Category: ECRUU weekly

As more countries around the world look to progressively unlock their economy, many food producers are still struggling to cope with the coronavirus outbreak. The disease is now spreading in Brazil where Raizen, one of the world’s largest sugar producers, reported that 15 workers at a Sao Paulo plant had tested positive for COVID-19. The meat sector, with its densely packed processing lines, remains one of the most vulnerable and a court forced JBS SA to close a meat plant in Rio Grande do Sul for two weeks. 

Some groups have jumped on the opportunity to highlight issues in our current food system and call for a dramatic rethink of the status quo. In response, a coalition of industry members insisted that livestock and modern agriculture were in no way responsible for the outbreak, which originated in wildlife. They asked the EU to keep supporting the meat sector and insisted on its high safety and welfare standards. 

In the US, meat plants are struggling to maintain a positive image as many criticised a decision by Tyson Food to reinstate a policy on absent workers which centres around “punitive effect for missing work due to illness.” Tyson has also taken a central role in the government’s price-fixing investigation as the firm confirmed that it was cooperating with the Justice Department. By becoming one of the first parties to admit to misconduct and collaborate with authorities which will now go after other firms, Tyson will be offered leniency, confidentiality and possible financial benefits. 

The impact of the pandemic on other food sectors has been more discreet but not always less significant. In Florida’s poor Immokalee area, a doctor revealed that half of the people he tested had been infected, making him think the area had “one of the highest rates of coronavirus infection globally.” Some 25,000 farm workers live in Immokalee, mostly to harvest the tomato crop, but many are undocumented and officials have not made the area a priority. 

Food producers who rely on foreign demand are also particularly vulnerable, like West Africa’s cashew nut growers. The region is responsible for 55% of world production but very little is consumed locally. Most of the crop is usually processed in Asia and Olam – the largest player in the market – commented that prices should remain low for a while as the pandemic disrupted cross border trade. In a demonstration of how global the food supply chain is, an African exporter noted that the collapse in cashew prices could be linked to the mass cancellation of weddings in India. 

How the world trades food could also be impacted by the coronavirus as the CME Group announced that its grain option pits will remain closed until the situation in Chicago and Illinois significantly improves, with the introduction of a vaccine or a treatment. A broker said she was struggling after losing the advantage of being on the floor, while Futures International suggested this could mark “the end of a 180-year era.”

Countries like Singapore are realising the key role international trade needs to play to feed people. The country unveiled a plan to diversify its trade partners and has been approving more countries for food imports, bringing the total to 170 countries. A plan was also launched to produce 30% of food needs locally by 2030, compared to 10% currently. The situation is going in the opposite direction in Venezuela which is now “on the verge of famine” according to the International Crisis Group. Farmers have not been able to sow crops because of a fuel shortage.

Things could be changing over at Nestle as the CEO mentioned a potential plan to sell the Nestle Waters North America unit in order to refocus on premium international brands like Perrier, S Pellegrino and Acqua Panna. The firm also announced the purchase of a majority stake in Vital Proteins, the US’ largest producer of collagen-based supplements, vitamins and food and beverage products. 

ADM, Bunge, Cargill, COFCO, Glencore Agriculture, and Louis Dreyfus joined forces under a new partnership program with Solidaridad Brazil which will focus on improving the sustainability of soy production in the Cerrado. The deforestation rate in the area is currently twice as high as in the Amazon. In Iowa, Cargill is hoping to expand a program that paid soy farmers for their efforts to sequester carbon dioxide and improve water quality. The venture is now looking to expand to other crops and find new corporate partners. 

After Murder Hornets made headlines in the US, another dangerous-sounding insect is now taking the spotlight: the Samurai Wasp. Italy is releasing the wasps, originally from Asia, in the hope that they will prey on the brown marmorated stink bug which was accidentally introduced from Asia. 

