Weekly Roundup: Global food prices plummet, UK-US free trade agreement in the making
08 May 2020 --- In food ingredient news this week, world food commodity prices dropped once again, while Hochdorf Group announced it will liquidate three of its businesses. A new sustainable marketplace called Food Industry Exchange aims to bring vast efficiencies to the food supply chain. The Hershey Company has sold Krave jerky back to Sonoma Brands, which had founded the snack line. Meanwhile, the UK and US governments began negotiating a UK-US Free Trade Agreement.
In brief: Business
World food commodity prices declined for the third month in a row during April, according to the UN Food and Agriculture Organization (FAO), as the economic and logistical impacts of the COVID-19 pandemic resulted in significant contractions in demand for many commodities. The FAO Sugar Price Index hit a 13-year low, declining 14.6 percent from March, while the FAO Vegetable Oil Price Index declined 5.2 percent in April, driven lower by falling palm, soy and rapeseed oil values. The FAO Meat Price index declined 2.7 percent, as a partial recovery in import demand from China was insufficient to balance a slump in imports elsewhere. Notably, international rice prices rose by 7.2 percent from March and the FAO expects global wheat utilization in 2020/21 to be stable, with anticipated increases in food consumption outweighing reductions in feed and industrial uses.
UK-based dairy cooperative First Milk will be holding its member milk price for June 2020 at the current level. This means that the liquid standard liter will remain at 26.75p (US$0.33), while its manufacturing standard liter will remain at 27.63p (US$0.34), both including its member premium. Commenting on the announcement, Jim Baird, Farmer Director and Vice-Chairman, says: “The effective shutdown of the foodservice sector as a result of the COVID-19 pandemic has impacted dairy markets, which have fallen sharply. Uncertainty continues, especially in relation to the easing of lockdown restrictions, and how long it will take for demand, and indeed the wider economy, to recover. As such, it remains hard to determine what the total impact of COVID-19 will be on dairy markets in the UK or globally in the months ahead.”
Hochdorf Group aims to liquidate its Zifru Trockenprodukte and two Snapz companies as the former no longer considers the latter to be “strategically relevant” to its business goals. The liquidation comes as Hochdorf has so far been unable to find buyers for all three companies “at acceptable conditions.” Although an interested party for Marbacher Ölmühle GmbH has also yet to come forward, this subsidiary will remain part of the Hochdorf Group as a marginally positive result is expected for the current financial year. Specific investments and additional market activities are planned for its further development.
Private equity investor and incubator Sonoma Brands has reacquired Krave jerky back from The Hershey Company for an undisclosed amount. Sonoma Brands, led by Jon Sebastiani, is the founder and “creative force” behind Krave, which had been sold to The Hershey Company in 2015. Sonoma Brands expects that innovation for Krave will now be catapulted. The diverse portfolio of Krave’s protein snacks currently features Meat Cuts, Pork Rinds and – most recently – Plant-Based Jerky.
Tesco is teaming up with potato supplier Branston.In brief: Retail focus
Tesco teamed up with UK potato supplier Branston to ensure more potatoes that were previously destined for the catering trade will hit retailer shelves. The closure of restaurants, pubs and many fast food outlets left a major surplus of particular varieties that are made into fries, which potato growers have struggled to sell. Branston’s potatoes will be sold as part of Tesco’s “Perfectly Imperfect” range, labeled as “I’m not looking my normal gorgeous self, but I still taste great, buy me and support British farmers.” Alongside the Perfectly Imperfect potatoes (2.5 kg), the products that these potatoes will be going into are Tesco White potatoes (2.5 kg) and Tesco Baking potatoes (2.5 kg).
To double its online grocery orders by September, Waitrose opened a 6 acre Customer Fulfilment Centre in London, UK. Lockdown restrictions caused by the pandemic shot up demand for online shopping, evidenced by the Waitrose delivery service increasing by more than 50 percent to more than 120,000 customer orders per week. In addition to its work to expand its Waitrose e-commerce, the retailer has also more than tripled the size of its rapid service to 7,000 orders per week, with at least 40 percent of slots reserved for vulnerable customers. The service offers up to 25 products for delivery within two hours.
Marks & Spencer has partnered with Deliveroo to provide its customers with a same-day delivery service of essential goods. Consumers who live within the delivery area of one of the 100-plus M&S BP stores offering delivery, or selected M&S stores will be able to receive products ranging from milk and bread to pizza and wine straight to their doorsteps.
