Winners & Losers of 2008 Part 2

Winner: Comfort Foods

Tough times call for familiar favorites on the dinner table. Despite the shrinking amount of product packaged in the same size box due to high production costs, Family staples such as Kraft Products and General Mills all posted profit increases last quarter. Forbes has more:

Kraft - which also sells the equally palliative Jell-O - posted a 7% increase in revenues last quarter and upped its yearlong sales guidance; Cheerios-maker General Mills boosted its net sales by 14%.

Loser: Organic Foods

While many grocery stores just got done redesigning their departments to highlight organic products, inflation really hit the organic industry toward the end of the year. Boston.com has more:

Market research firm NPD Group said the number of people who reported buying organic products fell 4 percent in August, compared with a year earlier. While more than one in five surveyed in the latest figures available from NPD purchased organic products, the August data represented the first customer losses for the sector since February 2006 -- a decline that is expected to accelerate in the months ahead.

Winner: Liquor

Despite a rough end of the year for wineries, the economy is not dampening liquor sales. Premium brands are still hot sellers, and the legalization of Absinthe into the US has helped launch some newer distilleries, such as Portland's Integrity Spirits- one of the only domestic producers of Absinthe, into the national limelight. A quick trip over to NotCot's Liqurious can prove to anyone that a good drink is still in fashion.

Loser: Soda

2008 saw the failure of diet soda to make a profit in schools, and the New York Health Chief appearing on Youtube to try and get people on board with a "soda tax" isn't exactly making any new friends. The TimesUnion.com states:

No matter how justifiable Dr. Daines' argument might be on the merits, or demerits, of soft drinks contributing to childhood obesity, the minute he began to lecture ever so gently on why this 18 percent tax would be good for us, he lost the argument.

And to add salt to the wound, MSNBC and Prevention Magazine listed diet soda in their 8 foods to avoid list:

In a 2008 study, researchers linked drinking just one diet soda a day with metabolic syndrome — the collection of symptoms including belly fat that puts you at high risk of heart disease. Researchers aren't sure if it's an ingredient in diet soda or the drinkers' eating habits that caused the association.

Most talked about food of the year: Corn

Corn was cast as the hero and the villain as we spent the first half of the year debating food vs fuel. Corn was blamed for any changes in prices or shortages, while simultaneously heralded for high profit margins. When the midwest flooded in June, everyone waited with baited breath to see how it would effect the crop, and it looks like we are not out of the woods yet.

When prices dipped in the remaining months, ending -12.37%, farmers were hurt by shrinking profits, and the fact that it took more than $2.00 to raise a bushel of corn that might sell for less than that. The Cattle Network has more:

But until there is a concrete turnaround, Hurt says demand for US corn continues to depreciate, such as the 300 million bushel downward adjustment in USDA’s estimate for corn used by ethanol refineries and a 100 million bushel drop in the estimate for exported corn.

It looks like corn will continue to be a big story into 2009.

What were your winners and losers for 2008? What are you looking forward to in 2009? Let us know in the comment section below, and have a Happy New Year!

Winners & Losers of 2008

This year was filled with a lot of grim news for the food industry, as oil prices and a recession caused prices to soar and consumers to spend less. Not everyone was hurt by the economy, however some major players will either not be seen again in 2009, or will have to make some drastic changes to survive. Here is part one of a look at who came out on top and who struggled throughout the year. We will have more later this week, so check back!

Winner: Mc Donald's
The Motley Fool reported that MCDonald's profits continued to increase, and people dined less ion sit down restaurants and opted for their value menu instead.

McDonald's has blown past analysts' expectations again and again. This outperformance has been going on for so long it's difficult to remember way back when McDonald's was in dire need of a turnaround.

Loser: Local Restaurants

The papers are filled with the eulogies of favorite eateries. Portlanders will miss chains such as Chili's, but will also lament the closing of restaurants that helped to make Portland a national "foodie" city such as Lucier and D.F. The Oregonian reports:

Observers can't remember a worse year for Portland restaurants. In the first two months of 2008, seven restaurants closed, four as part of the implosion of the overextended N.W. Hayden Enterprises. The year ends with the fall of Lucier -- the $4 million South Waterfront showcase -- ringing in our ears. In between, more than 20 Portland restaurants shut their doors.

