April 15, 2013

Operator News

The average fast-food employee works 24 hours a week, and those working full-time hours make a median annual salary of $17,813, according to U.S. Census Bureau data. Currently, only 16% of fast food industry jobs are held by teens, down from 25% a decade ago, and more than 42% of restaurant and fast-food employees older than 25 have at least some college education with 753,000 holding a bachelor's degree or higher. "With the national jobless rate hovering around 8% and more than 20 million individuals still unemployed or underemployed, the labor pool remains sufficiently deep for most [in the fast food industry]," the National Restaurant Association's 2013 outlook found, reported NBCNews. Full Story

McDonald's is sacrificing profit margin in order to better compete for cost-conscious consumers, according to the company's CEO, as it faces more intense competition from rivals mimicing its value strategy and menu. "There is so much marketing and messaging out there to consumers, it becomes harder to break through and really come up with a compelling offering that drives people to stores, and also builds loyalty," stated Ted Marzilli, CEO of YouGov BrandIndex. McDonald's hopes a pipeline of new products that include "Premium McWraps" and specialty drinks will keep it ahead of other U.S. chains, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

Retail News

Relay Food, an online grocery service that currently operates in the Mid-Atlantic region, will use $8.25 million in financing to expand its service in the Washington, D.C. and Baltimore metro areas as well as drive expansion into Williamsburg, VA. Relay gathers orders and delivers it to a pick-up spot or right to customer doors. People shop online through a selection of inventory from local farms, artisan producers, and grocery stores. Relay has partnered with hundreds of merchants and the inventory is wide - be it baby food or chia seed power snacks. Shoppers can search for specific items, peruse all the offerings from a particular vendor, or look within tags like "antibiotic free" or "expectant mothers," reported Reuters. Full Story

Nutrition experts are emerging as a major force at supermarkets, becoming a marketing tool to aid shoppers seeking the best foods to drop weight, battle diseases or avoid allergic reactions. The trend is another sign that consumers are demanding more from their food providers as the nation's health-care system puts a premium on preventive care. And it also represents an increasingly powerful constituency for the nation's food marketers to win over, reported Advertising Age. Full Story (Paid Subscription Required)

Some 2.4 million credit and debit cards may have been compromised at 79 Schnucks stores. The compromised cards lead to widespread fraudulent charges globally, with customers seeing charges vary from low amounts at convenience stores to high-ticket items at larger retailers, reported St. Louis Post-Dispatch. Full Story

Industry News

Royal Dutch Shell is considering selling some of its Italian downstream assets including its retail, aviation and supply and distribution businesses. Shell, which in a statement affirmed its commitment to its other activities in Italy including its upstream gas and power business, said the potential disposal was part of its strategy to focus on the most competitive parts of its downstream portfolio, reported Reuters. Full Story

The American Frozen Food Institute and the Frozen Food Roundtable are launching a campaign that could reach up to $50 million in spending, according to industry executives. The coalition includes ConAgra, General Mills, H.J. Heinz, Kellogg Co. and Nestle USA, along with Walmart. According to proprietary research from the organizations, 98% of products in the frozen aisle are experiencing flat or declining sales in the U.S., across nearly all categories. Driving these declines are more health-conscious consumers and their association of frozen foods with high sodium, sugar, fat, calories and preservatives, reported Advertising Age. Full Story (Paid Subscription Required)

Rutgers University will soon break ground on a nearly 80,000 sq.-ft. building in New Brunswick, NJ where its Institute for Food, Nutrition and Health will do basic nutrition research, study policy issues and create partnerships with food companies. This week, Rutgers awarded a $34 million construction contract to Joseph A. Natoli Construction in Montville to build a facility that is expected to open in 2015. The total construction project is expected to cost $55 million, reported NJBiz. Full Story

Companies expected to release sales and earnings this week include: Coca-Cola, Crown Holdings, PepsiCo, Sonoco Products, B&G Foods, Chipotle Mexican Grill, Cytec Industries, Kimberly-Clark and McDonald's.

