Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 24, 1993 TAG: 9301220410
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: MARK MORRISON STAFF WRITER
DATELINE: LENGTH: Long
STICKING TO THE LAW
CHEF Boyardee has a fresh shipment of canned spaghetti ready to go.Only they're short a few hundred thousand labels to slap on the cans.
The solution for the food division of American Home Products Corp. - one of the world's largest makers of consumer products - is to call Piedmont Label Co. Inc. in Bedford, one of about 15 major food-label printing companies in the country.
They order a new batch of labels - same as last time. No changes.
This is how Piedmont Label makes money, explains Joe Davidson, the company's president. His people get out the old Chef Boyardee "films," make a new set of plates from the films, crank up the press and print the order. Simple. Profitable. "Where we make our profit is where we can use a set of films over and over and over again," he said.
Now, the same scenario, only this time Chef Boyardee needs to make a change.
They call to Bedford again.
This is not how Piedmont Label makes money, Davidson says.
Even if Chef Boyardee only needs to change just one small detail on its label, Davidson's people still have to create a new film with the change, which is a costly and laborious procedure in the label-printing business.
Davidson says his company does this for only a nominal fee - far below what it costs in time and materials to make the change. But here, there is no other choice. If he charged more, Davidson said he would risk losing customers, most of which represent America's major food processors.
"That's everything," he explained. "I don't care what you're selling, if you're not competitive, you're going to lose business."
Piedmont Label prints 20,000 different labels, including name brands ranging from Mrs. Butterworths pancake syrup for Unilever Group and pickle jar labels for H.J. Heinz Co. to Borden's mincemeat and Tabasco hot sauce for the McIlhenny Co. Inc. The publicly owned company with some 300 shareholders nationwide had sales of more than $22 million last year, ranking it one of the 15 largest of the major food-label makers.
Looming in Davidson's future could be a nightmare for the label industry and its customers.
Last month, the government announced it will change its food labeling standards in 1994. They will require nearly every label on every packaged food on the grocery store shelves to be changed.
The new rules, developed by the Food and Drug Administration and the Department of Agriculture, will require more detailed information about fat content and other nutritional data. The changeover will cost the food industry hundreds of millions of dollars.
However, Davidson said Piedmont Label has yet to be bombarded with change orders. He said food companies are waiting to see more specifically what will be required. Not all the packaging and labeling details under the new guidelines have been ironed out.
Still, there is no doubt the bombardment will come.
When it does, Davidson said Piedmont Label should be ready. In anticipation of the changes, the company has added 12 workers to its pre-press department over the past year alone. The department does all the work prior to the actual printing of the labels; from designing a label and typesetting to proofreading and producing the press plates.
Plus, as many as half of the 20,000 different labels printed at Piedmont Label already are regularly changed each year anyhow to accommodate label redesigns, new marketing strategies, modifications to the ingredients or any number of other reasons. This isn't something new, Davidson pointed out.
Piedmont Label started in 1919 to print labels mostly for the 75 or so tomato canneries then operating just in Bedford County. Davidson said the company now employs 219 people and prints labels for the food industry, as well as other household consumer products, such as cleaning fluids and detergents.
Tony Parker, who heads the pre-press department, estimated that going through the complicated, nine-step process to change all 20,000 labels would take his staff of 55 about 18 months to accomplish.
"And everyone is probably going to want to be first," he noted.
Meanwhile, the soon-to-be outdated labels keep going out.
The added workload aside, Davidson said he doesn't like the label changes. Although he acknowledges the benefit of better consumer information on food labels, he questions some of the new requirements.
One of those is a minimum size limit of slightly less than 2 by 3 inches on all labels. Davidson said there are multitudes of products on the market too small now to accommodate a label that size. He cited canned tuna fish as an example.
Will tuna canneries be required to change their packaging?
Ultimately, Davidson said imposing those sorts of mandates could particularly hurt small manufacturers who can't afford to adapt their packaging systems to a new labeling standards. Larger companies can more easily absorb those costs or pass them along to the consumer, he said.
Beyond that, Davidson also questioned how necessary some of the nutritional information is to the average consumer. He believes only a small portion of food buyers will pay attention to the new labeling.
Also, he hopes this will be the last time for such radical changes in labels.
Twenty-five years ago, the food and labeling industries went through a similar changeover when the government mandated that weight statements appear on the front label of most food products. Davidson said it was a testing time then. It promises to be a testing time again.
"I just hope it will be the last one in my tenure in this business," he said.
\ KEY POINTS OF NEW FOOD LABELING RULES\ \ Labels on all processed foods will not only show calories, total fat,\ saturated fat, cholesterol, sodium, carbohydrates and protein, but will also\ put them all in the context of a recommended daily diet of 2,000 calories and\ 65 grams of fat. For example, the label on macaroni and cheese will state\ explicitly that a serving with 13 grams of fat, would comprise 30 percent of\ the total fat that someone on a 2,000-calorie diet should have for the day.
\ Products with reduced sodium may use the word "light" but only in the same size lettering as the word "sodium" itself.
\ Light" used alone means 50 percent less fat and calories than the original product.
\ The rules will not apply to restaurant menus, but any restaurant that posts a sign advertising a "low-fat" food must make sure its food complies with the government's definition.
\ Food companies are required to use new labels by May 1994 but many processors are likely to begin putting the new labels on their foods this year.
\ Source: Associated Press