Winner: The Country Of Origin Labeling Law

It only took six years and multiple delays, but 2008 finally saw the roll out of the C.O.O.L law, which will allow consumers to know where their meat and produce has traveled to on it's way to the grocery store. While detractors condemned the law for being full of loopholes and a hassle for the industry, threats of fines from the USDA prompted producers, distributors, and retailers to follow suit instead of pushing back the implementation for another few years.

Loser: The Country of Origin Labeling Law

The controversial law, which will do nothing to help food safety and recall issues, was seen by some as a way for the US to sell more product over other countries. The end of 2008 showed us what might be just the beginnings of fall out from other nations; Mexico barred imports from major meat processing plants. Forbes has more:

Meat industry sources said Mexico may be striking back at the U.S. country-of-origin labeling law for fresh beef and pork, which went into effect earlier this year. "That is the only reason that we could see for Mexico doing this," said Allendale analyst Rich Nelson, as one wasn't provided.

Winner: Hormel

Not only did they just win 2008 Food Processor of the Year, Hormel is seeing as an investor's dream in this turbulent climate. The Motley Fool rated it as one of the four stocks that will shine in the market, and even those across the pond are noticing that Americans are eating Spam ahain. The UK Times Online has more:

They have shot up by more than 10 per cent in the past three months and the Hormel Foods Corporation has had to introduce a double shift at its factory in Austin, Minnesota, seven days a week to keep up with demand.

Loser: The Chicken Industry

2008 saw industry gians Pilgrim's Pride file for bankrupcy, after reporting huge losses and a losing battle with meeting creditor deadlines. Their CEO resigned two weeks ago as they struggled to reorganize, and the future of the company is uncertain. Tyson's chicken division suffered losses as well, and on December 17th they signed an agreement with creditors essentially putting up all of their assets for collateral (via Forbes). Let's hope that works out for them.

Happy Holidays!

On Christmas Eve most of the Pacific Northwest is still paralyzed by the snow and ice that started last week, but there have been amazing tales of human compassion toward those who cannot manage the storm as well as others. In a change of pace for our blog, we will look at a few stories around the area of people getting out and making a difference.

The Oregonian wrote about a volunteer with the Meals on Wheels program, who on Tuesday, was still unable to deliver food due to nearly undrivable road conditions:

And that is where (Cynthia) Stowell arrived at 11 a.m. sharp to deliver meals to about a dozen residents in four low-income apartment buildings.

Her husband, John Miller, was on a snow day from his job as a system information specialist at Metro and came along to help, muscling an unwieldy cart carrying two large insulated boxes -- one for hot plates, the other for drinks and oranges -- over icy ruts and snowbanks.

Other volunteers loaded boxes into SUVs for slippery drives to outer neighborhoods.

Stowell, a photographer and writer, signed on with Meals-On-Wheels after their son began his freshman year at Portland State University this fall.

"Ever since I started this, I've had good weather," Stowell said as she stepped gingerly over a ridge of gray snow. "I thought, 'What will I do if it snows?' Naw, that's not going to happen."

Down in Medford, they are planning a huge community dinner- that is free to everyone. The Mobile Auto Detail Charity Events Group is hosting the first ever "Feed the Valley" event. They are still looking for donations of food, but are inviting everyone who wants to spend Christmas with their neighbors. The Mail Tribune has more:

With some of its founders knowing how it feels to be down and out during the holiday season, Mobile Auto Detail Charity Events will put on its first-ever Christmas dinner Thursday.

Dubbed "Feed the Valley," the event, to be held from 3 to 8 p.m. at Club Oxygen in downtown Medford, is in need of residents willing to give and receive.

Donations of hams, turkeys and toys would ease coordinators' minds about having enough food to serve and toys to hand out.

For those on the receiving end, a holiday meal will be ready for hundreds of residents along with a free visit and photo with Santa, toys for kids and a chance to make gingerbread houses.

"This is open to all residents of Southern Oregon and college kids who can't make it home for the holidays or just basically anyone who needs it," said Travis Sprague, Mobile Auto Detail Charity Events president.

What: "Feed the Valley" Christmas feast

When: 3 to 8 p.m. Christmas Day

Where: Club Oxygen, 333 E. Main St., Medford

Admission: Free to anyone who wants to share Christmas with the community

To make donations: Contact Travis Sprague at 840-6123 or e-mail him at mobileautodetailcharityevents@gmail.com

"We want anyone who needs something like this to come enjoy themselves and have a nice dinner with the community.""We want anyone who needs something like this to come enjoy themselves and have a nice dinner with the community."And if you were stuck in an airport, bus station, or train station waiting and hoping to make it home before Christmas, you might have been the recipient of anonymous donors, who send over everything from pillows to meals for the thousands of stranded travelers. The Salt Lake Tribune has more:

Since the media coverage, the five-dayers said an anonymous donor paid for 20 rooms at a motel for Sunday night, hamburgers and french fries were donated, and several people have brought toys, children's books and food.

