Natural Foods Merchandiser

What's next in naturals: July 2010

FDA plans to limit amount of salt in processed foods
Concerned that most adult Americans consume way more than the government’s recommended salt limit of 2,300 mg per day, the Food and Drug Administration is planning to introduce the country’s first legal salt limits for processed foods.
What’s next: While it will likely be years before any such limits are determined or put in place, say FDA sources quoted in the Washington Post, momentum is building. Major food companies such as Kraft Foods, Mars Food US and Starbucks have signed onto a New York City initiative to have food manufacturers and restaurants voluntarily reduce sodium use by 25 percent over five years.
What this means for retail: At first glance, natural foods manufacturers may seem to be especially vulnerable to new salt regulations since they can’t turn to synthetic alternatives like conventional companies. But Meera Vasudevan, executive vice president of Preferred Brands International, maker of Tasty Bite ready-to-eat Indian and Thai foods, believes the naturals industry is actually better poised to handle the new regulations. “From its inception, the industry has been focused on not just unnatural chemicals, but also on reducing things like sodium and fat,” she says. And while synthetic sodium alternatives may fall under the critical eye of regulators, Vasudevan says natural substitutes such as herbs and spices will likely be less controversial.

E. coli outbreaks down
A recent Centers for Disease Control report found that in 2009, incidences of E. coli-related illness were down 25 percent nationwide compared to the year before. But most other food-illness levels remained unchanged, and some pathogens such as vibrio, a bacteria usually linked to undercooked seafood, were on the rise.
What’s next: Expanded E. coli testing of ground beef and leafy greens 1in 2009 may have helped lessen risks of related illness, and additional food-safety measures spurred by the high-profile salmonella outbreak in peanut products last year may cut other pathogen levels in years to come. For example, new salmonella rules in shell eggs roll out this summer, and the FDA is now tackling safety regulations for produce.
What this means for retail: New food-safety rules will likely hit small, organic and natural farmers and ranchers hard since they don’t have the resources or profit margins to easily adapt to new inspection requirements and recall provisions, says Deborah Stockton, executive director of the National Independent Consumers and Farmers Association, in the Wall Street Journal. To help out, start supporting small-scale, locally sourced meats—especially since these non-industrialized processors are less likely to be linked to pathogen problems, says Dave Carter, executive director of the National Bison Association.

Retailers pay more when customers use debit cards
In April, Visa’s PIN debit network increased swipe fees retailers pay when customers use debit cards by nearly 30 percent. That means average debit-card fees for each purchase now ring in at 0.95 percent of the total plus 20 cents, compared to an average fee of 1.8 percent for credit-card purchases, says Jennifer Hatcher, group vice president of government relations for the Food Marketing Institute, a food-retailer lobbying group based in Arlington, Va.
What’s next: The Credit Card Fair Fee Act, introduced in Congress in May, would allow retailers to negotiate swipe fees with banks and credit-card companies. While the proposed legislation has the potential to rein in charges, considering that just two companies—Visa and MasterCard—control more than 80 percent of the market, Hatcher says any changes would come slowly. FMI estimates American consumers and businesses spent $48 billion on swipe fees in 2008. “The cost that retailers are paying on these fees exceeds what they are paying on health care or energy,” Hatcher says.
What this means for retail: Most retailers can’t risk turning off customers by limiting credit- or debit-card purchases. To cut back on costs, Hatcher recommends limiting processing fees with regular cleaning and upkeep of credit-card machines. Transactions keyed in by hand because of faulty machinery are automatically charged the highest processing rate.

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