|
Please see below for a listing of what the North Point Food & Beverage Team has been tracking this week. We hope that you find the content insightful and a nice way to summarize the most noteworthy Food & Beverage events of the week.
Have a nice weekend!
| |
|
Glen Clarke
Head of Food & Beverage
| |
LDC to acquire Cargill’s Polish poultry brand. | - French agri-food company Lambert Dodard Chancereul (LDC) announced plans to acquire Cargill’s Konspol brand and its Nowy Sacz, Poland, plant on June 7.
| |
Family owners of Badia Spices explore $1.2 billion-plus sale, sources say. | - The family behind Badia Spices is exploring a sale of the Hispanic food company that could value it at over $1.2 billion, including debt, according to sources familiar with the matter.
| |
FOOD AND BEVERAGE MUSINGS | |
U.S. pork exports top record from nearly three years ago. |
- U.S. pork exports hit a near three-year high in April, driven by a record performance in Mexico and growth in other regions.
- Beef exports also saw improvement, with Western and Middle Eastern markets leading the charge and Mexico showing significant growth.
- Despite challenges in Asia, including strong competition and currency issues, U.S. beef exports remain strong, particularly in Korea and Taiwan.
| |
Tall tasks ahead of instore delis, bakeries. |
- Instore deli and bakery departments face multiple challenges, including meeting consumer demands for convenience, experimentation, and health while also managing costs effectively.
- IDDBA identified six key trends for 2024, including a holistic approach to health, sustainability, technology, generational differences in shopping behavior, community engagement, and culinary innovation.
- Younger generations, influenced by social media, are driving changes in shopping behavior, preferring convenience, experimentation with new flavors and ethnic foods, and seeking inspiration from platforms like TikTok and Instagram.
| |
World food prices rise for third straight month in May, UN says. |
- The United Nations reported a third consecutive monthly increase in the world food price index in May. This rise was primarily driven by higher prices for cereals and dairy products, despite decreases in sugar and vegetable oil prices.
- The increase in cereal prices was attributed to concerns about unfavorable crop conditions in key producing regions like North America, Europe, and the Black Sea area. Dairy prices rose due to increased demand ahead of summer holidays and potential declines in milk production in Western Europe. Conversely, sugar prices fell due to a good start to the new harvest in Brazil, while vegetable oil prices declined with rising seasonal output.
- The FAO forecasted world cereal production for the 2024/25 period to be roughly on par with the previous year's record output. However, adverse weather conditions in the Black Sea region were anticipated to potentially downgrade world wheat production, which was not yet reflected in the forecast.
| |
Gut Feelings: Experts Largely Bullish on Prebiotic Sodas. |
- Prebiotic sodas, such as poppi and OLIPOP, have gained significant popularity in the beverage market. Sales of prebiotic sodas have soared in 2024, with U.S. sales of various brands estimated to be over $100 million, triple the sales of the previous year.
- While prebiotic sodas are perceived as healthier alternatives to traditional sodas due to their inclusion of beneficial gut bacteria-feeding ingredients like inulin, some experts question their true nutritional efficacy. Additionally, the relatively high price of prebiotic sodas, often exceeding $2.50 per can, presents a barrier to entry for some consumers.
- Despite challenges, the future of prebiotic sodas seems promising. Major players in the beverage industry, such as Coca-Cola, have shown interest in the market, indicating potential for further growth and consolidation. Overall, prebiotic sodas reflect a broader shift towards health and wellness in consumer preferences, suggesting their longevity in the market.
| |
Price cuts will lift U.S. vibes only so much. |
- Inflation disproportionately impacts lower-income households, who spend a larger portion of their income on essential items such as rent and food, which have seen significant price increases.
- Retailers and eateries are attempting to alleviate financial strain by offering discounts and price cuts on various products, but these measures may provide only temporary relief for lower-income households.
- Understanding the impact of inflation on different income groups is crucial for policymakers in shaping fiscal and monetary policies and addressing wealth inequality exacerbated by inflationary pressures.
| |
JM Smucker’s Café Bustelo enters refrigerated aisle with iced coffee. |
- JM Smucker’s Café Bustelo brand is debuting Café Bustelo Espresso Style Iced Coffee Beverages in the refrigerated aisle for the first time. The product comes in a 40 fluid-ounce multi-serve bottle with three varieties: vanilla, unsweetened, and sweetened.
- The launch aligns with the growing popularity of iced coffee, especially among millennials and Gen Z consumers. The cold brew coffee segment is expected to grow significantly, indicating a favorable market environment for iced coffee products.
- Café Bustelo’s expansion into the refrigerated aisle reflects its efforts to appeal to younger consumers and explore new avenues for growth. The brand aims to combine its iconic espresso style roasts with a cold and refreshing taste, catering to evolving consumer preferences.
| |
How Dr Pepper passed Pepsi by marketing around football, flavor innovation. |
- Dr Pepper has become the second-largest carbonated soft drink in the U.S., reflecting its promising future, distinctiveness, and ability to stay up-to-date.
