Friday, June 16, 2017

Phil's Friday Rap

What I'm watching this week.

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June 16, 2017 will go down in history as the beginning of the new world of supermarketing. Grocers have had Lidl, Aldi and Amazon on their radar for the past year or so, but now Amazon moves to the top of the list with their purchase of Whole Foods. This deal is brilliant for Amazon. The Amazon Prime shopper is the Whole Foods shopper. What I see happening is that Mackey is out (no matter what his statement said this morning) I don't see him and Jeff Bezos getting along at all, and frankly he hasn't done a great job of running WFM so why keep him? Maybe they bring back Walter Robb who is a great man and grocery retailer, or they start stealing management from other retailers (time to dust off those resumes).
 
The timing is interesting. The same week that Lidl opens, Aldi announces a bigger expansion, Texas Monthly profile of Mackey comes out, and Kroger stock down 18% yesterday.
 
The Amazon Whole Foods will lower prices, put Amazon lockers in every Whole Foods and become the store for Millennials and Genz Z offering great value and great foods. I also expect to see a push for more store branded products and less national brands (same as Aldi and Lidl) since Amazon has been pushing their own brands in food and beverages online. The losers? Just about every traditional grocer and companies like Instacart, who built their business on Whole Foods. Clearly Amazon doesn't need someone else to deliver their groceries.

Every grocer will remember this day as the beginning of a new era, and many are scared.

Just days away from the Summer Solstice (this year it is actually on June 20) and the Summer Fancy Food Show – two events I look forward to each year. We will be broadcasting live from the Fancy Food Show on Facebook LIVE Sunday through Tuesday with interviews as well as showcasing the latest and great new products. Hope to see you there, and be sure to stop by Level UP a fabulous new area featuring Consumer & Category Forecasts, The Future Market, Foodservice Reimagined, A Digitized Palate Visualization, Leading Edge Product Tastings as well as a special area in collaboration with SIAL Paris on World Food Trends.

What I'm reading about….

Andrea Huberty, senior analyst at the Agricultural Marketing Service's Livestock, Poultry and Seed program, spoke at the International Dairy Foods Association's regulatory conference in Washington and shared that the USDA plans on finalizing the rule for GMO disclosure standards within nine months. She reported that USDA has started to meet with farm, food and other groups in preparation to write the proposed rule, though it won't follow through with the prior administration's plan to make a public request for information, as reported by Politico.

Pink slime is back, this time in court. This past week the food trial of the century (Mad Cow was last century, can you believe it?) as BPI's lawyers got underway in their lawsuit against ABC news for $1.9 billion in damages (the network could actually have to pay much more as South Dakota's Food Product Disparagement Act allows for up to $5.7 billion). BPI claims that the series of aired reports between March 7 and April 3, 2012 caused so much damage to its sales of Lean Finely Textured Beef that it had to shutter three production facilities and lay off at least 650 workers. The ABC news reports referred to LFTB as "pink slime" more than 350 times during the reports.

SNAP provides needed food assistance to millions of people with disabilities. Over one in four SNAP participants, equivalent to over 11 million individuals in 2015, have a functional or work limitation or receives federal government disability benefits, according to CBPP analysis of data from the 2015 National Health Interview Survey (NHIS)..

The sugar agreement went largely unnoticed with all the other distractions coming out of Washington DC this week. Under the NAFTA agreement, Mexico could sell as much sugar to the US as they wanted to – that officially would change to reflect the agreement made three years ago to limit the amount of sugar they export to the US. In addition the agreement will reduce the price our food companies pay for the sugar. Just what we need, more cheap sugar to put into our food supply.

Have a great weekend.

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