IMPENDING REGULATION CHANGES SPARK FOOD DEALS

By Published on .

The Food & Drug Administration's new labeling regulations are proving to be a boon for barter companies.

Even though the FDA has extended the deadline to Aug. 18 for selling food in packaging that doesn't bear label information required as of May 9, that doesn't solve the problem for marketers faced with carloads of pre-regulation boxes, cans, containers and other forms of packaging that haven't yet been filled.

That's where people like William Steinberg, president of corporate media barter company Tradewell, New York, come in.

"We're placing about $200 million a year in media billings, and I would say that before this year is out, this new business will represent 2 million cases of barter product to us based solely on this legislation, and it could be even larger," Mr. Steinberg said. "When you're talking $20 to $30 a case, and we figure $20 a case wholesale, for 2 million cases, that's an extra $50 million a year in business."

For example, Tradewell recently traded 800,000 to 900,000 cases of product for Rochester, N.Y.-based Curtice-Burns Foods-including items from its Curtice-Burns Meat Snacks division, Nally's Fine Foods and Comstock Michigan Fruit-for broadcast media credit.

Tradewell is not alone.

"Right now, we're talking with about a half a dozen manufacturers, but those half-dozen each can have dozens of product lines," said Peter Bernassi, president of Media Resources International, based in Marina del Rey, Calif., and New York.

"The good thing about this situation is that the product is not even packaged yet," he said, "which means that when we sell it overseas, it's fresh product being sold so it's very desirable. There are plenty of countries that need food and are willing to pay good prices particularly in Mexico and Eastern European bloc countries. In this case, we would probably get cash in trade for it."

John P. Kramer, president of New York's Media Store and exec VP-director of sales for its parent, Icon International, also sees an uptick in his business.

"I'm in the middle of negotiating a job right now for a company that has some bottles of iced tea," he said. "This deal isn't completed yet, but they have very nice packaging that is now I think mislabeled. They have more than $2 million in packaging, and in this case, the packaging costs more than the product."

No one has exact figures on what the new regulations will mean to marketers or barter companies in terms of actual dollars, but Mr. Bernassi insisted: "I'm sure it's millions."

In this article:
Most Popular