in American society. It is a
disease of the endocrine system of the human body. The disease occurs when the body
does not either produce insulin or is unable to use insulin in the correct manner. Insulin is
a hormone that is produced and found in the body. It is essential for the conversion of
sugars, starches and other carbohydrate foods to energy that is used by the body to sustain
everyday life. There is no clear-cut reason why a person gets diabetes. There is
information linking it to genetic factors, obesity, diet and lack of exercise. There are four
main types of diabetes that will be discussed, types 1 and 2 diabetes, gestational diabetes
and pre-diabetes. An explanation of insulin production and carbohydrate breakdown will

be discussed as well as statistics, treatments and future estimation of diabetes. (American
Diabetes Association)

History of Diabetes: (Canadian Diabetes Association) (maintained by Canadian Diabetes
Association, updated 12/2003)

        The earliest known record of diabetes cases was found in the 3rd Egyptian
Dynasty. The physician Hesy-Ra spoke about polyuria, which is frequent urination as one
of the symptoms. This was discussed in his papyrus in 1552 BC. In the 1st century AD
Arateus described diabetes as “the melting down of flesh and limbs into urine”. The
Greek physician Galen of Perganmum had wrongly determined that diabetes was linked
to the kidneys. There was more advancement up until the 11th century AD. It was then
that “water tasters” did the diagnosis of diabetes. Water tasters were individuals who took
the urine of people who had symptoms of the disease and drank their urine. They
believed that the urine of those people who had diabetes would be sweet in taste. This is
how the term Diabetes Mellitus was derived. The term mellitus comes from the Latin
word for honey. It was not until the 16th century when Paracelsus finally suggested that
diabetes was a disorder that was serious in nature.

        In the early 19th century chemical tests were finally created that were able to find
the presence of sugar in urine and were able to measure the levels that existed. The
French physician Priorry incorrectly suggested to his diabetic patients that eating large
quantities of sugar would be an ideal treatment. The Franco-Prussian war gave physician
Bouchardat the opportunity to notice that rationing of food produced the disappearance of
glycosuria (the presence of sugar in the urine) in diabetic patients. This lead to the idea
that specialized diets should be made for diabetic patients. It was also during this time
that Claude Bernard studied the pancreas and how the liver metabolizes glycogen. This
combined with I.V. Pavlov‟s discovery that there is a link between the nervous system
and the digestive system. A major advancement in the diagnosis of diabetes was in 1869
when medical student Paul Langerhans from Germany gave a dissertation on the
pancreas. He determined that the two sets of cells in the pancreas secreted different
things. The first set secreted normal pancreatic juice and the secretions of the other cells
were not determined. Many years later those cells were named the Islets of Langerhans
after Dr. Langerhans and his work. In 1889 two professors at the University of Stasbourg
in France used a dog and removed his pancreas and observed how digestion occurred in
this animal. In the early part of the 1900‟s many “Fad” diets emerged for diabetic
patients. Oat diets, milk diets, rice diets and potato diets were found for these patients,
some patients even used opium.
        In 1908 a German scientist created the first pancreatic extract that could be
injected into the patient. This medicine was able to suppress glycosuria, but the side
effects of this drug were very severe. It was not until the summer of 1921 when insulin
was discovered. This was tested in a dog that lacked a pancreas, and the canine was
treated with great success. In 1922 Eli Lily and Company join with the University of
Toronto to mass-produce insulin in North America.

        In the 1940‟s further testing was done on diabetic patients and it was found that
many diabetic patients could have long term effects in complications of kidney and eye
disease. In 1944, the syringes used to administer insulin were standardized, further
making the treatment and management of diabetes easier. In the 1950‟s oral drugs were
found that were able to lower blood glucose levels. In 1959 the division between the two
types of diabetes was found, it was then that type 1 (insulin-dependent) and type 2 (non-
insulin dependent) diabetes were named. In the 1960‟s home sugar testing of urine was
made available, which helped the diabetic population, and insulin purity was increased.
In the 1970‟s blood glucose meters and insulin pumps were developed. The blindness that
some diabetics faced was lessened or slowed by laser therapy. The first biosynthetic
human insulin (Humulin) was brought into the market in 1983. Using an insulin pen
brought easier delivery methods for insulin to patients by using an insulin pen to market
in 1986. The 75th anniversary of the discovery of Insulin was celebrated in 1996. Until
the present time, different oral glucose lowering drugs were created, and easier less
painful home blood glucose testing systems were introduced to market.

