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PLUNKETT’S FOOD INDUSTRY TRENDS AND STATISTICS (Summary)
Jack W. Plunkett
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Copyright 2003 by Plunkett Research, Ltd.
Published by: Plunkett Research, Ltd. P. O. Drawer 541737 Houston, Texas 77254-1737 USA Phone: 713.932.0000 Fax: 713.932.7080 Internet: www.plunkettresearch.com ISBN # 1-59392-667-7 End-User License Agreement, Limited Warranty & Limitation of Liability--Effective January 2003, Plunkett Research, Ltd. Important, read carefully: This agreement is a legal agreement between you (whether as an individual or an organization) and Plunkett Research, Ltd. By installing, copying, downloading, accessing or otherwise using the Plunkett Data, you agree to be bound by the terms of this Agreement. If you do not agree to the terms of this Agreement, do not install or use the Plunkett Data. The information (the "Data" or the "Plunkett Data") contained in this printed version or electronic file is the property of Plunkett Research, Ltd. Copyright laws and international copyright treaties, as well as other intellectual property laws and treaties, protect the Plunkett Data. LIMITED RIGHTS TO INSTALL DATA ON ELECTRONIC DEVICES: Plunkett Research, Ltd. grants you, as an individual or an organization, a non-exclusive license to use and and/or install this Data, including installation of electronic files on one individual desktop computer AND on one laptop computer AND one personal digital assistant or dedicated portable eBook reader (such as a Palm or iPaq). This is a limited license, which applies to a single user. Organizations desiring multi-user licenses may purchase additional rights at reasonable cost by contacting Plunkett Research, Ltd., 713.932.0000, www.plunkettresearch.com, email:
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PLUNKETT'S FOOD INDUSTRY ALMANAC CONTENTS Chapter 1: Major Trends & Technologies Affecting the Food Industry The Globalization of the Food Industry Technology Enhances Productivity and Cuts Waste and Spoilage Wal-Mart Becomes the Biggest Grocer in the U.S., Heating Up Competition and Driving Retail Prices Down Grocery Sales Over the Internet Finally Gain Momentum and Earn Profits Big Breakthroughs/Controversy for Agricultural Biotechnology The Global Rise of Obesity—Overweight Population Soars in Many Nations Exacting Organic Standards Create Consumer Demand for Products Health Foods Earn Healthy Profits Trouble at the Golden Arches—Fast Food Companies Face Problems Competition Among Bottled Waters Diet Drink Sales Soar Wine Makers Try Mass Marketing Internet Research Tips
3 4 5 7 9 10 10 10 11 11 13
Chapter 2: Food Industry Statistics U.S. Food Manufacturing: 1997-2001 U.S. Food Price Inflation: 1982-2002 Percent of Family Income Spent on Food, U.S.: 1950-2001 What a Consumer Food Dollar Pays for Industry-wide, U.S. U.S. Store Characteristics by Format Type: 2001 U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006 U.S. Food Supply: Food Servings Available per Capita per Day, 1970-1997 World Exports in Agricultural Products, 2001 World Exports of Agricultural Products, By Trade Route: 2001 U.S. Farmers and Agriculture Profiles: 1790-2002 World and U.S. Supply and Use for Grains: 2000-2003 U.S. Meat Supply and Use: 2001-2003 Per Capita Consumption of Poultry and Livestock, U.S.: 1960 to Estimated 2002 U.S. Egg Supply and Use: 2000-2003 U.S. Milk Supply, Use and Prices: 2000-2003 U.S. Tobacco Production Overview: 1970-2003 U.S. Tobacco Manufacturing: 2001 U.S. Restaurant Industry Overview U.S. Restaurant Industry Forecasts U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003 U.S. Restaurant Industry Operating Ratios: 2002
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U.S. Restaurant Industry: Average Salary and Bonus Figures Beverages: Per Capita Consumption, 1970-2000 Top 10 Soft Drinks, U.S.: 2002 U.S. Alcoholic Beverages Manufacturing: 2001 Wine Sales in the U.S.: 1991-2002
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Chapter 1 MAJOR TRENDS AND TECHNOLOGIES AFFECTING THE FOOD INDUSTRY Major Trends Affecting the Food Industry: 1. The Globalization of the Food Industry 2. Technology Enhances Productivity and Cuts Waste and Spoilage 3. Wal-Mart Becomes the Biggest Grocer in the U.S., Heating Up Competition and Driving Retail Prices Down 4. Grocery Sales Over the Internet Finally Gain Momentum and Earn Profits 5. Big Breakthroughs/Controversy for Agricultural Biotechnology 6. The Global Rise of Obesity—Overweight Population Soars in Many Nations 7. Exacting Organic Standards Create Consumer Demand for Products 8. Health Foods Earn Healthy Profits 9. Trouble at the Golden Arches—Fast Food Companies Face Problems 10. Competition Among Bottled Waters 11. Diet Drink Sales Soar 12. Wine Makers Try Mass Marketing At the end of the Civil war in 1865, farmers made up about 55% of the workforce in the United States. By 1900, 38% of working Americans still toiled on 5.7 million farms—growing enough food to feed the nation’s population of 76 million. Today,
only about 2.5% of the U.S. workforce is employed on farms. The total number of American farms is down to a little over 2 million, but that dwindling count of farms and farmers takes care of the domestic needs of a national population approaching 300 million—nearly four times the population of 1900. Since the early 1900s, the amount of manpower required to grow food has plummeted. The relative cost of an American family’s food has likewise dropped impressively. According to the Federal Reserve Bank of Dallas, in 1901 46.4% of a typical American household’s income went to food. By 1995 that ratio had dropped to 14.0%. Here’s another way to look at it: In 1919, at the end of World War I, a basket of staple food items (one pound each of coffee, bacon, bread, beans, onions, lettuce and ground beef, plus generous amounts of sugar, tomatoes and other items) cost what an average American would earn in 10 hours of work. By 1995, that cost had dropped to less than two hours. Of course, the drop has been caused by increases in total personal income, as well as improvements in food technologies. Outside the U.S., other industrialized nations have made outstanding strides in food cost, availability and quality. Many developing nations have seen vast improvements as well. (Ironically, while we all need food to live, and we tend to derive tremendous enjoyment from good food, we
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nonetheless do a poor job of compensating most people who work in the food industry. From fry cooks to chicken pluckers to vegetable cookers, many people who work in the food sector receive very low wages.) Meanwhile, throughout much of the world, technology and globalization have revolutionized the way that we grow food, as well as the way that we transport, process, package, purchase and cook it. Waste and spoilage are down to nominal levels thanks to innovations like interstate highways and refrigerated trucks. Meanwhile, it’s an everyday occurrence for consumers in the U.S. to pick up strawberries from New Zealand or mangos from Mexico in the fresh produce section of the local supermarket. Globalization has led to the rise of massive multinational food processing companies like Nestle and Kraft, which often sell their foods under local names in local languages, after producing them in regional factories worldwide. The types of technologies affecting the food industry have evolved over time. From mechanized tractors and implements to diesel trucks to flash freezing, food technology has moved on to become high-tech. Today, computerization has made marked changes in the food industry: electronic data interchange ensures that inventories and shipments are well-managed so your local grocer doesn’t run out of the products that are selling quickly. Point-ofsale systems at the cash register capture minute-byminute sales data. Next, biotechnology is making sweeping changes at the ground level—in seed stocks and agricultural animal health. In fact, gradual genetic improvement of grain seeds like rice and wheat, combined with better fertilizers and other technologies, has created a “green revolution,” enabling nations like China and India to turn from agonizingly underfed populations to a large degree of food self-sufficiency and, in some cases, net exports of bounteous crops. Now, genetically modified seeds are gaining ground with the promise of crops that not only resist insects and have extremely high yields per acre, but also produce high levels of desirable nutrients and vitamins. The following is an analysis of major trends shaping the food industry today: 1)
The Globalization of the Food Industry The food industry is arguably the best example of the sweeping trend of globalization that is affecting a broad spectrum of businesses and industry sectors. When traveling the world, you are likely to see
McDonald's, Burger King and Kentucky Fried Chicken franchises cheek and jowl with the Eiffel Tower, the Great Wall of China or the Sydney Opera House. Of the 650 million bottles of Heinz ketchup produced each year, more are sold overseas than in the U.S. Conversely, almost any household in the U.S. contains products such as Perrier, Nestea, Stouffer's frozen foods and Coffee-Mate, which are manufactured and sold by Swiss giant Nestle SA. Globalization is, in the simplest terms, a constant flow of capital, goods and services from one country to the next. As manufacturers identify new foreign markets, direct investment occurs within those markets to fund production, distribution, marketing and sales. Major food companies have become truly global in nature with offices, production plants and stores around the world and sales that impact GDP in almost every country on the planet. According to Dr. Mike Boehlje of Purdue University, the factors driving this trend in the food industry are the move to market-based economies, the establishment of the World Bank, IMF (the International Monetary Fund) and WTO (the World Trade Organization), advances in technology that expand geographic reach, improved transportation and logistics and dietary transitions occurring around the world, particularly in Asia. The strongest globalization trends are found in North America, Japan, Europe and East Asia, while the weakest are in Sub-Saharan Africa and the former Soviet Union. 2)
Technology Enhances Productivity and Cuts Waste and Spoilage Comprehensive changes are affecting every sector of the food industry, from production to distribution to sales and inventory management. Farms today are highly mechanized, and processes such as in-vitro fertilization, computer-controlled sprayers and planters and the use of global positioning systems (GPS) for precision farming are the norm. In terms of packaging, tremendous advances have been made in cans, bottles, bags and boxes, resulting in greater quality, freshness and convenience. Nestle, for example, tested a canned instant coffee product in the U.K. called Nescafe Hot When You Want. The can contains separate compartments that hold water and a quicklime chemical and is armed with an activation button. Push the button, and the water and chemical combine to heat the can. In three minutes, the coffee’s temperature reaches 140° F, which is not quite hot but certainly warmer than room
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temperature. The can is insulated to prevent burnt fingers or lips. Self-cooling containers are also on the horizon. They work using one of two technologies: thermal insulation combined with vacuum packing to draw heat from the contents and store the resulting vapor in the bottom of the can; and refrigerant capsules that, when punctured, release CO2 which rapidly cools the food or beverage. Other packaging advances include films and coatings such as anti-microbial plastics that hinder the growth of harmful bacteria and mold. Watch for new wrappings for meat, dairy products and seafood that react to temperature changes. If a product exceeds a safe temperature at any point from the packing plant to the display case in a grocery store, the packaging will change color. Among the biggest changes in food industry technology are advancements in inventory control. Today, you’ll find at least a basic computer system in nearly all U.S. stores. Virtually all chain retailers are utilizing “point-of-sale” computer systems, in which bar code scanners immediately capture sales information at the cash register, adjust the inventory in the store's computer and reorder merchandise automatically. This technology, called EDI or electronic data interchange, has been around for a long time and helped companies like Wal-Mart and Kroger to become giants in their segments. Nonetheless, many chains were slow to adopt it. The more advanced point-of-sale systems prompt cashiers with suggestions of additional merchandise to offer that complement the items being purchased, or generate personalized coupons. The biggest breakthrough in inventory management is the placement of microchips in product packaging, combined with the use of special sensors on shelves that alert a central inventory management system as to product purchases and the need to restock inventory. From loading docks to store shelves to cash registers to parking lots, radio frequency readers will track the movement of each and every item. Bar codes will be replaced by radio frequency identification (RFID), electronic product information stored on the microchips. The chips even eliminate the need to scan each item at checkout. Checkout stations will be equipped with receivers that automatically calculate purchases. These systems can lead to great reductions in shoplifting and the elimination of costly manual inventory counts. Another benefit to RFID is that manufacturers will be able to reduce overall inventory thanks to greater efficiency. Proctor & Gamble, for example, hopes to
