Commodity Conversations Weekly Press Summary

Nestle has been using augmented reality to keep employees connected despite the coronavirus containment measures. Nestle’s team in Switzerland even managed to help set up a new production line at a Thai factory using the technology which, as a result, was completed ahead of schedule. A company official forecast that “Going forward, remote assistance will become a new way of working” as it will reduce traveling, and therefore lower costs and CO2 emissions. 

Another challenge for food and beverage companies has been adapting to online sales. For one, Coca-Cola is investing to become more visible and more attractive for online shoppers, including making images that are optimised for screens as well as better content, videos and descriptions. The idea is to have a product that is just as appealing online as it was designed to be in supermarket aisles. 

In China, Danone is following Nestle’s strategy and is focusing on importing premium water brands like Evian and Volvic. Nestle also launched a new sugar and sweetener-free flavoured water bottle range targeting children, as well as a coffee bean based bottled water. The Plant+Water by Buxton line is banking on the plant-based diet trend, an official said. As part of the same strategy, Nestle is launching the world’s first plant-based condensed milk from oat and rice flour. It will come out in September in the UK. Nestle also tied up with Starbucks to release plant-based creamers from almond and oat. 

Going back to the topic of water, Cargill has given more details on its new sustainability water targets. It plans to restore 600 billion L of water in priority watersheds – more than twice the amount of water the company uses across operations. It also plans to reduce 5,500mt of water pollutants – all of that by the end of 2030 and across its supply chain. The United Nations said this was the biggest water related sustainability target for a single company, especially as it does not only apply to its direct operations but also to its suppliers. Cargill explained that getting the right data was relatively easy thanks to its tie up with the World Resources Institute (WRI) but getting farmers to make the changes was a bigger challenge. To get other stakeholders to join the effort, Cargill and the WRI have worked on a Water Management Toolkit and made it publicly available. 

Governments around the world seem to be caught between a rock and a hard place managing the effect of the coronavirus. In the UK, the government has asked Nestle’s KitKat to rethink its decision to switch to buying Rainforest Alliance cocoa instead of Fairtrade cocoa. The Members of Parliament (MPs) said that poor coca farmers would be affected at a time when they are already struggling because of the coronavirus. The MPs said the move could affect consumer confidence in KitKat. They criticised the fact that farmers have agency over only one third of the Rainforest Alliance premium, compared to the full premium with Fairtrade. 

The UK government is being much more aggressive in its fight against rising obesity rates which it called a “a time bomb.” Backed by health data showing that 8% of those critically ill from the coronavirus were obese, compared to less than 3% for the general population, the government is banning the advertisement of junk food on television and online before 9pm. It is also banning ‘Buy one get one free’ discounts on products that are high in fat, sugar and salt, and these products won’t be allowed at checkout counters any more. Besides, big restaurants will have to display calories on their menus. Other measures that the government is looking at include completely banning online junk food advertising and adding calories counts on alcoholic drinks, among other measures. 

Critics say that the food, advertising and TV industry will be significantly affected. They also pointed out that the new measures are in direct contradiction with the government’s ‘Eat Out to Help Out’ promotion designed to stimulate the economy. The Advertising Association argued that junk food ads had already dropped by 70% over the last 15 years without any impact on obesity rates. Government officials, on the other hand, said that the sugar levy had been successful at forcing beverage companies to reformulate, adding that the new rules could have a similar effect. 

Similarly, analysts say that the coronavirus pandemic is hitting Mexico particularly hard because of the high incidence of obesity, diabetes and hypertension. While Coca-Cola noted a 28% global drop in sales during the second quarter due to the coronavirus and lockdown measures, sales in Mexico only dropped by 5% as people drank just as much but inside the home. 

The Minister of Economy said Mexico’s new labeling rules to highlight food and drinks products that have sugar, salt or fat content above a certain threshold will be rolled out as planned on October 1. He added that the coronavirus made this policy a priority. In response, the National Chamber of Sugar and Alcohol Industries (CNIAA) argued that sugar should not be blamed for the obesity crisis. Mexico’s per capita sugar consumption decreased by 36% in the past 25 years, while obesity and diabetes cases have been rising, it highlighted. 

Overall, however, the coronavirus pandemic is expected to cause a surge in obesity rates. A study by the University of Alberta found that stress, especially financial stress, enhances people’s urge to eat comfort food as the body, under stress, looks for high-calorie foods. To make things worse, many beverage companies, including alcoholic beverage makers, are facing a shortage of aluminium cans as producers have been adapting to the in-home consumption market and using cans instead of kegs. As a result, more companies are having to resort to using plastic bottles. 

If you’ve been thinking of switching to sugar-free Haribo Gummy Bears you may want to think again. A series of Amazon reviews brought to light the fact that the sugar substitute used, Lycasin, caused significant digestive and gut issues when consumed in large quantities. One review in particular caught the attention of The Mirror and likened the experience to a scene of The Games of Throne taking place in the bowel. 

This summary was produced by ECRUU

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