        Most people as Juvenile Diabetes knew type 1 diabetes. This is usually found in
children and young adults. This occurs because the body does not produce the insulin that
is needed for the breakdown of sugars in the body for energy. There are different
conditions that a patient with type 1 diabetes will encounter. These include but are not
limited to: hypoglycemia, hyperglycemia, ketoacidosis, Celiac disease,
Hemochromatosis, and frozen shoulder. Hypoglycemia is when the body has low blood
sugar. Checking blood sugar frequently can check this; if one is suffering from
hypoglycemia then they should take 3 glucose tablets or 5-6 pieces of hard candy.
Hyperglycemia is when there is too much sugar in the blood; this happens when not
enough insulin is taken, too much food eaten or less exercise is done that should be. This
can be remedied by taking an insulin shot. Also stress, cold or flu can also trigger
hyperglycemia. Ketoacidosis a very serious condition that can occur in type 1 diabetes.
This is when there is a very high level of ketones that have built up in the blood. This can
lead to diabetic coma or death. The ketones build up in the body when there is not enough
insulin in the body to break them down. When a diabetic patient suffers from
ketoacidosis they are treated in the hospital and under direct supervision. Ketoacidosis
can be detected before coma occurs if the patient checks the ketone levels in his or her
urine. Celiac disease can also occur in type 1 diabetes. This is when the diabetic patient
eats a gluten containing products. This can cause a reaction that will destroy the linning
of the small intestine, which will prevent the absorption of proper nutrients into the
bloodstream. Hematochromatosis can occur in diabetic patients also. It is a gene disorder
that can cause an accumulation of iron to occur in body tissues. The only treatment after
diagnosis is to have frequent blood letting of the patient. Frozen shoulder can occur from
diabetes since the glucose molecules attach themselves onto the collagen in the ligaments
of the shoulder. This causes the shoulder to stiffen up. The only treatment is to keep the
shoulder moving.

       Type II diabetes is a more commonly found version of diabetes. In this types of
diabetes, the body is either unable to produce enough insulin or the cells in the body
malfunction and are unable to recognize the insulin that was created. This type of

diabetes occurs in patients of all races and ages. It is more common in African
Americans, Asian Americans, Latinos, Native Americans and elderly patients.
Complications that can arise from this type of diabetes are heart disease and stroke,
kidney disease, eye complications, neuropathy, nerve damage, foot and skin
The complications of heart disease and stroke in the diabetic patient arise due to the
decreased circulation that the patient has. This poor circulation can lead to vessel disease,
heart attack and stroke. These diseases and conditions are exacerbated by less or
compromised circulation. The kidney disease that the diabetic patient will encounter is
not only kidney failure, but also loss of kidney filtration. This can lead to septicemia,
toxemia and build up of waste products. This occurs when the kidneys in a diabetic
patient degrade over time of having to filter large amounts of blood. The kidneys begin to
allow protein to leak into the urine and a loss of protein ensues. If the diabetic patient
keeps his/her blood pressure and diabetes under control there is less of a chance that the
patient will develop kidney disease. Diabetics have an increased chance of complications
of the eyes and even blindness if they do not keep their diabetes in check. These
complications can include glaucoma, retinopathy, and cataracts. These disorders are all
dependent on the pressure in the blood vessels in the eyes. The higher the pressure the
more likely the patient is to develop these conditions. Neuropathy that occurs in the
diabetic patient is a very serious and life threatening disorder. It can be one of many
different diseases, such as, motor, sensory and autonomic neuropathy. There is no
reasoning on why this happens more commonly to the diabetic, but it has been found that
glucose can play a large role in neuropathy.

        The foot and skin complications that occur in diabetes are more serious when they
involve neuropathy. The weakened blood flow in the body and specifically the foot can
lead to these problems. Calluses and dryness occur in the patient since the moisture is
taken from the body. Ulcers and poor circulation can occur which can in the most severe
conditions result in amputation of the foot.

