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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.
Additionally, sharing some key insights from our time at The Global Produce & Floral Show:
- The event had an impressive footprint, spanning 1.5M+ sq. ft. filled with thousands of booths
- “Innovation” was the word on everyone’s lips. We’re seeing increasing implementation of technology and innovation in the Ag space – ranging from the development of robotics and machine learning that enhance field production processes and supply chain logistics to new digital tools that redefine the grocery and restaurant foodservice experiences
- Sustainability and climate solutions remain important – profitability still trumps sustainability in some regards but climate solutions will remain a key area of leadership within Ag for the long-term
- Commodity Pricing Volatility – Recent results spotlight the many challenges that demonstrate the urgent need to improve predictability
Have a nice weekend!
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Glen Clarke
Head of Food & Beverage
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SVB Foods acquires Vita Specialty Foods. | - Food manufacturing company SVB Foods will acquire Vita Specialty Foods, a subsidiary of seafood company Vita Foods
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OSI Group to acquire IQI from Egeria. | - Dutch private equity firm Egeria will sell International Quality Ingredients, a Dutch provider of premium petfood ingredients, to OSI Group, an American supplier of beef, poultry, pork, vegetable and other food products
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Campbell Soup’s $2.7B purchase of Sovos delayed after FTC seeks more information. | - Campbell expected to close the purchase of Rao’s pasta sauce owner this year and has adjusted its anticipated closing timing to mid-2024 in light of requests from the Federal Trade Commission for more information about the proposed merger
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FOOD AND BEVERAGE MUSINGS | |
Hype built the cultivated meat industry. Now it could end it. |
- Belief in the prospects of the cultivated meat industry is waning among investors and the public as companies like Upside Foods fail to deliver on promised innovation
- Cultivated meat companies seemingly overstated their conviction in the R&D of cultivated meat products in the interest of garnering financial support, and are struggling to live up to the high expectations for the sector
- Compelled by troubling environmental conditions and the climate crisis, players continue to push the development of cultivated meat technology forward despite diminishing faith in the achievability of a viable end product
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Study: Food is Medicine Initiatives Improve Health, Reduce Spend. |
- Researchers at the Food is Medicine Institute at Tufts University quantified health and economic benefits of food-based nutritional interventions designed to treat or prevent disease
- Poor nutrition and food insecurity remain key drivers of poor health outcomes and excessive healthcare spending in the U.S. and encapsulate the issues targeted by the Food is Medicine initiative
- Tests of medically tailored meals and produce prescription programs suggest that Food is Medicine interventions on a national scale could greatly improve U.S. health in a highly cost-effective way, and meaningfully address widespread diet-related chronic illness and health inequities
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- Following three years of development with consulting company FutureBrand, JBS will launch a new, modernized brand identity with a new logo design and color palette
- The new logo will feature the traditional three letters of the company’s name and adds a series of parentheses representative of the company’s future
- The parentheses themselves are a symbol of hands, protection and affection between JBS and its customers & consumers
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Thor’s Skyr takes on Chobani, Danone with protein-packed yogurt. |
- Capitalizing on the growing popularity of protein, Icelandic skyr company Thor’s Skyr will release a protein-packed product that is lactose-free and has zero sugar added
- Skyr, a fresh dairy product comparable to yogurt, has a unique creaminess and high protein content derived from its production methodology
- The removal of lactose from the product allows the skyr to retain more natural sweetness, eliminating the need for added sweeteners, a feature which is expected to hold strong appeal for consumers
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Orange Juice Prices Are at Record Highs — and Could Keep Climbing. |
- As citrus growers contend with extreme weather and spreading greening disease, orange juice prices have skyrocketed
- The average price of a gallon of orange juice in grocery retail is up over 10% from last year and is expected to continue to rise
- This trend is expected to compound the sliding demand for orange juice as Americans gain interest in alternative beverages, including those with less sugar than orange juice
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How the Grocery Workforce Really Feels About In-Store Tech Tools. |
- A recent survey found that food retail associates believe in the potential of the technology & AI being implemented in grocery stores, but don’t feel they have the right tools to interact with the technology effectively
- Technological failure and the lack of proper training contributed to employee resistance to technology, with younger workers displaying more reception than older generations
- Looking forward, it will be crucial for grocery stores to listen to retail employees as technology and AI will play an increasingly large role in the grocery experience
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Food Is on Sale Again. You Might Still Have Sticker Shock. |
- Food promotions have reached a level not seen since 2019, however shoppers are paying over one-third more than they did then