cut its inventory by as much as 40%. Marks & Spencer, a major retailer in the U.K., is replacing bar codes with an RFID system, including tags for the millions of containers that hold food being shipped from suppliers to its stores. It takes a mere five seconds to scan 50 containers, an 85% improvement in the time it takes to scan using bar codes. The savings in time as well as the cost of spoiled food are expected to make the system's $3-million price tag feasible. Wal-Mart is heavily invested in this new technology and is currently testing RFID tags in some of its merchandise. Checkout procedures are changing as well. Selfcheckout stations are proliferating at a great rate. Nearly 30% of major supermarket chains have installed self-checkout systems in at least a few stores at which shoppers may scan their own items, bag them and pay using ATM-like kiosks, which accept debit and credit cards as well as cash. Another alternative are handheld scanners that shoppers carry with them, scanning each item as they remove it from the shelf, refrigerated case or produce bin. This practice is far more prevalent in Europe than in the U.S. For more on the impact of technology in the food industry, see "Big Breakthroughs/Controversy for Agricultural Biotechnology" later in this chapter. 3)
Wal-Mart Becomes the Biggest Grocer in the U.S., Heating Up Competition and Driving Retail Prices Down The grocery business is being deeply affected by the boom in discount shopping. The biggest player here is discount giant Wal-Mart. It is rapidly adding new Wal-Mart Supercenters to its chain, with immense, well-stocked, supermarket-like grocery departments that work on profit margins about 60% lower than the margins employed by traditional supermarkets. Shoppers who bypass the neighborhood supermarket to go to a Wal-Mart Supercenter know that they will save substantial amounts of money. At the same time, Wal-Mart’s non-grocery departments benefit when these grocery shoppers pick up items elsewhere in the store. WalMart management knows that the average shopper makes several grocery shopping trips weekly. These supercenters have been designed to sell top-quality groceries at bargain prices in order to bring those frequent shoppers into the total Wal-Mart shopping environment—thus driving up average sales. In the process, Wal-Marts are stealing large amounts of market share from traditional grocers, and
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the entire supermarket industry is likely to go through the same sorts of overwhelming changes that discounters forced on many other types of stores. Discount leaders Costco and Target likewise sell huge quantities of groceries at everyday low prices based on thin profit margins. Wal-Mart rang up an estimated $60 billion in annual grocery department sales during 2002, which makes it the nation's largest grocer based on revenues, followed by Kroger at about $50 billion. The success of the grocery venture is fueling significant expansion for Wal-Mart. The number of supercenters reached 1,060 in 2002, with at least 70 more scheduled to open in 2003. The competition is fierce indeed for competitors such as Kroger and Safeway. Typically, traditional supermarkets have a gross profit margin of approximately 24%, from which they must meet payroll, advertising costs and maintenance. Wal-Mart can remain successful with a grocery area margin as low as 16%, which is sending traditional supermarkets into a frenzy of effort to cut costs and streamline their operations. One of the ways in which traditional supermarkets are fighting back is to cater to the upscale market. H.E. Butt Grocery Co., for example, is enjoying remarkable success with its Central Market concept, featuring high-end items such as caviars and pates, extensive wine departments, exotic produce and more, housed in an exciting marketplace-like setting. Likewise Kroger is building Signature stores that stock items based on surveys mailed to consumers in surrounding neighborhoods prior to a store’s grand opening. For example, local customers might respond with requests for specific brands, or for an especially broad selection of fresh seafood. As a result of this focus, stores built in neighborhoods with heavy Asian populations stock items such as Chinese long beans, sweet cooking wine, jasmine rice and miso. Hispanic neighborhood stores stock tortillas made fresh on-site, a broad selection of peppers, fresh salsas and favored brands such as Goya. Prices are not as low as those found at Wal-Mart, but the selection is significantly higher and tailored to each market.
Spotlight: Wal-Mart Neighborhood Markets In a move diametrically opposed to the concept of a supercenter, Wal-Mart has opened a total of 49 "Small-Marts" in Arkansas, Texas, Oklahoma, Florida, Tennessee, Mississippi, Alabama and Utah. Opened with little fanfare and a decided lack of national marketing, the new stores average between 39,000 and 55,000 square feet (as opposed to 100,000 square feet for standard Wal-Marts and 180,000 square feet for supercenters). Neighborhood Markets offer groceries, a pharmacy, a deli, photo processing, gasoline pumps and a convenience store-like "Grab It and Go!" area stocked with coffee, tea, soft drinks and snacks. The concept has been around since 1998, and plans for new stores have been announced in Florida, Tennessee and Missouri, among others. Expansion is planned at a rate of 25 openings each year, a figure which seems small when compared with the supercenter growth of 70 new stores per year. Thinking small may prove to be another area in which Wal-Mart succeeds in a big way. 4)
Grocery Sales Over the Internet Finally Gain Momentum and Earn Profits The Holy Grail of e-commerce is to convince grocery shoppers to order over the Internet. Online grocery selling is such an appealing target because of the sheer size of the retail grocery market ($517 billion for 2002 in the U.S.). However, creating a viable online grocery business is a daunting challenge. Food retailing, with its highly perishable inventory, is a low-profit-margin enterprise—one in which consumers tend to make multiple trips to the market each week to select and purchase first-hand. Peapod, an aggressive home grocery delivery service that has been in business since 1989, is building a base of online shoppers slowly but surely. It operates in conjunction with major retail grocery chains such as Giant and Stop & Shop in Boston, Massachusetts; Chicago, Illinois; northwest Washington, D.C.; Long Island, New York; and other areas. Customers order online via Peapod.com and, for a fee, receive home delivery of their groceries, which are packed at warehouses near participating supermarkets. Despite its lengthy history and wealth of experience, Peapod has struggled financially. It was acquired in 2001 by one of the world’s largest supermarket chains, European-based Royal Ahold. The most ambitious effort to date was launched by Webvan Group, Inc., which resulted in one of the largest new business failures in U.S. history. The
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idea was conceived by Louis Borders, well-known as the founder of the Borders book superstores. Webvan began selling groceries to Internet customers in the San Francisco Bay area in mid-1999. Together, Webvan and the HomeGrocer firm it acquired went through $1.2 billion dollars in venture fund capital, debt and the proceeds of public offerings. Webvan’s initial plan was to rapidly gain market share by building highly automated warehouses in 26 major markets across the U.S. It began by constructing a state-of-the-art warehouse in Oakland, California, totaling 330,000 square feet, to serve the greater San Francisco area. Additional warehouses were built in other major markets as services were loudly launched. Despite its leading-edge technology and deep pockets, Webvan was unable to satisfy the needs of consumers in most markets. Myriad problems existed. For example, many consumers were not able to get home delivery during prime after-work hours unless they scheduled purchases and deliveries several days in advance. Webvan found that changing consumers’ habits to lure them into shopping online is extremely difficult to accomplish—most people want to shop at a physical store, and they make the decision to grocery shop on the spur–of–the moment. Despite the vast amounts of money invested in starting this business, Webvan ceased operations after filing for bankruptcy in July 2001. Nonetheless, some positive news is beginning to emerge from the online grocery segment. Peapod announced in Spring 2001 that it was finally earning an operating profit in one of its markets, Chicago. By early 2003, Peapod stated it was generating positive cash flow in four out of its five markets. In addition, supermarket giant Safeway purchased a controlling interest in a Texas-based firm called GroceryWorks.com and used this platform to create online grocery sales with home delivery in selected markets. In mid-2002, the firm introduced home delivery in 65 zip codes in the San Diego area for customers of the Safeway-owned Vons supermarket chain. Albertson’s has slowly been rolling out similar services in selected markets since 1999. Publix Supermarkets also has an online unit, PublixDirect. FreshDirect.com is a relatively new firm funded with $100 million in venture capital. It focuses on serving upscale customers within Manhattan. Online grocery shoppers tend to be busy professionals, time-challenged mothers of small children or people who largely stay at home because
of a lack of mobility. They tend to be better educated and make larger average purchases than walk-in store customers. They also tend to be very loyal, because they are seeking a timesaving convenience. Watch for steady growth in online grocery sales, driven largely by marketing initiatives at existing supermarket firms rather than startups. Analysts at Forrester Research project that online grocery sales will grow 46% in 2003 to $3.5 billion. 5)
Big Breakthroughs/Controversy for Agricultural Biotechnology The biotech-era technology of “molecular farming” will soon lead to broad commercialization of human drug therapies that are grown via agricultural methods. For example, by inserting human genes into plants, scientists can manipulate them so they grow certain human proteins instead of natural plant proteins. The growth in plants of transgenic protein therapies for humans may become widespread. Such drug development methods may prove to be extremely cost-effective. At the same time, hundreds of antibodies produced in farm animals, using biotech means, for use in human drug therapies are currently under development or in clinical trials. Meanwhile, genetically modified foods (frequently referred to as “GM” for genetically modified, or “GMO” for genetically modified organisms) offer tremendous promise in agriculture—particularly in low-income/highpopulation-growth nations like China and India. Although scientists have been able to engineer highly desirable traits in GM seeds for crops (such as disease-resistance and insect-resistance), and the scientific community has given GM foods a clean bill of health for years, such modified foods face stiff resistance among many consumers, particularly in Europe. Agricultural biotechnology became a significant commercial industry during the 1980s. It was fostered both by startups and by large chemical or seed companies. All of these players were focused on developing genetically modified seeds and plants that had higher yields, better nutritional qualities and/or resistance to diseases or insects. Additional traits of GM plants include resistance to temperature and moisture extremes. By 2001, over 50 million hectares of GM crops were planted worldwide— mostly in the U.S., but large amounts were also planted in Argentina, Canada, Mexico, Romania, Uruguay and South Africa. Meanwhile, GM seeds
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have the potential to create vast benefits in lowincome nations where reliance on small farms or gardens is high and food is scarce. China has made massive investments in agricultural biotechnology research and may raise such spending several fold between 2001 and 2005. At the same time, researchers are modifying the structural makeup of some plants in order to alter leaves, stems, branches, roots or seed structures. The ability to modify the nutritional makeup of plants can have highly desirable effects. For example, Mycogen, an affiliate of Dow AgroSciences, has developed sunflower seeds with higher levels of desirable oleic and linoleic acids—acids with exceptional nutritional value. There are currently dozens of agribio food products on the market. These range from fruits to vegetables to nuts. There is significant potential for rapid development of new products, thanks to the same technologies that are pushing development of human gene therapies in the pharmaceutical industry. Naturally, large numbers of seed and plant biotechnology patents have been filed. Meanwhile, over 100 patents relating to genetically modified animals have been filed—genetic engineering has the potential to create significant changes in the health and growth of agricultural animals as well as plants. In the same way that the development of genomics technology has opened up a wide and exciting vision of treatments for human disease, the study of agricultural animal genomics will enable the industry to maintain animals that are disease-resistant and that have desirable physical traits. U.S. farmers have enjoyed greatly increased crop yields and crop quality thanks to GM seeds, and by some estimates as much as 70% of U.S. food may contain ingredients that have been grown with GM methods. In particular, U.S. farmers are reaping tremendous crops of GM soybeans, cotton and corn. These crops may eventually become ingredients in everything from soft drinks to baked goods. While many areas of biotechnology are controversial, agricultural biotech is presently the largest target for consumer backlash and government intervention into the marketplace. The market for genetically engineered seeds has already reached the $50-billion-plus stage, but consumer resistance to food products containing material grown in this manner is sometimes fierce, and the near-term outlook for the market is cloudy at best. In the fall of 2000, a relatively small quantity of taco shells were found to have been manufactured with cornmeal made from GM corn known as
