Monsanto Halts R&D of Biotech Wheat

May 1, 2004
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Monsanto Halts R&D of Biotech Wheat

In a move that bakers quietly cheered, Monsanto Co. announced the discontinuation of breeding and field-level research of Roundup Ready biotech wheat, at least for the short term.
Instead, the company will focus its research efforts on developing biotech corn, cotton and oilseeds.
"As a result of our portfolio review and dialogue with wheat industry leaders, we recognize the business opportunities with Roundup Ready spring wheat are less attractive relative to Monsanto’s other commercial properties," says Carl Casale, Monsanto’s executive vice president. "Acreage planted in the spring wheat market in the United States and Canada has declined nearly 25% since 1997, and even more in the higher-cost weed control target market for this product. The technology adds value for only a segment of spring wheat growers, resulting in a lack of widespread wheat industry alignment, unlike the alignment we see in other crops where biotechnology is broadly applied. These factors underscore the difficulty of bringing new technologies to the wheat market at this time."
Monsanto, however, kept the doors open for the future introduction of biotech wheat if the market for the crop and the demand for biotech wheat improve. The company estimates that such a demand may occur in four to eight years.
Part of the problem with finding more buyers for the current strains of biotech wheat is that there are few, if any, benefits for bakers, cookie and cracker producers. Rather, most of the benefits are restricted to pest resistance, improved yields and other attributes that help the farming community. There was little interest among bakers in biotech wheat because the more expensive ingredients didn’t provide higher protein levels, longer shelf life or improve the quality of the final baked product.
Moreover, some members of the farming community itself were against biotech wheat because it would make the crop more difficult to export. They warned that several countries, including Japan and many of those in the European Union, might put up barriers to prevent bio-engineered imports of U.S. wheat.
Monsanto began the technical development stage of Roundup Ready wheat in 1997. Six years of field-testing by the company’s scientists and others revealed that the wheat enhanced yields by 5% to 15%. The firm spent under $5 million, or less than 1% of its R&D budget, on the project. It will work with regulators around the world to take the next steps with regard to regulatory submissions.
Bakers, Millers Lay the Foundation
The American Bakers Association and the North American Millers’ Association took the first steps to form a tax exempt independent organization called the Foundation for the Advancement for Grain Based Foods and had their attorneys file the legal documentation with the District of Columbia and the Internal Revenue Service. Approval from the IRS is expected to take two to three months.
The foundation will be formally established to execute and coordinate efforts for a national public relations campaign that will aggressively communicate the nutritional and health benefits of bread, rolls and other grain-based foods. Following IRS approval, an independent auditing company will distribute solicitation and voluntary pledge forms to ABA and NAMA members and other interested groups to attract financial support for the foundation. The groups hope to raise about $4 million annually over three years. About $1 million in seed money has already been pledged.
"Formation of the foundation is a historical step for the industry and an excellent opportunity for ABA to work with NAMA and other like-minded organizations to collectively educate consumers on the important health benefits of grain-based foods," says Gary Prince, ABA chairman and president of Weston Foods U.S.
John Gillcrist, NAMA’s chairman and president of Bartlett Milling Co., adds, that the joint project will soon become a reality to fight the low-carb trend and other challenges facing the baking industry. "Intensive consumer research is leading to a meaningful message that will educate consumers about the nutritional benefits of flour and grains," he says.
Tastykake gets ‘Sensable’
Normally, it takes food companies anywhere from 12 to 18 months to develop and roll out new products. However, it will take Philadelphia-based Tasty Baking Co. only about seven months to come up with no-sugar, lower-carb donuts, cakes and cookie bars, which will be shipped to retailers in July under the Sensables brand name. The fast timeline, the company says, reflects the urgency that officials felt with more Americans jumping on the carb-restricted bandwagon.
"It was a wave, and we wanted to ride it," says Vince Melchiorre, Tasty’s chief marketing officer. The line includes plain and chocolate donuts, chocolate and chocolate-chip cookie bars, and orange and chocolate-chip finger cakes. The bars, for instance, contain no sugar, 21 gm. carbs and 7 gm. net carbs.
