CFA FOOD·4·THOUGHT Friday, January 9, 2009 Stan Sorkin, Executive Director 195 Farmington Ave., Suite 200 · Farmington, CT 06032 · 860 677 8097 · Fax 860 677 8418 · www.ctfood.org

DON’T MISS THIS EVENT!!!

ANNUAL MEETING, INSTALLATION OF OFFICERS AND WINE TASTING EVENT

January 22, 2009 • St. Clements Castle

Registration NOW! This is a historic and exciting event and you should be there! -CFA’s revised Constitution and By-Laws will be presented for approval. - CFA 2008 performance and 2009 outlook will be reviewed -Network, eat, and taste great CT wines at a 90 minute cocktail reception -Get the latest on UCONN women’s basketball plus words of wisdom from Geno Auriemma. NEED TO UPDATE A QUALIFIED FOOD OPERATORS LICENSE? Each person owning, operating or managing any food service establishment designated either as a class III or class IV shall be a qualified food operator or shall employ on-site at least one qualified food operator who is in a supervisory position at said establishment. If you do not have one in your store the Connecticut Restaurant Association holds classes for food operators. Please contact them at 203-754-3340 for more information.

NEW WIC FOODS COMING IN JULY 2009 Starting in July WIC will offer new foods to help prevent obesity and chronic diseases as well as to promote breastfeeding. Information about this new program is attached to this newsletter. If you require additional information you can call the state WIC Program at 860.509.8084 or visit their website: http://www.ct.gov/dph/cwp/view.asp?a=3137&q=395460 CT SALES TAX IN SUPERMARKETS As a general rule, food in supermarkets is non-taxable, with a few exceptions. Below is a breakdown of taxable and non-taxable items that are most commonly asked about. TAXABLE Cups of coffee, tea, hot chocolate, soda, etc. Candy Sandwiches (pre-made or made to order) Soda All food sold and paid for at the food court Beer Or snack bar in a supermarket Non-alcoholic beer and wine Deli platters that are delivered Magazines NON-TAXABLE** Cooking Wine Vegetable seeds suitable for planting to Ice produce food for human consumption Baking chocolate Diapers Deli platters picked up by a customer Newspapers Nonprescription drugs and medicine Charcoal (for a complete list of drugs contact CFA) **This is not an all-inclusive list, just some of the most commonly asked about items. BUDGET WOES PROMISE TO OVERSHADOW SESSION

When state lawmakers return to the Capitol on Wednesday, they'll be greeted with the daunting task of having to fix the largest budget shortfall in recent Connecticut memory. Besides the current fiscal year deficit, estimated at anywhere from $193 million to $356 million, the next two fiscal years that begin next July 1 are predicted to be about $6 billion in the red. And considering some experts believe Connecticut's economy was in recession months after the nation's economy, those deficit numbers could worsen as state tax revenues continue to slow. "This is the worst predicament that we have been in, in anyone's memory," said Senate President Pro Tem Donald E. Williams Jr., a Democrat from Brooklyn. "It is not a bump in the road." Lawmakers and Gov. M. Jodi Rell have said they expect Connecticut's budget problems to overshadow much of the long, five-month legislative session, when the top priority typically has been to pass a new two-year tax and spending plan. Rep. Christopher Donovan, a Meriden Democrat and the incoming speaker of the House of the Representatives, said he believes the huge deficit will be one of the first issues taken up by the new General Assembly. Besides a planned Jan. 14 vote on Rell's latest deficit reduction plan for the current fiscal year, he said he wants the legislative committees to work on the next two fiscal years right away.

The legislature usually waits until the end of the session to complete the state budget. "We're going to be moving on the budget issues quickly," he said. "That's what is on everybody's mind and that affects so much of what we do." Rell, a Republican, has said she wants to avoid tax increases and state employee layoffs to solve the state's fiscal woes. But she has also repeated the phrase "everything is on the table" several times publicly. "Every aspect of the state budget will be affected one way or another," predicted Williams. "It's a mistake to say that any line item is a sacred cow." State officials are hoping to get some relief from the federal government. Besides money for capital projects, such as bridges and roads, they're also hoping to receive hundreds of millions of dollars in additional Medicaid funding. Medicaid is one of the state's largest spending areas. But Connecticut leaders are quick to point out that the federal government won't be able to patch the state's entire revenue hole. "I don't want to mislead anyone that this is going to be a fix. It certainly will be a help," Rell said. "It certainly will not be a fix." Rell said she sees the federal stimulus package as "a confidence builder" that will help assure taxpayers something is being done to address the worsening economy. "We need people to feel we're doing things in the right way," she said.