        Another type of diabetes is gestational diabetes. Gestational diabetes is a type of
diabetes that affects pregnant women only. This is usually diagnosed at around 28 weeks
of pregnancy. Gestational diabetes is when the previously diabetes free mother to be is
diagnosed with high blood sugar during their pregnancy. Hyperglycemia is the main
symptom of gestational diabetes. It occurs because the body is no longer able to use the
made insulin. There is no clear understanding of why this occurs, but there is one theory.
That theory is that the hormones that are created by the developing placenta, which are
meant to help the baby grow and form, block the action of the insulin in the mother‟s
body. Since gestational diabetes usually occurs after the majority of baby has developed,
there is less birth defects associated with gestational diabetes as apposed to mother‟s who
previously had either type I or type II diabetes.

        Untreated gestational diabetes must be kept under control using medications,
insulin, diet and exercise. Harmful effects can occur for the baby of a mother who keeps
her gestational diabetes untreated. The baby can have extra glucose than necessary, which
gets stored as fat in the baby. The pancreas of the baby will also work overtime to make

insulin to metabolize the glucose. This cold lead to a baby with shoulder problems during
birth due to the extra fat, or a newborn with breathing problems due to the overworked
pancreas. The newborns, which have extra fat, are more likely to be candidates for
obesity as children and can develop type II diabetes as adults. Mother‟s who developed
gestational diabetes in their first pregnancy are likely to develop it in subsequent
pregnancies. It is also seen that some women with gestational diabetes develop type II
diabetes in the future. This can be controlled with diet and exercise.

        The last type of diabetes is a not so well known type called pre-diabetes. This
type of diabetes is when the patient has high levels of glucose in their bloodstream, but
the levels are not high enough to be classified as diabetes. Even though this is not
classified as diabetes, it is still very dangerous. There can be very serious heart and
circulatory problems associated with pre-diabetes. There are measures that one can take
towards preventing pre-diabetes from becoming diabetes. They can alter their diet and
start exercising. It seems the major treatment that the patient can do to prevent or
improve any type of diabetes is to control their diet. This is where our carbohydrate-
substituted products will be very useful.

Treatment options:

         There are different treatment regimens for the different types of diabetes. Usually
type 1 diabetes is treated with insulin injections. These are either the brand names of
Humulin, Novolin, Lentin etc. Gestational diabetes is also usually treated with insulin
injections also. Type 2 diabetes is treated with a combination of diet, exercise, oral drugs
and insulin. Pre-diabetes is usually treated with diet and exercise.

        Insulin injections made the treatment of diabetes much more manageable. The
human insulin hormone was mass-produced by recombinant DNA techniques using
bacteria. Recently, daily insulin injections have been replaced with insulin pumps, which
are implanted into the skin and constantly monitor and inject insulin into the patient.
Common oral drugs for diabetes are grouped into different classes; there are
thiozoladines, sulfonylureals, alpha-glucose inhibitors, short acting insulin secretagogues,
combination products, and biguanides. Thiozoladines include the drugs: avandia, and
actos. Sulfonylureals include: amaryl, glipizide, glucotrol xl, and glyburide. Glucose
inhibitors include: precose and glyset,. Short acting insulin secretagogues are: Prandin
and Starlix. Combination products are Metaglip and Glucovance. Biguanides on only
include Glucophage. Diet and exercise for the diabetic patient are also treatments that
our products can help with.

        Future estimations on diabetic patients can be done using the statistics of previous
diabetic patients. The estimations will be made from 2002 diabetes data, since there is not
conclusive 2003 diabetes data published yet. In 2002 there were 18.2 million people that
had diabetes in the US. This comprised 6.3% of the population of the country. There were
13 million people whose diabetes was diagnosed and 5.2 million who had undiagnosed
diabetes. The amount of people under the age of 20 with diabetes was 206,000. This
comes out to 1 in 400-500 children having type 1 diabetes. People with diabetes between

the ages of 20-60 are 18 million people, and 60+ is 8.6 million people. There is more of
prevalence in women aged 20+ than males 20+ with diabetes. The difference is 0.6
million more women had diabetes than men in 2002. Out of that 12.5 million Caucasians
have diabetes, 2.7 million African-Americans, 2 million Hispanics and 107,775 Native
Americans had diabetes in 2002. It is estimated that 1.3 million people get diagnosed
with diabetes in the United States each year. Using this estimate, in 2004, there should be
20.8 million people with diabetes in the United States.
statistics/national-diabetes-fact-sheet.jsp (accessed 2/5/2004, maintained by the American
Diabetes Association)

        Our products will be mainly marketed in the NJ area. The increase in diabetes in
New Jersey from 2001 to 2002 was more than 6% increase. In there were 69 thousand
people aged 18-44 that were diagnosed with diabetes, 176 thousand 45-64 year olds, 109
thousand 65-74 year olds, and 70 thousand patients diagnosed with diabetes that were
older than 75 in New Jersey in 2002. That brings the total of new diagnoses of diabetes in
New Jersey in 2002 to 426 thousand. The in crease in diabetes cases in New Jersey from
1994 to 2002 was drastic. In 1994 the increase was less than 4 % and now it is more than
6%. This shows that diabetes is on the rise and that diabetic foods are very much needed.

