Today we look at how the lower prices in restaurants could be causing a major problem. Are we fooling ourselves when it comes to eating healthy? A local food system comes to the rescue. What retailers need to do to get us to spend money in this environment. An article in the New York Times challenges CPG profits. A food & drink consultancy opens a new office – in the Metaverse.
Today we look at how the lower prices in restaurants could be causing a major problem. Are we fooling ourselves when it comes to eating healthy? A local food system comes to the rescue. What retailers need to do to get us to spend money in this environment. An article in the New York Times challenges CPG profits. A food & drink consultancy opens a new office – in the Metaverse.
Welcome to the Lempert Report LIVE. Today, we honor, and we acknowledge Juneteenth and there's a great story. I highly recommend it in Oprah Daily, written by Mackenzie Jean Felipe talking about the foods for Juneteenth and learned something new. All day, every day. Red foods are the most prominent feature on the Juneteenth menu. That includes soda punch, hibiscus tea, red Velvet cake, red beans, and rice, hot sauce, fruits like strawberry and watermelon. And the historical importance of red food traces back to the times of enslavement, because many of the more common foods of the day were white, green or brown. There was an excitement that came with the rarity of eating red colored foods and also big on barbecues, pork, chicken ribs, hot links and brisket. And then, as side dishes, they have prosperity meals which are corn, cornbread, colored greens, cabbage, black eyed peas, pork potatoes, yams, and sweet potatoes. And another fact, I didn't know, black eyed peas and pork represent wealth. Collared greens, or any dish using leafy vegetables are said to bring good fortune and corn symbolizes gold. So we learn something new all the time. Today we're gonna take a look at how the lower prices and restaurants could be causing a major problem. Are we fooling ourselves when it comes to eating healthy, a local food system comes to the rescue, what retailers need to do to get us to spend money in this environment. An article in the New York times challenges CPG profits, and a food and drink consultancy opens a new office in the metaverse. But first, kudos go out to Uber who developed and donated a version of its software to help the United nations deliver food in the Ukraine. Sally, tell us more.
Sally:Phil, this is so wonderful to hear that Uber is doing something really positive with their technology for free. They have offered it to the world food program. And what it's doing is it's helping them get smaller vehicles into areas where they need to get food aid, to be to people. And they can track, they can see when it was delivered. Um, it's wonderful because they've had a hard time with these larger vehicles getting into certain areas.
Phil:Yeah. And, kudos go to Uber and anybody that can use what their resources are to help others that are in need. Um, they deserve it. So, um, let's talk about the price of food and the impact here. What's what's going on, where we should be concerned that today it's cheaper to go out to a restaurant than buy foods in a grocery store.
Sally:Yes. If you're reading the food news in the past couple of weeks, we are, we are hearing that food products for at home are way more expensive than going to a fast casual restaurant. The CPI for restaurant purchases rose 7.4% for the year ended April, 2022. And for food at home CPI, grocery and supermarket food purchases, it was 11.9% higher for the year ended May, 2022. So this is a really big difference.
Phil:It is. And, Breeze did a survey and here's some stats that are, that are very interesting. 88% of consumers have cut spending as a result of inflation. 73% have cut back on restaurants and takeout. 63% on consumer spending 62% on social spending, 57% on groceries, 54% on vacation, 44% on gas and 35% on debt payments. Uh, 75% of us are worried about providing food for, for ourselves and our families. While 93% are intentionally driving less to save gas money. And then, uh, 67%. And this is probably one of the most worrisome stats. 67% say that the current state of the economy has negatively impact their mental health. And 81% said that inflation has made the more stress than usual. So not, not great news as a result of these prices. And when we take a look at rising food prices, there's a lot more effect as well. For example, obesity, how, how do food prices relate to obesity Sally?