When Kathryn Jensen learned there were soldiers stranded, she took her laptop to the terminal and started buying plane tickets with the extra money she had in Let's Fly Em Home. The charity buys airfare for needy soldiers.

Here are some other places in Oregon that could use help with food donations:

The Oregon Food Bank is reporting record requests for emergency food boxes. They take fresh, canned, dehydrated, or frozen foods.

The Union Gospel Mission of Portland takes both money and food donations to provide food to the homeless.

Metro's Fork It Over program helps provide meals while reducing restaurant waste in Portland.

The Sunshine Division will help pack and distribute over 4,000 food boxes this holiday season.

Everyone at Pacific Food Distributors wish you and your family a happy, safe holiday season.

Oregon Ice Storm Notice to our Customers

A special weather notice for our customers- Pacific Food Distributors was open on Sunday through the storm, and did load trucks to go out to all of our normally scheduled deliveries. If you have closed your business or are experiencing delays in your area due to the weather, please contact your salesperson to let them know.


Pacific Food Distributors will also be on a Holiday Delivery Schedule for the next two weeks. You can find a copy of that here (pdf).

The Continued Saga of the Chicken Industry

The country is still buzzing from the Pilgrim's Pride bankruptcy announcement, but that isn't the only news circulating in the chicken industry. Sanderson Farms, the fourth largest producer in the country posted a loss of $51.9 million, or $2.56 per share, for the fourth quarter.

While Sanderson stocks were expected to plummet, Joe Sanderson, Sanderson Farms CEO made a statement via conference call to investors assuring them that his top priority was protecting the company's balance sheet and not seeking to buy up assets. This announcement helped the company's shares rise $4.65, to $30.27 per share. You can listen to the conference call here at the Sanderson Farms website, or read a detailed stock analysis at Forbes.

What is Sanderson blaming the loss on besides feed costs? Football fans. Yes, really. Reuters has more on the story:

"Normally wing prices firm after Labor Day as football starts and fans begin moving into bars and water holes to eat Buffalo wings and watch their favorite teams. That did not happen this fall," Joe Sanderson, chief executive of No. 4 chicken producer Sanderson Farms Inc, said Thursday during a conference call with analysts.

He points out that even while wing prices have dropped nearly 25% since last year, the recession is causing fans to stay home. Until demand increases or production decreases, wings will continue to be a money loser. In an attempt to jump start the latter, Sanderson announced that they would cut production by 10%.

The hard times in the chicken industry, while not as prominently displayed as the auto industry, are starting to have a pronounced effect on working Americans. The recession is causing people loose jobs and not be able to eat out or buy as much at the grocery store, and in turn major plants are cutting back or ceasing production altogether. Sanderson announced that they would not give out their annual bonuses for 2008, while a plant which did chicken de-boning for Tyson was forced to close after the poultry giant chose not to renew their contract. The town of Pittsburgh Texas is waiting to see what will become of Pilgrim's Pride- the company employs about 5,000 people at its headquarters. The Associated Press has more on the story:

"It would look like a ghost town," said Strawn, who says Pilgrim stops by the restaurant many weekends. "There ain't nothing else here that can keep Pittsburg up."

Despite the continuous flood of bad news, people are still trying to remain positive and hope for a turnaround. Joe Sanderson said in his statement to shareholders that he expects the American people will again visit restaurants.

"People haven't quit eating out for the rest of their lives," he said.

Further Reading:

ENC Today on tough times for chickens.
WXVT15 News on the Petit Jean Poulty Plant closing.
CNN Money on Sanderson stock prices.

Breaking News: Pilgrim's Pride files for bankruptcy.

After the speculation over the weekend about what the extended deadline would do for Pilgrim's Pride, they ended up filing for bankruptcy after all.

MSNBC has more:

MILWAUKEE - Pilgrim’s Pride Corp., the nation’s largest chicken producer, filed for Chapter 11 bankruptcy protection on Monday, a move some analysts had predicted given the company’s sagging debt load and volatile feed prices.