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Food Business Insight Alert Archive

Have a look at some of our recent alerts. These give broad coverage of the industry - if you want something more specific create your own here.

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August 20, 2017, to August 27, 2017

Walmart Opens New Battlefront In War Against Amazon

Walmart has launched something of an air war against arch-rival Amazon. The Arkansas-based retailer has applied for a patent for its version of a floating warehouse – a “gas-filled aerial transport and launch system” – a similar version of which Amazon patented more than a year ago. And like Amazon’s version, Walmart’s could launch sorties of drones to deliver purchases to nearby homes. Walmart’s dirigible airship would hover at up to 1,000 feet in the air, contain multiple drone launching bays, and be computer- or pilot-operated remotely. Proponents of the airborne warehouses say they would cut online order fulfillment costs for “the last mile” to a customer’s house.

Marketers Try To Meet Demand For “Authentic” Products And Services

Though debate continues about the true meaning of words like “genuine,” “authentic” and “real,” they represent important marketing and promotional themes. In fact, the most lucrative word used to sell products on eBay in 2016 was authentic. Social media marketers are trying to figure out how to create marketing material that deliver “authentic and relatable” messages. When marketers fail at this – using dishonest marketing schemes such as greenwashing or “realwashing” – they are lambasted mercilessly on social media. In the food world, the authenticity trend is reflected in: the “natural” and ”green-tinged” movements; buying quality products with real value; buying misshapen or wonky produce; adopting traditional diets; and showing concern about food waste. 

Smart Labeling Technology Could Revolutionize Retail Food Industry

Advocates of smart packaging and labeling that use short-range wireless technology – aka, near field communication – say that interactive labels can provide product information while reducing cost and waste, and boosting store profits. The technology doesn’t require a separate app like QR codes. Consumers need only tap the phone and receive info, without any additional steps. To advance the use of the technology, the NFC Forum has partnered with the Active & Intelligent Packaging Industry Association to create the smart labels. It will be a while before the technology hits grocery stores, but NFC is compatible now with millions of contactless cards and readers worldwide.

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August 13, 2017, to August 20, 2017

Battle Over “Country Of Origin” Meat Labeling Rages On

A lawsuit filed by groups representing American cattle growers alleges that USDA regulations that allow imported beef and pork to be classified as “domestic products” not only confuses consumers and harms farmers, they violate the Meat Inspection Act. The suit says meat products should be labeled with “country of origin.” American consumers agree: 90 percent in a recent survey said they favored country-of-origin labeling for fresh meat. Such labeling had been required in the U.S. until two years ago, when the World Trade Organization determined that the requirements discriminated against Canadian and Mexican livestock.

Americans Support More Humane Methods Of Raising Chickens For Food

Eighty-three percent of Americans say they want food companies to reduce “the suffering” of chickens raised for food, according to a poll. Americans oppose growing chickens so quickly they can’t bear their own weight; oppose live-shackle slaughter; and oppose extreme crowding in cages. They support keeping chicken litter clean and providing environmental enrichment, such as straw bales and pecking objects. NRG Research Group singled out Tyson Foods for censure, noting that its poultry-raising standards “fail to adequately address the most pressing chicken welfare issues.”

Large “Organic” Egg Producers Seem To Pay Only Lip Service To USDA Regs

Though the USDA requires that chickens granted the “organic” label must have access to the "outdoors" and get "direct sunlight" and "fresh air," the farm that raises chickens for Eggland’s Best organic eggs never lets its birds outside of the nine barns, according to a Washington Post report. Each barn holds 180,000 chickens, or about three hens per square foot of floor space. Katherine Paul of the Organic Consumers Association said the Herbruck's operation, which supplies ten percent of America’s organic eggs, “betrays consumer expectations.” Herbruck’s and other large farms say they keep the hens inside to protect them from disease and predators.

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August 06, 2017, to August 13, 2017

FDA Allows Heart Health Claim For Soybean Oil

The FDA has approved a soybean producer’s health claim that soybean oil consumption cuts the risk of heart disease. According to industry analyst Hartman Group, heart health leads the list of health concerns among American consumers. Bunge, the world’s largest producer of soybean oil, said its FDA filing included summaries of clinical studies showing the potential benefits of soybean oil to heart health. Those benefits are based on soybean oil’s positive effect on cholesterol levels and its high concentration of polyunsaturated omega-6 and omega-3 fatty acids versus other oils and fats. The FDA decision means companies can now claim that soybean oil as an ingredient replacing saturated fat may reduce heart disease risk and lower LDL-cholesterol.