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Many workers in the US food industry have been taking a stand as part of the #blacklivesmatter movement. On-duty officers have been asked out of a Starbucks in Arizona while employees staged a walkout in a Condado Tacos in Ohio after refusing to serve patrol officers during protests. This piece in Eater explains that this is in part because a majority of the food industry is made of minority workers. However, companies, too, are taking a stand. In Georgia, Coca-Cola was one of 60 signatories to a letter urging the state to pass hate crime laws. And Unilever’s Ben & Jerry’s issued a statement with a call to investigate the consequences of discrimination. Last September, it had launched a new ice cream called Justice ReMix’d in support of a reform to the criminal justice reform. 

Unilever’s head of marketing said consumers expect brands to have an opinion, explaining that “Brands need to move at the speed of culture and culture is moving faster than ever.” She warned, however, that while brands had an important role to play, they should make sure that they don’t come across as opportunistic which would result in a backlash, as L’Oreal discovered last week.  

Cargill just announced it would no longer release quarterly reports to reduce costs but also to keep the focus on long term goals. In its sustainability report, it said it was on schedule to meet the goals in the palm oil sector, notably to eliminate deforestation from its third-party supply chain – which represents 95% of its supply – by the end of the year. It added, however, that getting indirect suppliers to fall under the “No Deforestation, No Peat and No Exploitation” compliance was an issue and may require a different approach. 

Cargill said it had reduced CO2 emissions in ocean transportation by 800,000mt in the last two years as part of a commitment to reduce emissions in its supply chain by 30% by 2030. It is also working on a standard greenhouse gas emissions reporting process and has partnered with technology experts to find solutions for its beef supply chain as part of its BeefUp Sustainability initiative. 

The group launched a new sweetener made from wheat and barley malt syrup, called SweetPure. A company official said the sweetener was “label-friendly,” explaining that consumers want to know everything that goes into their food. This comes at a time when the US’ Sugar Association petitioned the FDA to force manufacturers to clearly identify the use of alternative sweeteners in their products. The FDA recently mandated that products list the amount of added sugar, so manufacturers are often exchanging sugar for other sweeteners that do not have to be labelled as such. Another Cargill official added that “The call for radical transparency is increasing.”

A class action lawsuit in Minnesota is taking Cargill, JBS USA, National Beef Packing and Tyson Foods – which control 80% of the meat industry – to court accusing them of fixing the price of meat since 2015 and deliberately running plants at below capacity to create a livestock surplus. This is coming out of an investigation started last month by 11 Midwestern states looking into explaining the rally in retail meat prices during the coronavirus outbreak while the price for livestock collapsed. The head JBS subsidiary Pilgrim’s Pride was already charged with fixing chicken prices by the Justice Department last week. 

In Tyson Foods’ 2019 Sustainability Report, it noted that the group was the country’s largest meat producer to go into plant-based protein via its Raised & Rooted line. However, its meat production throughput is picking up again with the easing of lockdown measures. It expects that demand for meat would continue to be strong even if people eat more at home. Besides, a survey by FMCG Gurus in 18 countries found that people were increasingly worried about the weight they gained from increased snacking during lockdown. It suggested there would be a growing demand for healthy snacks, as people will likely continue to snack amid the stress of a second wave of the coronavirus but will be more health conscious about it.

A Yale study looking at the impact of posters showing the carbon emissions of dishes in dining halls showed that two-thirds of students took this information into account when making their choice. Project Drawdown wants to get food delivery apps to join the initiative, arguing that people were likely to choose more sustainable dishes if they had the information at hand. The restaurant Just Salad has already added the estimated emissions next to each of its dishes in the menu. Those who come in can thus find out that a salad with a yogurt dressing has a heavier carbon footprint than a salad with chicken. In Europe, meanwhile, Danone’s water brand Volvic has been certified as carbon neutral by the Carbon Trust.

Nestle joined the Race to Zero campaign which commits to net-zero emissions by 2050. The group’s head of digital innovation and transformation in the US said she was putting together a common, single agenda to streamline and strategise the testing and adoption of new technologies across the group. She added that the media often hyped-up new technology, when in fact it was just a nascent stage. 

