Currently browsing posts about: Food-industry

The American Journal of Public Health has just published a first look—ahead of its print in June—at my most recent article, Regulating the Food Industry: An Aspirational Agenda [if you are not a member of the American Public Health Association, this will be behind a paywall, alas].

It begins:

I end it with policy recommendations for:

• Dietary guidelines
• Mass media campaigns
• Taxes
• Warning labels
• Marketing restrictions
• Portion size restrictions
• Farm subsidies

Hence, aspirational.

And, I say,

While we are thinking in aspirational terms, let us not forget root causes. We must also demand policies that link agriculture to public health, keep corporate money out of politics, reduce corporate concentration, and require Wall Street evaluate corporations on the basis of social as well as fiscal responsibility.  In comparison with those challenges, takin gon the food industry should be easy.

Let’s get to work.

The tragedy of the Ukraine War is beyond comprehension.  Like everything else, it affects food systems, and not just for the people caught up in it.

I’ve been collecting items, starting with Jose Andres @chefJoseAndres and World Central Kitchen @WCKitchen who are providing hundreds of thousands of meals to people fleeing from the Ukraine.

And then this one:

• Fast-food chains and food producers stay open in Russia, and mostly quiet about Ukraine. While technology giants like Apple and luxury retailers like Hermès have quickly moved to pause sales or shutter stores in Russia over the invasion of Ukraine, most U.S. food companies and fast-food chains have remained open — and largely silent.

Why the silence?

• “Unlike other chains, McDonald’s owns the vast majority of its 847 restaurants in Russia. According to a page for investors, Russia accounts for 9 percent of the company’s total revenues and 3 percent of its operating income.”
• “Last year, Russia accounted for $3.4 billion, or more than 4 percent, of PepsiCo’s $79.4 billion in revenues.”

Other items are about what this war means for agricultural trade, food prices, and specific food businesses—especially pet food.

• The Field Report: What the Invasion of Ukraine Means for the Food Supply: From the challenge of feeding millions of refugees to rising food prices and disrupted wheat crops, the war could have an outsized impact on the food system.
• Russian invasion of Ukraine: Implications for EU agriculture and dairy:   The Russian invasion of Ukraine has already led to massive destruction, loss of life, sanctions, and ramped up rhetoric on both sides…. Read more
• Russian invasion of Ukraine threatens food commodity prices, supply chains & consumer confidence: The food industry, already grappling with high inflation, supply chain constraints and transportation challenges related to the pandemic, could see surging prices of key commodities, fuel and energy following what chief of the NATO alliance described as Russia’s “brutal act of war” against Ukraine across three main fronts this week…. Read more
• Why the Ukraine conflict could spark ‘dangerous times’ for food prices and food security.  Producers in Europe fear the Ukraine crisis may result in rising prices of items such as bread, baked goods and beer that may be passed on to end consumers…. Read more
• Food and beverage companies suspend operations in Ukraine:  Several international food and beverage companies have temporarily shut down operations in Ukraine following Russia’s invasion to ensure the safety of employees while bracing for the long-term economic impact that skyrocketing commodity prices and potential sanctions will have on their businesses…. Read more
• Food Security (Even Beer) Will Suffer from Ukraine:  The stupid, senseless war in Ukraine is causing massive suffering. For anyone who is paying attention, that much is perfectly clear. Stepping back from the dire, immediate humanitarian crisis, economists are fretting about the shocks coming from oil prices. But the shock to the global food supply will also be huge.
• Nestle ‘tentatively’ reopens Ukrainian factories to restock empty food shelvesThe Swiss food giant is restarting some of its operations in Ukraine in order to support the delivery of essential food and beverages to those who remain in the country…. Read more
• War in Ukraine is ‘a huge tragedy for European confectionery family’, says BDSI: The Association of the German Confectionery Industry (BDSI) has welcomed tough sanctions imposed by the European Union on Russia, following its invasion of Ukraine, saying that the speed they were introduced shows the basic principles of the region are alive…. Read more
• What are dairy companies saying – and doing – on the war in Ukraine?  Following Russia’s invasion of Ukraine, and the subsequent sanctions imposed upon Russia, doing business with the world’s largest country is becoming increasingly complicated…. Read more
• P&G aids Ukrainian employees, curtails Russian operations:  Procter & Gamble is helping its Ukrainian employees evacuate while providing them food, shelter and financial support, P&G CEO Jon Moeller wrote in a company letter. P&G has stopped all media campaigns and capital investments in Russia and has trimmed its Russian portfolio to offer primarily health, hygiene and personal care products, added Moeller.
• Coca-Cola withdraws business from Russia while other companies remainCoca-Cola is the latest major global food and beverage giant to suspend operations in Russia as an act of protest against the Russian invasion and continued attack on Ukraine and follows similar announcements made by PepsiCo, Starbucks, and McDonald’s…. Read more 
• Abbott Condemns the War and Violence in Ukraine and Pledges $2 Million to Support Humanitarian Efforts.  Abbott stands with the international community condemning the war and the violence in Ukraine against its people, and calls for peace.  Our top priority is supporting the safety and wellbeing of our Ukrainian employees and we are taking all steps we can to assist them.  [Comment: Would this have anything to do with deflecting attention from the food safety recall of its infant formula?]

