Commodity Conversations Weekly Press Summary

Uber is looking to buy US delivery company Grubhub to cash in on the surge in home food deliveries, according to sources who spoke with Bloomberg. The rumour comes just a week after Uber said it was closing its UberEats operations in 8 countries where it didn’t think it could become a major player, although it said that its business in the US grew 54%, helping in part to offset an 80% fall in the ride side of the business. A Bloomberg analyst noted that most of the food delivery giants were unprofitable, however, while a merger of UberEats and Grubhub may not be allowed as it would represent a 55% share of the US market

Restaurants have been complaining about some of these delivery companies, however, accusing them of listing without their consent or charging very high fees. In response, the Mayor of Chicago (where, incidentally, Grubhub is based) announced that, as of next week, third-party delivery services would have to be more transparent about their cost and break down what they charged in receipts to customers. Chicago would be the first city to do so. DoorDash and Grubhub both opposed the measures, saying it was “overreaching regulation” and would confuse customers. 

One industry which, apparently, has extensive food production and delivery networks is airlines. A New York NGO has been working with airline caterers to deliver meals to people in need in 11 cities in the US. The founders of Project Isaiah said they were able to tap into the nationwide network of kitchens and distribution that airlines use. Meanwhile, companies that specialise in buying surplus stocks, such as Imperfect Foods, have been selling surplus airline snacks. In Japan, an Olympic athlete made the headlines by enrolling for a food delivery job. He said that, with the Tokyo Olympics delayed, this was a good way to make money while staying fit. 

Restaurants in the UK are blaming a 25% surge in food wastage on “unpredictable ordering patterns” during the coronavirus lockdown. The research, done by the Sustainable Restaurant Association, also found that in 2019 close to 10% of all ordered food ended up in the bin in people’s homes. One of the most wasted items, surprisingly, is chips.

The US meat processing industry was described this week as “the most narrow bottleneck in US agribusiness.” A small scale farmer told the Eater’s Digest that most of the livestock has been bred for “feed conversion” which means they have a low immune system and are not designed to outlive their slaughter date. The scale of the problem is such that the US is looking into financial assistance to put down some 7 million pigs because of the closure of meat plants. What to do with the carcasses is also a major environmental headache

But even if the industry wasn’t operating at a reduced rate, most of the meat is usually shipped in boxes that are close to 1mt, which cannot be sold to supermarkets. And in any case, the quality of food destined for the industrial chain is often of lower quality than that sold in supermarkets. This is also why a lot of vegetables, which don’t meet the higher specification for supermarkets, have not been harvested. In Florida, three-quarters of the lettuce crop has reportedly not been harvested, along with sweet corn and squash. 

An analysis by Bloomberg suggests that the main meatpackers will likely make some operational changes that will result in more expensive meat. Investment in automation is already happening, although it will be limited by the fact that the industry is a low-margin one. Similarly, more dairy producers are investing in making lactose-free milk, as demand saw a 30% increase in March, growing faster than plant-based alternatives. 

A famous consultant to the livestock industry noted that “Big is not bad, it is fragile.“ She expects that there could be some interest to shift to a more localised or distributed supply chain, even if it is more expensive, as it is less prone to disruptions. However, a study from Oxford University found that transport only accounted for 10% of carbon emissions in the global food supply. That’s because most of the food is transported by sea, and not by plane as many people believe. In other words, the main researcher explained that “It’s what you eat, not where it comes from, that really has an impact.”

Talking of where you eat, the Michelin star restaurant The Inn at Little Washington, which is already known for its theatricality and eccentricity, announced it would set up mannequins at empty tables to make social distancing less awkward when it reopens. 

This summary was produced by ECRUU

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Leave a Reply

Your email address will not be published. Required fields are marked *