FULL DISCLOSURE 2006

ROSEANNE HARPER

Remember the controversy over trans fats? Well, they're out in the open now, and supermarket bakery customers don't seem to care.

The fat labeling rule, in effect since Jan. 1, hasn't scared shoppers away from baked goods, according to a number of retailers and small manufacturers. Bakery customers have stopped asking questions about trans fats. If anything, they're looking for whole grain products. At the same time, bakers in some markets are having trouble finding fat substitutes that don't alter the product's flavor.

"We've had a lot fewer questions and comments about trans fats than we had expected," said Steve Beaird, bakery director at 10-unit Kowalski's Markets, St. Paul, Minn. "My sales are not down, and we haven't done much reformulating yet. We're just trying to follow the letter of the law on labeling. Trans fats and any allergens are listed right there. That comes first."

At Ukrop's Super Markets, Richmond, Va., Gary Larson, managing director of manufacturing, said much the same thing. So did Bill Mihu, vice president of bakery operations at 102-unit Schnuck Markets, St. Louis, and Tony Doering, deli-bakery director at nine-unit Quillin's, LaCrosse, Wis.

The trans fat labeling deadline "came and went and customer comments or questions have been minimal," Mihu said. "It was a non-event. I was concerned it would have some negative effect, but I've seen none. No negative effect on sales."

As far as trans fats go, Doering said he hasn't heard a peep out of customers in several months. "There was some talk early last year, but not recently," he said.

These retailers and others emphasized that they're following the labeling regulation. Those who supply their stores from central bakeries, including Ukrop's, Kowalski's and Schnucks, are waiting until the industry comes up with a good substitute for trans fats before they forge ahead with major reformulating. New blends on the market are either very expensive or they're not acceptable because they change the flavor or quality of the product, they said.

Meanwhile, shoppers seem unconcerned. That could be because the consumer media has not focused attention on trans fats in a while and consumers may feel the trans fat issue has been addressed, some industry sources said. Or they may simply not associate trans fats with the in-store bakery, one market researcher theorized.

"I think people associate trans fats with packaged items in the grocery aisle and by avoiding those, they feel, or they hope, they're not eating trans fats," said Mona Doyle, president of the Consumer Network, a Philadelphia-based consumer research group.

"Earlier last year, there were articles in the women's magazines about trans fats and everybody was talking about them, but the concern has stopped spreading."

Doyle suggested that when consumers are shopping the in-store bakery, they may not be thinking about trans fats. "If they're buying doughnuts, they probably don't care about them," she said.

Retailers stressed, however, that trans fat information is in plain sight on their labels now, along with a listing of any allergens contained in the product. The allergen rule, which took effect late last year, requires that if any of the eight most common allergens are contained in the product, they be noted on the label.

Auditing packages in-store consumed many hours, long after the Jan. 1 trans fat labeling deadline passed, Larson said. He did much of the auditing himself, checking for the trans fat line and whether the grams were accurately noted for each product, he said.

The central operation at Ukrop's, under Larson's direction, not only supplies Ukrop's 28 stores with bakery products but also wholesales 70 SKUs of its most popular products to non-competing retailers in the eastern United States.

"We were committed to getting all labeling information to our retailer-customers by the end of September, and we did it," Larson said. "We supplied the information and then our customers did the actual labeling themselves. Most products are shipped to them in bulk, frozen, so they do the packaging."

Like Beaird at Kowalski's, Larson said several associates spent about seven months, off and on, obtaining ingredient information for labels, trying substitute shortenings, experimenting and reformulating a few products.

"We did reformulate our signature White House dinner rolls," Larson said. "We had been using a partially hydrogenated soybean oil in them, and now we're using palm oil instead."

It's not an ideal solution since palm oil is a saturated fat, but Larson pointed out there's no shortening available right now that's affordable and acceptable that doesn't contain saturated fats or trans fats.

"We tried using canola oil in the rolls, but it affected the color, texture and taste and created an oily mouth feel." Palm oil, however, does not change those properties of the product.

Since the reformulated products contained very little fat, Ukrop's felt it was acceptable to substitute palm oil for the trans fats, Larson said. Dinner rolls, certain cookies and muffins were reformulated.

