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Earnings Calls and Biogas
5th February, 2023
Earnings calls from the big companies are back in full force, while consumers are getting anxious about elevated prices. Let’s dig in.
This week:
🛍️ Biden snaps back at grocery stores in South Carolina.
🏜️ Drought is crushing communities in Ethiopia.
☕️ Starbucks kicks off earnings season for the food industry.
🫣 The UK distances itself from Europe.
⛽️ Food waste is getting turned into biogas in Benin…
POLICY
JOE VS. GROCERY STORES
While in South Carolina, President Joe Biden grilled big food retailers, stating “there are still too many cooperations in America ripping people off”.
Prices for staples like eggs, milk, and bread have jumped more than 11% in 2022 and 5% in 2023 in an inflationary surge that hasn’t been seen in 40 years.
But, as food prices have remained elevated, profits of huge food-retailers have achieved 20-year highs and record-breaking low costs. Suspicious?
ZOOMING OUT: From spending millions of dollars to increase competition in the meatpacking industry to requiring suppliers to offer the same prices to every food retailer, the current administration is doing what they can to control the situation.
But whether this will be enough to help Biden before the election is a mystery.
CLIMATE
ETHIOPIAN HUNGER WORSENS
A new report has shown that at least 372 people have died in two northern Ethiopian regions from drought-induced hunger in the last six months.
Worse still, since the findings were from a 10-day assessment in just two regions of Ethiopia, more deaths of a similar sort are likely.
With more than 3 million people facing acute hunger in the north of the country already, some analysts say that the situation is eerily similar to the 1984 famine, in which 500,000 Ethiopians starved to death.
ZOOMING OUT: Periodic fighting in the Amhara region between state forces and local militiamen hasn’t made things better. And while this is being overshadowed by conflicts elsewhere, it looks like more international assistance will be necessary soon.
BUSINESS
STARBUCKS FIGHTS BACK
Amidst growing antagonism towards big restaurant brands and worrying inflation, Starbucks was the first big US food chain to release its quarterly earnings. The results? Better than expected.
While the company’s sales slowed and share-price slipped, more discount offers managed to entice enough customers to soften the financial landing.
And for a company that has received the a lot of backlash for its stance on unionisation and the Israel-Palestine conflict, this is a MIRACULOUS result.
ZOOMING OUT: In the long run, however, things are looking a little sketchy. Far fewer sales in the Middle East and competition from coffee brands in China mean that Starbucks may have to do more than buy-one-get-one-free offers on weekends to bolster its bottom line.
SUPPLY CHAIN
BRITS CLASH WITH EUROPE
A new UK law will now require European food products, entering the country, to be subjected to more stringent inspections. To say the least, food companies are not pleased.
Starting in April, animal products will have to be inspected by an authorised veterinarian, chilled products will have to match VERY specific requirements, fruits and vegetables will be classified as medium risk products alongside meat and much more.
Why worry? Well, as an example, the UK imports 50% of its pork from Europe. And with a concerning shortage of vets, there may not be enough officials to sign off on so many imports. Imagine this scenario for tons of other products entering the UK!
ZOOMING OUT: The issue of price is also up in the air. Fewer goods from Europe may mean that consumers will have to take price hikes on the chin.
But the UK government urges that this policy will protect the country from disease outbreaks and economic harm. Interesting.
THE BRIGHT SIDE
FOOD WASTE TO ENERGY
Small and medium-sized farms account for around 95% of Benin’s agricultural production. However, these farms produce enormous amount of food waste.
Enoch Gnaga and his company - Benin Biogas - have come up with a solution. They’ve created a system that turns food waste into biofuel that can be used for cooking and heating homes.
By building a network of concrete food waste tanks beneath various neighbourhoods and industrial zones that burn excess food, they’ve revolutionised the way in which dozens of farms and hundreds of homes manage their waste.
And, so far, Benin Biogas has provided fuel for over 560 households and 24-hour off-grid electricity in some areas.
Better still, the leftover compost gets transformed into fertiliser, reducing the reliance on imported - and potentially damaging - foreign alternatives! Food Jungle approved ✅
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BEFORE YOU GO…
Coca-Cola will temporarily remove labels from its Sprite bottles in the UK to try out label-less packaging.
Co-founder of healthy fast-food chain Leon - Henry Dimbleby – establishes a venture capital firm to discover “better ways to feed the world.”
Berlin-based, Delivery Hero, has sold its entire stake in Deliveroo as consumer takeaway demand has dwindled.
Residents of Catalonia will be banned from washing their cars to alleviate the region's worst drought on record.
Brazilian environmental agencies that oversee the country's adherence to climate pledges strike for better pay.
Delivery riders for Deliveroo, Just Eats, and Uber Eats protested pay and working conditions in the UK.
TAKE A BREAK
If you’re interested in some quality ORIGINAL journalism on what’s been going on in the food industry, look no further than Green Queen.
Founded in 2011, by Sonalie Figueiras, the team looks to analyse and discuss the latest news in food, from cultivated meat to food waste. Thoroughly recommend! 🤩
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