StarLink. Unfortunately, StarLink was intended for hog feed rather than human foods. Interestingly, the StarLink affair seems to have had little long-term effect on consumer preferences in the U.S., although there were loud cries for more government regulation at the time. Consumers in Europe have a strong fear of GM foods. It may stem in part from a cultural preference for locally grown and processed, natural foods. Basic European grocery shopping habits and food preparation habits vary from those of U.S. consumers. For example, Europeans tend to shop today for tonight’s meal, rather than stocking up on several days’ worth of food. Europeans also suffered mightily from the outbreak of mad cow disease in 1996, which contributed to their concerns about food sources. A particular concern among farmers in many parts of the world is that GM crops may infest neighboring plants when they pollinate, thus triggering unintended modification of plant DNA. In any event, there is a vast distrust of GM foods in certain areas. U.S. food growers and processors face increasing difficulty exporting to the European Union (EU) because of the reliance that American farmers place on GM seeds. Since 1998, the EU has placed a moratorium on approving the import of new GM foods. The EU also plans to require content disclosure on the label of any food product containing more than 0.9% GM ingredients. Other nations, while continuing to accept GM food imports from the U.S., are considering similar labeling requirements. In October 2002, the United States tried to donate nearly 26,000 tons of food to the hungry people of Zambia. Most of the food offered was corn grown using standard GM seeds in the U.S. Zambia’s president turned it down, despite widespread malnutrition in parts of his nation. His reasoning was that anti-GM nations in Europe would thereafter refuse to purchase Zambian-grown food exports for fear that they might be tainted by contact with the GM corn. (The issue of GM corn is particularly complex. Unlike wheat and rice crops, where the grain’s flower pollinates itself, corn pollinates by dispersing vast quantities of tiny pollen grains into the wind, randomly fertilizing nearby corn ears.) Some groups that claim to be concerned about the environment are also anti-GM. Some anti-GM activists have arguments with big business— particularly with the giant corporations like Monsanto that make GM seeds. In 2000 alone, there were over 30 acts of anti-biotech terrorism around the world, including the firebombing of a biotech lab at
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the University of Michigan. Also in 2000, a U.S. trade representative, Charlene Barshefsky, quietly signed a new section of the Convention on Biological Diversity that may allow member countries of the World Trade Organization to stop the importation of any biological product at any time. Spotlight: Monsanto Agribio giant Monsanto, a global company with large market share in the seed and agricultural chemicals business, is working on several exciting modified plants with tremendous potential benefit, including: • High stearate soybeans that may help people maintain healthier cholesterol levels. • Potatoes developed with higher solids content. Such potatoes can have decreased processing costs because less energy is needed to extract water when producing potato products. The higher solids content of potatoes holds the potential to bring consumers lower-fat chips. Since oil replaces water during frying, potatoes with higher solids content (and thus less water) absorb less oil. • Corn and soybeans with increased essential amino acids, the building blocks of protein. This may improve the quality of protein in food products and animal feed made from these crops. • Mustard plants enhanced with genes for vitamin A expression. By introducing a small part of the DNA from a virus into the genetic makeup of a plant, Monsanto has developed crops that have an in-built immunity to targeted diseases. 6)
The Global Rise of Obesity—Overweight Population Soars in Many Nations Obesity is increasing in nearly every country in the world. The problem is at its worst in the U.S., where obesity has doubled in the past 20 years to about 30%. A study of a sample of 4,115 adult Americans published in the October 9, 2002 issue of the Journal of the American Medical Association found that the age-adjusted prevalence of obesity was 30.5% (the study was actually conducted in 19992000). This was a significant increase from 22.9% in the previous study (made during the 1988-1994 period). The number of people either overweight or obese was estimated at 64.5%, up from 55.9%. These are official studies under a program referred to as NHANES—the National Health and Nutrition
Examination Survey. A report issued by the U.S. Surgeon General in 2001 found similar, although slightly lower, levels of overweight and obesity. It is interesting to compare American obesity levels to those of other nations. For example, the Organization for Economic Cooperation and Development reports that Britain and Australia are not far behind the U.S., with obesity rates of 21% and 20% respectively, while the obesity rate in France is only 9.6% and in Japan it is only 2.9%. However, while the French and Japanese rates are relatively low, they have nonetheless seen significant increases over the previous 10 years. Body Mass Index (BMI) as an indicator of health status based on weight: Underweight = less than 18.5 BMI Normal weight = 18.5 to 24.9 Overweight = 25 to 24.9 Obese = 30 or more To calculate Body Mass Index: First: divide weight (pounds) by height (inches) Second: divide the result by height again Third: multiply the result by 703 Internet Research Tip: For an easy-to-use, online calculator and a full discussion of BMI, see http://nhlbisupport.com/bmi/ Source: National Institutes of Health, National Heart, Lung and Blood Institute The U.S. Surgeon General estimates that obesity resulted in 300,000 American deaths in 2000, and $117 billion in health care costs. One of the most critical problems of obesity is the onset of diabetes. If obesity rates continue to skyrocket, the number of diabetics worldwide is expected by some experts to triple in the years from 2000 to 2015 to 320 million. The impact of these numbers combined with an accompanying rise in heart disease, cancer, high blood pressure and cholesterol levels may wreak havoc in the heath care system. Children and adolescents are also facing obesity in record numbers. The number of overweight 6- to 11-year-olds in the U.S. has doubled since the early 80s. Consequently, pediatricians are seeing conditions and illnesses (such as Type II diabetes) rarely found in children before. The culprit is high-calorie diets combined with sedentary lifestyles. Countless studies have shown
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that people are watching more television or spending more time at the computer while their eating habits have gravitated away from the family dinner table to the sofa, desk and, more and more often, the family car. People around the world are bombarded with tantalizing ads for fat-filled fast foods. Food companies are the second largest advertisers in the U.S. behind automobile makers, spending $33 billion on ads and promotions in 2002. In addition, the number of places in which to buy food is proliferating at a dizzying rate. Drug stores and gas stations are now stocked with foods, largely snacks that are high in fat and calories. Food courts can be found in any shopping mall. Vending machines are popping up in offices, schools and public gathering places of all kinds. A dining habit that may be adding to weight gain is gorging on fast food while riding in the car. Fast food drive-throughs are everywhere, and by one estimate, as much as 6% of all breakfasts in the U.S. were eaten in automobiles in 2002—double the amount of 1997. Portion sizes, in the U.S. especially, have reached epic proportions. For example, McDonald's original hamburger, french fries and Coke meal added up to 590 calories in 1957. Today, a Quarter Pounder with cheese, supersized fries and supersized drink totals a whopping 1,550 calories. Movie popcorn was sold in three-cup serving sizes in the 50s. Now, a medium popcorn order at most movie theaters contains 16 cups. Clerks in fast food restaurants and concession stands are trained to point out the value of supersized orders. At Wendy's, a Classic Single Old-Fashioned Combo of a hamburger, medium french fries and drink costs $3.89. For an additional $0.39, a Biggie Size fries and drink can be substituted, adding 180 calories to a meal that started at 1,360 calories. Thirsty? Try a 64-ounce Big Gulp from 7-Eleven. Choosing that size of any beverage that contains sugar takes the count up to 800 calories, while the cost per ounce to the consumer is far less than the smaller sizes. Physiologists point out that the tendency to prefer foods that are higher in fat is natural. Throughout man's history, in fact, until very recently in many parts of the world, the scarcity of food brought about malnutrition, disease and death. Those who could find more to eat did so to prepare for the next famine. Individuals with higher body weights were more likely to reproduce successfully. Occasional excessive eating was necessary for survival.
Today, the world is highly mechanized. Jobs that used to require heavy physical labor such as lumberjacking, ditch digging and farming are largely done by machine. Daily caloric needs have dropped and the availability of foods, especially inexpensive, high-fat, high-calorie foods, has soared to levels never before seen. According to USDA food-supply data, an increase of 500 calories per American per day in typical calories ingested occurred between 1984 and 2000. Attempts to stem the tide of rising obesity have so far met with little success. Administrators at schools in 10 states are discussing ways to limit or ban the sale of soft drinks and snack foods on campus. This may prove extremely difficult, since approximately 50% of U.S. schools have pouring rights contracts with particular soft drink companies to supply beverages to entire districts. The contracts pay lucrative fees to school districts, and pressure is placed on school administrators to keep signing such deals in order to receive funds for sports teams, study materials and other equipment. The same is true for deals made between school districts and fast food companies which are brought into cafeterias and snack bars. In 2002, a bill was proposed in the U.S. Senate called the Improved Nutrition and Physical Activity Act (IMPACT). IMPACT, if passed, would provide roughly $258 million in grants for obesity treatment, nutrition education, construction of exercise paths in city parks and tax incentives for companies and other agencies that promote healthy food. The bill is currently under consideration in the House of Representatives. The legal community is also jumping into the fray with several recent lawsuits reminiscent of those against tobacco companies. These cases charge fast food companies with negligence and intentional marketing of foods with links to obesity, diabetes, heart disease, high blood pressure, stroke and cancer. Plaintiffs include classes of overweight children and adults who face defendants such as McDonald's, Wendy's, Kentucky Fried Chicken and Burger King. As with tobacco suits, the question is one of responsibility. Are obese adults responsible for the foods they eat and the results of those choices? What may prove to be a question that food companies cannot answer successfully in court is, "Are children responsible?" Food companies around the world are scrambling to assess their marketing practices. Saturday morning television ads, lovable characters such as Ronald McDonald (the second most recognized character among children after Santa
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Claus) and toys packed in children's meals may prove to be unacceptable inducements to dine on high-fat fast foods. It is far too soon to gage, however, since pending suits are expected to be mired in legal wrangling for years to come. Only one country has achieved any sort of success rate when combating the obesity epidemic. Singapore, which requires military service of all adults, has instigated an extended six-week training camp for recruits who are obese in addition to its 10week basic boot camp. After discharge from the service, most Singaporean men and women remain on reserve status, which requires an annual physical and basic fitness test. Cashing in on Fat: The Weight Loss Industry Sales of weight loss programs and products such as Weight Watchers, Jenny Craig and Slim-Fast reached $24 billion in 2002, a rise of 7% over the previous year. Additional revenues generated by gyms, health clubs and weight loss prescriptions raise the total to $40 billion. Weight Watchers is the top weight-loss company with $810 million in 2002 revenue, with Slim-Fast, a subsidiary of Unilever, close behind at $800 million. Two popular diet programs that restrict carbohydrates, the Atkins diet and The Zone, are also producing food products such as nutrition bars, baking mixes and meal replacement drinks. Even companies known for high-fat and highcalorie foods such as chips and beer are trying to develop products for the diet market. AnheuserBusch recently debuted Michelob Ultra, a light beer with only 2.6 grams of carbohydrates and 95 calories per serving. At the Frito-Lay snacks unit of PepsiCo, tests are underway for a snack chip that contains broccoli, and low-fat baked potato chips and pretzels comprise a significant portion of this subsidiary’s $14 billion in yearly sales.
