Responding to government research, dietary recommendations, positive new reports and increased consumer perceptions of whole grains, wholesale bakers are slowly pulling away from low-carb and promoting more effort toward grains.

If they haven’t already repositioned their portfolio, they’re accelerating the rollout number of whole-grain and high-fiber products that command a higher margin and are perceived by consumers as more nutritious alternative value.

In addition, companies like the Sara Lee Bakery Group are introducing new extra-fiber products and adding folic acid, calcium and Vitamin D to several of its super-premium products to create a healthier slice of bread.

Even north of the border, the shift to whole grains is picking up steam. Canada Bread, for instance, expanded its line of whole-grain premium products by launching Dempster’s Healthy Way Organics, which includes a 14 Grain and 100 Stone Ground Whole Wheat bread.

While acknowledging that low-carb diets have taken its toll, Maple Leaf Foods, which owns 84% of Canada Bread, noted that sales and earnings in its bakery group rose for its most recent third quarter as the Toronto-based company continues to adjust its product mix toward higher-margin, value-added items.

“The bakery group continued to perform extremely well in spite of reduced-carbohydrate diets. The company benefited from a sales mix that favors high value and nutritious product lines as consumers shift their buying patterns from white bread products to higher health products as whole grains,” Maple Leaf reported.

“Sales volumes in the third quarter, both in the bakery group and the industry, indicate that the negative impact on white bread of low-carbohydrate diets may be declining, although there continues to be a trend toward increase consumption of whole grain and higher value products,” the company said.

In the United States, Sara Lee Bakery Group continues to be one of the most aggressive new product innovators in the bread aisle, as they have been over the past year.

For the first quarter of fiscal 2005, which ended Sept. 30, Sara Lee bagel sales rose 24%, aided by the introduction of the whole-grain bagels in July.

Following up on the success of its lower carb and lower calories Delightful breads that were launched last December, Sara Lee added two more varieties — Delightful 100% Whole Wheat with Honey and Delightful Multigrain — in September. According to the company, 77% of Delightful sales during the first six months of calendar 2004 was incremental.

In November, the St. Louis-based division is relaunching its Earth Grains sandwich bread line with three new extra-fiber products and six reformulated varieties. Launched in 1975, the Earth Grains brands had become the sole umbrella for its super-premium products over the years. The company decided to give the brand a second look to see if it could be positioned more effectively.

“Over the last few years, Earth Grains had not gotten as much attention for a while as we built up the Sara Lee business in the bread aisle,” explains Matt Hall, spokesman for the bakery group.

The 24-oz. Earth Grains Extra Fiber loaves come in 100% Multi-Grain, 100% Whole Wheat and 100% Whole Wheat made with Honey varieties. Each slice contains 5 gm. of fiber and two slices provide 35% of the government’s Recommended Daily Value (RDV) for fiber, Hall explains.

Additionally, the three extra-fiber varieties and six reformulated sandwich breads are the first loaves to contain folic acid, calcium and Vitamin D. Two slices of any of the nine varieties provide 20% of the RDV for folic acid, 30% of the RDV for calcium and 20% of the RDV for Vitamin D.

To develop these healthful breads, Sara Lee looked to the Daily Guidelines Advisory concerning the consumption of whole grains and reviewed the latest studies that note nutritional deficiencies, such as calcium and Vitamin D, in the American diet.

Adding Vitamin D was critical because the body uses it to absorb calcium, which promotes bone development and can offset osteoporosis in elderly women.

Moreover, since the government mandated the use of Vitamin D in enriched flour in the late 1990s, the annual number of neuro-tube birth defects has declined by 30%, Hall says. Although enriched baked products contain folic acid, whole-grain breads typically do not.

Because the government encourages Americans to eat more whole-grain products, Sara Lee marketers didn’t want a “folic acid gap” caused by consumers consuming less folic acid because they’re trading over to whole-grain products without the nutrient.

Fortifying its whole-grain products with folic acid would help consumers maintain their consumption of that nutrient. Sara Lee added to its whole-grain products a percentage of folic acid similar to what would be found in enriched-flour breads.

The six reformulated breads include 100% Stone Ground Whole Wheat, Honey Whole Grain, Potato, Honey Wheat Berry, Oat and Nut, and Buttermilk. Some of the varieties, such as Potato and Buttermilk, already contain folic acid because they are made with enriched flour, Hall says.

Despite the rash of hurricanes that bombarded the Southeast earlier this fall, Flowers Foods reported double-digit increases in both sales and net income for the third quarter as the result of strong sales in snack cakes, solid performance by its Nature’s Own brand and the recent acquisition of some Sara Lee business in Texas.