Joe Brennan, senior vice president at the Connecticut Business and Industry Association, said the state's business community hopes the federal stimulus package will provide Connecticut with an opportunity to become more efficient. He said this is a good time for the state to streamline its permitting process for projects, whether it's environmental permits or other requirements. "We always hear in Connecticut, it's always hard to get things done," he said. Brennan said he also hopes state policymakers won't pass legislation that could make life more expensive for Connecticut businesses. For example, CBIA has opposed legislation in past sessions that required paid sick leave, prohibited bullying in the workplace and opened up the state health plan to municipalities. "We're hopeful this is not the year to put mandates and costs onto businesses," Brennan said. Donovan, a proponent of opening the state employee health care plan to cities and towns, said he still plans to push his bill this session despite Rell's veto last year. He said the proposal would be an opportunity to help municipalities save money in difficult financial times by allowing them to participate in a larger insurance pool. There may be other legislation proposed this session that stems from the financial crisis, such as laws to make it easier for banks to merge or acquire other banks in Connecticut to avoid failure. Also, the General Assembly could pass additional legislation aimed at helping homeowners adversely affected by the mortgage meltdown. Last year, a package of reforms was passed to create programs to help people struggling to avoid foreclosure.

Other possible issues up for debate include:

-- Gay marriage: Now that the state Supreme Court has ruled that gay and lesbian couples have the right to marry in Connecticut, lawmakers will need to decide what to do with the state's existing civil unions law.

-- Highway tolls: The legislature is due to receive a report that examines the issues and options of highway tolls as a way to reduce traffic congestion and raise revenue. -- DCF: Reforms to the state Department of Children and Families will likely be considered in light of several disturbing reports, including the death of 7-month-old Michael Brown Jr. last May while in foster care at the home of a DCF employee in Mansfield.

-- Bottle bill: Lawmakers are expected to resume the debate over who should keep the unredeemed nickel deposits on soda and beer bottles and cans. The money, estimated at $24 million, now goes to the soda and beer distributors. The state, however, wants the cash to help fill its budget gap (Hartford Courant).

RELL: DEEP CUTS NEEDED TO BALANCE STATE BUDGET

"These are the worst financial times any of us can ever remember." With those words, Gov. M. Jodi Rell warned legislators Wednesday that the state will be forced to make deep cuts in spending to balance the $18 billion state budget as the nation heads deeper into a recession. Rell delivered her message on opening day of the 2009 legislative session, which many lawmakers believe will be the most difficult since the battle over the creation of the state income tax in 1991. In addition to a projected deficit of nearly $350 million in the current fiscal year, the state is facing a projected deficit of nearly $6 billion during the next two years to maintain the current level of services. Rell, though, said that funding those services will be difficult, adding that state taxpayers now have "a state government they cannot afford."But neither Rell nor her budget director, Robert Genuario, would reveal details about the cuts that will be proposed during the annual budget address on Feb. 4.

Employee Unions

Because salaries, benefits and pensions for state employees represent an important segment of the state budget, the Rell administration's dealings with the unions will have a crucial impact on the budget in the coming weeks and months. Genuario said no decision has been made on whether the Rell administration will ask the legislature to overturn an arbitrator's 141-page decision this week that awarded raises with a base rate of 3 percent, 2.5 percent and 2.5 percent during the next three years for more than 5,000 prison guards and other workers. The Rell administration is in the early stages of talks with the state-employee unions to see whether they can provide givebacks and concessions for about 45,000 union workers in order to save millions of dollars. Some legislators believe that personnel costs must be slashed — whether through an early retirement incentive program or layoffs. Senate Republican leader John McKinney of Southport said the number of state employees might need to drop by 5 percent to 10 percent in order to balance the budget. "I don't think we can survive this with the state workforce the size that it is now," McKinney said. "The bottom line is, our state government is too big, and we can't afford it now." The new House speaker, Christopher Donovan, said it is "very encouraging" that the governor's office is talking to the unions, but he declined to say whether he believes the unions should provide concessions in order to save money. "They are not the cause of this economic downturn," Donovan said of the unions. The new House majority leader, Rep. Denise Merrill, said any changes in benefits in the union contract would require cooperation on all sides under a 20-year deal that was signed 12 years ago. "They have the legal right to maintain their contract until 2017," Merrill said. "I do think state employees want to help. I really do." The State Employee Bargaining Agent Coalition, known as SEBAC, issued a statement from several union members regarding Rell's speech, but the union members did not say whether they would be making concessions (Hartford Courant).

