September 4, 2020
In this last week of the pandemic summer:
- Hunger issues escalate domestically and worldwide.
- McDonald’s finds itself in McTrouble.
- Walmart+ heightens food delivery competition.
‘America at Hunger’s Edge’
In The Intel Distillery’s Q2 Top Ten Topics report, Hunger ranked as the #1 topic discussed by the most influential voices in food production, and the topic continues to dominate conversations. In a post to kick off Hunger Action Month, Feeding America forecasted that 54 million people may be food-insecure in 2020, including 18 million children.
- The New York Times Magazine has dedicated this weekend’s edition to families dealing with food security issues and unemployment.
- In mid-August, the United Nations Food & Agriculture Organization published a 320-page global hunger assessment that estimated world hunger is on a trajectory from its current 8.9% to 9.8% of the population by 2030, and that the pandemic will have caused as many as 132 million people to be malnourished. Bloomberg contextualized the report in several articles this week.
- The Trump Administration’s Farmers to Families Food Box Program reported a milestone 75 million boxes of farm goods have been delivered via food banks.
- NPR’s Dan Charles examined the $4 billion program to uncover that the USDA “overpaid and underdelivered” by as much as three times the value of the produce in the boxes.
- To the relief of many families, USDA on August 31 extended its free meal program for all students, at least until December. The Counter reported on the change of course, but stressed that this is only a temporary fix to a larger food security issue.
- Food brands continue to step up. On September 3, Meatingplace (login required) listed what some major meat companies, including Tyson, Perdue Farms and Cargill, are doing to promote hunger relief.
- Forbes’ Afdhel Aziz interviewed General Mills Chief Brand Officer Brad Hiranaga to summarize how the company “has made some significant commitments against social and environmental goals including accelerating efforts to end hunger by providing 30 billion meals to people in need by 2030.”
McDonald’s PR firm had a busy week. In addition to ongoing fallout stemming from the firing of former CEO Steve Easterbrook, the fast-food giant faced a discrimination lawsuit from Black former franchisees.
- On August 10, McDonald’s sued Easterbrook to recover his $40 million severance package after discovering that the former CEO lied during an internal investigation (NBC News).
- The Wall Street Journal’s Heather Haddon reported on August 30 that the investigation had shifted focus to coverups led by the chain’s former chief people officer, David Fairhurst.
- On September 1, Beth Kowitt of Fortune covered a lawsuit filed by 52 Black former franchisees that accuses the chain of “systemic and covert racial discrimination” by offering poor-performing locations to Black franchisees.
- CEO Chris Kempczinski rejected the allegations: “I think it’s important in moments like this to remind ourselves … McDonald’s stands for diversity, equity and inclusion.”
- On a more lighthearted note, the chain also felt compelled to respond to a viral TikTok video in which a woman presents a mold-free 24-year-old burger she has, inexplicably, kept boxed in its original bag: “Look closely, the burgers you are seeing are likely dried out and dehydrated, and by no means ‘the same as the day they were purchased.'” We have so many questions …
Walmart vs. Amazon
Major moves in food delivery and grocery businesses shone a light on intensifying competition. Walmart, Amazon and Kroger made investments at a key time, as the pandemic spurred consumer adoption of grocery delivery.
- On September 1, Walmart announced the launch of Walmart+, a new membership-based service offering free delivery, scan-as-you-go checkout, fuel discounts and other benefits that position the company in direct competition with Amazon Prime.
- TABS Analytics showed online grocery transactions for Walmart surpassing Amazon for the first time. Meatingplace pointed out that “online shopping is complementing, not cannibalizing, brick and mortar.”
- With the opening of its first free-standing brick-and-mortar store in California last week, Amazon acted on plans to disrupt the grocery industry, according to Progressive Grocer.
- Bloomberg reported on Kroger’s plans to establish an e-commerce platform to compete with Walmart and Amazon by expanding offerings to include housewares and toys, as well as integrating third-party sellers.
- The Washington Post’s Laura Reiley suggested that increased online grocery shopping spurred by COVID-19 could lead to less product innovation, a lack of new brands and unhealthy eating behaviors.
- The city of Los Angeles advanced plans to extend delivery fee caps, imposed in May, to continue until 90 days after restaurants are permitted to operate at full capacity and with no restrictions.
“Customers know they can trust us and depend on us, and we’ve designed this program as the ultimate life hack for them.”Janey Whiteside, Chief Customer Officer, Walmart
Some important points of view worth checking out this weekend.
The Hustle dug into menu design and highlighted some brash changes restaurants are making to stay solvent in tough times, such as eliminating low-margin items. More interestingly, the article profiles menu wizard Michele Benesch, who employs tricks like removing the dollar sign: “Studies show that customers spend more when the price is presented as a standalone number.”
Paper or Digital
On September 1, The Wall Street Journal’s Annie Gasparro reported that, as of Q2 2020, digital couponing has overtaken the paper coupons found in newspaper inserts. The trend is here to stay, she wrote: “Companies say they expect consumers to stick with the convenience of online shopping and digital deal-seeking after the pandemic passes.”
Uncle P Moves In
Rapper/entrepreneur Master P announced the launch of “Uncle P’s Louisiana Seasoned” brand of rice, beans, grits, pancake mix, syrup and oatmeal. P told CNN Business: “If they made billions of dollars off Aunt Jemima and Uncle Ben, imagine how much we’ll make to give back to our own community. It’ll be us helping us without having to wait for the government. We can actually change the world.”
Chlorella Vulgaris? Yum!
In case you didn’t think there are enough competitors in the protein space, Unilever is exploring a seldom-used option: microalgae. Food Processing reported that the company partnered with startup Algenuity, which “has succeeded in developing a technology that removes the unpalatable taste without reducing any of the microalgae’s valuable nutritional content.” As much as not tasting bad is a benefit, the real selling points for Unilever might be the protein’s low carbon footprint and emulsifying properties.
‘Candy Bowl Occasion’
Fears are growing over the fate of Halloween this year, with candymakers chief among the worried. Fortune examined the outlook of candy sales, reporting that 74% of young moms said “Halloween is more important than ever this year.” Hershey CEO Michele Buck is also optimistic that families will get creative and implement safety and social distancing measures this season, but just as important is the “‘Treat for Me and Candy Bowl occasion’ — industry-speak for people buying candy that they will end up eating themselves.”
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