Thermo Fisher Scientific will purchase laboratory-equipment maker Life Technologies for about $13.6 billion. Life Technologies was formed by a series of deals including the merger of Invitrogen and Applied Biosystems about five years ago, had sales of $3.8 billion last year, and makes equipment with food industry applications such as improving food and water safety, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

Danone is not planning to launch a hostile takeover bid for Yakult Honsha, although it wants to increase its already sizeable stake in the lactic drink maker, according to a top Danone executive. Danone currently owns a roughly 20% stake in Yakult and has been involved in drawn-out talks with the firm over increasing its shareholding. Separately, Danone Japan plans to double the annual production capacity of its yogurt factory in Tatebayashi to 200,000 tons by 2022, reported The Japan Times. Full Story

Health News

Cocoa polyphenols may trigger more neuroprotection than originally thought, according to a study published in the Journal of Cellular Biochemistry. Previous studies focused on the anti-oxidant properties of these compounds and less on the actions at cellular and molecular levels. The findings found cocoa polyphenols trigger neuoprotection through the BDNF survival pathway and have important implications for prevention of cognitive impairment in the elderly and in neurodegenerative diseases, reported Science Daily. Full Story

Washington News

U.S. growers, the United Farm Workers union and key senators agreed in principle on immigration reform for farm laborers, the Agriculture Workforce Coalition stated. The issue will likely be part of a comprehensive immigration bill to be unveiled next week, and the agreement calls for the creation of a new guest worker program to replace the current H-2A program and legal status for farm workers who entered the U.S. illegally. As many as 900,000 of the 1.5 million agricultural workers in the U.S. are thought to be undocumented aliens, reported Reuters. Full Story

The dairy industry's request to allow low-calorie chocolate milk to be sold without a prominent reduced-calorie label is generating opposition from several consumer groups. A petition to FDA sought to drop a special labeling requirements for flavored milks that contain artificial sweeteners such as aspartame, as they are reportedly a turnoff for kids and require very specific reductions in sugar or calorie content. The groups claim the industry is trying to disguise the use of artificial sweeteners from consumers who may think they are buying an all-natural product. The public comment period for the petition ends May 21, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) is revising the fee schedule for official inspection and weighing services performed under the U.S. Grain Standards Act (USGSA), as amended. The final rule revises local and national tonnage fees for all export shipments serviced by GIPSA field offices. The national tonnage fee will be increased approximately 5% in fiscal year 2013 to $0.055 per metric ton of export grain inspected and/or weighed, from $0.052, and approximately 2% per year for fiscal years 2014 to 2017. Full Notice

Mandatory labeling on genetically modified foods in the U.S. could have significant consequences in developing nations, according to Wellesley College professor Robert Paarlberg in an opinion piece published in the Wall Street Journal. Mr. Paarlberg argues that if America joins Europe in requiring labeling and "embracing a new norm against the cultivation of GMO crops for human food," then the world's poorest and hungriest people will suffer a needless setback in efforts to reduce hunger because their governments will follow the practice of the U.S. and EU. Full Story (WSJ Subscription Required)

Market News

A panel of Florida citrus executives rated the industry's future prospects from cautiously optimistic to bullish, but all admitted the state's signature agricultural sector must weather citrus greening. After 2006, when the disease forced citrus nurseries to grow indoors to protect against infection, the number of Florida citrus nurseries shrank from 80 companies to 35 firms today, reported The Lakeland Ledger. Full Story (Free Registration Required)

Leaders at the National Potato Council hope that including Japan in the Trans Pacific Partnership talks could lead to a dramatic increase in the U.S. potato industry's exports. Japan is the largest export market for U.S. potatoes, totaling $400 million in 2012, reported The Packer Online. Full Story

While asparagus supplies were abundant in early April, volumes could decline significantly as Mother's Day approaches. Volumes from Mexico will likely dry up over the next few weeks, leaving California and Washington to have the Mother's Day deal, reported The Packer Online. Full Story

The California cherry crop for 2013 is expected to be a sizeable and potentially record-setting crop. Although crops looked almost ready at the beginning of April, much still depends on the weather, reported The Produce News. Full Story

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