LEADERSHIP DURING ECONOMIC TURMOIL: Q&A WITH RAM CHARAN With top executives heavily criticized for their hand in the economic downturn, those still in leaderships positions are now charged with saving their companies. They even have to come out of this recession much stronger and more resilient. Business advisor Ram Charan details exactly how to do this in his latest book, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times. For the companies that are still doing well, do you think it's mostly a matter of leadership, or are there other factors? Good leaders are tuned to external change--anticipating, connecting the dots and seeing the outside world. So the question here is that while the landscape change is the same for everybody, it impacts differently. Leaders are those who are able to connect to this change and confront the reality of what it is. If they do that, their companies will come out ahead of others--and that's why the leadership at this point is not only analytics or working with people, but also a performing art. How can leaders master this art? The key is very simple: Leaders are teachers also--practice teaching in your staff meetings. It's personality, courage, ambition and drive. You say that it's important for leaders not to give false assurance--how would you suggest this be executed? This is the part I call a leader's intellectual honesty. The first part is that whatever's coming in from the media or a common person is bound to be confusing because there is no clear combined viewpoint. A good leader will sort all this confusion and give an intellectual honest viewpoint. There's no sugar coating, extraordinary pessimism nor extraordinary optimism--you have to build credibility in the eyes of your people. What is the biggest difference between the leaders who will be able to pull through and those who won't? There are three differences in the leaders in these circumstances. The first and foremost is defining realism, and then taking the actions now and not postponing them. The second thing is orienting people on the new reality with superb communications--internally and externally. And the third, coping with the toughness of the existing environment, but positioning the business to change the game after the storm. Are some leaders more prepared for crises? Those who have something in place that are properly tuned to the external change now--they have the advantage of availability of time. If you have not done so though, it's never too late. Urgency, speed and flexibility will make you win. Translate those three concepts in your company in an operational sense. How should they prepare to better cope with crises? I think hindsight is great. Most people weren't prepared for [this economic downturn]. The leadership should see the tsunami as it is, not second guess it, but have the poise and the urgency to deal with it. For example, if you were in the auto industry today in America, let's say you decided to go through and produce 18 million cars in America--you will make huge mistakes from allocating your resources like that. You will open the plants, and you could run out of cash in no time. So the realism is: What is your view of the total demand? What's your view of the demand in the segments you do well and don't do well in? What's your view of the number of plants you're going to open? Here, you should prefer conservatism more than skating on the edge of optimism. Those are the mistakes you make--because cash is king. The highest priority for most companies today is cash. Would downsizing solve the cash problem? The second priority after cash is to rethink your business model and cut your cloth--tailor your cloth through the realities of demand. The first thing you need to know is where is your cash being consumed? Where is your cash being generated? It's training people about that--it's not accounting, it's business--to know where the cash is every hour. The corner grocery store person knows without computers where the cash is. If you could give one piece of advice for the leaders of corporate America during these times, what would it be? No leader succeeds without taking his or her people with him or her. Inspire them, be honest with them, engage them. Whatever you do now, don't forget you build your future as well (FastCompany.com). SANSOLO SPEAKS: FEELING THEIR PAIN

The main reason I love the Internet is that I’m an information junkie. Just the idea that I have access to countless articles each day just jazzes me up. Lately, though, the news is so dismal that it’s hard to read. The news, after all, is awful on every front. And the reality is that changing our calendars or our president won’t make problems go away easily. Instead, we need to start focusing on a simple agenda of progress. An article Monday in Advertising Age took this on, listing resolutions for the advertising industry that focused - shock alert - on providing real value in tough times. Our industry has the same need…so let’s start the New Year with a five-point plan.

1. Don’t downplay what’s happening out there. People are scared and they see no signs of improvement. For every economist saying that we’ve hit bottom and the recovery will start by July, there is another one who behaves like the fabled groundhog, seeing his shadow and predicting two more years of recession. So, what can you do? Don’t tell shoppers that you are there to help. Show them. It’s more than running specials and acknowledging tough times, it’s about providing strategies for the times. Consumer reporters everywhere are talking about how to stretch dollars by shopping specials and circulars. Be part of this conversation and guide the shopper.

2. Help shoppers find the opportunity for savings by shining the light where they need to look. The February Consumer Reports lists tips for a “downturn diet” that the retail food industry should be embracing like crazy. Gear recipe suggestions around some of these budget stretching and belly filling ideas, such as using more beans, frozen produce and bulk products. Help people return to comfort foods that help the budget, such as baked potatoes with dinner or peanut butter and jelly sandwiches for lunch.