Conversely, the company's very popular pound cake, which contains three grams of trans fat per serving, has not been reformulated. Nor have Ukrop's chess pies, which also contain a good deal of fat.

"You can't in good conscience replace trans fats with saturated fats" in that large a quantity, Larson said.

The reformulating would not be worth the time and effort because the new product would not be much healthier than the former.

"What we really want to do is reduce or eliminate trans fats without adding saturated fats," Larson said. "But, right now, for the items with more fat, we've chosen to wait until something comes out that'll work, maybe a blend of fats with a higher melting point that contains no saturated or trans fats. I know some manufacturers are working on a different hydrogenation process that doesn't create trans fats."

Other retailers and industry sources said it may be impossible to reformulate some products.

"Reformulation, in some cases, could change the whole product," Beaird of Kowalski's said. "It could become something entirely different."

Schnucks' Mihu said the company has reformulated products where it makes sense to, but not at the expense of taste and quality.

"Our industry has chased trends and in doing so often has compromised the quality or taste of our products. I know it's hindsight, but I don't think that's a good thing to do," Mihu said.

Companies are working on new shortening formulations that contain no trans or saturated fats, but Beaird said the ones he's tried have been disappointing.

He said he usually tries the new shortening products in chocolate chip cookies because everybody knows what a chocolate chip cookie is supposed to taste like, look like and feel like.

"The results haven't been good," Beaird said. The new shortenings "leave an aftertaste and the cost is high because they're not being mass produced. These are small companies, too. What if we reformulated using the product, and the company isn't around anymore, or the product's not available?"

The problem is that retailers who have their own central bakeries - and even Ukrop's, which wholesales some of its bakery products - are relatively small operations that don't have the clout to drive research.

"Eventually, this will be driven by the big bakery manufacturers. There will be an acceptable product developed and the price will be acceptable," Beaird said. "It'll be like whole grain flour. Once General Mills decided to make all its cereals from whole grain, all of a sudden, whole grain flour's price came down. Ten months ago, 50 pounds of whole grain flour cost me $18, and now I can get it for $10. There are whole mills producing it now. The same kind of thing will happen with shortenings. The industry will drive it."

Meanwhile, Kowalski's is showcasing bakery products that have no shortening in them, and therefore no trans fats. The line includes 120 SKUs, Beaird said. The chain is also developing more whole grain products, which consumers are seeking. Ukrop's, too, is putting a focus on whole grain products.

"Just in the last couple of months, we developed a whole grain version of our White House rolls and they're selling very well," Larson said. Just over a month ago, Schnucks also introduced a multi-grain dinner roll and a multi-grain bread, both made at the central bakery.

Fat and Happy

Doughnuts made with trans fats are here to stay, at least for the time being, industry sources told SN.

What's more, sales have not been impacted by the mandatory labels that spell out the trans fat content. While the labeling rule spurred the reformulation of some sweet goods, doughnuts are not set for a makeover.

"There just is not a frying oil that doesn't have trans or saturated fat that would work for doughnuts," a representative of a major shortening company told SN. "You have to have an oil that sets up on the doughnut properly so it'll take the glaze or sugar. Otherwise, powdered sugar, for instance, would absorb oil, turn gray and create a soggy thing. Not an appetizing doughnut."

Doughnuts, made fresh at the central commissary, are a top-selling product for Schnuck Markets, St. Louis. The chain has no plans to change the frying oil.

"We're not going to compromise the product. It has to taste good," said Bill Mihu, vice president of bakery operations, at the 102-unit independent. "I've seen no negative effect on sales. People will reward themselves [no matter the trans fats]. If the low-carb trend taught us anything, it's that moderation is good. People know they can still eat doughnuts, just not a dozen in one sitting."

Another bakery director, whose chain does a big doughnut business, said he has not found a non-hydrogenated oil that can produce a good doughnut. "There just isn't one at this point in time," the director said. "Meanwhile, our doughnut sales have not suffered [from mandatory trans fat labeling]."

Dunkin' Donuts apparently hasn't switched oils either. Some of the chain's product labels indicate as much as four and five grams of trans fat per doughnut.