APPLYING THE LABELS

JONNA CRISPENS

With just weeks until the federal government's new labeling law goes into effect, supermarket bakery and deli executives across the country are pushing to be in compliance by the May 8 deadline.

Some are still deciphering the rules to figure out which of the products they carry will have to bear nutrition labels and what health claims they can make. Unlike packaged goods in the grocery aisles, essentially all of which must have the new labels, some items in the bakery and deli do not have to have them, provided certain conditions are met.

Those conditions, such as whether the product will be eaten on site immediately, whether it was prepared on site, finished on site or produced in a central commissary, have created confusion for bakery and deli departments, especially those with extensive on-site preparation and service counters.

The labeling regulations were created by the Food and Drug Administration and released in December 1992 to carry out the Nutrition Labeling and Education Act passed by Congress in 1990. The law applies to all packaged goods regulated by FDA.

The law sparked concerns among retailers that creativity in the deli and bakery, the show-off departments of a supermarket, would be hampered. A chef adding a dash of this or that to a salad or a sprinkling of topping on a cake might be changing the nutritional content of an item and thus be creating the need for a new nutritional label. That could add up to significant costs.

Retailers interviewed by SN said they are taking a variety of steps to meet the deadline, such as gathering ingredient information to send away for laboratory testing, requesting such information from suppliers, purchasing new labeling machines, designing labels and determining where to place those labels on product packages.

"We're doing what everybody else is doing -- trying to decipher the information," said Don Ledford, vice president of deli and bakery merchandising at Winn-Dixie Stores, Jacksonville, Fla.

Despite the obvious changes that the new regulations will bring, most retailers said they won't alter their methods of operation.

"The customer will continue to come first in our stores, and we won't make any major decisions, such as revamping our service and self-service format because of the labeling regulations," said Ledford.

"Customer service has always been our calling card, so I don't expect the new regulations to change us into a self-service format," said Abby Fox, bakery manager at West Point Market, Akron, Ohio.

"The labeling regulations are not going to change my bakery philosophy by any means," said Robert Hirsch, corporate bakery director at Foodarama Supermarkets, Freehold, N.J. "If a product needs to be labeled, I'll simply label it."

But Fox said the regulations "will make me consider the profitability of introducing a new product and choosing a method for merchandising it."

"We don't plan to change the service and self-service formats within our stores to avoid labeling products, but I definitely think the regulations will hamper the introduction of new products," said a retailer at a large West Coast chain.

The nutritional analysis program offered by the American Institute of Baking, Manhattan, Kan., proved to be most mentioned source of where retailers said they'd be getting their nutritional information.

SN asked retailers from different markets how they believe the law will affect their operations. Here's what they had to say.

William de Brauwere corporate bakery merchandising manager

Grand Union Co. Wayne, N.J.

We feel confident that we'll be in compliance with the labeling regulations when the deadline rolls around. We're not anticipating a hundred citations the day after.

Still, I hope there'll be some leniency and some understanding by the government that this is a major undertaking and retailers are doing their best to comply.

About 10% of our bakery products will requrie nutritional labels, and we're relying on product manufacturers to supply labels for most of that amount, about 9% of the total products.

In fact, we've told our vendors that we'll only carry products that come with nutritional labels supplied by the manufacturer. So far, they've all complied. I think the large manufacturers know that this will be expected of them in the future. We've been declaring nutritional information on our breads and rolls for three years, so we already have the information we need. We're not sending any of our products out for nutritional analysis. Deciding where to place the new labels on product packages is going to be a real challenge to retailers -- especially since the industry has been moving toward clear, clamshell containers and the product view they provide. One of the new labels can obscure half the view on some clamshell containers. The new regulations may actually prompt retailers to take another look at the window box packaging. It's a packaging option we'll consider using in the future.

Sue Gibson Kunstmann spokeswoman

Schnuck Markets St. Louis

We've been getting ready for the labeling deadline for several months, and probably longer than that.

We're putting nutritional labels on all of our plant produced products, which is basically all of our high-volume items.

In addition, we're creating nutritional information sheets on about 80% of our bakery's in-store baked items, which are exempt from the labeling regulations. The information will be given to our associates so they can answer any nutritional questions customers might have.

