Commodity Conversations Weekly Press Summary

Coca-Cola, which depends on venues like restaurants or cinema halls for half of its revenues, expects that the economy will take a while to recover from the coronavirus crisis. Consumers will have less money to spend and will look for cheaper products, the CEO  forecast. The group launched a #WeLoveThisPlace social media campaign in the US to encourage people to support their local restaurants. An analysis in the Motley Fool argued that Coca-Cola’s fate is tightly intertwined with that of restaurants. Using data from a survey which showed that 80% of restaurateurs are worried they may have to close down, compared to a 38% restaurant closure rate in April, it warned this could translate into a 50% fall in Coke sales. 

On the other hand, the company is set to benefit from its new plant-based milk products called Simply Almond Milk which it just launched in North America. The US sales of plant-based milk grew by almost 15% in 2017-19, and even more in the lockdown period, according to GFI data. 

Nestle, too, expects a fall in sales in the current quarter, after benefitting from panic-buying at the start of the lockdown. However, it reported a surge in the sale of pet food globally, which it attributed to more people adopting pets to cope with the lockdown but also because vets stayed open. And in the same vein as the Coke CEO, Nestle’s India head forecast that consumers would “trade downwards” and buy cheaper products to cope with job losses and pay cuts. In Malaysia, Nestle and Starbucks released a premium instant coffee to continue to encourage consumers to consume the in-store coffee at home. Back in the US, meanwhile, Starbucks has reportedly sent a letter to all the landlords of its stores asking them to write-off one year of rent to help them cope with the current scenario. 

A poll of small-scale farmers across the US showed that a third of them would go bankrupt if restaurants and farmers markets don’t reopen by August. The government’s USD 16 billion farm aid is not expected to make much of a difference because it is based on large-scale wholesale prices, which are much lower than the prices small farmers usually get. An indepth piece by Mother Jones found that, for instance, the compensation price for asparagus was USD 0.38/lb, compared to USD 5/lb at a farmers market. 

The CEO of ADM said the COVID-19 pandemic had made the need for sustainable business more apparent. As such, the group committed to reducing water intensity by 10% and reach a 90% landfill diversion rate by 2035, as well as reduce its greenhouse gas emissions by 25%. Similarly, Danone announced it would become an “entreprise à mission” (company with a mission). The framework was set up by the French government in 2019 and includes a novel governance system which checks on social and environmental goals. Danone would be the first publicly listed company to do so. 

Looking at the waste side of things, Coke joined the “Paper Bottle Project” as part of its pledge to be plastic-free by 2023 by using environmentally friendly, biodegradable plastic from plants. It might also build a plastic recycling plant in Indonesia as the country committed to reducing plastic waste by 70% by 2025. Nestle, meanwhile, committed to only using recyclable and reusable packaging by 2025. It is looking into bulk delivery systems instead, combined with refill options to reduce packaging whilst ensuring food safety. It is currently testing such a system with Purina pet food and Nescafe coffee dispensers in a few shops in Switzerland. 

In its latest sustainability report, Cargill said it was now able to trace half of the cocoa beans in its direct supply chain from farm to factory. It has some 300 data points along the supply chain using GPS, digital data collection and mobile money, among other technologies. Technology is also helping Cargill trade faster. In Australia, the group used a trade finance platform, Bolero International Galileo, to transfer documents required for a canola oil vessel headed to China ahead of the Chinese holidays and despite coronavirus disruptions. On a more global scale, Cargill signed an agreement with Eagle Genomics to digitalise microbiome data that the former has collected over the last 10 years. 

On the topic of data, this piece by The Counter brings you inside the world of vaults and bunkers designed to protect…seeds! These banks contain seeds and roots collections to ensure a wide range of genetic material for scientists to breed new varieties with. One plant physiologist recounts how Russian scientists died protecting one such seedbank during the Leningrad siege in 1941. You can read the story here

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 *