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Changing course: Wine struggles in ecommerce, battles ‘Amazon effect’

The U.S. wine market is now the largest in the world, but retailers are still struggling to compete on ecommerce channels, reported Beverage Daily, citing Rabobank’s Wine Quarterly Q3 report and an earlier report on alcohol ecommerce. “Changes in technology, business models and market structure are disrupting the market and creating new sets of winners and losers among wholesalers, retailers and suppliers,” Senior Beverage Analyst Stephen Rannkeleiv wrote in the Wine Quarterly. “Responding quickly to these changes will determine who survives, who thrives and who fades away.”

Beef: It’s still what’s for dinner

Today’s beef is healthier than ever, reports Food Dive. Despite consumers’ concerns about their health and the environment, production and consumption of beef continues to rise. “Eating quality and wholesomeness of beef is the best it’s ever been,” Senior Animal Protein Analyst Don Close told Food Dive. “The industry collectively got together and came to a conclusion that we’re going to have to make changes and be more responsive to product quality and consumer input,” he said. “Those changes led to better genetic selection, cattle that gain quicker and use less feed per pound gain, leading to higher production expectations.”

I Can’t Believe It’s Not…

Global retail sales of dairy alternatives have risen 8 percent annually for the past 10 years, and the current market for milk alternatives is valued at $15.6 billion, reports Food Business News. “Dairy alternatives are on the rise as consumers are increasingly going dairy-free, particularly when it comes to fluid milk used on things like cereal or in coffees,” said Senior Analyst Tom Bailey. “These products have competed in the dairy space for decades, but competition has intensified as dairy alternatives broaden in types, styles and categories of product.”

Nightly Business Report: The U.S. “Meat Glut”

Senior Animal Protein Analyst Christine McCracken discussed the U.S. “Meat Glut” on CNBC’s Nightly Business Report. If frozen stockpiles of U.S. meat continue to grow, we could see a significant drop in meat prices, she said. Price drops could hurt farmers, but consumers could benefit from lower-cost meats this holiday season.

2.5 Billion Pounds of Meat Piles Up in U.S. as Production Grows, Exports Slow

A record level of beef, pork, poultry and turkey began stockpiling in U.S. facilities in July, reported the Wall Street Journal. U.S. production of meat far outpaces consumer demand, leaving the U.S. increasingly reliant on exports. But Mexico and China—two of the largest foreign buyers of U.S. meat— both implemented retaliatory tariffs on U.S. pork products. The combination of trade risk and expanding meat supplies could result in “one of the biggest corrections we’ve seen in the industry in several years,” said Senior Animal Protein Analyst Christine McCracken.

Italy’s Illy Coffee Attracts Interest From JAB and Nestle

Family-owned Italian coffee maker Illy Coffee is one of the biggest independent roasters still in the business. Most other independent chains and smaller brands have been consolidated among the three major coffee industry players – Nestle, JAB and Starbucks Corp. – reports Bloomberg. “It’s tougher and tougher to compete without growing. As the market consolidates around you, staying the size of an Illy or even a Lavazza becomes more difficult,” Senior Beverage Analyst Jim Watson told Bloomberg. “As they all get bigger, and even as Lavazza gets bigger, it definitely puts Illy’s place at risk.”

How U.S. and China Tariffs Are Rippling Through U.S. Industries

Tariffs in Mexico drove down U.S. milk prices in early 2018, and new tariffs imposed by China on cheese and whey further complicated the market outlook for U.S. cheese makers. “We are going to see more significant impacts to inventory,” said Senior Dairy Analyst Tom Bailey to the Wall Street Journal. “We will struggle to move cheese products into other markets.”

Mexico peso surges, lifted by Lopez Obrador comments

The Mexican peso surged in early July, boosted in part by newly elected Mexican president Andres Manuel Lopez Obrador’s announcement that he would not ramp up spending in the year ahead. Concerns about an increase in government spending could come back to hit the peso later this year when Lopez Obrador presents his first budget in December, Senior Market Strategist Christian Lawrence told Reuters.

How Can Grocers Drive Alcohol Sales in an Ecommerce World?

If alcohol sales continue to underperform online and if online grocery sales grow as fast as analysts expect, then supermarkets could lose $3.9 billion in alcohol sales per year by 2022, said Beverage Analyst Bourcard Nesin in a June RaboResearch report. In this Progressive Grocer article, he offers four strategies to help retailers increase online alcohol sales.

Parched Plains Means Cheap Burgers for Fourth of July Grilling

Burgers were cheaper just in time for the Fourth of July in 2018. Because of a winter drought that dried out pastures, ranchers were forced to sell their cattle early. Higher supply drove down beef prices mid-summer, but supplies could tighten up down the road, Senior Animal Protein Analyst Don Close told Bloomberg.

Milk may need a makeover: Alternatives to dairy are increasingly winning over consumers

Consumer perceptions of dairy-free have shifted. While dairy alternatives may appear healthier than milk and dairy products, there is no evidence to prove that, Senior Dairy Analyst Tom Bailey told CNBC. Rather, “the makers of dairy alternatives generally appear to be doing a better job of connecting emotionally with consumers who favor more dairy-free options to meet their own perceptions about health and lifestyle,” he said.