Diabetes, Weight Loss, and Low-carb Diets
   Weight loss is the largest single health category in the supplement arena,
supported by the following statistics:
      Almost 1/3 of adults in the U.S. are overweight
      23% of American households had someone trying to lose weight for health
      A 12% increase in overweight women by 2005 is predicted
      The number of women desiring to lose 20 lbs. is at an all-time high
      The weight loss, obesity and satiety markets are strong and predicted to be
      1 in 4 children are currently overweight, and a childhood obesity market is
Another area that goes hand-in-hand with the weight loss market in the functionality of
many of the products is Type II diabetes, or non-insulin dependent diabetes mellitus
(NIDDM). It usually starts with the cell‟s impaired ability to interact with insulin
(insulin-resistance), and as the body‟s demand for insulin increases, the pancreas slowly
loses its ability to produce insulin. So far, 6.2% of the population, or 17 million people,
has diabetes. Of that figure, only 11.1 million people have been diagnosed. About 90-
95% of all diagnosed cases are Type II diabetes. One million more people aged 20 and
older are diagnosed with diabetes every year.
0,,112863,00+en-uss_01dbc.html) Type II Diabetes has been seen in children as young as

10, and is just another symptom of the rising trends in obesity and other health problems
associated with obesity. In eight years, the prevalence of diabetes among adults in the
United States rose by 33 percent, from 4.9 percent in 1990 to 6.5 percent in 1998. Among
Hispanics, it increased by 38 percent, going from 5.6 percent to 7.7 percent. Among
African-Americans, it increased by 26 percent, going from 7.0 percent to 8.9 percent.
These numbers are cause for concern. But by far the most worrying are those in the 30 to
39 age group. There, the prevalence increased by 70 percent, from 2.1 percent in 1990 to
3.7 percent in 1998. The youngest age group that the study considered, those 18 to 29,
showed only a 9 percent increase. The increase among older age groups ranged from 40
percent among those 40 to 49 down to 10 percent for those over 70.
        The age-adjusted prevalence of combined overweight and obesity (BMI > 25) in
racial/ethnic minorities—especially minority women—is generally higher than in whites
in the United States.[8]
       Non-Hispanic Black women: 77.3%
       Mexican American women: 71.9%
       Non-Hispanic White women: 57.3%
       Non-Hispanic Black men: 60.7%
       Mexican American men: 74.7%
       Non-Hispanic White men: 67.4%
       (Statistics are for populations 20+ years old)
         ACNielsen also released new consumer research showing that more than 17% of
U.S. households report that someone in their household is currently on a low-
carbohydrate diet. "Importantly, a slightly higher number (19.2%) reported that someone
in their household was once on such a diet but is no longer," the research company said.
        Many people at risk for Type II Diabetes have been trying low-carb diets to lose
weight, as a way of preventing the problems that are associated with obesity and Type II
Diabetes. Others cut down on their carbohydrates not to prevent diabetes but simply to
lose weight, as many Americans are overweight. The link between diabetes, weight
problems, and low-carb diets can work in Fifty50 Foods‟ favor, because consumers may
opt to purchase diabetic foods in addition to Atkins-approved foods or high protein
The World of Sorghum
         The US is the number one producer and exporter of sorghum, and sorghum is the
fifth largest cereal grain in US and world production.
Top 100 Grains - Sorghum consumption
     Country         Description                    Amount
1.   Mexico          9,400
2.   India           8,000

3.     Nigeria               7,950
4.     United States         5,335
5.     Sudan                 3,700
6.     China                 2,500
7.     Argentina             2,300
8.     Australia             1,700
9.     Japan                 1,500
10.    Ethiopia              1,200
11.    Brazil                1,100
12.    Egypt                 750
13.    Niger                 700
       Total                 46,135 thousand metric tons
       Average               3,548.85 thousand metric tons
Definition: Figures for 2003/2004
Source: United States Department of Agriculture

