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Food and Beverages:

The food and beverages industry is known by many names: Snack Food Industry, Beverage Industry, Food and Beverage Processing Industry, Packaging Industry, Food Industry, Liquor Industry, Food Processing Industry, Brewing Industry, Packaged Food Industry, Grocery Industry, Consumer Beverages Industry, Beverages Industry, and Soft Drinks Industry. By definition, the food and beverages sector deals with retail of food and beverages merchandise from fixed point-of-sale locations using special equipments such as freezers, refrigerated display cases and refrigerators for displaying food and beverage goods. The industry is marked by regulations to ensure that proper storage and sanitary conditions are maintained, low profit margins, intense competition and high customer-service expectations (Alldredge et al, 1996). The industry is very diverse and deals with different products that come in different processed forms (fresh, frozen, chilled and long shelf-life goods). It encompasses a wide range of customers ranging from mega-retailers to small chains, independent stores, catering services, restaurants, and exporters (MD, 2006).

The food and beverage industry is dependent on natural resources and the earth is a major part of its capital base. Mass production of food and beverage items can deplete the world’s stock. This in turn will affect availability and cause rise in prices of food commodities. The food industry also produces a lot of emissions and wastes that can affect both the global climate and the crop quality. This in turn can affect livestock. Thus we find that food and beverage industry has consciously or unconsciously become a part of the food web (McIntosh, 1995).

Milk is a raw commodity whose production starts with cows in confinement. The milk of many animals such as the goat, ewe and buffalo are also used. The cows spend about  8 hours eating, 8 hours sleeping and 8 hours ruminating or chewing their cud in a dairy farm. They are provided grass, grain or cattle feed twice a day. Cows are milked 2 times per day; however some high producing herds are milked 3 times per day. Most dairies have enough machines to milk 20 to 40 cows at the same time (Parmalat, 2003). The milk is stored in vats or silos at 4 degrees Celsius for no longer than 48 hours. The milk is transported by special tankers with a special designed and insulated stainless steel that keeps the milk cold during transportation to the processing factory. Samples of milk are tested for antibiotic, content, and bacteria count (Parmalat, 2003). The temperature is also checked before the milk enters the factory processing area.  Approved milk is pumped into storage silos where it undergoes pasteurization, homogenization and further processing. The milk is then packed, labeled and sent for sale (Parmalat, 2003).

The composition of milk varies with the species, breed, feed, and condition of the animal. Jersey and Guernsey cows produce milk of high butterfat content. Tony Rickard, dairy specialist with University of Missouri Outreach and Extension says: “Research shows that each pound of dry matter intake above a dairy cow’s maintenance requirements will result in a production response of two to three pounds of milk” (Burton, 2004). Thus milk production is dependent on the intake of the cows. To improve dry matter intake of dairy cows, quality of the forage fed must be increased. The forage should preferably have a relative feed value (RFV) of 150 or better. The feed should also be fresh. The cattle should be fed more often, provided bunk space, and kept cool during the summer in order to ensure adequate milk supply (Burton, 2004).

For many years, calves have been fed cow’s blood instead of milk, and cattle feed has been allowed to contain composted wastes from chicken coops, including feathers, spilled feed and even feces (Grady, 2004). Many people were not aware of these dangerous practices until 2004 when the FDA barred them, saying they could spread mad cow disease. Though the United States banned the use of cow parts in cattle feed in the 1990’s, it still permits rendered matter from cows to be fed to pigs and chickens, and rendered pigs and chickens to be fed back to cows. Critics say that in theory, that sequence could bring mad cow disease full circle, back to cows (Grady, 2004). This would be an environmental hazard.

The milk prepared for sale is often homogenized. During homogenization, the milk is pumped under pressure through small openings to break up the milk-fat globules, thus ensuring an equal distribution of fat throughout the milk rather than permitting it to rise to the top as cream. Milk as a commercial product is subject to many regulations regarding its composition. The proportion of butterfat and other solids should be standardized and its purity should be maintained.  There are sanitary measures in force that cover milk handlers, herds, plants, and equipment. The milk is pasteurized at 161 degrees F. If the temperature is 200 degrees the milk is called ultrapasteurized. This process gives the milk a distinct cooked taste and makes the milk sterile (Fallon, 2002). Pasteurization checks bacterial growth, thereby making milk safer to drink and increasing its keeping qualities and range of transport.

Commercially speaking a patent was issued for the production of concentrated milk in the United States to Gail Borden in 1856. There are two types of concentrated milk: evaporated and condensed. Condensed milk is a sweetened product (over 40% sugar), and evaporated is unsweetened. Dried, or powdered, milk is made by passing a film of partially evaporated milk over a heated drum or by spraying it into a heated chamber in which the particles dry.

