Lobbyists respond to Senate’s delay to review food safety bill
WASHINGTON A coalition of lobbying groups urged the Senate on Monday to review and pass pending food safety legislation before November elections.
The Food Marketing Institute, which backed the bipartisan bill, issued a statement Monday that the organization was "disappointed" that the Senate elected not to review the Food and Drug Administration Food Safety Modernization Act before the midterm elections. The bill passed in the House of Representatives last year.
"The most important goal of America’s food retailers and wholesalers is to provide nutritious, safe, high-quality and affordable food," said FMI president and CEO Leslie Sarasin. "We all have a responsibility to work together to improve the safety of our food supply. We believe the focus should be on trying to prevent problems before they occur by providing the FDA the necessary resources and authority to help the agency protect our food supply."
Similarly, the Grocery Manufacturers Association said on Capitol Hill Monday that “the [FDA Food Safety Modernization] Act is too important to delay its passage any further,” noting that the bill’s passage would provide the FDA “with the resources and authorities the agency needs to help strengthen our nation’s food safety system by making prevention the focus of our food safety strategies,” said Scott Faber, GMA VP federal affairs.
The FDA Food Safety Modernization Act will enhance public health and safety by requiring all food companies to develop a food safety plan, adopting a risk-based approach to inspection and improving the safety of imported food and food ingredients.
SymphonyIRI examines lower-income shoppers’ spending habits
CHICAGO Even in a challenging and rapidly changing marketplace, lower-income shoppers will generate $115 billion in incremental spending during the next decade, the SymphonyIRI Group reported Monday in its fourth annual research report, “The Lower-Income Shopper Report: Serving Lower-Income/Multicultural Shopper Micro-Segments.” Yet, they are one of the most misunderstood, ethnically diverse and underserved shopper segments in the United States, SymphonyIRI added.
“Many retailers and manufacturers take a one-size-fits-all approach to reaching lower-income shoppers, but with a $115 billion opportunity at stake and increasing competition to win their share of wallet, a mass market view of these shoppers will not be enough to win their loyalty,” stated Sean Seitzinger, partner, Symphony Consulting at SymphonyIRI Group. “Only those retailers and manufacturers that embrace a micro-segmentation strategy to truly understand the needs and wants of these varied, nuanced and multicultural shopper groups will be able to serve them effectively and profitably.”
“The ‘Lower-Income Shopper Report’ exemplifies our continuing commitment to be industry leaders in providing actionable thought leadership to the [consumer packaged good] industry,” noted Krishnakumar Davey, managing director, Symphony Consulting at SymphonyIRI Group. “Specifically, this report will help the industry better understand the current and emerging needs of lower-income shoppers, so that retailers and manufacturers can tailor their offerings for the varied lower-income/multicultural microsegments.”
The “Lower-Income Shopper Report” is built on a four-year history of shopper behavior across five lower-income/multicultural segments — Hispanic households, African American households, young households ages 25 to 34 years, older/senior households ages 65 years and older, and households with children — and examined what is important to each group and what it will take to be successful in serving their changing needs.
Lower-income consumers frequently shop but generally spend less per trip than average, often shopping only with a paycheck or pocket cash. African-American lower-income consumers make the most retail shopping trips per year with 177 trips. Seniors make 169 trips, and Hispanics make 168. Lower-income households with children spend the most at $39.65 per trip, followed by younger households at $37.58.
Although lower- and higher-income shoppers both report careful trip planning, more than half routinely make unplanned purchases while in the store. At the same time, 49% of lower-income shoppers are much more likely to track their spending during the trip and make budget driven decisions on the fly, versus 38% of higher-income shoppers.
Over the past two years, half of lower-income shoppers report that they have decreased spending in discretionary areas, including home furnishings and furniture, in order to better afford essentials, such as food and health care. For example, spending on clothing and shoes has decreased by 43%, while spending on food and beverages and healthcare products has increased by 31% and 27%, respectively.
In selecting individual products in the store, lower- and higher-income shoppers are heavily influenced by promotional pricing and products for which they have a coupon. Higher-income shoppers more likely are to be influenced by past usage, TV and print advertising, and recommendations from friends.
Lower-income shoppers across the board are turning to private-label products to save money; however, there are some nuances regarding private-label attitudes. For instance, 29% of older lower-income households think name brands are worth the extra price versus 46% of African-Americans, who appear to the be the most brand loyal micro segment.
In addition, 64% of younger households and households with children are willing to sacrifice quality to get a better price on a product versus 51% of older households. And, 70% of households with children will switch to another brand if it’s cheaper versus 60% of African-Americans.
Fitting the diverse nature of lower-income households, their lifestyles and attitudes toward health vary broadly. For example, 76% of older households said eating healthy is important versus 65% of younger households. On the opposite end of the spectrum, only 41% of older households said projecting a good image is important, versus 64% of African-Americans and 62% of households with children.
When shopping for specific products, better-for-you attributes are important to all microsegments but with important variations. Older households are primarily focused on whole grains/high fiber and weight-management attributes, while Hispanics place a higher relative importance on natural foods, super foods and those enriched with protein.
Prestige Brands to acquire Blacksmith Brands for $190 million
IRVINGTON, N.Y. Prestige Brands on Monday announced that it has entered into a definitive agreement to acquire 100% of the stock of Blacksmith Brands for $190 million in cash. Blacksmith manages five over-the-counter brands, including Efferdent, Effergrip, PediaCare, Luden’s and NasalCrom.
With the addition of these five brands, OTC products in the Prestige portfolio now account for 75% of revenues and an even greater percentage of brand contribution.
“Strategic acquisitions in the OTC market are core to our shareholder value creation strategy,” stated Matthew Mannelly, Prestige CEO. "We are strengthening Prestige’s position in key categories with the additions of Efferdent, PediaCare and Luden’s. These three scale brands compete in attractive categories we know well.”
The transaction is subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976, and is expected to close during fourth quarter 2010.
In June, Blacksmith Brands had voluntarily recalled all lots of its four children’s products in the PediaCare line, which were being manufactured for Blacksmith Brands by McNeil Consumer Healthcare at McNeil’s now-closed Fort Washington, Pa., plant. That recall was not initiated as a result of any consumer reports of adverse events, and no consumer complaints have been received about the safety or purity of the products, the company stated at the time.
In line with the announcement of the Blacksmith transaction, Prestige also announced the divestiture of its Cutex line of nail polish removers, the largest remaining product in its personal care segment. The sale to Arch Equity Partners of St. Louis was effective Sept. 1.