Carol Moore director of food service

West Point Market Akron, Ohio

Because the regulations are very confusing, we've asked one of our manufacturers to come in and answer our questions so we'll know which products need labels and which don't.

Although we've always been a service deli, we just started packaging a number of our deli products in self service containers. The impact of the labeling regulations could curtail our move in that direction.

We're always adding new products, and there's a possibility the regulations could stunt our creativity in that area. The cost of the regulations is harder to bear for a one-store operator like ourselves.

Abby Fox bakery manager

West Point Market Akron, Ohio

We have a licensed dietitian on staff who will be preparing all of our nutritional analyses.

Our suppliers will also be providing us with nutritional information. For example, we carry about 20 varieties of muffins every day, which come from a local bakery, which has provided us with nutritional information since we started carrying the products three years ago.

And I expect the bakery that supplies us with ethnic products to also provide nutritional information.

We're investing in a new labeling machine, since the one we have can't handle the new labeling regulations.

Customer service has always been our calling card, so I don't expect the new regulations to change us into a self-service format. On the other hand, they will make me consider the profitability of introducing a new product and choosing a method for merchandising it.

West Coast retailer

We're going to comply with the regulations to the best of our ability, but I think they're wide open to interpretation and not clearly defined.

We've identified about two dozen -- or 20% -- of the bakery products from our central facility that will require labels, and I've spent weeks gathering ingredient information on them to send to AIB for analysis. Each analysis will cost only about $50, which is a lot cheaper than the $300 to $400 a private laboratory might charge.

Once we get the nutritional information back -- which should be five to six weeks after it's sent -- we'll use our own labeling equipment to create the new label. We're not really relying on suppliers for any of the information.

It's easy to comply with the regulations, but it's very time-consuming and it's a burden. We don't plan to change the service and self-service formats within our stores to avoid labeling products, but I definitely think the regulations will hamper the introduction of new products.

Don Ledford VP, director of deli, bakery merchandising

Winn-Dixie Stores Jacksonville, Fla.

We're doing what everybody else is doing -- trying to decipher the information.

I will say, however, that the customer will continue to come first in our stores, and we won't make any major decisions, such as revamping our service and self-service format, because of the labeling regulations.

Phillip Grasso director of deli operations

Ingles Markets Black Mountain, N.C.

It's always been my policy to make sure products have nutritional labels on them, and we'll definitely be in compliance. We'll probably rely heavily on manufacturers to supply nutritional information on their products, and everything else we'll send to a laboratory.

Robert Hirsch corporate bakery director

Foodarama Supermarkets Freehold, N.J.

Three of our employees have been gathering information and getting ready for the May 8 deadline since January. As a result, we have nutritional information for about 40% of the 200 to 250 products that will require labels.

Most of the analyses are being supplied by our vendors. Only about 5% have to be sent out, and I haven't yet decided where I'm going to send them.

Getting the nutritional information is difficult, but it's not a problem. The problem is designing the labels and deciding where to put them on the packages. You don't want them to cover the entire product.

We recently purchased a software program to design our labels, and next week we'll take our product packages and decide where to put the label on each one. Fortunately, many of the packages are identical. For example, each of our 80 varieties of cake comes in the same package.

The labeling regulations are not going to change my bakery philosophy by any means. If a product needs to be labeled, I'll simply label it. I realize that the regulations carry a price, but hopefully they won't prevent us from introducing new products.

I'm in agreement with the labeling law, but it comes at a high cost, and the bakery industry can only bear so much extra cost. I haven't figured out how much the initial start-up is costing us, but the figure is in the thousands.

The labeling regulations could create a sales advantage in the bakery department -- or a disadvantage. I don't think we'll know for a year.

Hopefully, the increased information will prompt even greater sales in the bakery department. Maybe consumers will realize that some products are lower in fat and calories than what they originally thought.

Tim Ulschmid director of bakery

Fairway Foods Minneapolis

Several of our larger customers with central bakery facilities are affected by the labeling regulations.

They seem to be relying on their suppliers wherever possible for nutritional analyses, and some of them are also sending product to AIB for analysis.

Some of our customers have ordered preprinted labels, while others have purchased new labeling machines. One of our customers, which creates about half of its products from scratch, may buy its own software program for product analyses from AIB.