Milk is considered to be a wholesome food with proteins (mainly casein ), fat, salts, and milk sugar, or lactose, as well as vitamins A, C, D, certain B vitamins, and lesser amounts of others. Milk that is available in cartons are often supplemented with natural Vitamin D. It is also a major source of calcium and a good source of phosphorus. Whole milk has 3.5% milkfat, low-fat milk 1% to 2%, and skim, 0.5%. During the pasteurization process, many of the complex milk proteins are deformed and denatured. Numerous animal studies in the 1930s and 1940s showed the superiority of raw milk over pasteurized in terms of health benefits. During the production of skimmed milk powder, a lot of nitrates are formed and the cholesterol in the milk is oxidized. Oxidized cholesterol is harmful and causes plaque formation in the arteries (Fallon, 2002).

With increasing consumer awareness, the retail prices for organic dairy products are often significantly higher than those of their conventional counterparts. According to Data Monitor Information report on organics, in 1999 the U.S. organic dairy industry enjoyed $598 million in sales, enough to capture more than nine percent of the overall organic market. This is mainly because people are now concerned about having hormones and antibiotics in their milk. The doubt is due to a genetically engineered drug called rBGH, or bovine growth hormone. Administered to an estimated 30 percent of conventional dairy cows, the hormone has been shown to increase milk production by up to 15 percent (Hayhurst, 2000). Manufactured by Monsanto Corporation, it has been outlawed in Europe and Canada but has been used in the United States since its approval by the FDA in 1993 (Hayhurst, 2000). The evidence is inconclusive for now, but some scientists believe that drinking milk from treated cows may increase the risk of prostate and pre-menopausal breast cancer. All certified-organic milk products are rBGH-free (Hayhurst, 2000).

But the boom in the popularity of organic dairy is not due entirely to rBGH. There is greater concern for the environment and for the animals from the consumer viewpoint. “We feel that agriculture should be done in a way that does the least amount of damage to the environment as possible” says Amy Barr, spokesperson for Horizon Organic Dairy, the nation’s leading producer of organic milk and dairy products.  Horizon’s cows receive no antibiotics or hormones and survive, quite happily, on a chemical-free diet of open air, sunshine and organic feed. Many dairy farmers are finding that going organic offers them great competitive advantage. With US milk sales projected at US$ 110 million for 2002, Horizon has 52.8 percent of the national market share for fluid organic milk (Ihde, 2002).

Milk and dairy products are mainly monitored through a memorandum of understanding between FDA and the National Conference on Interstate Milk Shipments, an organization in which all the states are represented. The basic standards that dairies must meet in the production of Grade A milk and other dairy products are spelled out in the Pasteurized Milk Ordinance that was developed by FDA in a joint effort with the states and the industry. The ordinance’s requirements form the basis of the milk safety and inspection laws of all the states (Cohen, 2007).

One of the latest strategies in selling milk to children is by adding flavor to it. Studies show that an additional 55% children in the 6-11 age group would drink more milk if it were chocolate flavored.  One quart of whole milk equals 600 calories and 32.6 grams of fat whereas one quart of chocolate milk equals 834 calories and 33.9 grams of fat. The increased calorie intake can result in obesity among children (Cohen, 2007).

With the advent of globalization, the chain of supply of food materials from farm to supermarket shelf has become longer and more complex. This is measured in terms of ‘food mileage” in the UK. Food mileage refers to the typical distance traveled by a food item from farm to shelf. This has doubled in the last five years and what must be noted here is that at each stage in the chain there is loss and waste. Hence, the shorter the supply chain, there is better use of resources. Moreover, waste can be reduced by using resource efficient practices such as reusable plastics instead of disposable cartons. Shorter chains also ensure there is less transport related expenditure.

Globalization has allowed the overlapping and seeping of cultures across borders and culture includes food habits as well (McIntosh, 1995). The concept of resource efficiency raises the question as whether it is reasonable to spend so much energy resources for transportation of these food items. Generally speaking, in the food industry, most processes are designed around the concept of maximizing efficiency. However, more importance is given to labor productivity rather than installation design and simplicity. This sometimes results in a waste of energy, water, raw materials, product, cleaning fluids, human effort, and management time (Poynon, 2001). Local, state, national and international government agencies undertake the huge responsibility for monitoring and regulating the origin, composition, quality, safety, weight, labeling, packaging, marketing and distribution of the food products. These agencies include (Modeland, 1988):

U.S. Department of Agriculture (USDA) is responsible for enforcing standards for wholesomeness and quality of meat, poultry and eggs produced in the United States. Bureau of Alcohol, Tobacco and Firearms (ATF) is responsible for enforcing the laws that cover the production, distribution and labeling of alcoholic beverages, except wine beverages that contain less than 7 percent alcohol (this comes under FDA control).