Top 100 Grains - Sorghum production
      Country               Description                         Amount
1.    United States         10,177
2.    India                 8,000
3.    Nigeria               8,000
4.    Mexico                5,600
5.    Sudan                 4,350
6.    Argentina             2,800
7.    China                 2,500
8.    Australia             2,100
9.    Ethiopia              1,200
10.   Brazil                1,100
11.   Egypt                 750
12.   Niger                 650
      Total                 47,227 thousand metric tons
      Average               3,935.58 thousand metric tons
Definition: Figures for 2003/2004
Source: United States Department of Agriculture


                            Regional Sorghum Imports, Production, Consumption and Stocks
                                               Thousand Metric Tons

                                                             Date Created: 2/11/2004



North America

Latin America

European Union

Other Western Europe

Middle East

Other Africa

Other Asia


North America

Latin America

European Union

Eastern Europe

Middle East

North Africa

Other Africa

South Asia

Other Asia



North America

Latin America

European Union

Other Western Europe

Eastern Europe

Middle East

North Africa

Other Africa

          South Asia

          Other Asia


                   Sorghum in this country is mainly used as animal feed, but in other countries like
          India and various African countries, sorghum is the staple grain of the diet. Sorghum
          flour is often sold in the US to those who need to eat gluten-free baked products, and it is
          recommended to mix it with corn starch because the lack of gluten makes it very
          crumbly. Not much information is currently available about the link between sorghum
          and diabetes treatments, though research is currently being conducted at Rutgers
          University, among other places around the world.
                  Sorghum is an underutilized grain source in the US, available mostly in ethnic and
          specialty foods stores. In Central America, white food sorghums are used in pan dulce,
          breads, cookies, and other products as a substitute for wheat or maize flour. Value-
          enhanced white food sorghums have been used by the Japanese food industry to market
          snacks and several other products. ( The
          use of sorghum in Fifty50 Foods products could change all that. Some traditional
          sorghum products have been put into a table, as follows:
          TABLE 28: Forms of utilization of sorghum and millets in India
Food                   Product type                     Form of grain used
                                                                                       No.         Percentagea
Roti                   Unleavened flat bread            Flour                           1 132      67
Sangati                Stiff porridge                   Mixture of coarse particles and 811        48

Annam                           Rice-like                                    Dehulled grain                           586                    35
Kudumulu                        Steamed                                      Flour                                    295                    18
Dosa                            Pancake                                      Flour                                    213                    13
Ambali                          Thin porridge                                Flour                                    167                    10
Boorelu                         Deep fried                                   Flour                                    164                    10
Pelapindi                       Popped whole grain and flour                 Mixture of coarse particles and          94                     6
Karappoosa                      Deep fried                                   Flour                                     42                    3
Thapala chakkalu                Shallow fried                                Flour                                     24                    1
             a Of surveyed consumers of each grain, percentage who consume the specified preparation. For example,
             67 percent of sorghum consumers reported that they consume sorghum prepared as roti.
             Source: Pushpumma and Chittemma Rao, 1981. (

                      It‟s clear that most of the world considers sorghum a key grain in the diet, and NJ
             farmers think it‟s time for the US in general, and NJ in particular, to catch up. Grain
             sorghum is a drought-tolerant, versatile grain with many varieties, some of which can be
             used in the cereal, snack food, baking and brewing industries. “Consumers who know
             about grain sorghum can‟t wait to sink their teeth into products made from the grain due
             to its anti-oxidant content and other health benefits, including its absence of wheat-type
             glutens thought to aggravate celiac sprue and other wheat gluten allergies,” says Tim
             Snyder, NGSP marketing director. Antioxidant rich sorghum varieties currently being
             studied offer high levels of phenols and tannins, which are two compounds that have
             been linked to cancer prevention and improved cardiovascular health. Early results from
             studies being conducted by two independent labs suggest that certain grain sorghum
             varieties may be a powerhouse of cancer-fighting, heart-healthy compounds on par with
             blueberries and cranberries. (
             The antioxidant level in brown sorghum bran is higher than that of blueberries.
                               Public and private research efforts continue to work on improving white, food-type sorghum varieties both from a
                   yield and processing standpoint. Food-type grain sorghum is a comparable substitute for other carbohydrate sources, and starch
                   found in grain sorghum is similar to that of corn. When milled into flour—with natural additives—sorghum flour can be
                   substituted for wheat flour in baking. Nutritionally, grain sorghum is comprised of 11.3 percent protein and 3.3 percent fat.
                   Food-type sorghum is high in insoluble fiber with relatively small amounts of soluble fiber. The protein and starch in grain
                   sorghum are more slowly digested than other cereals, and slower rates of digestibility are particularly beneficial for diabetics.
                   Grain sorghum produces bland-tasting flour that takes on other flavors very well, and flakes made with the grain tend to stay
                   crunchy in milk. Grain sorghum kernels can be extruded, steam-flaked, popped, or puffed to produce snacks, granola cereals,
                   granola bars, baked products, dry snack cakes and other products. (