3. Emphasize value in all forms. Quality still matters, as do service and guarantees of satisfaction. One reason no-name generics became such a punch line in the 1970s was the inconsistent quality of the product. Value means many things, but quality and consistency are always important. Don’t forget it.

4. Sweat the small stuff, especially where the shopper doesn’t see it. Finding improvements in supply chain issues always matters. Cutting inefficiency always matters. Well, now it matters more, especially as price deflation becomes a reality in some categories. Make sweating the small stuff a priority for your staff, your trading partners…everyone. It could pay off.

5. Don’t get near-sighted. There are problems beyond the economy that still demand your attention and the back-burner is the wrong place for them. Like it or not, we still need to keep some focus on health and wellness, the environment and the future leadership crisis. Whether this downturn lasts six more months or two years, none of these problems are going away.

For example…The Washington Post had a scary article this weekend on the coming demographic crisis facing virtually every industrialized country on earth in the lack of a young population to take over leadership. That’s a problem. More than 50% of Americans are now considered overweight and that’s a problem too. And despite early snows in the Midwest, global climate change isn’t turning around. In short, all of these problems still exist and all involve the food industry in different ways.

Just because the economy is a bigger current problem doesn’t mean these others (and more) will go away (Morning News Beat).

SALMONELLA OUTBREAK SPREADS TO 42 STATES, CDC SAYS

Health officials are investigating a salmonella outbreak that has reportedly sickened nearly 400 people in 42 states, but they don't know how the bacteria are spreading. The U.S. Centers for Disease Control and Prevention has not named all the states. Ohio officials say at least 50 people there have been sickened by salmonella since October. California officials report 51 cases as of last week. Michigan had 20 cases and seven people there were hospitalized. Most people infected with salmonella develop diarrhea, fever and abdominal cramps 12 to 72 hours later. The illness usually lasts four to seven days. Most people recover without treatment. Officials say steps to protect against illness include careful handling of raw meat and frequent hand washing (Food Institute).

A.T. KEARNEY TO ASSESS CPG SALES FORCE FOR GMA/NEW STUDY The Grocery Manufacturers Association (GMA), in partnership with the Network of Executive Women (NEW), has selected A.T. Kearney, Inc. to carry out cutting-edge research into the state of sales force talent management in the CPG industry. The GMA/NEW Industry Review of Sales Force Talent Management Trends is being conducted in response to changing work force trends that have made recruitment, retention, and development of sales professionals with strong performance and leadership potential key components of long-term organizational success. "Sales talent is one of the CPG industry's most critical assets and should be carefully cultivated," observed GMA director of sales and sales promotion Brian Lynch. "This study will provide today's leaders with insight into how effective sales force talent management strategies can translate into future prosperity for our industry." The review will single out successful sales force talent management practices that are meeting the challenges of a changing work force. It will also explore the main reasons for turnover and employee loyalty, and project the benefits of optimizing talent management based on emerging work force trends. The final report will offer recommendations for fine-tuning recruitment, retention, and development programs. "One of the best ways to stay ahead of an ever-changing market place is to build a competent workforce with diverse skill sets and perspectives," noted NEW executive director Joan Toth, executive director of NEW, a nonprofit educational organization with the mission of attracting, retaining, and advancing women in the consumer products and retail industry through education, leadership, and business development. "This GMA/NEW partnership will delve into ways our industry can develop programs that will enable our people to meet the challenges of tomorrow."(Progressive Grocer)

GRAPE EXTRACT KILLS CANCER CELLS

In lab experiments, scientists found that the extract stimulated leukaemia cells to commit suicide. Within 24 hours, 76% of leukaemia cells exposed to the extract were killed off, while healthy cells were unharmed, Clinical Cancer Research reports. The study raises the possibility of new cancer treatments, but scientists said it was too early to recommend that people eat grapes to ward off cancer. Grape seeds contain a number of antioxidants, including resveratrol, which is known to have anti-cancer properties, as well as positive effect on the heart. Previous research has shown grapeseed extract has an effect on skin, breast, bowel, lung, stomach and prostate cancer cells in the laboratory. It can also reduce the size of breast tumours in rats and skin tumours in mice. However, the University of Kentucky study is the first to test its impact on a blood cancer. Lead researcher Professor Xianglin Shi said: "These results could have implications for the incorporation of agents such as grapeseed extract into prevention or treatment of haematological (blood) malignancies and possibly other cancers. "What everyone seeks is an agent that has an effect on cancer cells but leaves normal cells alone, and this shows that grapeseed extract fits into this category." The researchers exposed leukaemia cells to grape extract in a range of different doses (BBC News).