On the topic of testing, Nestle Australia is looking for a paid chocolate taste tester. If you’re interested, you can apply here. 

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Countries around the world are unlikely to impose more restrictions on food exports, according to the FAO which said that “food supply is not the issue” amid the coronavirus pandemic. The export control measures imposed by countries like Russia, Kazakhstan, Ukraine and Vietnam have been removed as the supply chain showed it could easily cope with the increase in demand from countries building food stocks. However, an economist warned that an uncontrolled spread of the disease in Brazil could be dramatic as the country is “basically […] feeding China”. 

Moreover, ships looking to export grains from Argentina and Paraguay are struggling because of the very low water level in the Parana river, which is pushing traders to buy from Brazil instead. Besides, the US reaction to China’s new security policy in Hong Kong, along with the US President blaming China for the coronavirus pandemic, could potentially lead to the collapse of the Phase One trade deal. China’s state-run agricultural groups have been reportedly instructed to stop buying US farm goods. US lawmakers, however, remained confident that the tensions were only temporary and that China would honour the deal. Some pointed to the Chinese purchase of US soybeans earlier this week, although market sources said this could just be motivated by the low price. 

The United Arab Emirates, which currently relies on imports for 90% of its food supply, is intensifying efforts to produce more food locally. The country successfully harvested rice grown using underwater irrigation and desalinated sea water, a method considered more sustainable than Saudi Arabia’s use of groundwater and rotary sprinklers. In parallel, Abu Dhabi Ports Co launched a new shipping company, called Safeen Feeders, which will strengthen food and medical imports from India, Pakistan, the Persian Gulf and East Africa. 

In contrast, Thailand is cementing its position as a major food exporter. A government official said she expected that the proportion of food and agricultural exports will keep growing – the weak economy and currency should keep supporting exports. Nonetheless, farmers are worried about a new ban on paraquat and chlorpyrifos which was enforced as of June 1. Farmers often do not have alternatives and total food output could suffer as a result. A similar decision to ban glyphosate was reversed in November after some pressure from the US. 

Glyphosate was in the news this week as lawyers presented arguments in the appeal of a California verdict against Bayer, the maker of the Roundup pesticide. Bayer’s legal strategy reportedly revolved around fighting the three guilty verdicts to gain leverage and settle cases. The Californian court heard arguments that federal guidance comes before state laws, as Bayer highlighted that the Environmental Protection Agency does not classify glyphosate as cancerogenic. Regardless, legal experts predict that Bayer will need to spend USD 10-12 billion to settle around 125,000 lawsuits. 

Although it started in a wet market, some experts are using the coronavirus pandemic to highlight the inherent dangers of massive livestock farms, or Concentrated Animal Feeding Operations (CAFOs), as they call for urgent institutional reforms. In Germany, the Green Party went as far as proposing a minimum price for meat, while a new law was passed banning meat plants from hiring foreign workers on short-term contracts. And in the Netherlands, Europe’s biggest pig slaughterhouse managed to avoid disruptions by relying on robots to do most of the work. 

In the meantime, global food producers continue to bet on the growth of plant-based meat. ADM and Marfrig Global Foods, the world’s second-largest beef producer, created a new venture called PlantPlus Foods to market plant proteins in North and South America. The market for plant-based meat should more than double in the next 5 years, the firms estimated. Otherwise, Nestle will be forced to rebrand its plant burger in the EU after a Dutch court agreed with a claim by Impossible Foods that Nestle’s Incredible Burger was too similar to the Impossible Burger. Nestle will rename its product Sensational Burger as a result, while it used the name Awesome Burger in the US after a court made a similar ruling. 