7)
Exacting Organic Standards Create Consumer Demand for Products Although organic farms provide less than 2% of the food supply in the U.S. and occupy less than 1% of the farmland, the market for organic foods has grown in the past 10 years by 15% to 20% each year. Sales of organic foods exceeded $11 billion in 2002. The term organic typically refers to crops grown without pesticides, herbicides or fungicides. As of October 2002, food that bears an organic label must meet criteria set by the U.S. Department of Agriculture (USDA). Specifically, these products may not contain artificial flavors, colors, preservatives or fertilizers, synthetic pesticides, irradiation (germ-killing radiation) or genetically engineered ingredients. Foods certified as natural, as opposed to organic, may have been exposed to artificial fertilizers, synthetic pesticides, irradiation and genetically engineered ingredients. With regard to meat and dairy products, the organic label requires that livestock be fed only organic grains or grasses, and that they be free from growth hormones and antibiotics. Livestock also must have access to the outdoors. The impact of federal regulation has, in some cases, brought about higher sales for organic products. Consumers are more willing to pay the higher prices for organic products that meet USDA standards. The market for organic pork, for example, has seen growth in supermarkets because of the new certification. Organic foods tend to sell for an average of 15% more than traditionally grown foods. A growing number of consumers, individuals and restaurant buyers alike tout organic foods as having superior flavor and texture. Other proponents cite the health benefits of avoiding chemicals and potentially poisonous treatments used as pesticides. There is currently no research data to support these claims. Organic products have limited shelf life since they contain no preservatives. Consequently, they must be picked and/or packed when they reach optimum freshness and quickly shipped to nearby markets to avoid spoilage. Major grocery store chains such as Kroger, Wal-Mart, Whole Foods and Costco are large enough to contract with multiple organic farmers since there are store locations throughout the U.S. and beyond, and are therefore close enough to suppliers to take advantage of the small window of opportunity before organic products spoil.
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8)
Health Foods Earn Healthy Profits Worldwide sales of foods that claim to foster nutrition, health, weight loss or other advantages are enjoying immense sales. The U.S. accounts for about one-third of the market for such foods, followed by Europe, Japan and the balance of Asia. Many types of food and nutrition products are considered to fall into this broad sector, ranging from vitamins to dietary supplements, organic foods and “functional” foods (foods that are enhanced in some way, such as products heavily fortified with vitamins or minerals). Total nutrition industry sales are more than $50 billion yearly in the U.S. (including certain types of personal care items). Annual dietary supplement sales alone are more than $17 billion in America. A handful of U.S.-based chain store firms have built very impressive businesses by focusing on health foods and supplements. Among them are supermarket firms Whole Foods (with over $2.6 billion in annual sales) and Wild Oats (over $900 million). Another impressive chain is General Nutrition Companies, creator of the GNC stores. Meanwhile, there are several very successful companies that either manufacture or distribute processed foods that cater to the health foods sector. Impressive success will continue to be found in this growing sector, which is now a significant part of the food industry overall. 9)
Trouble at the Golden Arches—Fast Food Companies Face Problems For the first time in its history, McDonald's Corporation is posting losses. For 13 consecutive months in 2002-2003, the fast food giant reported declines in “same-store” (stores that have been open at least one year) sales, citing a slowing U.S. economy, changes in consumer tastes, the Iraqi conflict and a possible over-penetration in Europe as the cause. CEO Jim Cantalupo, who came out of retirement to step into the top office in early 2003, plans to reorganize the company with an emphasis on operations and menu improvements as opposed to global expansion. McDonald's will open 360 new restaurants around the world in 2003 (having opened 1,000 the previous year) and will close 700 locations that are under-performing. Plans to refurbish existing restaurants have been put on hold, and cuts amounting to $700 million have been made from the company's 2003 budget. Food enhancements include a change in seasoning in its hamburgers and improvement in the
quality of sandwich buns. Its Chicken McNuggets will now be made with white-meat chicken only, and several healthy choices will be added to the menu, including a Grilled Chicken Flatbread sandwich and entrée salads with Newman's Own dressings to be offered in the U.S. McDonald's was formerly able to outstrip the competition due to its impressive real estate holdings. While 85% of its restaurants are franchised, the company owns much of the land and the buildings in which the franchises are run. In addition to a 4% franchise fee from sales, the company also receives rent for the buildings and land. Its rapid expansion policy worked as long as building and realty costs were kept low enough. Now, McDonald's is facing a saturation problem in addition to changing consumer tastes and difficulties in maintaining acceptable levels of customer satisfaction. Traditionally, the company has not been successful at building sales in existing stores. The current situation requires it to become adept in the very area in which it has been historically lacking. The slump in fast food is sweeping, with numbertwo Burger King facing similar drops in revenue. The company suffered a rocky 2002, hurting from deep discounts offered in an attempt to compete with McDonald's and other major fast food franchises including Wendy's. Diageo PLC, Burger King's former parent company, sold the fast food purveyor to a consortium of U.S. investors. Burger King is also opting for healthier menu choices in order to attract and keep customers with changing tastes and health concerns. 10) Competition Among Bottled Waters The $7 billion market for bottled water is booming, growing 30% in sales in 2002 over 2001 figures, leaping far ahead of soft drink growth which was only 0.6% for the same period. It's not surprising, when comparing soft drink markets to the bottled water market, to find that the two top U.S. competitors in bottled water are PepsiCo, Inc. and the Coca-Cola Co. Pepsi's contender, Aquafina, is the top-selling water produced in the U.S., with a 10% market share, followed closely by Coca-Cola's Dasani, with an 8.5% market share. On a global basis, Nestlé is king, selling over 70 different brands of bottled water in 160 countries. In the U.S. Nestle’s Perrier Group of North America holds about a 37% market share, with such popular brands as Perrier, Arrowhead, Poland Spring and San Pellegrino. Another contender is Groupe Danone World Water, a
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French company ranked second in the global bottled water market, which produces popular brands including Evian, Sparkletts, Volvic and Crystal Springs. High-quality drinking water has been paramount in European countries for quite some time, a trend that is reflected in the highest sales of bottled water in the world. It's only in the past decade that awareness of the importance of hydration has become prevalent in the U.S. Along with this awareness comes an enormous business opportunity that the soft drink companies were quick to embrace. Producing and selling bottled water may be more difficult than it seems. The U.S. Food and Drug Administration regulates bottled water the same way it does other ingestible products. Standards for purification and labeling are strict, and spring water, for example, must identify the location where it was bottled on its labels. Perrier, the carbonated water produced by Nestlé, comes from a spring in the town of Vergeze in the South of France. The water sold under the Aquafina and Dasani brands is taken from municipal water supplies. Aquafina is highly filtered using reverse osmosis, while Dasani, as a way of differentiating itself from the PepsiCo competition, adds a mix of minerals to enhance the taste. Marketing campaigns have been fierce, with both companies spending millions to put their products in the public eye. Coca-Cola placed Dasani vending machines in health clubs and ran ads similar to carbonated beverage ads. PepsiCo took a different tack, distancing its water product from its other soft drinks. A recent slogan was, "So pure, we promise nothing," a less than subtle reference to Dasani's added minerals. The next step may be price wars with both companies slashing prices in order to capture share of a market which, so far, has shown very little loyalty to a particular brand. Both bottlers are also experimenting with additional bottled water products with added flavors and nutrients, dubbed "sports waters." 11) Diet Drink Sales Soar While 2002 sales slumped for sugar-filled favorites such as Coca-Cola Classic and Pepsi-Cola, their sugar-free counterparts of Diet Coke, Diet Pepsi and Diet Dr. Pepper all enjoyed substantial increases in sales and market share. Overall, the soft drink industry did show growth in 2002 over 2001, rather
minor growth at 0.8% or an additional 76 million cases. Total case volume sold was 10.1 billion. Classic Coke and Pepsi remain the undisputed favorites in the U.S. market with 19.3% and 13.1% of the soft drink market respectively. Since 1998, Coke lost 52.3% of market share when calculating its industry growth factor (brand volume growth divided by industry-wide volume growth). Things for Pepsi are even more depressing since its IGF fell by 71.7%. What are consumers reaching for when they are thirsty? You guessed it: diet drinks. Diet Coke has risen to the number-three spot among the top 10 U.S. soft drinks. With an IGF of 34.9%, it's the drink that industry experts say will help keep soft drink manufacturers in the black. Diet Pepsi weighs in at number seven on the top 10 list with an IGF of 23.7%. Diet Mountain Dew, also produced by PepsiCo, is another diet winner. Clearly, many consumers are watching their calories—at least in terms of soft drinks—and picking up artificially sweetened beverages more than ever before. The newest addition to the top 10 list is Diet Dr. Pepper, squeezing in at number 10. Having enjoyed steady gains for more than five years straight, 2002 was the year it really came into its own, showing a 3.9% sales gain over the previous year. No other soft drink posted a gain that high. As obesity reaches higher and higher levels worldwide, look for continued growth in diet drink sales. 12) Wine Makers Try Mass Marketing Competition and consolidation define the current market for wine. After an unprecedented boom in the 1990s, sales for lower-end wines ($8 per bottle and under), which comprise 75% of the volume of wines sold in the U.S., dropped 6% in 2002 over the previous year. Meanwhile, consumers enjoyed a wider selection of wines from which to choose than ever before. Producers have been prey to a slow economy and to a glut of grapes, overplanted during the boom of the 90s. The resulting inventories of wine in the current market are driving prices down, particularly for medium to high quality French and California labels. The situation has become dire enough to force some grape farmers to plow under their vines and attempt to grow other, more profitable crops. Consolidation is taking place among vintners as well as distributors and retailers. Gallo and Beringer Blass Wine Estates were acquired by Foster's Group, Ltd.; The Hogue Cellars was purchased by Vincor
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International, Inc.; and Ravenswood Winery is now part of Constellation Brands. As for distributors, Southern Wine & Spirits currently sells one out of every 10 bottles of wine in the U.S. market. Small vineyards have fewer chances to get their product on the store shelf or behind the bar. Today, independent producers operating within a cottage industry face growing obstacles from the emergence of giant corporate operations producing goods for a global market. Compounding the problem is rising competition from foreign markets, including Australia, New Zealand, South Africa and countries in South America and Eastern Europe. The American palate remains more accustomed to beer than wine. Wine consumption amounts to one-tenth that of beer, placing the U.S. far behind countries such as the U.K., Germany, Uruguay, Italy, France and Luxembourg for per-capita consumption. Of the wine consumed domestically in 2002, 67% was from California, with foreign wines comprising 25% and wines from U.S. states other than California making up the rest. White table wine is preferred by most American consumers, at 40% of the national volume consumed, with red following at 39%. Blush wine holds 21% of the 2002 market. With regard to varieties, Chardonnay remains the most popular with 27% of the market, Merlot is second with 15%, Cabernet Sauvignon has 13%, White Zinfandel 8% and Sauvignon Blanc 3%. Sparkling wine drinkers in 2002 quaffed 17.3 million gallons produced in the U.S. and 9.7 million gallons of champagne and sparkling wine produced elsewhere. Although the practice is repellent to traditional wine drinkers and collectors, wineries are attempting to mass market their products. In doing so, they are segmenting the wine market and building brands to appeal to each segment. Producing a popular, inexpensive, often non-vintage wine month after month and year after year has become the lifeline for producers in the low-end market. This is a radical shift from boutique wines which typically focus on idiosyncratic differences in taste, color and aroma. The lower-priced vintage and non-vintage wines, often made from blends of grapes, support the higherend. Kendall-Jackson, for example, can afford to produce and market a limited-edition 1997 K-J Stature Cabernet Sauvignon for $90 per bottle because it sells a far larger volume of 2000 K-J Collage Cabernet Sauvignon-Merlot for $8.50 per bottle. Advertising budgets for wine are expanding, exceeding $111 million in 2002. This figure is dwarfed, however, by the amounts spent by beer
producers and distillers. In 2002, Anheuser-Busch Companies alone spent $821.7 million on advertising and promotional expenses. Wine marketing efforts are also spreading to restaurant chains such as Olive Garden, where wine promotions have resulted in sales doubling in some locations. Even unlikely venues such as Texas Stadium, home of the Dallas Cowboys, are promoting wine by training staff to suggest wines to complement particular foods.