Karen Schutz, who joined the snack producer in January as director of business development, spearheaded the creation of the health-conscious, low-carb snacks. In February, researchers had made about two dozen experimental batches of low-carb cookies.
The formula exchanged granular sugar and high-fructose corn syrup for sucralose, an ingredient derived from sugar but with no calories, and maltitol, a sugar alcohol often used in low-carb products because it is more slowly absorbed by the body. In addition to targeting carb-cutters, the line will be marketed toward those who are restricting their sugar intake.
New Home for Casa de Oro
ConAgra sold its Casa de Oro Foods group to an investment group led by Plaza Belmont Fund II LLC, a private equity firm specializing in the acquisition of food companies. Casa de Oro Foods produces flour tortilla, corn tortillas, taco shells, pizza crusts and other flat bread products. It also makes low-carbohydrate tortillas, flavored tortillas, taco kits and fajita kits. John Stout, Jr., Plaza Belmont’s chief executive officer, serves as chairman and CEO of the new Casa de Oro business while Ted Longacre serves as president. The company operates plants in Omaha and Louisville, Ky.
New Home for Elves
The Hollow Tree is being uprooted from Elmhurst, Ill., to Kellogg’s tiger den in Battle Creek, Mich., affecting about 300 jobs. The question will be how many Keebler officials will want to leave the Chicago area for the small town life in the middle of Michigan.
Kellogg, which acquired Keebler Foods in March 2001, notes that the move is a logical step in its long and beleaguered effort to integrate the cookie and cracker business into the cereal company. Relocation of the now-called U.S. Snacks business "offers both marketing and cost synergies," Kellogg says.
"We continue to transition our U.S. Snacks business from an acquire-and-integrate strategy to one of sustainable, organic growth," notes Carlos Gutierrez, Kellogg’s chairman and CEO. Last year, Kellogg integrated its Keebler R&D team to the W.K. Kellogg Institute for Food and Nutrition Research in Battle Creek.
Kellogg is giving 300 employees the chance to relocate. Another 300 workers in the Food Away from Home and information technology center will remain in Elmhurst.
"Our goal this year is to stabilize the snacks business and deliver results," adds Brad Davidson, president of the U.S. Snacks group. "We acknowledge that relocating can be a difficult process and will endeavor to make this transition as smooth as possible."
SEC Fines former IBC Director and Son
The Securities and Exchange Commission reportedly settled insider trading charges against E. Garrett Bewkes, Jr., a former director of Interstate Bakeries Corp., and his son, Robert. The SEC complaint alleges that the elder Bewkes received a "highly confidential report detailing the company’s deteriorating financial condition" on January 29, 2003, then called his son, telling him the business was "lousy" and advising him to sell. According to published reports, Robert Bewkes, who worked at UBS Financial Services, sold 16,230 shares of stock owned by himself, family members and his brokerage clients. Robert Bewkes worked at UBS until June 2003, according to Reuters.
Without admitting or denying the charges, each man agreed to pay a penalty of $67,517. Robert Bewkes will pay an additional $67,517 fine and agreed to a ban on associating with any broker, dealer or investment advisor, according to the report.
Atkins Beefs up Image
In a bid to neutralize the Atkins diet’s heavy meat-consuming image, the company has launched an advertising campaign intended to do more educating than selling of its products.
Trying to tone down the public’s perception that the Atkins diet is identical with consuming unlimited bacon cheeseburgers, the privately held company, Atkins Nutritionals, Inc., has taken out ads in major U.S. publications featuring the new Atkins lifestyle food guide pyramid. Although the company refuses to disclose sales figures, Atkins officials noted that sales of its low-carb products, such as its baking mixes and energy bars, doubled last year. Investment analysts estimate Atkins’ retail sales range from $500 million to $750 million.
