February 4, 2022
Friday by Noon:
Clogged Ports and Runny Honey
Influential voices in food, beverage and agriculture covered the basics this week, addressing pinch points as well as opportunities to differentiate. Make sure to scroll down, as our “Worth Reading” section covers honey crystallization, prison food and pizza for life. Here’s our take on the ABCs:
- Administration alleviated accumulations at ports
- Brands bolstered businesses’ plans
- Companies contributed to community causes
As calls for shipping reform ramped up, so did government-led efforts at unclogging bottlenecked U.S. ports. With food staples idling in containers, agriculture groups welcomed announcements of new funding and legislation.
- The USDA announced on Monday that it would fund a 25-acre “pop-up” site at the Port of Oakland dedicated to agricultural exports.
- Jim Mulhern, president and CEO of National Milk Producers Federation, said the collaboration “is one key step in the right direction.”
- In a letter sent to lawmakers midweek, more than 100 agricultural organizations urged the U.S. Senate to act quickly on legislation to address unfair ocean carrier practices (American Farm Bureau Federation). The letter cited an Agriculture Transportation Coalition survey: “On average, 22% of U.S. agriculture foreign sales could not be completed because of ocean carrier practices like exorbitant freight rates.”
- The House voted yesterday to include an amendment to the U.S. Shipping Reform Act that would revamp U.S. international ocean-shipping laws (Bloomberg). The House already passed the shipping legislation in December.
Bottom Dollar Top of Mind
A wave of business updates rolled in over the past fortnight, covering earnings, venture funding and infrastructure plans. Much of the news comes in response to labor issues and other rising input costs.
- The National Restaurant Association released its 2022 State of the Restaurant Industry report on February 1. The report focuses heavily on labor shortages, but also predicts sales to grow to $898 billion this year. Your meals should be right out, eventually.
- CNBC covered McDonald’s: the burger chain reported higher sales in the fourth quarter, but missed investor targets due to rising costs. However, tests of the McPlant sandwich outperformed expectations, and the chain will expand the offering on February 14.
- Starbucks echoed the results — higher sales offset by higher costs — but Nation’s Restaurant News called attention to CEO Kevin Johnson raking in a 40% salary boost from bonuses, totalling 1,579 times more than the median worker.
- On January 25, Walmart joined a $400 million funding round for Plenty, a company that operates indoor vertical farms. The investment marks both the largest flow of capital and the first national retail partnership for an indoor farm.
- Nestlé took a majority stake in plant-based protein powder maker Orgain.
- Chobani continued to expand beyond yogurt with its February 3 rollout of lactose-free, protein-added ultra-filtered milk and creamer products.
- As ingredient prices increase, businesses like Kraft Heinz are passing costs along to consumers (CNN). Domino’s incentivized customers to pick up pizzas to save on delivery costs.
- While Tyson Foods broke ground on a bacon processing plant in Kentucky, Chicago Tribune reported that Mars Wrigley will phase out its century-old Chicago chocolate plant by 2024.
Food companies continue to seek ways to define what “good” means for their brands. The actions we tracked this week focused on improving communities, mitigating hunger and reducing waste.
- MOD Pizza committed to donate 6.2 million meals to Feeding America as part of its MODness Meals hunger relief program.
- IHOP kicked off a month of giving campaign ahead of its annual National Pancake Day charity event on March 1.
- Specialty Foods highlighted 29 food companies that made Human Rights Campaign’s list of “best places to work for LGBTQ+ equality.”
- The EPA recognized companies and organizations that participated in its Food Recovery Challenge, preventing 1.2 million tons of food waste.
- Del Monte pledged to reduce packaging waste, converting to 100% recyclable, reusable or compostable plastic packaging by 2030.
- Food Ingredients First covered a $6.7 million commitment from Kerry Group to support dairy farmers who switch to climate-friendly practices.
Some important points of view worth checking out this weekend.
Keeping Honey Runny
Wall Street Journal physics columnist Helen Czerski nestled herself deep into the beehive to uncover why honey crystallizes, and what we can do to switch it back. How, exactly, does honey crystallize then? “In a typical honey, so much glucose is dissolved in the solution that it becomes supersaturated, spurring glucose molecules to separate from the liquid and form crystals given the slightest chance.”
Food Ingredients First covered University of North Carolina research that studied the effectiveness of in-store signage warning people about the dangers of high-sugar drinks. Taking a page from cigarette warnings, the signage depicts things like feet blackened by Type 2 diabetes and hearts damaged by excessive sugar consumption. “Showing that warnings can cut through the noise of everything else that’s happening in a food store is powerful evidence that they would help reduce sugary drink purchases in the real world,” says senior author Lindsey Smith Taillie.
Behind Food Bars
The Counter’s Lela Nargi explored prison food, both its ill effects on people while incarcerated and some of the lasting mental tolls it can take. “High in sodium and sugar, the diet in our nation’s jails and prisons is severely lacking in healthy foods. More often than not, it’s carb-heavy and ultra-processed fare. It’s also frequently rotten, moldy, or vermin-infested.”
In an effort to increase production, Oatly is offering funds for farmers to add oats into their crop rotations (GreenBiz). “The economics are really hard. [The farmers] don’t make as much money. We provide some safety in terms of there being a market, but they can sell the corn and soybean for a higher price. So that’s been a challenge,” said Oatly’s director of sustainability.
Ohio-based Donato’s Pizza commissioned a study of 2,000 Americans to tally national pizza preferences (SWNS). While the majority considered pizza a “junk food,” many respondents said pizza was acceptable for any meal. When asked what would you do for free pizza for life, a surprising percentage of people would do crazy things like have every movie ending spoiled for the rest of their lives.
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