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Internet Research Tips: Here are some useful web sites you won’t want to miss. Also, see our “Contacts” chapter for hundreds of resources hand-selected by our editors. (Plunkett Research Online subscribers should use the “Organizations and Associations” tool.) Food Institute (The) www.foodinstitute.com Tools available at this web site include food industry news, international news, food regulation and food market reports. Economic Research Service of the USDA www.ers.usda.gov The ERS is the main source of economic information and research from the U.S. Department of Agriculture. Its web site provides a wealth of information on topics from nutrition to food consumption to biotechnology and agriculture. American Dietetic Association www.eatright.org This organization's web site offers consumers a nutrition Knowledge Center and a Healthy Lifestyle Center. National Restaurant Association www.restaurant.org On this web site, you can learn everything you ever wanted to know about the restaurant business, from industry research to how to open a restaurant. International Food Information Council http://ific.org Communicates a wealth of science-based information on food safety and nutrition. This web site provides extensive research tools.
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Chapter 2 FOOD STATISTICS Contents: U.S. Food Manufacturing: 1997-2001 U.S. Food Price Inflation: 1982-2002 Percent of Family Income Spent on Food, U.S.: 1950-2001 What a Consumer Food Dollar Pays for Industry-wide, U.S. U.S. Store Characteristics by Format Type: 2001 U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006 U.S. Food Supply: Food Servings Available per Capita per Day, 1970-1997 World Exports in Agricultural Products, 2001 World Exports of Agricultural Products, By Trade Route: 2001 U.S. Farmers and Agriculture Profiles: 1790-2002 World and U.S. Supply and Use for Grains: 2000-2003 U.S. Meat Supply and Use: 2001-2003 Per Capita Consumption of Poultry and Livestock, U.S.: 1960 to Estimated 2002 U.S. Egg Supply and Use: 2000-2003 U.S. Milk Supply, Use and Prices: 2000-2003 U.S. Tobacco Production Overview: 1970-2003 U.S. Tobacco Manufacturing: 2001 U.S. Restaurant Industry Overview U.S. Restaurant Industry Forecasts U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003 U.S. Restaurant Industry Operating Ratios: 2002 U.S. Restaurant Industry: Average Salary and Bonus Figures Beverages: Per Capita Consumption, 1970-2000 Top 10 Soft Drinks, U.S.: 2002 U.S. Alcoholic Beverages Manufacturing: 2001 Wine Sales in the U.S.: 1991-2002
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p. 15 p. 16 p. 17 p. 18 p. 19 p. 20 p. 21 p. 22 p. 23 p. 24 p. 25 p. 26 p. 27 p. 28 p. 29 p. 30 p. 31 p. 32 p. 33 p. 34 p. 35 p. 36 p. 37 p. 38 p. 39 p. 40
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U.S. Food Manufacturing: 1997-2001 (latest data available)
All Employees Year Number
Payroll (US$ 000)
Production workers
Number
Hours (000)
Wages (US$ 000)
Goods Total cost of Total value materials of shipments (US$ 000) (US$ 000)
2001 1,504,666 43,586,136 1,145,128 2,310,153 28,485,677 258,670,228 451,385,857
2000 1,505,642 42,657,764 1,149,631 2,327,200 27,897,267 251,568,953 435,229,643
1999 1,488,076 41,428,289 1,134,624 2,309,894 27,139,205 249,834,628 426,000,288
1998 1,498,667 39,659,857 1,140,157 2,314,849 26,159,910 255,053,796 428,478,276
1997 1,466,956 38,366,240 1,112,307 2,234,216 25,185,751 258,537,984 421,737,017 Source: U.S. Census, Annual Survey of Manufacturers.
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U.S. Food Price Inflation: 1982-2002* In Percent Year
Inflation (%)
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
4.1 2.1 3.8 2.3 3.2 4.1 4.1 5.8 5.8 2.9 1.2 2.2 2.4 2.8 3.3 2.6 2.7 2.1 2.3 3.2
2002*
2.1
* Estimated. Source: U.S. Bureau of Labor Statistics; U.S. Dept. of Agriculture, Economic Research Service.
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Percent of Family Income Spent on Food, U.S.: 1950-2001
Year
Away From Home
At Home
Total Food
1950
3.6
16.9
20.5
1960
3.4
14.1
17.5
1970
3.6
10.3
13.8
1980
4.4
8.9
13.2
1990
4.4
7.2
11.6
2000
4.1
6.1
10.1
2001
4.0
5.9
10.0
Source: U.S. Dept. of Agriculture, Economic Research Service.
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What a Consumer Food Dollar Pays for Industry-wide, U.S. In U.S. Cents
Type of Expense
Cost (in U.S. cents)
Total
100.0
Farm Value
19.0
Labor
38.0
Packaging
8.0
Gross Profit
4.5
Transportation
4.0
Advertising
4.0
Rent
4.0
Energy
3.5
Business Taxes
3.5
Depreciation
3.5
Interest
2.5
Repairs
1.5
Other
4.0
Source: U.S. Dept. of Agriculture, Economic Research Service.
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U.S. Store Characteristics by Format Type: 2001
Total Area (Sq. Ft.)
Weekly Sales
SKU's1
GM/HBC2 and Other NonFood % of Sales
Traditional Grocery Channel Conventional
25,800
$160,000
22,000
9%
Superstore
51,200
360,000
27,000
13
Food/Drug Combo
55,700
432,000
52,000
15
Warehouse Store
42,000
290,000
24,500
6
Super Warehouse
59,500
640,000
32,500
8
Limited Assortment
11,200
90,000
1,900
6
Convenience Store (Trad.)3
2,750
15,000
3,500
7
Convenience Store (Petro.)3
2,330
12,400
2,900
8
N/A
18,000
N/A
N/A
Other
4
Non-Traditional Grocery Channel Hypermarket
180,000
$710,000
100,000+
40%
Wholesale Club
135,000
960,000
5,000
60
Mini Club
16,000
127,000
2,400
15
Supercenter5
195,000
987,000
125,000
50
Deep Discounter
32,500
130,000
25,000
80
N/A
12,500,000
18,000+
40
Internet6 1
SKU stands for Stock Keeping Unit, a numer that identifies the product for inventory and sales purposes.
2
GM/HBC stands for General Merchandise/Health & Beauty Care.
3
Non-gas merchandise sales only.
4
Reflects share adjustments for items not commonly found in the traditional grocery channel.
5
Includes Kmart, Super Target, Wal-Mart Supercenters, Fred Meyer and Meijer Stores.
6
Reflects national online suppliers. Source: Bishop Consulting.
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U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006 1980
2001
2006
Share Share Stores (% ACV) (% ACV) Traditional Grocery Channel Stores
Stores
Share (% ACV)
Conventional
30,250
55.2%
13,000
18.76%
12,500
15.05%
Superstore
3,150
11.6
7,900
25.89
9,200
25.69
Food/Drug Combo
475
2.2
3,850
14.27
4,300
15.22
Warehouse Store
920
2.5
800
2.57
1,200
2.40
Super Warehouse
7
N/A
480
3.01
405
2.66
Limited Assortment
750
0.6
1,871
1.55
2,500
1.40
Convenience Store (Trad.)3
35,800
5.4
42,900
5.96
41,750
5.36
Convenience Store (Petro.)3
N/A
N/A
40,800
4.55
42,500
4.17
96,000
22.5
33,000
4.28
30,000
3
144,355
75.19%
Other Total
167,352 100.0% 144,601 80.85% Non-Traditional Grocery Channel4
Hypermarket
N/A
N/A
9
0.06%
9
0.07%
Wholesale Club
N/A
N/A
991
8.50
1,200
8.53
Mini Club
N/A
N/A
174
0.26
210
0.22
Supercenter5
N/A
N/A
1,575
9.86
2,020
15.26
Deep Discounter
N/A
N/A
190
0.34
300
0.29
Internet6
N/A
N/A
80
0.12
200
0.43
Total
N/A
N/A
3,019
19.15%
3,939
24.81%
Note: % ACV stands for % of All Commodity Volume. 1
SKU stands for Stock Keeping Unit, a numer that identifies the product for inventory and sales purposes.
2
GM/HBC stands for General Merchandise/Health & Beauty Care.
3
Non-gas merchandise sales only.
4
Reflects share adjustments for items not commonly found in the traditional grocery channel.
5
Includes Kmart, Super Target, Wal-Mart Supercenters, Fred Meyer and Meijer Stores.
6
Reflects national online suppliers. Source: Bishop Consulting.
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U.S. Food Supply: Food Servings Available per Capita per Day, 1970-1997 (latest information available) Year
Bread, cereal, rice and pasta
Milk, yogurt and cheese
Meat, poultry, fish, dry beans, eggs and nuts
Vegetables
Fruits
Number 1970
6.93
1.81
3.25
3.29
1.12
1971
6.91
1.82
3.28
3.28
1.15
1972
6.80
1.80
3.30
3.27
1.10
1973
6.95
1.80
3.20
3.31
1.12
1974
7.09
1.72
3.23
3.31
1.13
1975
7.30
1.67
3.23
3.37
1.18
1976
7.53
1.75
3.35
3.45
1.18
1977
7.40
1.73
3.34
3.42
1.19
1978
7.38
1.73
3.30
3.35
1.17
1979
7.52
1.73
3.30
3.38
1.18
1980
7.58
1.70
3.25
3.36
1.23
1981
7.61
1.66
3.27
3.36
1.19
1982
7.70
1.67
3.26
3.35
1.22
1983
7.74
1.69
3.32
3.29
1.26
1984
7.80
1.72
3.30
3.42
1.26
1985
8.17
1.75
3.40
3.42
1.26
1986
8.39
1.77
3.40
3.38
1.31
1987
8.73
1.77
3.35
3.38
1.35
1988
9.05
1.74
3.41
3.39
1.35
1989
8.99
1.71
3.36
3.51
1.33
1990
9.24
1.74
3.35
3.54
1.26
1991
9.35
1.72
3.39
3.51
1.26
1992
9.40
1.74
3.44
3.55
1.31
1993
9.67
1.71
3.43
3.55
1.36
1994
9.74
1.75
3.50
3.64
1.36
1995
9.68
1.72
3.48
3.56
1.34
1996
9.98
1.73
3.48
3.66
1.37
1997
10.12
1.71
3.51
3.71
1.40
Source: U.S. Dept. of Agriculture, Economic Research Service.
