News and Trends From Across the Food Supply Chain

For the second consecutive year, the cost of unsaleables has gone down for consumer products manufacturers.


Cost Of Unsaleables Continues To Decline
For the second consecutive year, the cost of unsaleables has gone down for consumer products manufacturers, according to the 2005 Unsaleables Benchmark Report released July 20 at the Joint Unsaleables Management Conference.

The report found that the cost of unsaleables, including damaged, expired, out-of-date and seasonal merchandise, was reduced by $50 million between 2003 and 2004. Total industry cost of unsaleables is projected to be $2.52 billion in 2004.

However, only 56 percent of respondents in this years survey reported lower rates of unsaleable costs vs. the previous year, virtually identical to last years 55 percent year-to-year rate decline.

The 2005 report found that manufacturers and retailers are employing a variety of tactics to cut the cost of unsaleables, including working together to improve product packaging and shipping. Companies also are manufacturing directly to pallet to reduce handling and damage, and instituting programs to help relieve retailers of excess product due to product failures and seasonal items.

"While we continue to make progress, more can be done to reduce unsaleables. As this years report has shown, reducing the cost of unsaleables is not simple, guaranteed or enduring without a focused commitment to improvement and collaboration between trading partners," says Karin Croft, senior director of industry affairs for the Grocery Manufacturers Association (GMA).

Also at the conference, GMA singled out Campbell Soup, Camden, NJ, and Food Lion, Salisbury, NC, for working together to identify a packaging flaw in Campbells V8 and tomato juice. The two companies were among four companies honored with the 2005 Innovation Award, along with Kellogg, Land OLakes and MeadWestvaco.

Tyson To Expand, Combine Poultry Plants
Tyson Foods is expanding poultry plants in Russellville, AR, and Forest, MI, to increase production of value-added products and boost operating efficiencies. It will also close a plant in Bentonville, AR, Oct. 1

The expansion in Russellville will increase Tysons processed chicken capacity by almost 60 percent and enable it to absorb operations from the plant in Bentonville. At the Forest plant, Tyson will install several new chicken processing lines, enabling it to combine two plants there into one facility by early 2006.

"These are major projects we believe will contribute to our goals to increase value-added product sales and streamline our ability to produce and deliver the high-quality products our customers have come to expect," says Bill Lovette, group vice president of food service, Tyson Foods, based in Springdale, AR.

Once the project is completed next year, Tyson will close an older plant in Forest and shift production and workers to the newly upgraded, 325,000-square-foot facility.

IFDA Releases Safety, Recall Manuals
The International Foodservice Distributors Association (IFDA) has released two new manuals that provide operational information for managing facility inspections and product recalls.

The "FDA and USDA Inspection Manual for Foodservice Distributors," provides guidance on distributor rights and responsibilities in handling a visit from food safety regulators. It was crafted in response to the Bioterrorism Act of 2002, and serves as a tool for the foodservice industry to cope with the anticipated increase in food inspections.

Foodservice distributors can use the manual as a template for establishing a new set of procedures or can compare the manual guidance to existing programs to find ways to enhance procedures.

The second manual, "Effective Recall Management for Foodservice Distributors," provides guidance that can improve a companys processes for product recall or market withdrawal and details new requirements under the Bioterrorism Act. It provides insights in how to deal with suppliers, customers, regulators and the media, and how to minimize business disruptions. It also explains rules and regulator schemes relating to recalls, provides guidance on conducting timely and efficient recalls and captures industry best practices in recall management.

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