From Peas to Hemp, Dairy Companies Are Milking ‘Just About Everything’

Beverage producers are “milking just about everything,” says Senior Dairy Analyst Tom Bailey in his report titled, “Dare Not to Dairy: What the Rise of Dairy-Free Means for Dairy.” Firms that have invested in dairy alternatives have shown better returns as consumer demand for plant-based food and beverages grows, he told Bloomberg.

Craft Beer in Asia

Craft beer reached Asia in the early 2000s, nearly two decades behind North American and the European market.

Is Nestlé eyeing up Starbucks’ packaged coffee business?

Senior Beverage Analyst Jim Watson spoke with Food Navigator about why a tie-up between Nestle and Starbucks would make sense for both parties. “Starbucks has lots of growth opportunities through its digital rewards platform, food offerings in the US and store openings in China, but coffee beans in the retail channel is not a growth segment,” he said. “For Nestle, this can provide additional scale and help build out a more powerful retail portfolio to compete against the growing JAB companies.”

Limes Are Cheaper Just in Time for Cinco De Mayo. Avocados, Too

Higher lime prices are typical for March and April, and partly boosted by increased demand ahead of Cinco de Mayo, Senior Analyst Roland Fumasi told Bloomberg. The seasonal gains were exacerbated this year because of adverse weather in Mexico, but prices eased just in time for the May 5 holiday.

Rabobank eyes potential effects of NAFTA breakup

Senior Analyst Roland Fumasi predicted potential consequences for the North American produce trade if the U.S. pulled out of NAFTA. Fumasi said that if the U.S. were to withdraw from NAFTA, imports of fresh produce from Mexico and Canada to the U.S. would likely increase. “In that scenario, product flowing from Mexico to the U.S., and from Canada to the U.S., is going to be more price competitive and cheaper,” he said.

Trading wine for weed? Experts say trend likely to accelerate thanks to legal pot

Many experts predicted that the beer industry would be the alcoholic beverage most affected by the legalization of pot, as drinkers switched to weed to unwind at the end of the day. Global Beverage Strategist Stephen Rannekleiv, however, believed that wine drinkers, especially women, would be more likely to make the switch. “Young men are already smoking,” he told USA Today. “It’s the people who are more educated and affluent who are saying ‘if it’s legalized, I’ll give it a try.’ And that’s definitely the demographic of the wine consumer.”

After 124 years, Hershey tries to be more than just a chocolate company (again)

Chocolate maker Hershey moved to once again diversify its product portfolio in early 2018. Senior Consumer Foods Analyst Nick Fereday spoke with CNBC about how confectionary companies must look for growth opportunities in other food categories in order to stay competitive. “Confectionery companies are realizing they lived in a bubble — a privileged category, isolated from the day’s trends. There has been a wake-up call that no category is immune to the challenges facing the food industry, and now they’re all looking for growth,” he said.

On the Money: Paying More [Video]

Senior Markets Strategist Christian Lawrence talks with CBC TV in Canada on the rising cost of living in the country. “When you look at the components that are driving prices up, it’s not really the consumers that are contributing to the inflation – it’s more on the supply side,” he said, citing the rising costs for gasoline, housing and internet access. “That really squeezes disposable income in a household and it’s going to squeeze consumption, preventing consumers from spending money on other things.”

Rising Cannabis Use Could Cut Into Wine Consumption

The wine industry could face competition from the legalization of marijuana, but hardcore wine enthusiasts are unlikely to change their consumption habits, Global Beverage Strategist Stephen Rannekleiv told Forbes. Rather, he expected that causal wine drinkers, who often pour a glass to unwind at the end of the day, would be more likely make the wine-to-marijuana shift. As a result, Rannekleiv predicted the under-$10 segment to see the most potential impact from legalization.

Dollar Extends Last Year’s Slide Into 2018

The U.S. dollar posted its fifth straight quarterly loss in April 2018, while the euro, the yen and other emerging markets currencies were up in the first quarter of the year.

If China Strikes Back – Potential Implications for U.S. Food & Agribusiness

After the U.S. government announced a package of trade sanctions on Chinese imports of around USD 60bn, China announced it would retaliate by targeting several U.S. agricultural products. So far, China has said it would impose a 25% tariff on pork and a 15% tariff on nuts, fruits, vegetables, and wine. At this point, the picture is not complete yet, but we can begin to evaluate the potential consequences based on current information.

Rabobank: Awaking the ‘sleeping giant’ of online alcohol sales

In their report “The Times They Are E-Changin’” Rabobank beverage analysts urged alcohol brands to carve out a space in the booming e-commerce channel. Many of the largest grocery retailers have scrambled to offer online options, creating an opportunity for alcohol brands to move their sales online as well. In fact, online alcohol sales could soon surpass online grocery sales overall, said beverage analyst Bourcard Nesin.

Grocery poised to grow online alcohol sales

Beverage analysts Bourcard Nesin, Steve Rannekleiv and Jim Watson believe the online grocery channel will develop into the most important driver of online alcohol sales, according their report “The Times They Are E-Changin’ – Where Alcohol Brands Can Win Online.” Large-format brick-and-mortar grocery channel accounted for 25% of beer and spirits sales and 44% of wine sales in the U.S., according to the report. “The data suggests that the share of alcohol sales coming from online, currently 1.6 percent, will eventually catch up to, or even surpass, grocery overall,” they stated.