Active Organic Chickens Offer Perdue Some Major Benefits

Poultry producer Perdue Farms is spurning traditional ways of growing chickens. Some long-time opponents – namely, animal welfare advocates – seem to approve. Representatives of the Humane Society of the U.S., Compassion in World Farming, and Mercy for Animals were positively impressed during a recent tour of facilities. They saw windows and light, and chickens flapping their wings and running around. The bright, airy environment and activity of the birds are very different from current methods of raising poultry. But Perdue acknowledges it’s not all about chicken welfare. The meat from more active, organically grown chickens is higher quality, more tender, and a different color. “Activity is the key,” says CEO Jim Perdue.

Direct-To-Consumer Distribution Of Vitamins: The Future Is Now

National Business Journal (NBJ) says vitamin supplement producers have embraced the trend toward direct-to-consumer distribution, now the largest sales channel for multivitamins. Use of vending machines and other novel modes of multivitamin delivery – could drone delivery be far off? – are gaining legitimacy. According to NBJ, new delivery technologies and formats could finally convince the federal government to allow multivitamins as a permitted purchase in the Supplemental Nutrition Assistance Program (SNAP). At any rate, NBJ expects vitamin sales to surpass $15 billion by 2021, led by multivitamins.

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July 30, 2017, to August 06, 2017

Campbell Ramps Up Online Delivery Infrastructure For Evolving Retail Environment

Though the percentage of food sold online today is in the low single digits, by 2021 it will be a $66 billion business. Campbell Soup is determined to part of that phenomenon.
It recently announced the hiring of Amazon (and eBay and Kohl’s) veteran Shakeel Farooque to lead the new e-commerce division. This “revealing” hire, as Quartz put it, underscores the company’s goal of selling more soup online. Campbell says its new distribution centers will operate differently from its warehouses that keep supermarkets stocked. The new distribution centers will focus on e-commerce only, customizing delivery of foods for different channels, whether meal kits or online grocery orders.

Nestle Touts Pure Life Water’s Unique Environmental Benefits

Volume sales of Nestlé Waters’ purified water brand, Pure Life, grew one percent last year – not bad considering that consumers don’t seem to distinguish among mass-produced plain waters, such as Coca-Cola’s Dasani and PepsiCo’s Aquafina offerings. So it is marketing Pure Life with a view to distinguish it ecologically from the competition. The latest ad campaign, created by Publicis (“Pure Life Begins Now”) positions the brand as environmentally friendly and a partial solution to global water shortages. A “water-filled fantasy land” TV spot launching in September features children and bubbles. Social media pitches, however, are more reality-centered, describing Pure Life’s ecological benefits.

Dunkin’ Donuts Offers High-Octane Monster Energy Punch

Dunkin’ Donuts has partnered with Monster Beverage to launch Dunkin’ Energy Punch, powered by Monster Energy, in strawberry and blue raspberry flavors. The drinks were introduced in March in the Northeast and Florida, and recently in Riverside, Calif. A 16-ounce can of Monster Energy contains 160 mg of caffeine, while a 14-ounce cup of Dunkin’ Donuts coffee has 210 mg or caffeine. A quart-size cup of Dunkin’ Energy Punch sells for $4.29 in Riverside Dunkin’ Donuts shops.   ]

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July 23, 2017, to July 30, 2017

Drought Will Push Up Prices Of Baked Goods In 2018

The USDA reports that grocery and restaurant costs for baked goods and cereals could jump four percent next year on average, thanks to a drought-induced reduction in wheat production. Farmers will be getting higher prices for their wheat, and imports will decline, driving up prices for baked goods. Some will feel the pinch more than others, depending on the type of wheat used. An agri-economist notes that “not all wheat is created equal,” so the prices of products like pizza dough and bagels will rise more than wheat flour.

Consumer Shopping: Speed Is Of The Essence

Now that consumers have the technological capability to shop at the speed of light, they expect instant gratification at online stores. Retailers have put in place a wide array of technologies and practices that speed transactions and fulfillment, from one-day delivery to in-store beacons (left) that communicate with shoppers via smartphones. Other advancements created to satisfy the new “I want what I want when I want it” shopping culture are: experimental delivery drones, same-day doctor appointments,, virtual doctor consultations, one-hour delivery of food and groceries, in-store restaurants and bars, and the “see-now, shop-now” trend that lets consumers order new fashion items seen on Instagram almost immediately.

