Food Chain News - July 19

Our food system is undergoing rapid change: increased demand for organics and lots of new ways to get dinner to the table means supply chains, labels — and maybe even waste — are becoming more complicated. Check out some recent Food Chain headlines and add your thoughts in the comments.

Danone, best known for yogurt products, recently bought WhiteWave, makers of Horizon organic dairy products and Silk soy and almond beverages.

Danone, best known for yogurt products, recently bought WhiteWave, makers of Horizon organic dairy products and Silk soy and almond beverages.

As food companies adjust to changing consumer preferences — more GMO and organics, fewer conventional-ingredient products — some are acquiring once-niche players to address new needs. WhiteWave (makers of Horizon organic dairy products and Silk soy and almond beverages) was purchased by Danone (the French yogurt maker) for $10.4 billion, the latest in a string of similar mergers or acquisitions, including Hormel’s purchase of Applegate Farms and General Mills’ acquisition of Annie’s. “The reality has changed on the shelf,” said Danone CEO Emmanuel Faber. He said the sales of those products are growing around three times as fast as their conventional counterparts and are no longer niche.

And this shift toward organics isn’t limited to American markets. Danish supermarkets are making deals directly with food producers to meet consumer demand. “Our sales have increased by almost 50 percent during the first six months of this year compared to the same period last year,” said Jeppe Dahl Jeppesen, the purchasing director at Dansk Supermarked Group.

While some are bound to view this as a “sell-out” by the smaller companies, these larger food companies can adapt to changing consumer behavior by acquiring innovative companies. Ideally, these acquisitions will bring sustainable practices to a larger market. Keep watching for more of these mergers and acquisitions.

According to Goldman Sachs, Millenials are the consumers driving much of the change in preferences. They’re into healthy trends, ethnic flavors and they value convenience over price. “The front door is the new drive-through. Food arrives at the home or office with tech-enabled efficiency powering all aspects of the food supply chain.” Check out how foodie businesses in Miami are meeting these new needs.

Seems consumers are turning towards online purchases with stores that offer on-site pickups, rather than opting for home delivery. Too much time waiting for deliveries, impatient consumers are saying.

An increased interest in local and artisanal ingredients means more frequent and shorter trips for suppliers — it's a more complex logistical job for the "cold chain."

An increased interest in local and artisanal ingredients means more frequent and shorter trips for suppliers — it's a more complex logistical job for the "cold chain."

In addition to nifty new craft food products and app-driven “last-mile” services that aim to respond to new consumer preferences, some changes in the food sector are less obvious. As producers move toward new flavors and more “wholesome” sources, players in the supply chain are facing increased distribution complexity: “A lot more local food is sourced from micro-suppliers, which adds to distribution complexity and more labor-intensive work, [Javier] Botello [director of business development for Americold] explained…. ‘Today there are more customized orders and a greater variety of temperature requirements. Americold and other service providers in the cold chain are asked to do more value-added services,’ he said.”

Look for personal supply chains that offer the ability to bring customized food and medicine to your door, or at least to a local drive-through kiosk.

It’s all part of a growth trend for reefers, or refrigerated shipping vessels, as the type of cargo they carry and how they respond to new logistical needs evolves. “Perishable fruits and vegetables, fish and other food products account for most of containerized refrigerated shipments. But other goods, including temperature-controlled chemicals, medicine, pharmaceuticals and floriculture products are increasingly migrating toward ocean freight.”

This is an opportunity for engineers and food scientists to innovate. And the new Panama Canal locks should support this growth in ocean freight, as long as we see a return to more sustained economic growth.

Rather than labels that include GMO information right on the package, Congress approved a bill that allows for a "digital link" to GMO information. Will you be scanning your food at the market?

Rather than labels that include GMO information right on the package, Congress approved a bill that allows for a "digital link" to GMO information. Will you be scanning your food at the market?

The U.S. Congress has gotten on board with GMO labeling — just not in the way most labeling advocates wanted. The bill sent to the White House on July 14 allows for “a text, symbol, or electronic or digital link” to help consumers determine if a product contains genetically modified organisms. The bill is less stringent than a similar law recently passed in Vermont (and would supersede the Vermont law if passed), and critics say “shoppers shouldn’t need a smartphone to know whether their foods contain GE ingredients.” Would you scan a QR code while grocery shopping?

The bill awaits President Obama’s approval; look for a response from Vermont soon.

If no animal died to put protein on your plate, and yet the protein is derived from chicken, can it be considered vegan? An Israeli startup says yes, and it has the backing of some rabbis. SuperMeat is “developing a method for bioengineering ‘cultured meat’ from animal cells. Its tagline: ‘Real meat, without harming animals.’” Here’s how it works: “Cells will be harmlessly taken from a chicken and put into a special machine that simulates the bird’s biology, allowing them to self-assemble into meat.” The company’s product is still a few years from hitting the market.

Is meat that doesn't involve a dead animal still meat? Israeli startup SuperMeat says yes, and some rabbis agree. Photo by David Wild, via Creative Commons.

Is meat that doesn't involve a dead animal still meat? Israeli startup SuperMeat says yes, and some rabbis agree. Photo by David Wild, via Creative Commons.

Observers at this month’s International Food Technologists convention in Chicago are seeing a surge in meat-substitute foods. Look for this trend to continue beyond the usual vegetarian crowd to the newer and larger flexitarian crowd.

Finally, no matter what food trend comes and goes, research shows that Americans are tossing — whether at home, at the supermarket or at the farm — nearly half of the food produced on farms, a staggering waste of water and other resources and a dangerous addition to landfills. ”It’s not a food production problem or a food storage problem. It is a food distribution problem.” The Guardian breaks down the whats, wheres and whys of the waste in this in-depth article.

The Guardian's article includes infographics like this one that break down how much and where food is wasted, from the farm to the refrigerator.

The Guardian's article includes infographics like this one that break down how much and where food is wasted, from the farm to the refrigerator.

Until the packaging industry finds an inexpensive and less-wasteful way to package food into smaller, more individual servings, we are likely to see a continuation of this pattern.


Are you a food supply chain innovator? If so, enter our third annual Food+City Challenge Prize for the chance at $50,000 in prizes, plus expert mentors and valuable feedback from industry insiders. Submit your idea today!