- Rising grocery prices and the resulting hesitancy of the consumer to spend at the grocery store has led to an uptick in sales and promotions in both the grocery store and in restaurants / fast casual dining
- Consumers are expected to become used to higher prices and return to normal purchasing behavior next year as wages increase and companies roll out new products and offer more promotions
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Can In-Store Marketing Boost Plant-Based Sales? |
- The plant-based industry has plateaued after a strong rise in penetration that then went into reverse
- As a result, plant-based meat companies are launching marketing and merchandising initiatives to reengage with consumers, including in-store displays and endcaps
- Plant-based brands will utilize storytelling, clarify nutritional trends, share recipes and promote vegetarian trends (i.e., Meatless Mondays, Veganuary) in an attempt to regain enthusiasm from the consumer
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C.H. Guenther names top executive. |
- Private label food manufacturer C.H. Guenther has named Rod Hepponstall as the company’s CEO
- Hepponstall has over two decades of senior leadership experience in the consumer product goods industry
- Previously, Hepponstall was the president, CEO and a board of directors member at High Liner Foods, where he led the company through multiple transformative initiatives
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USDA pours $2.3 billion into international market development, food insecurity. |
- The USDA will invest $2.3 billion in international trade and food assistance, supporting farmers and international communities
- $1.3 billion will be allocated to support specialty crop industries in the diversification of their end markets, and $1 billion will be dedicated to addressing global food insecurity
- The USDA emphasized the importance of keeping ahead of competition in commodity markets and the existent need to fill the gaps in global hunger
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How Hershey is reinventing candy displays. |
- Hershey is utilizing digital technology and automation to revamp its merchandizing displays and enable agile fulfillment in order to sell more of what consumers want while minimizing waste
- Grocery stores have significantly reduced the number of displays per store, and Hershey’s agile approach enables the company to do more with less through built-in flexibility and broad scale appeal
- Hershey designed a system of modular building blocks that are all the same size and can be assembled quickly by robots, and the blocks included are customized in count and brand to resonate with a particular grocery store’s shoppers
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Beef prices are at record highs — how much pricier will your steak get? |
- Beef retail prices are at record highs and continue to push the prices of beef-based products up
- The uptick in beef prices is caused largely by a shrinking cattle supply and higher input prices, issues which are not expected to ease in the near-term
- Herd sizes have shrunk across the U.S. to the lowest number in decades due to prolonged drought in key cattle ranching states
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Top 5 Things Grocery Shoppers Look For on Food Labels. |
- Customers increasingly show concern about the content of their food, and are taking greater care to check labels
- Consumers are most attracted to: no-added sugar, real food ingredients, no high-fructose corn syrup, no artificial sweeteners and all-natural foods
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Keurig Dr Pepper to invest $100M in South Carolina coffee facility. |
- Keurig Dr Pepper’s $100 million investment will expand the company’s coffee roasting and manufacturing capabilities and will create ~250 jobs
- The project is expected to be completed by 2027 and aims to take advantage of fast-growing coffee demand in the U.S.
- This move comes as part of a larger trend of major food & beverage companies announcing expansion initiatives, such as PepsiCo, JM Smucker, Kraft Heinz and Nestlé
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Upcycled food & ag side streams: the key to unlocking the potential of alternative proteins? |
- Sustainability credentials and unit economics of alternative proteins could be greatly improved by tapping into food & ag upcycling opportunities
- Byproducts of crop production often end up discarded or used in animal feed despite being well-suited to use in human food, specifically in alternative proteins
- Though high costs and technical challenges present barriers to entry, fermentable sugars and protein hydrolysates repurposing present sizable upcycling opportunities
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USDA details new organic livestock, poultry standards. |
- The USDA announced that its Organic Livestock and Poultry Standards (OLPS) rule will promote a fairer and more competitive market for organic live producers by making consistent standards for organic livestock and poultry production
- The new OLPS rule will improve uniformity with animal welfare practice requirements for organic livestock and promote the well-being and natural behaviors of animals
- The USDA’s National Organic Program will oversee the implementation and enforcement of the new OLPS rule
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Sanderson Farms cleared in latest antitrust litigation. |
- A federal jury declared on Oct. 25 that Sanderson Farms did not engage in a supply reduction conspiracy with other poultry producers in the years 2008-2012
- The conspiracy accusation came before the purchase of Sanderson Farms by Wayne Farms in 2022
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McDonald’s is getting rid of McFlurry spoons. It’s the end of an era. The McFlurry spoon, which sparked confusion for being hollow, is being phased out - CNN
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