Competition is also growing in the coffee sector as large firms are rushing to fill in the gap left by small operations which did not have the cash reserves to survive an extended lockdown. Nestle and Starbucks are seen as the two main contenders, but Coca-Cola joined the scene with its 2019 purchase of Costa Coffee, the second-largest coffee chain in the world. Earlier this week, Coca-Cola launched the first at-home Costa Coffee products in the EU. But small coffee operations might not all disappear, as this couple from London discovered. They opened two small coffee shops inside red telephone boxes and realised that the lack of space inside the boxes was actually an advantage in the time of social distancing. 

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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. 

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While many small independent farmers have been able to benefit from the impact of the coronavirus so far, an expert argued that “the current boom is a sweet illusion; the bust is coming fast”. A US survey revealed that many small operations would not survive the year. Part of the issue is that the pandemic seems to have reversed the previous trend where consumers were moving away from processed food to focus on eating local and fresh products. An executive at a large food firm noted that “people aren’t cooking, they’re reheating”, as he highlighted that processed food has gotten much better both in terms of taste and health. The result is that the disease could open the door for large multinationals to take over smaller operations. 

Right on cue, Nestle announced that it will invest USD 100 million to grow its presence in China. The plan includes building its first plant-based meat factory on the continent, expanding a pet food plant and a biscuit factory. In Brazil, Bunge said it will purchase two soy processing plants from Imcopa for a combined USD 9.16 million. The move would cement Bunge as one of the largest soy processors as it currently operates 12 facilities in the country, compared to Cargill’s eight plants. 

Others are seizing on the crisis as an opportunity to highlight sustainability goals. Danone, for one, will add the commitment to produce healthy and environmentally-friendly food to the company bylaws. The key aspect to sustainability is transparency when it comes to gaining consumer trust, according to Cargill’s latest Feed4Thought survey. The Global Salmon Initiative (GSI) has taken the idea to heart and published its Sustainability Report outlining the performance of salmon farming. Salmon farms have a lower carbon footprint and more efficient use of feed when compared to land-based operations, the report claims. 

Meanwhile, the price of food in US grocery stores saw its biggest monthly jump in 50 years in April with the outbreak of the coronavirus. Data from the Bureau of Labor Statistics revealed a 2.6% overall price hike in retail food prices when compared to the previous month. The situation is similar in Latin America where rising food prices and shortages led to some violent protests. In Chile, the President argued that supply remained plentiful, although he pledged to accelerate the distribution of food packages. 

The extraordinary measures taken by the EU to alleviate the impact of the coronavirus are increasingly clashing with the bloc’s long-term sustainability efforts. For example, countries like France have relaxed rules on the use of pesticides, while a draft proposal by the European Commission outlined a plan to reduce the use of chemical pesticides by half by 2030. Similarly, the Agriculture Commissioner expressed his concern at the call from France and Poland asking citizens to buy local products instead of items imported from other EU nations. The idea could threaten fair competition in the common market, he said. 

The Commissioner also expressed concern at the amount of direct aid offered by some governments. The EU recently increased the limits on state aid but he argued that this would give wealthier countries an unfair advantage. Most of the direct aid so far has been offered by Germany and the Netherlands. A solution presented by Poland would be to increase the CAP budget to make it more resilient in times of crisis. 

A key piece of legislation is due to be published this week with the release of a draft Farm to Fork (F2F) strategy, a central component of the European Green New Deal. The bioenergy policy will also see a major rewrite and will focus on minimising the use of food and feed crops, while reconsidering whether biomass feedstock is carbon neutral. In response, Bioenergy Europe said it was concerned about the decision to impose arbitrary restrictions that do not reflect the scientific consensus.

In the meantime, official data from the EU showed that supermarket food and beverage sales surged in March when compared to February, most notably in Luxembourg, Ireland and Belgium where food sales were up 20%, 14% and 13% respectively. More dramatic was the surge in demand for Trappist Westvleteren 12 ale made by monks in Belgium. Their website crashed after being opened for just four hours because of what they called a “tsunami of visitors”. In the UK and Scotland, prime barley usually used to make scotch and beer might have to be used as pig feed. 

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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. 

