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CHEESE REPORTER
Vol. 138, No. 36 • Friday, February 28, 2014 • Madison, Wisconsin
FDA Proposes ‘Nutrition Facts’
Changes; Calories From Fat Gone
Info About Added Sugars,
Potassium, Vitamin D Would
Be Required; Compliance
Date Would Be Two Years
After Effective Date
Washington—The US Food and
Drug Administration (FDA) on
Thursday proposed to update the
“Nutrition Facts” label that’s found
on most food packages in the US.
The agency first issued regulations related to the Nutrition
Facts label in 1993. FDA has not
updated the Nutrition Facts label
since the 2003 trans fat rulemaking, or established new or updated
Daily Values (DVs) for nutrients
since 1995.
FDA is proposing an effective
date of 60 days after the date of
the final rule’s publication in the
Federal Register, with a compliance
date two years after the effective
date.
A primary change that FDA
is proposing to the format of the
Nutrition Facts label is to increase
the prominence of the “Calories,”
numeric value of calories, “Servings per container,” and numeric
value of servings per container
Delaware Cheese Company
Recalls Hispanic Cheeses
Due To Listeria Concerns
Kenton, DE—Roos Foods of Kenton, DE, is recalling a variety of
its Hispanic-style cheese products after a total of eight persons
infected with an outbreak strain
of Listeria monocytogenes were
reported in Maryland and California.
Seven of the eight ill persons
were hospitalized, while one death
was reported in California, according to the Centers for Disease
Control and Prevention (CDC).
Roos Foods has actually issued
two recall notices in the past week.
Last Sunday, the company
recalled all lots of the following cheeses Mexicana: Cuajada
En Terron, Cuajada/Cuajadita
Cacera, Cuajada Fresca, Queso
Fresca Round, Queso Dura Viejo
Hard Cheeses; Amigo: Cuajada
declaration of cholesterol on the
Nutrition Facts label and, therefore, the agency is not proposing
any changes to the current requirement.
FDA regulations neither define
the term “added sugars” nor require
or permit its declaration on the
Nutrition Facts label. The agency
is now reconsidering this declaration of added sugars, taking into
account new data and information.
For the purposes of the discussion in the proposed rule, added
sugars refer to sugars and syrups
that are added to foods during processing or preparation.
In the absence of uniform added
sugars declaration on the Nutrition
Facts label, consumers would not
be able to compare the added sugars content of foods, particularly
those that contain both naturally
occurring sugars and added sugars,
such as yogurt and dairy-based desserts, FDA noted.
The added sugars declaration in
the ingredient statement of a food
label may not provide sufficient or
quantitative information for consumers to be able to formulate diets
• See New ‘Nutrition Facts’, p. 22
Greek Yogurt: Not Just A Fad, Expected To
Become Enduring Part Of US Food Landscape
New York State Expected To
Remain Largest Greek Yogurt
Producer, But Growth Rate
‘Will Not Continue Apace’
Total Estimated Milk Cows
2003
Start of Jan. 2010 – 2014
1000 head
9250
9200
9150
9100
9050
2014
2013
2012
• See Greek Yogurt, p. 16
• See New Serving Sizes, p. 8
2011
Ithaca, NY—Is Greek yogurt a
fad that will soon run its course or
a new product category that will
become an enduring part of the
US food landscape?
“All indications point to the
latter,” according to a recently
released Cornell University
study. Indeed, the bigger question is what the ongoing upside
potential is for the Greek yogurt
category.
The study also concluded,
among other things, that New
York will continue to be the largest producer of Greek yogurt for
the foreseeable future, although
the growth rate “will not continue
apace.”
Industry Evaluations of the Status and Prospects for the Burgeoning New York Greek-style Yogurt
Industry was written by Bob Boynton, adjunct professor, and Andy
Novakovic, the E.V. Baker professor of agricultural economics,
in Cornell’s Charles H. Dyson
School of Applied Economics and
Management.
The study’s objective was to
better understand and quantify
the recent growth in the Greekstyle yogurt market in the US and
the production of yogurt in New
York-based plants.
Publicly available data was the
primary source of information
on the recent evolution of the
Greek-style yogurt sector. Personal interviews of industry leaders were conducted to provide
insights into the current market
Washington—The US Food and
Drug Administration (FDA) on
Thursday proposed several changes
to its regulations related to serving size requirements for foods and
beverages.
The proposed rule was released
at the same time as a proposal to
revise the “Nutrition Facts” labels
on foods and beverages (for more
information, please see adjacent
story).