Centers for Disease Control (CDC) is involved in maintaining food safety especially from the viewpoint of food-borne diseases. It directs and enforces quarantines, administers national programs for prevention and control of vector-born diseases, etc

Department of Justice ensure the legal side of food products and seize those that are in violation of federal law.

Environmental Protection Agency (EPA) regulates pesticides, determines the safety of new pesticide products, sets tolerance levels for pesticide residues in foods, establishes water quality standards and works collaboratively with FDA.

Federal Trade Commission (FTC)’s Bureau of Consumer Protection regulates advertising of foods.

Food and Drug Administration (FDA) is responsible for ensuring the safety and wholesomeness of all food products except for meat, poultry and eggs, by preparing standards for the composition, quality, nutrition and safety of foods, including food and color additives. It is also involved in research to improve detection and prevention of food contamination.

National Marine Fisheries Service (NMFS) is responsible for seafood quality and identification, fisheries management and development, habitat conversation, and aquaculture production.

Author Marion Nestle, in her book “Food Politics: How the Food Industry Influences Nutrition and Health”   blames the increasing incidences of obesity in the United States on the availability of too much food and incessant food marketing. To address this issue, the FDA has announced regulations that enforce mandatory labeling of food products containing trans-fats.  The labeling legislations have created awareness among food manufacturers to reexamine and even reformulate their ingredients. Food consumers are also increasingly demanding healthier oils and fats. Hence there are now more changes in the food production department.

Today, there are many new milk products targeted at consumers of varied ages and tastes–from kid-friendly flavors to low-fat varieties for health-conscious adults. It has been found that while per person sales of whole milk have dropped more than 60% in the last decade, skim, 1%, and 2% milk have gained in popularity. Compared to whole milk (which contains eight grams of fat per eight-ounce serving), 2% milk has nearly 40% less fat (five grams), while 1% has almost 70% less (2.5 grams). Chocolate remains the most popular flavored milk in the U.S. and other popular flavors include blueberry, strawberry, banana, and black raspberry. Consumers looking for a choice in flavored milks can choose from whole, 2%, 1%, and skim (USA Today, 1995). With the rise in popularity of flavored milks, industry experts warn parents not to be fooled by nondairy flavored drinks that may appear to be milk-based at first glance. It is advised that consumers should check the labels of milk products. For adult consumers, the most popular milk product is the “latte”–coffee drinks that actually are more than half milk–as well as iced coffees that are available in 10- and 14-ounce cartons and are more than half milk by volume. There are also “holiday collections” that offer milk-based treats with flavors such as chocolate Irish cream, Swiss chocolate mint, and eggnog–some of which are available in lower-fat and lower-cholesterol versions (USA Today, 1995).

As for new food products in other categories, there are new breeds of corn have been discovered to create cooking oils and margarine that lower blood cholesterol. Another new blend of cooking oils has been found to have the potential to heighten the metabolic rate in humans, thereby lowering cholesterol level by about 13 percent.  Olestra is a fat substitute that has got the approval of FDA. Another breakthrough in the search for low-fat palatable foods is the development of fat-free cream cheese with the firmness, flavor, and texture of regular cream cheese. Spreads are now made with corn syrup that is low in fat and calories (, 2004).

With then advent of globalization and immigration, the American landscape has become infinitely more diverse and this rich diversity is now reflected in the menu cards of American restaurants and supermarkets. More and more Americans are embracing foreign cuisines such as Thai style sesame peanut noodles, Japanese style sushi, Chinese spring rolls, Kobe beef hamburgers, etc. This is mainly due to the unprecedented levels of globalization, shrinking cost of airline travel, affordable shipping infrastructure and the internet (Paschel, 2007).

On the positive side, a quiet revolution in the food and beverages industry is happening due to the impact of biotechnology on this sector. First-generation biotechnology-enabled innovations in the market include herbicide-tolerant soybeans, slow-ripening tomatoes, virus-resistant squash, and insect-resistant potatoes, corn, and cotton (Cook et al, 1997). Tomato puree made from genetically modified tomatoes and the NewLeaf potatoes are hugely successful food products from biotechnology (Cook et al, 1997). These new crops need less pesticide than normal, benefiting the environment and bringing economies for growers.  In the near future, biotechnology is expected to move on towards providing a full menu.

Thus we find that the food and beverages industry is on the verge of explosive growth in a world dictated by the phenomenon of globalization, merging of different cultures and creation of fusion foods. There is an ever widening market with all countries pitching in and food and beverages industry is set to boom with biotechnology all set to accelerate its growth. Consumer awareness with respect to health and nutrition bodes well for the quality factor in the industry.


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