The Struggle Is Real

• Trade relations with China are remarkably consistent.
• Restaurant inputs are increasingly expensive.
• Food brands are continually redefining “good.”

“It is critical the administration initiate immediate discussions with China so we can level the international playing field and bring an end to the global supply chain disruption.”

David French, National Retail Federation

Superpowered Negotiations

On October 4, U.S. Trade Representative Katherine Tai unveiled the Biden administration’s approach to trade with China. The administration will largely continue where the Trump administration left off — bringing a mixed bag of reactions from food producers.

• While embracing tariffs and tactics used by the previous administration, representative Tai commented on the “Phase One” trade deal: “It has stabilized the market, especially for U.S. agricultural exports. … But the reality is, this agreement did not meaningfully address the fundamental concerns that we have with China’s trade practices.”
• U.S. Dairy Export Council objected to the trade war waged under the Trump administration: “retaliatory tariffs continue to weigh down our prospects.”
• The National Retail Federation rejected the continued use of tariffs, calling the strategy “lackluster at most, and will further inflict unnecessary damage to the American economy and retail supply chains.”
• USA Rice President and CEO Betsy Ward urged the Biden administration to pursue “the WTO litigation process to hold China accountable …”
• Notably quiet were two commodity groups that dealt with market whiplash over the past five years of negotiations — beef and pork. The U.S. Meat Export Federation reported that beef exports hit a record $1 billion in August, largely destined for China. Meanwhile, pork shipments have shifted away from the country as Chinese producers recover from African swine fever.

Rising Costs for Restaurants

With another pandemic winter looming, restaurants continue to struggle with worker shortages, outdoor dining, and the ever-rising cost of … well, just about everything. At least it’s not all bad news for the fine-dining restaurants named to the 2021 World’s 50 Best Restaurants list.

• Small restaurants have been hit the hardest by rising costs and worker shortages, with a recent study showing 51% unable to pay their September rent. Bloomberg noted that number is up 40% since July.
• A National Restaurant Association survey indicated that more than half of restaurant operators said that business is worse than it was three months ago.
• Amid the labor shortage, Raising Cane’s is taking a unique approach to keep its restaurants staffed — it’s sending 50% of its corporate team to locations across the country to assist short-staffed stores. QSR magazine quoted co-CEO and COO AJ Kumaran: “The first thing we teach new hires at Cane’s is that we are all fry cooks & cashiers, and this week, we are proving that.”
• Now that dining rooms are open again and more people are comfortable dining indoors, some restaurants are debating whether to continue outdoor dining options this winter, as detailed by The Chicago Tribune. While waiting to see if Chicago will extend dining in parking lots and shut-down streets, some are investing in sturdier tents to withstand harsh winter weather. We kinda like in-street dining.
• You may want to start planning your trip to Copenhagen. Two of that city’s restaurants took first and second place on the 2021 World’s 50 Best Restaurants list, as covered in Grub Street. If you’re looking to stay in the U.S., Cosme in New York City comes in at a “close” 22nd place …

Lots of Zeros by 2050

Significant CSR commitments continued to roll in from across food production. Restaurant chains, manufacturers, commodity groups and seed companies addressed sustainability, responsibility and stewardship.

• Reuters reporter Hillary Russ described McDonald’s commitment to net zero emissions by 2050, which the company announced on October 4.
• McDonald’s announcement came shortly after the burger giant committed to phasing out plastic toys by 2025.
• Restaurant Brands International (Burger King, Popeyes and Tim Hortons) committed to cutting emissions by 50% by 2030 and matched McDonald’s goal of net zero by 2050. Nation’s Restaurant News summarized the company’s strategy of “promoting leading environmental stewardship practices already underway in the agricultural supply chain through partnerships with suppliers, researchers, farmers and ranchers.”
• Mars followed suit on October 5. CEO Grant Reid elaborated: “Our net zero target covers our entire GHG footprint, from how we source materials through to how consumers use our products and we’re mobilizing our entire business around taking action now.”
• Hormel (Planters, Skippy, SPAM, etc.) published a comprehensive 2020 CSR report that focused on “greenhouse gas (GHG) emissions, energy, water and solid waste.”
• On the agricultural side, Bayer announced a new organic vegetable seed launch. Citing increased consumer need, “Vegetables by Bayer” will include tomato, sweet pepper and cucumber seeds.
• After successfully testing payments to soybean farmers to adopt regenerative practices in 2020, Cargill expanded its RegenConnect program. GreenBiz described how the program “will connect farmers to consumer packaged goods (CPG) companies hoping to buy offsets for their net-zero commitments, starting in 2022.”

“We’re trying to send a signal to our partners, to our investors, to our suppliers, to other brands in the global community, to policymakers, that we share that vision for 2050.”

Jenny McColloch, Chief Sustainability Officer, McDonald’s