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World Exports in Agricultural Products, 2001 In US$ Millions
$
Trade Value
5,474.58
Annual percentage change 1980 - 1985
-2.32%
1985 - 1990
9.31%
1990 - 2001
2.56%
2000
0.78%
2001
-0.87%
Share in world merchandise trade Share in world exports of primary products
9.15% 40.92%
Source: International Trade Statistics 2002, World Trade Organization.
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World Exports of Agricultural Products, By Trade Route: 2001 In US$ Billions
Trade Route
Trade Value Annual percentage (US$ Bil.) change (%) 2001
1990-01
2000
2001
Intra-Western Europe
172.8
1.5
-5.2
-2.2
Intra-Asia
60.5
3.6
6.0
-2.5
North America to Asia
34.0
0.7
11.4
-6.1
Intra-North America
33.6
6.1
4.9
0.8
Latin America to Western Europe
17.7
2.7
-4.2
-0.3
Latin America to North America
17.1
4.6
4.1
-7.1
Source: International Trade Statistics 2002, World Trade Organization.
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U.S. Farmers and Agriculture Profiles: 1790-2002
Total U.S. Population
Farmers as a Percent of U.S. Workforce
Number of Farms
Land in Farms (Thousands of Acres)
Average Farm Size (Acres)
1790
3,929,214
90%
N/A
N/A
N/A
1800
5,308,483
N/A
N/A
N/A
N/A
1810
7,239,881
N/A
N/A
N/A
N/A
1820
9,638,453
N/A
N/A
N/A
N/A
1830
12,866,020
N/A
N/A
N/A
N/A
1840
17,069,453
69%
N/A
N/A
N/A
1850
23,191,786
64%
1,449,000
N/A
203
1860
31,443,321
58%
2,044,000
N/A
199
1870
38,558,371
53%
2,660,000
N/A
153
1880
50,155,783
49%
4,009,000
N/A
134
1890
62,941,714
43%
4,565,000
N/A
136
1900
75,994,266
38%
5,740,000
N/A
147
1910
91,972,266
31%
6,366,000
N/A
138
1920
105,710,620
27%
6,454,000
N/A
148
1930
122,775,046
21%
6,295,000
14,633,252
157
1940
131,820,000
18%
6,102,000
17,942,968
175
1950
151,132,000
12%
5,647,800
1,202,019
216
1960
180,007,000
8%
3,962,520
1,175,646
303
1970
204,335,000
5%
2,949,140
1,102,371
390
1980
227,020,000
3%
2,439,510
1,038,885
426
1990
246,081,000
3%
2,145,820
986,850
461
2000
282,224,348
N/A
2,172,280
943,090
434
2001
285,317,559
N/A
2,155,680
941,310
437
2002
288,368,698
N/A
2,158,090
941,480
436
Source: U.S. Dept. of Agriculture; U.S. Census Bureau.
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World and U.S. Supply and Use for Grains1: 2000-2003 In Million Metric Tons Year
Output
Total Supply
Trade2
Total Use
Ending Stocks
World Total grains3 2000-2001
1,839.67
2,401.88
232.95
1,860.16
541.72
2001-2002
1,868.34
2,410.06
238.15
1,896.81
513.25
2002-2003
1,806.01
2,319.25
229.54 Wheat
1,893.27
425.98
2000-2001
582.05
788.69
102.78
584.41
204.29
2001-2002
580.03
784.31
108.01
585.60
198.72
2002-2003
564.28
763.00
102.22 Coarse grains4
595.53
167.46
2000-2001
859.67
1069.60
106.00
880.19
189.41
2001-2002
891.18
1080.59
103.17
900.84
179.74
2002-2003
860.67
1040.41
100.53 Rice, milled
888.98
151.43
2000-2001
397.96
543.59
24.17
395.56
148.03
2001-2002
397.13
545.16
26.96
410.37
134.78
2002-2003
381.06
515.84
26.79 United States Total grains3
408.76
107.09
2000-2001
339.83
420.91
88.11
255.36
77.43
2001-2002
321.86
405.20
83.82
253.96
67.42
2002-2003
295.54
367.97
75.07 Wheat
250.99
41.91
2000-2001
60.76
89.05
28.90
36.30
23.85
2001-2002
53.26
80.04
26.16
32.72
21.15
2002-2003
43.99
67.05
23.81 Coarse grains4
31.13
12.10
2000-2001
273.13
324.70
56.62
215.39
52.70
2001-2002
261.86
317.12
54.71
217.36
45.05
2002-2003
245.04
292.79
47.89 Rice, milled
215.98
28.91
2000-2001
5.94
7.15
2.59
3.68
0.89
2001-2002
6.74
8.04
2.94
3.88
1.22
2002-2003
6.51
8.14
3.36
3.88
0.90
1
2
Note: 2001-2002 figures are estimates and 2002-2003 figures are projections. Aggregate of local marketing years. Based on 3 4 export estimate. Wheat, coarse grains and milled rice. Corn, sorghum, barley, oats, rye, millet and mixed grains (for U.S. excludes millet and mixed grains). Source: U.S. Dept. of Agriculture, Economic Research Service.
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U.S. Meat Supply and Use: 2001-2003 In Millions of Pounds3 Supply
Use
Year Beginning Total Ending Total Per Capita Exports Production1 Imports Stocks Consumption Consumption2 Supply Stocks Beef 2001
525
26,212
3,164
29,901
2,269
606
27,026
66.4
2002
606
27,192
3,218
31,016
2,447
691
27,878
67.9
2003
691
26,240
3,265
30,196 2,500 Pork
525
27,171
65.5
2001
478
19,160
951
20,588
1,560
536
18,492
50.4
2002
536
19,685
1,071
21,292
1,614
533
19,145
51.7
2003
533
19,552
1,080
21,165 1,645 Total Red Meat4
540
18,980
50.7
2001
1,021
45,804
4,260
51,085
3,836
1,160
46,089
118.5
2002
1,160
47,305
4,451
52,916
4,068
1,238
47,610
121.3
2003
1,238
46,167
4,510
51,915 4,165 Chicken
1,079
46,671
117.8
2001
798
30,938
14
31,749
5,555
712
25,482
76.9
2002
712
31,895
12
32,619
4,800
763
27,057
80.8
2003
763
31,831
12
32,605 5,125 Turkey
700
26,780
79.3
2001
241
5,489
1
5,732
487
241
5,004
17.6
2002
241
5,638
1
5,880
439
333
5,107
17.8
2003
333
5,601
1
5,935 470 Total Poultry5
350
5,114
17.6
2001
1,048
36,942
18
38,008
6,224
960
30,823
95.6
2002
960
38,080
17
39,057
5,373
1,101
32,582
100.1
2003
1,101
37,941
17
39,059 5,715 1,056 Red Meat & Poultry
32,287
98.2
2001
2,069
82,746
4,278
89,093
10,060
2,120
76,912
214.1
2002
2,120
85,385
4,468
91,973
9,441
2,339
80,192
221.4
2003
2,339
84,108
4,527
90,974
9,880
2,135
78,958
216.1
Note: 2002 figures are estimates and 2003 figures are forecasts. 1 Total including farm production for red meats and, for poultry, federally inspected plus non-federally inspected, less condemnations. 2 Pounds, retail-weight basis. 3 Carcass weight for red meats and certified ready-to-cook weight for poultry. 4 Beef, pork, veal, lamb and mutton. 5 Broilers, turkeys and mature chicken. Source: U.S. Dept. of Agriculture, Economic Research Service; Dept. of Commerce, Bureau of Economic Analysis.
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Per Capita Consumption of Poultry and Livestock, U.S.: 1960 to Estimated 2002 In Pounds (Lbs.)
Year
Beef
Total Red Meat
Pork
Broilers
Other Chicken
Total Chicken
Turkey
Meat Total Poultry
Total Red Fish and Poultry
Commercial Shellfish
1960
63.3
131.6
59.1
23.6
4.4
28.0
6.3
34.3
165.9
10.3
1965
74.6
134.0
51.8
29.9
3.8
33.7
7.5
41.2
175.2
10.8
1970
84.4
145.8
55.8
36.6
3.7
40.3
8.1
48.4
194.2
11.8
1975
88.2
136.3
42.9
36.3
2.7
39.0
8.3
47.3
183.9
12.2
1980
76.6
136.8
57.3
45.8
2.2
48.0
10.3
58.3
195.1
12.5
1985
79.2
134.4
51.9
51.0
2.1
53.1
11.6
64.7
199.1
15.1
1990
67.8
120.0
49.7
59.5
2.0
61.5
17.6
79.1
199.1
15.0
1991
66.8
119.5
50.3
62.1
1.9
64.0
17.9
81.9
201.4
14.9
1992
66.5
121.9
53.1
65.9
1.9
67.8
17.9
85.7
207.6
14.8
1993
65.1
119.7
52.3
68.5
1.8
70.3
17.7
88.0
207.7
15.0
1994
67.0
122.1
53.0
69.5
1.6
71.1
17.8
88.9
211.0
15.2
1995
67.5
122.0
52.4
68.8
1.6
70.4
17.9
88.3
210.3
15.0
1996
68.2
119.6
49.1
70.4
0.9
71.3
18.5
89.8
209.4
14.8
1997
66.9
117.7
48.7
71.9
0.5
72.4
17.6
90.0
207.7
14.6
1998
68.0
122.5
52.5
72.5
0.4
72.9
18.0
90.9
213.4
14.9
1999
69.1
124.8
53.9
77.0
0.5
77.5
18.0
95.5
220.3
15.3
2000
69.6
123.8
52.4
76.7
1.1
77.8
17.8
95.6
219.5
15.4
2001
66.2
120.9
53.0
78.3
1.1
79.4
18.3
97.7
218.6
15.5
2002
64.0
118.5
53.0
80.5
1.0
81.5
18.4
99.9
218.4
15.5
Note: All products are on a retail weight basis, except "other chicken" and "turkey" which are reported by USDA on a carcass-weight basis. 1
Includes beef/port/veal, and mutton/lamb,but excludes edible offals.
2
Estimated by the U.S. Dept. of Agriculture and Economic Research Service.
3
Forecasted by National Chicken Council. Source: U.S. Department of Agriculture, Economic Research Service.