Functional Snack Bars Target The Human Microbiome With Barley

Australian natural foods company Freedom Foods Group has introduced a range of functional snack bars based on a strain of whole grain, non-GMO barley. The snack bars promote gut wellness, according to the company, because mix of grains, including barley, has more of the three types of important fiber – namely, insoluble fiber (“roughage”), resistant starch that acts like fiber, and soluble fiber. The Barley+ Toasted Muesli and Snack Bar range, featuring the Australian whole grain, BARLEYmax, will be sold by Kroger in the U.S.

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July 16, 2017, to July 23, 2017

Unilever’s Tinkering With Marketing Spending Boosts 2nd Q Profits

Unilever’s second quarter financials mostly beat Wall Street expectations – sales growth fell three percent short – but the rise in profit came from cuts in marketing expenses. In April the company said about $2.3 billion of its planned three-year $7 billion cost-cutting program would come from marketing and overhead. During the first half of this fiscal year, however, nearly a third of the cuts came only from marketing; half were attributable to both marketing and overhead. The company is cutting ad agency and production spending, but marketing spending overall will rebound in the second half when 60 percent of Unilever's new-product launches for the year will take place.

Unilever Posts Stronger Revenue Performance In 1H 2017

Unilever said net profit rose to €3.11 billion, or $3.58 billion, for the six-month period ending June 30, 2017, compared with €2.51 billion in the previous year. According to the company, revenue grew to €27.72 billion from the previous year's €26.28 billion. Gross margin improved by 40bps to 43.1 percent, pushed by margin-accretive innovations and acquisitions, the company said.

Reckitt Benckiser Divests Food Business

U.K.-based Reckitt Benckiser Group plc announced it is selling its food business (RB Food) to McCormick & Company for $4.2 billion. The RB Food (Chester, N.J.) condiments and toppings line includes French's, Frank's RedHot and Cattlemen's brands. The nutrition bar Tiger’s Milk will be included in the cash-free, debt-free deal. Divestiture of its food business marks another step in RB’s transformation into a consumer health and hygiene company. It acquired infant formula firm Mead Johnson Nutrition in February for $16.7 billion.

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July 02, 2017, to July 16, 2017

Lawsuit Alleges Poultry Farmer’s “100% Natural” Label Claim Is Deceptive

Three nonprofit organizations are suing poultry company Sanderson Farms in federal court for using the claim “100 percent natural” in its product advertising. The Center for Food Safety, Friends of the Earth, and the Organic Consumers Association, filed the lawsuit in the U.S. District Court for the Northern District of California, alleging that “consumers are being deceived” by the claim because synthetic drug residues were found in Sanderson’s poultry meat. The company, third largest poultry producer in the U.S., denied that it administers drugs to its flocks, except penicillin “when needed.”

Senators Push USDA Secretary To Enforce Organic Certification Law On Imports

Three U.S. senators have urged the USDA to crack down on non-organic foreign goods being imported and sold fraudulently as USDA-certified. The fraud disclosed in various press reports "undermines the National Organic Program's continued success and hurts American farmers,” the letter to USDA Secretary Sonny Perdue said. Sens. Dianne Feinstein (D-Calif.), Debbie Stabenow (D-Mich.) and Patrick Leahy (D-Vt.) were the signatories of the letter, which noted that non-organic grains, particularly corn, were being sold as organic-certified

Coca-Cola Set To Boost Amount Of Recycled Plastic In Its Bottles

In response to environmental pressures and concerns, Coca-Cola in the UK announced it will increase the amount of recycled plastic in its bottles to 50% by 2020, up from a current target of 40% by 2020 for its UK and European operations. Many environmentalists believe the target is inadequate, Greenpeace UK points out that other bottlers are already at 50% and are aiming to be at 100% by 2020. Greenpeace estimates that the top six drinks companies in the world use a combined average of just 6.6% of recycled plastic in their products, with none are aiming to use 100% across their global production.

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June 25, 2017, to July 02, 2017

Coca-Cola’s Analytics Center In Pune, India, To Shut Down

As part of Coca-Cola’s global streamlining and belt-tightening mission, the company is closing a seven-year-old analytical services facility in Pirangut, Pune, India. The facility supported operations in India, South Asia, Eastern Europe, Southern Eurasia and the Middle East. It was one of six such centers around the world. The work done at the center will be shifted to its bottling companies and to third-party analytics centers in India. [Image source: Coca-Cola Company]

Big Companies Ponder How To Evaluate Nonfinancial Assets

The nonprofit Coalition for Inclusive Capitalism is leading an effort to establish a consistent framework for informing investors about nonfinancial activities that also give companies value. These may include such things as workforce training, environmental impact, and creation of intellectual property. Chief executives of more than 20 companies and investment funds, including PepsiCo and Nestlé, and asset managers Vanguard, Fidelity and Schroders, are involved in the project. 

