News Watch 2007-07-02 (2)

REPORT: BAGGED SALAD SALES TO CONTINUE RECOVERY

CHARLOTTE, N.C. — Wachovia Capital Markets High Yield Research has projected that recovery of the bagged salad and spinach categories will continue, despite the fact that sales are still down after last fall's E. coli outbreak. Following the news of the outbreak, sales of packaged salads dropped 30% industrywide, and sales continue to remain below normal levels, according to the report “U.S. Bagged Salad Market Analysis,” by Bryan Hunt, chartered financial analyst, and Meredith Fowler, high-yield research analyst at Wachovia. The analysis presents fewer market constraints than market drivers for the segment. It also projects that sales of bagged salads at two major manufacturers, Fresh Express and Dole, will continue to improve and stabilize over the next 12 to 18 months. Market drivers, according to the report, include growing health-consciousness, convenience-driven demand and advances in packaging technology, with companies focused on assuring consumers of quality and food safety. Growth opportunities in the bagged salad industry include organic products and single-meal salads, the report said. Market constraints include consumer acceptance in new product categories, such as diced and pre-sliced vegetables, contamination risks and additional costs related to increased food safety requirements.