                      Several extruded salty snacks and milled products based on IP U.S. white food
             sorghums continue to be sold by Japanese food companies. They are marketing flour,
             meal, grits and decorticated sorghum sold as a rice-like product. Various prepared mixes,
             flours and other products containing sorghum have been introduced into specialty
             markets recently. These activities especially for special dietary requirements and ethnic
             foods are continuing to expand as more products are made available.
             ( Whole sorghum kernels can be popped
             like popcorn, and salted or caramel-coated snack foods like “POPums” have appeared in
             the United States and abroad. In Japan, sorghum flour is processed, extruded and puffed
             into snack foods with flavors such as squid, octopus, seaweed and chocolate.

         Urban customers want food products that deliver convenience, taste, texture, color
and shelf-stability at an economical cost. Upscale sorghum and millet products that meet
these requirements are usually not available in urban areas. Progress has been made in
recent years in the US to provide identity-preserved white food sorghums for use in
domestic ethnic and dietary foods and for export to Japan for snacks and other products
like the ones discussed above. Reasonable chances for growth of these markets exist,
provided progress to produce good-quality sorghum continues.
( The NJ farmers intend to grow
brown sorghum, but the same principles should hold true as to market and product

        The best strategy for developing convenient, shelf-stable sorghum foods is to use
identity preserved grains to produce high-value products priced slightly lower than
imported products. Sorghum is sometimes deemed a “poor man‟s food”, and that image
can be overcome by developing products with attractive names and identities that appeal
to wealthy and middle-class customers. The marketing of new grains calls for
imagination along with new superior types.

The farmers in New Jersey are mandated by the state to have chemical applicators license
to spray pesticides on the crops. They also need to have both county and public health
licenses. This is required for any food distributor. Michalenko farms use herbicides to
control weeds.
The farmers must also abide by USDA rules and regulations concerning their farms. The
US code title seven chapter three sections seventy one to eighty seven K elaborates the
licensing procedures, criminal penalties, registration requirements, records, standards and
procedures, establishments, amendments and revocation of farm licenses.
There is also financial aid to the farmers from the government. According to the 2002
farm bill the loan rates for corn, grain sorghum and soybeans were reduced from $1.98
per bushel to $1.95 per bushel for the 2004 to 2007 crop year.

Fifty 50:

Fifty 50 is a registered business company that deals with food for diabetics. Half of its
profit margins go to diabetic research and so far they have contributed about eight million
dollars. The company was started in 1990 with the aim of providing special line of
products to the diabetics, “Seeing a need for better tasting products for people with
diabetes, we started a company that gives 50% of its profits to diabetes research and
offers the best products available.” ( They have a wide variety of
products ranging from cookies, syrups, spreads, candy, pie crusts etc. Fifty 50 are
required to be registered in the treasury department. They also have an Employer

Identification Number (EIN) also called Federal Tax Identification Number for tax
purposes (

Currently sorghum is mostly grown in the Mid-East region of the country. The products
include cookies, wafers, spreads, chocolate bars, peanut butter, pie crusts etc. Therefore
there is a potential for expansion in the production of pasta in New Jersey especially
since 68 percent of the population is white, non-Hispanic (Newsweek. September 18,
2000. America 2000: A map of the mix) whose traditional food include pasta, linguine,
lasagna etc. Since sorghum is a good food for type1 and 2 diabetics it will not be a
seasonal food product.

