Now What?

• The war in Ukraine added to a maxed out supply chain.
• The fake meat sector felt real pain.
• Foodservice unmasked and reopened in many large states.

“Not everyone’s out there buying a TV or buying a car. Pretty much everyone’s going to the grocery store. They tend to feel food price inflation in a way they don’t feel other categories.”

Andrew Harig, VP at FMI (Food Business News)

State of the Chain

Food supply chains continue to struggle. Port bottlenecks, the Russian invasion of Ukraine and consolidation all generated somber conversation this week.

• While President Biden did not spend much time on food during his first State of the Union speech, he continued attacks on consolidation in the meatpacking industry, port bottlenecks and inflation. Agri-Pulse covered the highlights.
• As the East Coast caught up with the West Coast in terms of port congestion (American Shipper), dairy industry groups welcomed a Biden administration commitment to increase shipping industry competition.
• The Consumer Brands Association brought up an aspect of the supply chain struggle that Biden passed over: worker shortages.
• The National Association of Wheat Growers focused on the Russian invasion’s impact on grain markets.
• Feedstuffs hosted a webinar evaluating how disruption of trade from Ukraine will affect the price of corn, wheat and sunflower oil. Analyst Richard Brock called his presentation “the scariest PowerPoint I’ve ever had to go through in 45 years.”
• It seems that consumers are taking the bad news to heart a bit too much. Supermarket News reported that the latest Consumer Pulse Survey from Dunnhumby found consumers overestimated food inflation by more than 10%.

‘Sober’ News for Nü Meat

“Bleeding Out Profits,” “Hit By Slower Sales,” “Takes a Beating,” were just a handful of the headline phrases describing the major dip Beyond Meat’s stock suffered last week. The trend of adding plant-based protein alternatives to fast food menus seems to have plateaued and the traditional meat supply chain has steadied, bringing the future of Beyond and its peers into question.

• The Financial Times described how the plant-based meat alternative category slumped after Beyond Meat missed its quarterly expectations. On February 24, the category leader’s stock dropped 11%, for a loss of $80.4 million.
• Reuters captured Beyond Meat CEO Ethan Brown’s assurance that sales would bounce back because of partnerships with McDonald’s, Yum! Brands and PepsiCo.
• Food Dive’s Megan Poinski reported on other brands experiencing a drop and referenced an earnings call during which Maple Leaf President and COO Curtis Frank said, “After years of spectacular growth, the category has in fact stalled.”
• On Twitter, UC Davis professor Frank Mitloehner captured the change in tone with the traditional exuberance journalists had for the category: “News have become much more sober around plant based meat alternatives that were once hyped to overtake or even replace real meat.”
• The traditional arguments for producing and eating plant-based meat alternatives focus on environmental benefits, human health and animal welfare — and debates rage on. A study from the University of Oxford found that eating meat-free was associated with lower cancer risk, while a Harvard University study concluded that packaged plant-based foods are not necessarily healthy.

A Grand Re-reopening

The grand re-reopening kicked off this week, following the February 25 release of CDC’s new COVID-19 guidelines that allow most people to ditch their masks indoors as long as the COVID-19 community level is not high.

• Estimates suggest 90% of Americans can stop wearing masks under the new guidelines. On a call with reporters, the CDC underscored these guidelines may not last forever because COVID-19 isn’t in the endemic stage yet (CNBC).
• Ahead of the guidelines, cities across the country were already allowing mask mandates to expire. Mandates in both Illinois and Chicago lapsed at the end of February, while Chicago also removed its order requiring businesses to check the vaccination status of customers (Chicago Tribune).
• Los Angeles issued an updated health order on February 25 giving businesses the ability to allow fully vaccinated customers and employers to remove their masks when vaccination status is checked at the door (Food & Wine).
• Agri-Pulse reported on March 3 that USDA’s Food Safety and Inspection Service no longer plans to impose a mask mandate at federally inspected meat processing facilities.
• New York City will decide today (March 4) whether to lift its citywide vaccine mandate. Mayor Eric Adams told Grub Street the mandate will likely be lifted if “numbers continue to show a low level of risk.” While some restaurant operators are relieved by the news, many restaurant workers shared concern about the sudden reversal.
• The New York Times surveyed 500 top corporations about their COVID-19 policies and found that 79 of the 129 respondents still planned to require vaccinations for some workers.

Hey, What’s Good This Week?

Two food and beverage companies made their goods known this week. One supports racial equity and the other addresses food insecurity. While they focused on different types of good, both involved collaborations.

• The Kroger Co. Foundation announced its $1.1 million investment in The Racial Equity Fund Changemaker Grant: a partnership with local institutions that build and sustain black wealth and others that advance health and social equity.
• KFC teamed with TikTok creator Isaiah Garza to launch the $500,000 #KentuckyFriedGivingChallenge. Creators focused on promoting nonprofits can submit videos to win one of 11 cash grants.