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The latest quarterly results of the major agricultural groups show that the most significant impact of the coronavirus pandemic, so far, has been on the meat and biofuels industries. ADM reported a 2.2% drop in revenue, although it performed better than the market was expecting, while Bunge logged a loss and lowered its 2020 outlook. Both firms struggled with the collapse in biofuel consumption and the drop in corn or soybean demand, along with the closure of US meat plants and lower feed demand. For its part, Cargill decided to postpone its earnings release amid the uncertainty. Brazil was the only silver lining in the period, thanks to a weak Real and a recovery in demand from China. 

The failure to quickly implement containment measures in US meat plants could actually be boosting margins, especially after the President signed an order to keep them open which should protect them from lawsuits. With 22 plants closed, meat prices went up while the price of livestock collapsed. An expert estimated that the margin for cattle went from USD 74 in 2014 to USD 726 now. In response, ranchers are asking the government to correct the disparity in profit, while some lawmakers are already looking to block mergers to avoid creating more food giants and monopolies. 

Despite the recent White House order, Cargill is still closing meat plants across the US, such as in Wisconsin and Nebraska. The situation is more complicated in Canada as workers are legally allowed to refuse to work if they think it is still too dangerous. A union filed a lawsuit to block Cargill from reopening a plant in Alberta arguing that working conditions were still not safe enough. 

The supply disruptions forced Wendy’s to stop selling beef items at over 1,000 of its stores, while Costco is now rationing the sale of beef, pork and poultry products to three items per customer. The supply disruption is forcing people to change their habits, by buying chicken from small independent farms, for example. Unlike food giants like Perdue and Tyson, small poultry operations have seen little disruptions and some reported a 300% increase in retail sales. One farmer said he expected that large firms will keep struggling and that this was just “the tip of the iceberg”.

Beyond Meat is seizing the opportunity by offering discounts and large value packs to increase its market share. The higher meat price is eroding the premium for the plant-based meat, which was previously 2-3 times more expensive than ground beef. Moreover, the difficulties faced by the meat sector is protecting alternative-meat producers as shoppers would normally focus on cheaper goods amid an economic downturn. Nielsen data suggested that US sales of plant-based meat were up 200% in the week ending April 18 when compared to the same week last year. In Asia, plant-based meat is also gaining in popularity as the coronavirus outbreak was linked to the consumption of animal-based products, the World Economic Forum suggested. 

In India, Kashmiris are also struggling to find enough meat because the lockdown is slowing imports from other states. Consumers are not worried, however, as they are simply eating more locally grown vegetables, like haakh. Vegetables are not seen as a suitable substitute by everyone, however, and some regions in the US noted a spike in hunting and fishing permit requests. 

Agencies are warning of severe supply disruptions in Africa because of pests. The restriction on cross border trade and global air freight is hampering efforts to combat the worst locust outbreak in decades in East Africa, according to the FAO. The coronavirus containment measures are limiting the supply of pesticides ahead of the key planting season, which could jeopardise the production of key crops. 

A sudden change in lifestyle was also responsible for new consumer habits. Sales of sugar in British supermarkets were up by 46% over the four weeks up to mid-April, mainly because shoppers were reportedly doing more baking. In Sweden, a leading candy manufacturer reported a sharp drop in sales of pick & mix candy, as people are worried about touching the shovels to select their candy.

The coronavirus pandemic has created an unusual and sometimes painful sight: producers forced to destroy food crops because of the drop in restaurant demand, combined with a worrying increase in hunger as more people lose their jobs. The obvious solution is to divert some of the food to food banks. For example, Kroger said it will donate 200,000 gal of milk, as the Dairy Farmers of America estimated that 2.7-3.7 million gal/day of milk will need to be dumped. Even luxury products are going to food banks, such as these USD 60 prime 10 oz American Wagyu steaks from Snake River Farms. The meat usually goes to high-end restaurants but the farm donated 35,000 steaks, worth USD 2 million, to the San Francisco-Marin Food Bank.