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U.S. Egg Supply and Use: 2000-2003 In Millions of Dozen 2000
2001
2002*
2003*
Supply (Mllions of dozen) Beginning stocks Production Imports
7.6
11.4
10.4
10.3
7,033.5
7,155.0
7,221.0
7,235.0
8.4
8.9
15.0
12.0
7,246.4
7,257.3
7,049.5
7,175.2 Use (Mllions of dozen)
Total supply
Exports
171.1
190
173.7
166
Hatching use
940.2
953.0
964.0
960.0
Ending stocks
11.4
10.4
10.3
10
Consumption Total (Millions of dozen) Per capita (Number)
5,926.8
6,021.8
6,098.4
6,121.3
252.1
253.7
254.6
253.1
* 2002 figures are estimates. 2003 figures are projections. Source: U.S. Dept. of Agriculture, Economic Research Service.
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U.S. Milk Supply, Use and Prices: 2000-2003 In Millions of Dozen 2000
2001
2002
2003
Supply (Billions of pounds) Beginning stocks Production Farm use Marketings Imports Total supply
7.4
8.9
8.8
11.2
167.4
165.2
169.2
171.0
1.3
1.3
1.2
1.2
166.0
163.9
167.9
169.8
4.6
5.4
5.2
5.0
178.1
178.2
181.9
186.1
Use (Billions of pounds) 168.4
169.2
170.4
172.5
8.9
8.8
11.2
11.9
Milkfat basis
0.8
0.3
0.3
1.7
Skim-solids basis
8.5
6.3
9.6
8.8
Commercial use Ending commercial stocks CCC net removals
Milk Prices (Dollars per cwt)
Basic formula/Class III Class IV All milk
9.99
12.29
11.03
9.559.85
11.51
13.88
11.22
9.8010.30
12.61
14.51
12.76
11.1011.40
CCC Product Net Removals (Millions of pounds) 11
0
0
50
Cheese
17.0
17.0
9.0
50.0
Nonfat dry milk
690.0
525.0
817.0
715.0
Dry whole milk
34.0
3.0
0.0
0.0
Butter
Note: Totals may not add due to rounding. Source: U.S. Dept. of Agriculture, Economic Research Service.
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U.S. Tobacco Production Overview: 1970-2003 Based on All Types of Tobacco
Year
Total Harvested (acre)
Total Yield (pounds)
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
898,330 837,590 842,420 886,590 962,620 1,086,650 1,046,920 965,800 963,730 827,700 921,020 976,580 912,730 789,155 791,700 688,020 580,550 586,290 634,030 678,200 733,310 763,680 784,440 746,405 671,065 663,525 733,060 836,230 717,605 647,160 472,410 432,340 430,280 417,510
2,122 2,035 2,076 1,965 2,067 2,008 2,041 1,982 2,101 1,844 1,939 2,113 2,185 1,811 2,183 2,197 2,001 2,028 2,160 2,016 2,218 2,179 2,195 2,161 2,359 1,914 2,072 2,137 2,062 1,997 2,229 2,293 2,068 N/A
Total Price per Unit Production (US$ per lb.) (000 pounds) 1,906,453 1,704,884 1,749,085 1,742,105 1,989,728 2,182,304 2,136,674 1,914,129 2,024,820 1,526,516 1,786,225 2,063,589 1,994,494 1,428,969 1,727,962 1,511,638 1,161,940 1,188,868 1,369,500 1,367,188 1,626,380 1,664,372 1,721,671 1,613,319 1,582,896 1,269,910 1,518,704 1,787,399 1,479,867 1,292,692 1,052,999 991,552 889,632 N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A 1.411 1.523 1.706 1.764 1.746 1.806 1.645 1.524 1.573 1.646 1.708 1.738 1.773 1.777 1.754 1.758 1.820 1.882 1.802 1.828 1.828 1.910 1.920 1.907 N/A
Value of Production (US$ 000) N/A N/A 1,451,275 N/A N/A N/A N/A 2,270,360 N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,869,569 2,254,206 2,335,052 2,827,167 2,947,309 3,059,246 2,829,161 2,779,056 2,307,168 2,853,739 3,217,176 2,700,795 2,356,304 2,001,775 1,952,120 1,726,013 N/A
Source: U.S. Dept. of Agriculture, National Agricultural Statistics Service.
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U.S. Tobacco Manufacturing: 2001 (latest data available)
All Employees Number
Production workers
Payroll (US$ Number 000)
Tobacco manufacturing 26,706 1,390,690 19,570
Goods Total value Total cost of of materials shipments (US$ 000) (US$ 000)
Hours (000)
Wages (US$ 000)
38,290
874,297
6,986,296
53,097,966
Tobacco stemming & redrying
4,201
3,113
6,487
53,463
1,812,513
2,338,006
Tobacco product mfg.
22,506 1,281,598 16,458
31,804
820,833
5,173,783
50,759,960
Cigarette mfg.
15,218 1,017,948 10,908
21,395
654,995
4,139,006
47,190,379
Other tobacco product mfg.
7,288
10,409
165,838
1,034,777
3,569,581
109,092
263,650
5,550
Source: U.S. Census, Annual Survey of Manufacturers.
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U.S. Restaurant Industry Overview
Sales, 2002 (US$ Bil.)
$407.8
Sales, 2003 (US$ Bil.)*
$426.1
Average daily sales (US$ Bil.)
$1.20
Average per person sales check
$15.00 - $24.99
Number of meals served1, 2002 (Bil.)
54
Restaurant industry sales as % of U.S. Gross Domestic Product (GDP)
4%
Locations
870,000
Total annual wages & benefits, fullservice (US$ Bil)
$49
Total annual wages & benefits, limited-service (US$ Bil.)
$35
Employees, 2003 (Mil.)*
11.7
Employees, 2012 (Mil.) Projected
13.3
Annual household expenditures for food away from home, 2000
$2,137
Annual per person expenditure for food away from home, 2001
$855
* All figures are projected for 2003, unless otherwise noted. 1
Eaten in restaurants, school and work cafeterias. Source: National Restaurant Association.
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U.S. Restaurant Industry Forecasts
Source: National Restaurant Association. CopyRight©2003 Plunkett Research, Ltd., All Rights Reserved
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U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003 2002 Projected F&D Sales (US$ 000)
2003 Projected F&D Sales (US$ 000)
2002 - 2003 (% Change)
GROUP I – COMMERCIAL RESTAURANT SERVICES1 EATING PLACES Fullservice restaurants2 $146,148,997 $153,164,149 Limited-service (fast-food) restaurants3 116,113,251 120,873,894 Commercial cafeterias 2,033,875 1,922,012 Social caterers 3,948,243 4,129,862 Snack and nonalcoholic beverage bars 15,349,857 16,914,224 TOTAL EATING PLACES $283,594,223 $297,004,141 Bars and taverns 13,270,346 13,721,538 TOTAL EATING- AND- DRINKING PLACES $296,864,569 $310,725,679 FOODSERVICE CONTRACTOR MANAGED SERVICES5 Manufacturing and industrial plants $6,185,443 $6,441,347 Commercial and office buildings 1,999,808 2,067,801 Hospitals and nursing homes 3,053,348 3,399,851 Colleges and universities 6,762,055 7,232,846 Primary and secondary schools 3,064,982 3,328,632 In-transit restaurant services (airlines) 2,044,527 2,152,887 Recreation and sports centers 3,730,455 3,902,056 TOTAL MANAGED SERVICES $26,840,618 $28,525,420 LODGING PLACES Hotel restaurants $17,573,272 $18,346,496 Motor-hotel restaurants 152,206 156,011 Motel restaurants 390,881 403,389 Other accommodation restaurants 341,299 353,586 TOTAL LODGING PLACES $18,457,658 $19,259,482 Retail-host restaurants6 $16,443,172 $17,343,141 Recreation and sports7 5,105,387 5,310,345 Mobile caterers 971,325 996,178 Vending and non-store retailers8 8,949,736 9,316,675 TOTAL – GROUP I
$373,632,465
$391,476,920
GROUP II – NONCOMMERCIAL RESTAURANT SERVICES Employee restaurant services10 Public and parochial elementary, secondary schools Colleges and universities Transportation Hospitals11 Nursing homes, homes for the aged, blind, orphans and the mentally and physically disabled12 Clubs, sporting and recreational camps Community centers TOTAL – GROUP II TOTAL – GROUPS I AND II
2002 - 2003 (Real % Change)
4.8% 4.1 -5.5 4.6 10.2 4.7% 3.4 4.7%4
2.1% 1.4 -8.2 1.9 7.5 2.0% 0.4 2.0%
4.10% 3.4 11.3 7.0 8.6 5.3 4.6 6.3%
1.40% 0.7 9.6 3.4 6.3 2.6 1.9 3.6%
4.4% 2.5 3.2 3.6 4.3% 5.5% 4.0 2.6 4.1
1.7% -0.2 0.5 0.9 1.6% 2.8% 1.2 -0.1 1.4
4.8%
2.1%
9
$826,462 4,973,640 5,015,708 1,245,829 10,006,244
$789,980 4,958,705 5,051,361 1,357,564 9,926,194
-4.4% -0.3 0.7 9.0 -0.8
-6.90% -2.6 -2.7 6.8 -1.9
5,537,957 3,683,241 1,412,967 $32,702,048
5,670,868 3,866,970 1,455,356 $33,076,998
2.4 5.0 3.0 1.1%
0.7 2.3 0.7 -0.9%
$406,334,513
$424,553,918
4.5%
1.8%
GROUP III – MILITARY RESTAURANT SERVICES $1,012,460 $1,066,120 489,910 516,855
5.3% 5.5
2.6% 2.8
$1,502,370 $407,836,883
5.4% 4.5%
2.7% 1.8%
13
Officer and NCO clubs (Open mess) Military exchanges TOTAL – GROUP III GRAND TOTAL
$1,582,975 $426,136,893
1 Data are given only for establishments with payroll. 2 Waiter/waitress service is provided, and the order is taken while the patron is seated. Patrons pay after they eat. 3 Patrons generally order at a cash register or select items from a food bar and pay before they eat. 4 Food-and-drink sales for nonpayroll establishments should total $6,828,871,000 in 2003. 5 Also referred to as onsite foodservice and food contractors. 6 Includes drug- and proprietary-store restaurants, general-merchandise-store restaurants, variety-store restaurants, food-store restaurants and grocerystore restaurants (including a portion of delis and all salad bars), gasoline-service-station restaurants and miscellaneous retailers. 7 Includes movies, bowling lanes, recreation and sport centers. 8 Includes sales of hot food, sandwiches, pastries, coffee and other hot beverages. 9 Business, educational, governmental or institutional organizations that operate their own restaurant services. 10 Includes industrial and commercial organizations, seagoing and inland-waterway vessels. 11 Includes voluntary and proprietary hospitals; long term general, TB, nervous and mental hospitals; and sales or commercial equivalent to employees in state and local short term hospitals and federal hospitals. 12 Sales (commercial equivalent) calculated for nursing homes and homes for aged only. All others in this grouping make no charge for food served either in cash or in kind. 13 Continental United States only.
Source: National Restaurant Association, 2003 Restaurant Industry Forecast.
