Currently browsing posts about: Food-industry

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.

Xavier Naville.  The Lettuce Diaries: How a Frenchman Found Gold Growing Vegetables in China.  Earnshaw Books, 2021. 

The publicist for this quirky book sent it to me and I have to admit being charmed by it.  The French author started out in international corporate food, managing canteens in 70 countries for the Compass Group and based in Paris.

At age 27, almost on a whim, he went to Shanghai to sell salads to the Chinese (who didn’t eat salads) and oversee the production of vegetables for KFC and other fast food places.

He was, to say the least, ignorant of Chinese language and culture but learned a lot during the twenty years or so he spent there.

His book is about how his naivete and uncertainty got in the way of getting small farmers to grow lettuce and other vegetables consistently and safely, and how he slowly and painfully learned to speak and write Chinese, and learn the importance of guanxi (personal relationships essential for getting anything done in China).

He is so modest, so hard on himself, and so likable that I wanted him to succeed—which he did, and quite well.

Among other things, his company produced bagged salads for Chinese supermarkets.  Food safety maven that I am, I won’t even buy bagged salads in the U.S.  His descriptions of small-scale food production are terrifying.

He reports no outbreaks due to his products, although he talks about plenty of others, including the melamine-in-infant-formula scandal predicted by the earlier melamine-in-pet-food scandal I wrote about in Pet Food Politics.  

I liked his thoughtfulness about his experience.

All these years, I had viewed the microscopic farming plots as a barrier to the modernization of China’s agriculture.  But after a few hours with my Chinese friends, I was beginning to see things differently.  Where would all these seasonal foods come from if there were fewer farmers?  Would there still be regional differences?  If China follows the developmental path of the West, the number of farmers will shrink while operations increase in size.  Farms will focus on scale and productivity, specializing in fewer crops, breeding the most productive ones and neglecting some that have a higher nutritional content but lower returns per acre.  Is that really what Chinese consumers want?

…family farmers weren’t necessarily just an obstacle on China’s path toward modernization; they might actually be its cultural gatekeepers, protecting the local food industry and underpinning a renaissance of Chinese beliefs that will be key to the health of both the Chinese people and the safety of the foods they cherish.  (p. 246)

Quirky?  Definitely for a business book, but in a good way.  I enjoyed reading it.

[The author is now a food business consultant in Oakland, CA].

Two articles on similar themes have come out recently.

Is It Time to Break Up Big Ag? — The New Yorker

Nationally, the four largest dairy co-ops now control more than fifty per cent of the market. They’ve been able to grow so big, in part, because of a 1922 law called the Capper-Volstead Act, which provides significant exemptions from antitrust laws for farmer-owned agricultural coöperatives. “The agricultural industry is different than other industries because Capper-Volstead allows them to combine in ways that other individuals would go to jail for,” Allee A. Ramadhan, a former Justice Department antitrust attorney who led an investigation into the dairy industry, told me.

The law’s protections were intended to give small, independent farmers the right to collectively bargain prices for processing and selling their goods, but many large co-ops, such as D.F.A., have increasingly come to resemble corporations.

Break Up Big Chicken — The New York Times

Most chicken that Americans eat is processed by a handful of big companies because, in recent decades, the government gave its blessing to the consolidation of poultry processing, along with a wide range of other industries. The unsurprising result: In recent years, the surviving companies took advantage of their market power to prop up the price of chicken, overcharging Americans by as much as 30 percent.

Evidence of the industry’s misconduct became so blatant — thanks in part to lawsuits filed by wholesale poultry buyers — that regulators were roused from complacency. Beginning in 2019, the government has filed a series of charges against the companies and their executives.

And while we are at it, let’s not forget Philip Howard’s work, which I’ve written about previously.

Feed the Truth (FTT), an organization I’ve discussed previously and whose mission is to work “at the intersection of equity, democracy, and food justice to stop corporate control over the food we eat,” has just come out with the results of its new research on Big Food’s lack of transparency in political giving.

FTT attempted to discover the political spending levels of the ten largest food and agriculture corporations: ADM, Bunge, Cargill, Coca-Cola Company, JBS, Mars, Nestle, PepsiCo, Inc., Tyson Foods and Unilever.

FTT’s unsurprising conclusion: “despite the massive influence these corporations have on our health, economy, and the environment, there is very little publicly-available information about how they manipulate the political system to their advantage.”

This led FTT to develop The Food and Agriculture Corporate Transparency (FACT) Index.  This ranks the transparency of the corporations on a scale of zero to 100 on readily available disclosure of their spending on electioneering, lobbying, science, and charity.

Among the key findings:

Overall transparency scores:

• Total: 2 (Bunge, Tyson) to 39 (Coca-Cola)
• Electioneering: 0 (Bunge) to 20 (Mars).
• Lobbying: 0 (Bunge, Tyson) to 9 (Coca-Cola)
• Charity: 0 (Unilever, ADM) to 8 (Coca-Cola)
• Science: 0 (PepsiCo, Mars, Unilever, JBS, Bunge) to 8 (Nestlé)

Coca-Cola ranks highest in part because of the transparency initiative it started in response to the furor over disclosure of its role in the Global Energy Balance Network.

I could have told FTT how hard it is to get information about food industry funding of science as well as all the other ways it uses funding to influence attitudes and policy.  I had my own version of these difficulties doing the research for Unsavory Truth: How Food Companies Skew the Science of What We Eat.