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The US President ordered meat plants to remain open this week, using an executive order under the war era Defense Production Act. This came after the head of Tyson warned of an upcoming domestic meat shortage because of plant closures. According to USA Today, about a third of the country’s biggest meatpacking plants are in areas with high infection rates and over half of them have already reported infections. To make things worse, some 100 USDA health inspectors who have been touring the country inspecting plants have been diagnosed with the virus, causing concern that they may have contributed to the spread. The President also suggested that, under the act, companies would not be liable if workers get infected, although some say that only judges can make that call. 

About a quarter of the beet and pork production capacity is currently closed, creating a bottleneck in the country’s meat supply chain. The price of meat in supermarkets was up 5-7% on year at the start of the month despite ample supply of livestock. The timing is particularly bad as the US hog population is at record high because producers had planned to cash in on a surge in demand from China. In a bid to cope, factories have been given waivers to accelerate their slaughter pace. The Food Safety Inspection Service and producers said the faster pace is still safe, but the Food & Water Watch warned that the measure would compromise food safety and workers are worried this will facilitate a spread in the virus. There is also a concern that the outbreak of diseases like salmonella could soar as a result. 

Plants that produce eggs for the industrial sector have been euthanising chicken en masse due to the collapse of the demand from the restaurant sector. On the other hand, the wholesale price of eggs reached USD 3/dozen as of the start of April, a threefold increase within one month, as suppliers are struggling to meet the surge in demand. The Chicken & Egg Association noted that it was expensive for industrial egg producers to switch to selling to the retail market because of the equipment required. Further up the chain, this is affecting feed suppliers, and therefore corn and soybean farmers. 

The whole coronavirus situation pushed a group of US lawmakers to call on a global ban on “wet markets,” something which many animal welfare organisations have been advocating for a while. However, an analysis in The Guardian warns against the West’s negative bias against these markets, which are basically open air markets (the term “wet” comes from the water splashed on vegetables to keep them fresh). Many wet markets in Asia do not sell any meat, and small farmers depend on them to sell their produce. The sale of wildlife meat mainly happens in the unregulated markets, and is therefore unlikely to disappear under a blanket ban. And in any case, an expert noted that consumers are increasingly keen on buying from supermarkets, adding that wet markets could slowly disappear by themselves. 

The news of a potential shortage of meat in the US pushed the shares of plant-based meat company Beyond Meat, which has been struggling from the closure of restaurants and food chains. The company announced it was launching its products in China in a deal with Starbucks. The coffee chain has reopened almost all of its stores in the country. 

Nestle reported an organic growth of 4.3% in the first quarter, the highest in almost 5 years. Sales were driven in large part by pet food, as people panic-bought feed and are now spending more time with their pets – and therefore spoiling them. Nestle’s retail coffee products with Starbucks, Nespresso and Nescafe also performed well. The company is keeping an eye out for acquisition opportunities, the president said. 

The CEO of Danone noted that consumers are switching away from trendy niche products and returning to older, more established, and even sometimes old fashioned, brands. Campbell Soup and Kraft Heinz Oscar Mayer hot dogs are seeing a revival, while the UK is witnessing a growing demand for Smash instant powdered mashed potatoes. This is in part because it has been easier for these bigger groups to ensure supply amid the current restrictions but it could also be that consumers may be looking for reassurance in known products, which also happen to often be cheaper than the new, trendy ones. 

Many brands are even relaunching products popular in the 90s which were discontinued. A journalist noted that these brands have a strong nostalgic appeal. For example, Kraft is launching new flavour of Planters Cheez Balls, originally discontinued in 2006, General Mills is bringing back Dunkaroos and Coca-Cola is relaunching Surge. Most of these products were discontinued when consumers moved away from unhealthy ultra-processed products but an author noted that “there’s always going to be a few million people who are just in it for the craving and the fix”. 