Here are the pet food items:

• Blog: Pet food not immune to global crises and issues: Debbie Phillips-Donaldson: As a consumer good that’s popular the world over (and becoming more so), pet food is as enmeshed in the global economy as any other product or consumer category.Read more
• Ukraine wheat, oil disruptions may hit US pet foodAny problems with Ukrainian commodity supplies could exacerbate existing supply chain problems. The Russian market was already unavailable to U.S. pet food exporters, so nothing will change.Read more
• Ukraine pet food company keeps producing, starts charityAmid the Russian invasion, Kormotech pet food in western Ukraine continues production and opens a new pet charity.Read more 

Four items about the Big Four meat companies that collectively control 85% of the beef market.

I.  Reuters reports that JBS, the Brazilian meat giant, has settled claims that it engaged in price fixing for—gasp—$52.5 million.

JBS, its U.S. affiliates, and the other three of the Big Meat companies—Cargill Inc, National Beef Packing Co and Tyson Foods—have been accused of conspiring to limit supply iin order to raise prices and boost profits.

In a statement, JBS said it did not admit liability but that settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs.

The settlement still requires approval from the courts.

JBS settled one month after U.S. President Joe Biden announced a plan here for new rules to bolster competition and stop “exploitation” in the meat sector.

Comment: I’ve written about the President’s executive order on the meat industry here, his challenge to consolidation here, and his concern about lack of competition here.  $52.5 million sure looks like guilty as charged, no matter what JBS says.

II.  The National Cattlemen’s Beef Association issued a statement on the settlement.

The announcement that JBS USA has decided on a $52.5 million settlement over allegations of beef price fixing is deeply disturbing to the National Cattlemen’s Beef Association (NCBA). NCBA was the first national organization to request a government investigation of beef markets in 2019. Now there are settlements occurring without Department of Justice (DOJ) having released findings or even providing cattle producers with an update on progress.

Comment: The NCBS is disturbed?  I’ll bet.

III.  The American Enterprise Institute has released three articles on food price inflation, meat prices and pork prices.

• AEI – Food price spikes temporary, inflation likely to fall in 2022
• Where’s the pork in the surge in recent pork prices?  Maybe nowhere, and not in the meatpacking industry 
• Subsidized beef packing expansion unlikely sustainable

IV.  Tyson Foods, one of the other defendents in the price-fixing case, is #1 on Fortune’s World’s most admired companies list for food producction, and for the sixth straight year, no less.

Comment: You can’t make this stuff up.

Paco Underhill.  How We Eat: The Brave New World of Food and Drink.  Simon & Schuster, 2022.

What to say about this book.

For one thing, Underhill is a supermarket consultant, whose job it is to tell supermarkets how to sell more food.

For another (full disclosure), chapter nine is titled “Shopping with Marion,” and that would be me.

I met Underhill and his collaborator, Bill Tonelli, at the amazing Sunrise Asian supermarket upstairs from the corner of 9^th Street and 3^rd Avenue in Manhattan.  We wandered around the store for a bit, collected another shopper, and went out for coffee.  The result is presented largely in the form of a conversation.  Here’s a sample from page 157 that starts with Underhill explaining why he loves visiting Hollywood (he lives in New York):

“…And going to L.A. is so refreshing.  Partially because I got sick of eating here—I live by eating according to the season, and it’s so easy to do in L.A., but back here I’m like, cabbage and apples and potatoes, again?”

“Carrots,” Marion says.

“Carrots.  ‘Oh look, we have rutabaga.  Yay!’  So yeah, I’m a jerk.  I’m one of those people who want to be completely seasonal and local but can’t hack it everywhere.”

“Ithaca has a rutabaga roll every year just before Christmas,” Marion says.  “It’s a bowling contest at the farmers market.  You bowl with rutabagas.”

This is a chatty book with lots of Underhill’s insights into how supermarkets work, starting with parking lots, and what he thinks stores ought to do to face the retail future.

He also went to farmers’ markets, this time with Nina (Planck) Kaufelt.  That chapter is titled “The citified get countrified (and vice versa.”

It’s a chattier and unreferenced version of my 2006 book, What to Eat—the one I am currently updating—but I did take some notes.

I enjoyed reading it, but I’m not exactly an unbiased critic.

I am on the mailing list for the North American Meat Institute (NAMI) the trade association for Big Beef, and I like knowing what it has to say.

Right now, it is in defensive mode.  The industry must be—and ought to be—concerned about White House interest in making the beef industry more competitive.

But wait, says NAMI, there’s nothing new here.  Four beef processors have held 80% of the market since 1994.

And, it says, the meat industry is not responsible for the inflationary cost of meat.

It also denies anti-trust allegations.