- The brand’s success is attributed to increased investment and patience since its 2018 acquisition by Keurig Green Mountain and the Dr Pepper Snapple Group, with a commitment to making Dr Pepper the workhorse of the organization.
- Dr Pepper’s marketing strategy emphasizes brand identity, disruption, and innovation, leveraging platforms like college football, flavor introductions, and an agile marketing model to engage consumers and drive growth.
| |
Energy drink giant Celsius considers move into food, water. |
- Celsius Holdings is exploring the possibility of entering adjacent categories such as food or water in the U.S., but CEO John Fieldly emphasized that any expansion would be several years away, with the company currently prioritizing the growth of its energy drink.
- While considering expansion, Fieldly mentioned potential options like functional water, hydration, protein shakes or bars, and some type of confectionary. However, he stressed that there are no immediate plans in place for such ventures.
- Despite its success in the energy drink market, particularly in the U.S., Celsius is focusing on its current massive opportunity in energy drinks, with identified growth areas including convenience stores and international markets.
| |
Frozen Heats Up the Market at Frozen IQ 2024. |
- Frozen IQ discussed how inflation has impacted consumer purchasing behaviors, with many cash-strapped consumers cutting back on non-essential purchases and seeking lower-priced brands due to rising costs on groceries and other essentials.
- The conference highlighted the significant growth of private-label brands in the frozen food sector, with dollar sales outpacing national brands. Consumer preferences are shifting towards private-label products, indicating a growing opportunity for retailers and manufacturers in this space.
- Emerging technologies such as smart shopping carts and home appliances are poised to enhance the frozen food experience for consumers. Companies are investing in solutions to improve in-store and online shopping experiences, as well as advancements in food preservation and preparation technologies.
| |
CONSUMER PRICE INDEX – MAY 2024. |
- Consumer Price Index (CPI-U) remained unchanged in May 2024, following a 0.3 percent increase in April.
- Shelter index rose by 0.4 percent for the fourth consecutive month, offsetting a decline in gasoline prices.
- Food index increased by 0.1 percent, with food away from home rising by 0.4 percent, while food at home remained unchanged.
| |
Inside Chobani’s integration of its $900M acquisition of La Colombe. |
- Chobani invests over $30 million in improving La Colombe's Michigan plant and enhancing employee benefits following its $900 million acquisition of the coffee brand.
- La Colombe benefits from Chobani's expertise and resources, with improvements in efficiency, equipment reliability, and safety programs.
- Future plans include further investments in infrastructure, employee development, and process optimization to maximize output and establish La Colombe as a first-choice employer in the area.
| |
Hershey looks to prioritize sustainable cocoa sourcing. |
- Hershey intensifies commitment to sustainable cocoa sourcing, aiming for full visibility in cocoa volume from Ivory Coast and Ghana by 2025.
- Over half of its $500 million Cocoa For Good initiative invested by December 2023, with plans to map 100% of cocoa farmers in targeted regions by 2025.
- Prioritizing responsible sourcing, human rights, environment, and community alongside cocoa sustainability efforts.
| |
Mondelēz and Biscoff owner Lotus Bakeries partner to develop new products. |
- Mondelēz International and Lotus Bakeries form a strategic partnership to develop new chocolate products incorporating the flavor and texture of Lotus Biscoff cookies with Mondelēz's Cadbury, Milka, and other chocolate brands in Europe, with a potential for global expansion.
- The collaboration aims to accelerate growth ambitions in the cookie and chocolate categories, leveraging Mondelēz's expertise in chocolates and cookies and Lotus Bakeries' iconic Biscoff brand.
- The partnership will initially launch co-branded products in early 2025, featuring Cadbury and Biscoff in the UK and Milka and Biscoff in Europe, with plans for further expansion and growth of the Biscoff brand in India.
| |
Brewing change: iced tea stealing spotlight from soda. |
- Iced tea is gaining popularity in the U.S., moving from the seventh to the third most popular drink according to the Bev50 2024 survey, potentially posing a threat to carbonated soft drinks (CSDs).
- The trend towards iced tea is driven by factors such as bold flavors, eye-catching packaging, and the perception of it being a healthier alternative to soda.
- Major soft drink companies like PepsiCo and Coca-Cola have recognized the potential of tea and have introduced bottled versions under various brands, contributing to the growth of the market.
| |
Leftovers: GoodPop refreshes ice pops with electrolytes | ‘TikTok’s First Family’ debuts new popcorn flavors. |
- GoodPop, known for its better-for-you frozen treats, has launched Hydrating Freezer Pops containing electrolytes. Available in flavors like Tropical Lemonade and Peach Lemonade, these pops cater to the growing demand for hydration products, particularly among demographics like child-free millennials and athletes.
