This looks pretty promising. It's long, but really goes into LCing views by major companies. I was particularly fond of this quote:
Quote:
And while the Atkins diet may prove to be a fad without much longevity, the company has no choice but to serve up those foods, he said, because of customer demand
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www.globeandmail.ca/servl.../Business/
TEXT:
Weston vows to rid its food of trans-fats
By MARINA STRAUSS
From Wednesday's Globe and Mail
George Weston Ltd. is embracing a healthy new era, vowing to get rid of trans-fatty acids in its cakes and other desserts by year-end, and adjusting its bread line to feed consumers who increasingly favour whole grains over Wonder Bread.
The food giant is just starting to launch Atkins diet — or Atkins endorsed — breads and bagels in grocery stores in Canada, company officials said Tuesday.
If these fashionable low-carbohydrate products take off in Canada as they have in the United States, the company will roll out more of them, said Galen Weston, chairman of George Weston.
“If it's as positive as in the United States, you'll see big stuff,” Mr. Weston told an analysts' conference call about the new lines, some of them endorsed by Atkins Nutritionals Inc. and others under the Atkins brand.
Meanwhile, a heightened demand for whole grain and wheat-based breads is driving a lot of the growth in the company's bakery business as consumers shift away from white bread, said Gary Prince, who heads the U.S. bakery division. “It's very positive for the industry,” he said, pointing to higher profit margins in premium-priced whole grains.
Over all, George Weston is streamlining its bakery operations and focusing on healthier food lines as it rings in more sales to major customers such as U.S. retail titan Wal-Mart Stores Inc., Costco Wholesale and other non-traditional food merchants.
At the same time, it's scrambling to cut costs at its own Loblaw chain, which generates the bulk of the company's profit, to take on Wal-Mart Canada Corp. here.
The flurry of activity left George Weston with its lowest quarterly profit gain in about two years in the fourth quarter of 2003. But Mr. Weston said he expects overall sales and profit to continue to grow in 2004.
For the 13 weeks ended Dec. 31, profit rose to $252-million or $1.87 a share from $231-million or $1.70 in the 12-week quarter a year earlier. Sales grew to $7.28-billion from $6.62-billion.
Profit in the latest period was reduced by a $35-million charge for closing two bakeries in Canada and rationalizing U.S. bakery production, as well as a $25-million charge for voluntary early retirement offers at Loblaw.
Sales dropped 3 per cent at George Weston's bakery division, mainly because the rising Canadian dollar reduced the value of U.S. sales.
The stronger dollar trimmed the value of sales 12 per cent, the company said, while the volume of baked goods sold rose 7 per cent because of the extra week in fiscal 2003.
The company continued to suffer operating losses at its fisheries division, although at a lower rate than in 2002. “A return to profitability remains dependent on further price improvements,” it said.
For the 53 weeks of fiscal 2003, profit rose to $792-million or $5.90 a share from $690-million or $5.05 in the 52 weeks of the previous year. Sales increased to $29.2-billion from $27.4-billion.
Don Povilaitis, an analyst at rating agency Standard & Poor's Corp., said the bakery business won't get any easier in the coming year. “It will be a very competitive market.”
George Weston's fish processing business may also be squeezed because of the flood of publicity about health concerns in fish, he said.
He pointed to stepped-up commodity prices for fuel and basic cooking ingredients such as flour and sugar.
Analysts were told the company's commodity costs rose as much as 9 per cent last year and are expected to continue to climb in 2004. It will look at raising U.S. bread prices to help recoup extra costs.
But Mr. Povilaitis said George Weston was smart to move on eliminating trans-fats from its desserts because consumers are demanding healthier alternatives.
And while the Atkins diet may prove to be a fad without much longevity, the company has no choice but to serve up those foods, he said, because of customer demand.
Loblaw spokesman Geoffrey Wilson said later that the low-carb phenomenon isn't nearly as strong in Canada as in the United States, where obesity is a bigger problem.
Trans-fatty acids are manufactured oils that have been described by one Canadian expert as a “secret killer.”
The fats are absorbed into foods made with partly hydrogenated oils, and are found in many snacks, processed foods and fast foods.
These fats can raise levels of “bad” cholesterol, while lowering the good cholesterol levels in the body.