In testimony to the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law on “reviving competition,” NAMI said the meat industry is not to blame:

The administration will be surprised to learn that economic fundamentals have led to inflation. Labor shortages. Transportation and supply chain challenges. Regulatory policies. And all of those input challenges were coupled with record meat demand.
Collectively, these factors drove up prices for wholesale and retail beef…The discussion above demonstrates that free market fundamentals drive the cattle and beef markets and that what we have seen before and during the course of the pandemic was to be expected.

The testimony, which is well worth reading, makes this case.  It does not discuss the behavior of the big four meat processors during the pandemic: forcing sick people to come to work, inducing the President to sign an executive order to keep plants open, squeezing ranchers so they can’t make a living, and demanding higher prices at the store.

NAMI may be right that consolidation in this industry happened a long time ago, but the pandemic revealed its exercise of power in a way that had not been previously so visible.

Let’s hope the Justice Department gets to work on this.

To continue the thene of yesterday’s post, check out this report from the Global Health Advocacy Incubator (an international organization that supports advocacy).

The report documents the food industry’s strategies to defeat warning labels on ultra-processed food products (UPP).

1. Protect the UPP industry’s reputation and brands through corporate washing;
2. Influence policies through multilateral bodies to delay implementation and threaten countries with legal and economic concerns;
3. Divert attention from its corporate responsibility on the damage to environmental and human health to blame individuals for their behaviors;
4. Imply that their products contribute to health, the environment, and society while blocking the development and implementation of healthy food policies; and
5. Seek loopholes in regulations to continue promoting ultraprocessed products.

For example, here is how strategy #5 was implemented in Mexico:

Here, also for example, is image #27:

What should civil society organizations be doing to counter industry tactics?

• Monitor and unmask industry practices
• Use legal strategies
• Avoid loopholes, gaps, and ambiguities when developing labeling  policies
• Demand transparency and no conflicts of interest

This report is exceptionally well documented, covers an enormous range of countries, and gives a quick but compelling overview of how the food industry operates internationally to product product sales.

• Full report click here.
• Executive Summary
• Report’s microsite:  advocacy examples recommendetions.
• Webinar: English, Spanish, Portuguese

I was amazed to see this announcement from the White House, of all places: “Recent Data Show Dominant Meat Processing Companies Are Taking Advantage of Market Power to Raise Prices and Grow Profit Margins.”

In September, we explained that meat prices are the biggest contributor to the rising cost of groceries, in part because just a few large corporations dominate meat processing. The November Consumer Price Index data released this morning demonstrates that meat prices are still the single largest contributor to the rising cost of food people consume at home. Beef, pork, and poultry price increases make up a quarter of the overall increase in food-at-home prices last month.

The big concern is consolidation—monopoly power—in the meat industry.

Four large conglomerates control approximately 55-85% of the market for pork, beef, and poultry, and these middlemen were using their market power to increase prices and underpay farmers, while taking more and more for themselves…their gross profits have collectively increased by more than 120% since before the pandemic, and their net income has surged by 500%. They have also recently announced over a billion dollars in new dividends and stock buybacks, on top of the more than $3 billion they paid out to shareholders since the pandemic began.

The bottom line?

The meat price increases we are seeing are not just the natural consequences of supply and demand in a free market—they are also the result of corporate decisions to take advantage of their market power in an uncompetitive market, to the detriment of consumers, farmers and ranchers, and our economy [bold face in original].

Will the Biden Administration be able to do anything about this level of monopoly power?  Stay tuned.

Benjamin Lorr.  The Secret Life of Groceries: the Dark Miracle of the American supermarket.  Avery/Penguin Random House, 2020.

I don’t know how I missed this one when it came out in mid-2020, but I did.*

I saw a reference to it and thought I ought to take a look, largely because I am gearing up to update my book, What to Eat, in a second edition for Picador/Farrar Straus Giroux.

My book, which first appeared in 2006, is about food issues, using supermarkets as an organizing device.

Lorr’s book, which I expected to be a superficial expose of supermarkets, is anything but.

It is a deep, detailed, personal, and utterly powerful indictment of the human rights violations perpetrated on workers in grocery supply chains: truckers, grocery store clerks, Thai workers on shrimp-catching boats.

The personal comes in because Lorr is an experiential immersion journalist.  He embedded himself with a trucker, the fish section of a Whole Foods market, and a Thai fishing boat, as well as spending several years doing interviews.  Using the personal stories, he has plenty to say about truly shameless exploitation of low-wage workers in order to keep food costs low.

If you want to understand what low-wage work—or the Great Resignation—is about, here’s an excellent place to start.

This is an important book about food labor issues, but also about how more general systems of exploitation are maintained.

The “more general” leads me to pick one bone with Lorr’s analysis.

For those of us, he says:

Who want to shake the world aware to the fact that we are literally sustaining ourselves on misery, who want to reform, I very much don’t want to dissuade you so much as I want you to consider that any solution with come from outside our food system, so far outside it that thinking about food is only a distraction from the real work to be done.

His book, I’d say, proves just the opposite.  Food is his entry point into this topic and would not be there without it.

*I shouldn’t have missed it.  It was reviewed in the New York Times.  And Charles Platkin, whose work I follow closely, interviewed Lorr when the book first came out.