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U.S. Restaurant Industry Operating Ratios: 2002
Full Service
Limited Service
Where It Came From 100%
Total Sales
100%
Where It Went 27%
32%
Cost of Beverages Sold
7
3
Salaries and Wages
31
29
Employee Benefits
4
2
Restaurant Occupancy Costs
6
6
Other
19
23
Income Before Income Taxes
6
5
Cost of Food Sold
Note: All figures are averages, are computed individually for each cost category and are rounded. All amounts are reflected as a percentage of total sales. Source: National Restaurant Association, Restaurant Industry Operations Report--2002.
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U.S. Restaurant Industry: Average Salary and Bonus Figures Median base salary Median annual bonus Owner
$50,000
$16,000
President/Chief Executive Officer
63,500
21,000
Chief Financial Officer
70,000
10,000
Chief Operating Officer/General Mgr.
54,000
9,600
Treasurer
32,000
10,000
Construction/Engineering
60,000
8,666
Development/Real Estate
100,000
13,550
Distribution/Purchasing
55,000
7,000
Franchising
127,500
25,000
Management Information Systems
55,000
9,500
Marketing
48,300
8,000
Operations
60,000
10,000
Personnel/Human Resources
45,500
5,000
Training
50,000
5,000
Quality Assurance
50,000
5,000
Controller
45,000
5,000
Food and Beverage Director
44,200
4,000
Executive Chef
48,000
5,000
Chef
35,000
2,500
Sous Chef
30,000
2,000
Pastry Chef
30,000
1,100
Nutritionist/Dietician
37,000
*
Wine Steward
31,050
7,000
Banquet Manager
32,000
3,000
Catering Manager
35,000
4,000
Unit Manager
35,132
4,615
Assistant Unit Manager
28,000
2,460
Night Manager
26,000
1,500
Manager Trainee
25,080
2,000
Dining Room Manager
30,000
2,000
Kitchen Manager
29,000
2,000
Regional Manager
62,500
15,000
District Manager
53,262
10,000
Regional Training Manager
50,914
4,318
Head of:
* Insufficient data. Source: National Restaurant Association, Compensation for Salaried Personnel in Restaurants.
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Beverages: Per Capita Consumption, 1970-20001 (Latest data available; In Gallons) Carbonated soft drinks
Fruit Alcoholic beverages Selected drinks, Canned Vegetable Bottled cocktails Year Tea4 Coffee5 fruit iced tea juices water and juices Distilled 2 3 3 Total3 Beer Wine Whole Other Total Diet Regular Total ades6 spirits Milk
Gallons 1970 25.5
5.8
31.3
6.8
33.4
NA
2.1
22.2
24.3
5.7
NA
NA
NA
18.5
1.3
1.8
21.6
1971 25.0
6.3
31.3
7.2
32.2
NA
2.2
23.3
25.5
6.2
NA
NA
NA
18.9
1.5
1.8
22.3
1972 24.1
6.9
31.0
7.3
33.6
NA
2.3
23.9
26.2
6.1
NA
NA
NA
19.3
1.6
1.9
22.8
1973 23.0
7.5
30.5
7.4
33.3
NA
2.7
25.0
27.6
6.0
NA
NA
NA
20.1
1.6
1.9
23.6
1974 21.7
7.7
29.5
7.5
33.2
NA
2.9
24.7
27.6
6.6
NA
NA
NA
20.9
1.6
2.0
24.5
1975 21.1
8.4
29.5
7.5
31.4
NA
3.2
25.0
28.2
6.9
NA
NA
NA
21.3
1.7
2.0
25.0
1976 20.4
9.0
29.3
7.7
32.5
1.2
3.8
27.0
30.8
7.0
NA
NA
NA
21.5
1.7
2.0
25.2
1977 19.5
9.5
29.0
7.5
24.5
1.3
4.3
28.7
33.0
6.5
NA
NA
NA
22.4
1.8
2.0
26.1
1978 18.7
9.8
28.6
7.2
27.3
1.9
4.6
29.5
34.2
6.8
NA
NA
NA
23.0
2.0
2.0
26.9
1979 18.0
10.2
28.2
6.9
29.3
2.2
4.9
29.8
34.7
7.2
NA
NA
NA
23.8
2.0
2.0
27.8
1980 17.0
10.5
27.6
7.3
26.7
2.4
5.1
29.9
35.1
7.4
NA
NA
NA
NA
NA
NA
NA
1981 16.3
10.8
27.1
7.2
26.0
2.7
5.3
30.0
35.4
6.7
NA
NA
NA
24.6
2.2
2.0
28.8
1982 15.5
10.9
26.4
6.9
25.9
3.0
5.5
29.8
35.3
8.4
NA
NA
NA
24.4
2.2
1.9
28.5
1983 15.2
11.1
26.3
7.0
26.3
3.4
6.0
29.3
35.2
7.3
NA
NA
NA
24.2
2.3
1.8
28.3
1984 14.8
11.6
26.4
7.1
26.8
4.0
6.6
29.3
35.9
7.7
NA
NA
NA
24.0
2.4
1.8
28.1
1985 14.3
12.3
26.7
7.1
27.4
4.5
7.1
28.7
35.7
7.8
NA
NA
NA
23.8
2.4
1.8
28.0
1986 13.5
13.0
26.5
7.1
27.5
5.0
7.6
28.2
35.8
8.3
NA
NA
NA
24.1
2.4
1.6
28.2
1987 13.0
13.3
26.3
6.9
26.7
5.7
9.4
32.4
41.9
7.9
5.4
0.1
0.2
24.0
2.4
1.6
28.0
1988 12.3
13.5
25.8
7.0
25.6
6.5
10.1
34.5
44.7
7.6
5.7
0.1
0.3
23.8
2.3
1.5
27.6
1989 11.3
14.7
26.0
6.9
26.2
7.4
10.7
34.7
45.4
7.6
5.9
0.1
0.3
23.6
2.1
1.5
27.2
1990 10.5
15.2
25.7
6.9
26.9
8.0
10.7
35.6
46.2
7.9
6.3
0.1
0.3
23.9
2.0
1.5
27.5
1991 10.1
15.5
25.6
7.4
26.7
8.0
11.6
36.2
47.8
7.4
6.9
0.2
0.3
23.1
1.8
1.4
26.3
1992
9.7
15.5
25.2
8.1
25.8
8.2
11.5
36.7
48.2
8.4
6.5
0.2
0.3
22.7
1.9
1.4
25.9
1993
9.2
15.3
24.6
8.3
23.3
9.3
11.5
37.2
48.7
8.5
6.9
0.4
0.3
22.5
1.7
1.3
25.5
1994
9.1
15.4
24.5
8.1
20.9
10.6
11.4
37.1
48.5
8.3
7.3
0.6
0.3
22.3
1.7
1.3
25.3
1995
8.6
15.4
24.0
7.9
20.3
11.5
10.9
36.5
47.5
8.3
7.7
0.7
0.3
21.8
1.7
1.2
24.7
1996
8.5
15.4
24.0
7.6
22.1
12.3
10.6
36.0
46.7
8.7
7.9
0.7
0.3
21.7
1.9
1.2
24.8
1997
8.3
15.3
23.6
7.3
23.3
12.9
10.6
36.2
46.8
8.7
8.2
0.8
0.3
21.6
1.9
1.2
24.7
1998
8.2
15.1
23.2
8.3
23.9
15.7
11.0
36.8
47.9
8.5
7.7
0.7
0.3
21.7
1.9
1.2
24.8
1999
8.2
14.9
23.1
8.2
25.1
17.7
11.5
38.2
49.7
9.3
7.7
0.7
0.3
21.8
2.0
1.2
25.0
2000
8.1
14.5
22.6
7.8
26.3
NA
11.6
37.7
49.3
8.4
NA
NA
NA
21.7
2.0
1.3
24.9
NA = Not available. Carbonated soft drink, fruit drink, canned iced tea, vegetable juice and alcoholic beverage per capita figures are calculated by ERS using industry data. Uses U.S. resident population, July 1 for everything except for coffee, tea and fruit juices, which use U.S. resident 2 3 4 population plus the Armed Forces overseas, July 1. Includes buttermilk. Computed from unrounded data. Converted to fluid 5 equivalent as follows: 200 6 oz. cups per pound of tea, dry leaf equivalent. Includes instant and decaffeinated coffee. Converted to fluid equivalent as follows: 60 6 oz. cups per pound of regular roasted coffee and 187.5 6 oz. cups per pound of instant coffee. 6 Canned, bottled and frozen (reconstituted). 1
Source: U.S. Dept. of Agriculture, Economic Research Service.
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Top 10 Soft Drinks, U.S.: 2002 Based on Market Share
Rank
Brand
Million Cases
Million Gallons
Market Share
2002 Growth
1
Coca-Cola Classic
1,953.0
2,929.6
19.3%
-2.0%
2
Pepsi-Cola
1,328.5
1,992.7
13.1%
-4.0%
3
Diet Coke
913.4
1,370.1
9.0%
3.0%
4
Mountain Dew
655.9
983.9
6.5%
-4.2%
5
Sprite
633.2
949.7
6.3%
-2.5%
6
Dr Pepper
596.9
895.4
5.9%
-3.3%
7
Diet Pepsi
528.6
792.9
5.2%
3.5%
8
7 UP
174.5
261.8
1.7%
-7.8%
9
Caffeine Free Diet Coke
170.3
255.5
1.7%
-2.0%
10
Diet Dr Pepper
111.3
167.0
1.1%
3.9%
Top 10 Soft Drinks
7,065.6
10,598.4
69.8%
-1.8%
All Others
3,063.9
4,596.0
30.2%
7.2%
Total Industry
10,129.5
15,194.4
100.0%
0.8%
Note: All results preliminary. Source: Beverage Marketing Corporation.
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U.S. Alcoholic Beverages Manufacturing: 2001 (latest data available)
All Employees Payroll (US$ 000)
Production workers
Goods Total value Total cost of of materials shipments (US$ 000) (US$ 000)
Hours (000)
Wages (US$ 000)
33,286 1,509,015 23,177
43,073
918,799
6,669,984
16,914,132
Wineries
23,774
870,639
11,129
19,905
319,600
4,190,196
8,154,387
Distilleries
7,401
302,056
5,260
11,768
197,477
1,998,974
4,310,422
Number
Breweries
Number
Source: U.S. Census, Annual Survey of Manufacturers.
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Wine Sales in the U.S.: 1991-2002 In Millions of Gallons
Champagne/ Sparkling Total Wine Wine
Year
Table Wine1
Dessert Wine2
Total Retail Value
2002
532
37
27
595
$21.1 billion
2001
503
34
25
561
$19.8 billion
2000
499
32
28
558
$19.0 billion
1999
475
31
37
543
$18.1 billion
1998
466
31
29
526
$17.0 billion
1997
461
29
29
519
$16.1 billion
1996
439
31
29
500
$14.3 billion
1995
404
30
30
464
$12.2 billion
1994
394
33
31
458
$11.5 billion
1993
381
35
33
449
$11.0 billion
1992
405
37
33
476
$11.4 billion
1991
394
39
33
466
$10.9 billion
Note: 2002 figure preliminary. Totals may not add due to rounding. Excludes exports. 1 Includes all still wines not over 14 percent alcohol; excludes Canadian coolers (made from malt). 2 Includes all still wines over 14 percent alcohol and sake. History revised for foreign bulk wine. Source: U.S. Dept. of Commerce, Gomberg, Fredrikson & Associates, Wine Institute.
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