For both proposals, FDA is proposing an effective date of 60 days
after the date of the final rule’s
publication in the Federal Register
with a compliance date two years
after the effective date.
Following the passage of the
Nutrition Labeling and Education
Act of 1990, FDA issued various
regulations related to serving size
requirements. Since the agency
established those regulations, there
have been developments that have
compelled it to re-evaluate its regulations on serving sizes and determine whether and what, if any,
revisions are needed to ensure that
the Nutrition Facts label meets its
goal of helping consumers maintain healthy dietary practices.
In consideration of these new
developments, this rule proposes a
number of changes to FDA’s regulations. In consideration of the
new consumption data, this rule
proposes to amend the reference
amounts customarily consumed
(RACCs) that are used to determine serving sizes.
2010
• See Cheese Recall, p. 11
declarations. Research suggests
that these proposed changes may
increase consumers’ attention to
the information, and in certain
situations, help consumers to accurately identify the number of calories in a product.
Among other changes related to
the declaration of nutrients, FDA
is proposing to no longer require,
and to not allow voluntarily, the
declaration of “Calories from fat”
because current science supports
a view that the type of fat is more
relevant than overall total fat
intake in increased risk of chronic
disease.
Labels would continue to provide information about “Total
Fat,” “Saturated Fat” and “Trans
Fat.”
FDA is also proposing to move
the “%DV” to the left side of the
label in order to highlight the
information to consumers. The
agency is also proposing to remove
the requirement for the footnote
table listing the reference values
for certain nutrients for 2,000 and
2,500 calorie diets.
FDA said it is unaware of evidence that would support a change
to the requirement for mandatory
FDA Proposes Changes In
Serving Sizes For Foods,
Including Single-Serving
Containers; Yogurt Serving
Size Would Be Reduced
Page 16
Greek Yogurt
(Continued from p. 1)
structure, challenges facing the
Greek yogurt industry in New York
and the US, and illuminate growth
scenarios in terms of product
demand and processing capacity.
For this report, Boynton and
Novakovic used the term “Greek
yogurt” to include both strained
and non-strained products and
without regard to the ingredients
used. By adopting this approach,
the authors used the two most
commonly cited consumer characteristics to identify Greek yogurt: a
higher protein content and thicker
consistency than regular yogurt.
USDA has been reporting
yogurt production since 1989; it
has grown from under 1.0 billion
pounds that year to a record 4.6
billion pounds in 2013. The number of plants producing yogurt generally declined until around 2000,
when the growth in yogurt production accelerated and the number of
plants producing yogurt climbed by
more than 50 percent, from 80 in
2000 to 131 in 2012.
Data from the fall of 2012 indicates that retail yogurt sales occur
primarily in grocery stores (about
two-thirds of all retail sales). Drug
stores represent almost all of the
remaining one-third, with a small
February 28, 2014
CHEESE REPORTER
fraction sold in club and other
stores.
IRI panel data (as reported by
DMI) show that 83 percent of all
US households bought some kind
of yogurt in 2012, representing no
change from 2011. Adult males
represented 25 percent of total inhome yogurt consumption in 2012,
with women representing 52 percent and children and teenagers
the balance.
“Greek yogurts have shown phenomenal growth,” the study noted.
In 2012, Greek yogurt sales were
34 percent of total yogurt dollar
sales and 22.5 percent of total
yogurt volume sales, according to
the IRI Yogurt Database (multioutlet, provided by DMI). Greek
yogurt sales by volume were only
2 percent of total yogurt sales as
recently as 2009.
Shortly after the Greek yogurt
boom began (around 2010), market analysis indicated that sales
were primarily from two types of
customers. One was women who
were already yogurt eaters but
switched from conventional yogurt
to Greek.
The second were (mostly) men
who saw Greek yogurt as a new
sports nutrition product. These
men were new consumers who
were not switching from conventional yogurt but rather were sub-
stituting Greek yogurt for other
types of protein supplements.
Greek Yogurt Observations
In the latter part of the study,
the authors drew on information
provided by the executives interviewed for the study, referenced
secondary data, and their own
knowledge and understanding of
the US dairy industry in offering
observations on the Greek yogurt
industry in New York and the US.
Regarding yogurt plant siting
factors, virtually all interviewees
confirmed directly or indirectly
that their new or expanded yogurt
facilities were located in New York
due primarily to the state’s: proximity to large, dense population
centers along the East Coast with
the highest per capita consumption of yogurt in the US; and large
milk production volume.
Some interviewees noted that
their New York location gives
them quick access to the interstate
highway system and allows costcompetitive distribution of their
products as far west as Chicago, as
well as throughout the East Coast.