The change in the company’s public communications strategy may be one facet of Atkins’ preparations to reshape its image for an initial public stock offering. Other interpretations include a report published by Morgan Stanley noting that low-carb dieting has already reached its peak, giving Atkins all the more reason to attempt to stabilize its public posture.
Pies Judged a Slice Above the Rest
Pie producers from across the nation competed in Celebration, Fla., in April for top pie-industry honors in the commercial division of the 2004 American Pie Council/Crisco National Pie Championships. The APC/Crisco National Pie Championships took place in conjunction with the Great American Pie Festival.
"The championships provide commercial bakers with the opportunity to test their pies directly against the competition and gain valuable feedback about what judges liked and thought could be improved about each pie. Plus, winning first place and thus earning the right to place our APC goal seal on a pie box can increase sales of that pie by 30% to 40%," says Linda Hoskins, executive director, APC.
People on the Move
Bimbo Bakeries USA, Fort Worth, Tex. — Reynaldo Reyna Rodriguez has been named president of Bimbo Bakeries USA.
Campbell Soup Co., Camden, N.J. — Gerald Lord named vice president of finance and strategy for Campbell North America, a new division announced by Campbell in February. Anthony DiSilvestro was appointed vice president-controller to succeed Lord.
Flowers Foods Bakeries Group, Thomasville, Ga. — Dan (Rick) Williams named director of manufacturing; Ashley Hightower named controller; Douglas Woolf takes over as director of human resources; and Billy Lee Boyer oversees day-to-day bakery operations. In addition, Sherry Harper has been promoted to director of marketing. She will report to Janice Anderson, recently promoted to vice president of marketing.
Maple Leaf Foods, Inc., Toronto — Michael Vels named executive vice president and chief financial officer.
Wyandot, Inc., Marion, Ohio —Tom Shank promoted to vice president, supply chain management.
SK Food International, Inc., Fargo, N.D. — Ken Hodnefield joined the marketing department and will be responsible for providing sales and marketing support in all areas relating to certified organic and conventional non-GMO agricultural commodities.
The commercial division, one of three in the contest, was broken down into categories based on the wholesale price of the pie and further divided into 20 different flavor varieties. This year, 385 pies were entered in the competition.
Among this year’s winners were Edwards Fine Foods, Kyger Bakery Products, Mrs. Smith’s Bakeries, Nancy’s Pies, and Sara Lee Bakery Group. Sara Lee lemon meringue dessert claimed the first place prize in the commercial division.
Man alleges Atkins diet Causes Heart Problems
In what could open the door to lawsuits over the Atkins diet, a businessman from West Palm Beach, Fla., reportedly filed suit against the estate of Dr. Robert Atkins, alleging that the low-carb plan threatened his health.
Jody Gorran filed the suit in Palm Beach Country Circuit Court in May, seeking $15,000. He alleges that the high-fat content of the Atkins diet clogged his arteries, raised his cholesterol to unhealthy levels and forced him to need heart angioplasty to clear his arteries.
"I came very close to dying, and this is from a diet I thought was marvelous," he told the media. The 53-year-old man started his diet in May 2001 because his weight rose to 148 lbs. from 140 lbs. In two months, his cholesterol rose to 230 from 146. In October 2003, he had surgery.
In a statement, Atkins Nutritional said that it stands by the science that has repeatedly reaffirmed the safety of the diet. The company believes that Gorran had been helped by the Physicians Committee for Responsible Medicine, which promotes a vegan diet banning meat, fish, dairy and egg products and had questioned the Atkins diet’s approach to health in the past.
Lufthansa to Sell Chef Solutions
LSG Lufthansa Service Holding is selling its Chef Solutions unit, which includes Orval Kent and Pennant, to Questor Partners Fund II and its affiliates for an undisclosed amount. Southfild, Mich.-based Questor is a private equity firm that acquired businesses that are in businesses and often relies on turnaround specialists to get quick and superior returns on its investments.
Chef Solutions operates 14 facilities in North America and employs a workforce of 2,600 people.

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