It’s great that FTT is bringing this problem up to date, and identifying what needs to be done about it.

The Guardian and Food and Water Watch have produced a lengthy, interactive, and fact-filled investigative report, essential reading for anyone interested in how power is distributed in the US food system.

The report is a about how consolidation has increased the power of every segment of the food industry, and how that power imbalance threatens workers, consumers, and American democracy.

The size, power and profits of these mega companies have expanded thanks to political lobbying and weak regulation which enabled a wave of unchecked mergers and acquisitions. This matters because the size and influence of these mega-companies enables them to largely dictate what America’s 2 million farmers grow and how much they are paid, as well as what consumers eat and how much our groceries cost.

Here are some of the facts (and the Guardian summarizes others in an article on “The Illusion of Choice“):

• At least half of the 10 lowest-paid jobs are in the food industry. Farms and meat processing plants are among the most dangerous and exploitative workplaces in the country.
• Overall, only 15 cents of every dollar we spend in the supermarket goes to farmers. The rest goes to processing and marketing our food.
• Four firms or fewer controlled at least 50% of the market for 79% of the groceries. For almost a third of shopping items, the top firms controlled at least 75% of the market share.
• During the 2020 election cycle, the food industry spent $175m on political contributions, including lobbying by PACs and individuals and other efforts.
• Until the 1990s, most people shopped in local or regional grocery stores. Now, just four companies – Walmart, Costco, Kroger and Ahold Delhaize – control 65% of the retail market.
• Farmers received $424.4bn in subsidies between 1995 and 2020, of which 49% were for just three crops: corn, wheat and soybeans, according to the Environmental Working Group. Corn subsidies are the largest by a long way – $116.6bn – accounting for 27% of the total.
• At least half of the 10 lowest-paid jobs in the US are in the food industry, and they rely disproportionately on federal benefits. Walmart and McDonald’s are among the top employers of beneficiaries of food stamps and Medicaid, according to a 2020 study by a non-partisan government watchdog.
• Here in the US, there were 1.6bn animals living on 25,000 factory farms in 2017 – a 14% rise in just five years. Together, these animals produced about 885bn pounds of manure annually – equivalent to the human sewage generated by residents of 30 New York Cities.

The Center for Digital Democracy has issued a report, Big Tech and Big Food.

The coronavirus pandemic triggered a dramatic increase in online use. Children and teens whose schools have closed relied on YouTube for educational videos, attending virtual classes on Zoom and Google Classroom, and flocking to TikTok, Snapchat, and Instagram for entertainment and social interaction. This constant immersion in digital culture has exposed them to a steady flow of marketing for fast foods, soft drinks, and other unhealthy products, much of it under the radar of parents and teachers. Food and beverage companies have made digital media ground zero for their youth promotion efforts, employing a growing spectrum of new strategies and high-tech tools to penetrate every aspect of young peoples’ lives.

The full report is divided into five parts (annoyingly, there is no table of contents and page numbers are almost invisible):

1.  The data-driven media and marketing complex (starts on page 8).

Today’s youth are at the epicenter of an exploding digital media and marketing landscape. Their deep connection to technology and their influence on purchasing are fueling the growth of new platforms, programs, and services, and generating a multiplicity of marketing opportunities. Google has created a global business offering videos and channels that target children and other young people who are attracted by its entertainment and educational content.

2.  This describes how Big Food targets kids using digital media (page 17)

3.   This part talks about threats to kids’ health, privacy, and autonomy (page 38)

4.  The growing momentum for regulation (is it ever needed) (page 42)

5.  This section lays out a framework for creating a healthier digital environment for kids (page 47)

The report is chilling.  It makes cartoons on breakfast cereals look so last century.  I could not believe the sophistication of these digital marketing efforts, all aimed at getting kids to demand junk foods.

Some congressional leaders are on this.  They deserve support.

You don’t think this is an urgent issue?  Read the report.

Here are a few news stories about this report.

• https://www.campaignlive.com/article/fast-food-soft-drink-advertising-contributes-childhood-obesity/1715799
• https://www.bloomberg.com/news/articles/2021-05-12/food-companies-tech-ties-pose-harm-to-kids-consumer-group-says
• https://thecounter.org/junk-food-ads-harm-childrens-health-online-privacy-social-media-coca-cola/ 
• https://www.mediapost.com/publications/article/363184/advocates-call-for-new-curbs-on-junk-food-marketin.html

I read in DairyReporter.com that Danone reports an increased score in it B-Corporation certification.

I am interested in the B-Corporation phenomenon.

B Corporations are required to include social values—along with the usual profit motives—as established goals.

Society’s most challenging problems cannot be solved by government and nonprofits alone. The B Corp community works toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high quality jobs with dignity and purpose. By harnessing the power of business, B Corps use profits and growth as a means to a greater end: positive impact for their employees, communities, and the environment.

What is that one unifying goal?  “We envision a global economy that uses business as a force for good.”

Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good.

B Corporations promise:

• That we must be the change we seek in the world.
• That all business ought to be conducted as if people and place mattered.
• That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
• To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.

Companies are assessed and rated on social value criteria.  They must achieve 80 of 200 points to be certified.

Food companies are among those certified as B corps

I’m not sure how this plays out in practice, but this certainly appears to be a step in the right direction.

If we want to encourage this effort:

• Support food companies that sign up to be B corps.
• Urge other food companies to join.
• Hold them all accountable.