Financial Management Plan:

The objective of the business is to maximize profits while minimizing expenditure for
Michalenko farms. Michalenko Farms will be producing the crop while Fifty 5o foods
will be on the marketing end to deliver the finished product to the consumers.
The available finances will be distributed as follows,

Allocation of costs

Basic Capital                                                $100,000

Milling equipment                                            $38,000

Transportation from farmer to co-packer                      $20,000

Packaging                                                    $30,000

Distribution                                                 $30,000

There are only two employees in the farm who manage all activities in the farms.
 This business looks very promising since statistics show that about 18.2 million
Americans are affected by diabetes and the number is rising every year hence there is a
need for good tasting diabetic products.
The individual pasta boxes that will weigh about 1lb will cost about $2.49. Michalenko
farm is about 400 acres and on a good year the harvest may produce about 30,000kg of
sorghum seeds. The sorghum seed will then be milled into flour and transported to the co-
packer (Zerega) to make the different kinds of pasta. The different kinds of pasta will
include elbows and shells, spiral tubes, twists, small and large pasta etc. With all these
different shapes customers will be able to enjoy making their favorite foods and enjoy the
nutritious taste of sorghum.
                     Balance Sheet

                       For the year 2004


Basic capital                              100,000

Milling equipment                          38,000

Investment                                 50,000

Distribution                               30,000


Owner‟s Equity                             100,000

Equipment                                  38,000

Investment                                 50,000

Distribution                               30,000

         Start up/Operating Budget of Michalenko Farms
                      (For the Year 2004)

Capital Budget

Equipment and supplies                                     20,000

Start up capital                                           100,000

Investment                                                 50,000

Manufacturing budget

Milling                                                    30,000

Processing                                                 40,000

Packaging                                                  25,000

Transportation and Distribution                            40,000

Due to the increase of diabetes diagnoses in New Jersey and in the US, a whole grain
pasta product can be expected to have a significant market potential.

Sorghum pasta provides a nutritious value added product that has potential to benefit
New Jersey farmers seeking a more secure crop.

(taken from Scale up presentation, Dvores et al)
Planned Production Output and Mass Balance
         As explained previously in the „Market Potential‟ section a 151.9-ton yearly
output of sorghum pasta is forecast as the maximum planned production output for our
product. This being said, management at Fifty50 Foods specifically requested that only
10,000 lbs., the minimum run at A. Zerega‟s Sons, Inc., be produced. The following mass
balance was constructed with the assumption that 10,000 lbs. of dry sorghum pasta will
be manufactured. This mass balance was constructed with mixing, extrusion, and drying
rates taken from literature values. Since these rates were much slower than the eight-hour
start to finish process used at Zerega (as verified by Ms. Linda Gavin) would allow for,
proportional estimates assuming a total process time of eight hours were used. The mass
balance also assumes a 5% loss of material during production, according to a generalized
estimate made by Dr. Henryk Daun, therefore 10,526 lbs. is taken as the initial total
weight of the ingredients. The weight of each ingredient needed to produce 10,526 lbs. of
pasta dough as derived from the amount used in the prototype is given in Table 1, on the
next page.

Table 1- Amount of Ingredients in 10,526 lbs.
Ingredient    Prototype (g) % of total In 10,526 lbs. (lbs.)
Sorghum flour             132     51.5              5420.9
Cornstarch                  11     4.3                425.6
Wheat Gluten                20     7.8                   821
Xanthan gum              2.15      8.4                884.2
Salt                       0.6    0.23                  24.2
Eggwhites                   58    22.7              2389.4
Oil                        2.5    0.98                103.2
Water                       30    11.7              1233.5

              Total= 256.215

       Information regarding the time needed to process 10,526 lbs. of ingredients into
10,000 lbs. of dry pasta at Zerega was provided by Mr. Martin Carman. According to Mr.
Carman, Zerega uses a continuous process to make their pasta. For the following mass
balance the mixer and extruder capacities were back calculated from the time each
machine would take to process 10,526 lbs. of ingredients. It is not known whether these
machines are really capable of operating at higher capacities.

Mixer capacity:
63,156 lbs/hr
       Time needed for 10,526 lbs. = 10 minutes
Extruder capacity:

63,156 lbs/hr
       Time needed for 10,526 lbs. = 10 minutes

Pre-dryer time:
20-30 minutes

Final-dryer time:
5-7 hours

Flow Chart of Production Process
         Figure 1, on the next page, shows a flow chart of the production process including
critical control points. This flow chart does not represent the actual process used at
Zerega as details of that process are currently unavailable. The equipment used in the
process includes refrigerated storage facilities, a mixer, a single screw extruder, a
conveyor belt transport system, and screens for drying the pasta.