In brief: Launches and NPD
A sustainable marketplace called the Food Industry Exchange has been launched by The Food Industry Association (FMI) and powered by The Seam, a provider of commodities trading and agriculture software solutions. The launch aims to immediately address the urgent needs of retailers and wholesalers by showcasing products and services available in a digital space and on an ongoing basis. Additionally, the platform is touted as bringing vast efficiencies to the food supply chain, while also serving as a critical tool in times of need. Retailers requiring additional resources to fulfill needs at grocery stores are connected with sellers that have a capacity for products, transportation services, labor and warehousing services. FMI notes that in addition to addressing needs created by the COVID-19 pandemic, the platform also fills the long-term demands of retailers and wholesalers for product discovery and procurement.
US organic meat brand Applegate launched a new line of organic hybrid burgers and meatballs, featuring meat and vegetables, called Well Carved. According to company President John Ghingo, the new product line challenges the notion that the only way to eat meat responsibly is to settle for a highly processed soy or pea-based burger or to not eat meat at all. All Well Carved products are made without any unfamiliar ingredients, which could be found in heavily processed plant-based protein alternatives. The new line includes the Grass-Fed Organic Beef Burger with cauliflower, spinach, lentils and butternut squash; the Organic Turkey Burger, made with white bean, kale and roasted onion; Organic Asian Style Pork Meatball topped with brown rice, green onion, carrot and parsley; as well as Organic Mediterranean Style Turkey Meatball, with lentils, feta cheese and spinach.
Applegate launched a new line of organic hybrid burgers and meatballs featuring meat and vegetables.In brief: Awards and recognition
The Food and Drink Federation (FDF), Unite, Usdaw, BFAWU and GMB have banded together to commend the efforts of those working in food and drink manufacturing who are “doing so much to keep the nation fed and to maintain the UK’s food security.” In a joint statement, FDF and the unions highlight the critical importance of working together at this exceptionally demanding time to ensure our workforce is safe, protected and respected. They state that the good practice is underway in many workplaces, including social distancing and hygiene standards and support for the workforce. As the UK’s largest manufacturing sector, food and drink employs 430,000 people in every part of the country.
Epogee Foods was awarded its place among the Thrive Top 50 AgTech Companies of the Year. The annual ranking showcases exceptional companies that push the boundaries of food-focused innovation and agricultural technology. To qualify for a spot on Thrive’s Top 50 listing, a company must have received a minimum of Series A funding and have a product in a market that is scaling. In this space, Epogee Fat Replacer (EPG) is a solid fat alternative that can reduce calories from fat by 92 percent and total calories by as much as 45 percent, leaving taste and texture intact. EPG has Generally Recognized As Safe (GRAS) status for use in a variety of food and beverage products, including confections and bars, baked goods and mixes, frozen dairy and desserts.
Professor Dame Caroline Dean of the John Innes Centre (JIC) was elected to the American Academy of Arts and Sciences and now is one of the 250 individuals to join the Academy in 2020. She was selected as an International Honorary Member under the class of biological sciences, having spent her 32-year career at the JIC.
In brief: Bilateral trade agreements
The UK and US governments began negotiating a UK-US Free Trade Agreement (FTA), aiming to discuss a bilateral partnership for goods and services trade, digital trade, investment and supporting small- and medium-sized enterprises (SMEs). The UK aims to benefit from reduced US tariffs on food and drink, as well as lowering high tariffs on UK products such as cheddar cheese to increase its access to the US market. According to the UK government, this FTA will benefit every region and nation of the UK, with the greatest benefits in Scotland, the North East and the Midlands. The first round of negotiations will last approximately two weeks and will involve around 100 negotiators on each side. Further rounds will take place approximately every six weeks and will be carried out remotely until it is safe to travel.
In brief: Research and study
Aquaponics – a production system combining fish farming and vegetable cultivation – could help increase focus on local food production while decreasing the environmental impact of fish and crop production, according to research conducted at Wageningen University & Research (WUR). Plant microorganisms in the circular system convert fish waste into nutrients for plants, which purifies the water and creates an appropriate environment for the fish. Compared to open rivers using 190,000 liters of water per kg of fish, modern aquaponics systems utilize just 500 liters, lead researcher Professor Haïssam Jijakli highlights. Prospective applications of the aquaponic systems range from households to restaurants to industrial systems, all using an app that assists in system design. Professor Jijakli expects to launch a beta test at the end of 2020 and release the application by the end of 2021.
By Anni Schleicher and Katherine Durrell
