July 15, 2022
‘Giving Inflation the Bird’
Familiar topics occupied the bulk of conversations this week, but that’s not to say that there weren’t fresh developments:
- Food inflation may be cooling, but price-fixing claims are heating up.
- Union negotiations are going … smoothly?
- Brands are looking for value in new places.
The Price Is Wrong
The latest inflation figures confirmed what you already knew: food prices are still going up. But there’s some hope that we’re nearing the peak. In the meantime, the past two weeks saw a flurry of price-fixing lawsuit filings and resolutions.
- Agri-Pulse broke down food cost inflation, noting that grocery prices rose by 1% in June, amounting to a 12.2% increase year over year.
- Meatingplace highlighted a mild drop in meat prices in June. But the change wasn’t enough to stem the trend of “trading down” to cheaper cuts of meat, which Wall Street Journal writer Joshua Jamerson dubbed “giving inflation the bird.” Nice.
- Taking a broader view, Bloomberg’s Economy Daily column observed that global food prices have fallen for three consecutive months, potentially signaling that inflation is nearing its peak.
- On July 5, Smithfield Foods agreed to pay restaurants and caterers $42 million to settle a lawsuit alleging that the company inflated pork prices between 2009 and 2022 (The Associated Press).
- On July 7, a jury acquitted five poultry processing executives of price-fixing. High Plains Journal explained the unusual U.S. Department of Justice (DOJ) loss in its third trial attempt.
- Food Business News reported on July 11 that restaurant distributor Sysco filed suit against Tyson, JBS, Cargill and National Beef for manipulating the beef market. Reporter Rachel Oatman noted that the DOJ has yet to bring a case against beef packers despite a two-year investigation into the matter.
- Through all these fluctuations and troubled waters, the price of the Costco hot dog combo has taken a stand against inflation, holding firm at $1.50. The Hustle explained how the company has maintained this “under threat of death.”
Power in Numbers
High-profile labor negotiations kept unions in the forefront as workers’ embrace of organizing efforts continued to grow.
- The Wall Street Journal found that organizing efforts at U.S. workplaces were on the rise in the first half of 2022. Workers at 1,411 U.S. workplaces — including 311 Starbucks locations — took the first step in joining a union by filing petitions with the National Labor Relations Board.
- Nation’s Restaurant News reported that workers at a Michigan Chipotle location filed a petition with the National Labor Relations Board to unionize last week.
- Contract negotiations between West Coast dockworkers and shipping companies continued even after the current contract expired July 1. The Scoop noted, “Both sides pledged to continue normal operations at ports until an agreement is reached.”
- Reuters warned that President Biden has until Monday to decide whether to intervene in labor negotiations between major freight railroads and workers. If he declines, “the railroads and unions could opt for operational shutdowns or strikes” that could add to supply chain woes.
- Truckers stopped work at three California ports on Wednesday in protest of a state law that would reclassify many independent contractors as company employees (Freight Waves). The law has been mired in legal battles, preventing it from taking effect in January of this year.
- Meatingplace shared Tyson Foods’ automation investments and a flexible schedule pilot program introduced at several poultry processing plants in late 2021, which “has helped address labor challenges while boosting productivity and operational efficiencies.”
Weeks like this — without momentous or contentious happenings that get editorials churning — are good for cherry-picking interesting brand and business tidbits that caught our attention. Here are a few that did just that:
- NPR reported that a judge has allowed a plaintiff in Alameda County, California, to sue Subway for misrepresenting the tuna in the tuna sub. The lawsuit cites a marine biologist who found very little actual tuna, and evidence of chicken and pork.
- Starbucks tapped out of the chicken sandwich war (it was never really in contention against Popeye’s, Chick-fil-A, etc.), pulling its egg and fried chicken creation off the menu due to food safety concerns (Food & Wine). The coffee chain was also in the news for closing 14 stores on the West Coast citing “drug use and other disruptive behaviors that threaten staff” (The Associated Press).
- Food Business News looked at the next generation of certifications manufacturers are seeking for product labeling. They’re looking beyond organic and non-GMO for further differentiations, like “upcycled,” which means “using ingredients that otherwise would not have gone to human consumption.”
- Supermarket News described Peapod’s new incubator, which was launched to develop “new, top-quality, store-brand products in partnership with certified, diverse-owned suppliers.”
Hey, What’s Good This Week?
Last week, PepsiCo released its 2021 ESG Summary, highlighting “significant progress” on reducing sodium, added sugars and saturated fats from their foods. Specifically, they had set an aggressive goal of getting three-fourths of their convenient food portfolio slimmed down to under 1.1 grams of saturated fat per 100 calories by 2025, and they’ve already done that four years ahead of schedule. This is just part of PepsiCo Positive, a strategic transformation initiative designed to leverage its brands, people and scale across three pillars: Positive Agriculture, Positive Value Chain and Positive Choices.
Giant Snails Invade Florida … Again!
Many frightening things have happened in food production over the past few years. But it’s hard to top this paragraph that Food Safety News posted about the return of giant African snails to Florida: “This snail can carry rat lungworm. Rat lungworm infections come from microscopic creatures that infect rats. Larvae infect the rats’ lungs and are then passed through their feces to animals that people eat, such as snails and frogs. The parasitic worms travel through the human body to the brain and can cause eosinophilic meningitis and/or damage the central nervous system.” Rat lungworm?!
This Scam Is Undercooked. One Star.
Chicago Tribune covered a rash of comment-free one-star reviews on Google Maps targeting acclaimed Chicago restaurants — ranging from Adalina to Topolobampo. Several days (and reviews) later, restaurant owners received extortionary emails. After unsuccessful attempts to contact Google Maps about the scam, Sochi co-owner Chinh Pham left her own one-star review: “There is no one to help at all. There’s no customer service.”
What About the Farmers
New York Times writer Julie Creswell dug into a major sticking point in food companies’ sourcing policies: the farmers they source from. Creswell pits the magnitude of corporate commitments — 18% of U.S. cropland should use regenerative practices by 2030 — against their actions. She explains, “The incentives being offered simply aren’t enough to cover the additional costs these new techniques will incur.”
Better Printed and Not Seen
Food Business News covered a panel at ingredients convention IFT First on the effectiveness of nutrition labels. Robert Lilienfeld of Sustainable Packaging Research, Information, and Networking Group recounted his time at Procter & Gamble in the 1990s: “We did research that showed 95% of consumers said it was important to have the information, only 5% actually used it. It did very little to change how consumers purchased products and what they purchased.”
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