This summary was produced by ECRUU

The spread of the coronavirus is shining a spotlight on the weakest links in the global food supply chain. This could have long-term implications on how we feed ourselves. Most dramatically, some people are facing a heightened risk of famine. The UN’s World Food Programme (WFP) warned in a new report that “we could be facing multiple famines of biblical proportions within a short few months,” because of the virus. The head of the WFP remained optimistic, however, saying this could be avoided by acting quickly and wisely. 

The alarming number of Covid-19 cases in US meat packing plants is also highlighting what labour unions are calling long-standing problems in the sector, like worker exploitation. A BBC piece analysed the case of the huge Smithfield meat plant in South Dakota – responsible for 4-5% of the total pork production in the country – which was forced to close after 644 employees contracted the disease. Efforts by the USDA to stabilise the food supply only made things worse. It removed speed limits on a lot of meat plants, forcing employees to work closer together, heightening the contamination risk which could then force the whole plant to close. 

Labour unions see a silver lining, however, as the whole country turns its attention to the previously ignored but essential role of the food worker. For one, companies are accelerating efforts to protect employees. A food union recently announced that JBS agreed to increase wages and reinforce safety precautions. Nevertheless, some argue that companies are offering too little too late – around 12 meat plants in North America are reportedly closed or idled. The situation is similar in Canada where Cargill agreed to slow production to protect employees at an Alberta plant but only after dozens of employees caught the disease. 

These meat packing plants are often located in Midwestern states where the quarantine orders are the weakest. Many Governors of the so-called Corn Belt have refused to issue stay-at-home orders but local officials warn that infection numbers are starting to soar. Despite a growing concern, the head of the USDA reassured that the meat and dairy supply was so far not affected. He added that the agency will support the sector by buying and stocking products. 

For the most part, governments around the world are working hard to make sure the poorest are still able to buy enough food and medicine. However, the informal sector has also been stepping in to help. In Italy, well-known mafia members have been seen distributing food parcels, while armed narco-traffickers in Mexico were traveling across the country to supply the poorest households with food. Some recognised the daughter of El Chapo handing out packages advertising her company “El Chapo 701”. In response, the Mexican President urged the groups to focus on reducing violence instead. 

In Croatia, the government is urging the young and unemployed to consider working in the agricultural sector to help address a labour shortage. The crisis helped “enhance” the importance of the sector, a minister said. The Austrian agriculture minister, meanwhile, asked consumers to help support the livelihoods of local farmers by buying more goods produced in their regions. She also encouraged supermarkets to offer discounts on local products. In the same vein, the British Nature Friendly Farming Network (NFFN) urged people to buy more locally and sustainably produced goods, and to consider working or volunteering on a farm. 

Changing consumer habits are helping rural grocery stores in the US which witnessed a surge in interest as people try to avoid crowded supermarkets. Nevertheless, grocers are worried that the trend will not last, as experts predict that online retailers will benefit the most. Online sales have been a lifesaver for many small coffee shops, although that might not be enough to stop many shops from closing. The Counter even wonders whether “Starbucks will be the last one standing”. Independent coffee operations remain hopeful, however, noting that the 1918 Spanish Flu was followed by the Roaring Twenties, a “transformative” time for coffee. 

Another sign that food is gaining in visibility is that Americans are using most of the USD 1,200 they are receiving from the government to buy groceries. But shoppers are looking at food items differently in these times, as this Quartz survey of 27,244 readers showed. Respondents now prioritise boxed wine and vodka over beer and whiskey, or spam over strawberries. You can see below the difference between the pandemic popularity of some items and their everyday popularity:

This summary was produced by ECRUU

The lockdown measures are expected to help a lot of alcoholics overcome their addiction, according to a research centre in Thailand. However, some  are so severely dependent that suddenly stopping drinking could be dangerous. In India, there have even been reports of people committing suicide due to alcohol withdrawal symptoms. So much so that two states are reopening liquor stores, saying that more people are dying from withdrawal than from the coronavirus. In Kerala, the government is issuing “passes” to alcoholics to allow them to buy drinks. The price of alcohol in the black market has surged, as well as break-ins into the closed liquor stores. “How to make alcohol at home” has also become a very popular Internet search in India, according to Google Trend. 