Greek/premium yogurt companies represent a new profile for
the US dairy industry. The study’s
authors were struck by the unique
kinds of processors that have populated the US Greek yogurt market;
their profile is “dramatically different and more varied” than that
found in other dairy product categories.
The authors offered the following unique characterization of the
major players in the Greek yogurt
market: foreign dairy investment
by dairy companies with no prior
experience in the US (FAGE,
Alpina, and the Theo Muller
Group, which is partnering with
PepsiCo to form Muller Quaker
Dairy); US food companies with
no prior US dairy experience (PepsiCo); brand new start-ups with
only Greek yogurt production
(Chobani); joint ventures with
domestic and international companies; large, international yogurt
companies with dominant positions in the US yogurt market; at
least two dairy cooperatives; and
a start-up in New England with
some European investment.
Yogurt processors expect continued, strong growth in demand
for Greek and premium yogurts in
the next five to 10 years. With
• See Greek Yogurt, p. 17
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Greek Yogurt
(Continued from p. 16)
out exception, all interviewees
expected demand for Greek and
other premium yogurts to continue
to grow strongly in the next five to
10 years.
Slotting allowances represent
an increasingly higher barrier to
entry for Greek yogurt processors.
Four interviewees commented on
the rise in slotting allowance levels
for Greek yogurt (and other premium yogurts) and the increasing
cost of market entry.
Every executive interviewed
who made strained yogurt noted
that disposal of acid whey from
strained or spun Greek yogurt is a
major cost and processing/disposal
challenge. Options are several, but
at this stage, all processors interviewed who made strained Greek
yogurt indicate that all available
practical options are an added cost,
not a source of revenue.
Page 17
CHEESE REPORTER
sider the recent announcement by
AGRANA Fruit USA that it will
build a fruit processing plant in
Lysander, NY, to serve the growing
number and size of dairy product
processors, including the Greek
and premium yogurt segment, in
New York and the Northeast.
 New York’s proximity to
large, high per capita consumption markets, and easy access to
the interstate highway system, will
help ensure that high volume production will continue in the state.
 Expected continuance of
New York’s role as one of the top
milk-producing states in the US.
Certainly if demand for Greek
yogurt continues to grow, additional processing capacity will be
built in the western half of the US,
where milk supplies are large and
growing and distribution costs to
large western markets can be minimized, the study noted. And some
existing yogurt capacity could be
shuttered if financial goals cannot
be met.
The growth rate of Greek yogurt
over the past four or five years
will not be sustained at the same
level for the next five years, and
the authors, and all of the executives interviewed, do not expect
per capita consumption of yogurt
in the United States to reach that
of Europe, but the upside potential for yogurt consumption “is still
large.”
The most rapid growth will
occur in those regions where per
capita yogurt consumption is lowest, so growth will likely slow in
the Northeast and New England.
Greek yogurt has cannibalized,
and will continue to cannibalize, consumption of other dairy
products, including other styles of
yogurt and other dairy products,
so any Greek yogurt growth will
not be without some offsetting
declines in other dairy product
categories.
There is “ample anecdotal evidence” that Greek yogurt has
cannibalized other yogurts, sour
cream and cream cheese (in dips
and sauces), fluid milk (as Greek
yogurt displaces breakfast cereal),
ice cream (as Greek yogurt makes
inroads as a nighttime snack) and
other dairy-based and non-dairybased desserts.
Copies of the Cornell research
bulletin are available at: http://aem.
cornell.edu/research/rb.php.
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Slotting allowances
represent an
increasingly higher
barrier to entry
for Greek yogurt
processors.
Many Greek yogurt manufacturers have plans for expansion, the
study found. They know where
future plants will be sited (at least
in a general sense) and they have
a vision of their capacity growth.
However, there is also a general
feeling among some Greek and
premium yogurt processors that
over-capacity exists, or soon will,
in the US market.
The development of the Greek
yogurt industry in New York and
the Northeast has increased cream
availability, thereby improving
the profitability of butter manufacturing. Butter operations in
the region not only can operate
at higher capacity but the price of
cream has also come down.
New York’s Prospects Bright
“New York will continue to be the
largest producer of Greek yogurt
for the foreseeable future,” the
study said. While the growth rate
“will not continue apace,” New
York is expected to hold on to its
ranking as the premier state for
yogurt production in general and
for Greek yogurt in particular.
Several factors contribute to
this situation, the study said:
 Large and generally quite new
/modern fixed plant investments
already exist in New York and the
vast majority of these assets will be
employed for many years.
 Supporting businesses are
also being built in New York. Con-
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