For the quarter ended Oct. 9, the Thomasville, Ga.-based company reported that net income jumped 17% to $14.4 million from $12.5 million for the same period a year ago. Sales rose 11.5% to $371.4 million from $333.2 million for the third quarter last year.

Fueling sales and revenue growth were Flowers’ acquisition of a closed bakery in Houston and a foodservice customer list from Sara Lee Bakery Group. That purchase could add upwards of $40 million in added sales, the company noted. The company’s new bun line in Denton, Texas, is producing much of the additional bun volume. A bread line in the Denton plant will open next summer.

Moreover, the company’s top-selling Nature’s Own brand experienced double-digit sales growth while the company’s snack cake products, sold primarily under the Mrs. Freshley’s label, also showed growth.

“Our continued growth is made possible by our strong brands, the quality of our products and our exceptional service in the marketplace,” said George Deese, president and CEO. “Our Nature’s Own breads continue to perform well in the retail sales channel. In addition, sales were up across all other distribution channels during the quarter. New products, new territories and the Texas acquisition drove the sales increase, continuing the trend we have seen throughout the year.”

New research by the Harvard School of Public Health indicates that consumers should eat more whole grains if they are looking to lose weight.

The study, published recently in the American Journal of Clinical Nutrition, analyzed data on more than 27,000 middle-aged men and found increased consumption of whole grains was inversely related to weight gain.

According to a release from the Independent Bakers Association, the Harvard team observed a dose response relationship between whole grain intake and long-term weight gain. Researchers concluded for every 40 gm. increment in whole grains from all types of food, weight gain was reduced by 0.49 kg. The types of food included baked goods, fortified-grain foods, fruit and cereal.

To come up with their conclusions, the researchers used new quantitative estimates of whole grain intake from some 27,082 men, ages 40 to 75, over an eight-year period. While there was a correlation between whole grains and weight loss, the researchers found no links between refined grains or wheat germ consumption and weight reduction.

According to IBA, the benefits of whole grains are in the spotlight following the Dietary Guidelines Committee’s recommendations that Americans consume more servings of whole grain products on a daily basis.

In yet another survey showing that the carb craze may be winding down, Parade magazine’s “2004 What America Eats” survey shows that most consumers believe that low-carb diets are a fad that is becoming yesterday’s news.

The survey, released in November, noted that half of the nation expects carb mania to last “just until the next fad hits.” However, while the fanaticism about low-carbs is waning, the report indicated that carb watching has become an integral part of the nation’s health consciousness.

Specifically, 38% of the 1,000 who participated in the phone survey said “reducing carbs” has become a permanent change in their eating habits. On the other hand, 56% or the bulk of respondents said they “never think about carbohydrates” when buying or eating food.

Additionally, 44% say they never choose products because they are low in carbs or don’t have them. In fact, 38% consider low-carb diets to be unhealthy.

The study also reveals that fewer Americans are dieting than in years past. Only one in five Americans are dieting to lose weight. That compares to one in three last year. On average, consumers want to lose a whopping 38 lbs. while one in three respondents said they would like to shed 50 lbs. or more.

To cut their weight over the last year, 39% have tried the Atkins diet, 23% joined Weight Watchers and 12% jumped on the South Beach Diet bandwagon. Around 45% Americans say they have reduced portion sizes while 40% are eating low-fat foods and 31% are cutting the calories.

Still, the news isn’t totally good for the snack and baking industry. Nearly 40% of consumers are eating less bread, 43% are eating fewer potatoes and 41% are cutting down on sweets.

“One of the positive things the low-carb craze has done is bring attention to the differences between simple carbohydrates, like sugar and white bread, and healthier complex carbohydrates,” Jeannie Moloo, a spokesperson for the American Dietetic Assocation, told the magazine’s editors.

Added Roberta Anding, a clinical dietitian at Texas Children’s Hospital in Houston, “Although U.S. consumers are consistently bombarded with messages that low carb is the way to go, overall, we are paying more attention to total fat and saturated fat and looking for 100% whole grains and high-fiber foods.”

ConAgra Foods Inc. partnered with Parade magazine with an exclusive, integrated marketing deal where it promoted its brands throughout the report.

Americans Claim They’re Watching Portions
Changesto Diet	Percent Change
Eating Smaller Portions	44.5
Eating Fewer Sweets	41.1
Eating Low-fat Foods	39.5
Reducing Calorie Intake	31.4
Reducing/Cutting Carbs	29.3
Eating Low-carb Foods	28.6
Eating Low-calorie Foods	28.4
Eating Organic Products	17.3
Source: Mark Clements Research telephone survey of 1,000 consumers who were asked “Which of the following changes, if any, have you made to your diet in the past year?” Published on Nov. 14 in Parade magazine in partnership with ConAgra Foods.