October 14, 2022
Friday by Noon:
Leading voices in food production put some important issues under the microscope this week:
- Searching for a possible end to rising food prices
- Examining what makes an “independent contractor”
- Clarifying “healthy” and regulatory effectiveness
Price Moderation in Sight?
Abundant speculation about rising food costs — nationally and internationally — continued to draw attention. The past few years have provided an ideal climate for prices to skyrocket, but indicators suggest a slowdown may be within reach.
- PBS Economics correspondent Paul Solman outlined the major factors behind the dramatic 13.5% increase in U.S. food costs over the past year. Supply chain, drought, the Ukraine war and transportation are some of the forces causing the biggest price hike in 43 years.
- The International Monetary Fund agreed that economic, geopolitical and ecological volatility have conspired to raise costs globally, but anticipated that inflation will peak late this year (The Scoop).
- Meanwhile, Reuters reported that The U.N. Food and Agriculture Organization world food price index has been falling for six months.
- Supermarket News summarized an Advantage Sales report that manufacturers and retailers are balancing pressure to raise prices against shopper sensitivity.
- The Wall Street Journal’s Patrick Thomas interviewed ConAgra CEO Sean Connolly who anticipated U.S. food inflation to level off: “We are seeing some commodities moderating; we are seeing some actually improve.”
- Thanks to avian flu, expect to pay more for your Thanksgiving turkey this year. Feedstuffs outlined American Farm Bureau Federation’s projected record prices. We predict another Detroit loss in the afternoon.
When a Gig Isn’t
On October 11, the U.S. Department of Labor (DOL) proposed a rule that clarifies when employers can treat a worker as an independent contractor instead of as an employee. The deciding factors would include the ability to set hours, permanence of employment, ability to profit, skill required and whether the work is “integral to the employer’s business.” Employers do not provide benefits, minimum wage or overtime for contractors.
- Bloomberg provided context: the rule replaces a more lenient Trump-era rule that the Biden administration unsuccessfully attempted to rescind in March.
- Winsight Grocery Business reported that the rule will likely undermine the business model used by grocery delivery apps like Instacart and DoorDash.
- PBS NewsHour cited Uber representatives as unconcerned about the change.
- The National Retail Federation opposed the rule, saying it “will only foster massive confusion, endless litigation, reduced innovation and fewer opportunities.”
- The Wall Street Journal editorial board described the rule as a step to increase unionization.
- Meanwhile, thousands of California gig workers — typically classified as contractors — rallied at Uber headquarters to pursue unionization (CBS News). Existing worker groups, like Fight for $15, amplified the message.
- On October 12, Instacart settled with the city of San Diego, agreeing to pay $46.5 million for misclassifying its workers as contractors between 2015 and 2020 (Supermarket News).
Auditing the Auditors
Initially overshadowed by the hoopla of the White House Conference on Hunger, Nutrition and Health, two major updates have progressed at the FDA.
- The same day as the conference, September 28, the FDA revised its guidelines for using the word “healthy” in food descriptions.
- The FDA unveiled more details at the Consumer Federation of America’s annual food policy conference on October 12. Agri-Pulse summarized FDA Commissioner Robert Califf’s goals to develop regulations for front-of-pack labeling and new longer-term targets for reducing sodium in foods.
- Food Politics blogger Marion Nestle dissected the rules as well as the proposed graphics that would label food “healthy,” noting, “These proposed rules would exclude almost all cereals marketed to children.” Here’s where we feign surprise.
- In another ongoing thread, the Reagan-Udall Foundation held a public meeting to gather feedback on the effectiveness of the FDA’s human foods programs, publishing the findings on October 7.
- The FDA’s mishandling of the infant formula crisis, which sparked the review, continues to be a sticking point. In a letter to Commissioner Califf, Sen. Richard Burr (R-N.C.) threatened to withhold funding for an agency that “does not take accountability seriously.”
- The Consumer Federation of America worried that FDA’s struggles stem from a vicious cycle: “FDA’s effectiveness in safeguarding the food supply has been hampered by a lack of resources, a lack of transparency, and a lack of willingness to use the agency’s full authority to protect public health.”
- An unusual coalition that includes environmental activists, public health organizations and CPG industry groups suggested organizational reforms to centralize the food programs.
Pork’s Day in Court
On October 11, the U.S. Supreme Court heard oral arguments in the National Pork Producers’ (NPPC) challenge of a California law that mandates space requirements for pregnant sows. Out-of-state hog farmers using systems that do not meet California’s requirements would not be able to sell products in California, a state with 13% of the U.S. population. The Des Moines Register’s Donnelle Eller summarized the proceedings from the hearing as well as a press event held by NPPC immediately afterward.
Teaming Up on Walmart
On October 14, supermarket leaders Albertsons and Kroger announced a “definitive agreement” to proceed with their so-called mega-merger “under which the companies will merge two complementary organizations with iconic brands and deep roots in their local communities to establish a national footprint and unite around Kroger’s Purpose to Feed the Human Spirit.” The Wall Street Journal’s Cara Lombardo and Jaewon Kang’s October 13 article outlined the specifics of the deal, including all of the anti-competitive and regulatory hurdles that must happen for this deal to proceed, comparing it to the 2015 blocked merger between Sysco and U.S. Foods. Additionally, Meatingplace covered how the chains would need to divest 450 of their collective 5,000 outlets to pave the way for approval. So mega …
Consultant group Intouch Insight published its annual ranking of the quickest drive-thru service among the top 10 fast-food brands. While speed of service has thankfully decreased from last year, it remains more than a minute longer than average pre-pandemic service time. The report covers all kinds of findings, including order accuracy and the effectiveness of different tactics. Is it fair that Carl’s Jr. and Hardee’s are listed separately?
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