The WHO, however, had to issue a notice clarifying that drinking alcohol would not help against the coronavirus. This was after a major news channel in Iran reported that close to 4,000 people had died from trying to treat the coronavirus by drinking adulterated alcohol. 

We previously talked about the closure of US ethanol plants as a result of the collapse in fuel demand, causing a surplus of corn in the US. The other consequence of the plant closures is that food companies are running out of CO2 for their refrigerators. This could slow down the production of food, notably meat, the Compressed Gas Association said. The price of dried distiller’s grains, an ethanol by-product used in animal feed, has also shot up. Feedlots are stuck between rising costs and a fall in demand following the closure, or slowing, of meat processing plants. 

After idling a meat processing plant in Pennsylvania, Cargill has interrupted production at its egg factory in Minnesota because of a collapse in demand as it mainly catered for the restaurant and food chain markets. The company warned it would also be slowing meat processing in Canada. 

The animal protection agency PETA, upon hearing the news, sent a letter to Cargill urging them to take this opportunity to make vegan products instead. PETA argued that eating meat was responsible for causing the swine flu and the coronavirus epidemics in the first place. However, several scientists interviewed by The Counter pointed out that there was currently no evidence that neither SARS-CoV-2 nor CoVID-19 were foodborne illnesses. However, they warned that the supply chain of wild animals destroyed geographical and ecological barriers which, combined with the proximity to people, facilitated the transmission of diseases. Overcrowding animals is also an issue in animal husbandry, especially with the use of antibiotics. One of the scientists warned that “antibiotic resistant bacteria are globally, perhaps, the most important source of disease emergence.” 

Nestle noted a 50% increase in demand for frozen food products since the coronavirus containment measures started in the US, notably for frozen pizza, as well as a surge in demand for baking products. However, while #quarantinebaking has been trending on social media, supermarkets have been struggling to source retail-size bags of flour. Data from the North American Millers Association showed that, up until the coronavirus crisis, only 4% of the US’ flour production was used by home bakers. 

This could also signal a turnaround in grains consumption which has been falling steadily over the past decade, according to an analysis by The Counter. And while the bigger milling groups have been struggling to adjust to the switch in demand, consumers have turned to local grain suppliers instead. A local farmers’ market in New York City, for instance, reported a 50% increase in the sale of organically grown whole grains, flours, and beans in the Jan-Mar period. 

Ports in Asia are struggling under the growing number of containers that are piling up because the coronavirus measures have significantly slowed down the pace at which the containers can be cleared. Besides, Alphaliner estimated the equivalent of 9% of the world’s container capacity had been idled as of the end of March,, due to low demand. Overall, global trade could fall by up to 32% in 2020 because of the virus, according to the WTO. Exporting countries like Brazil, meanwhile, are struggling to get containers. Maersk said it was taking empty containers there to help deal with the shortage. 

In a bid to streamline domestic logistics, Bunge announced the launch of its trucking app, Vector, which it has been testing since the start of the year. Bunge noted that, in addition to accelerating and simplifying the process, it also significantly reduced contact between people and was therefore a crucial tool in the times of the coronavirus. The group said exports were moving well despite the containment measures. 

Cargill and Agrocorp, with the help of Rabobank, used blockchain technology to settle a USD 12 million wheat shipment from North America to Indonesia. The stakeholders said the technology helped them shorten the trade deal to 5 days, compared to sometimes as much as a month. The platform, dltledgers, has seen USD 3.3 billion in deals traded over the past 18 months. 

Going back to our beverage news, bars in Washington DC have been exceptionally allowed to cater to the takeout market. One of them, called Dirty Water, has been lowering buckets of cocktails from the third floor of the building where it is located. But you can’t beat this Maryland winery which is using dog delivery. 

This summary was produced by ECRUU