- Be Happy Snacks, a popcorn brand under the D’Amelio family's cross-platform company D’Amelio Brands, has introduced new varieties including Cotton Candy, White Cheddar, and Himalayan Salt. Leveraging their fame from TikTok, the family is hosting a dance giveaway to celebrate the launch, offering a chance to win a trip to Los Angeles and attend a major dance show.
- Tyson Foods has launched four new chicken products designed for ovens or air fryers, catering to consumers who prefer homemade meals. Offerings include Honey Chicken Bites and Restaurant Style Crispy Wings in flavors like Rotisserie and Garlic Parmesan, reflecting the company's commitment to innovation and quality amidst changing consumer preferences.
| |
First 2024 soybean crop report shows promising start. |
- The U.S. Department of Agriculture (USDA) released its initial assessment of the 2024 U.S. soybean crop in the June 10 Crop Progress report. The crop in the 18 major growing states was rated at 72% good-to-excellent as of June 9, marking a significant improvement from the previous year's rating of 59% for the same week. Top producers Illinois and Iowa also showed improved ratings compared to the previous year.
- As of June 9, 87% of the soybean crop had been planted, slightly behind the pace of the previous year but above the five-year average rate. Emergence of the crop reflected a similar pattern, with 70% emerged by June 9, again behind the previous year's pace but ahead of the 2019-23 average.
- Abundant spring rains across major Midwest growing areas have provided a healthy boost to the crop this season. The U.S. Drought Monitor reported that while there were some areas of abnormally dry conditions, neither Illinois nor Iowa showed indications of drought. Topsoil moisture conditions were greatly enhanced compared to the previous year, with adequate-to-surplus ratings in Illinois and Iowa. Overall, contiguous states' topsoil moisture condition was rated at 81% adequate-to-surplus, up from 53% during the same week in 2023.
| |
Rabobank: Global avocado market on the rise as industry braces for expansion. |
- Rabobank's recent report indicates a shift in the global avocado market, foreseeing increased production and trade. Latin America leads in exports, while the US remains the primary importer, with growing consolidation in South America due to competition and margin pressures.
- Regional Production Trends: Avocado exports are projected to surpass 3 million metric tons by 2025, with Mexico, Peru, and Colombia as the largest exporters. Europe and Africa are experiencing steady production growth, particularly in Spain and Kenya, respectively.
- Destination Market Trends: The U.S. continues to exhibit rising avocado demand, with imports reaching record levels in 2023, predominantly from Mexico. Europe's consumption is evolving, and Asian markets, led by China, are seeing significant import increases.
| |
Senator reveals framework for farm bill draft. |
- Senator John Boozman released a drafted framework for the Senate farm bill aimed at modernizing the farm safety net, improving conservation and nutrition programs, increasing access to overseas markets, and strengthening resources for protecting the nation’s food supply against foreign animal diseases.
- The framework has garnered support from producers, Republicans, and organizations like the National Pork Producers Council (NPPC), which praised it for addressing their priorities. However, Democrats, led by House Agriculture Committee Ranking Member David Scott, have expressed concerns, particularly regarding nutrition policies, suggesting that further revisions may be necessary for bipartisan agreement.
- The Senate Agriculture Republican minority's approach mirrors that of House Agriculture Republicans, prompting debate over the inclusion of certain policies, especially related to nutrition, which Democrats have signaled they may not accept. Despite differences, both chambers are working to pass a farm bill that addresses key agricultural and food security issues.
| |
Gone ‘til September: Huy Fong’s sriracha is orange and in short supply. |
- Huy Fong Foods, known for its iconic sriracha sauce, is facing a shortage of crimson red winter jalapeño chiles, leading to an interruption in production. The scarcity is attributed to adverse weather conditions, including scorching temperatures and dryness, affecting the ripening of the peppers.
- Huy Fong Foods announced a halt in production until after Labor Day due to the unripeness of the chili peppers, resulting in an orange tint in the sauce instead of the usual vibrant red. This decision impacts not only the sriracha sauce but also other products like chili garlic sauce and Sambal Oelek sauce.
- The reliance on a single supplier for red jalapeño chilies has left Huy Fong Foods vulnerable to supply chain disruptions. Experts emphasize the importance of diversifying suppliers and stabilizing the supply chain to maintain product quality and consumer trust amidst market challenges.
| |
Frozen Heats Up the Market at Frozen IQ 2024. |
- Consumers are grappling with rising prices across various sectors, including groceries. Frozen food manufacturers and retailers are adjusting their offerings to cater to budget-conscious consumers, with private-label brands experiencing notable growth.
- Despite economic challenges, consumers still seek premium dining experiences at home. Frozen food companies are responding by introducing gourmet options and premium private-label lines, leveraging emerging technologies to enhance convenience and product quality.
- AFFI is actively lobbying for the inclusion of frozen foods in federal feeding programs and promoting sustainability efforts. Collaboration within the frozen food supply chain is emphasized to address regulatory challenges and promote sustainability.
| | | | |
