FRESH CATEGORIES EXPECT GOOD YEAR

NEW YORK -- Demand for meats, dairy products, whole-grain foods and produce will grow during 2005, despite the waning popularity of low-carb dieting, according to industry sources.Low-carb dieting, credited with spawning trends ranging from the growth of diet soft drinks to the spike in meat sales during 2003 and 2004, has declined steadily since one year ago. In January 2004, about 9.1% of the country

NEW YORK -- Demand for meats, dairy products, whole-grain foods and produce will grow during 2005, despite the waning popularity of low-carb dieting, according to industry sources.

Low-carb dieting, credited with spawning trends ranging from the growth of diet soft drinks to the spike in meat sales during 2003 and 2004, has declined steadily since one year ago. In January 2004, about 9.1% of the country was following a strict low-carb regimen, but by late November, that number had fallen to 3.6%, according to bi-monthly consumer surveys conducted by The NPD Group, Port Washington, N.Y.

Yet the diets, along with media coverage of topics like the obesity epidemic, the growth of diabetes, and nutrition in general, appear to have produced a shift in American eating habits that will continue to boost consumption of fresh foods.

The U.S. Department of Agriculture is anticipating moderate-to-solid growth in virtually every fresh-food category, but unless retailers help customers discover innovative ways to prepare these foods, they may not see these gains translate into additional sales, according to Harry Balzer, vice president of The NPD Group.

"This country is really trying to find a way to deal with fresh foods," he said. "We're asking Americans to buy more of this stuff, use it right away, [and wash] dirty dishes because they have to use it right away and then discard part of it because they couldn't use all of it fast enough. Fresh foods are not easy, and they're often expensive. So they run counter to the things that drive [U.S. consumer] behavior, such as convenience. That's why you're seeing more of our consumption move toward food service because consumers want to let restaurants deal with those problems."

Regardless of which sector they benefit, beef sales are expected to grow again in 2005, with consumption forecast to increase slightly from 65.7 pounds to about 65.9 pounds per capita, according to USDA. The agency's Economic Research Service has predicted this increase will lead to a record-setting year for domestic consumption. The ERS has also noted that domestic supplies have tightened during beef's ongoing boom in popularity. However, USDA's decision last month to allow the limited resumption of live cattle imports from Canada, beginning in March, should help ease pressure on domestic supplies, and help control wholesale and retail prices during the year. Despite the discovery of another case of mad cow disease in an Alberta dairy cow, USDA said it would continue to move forward with the import plan.

Per capita consumption of pork is expected to increase as well, from 51.7 pounds to 52 pounds. Poultry consumption is expected to increase at a more significant rate, from 103.2 pounds to 104.1 pounds per capita.

Dairy products can expect a good year, too. USDA's Foreign Agriculture Service is anticipating that cheese will continue its growth spurt this year, with 128,000 additional tons of it expected to be consumed in the United States this year. Growing interest in "nutrient dense" foods, as well as the new proliferation of American-made specialty cheeses, are advancing the trend, the Wisconsin Milk Marketing Board said recently.

Milk consumption, which has steadily declined for decades, is expected to experience slight growth in 2005 after a challenging year of volatile pricing. The ERS anticipates that more than 27 million tons of milk will be consumed -- up slightly from last year, but still less than 2003.

Seafood processors and producers of whole-grain breads and cereals are anticipating a boost this year from the government's new dietary guidelines, which will be released this month. The dietary guidelines, which are the foundation for USDA's food guide pyramid, have not been finalized, but a federally appointed panel of 13 nutritionists last year recommended two important changes. One urged Americans to eat at least two 8-ounce servings of fish per week -- particularly fish high in omega-3 fatty acids, such as salmon. Another recommended that half of Americans' grain consumption should come from whole-grain foods. Currently, the pyramid makes no distinction between whole and refined grain products.

Meanwhile, major demographic trends, ranging from the growth of the Hispanic population to the aging baby boomers, are expected to drive significant growth in fruits and vegetables during the next 15 years, according to a recent USDA bulletin. Per capita consumption of apples, grapes, citrus and other fruits are projected to grow between 5.1% and 7.8% through 2020, driving overall consumption up 24% to 27% during that time. Similarly, per capita consumption of tomatoes, lettuce and other vegetables are expected to grow between 1.3% and 3.6%, leading to overall growth of 19% to 24%. Only potatoes were expected to see declines in individual consumption, due primarily to baby boomers eating fewer fried potato products, such as french fries and potato chips, in the coming years.