Pressure Builds In EU To Stop Marketing Sugary Drinks To Kids

Consumer advocate Foodwatch France is urging Coca-Cola European Partners (CCEP) to stop marketing the Capri-Sun juice beverage to children because of its high sugar content. The organization is opposed to the use of cartoon characters to advertise foods and beverages that are “too sweet or contain added sugar.” Capri-Sun contains only “12 percent fruit juice concentrate” and “19 grams of sugar” per serving. CCEP says it does not market to children under 12 years of age. [Image source: Capri-Sun]

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June 18, 2017, to June 25, 2017

Langrock Named CFO At Hain Celestial

Organic and natural products company Hain Celestial has named James M. Langrock as executive vice president and chief financial officer to succeed Pasquale Conte, who is leaving to pursue other opportunities. Langrock, who joined the company in November 2015 as senior vice president, finance and treasurer, has more than 25 years’ experience at companies like Monster Worldwide, Motorola's Enterprise Mobility Division, Symbol Technologies, and Citibank.

Hain Celestial Reports Healthy Financial Numbers

Organic and natural products company Hain Celestial posted an adjusted profit of $192.9 million on net sales of $2.9 billion for fiscal 2016, an 11 percent increase over 2015, and 13 percent on a constant currency basis, compared to fiscal 2015 sales of $2.6 billion. Sales figures were buffeted by $69.2 million in foreign exchange fluctuations over the prior year. For the first nine months of fiscal 2017, the company reported flat net sales of $2.1 billion over the prior year, but a four percent increase on a constant currency basis. Sales were affected by $96.2 million from foreign exchange rate movements over the prior year. CEO Irwin Simon said the company accomplished “substantial cost-savings, enhancing customer-centric, go-to market initiatives and fueling innovation.”

Unilever Continues To Realign Agency And Ad Tech Relationships

Unilever and British advertising/PR firm WPP announced they are investing in mobile creative management platform Celtra. The move furthers Unilever’s goal of boosting and applying creative technology innovation while reducing associations with ad agencies. As Unilever gets more involved in data and ad tech it has cut the costs and complexities of advertising across its 400+ brands. Celtra has been providing top brands with the ability to connect operational data, creative, advertising and analytics. The company has worked for several years with Unilever and with WPP’s Mindshare.

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June 11, 2017, to June 18, 2017

Discount Grocer Aldi To Add 900 Stores By 2022

Aldi announced it is adding 900 stores in the U.S. over the next five years. The $3.4 billion expansion is in addition to the $1.6 billion it is spending to remodel 1,300 U.S. stores by 2020. According to the company, the new stores – it currently has 1,600 – will make Aldi the third largest grocery chain in the U.S., with a goal of serving 100 million customers a month. The expansion will add 25,000 new jobs in stores, warehouses and offices. Sheds Its Costco Ethos

E-commerce company’s co-founder Marc Lore was inspired by the Costco example. Its original business model was based on membership fees, and on bulk sales savings passed on to the customer. But now that it has been acquired by Walmart, and continues to integrate its operations with the giant retailer, it has begun phasing out the Kirkland Signature brand of products, replacing them with products offered under the Sam’s Club Member’s Mark brand. According to analytics provider 1010data, Jet accounted for 5.5 percent of online sales of the Kirkland brand in the first half of 2016, behind Amazon and

Low-Fat Dairy Products Linked To Higher Risk Of Parkinson’s

U.S. researchers who analyzed 25 years of diet and health data on nearly 130,000 men and women found that three servings of low-fat dairy products a day were linked with an increased risk of Parkinson’s disease. No such association was found with whole milk or other full-fat dairy products. People who consumed at least three servings of low-fat dairy a day had a 34 percent greater chance of developing Parkinson's than people who consumed less than one serving a day. Consuming more than one serving of skim and low-fat a day was associated with a 39 percent greater chance of developing Parkinson's. The researchers acknowledged that early Parkinson's symptoms may have affected the dietary behaviors and questionnaire responses of study participants.
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