                                                             Egg whites receipt      H-2
Sorghum flour, wheat gluten,
cornstarch, xanthan gum, salt          H-1

                                                        Refrigerated storage          H-4
         Chilled storage         H-3


                           H-5          Ingredients mixed with tepid water                H-6

                                             Single screw Extrusion


                                                Drying zone 1                  H-7

                                                Drying zone 2                  H-7

                                                 Cooling zone                  H-7

                                                Labeling/casing                H-8


                                                   Shipping                    H-8

                                                                           H-9       (Sanitation)

H- = Critical Control Point of assessment

           HACCP Planning for Sorghum Pasta Production
               The critical control points noted in Figure 1 are specified in Table 2, below.

           Table 2- Critical Control Points (CCP) for Sorghum Pasta Production
           CCP Step                   Safety Concern
               Raw materials
           H-1 receipt                Biological and physical hazards such as mould and grit
               Raw materials          Biological and chemical hazards such as salmonella and
           H-2 receipt                Staphylococcus aureus toxin
           H-3 Chilled storage        Microbial safety
           H-4 Refrigerated storage   Microbial safety
           H-5 Load into mixture      Proper formula and density
           H-6 Dough formation        Microbial safety
           H-7 Drying/cooling         Microbial safety
           H-8 packages/shipping      Product identity
           H-9 Sanitation             Microbial safety

           Job Progress Bar Chart for the Development of Sorghum Pasta

           Week        Start
                                                                      Speak to Mr. Michalenko,
             1       Desk research on sorghum and pasta:              Zerega, and Fifty50 Foods
                     definitions, preliminary market analysis,        to identify their expectations
                     and recipes                                      and constraints

             2       In depth market analysis: estimate the           Design qualitative screening
                     market potential for sorghum pasta based         and consumer survey
                     on population and sales data


           Estimation of capital investment costs:
           Since the farmer has the old machineries used in growing and harvesting corn, there is no
           need of purchasing new equipment. The only thing that the farmer will buy is a smaller
           mesh 300 since sorghum has smaller grain.

           All the spices to be used in processing the pasts will be ordered from American Key Food
           Product Company. The prices of the individual spices are
           Garlic Powder $0.49/lb,

Black pepper $1.15/lb,
Ginger $0.50/lb,
Red pepper flakes $1.10/lb,
Sesame oil $0.87/lb,
Soy sauce $2.49/17oz,
Vinegar $1.97 per gallon,
Chili $1.68/lb,
Zucchini $0.04/lb.

The farmer will also harvest and mill the sorghum flour. The other major ingredients
Sorghum flour $200/ton
Wheat gluten $1.37-1.57/lb,
Egg whites $6.50 (however the recipe was altered to include less egg white to cut down
Canola oil $0.99/litre,
Salt $0.55/lb,
Xanthum gum $1.19/lb and Corn starch $1.49 for 22oz.

The processing fees for one pound of pasta will cost about 40 cents.

Packaging costs:
The pasta will be packaged in cellophane packaging because cellophane has high tensile
strength and has good resistance to abrasion. It also has a wide temperature range
applications. In a year about 200,000 pounds of pasta will be produced thus costing
$20,000 per year.

To produce 150 tons of pasta, the company has to have at least six employees. Their
duties will be as follows,
1 Quality chemist,
 2 unskilled workers for loading and off-loading products to and from the processing
3 skilled workers to actually mix the ingredients according to the recipe and also do the
processing of pasta. In an 8-hour shift the labor costs will be $110 per day. This will be
about 28,000 per year for labor costs.
The employees will not have benefits yet since this is a new project but next year the
committee will have to discuss about the best benefit plans to be offered.

The machinery available at the plant are food processors, dryers and mixers and they all
use electricity.
There will also be a backup generator just in case there is a power blackout. The total cost
for utilities per year will be about $90,000.
 The fixed charge i.e. local taxes, insurance of fixed capital investments, rent and
depreciation of machinery and equipment will be ten percent of the total production cost.

Product Promotion:
The product will be advertised using local newspapers and magazines and local
supermarkets. The message content on the advertisement will be a low glycemic index
food product and will be mainly sold to diabetic patients and weight watchers.

Overall the expected gross earnings will be about $400,000 per year.


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