Sally:Well, the consequences, and we've heard this from researchers for a long time, but we're still hearing this today that the consequences are not what you would think they would be people with lower incomes with medium and lower incomes, um, that need to pinch pennies on food, uh, tend to buy these more calorie dense, highly processed, or, you know, fast food because it's less expensive, it's more filling, but the result is, um, a problem with a bigger problem with obesity. And we particularly are concerned about this with our children, because once those, that obesity starts at a young age, it becomes very difficult. As they grow to get a better, get a handle on it, and it, it can potentially cause a lot of health problems.
Phil:And when we look at sugar, salt, and fat obviously those are the main ingredients when we go to fast food restaurants that are cheaper. And we really just have to, you know, hold back a little bit and just, you know, think more about what we're gonna eat than just, you know, running out to feed our bellies.
Sally:Yes. And it, and it's great to see, you know, there are some supermarket stores that are making real efforts to have great promotions on fresh fruits and vegetables and to try and get those healthy, make those healthy foods more accessible to people. But hopefully we're gonna see more of that.
Phil:Yeah, I hope so because the other problem that came out another study came out from the U S D A matter of fact, um, the study author, Jessica Thompson, um, put together a study to ask people to rate their diets is either excellent, very good, good, fair, or poor. They had to conduct a 24 hour questionnaire and they surveyed more than 9,700 people. 85% were off base when they asked to rate the quality of their diet. Almost everybody overestimated how healthy it was. So, you know, our perception on what we're eating is that far off as well.
Sally:Yes. And just last week, we were talking about also the influence of social media and how studies are showing us that, you know, all these, you know, very popular TikTok posts about healthy diets, you know, are actually not giving real healthy information. So there is a disconnect with people on, you know, what they think they're eating, you know, whether how good it is for them. And, you know, if they're eating enough fruits and vegetables and whole grains, you know, which is what we want people to do.
Phil:And, um, this article also has something I've never thought about before and what their recommendation is for people to avoid saying, I am on a diet or I'm going on a diet. And the reason is that mentally it implies that the diet is temporary versus making a lifestyle change.
Sally:I think this is really smart. And, and we are seeing this perspective on changing your diet a lot more, I think, and it's, it's really been a long time coming because, you know, it's restrictive diets. We have shown in studies that they, they are not usually successful for most people. And it's hard for people to stick to them.
Phil:It is, it is. So in Food Navigator, they did a story about how retailers and brands need to rethink their inventory and promotional strategies to attract and maintain shoppers, retail and food service sales for may served 8.1% from a year ago, but slipped three tenths of a point from April because April was weaker. We talked last week.I think it was last week about target, having to slash prices on their big TVs again, to try to get people in there. But the reality is that all these pundits are saying because of climate change because of gasoline prices, because of labor shortage, it's gonna get worse before it gets better.
Sally:Right? Sadly, we are hearing that, but we're also hearing that, you know, that analysts believe that that consumers do have money. They're just being extra, extra careful on how they spend it, because they're really worried about these prices that are continuing to go up and up and up. So, you know, what, what the recommendation here, what this article in food navigator was talking about is like that, you know, the companies, the retailers and supermarkets, um, have gotta have gotta be a little bit creative on how they create a better experience for people in the store to entice them to come to the store and shop, to run better promotions for people on, um, you know, like what we were just talking about on fresh fruits and vegetables and foods that, you know, they feel a lot, they feel are valuable that it is valuable to spend a little bit extra on that, on that product.
Phil:So what we're seeing is we're seeing people being more cautious about money. But you know, in these times, there's a lot of controversy out there. And I just saw this morning how much money, big oil is enjoying record profits. This is the first quarter profits of this year, shell 9.1 billion Exxon 8.8 billion Chevron, 6.5 billion BP, 6.2 billion and Phillips 4.3 billion. So we're seeing all these big companies, oil making a lot of money, but also we're seeing big food companies make a lot of money what's going on there.
Sally:Yes, I think this is very disheartening for people that are struggling to buy food that they're, you know, they're, they're hearing from Oxfam international that 62 new food billionaires were created during the pandemic. You know, calling out some of them by name cargo, the food company giant is expected to report record profits this year. And so that family has now joined the Bloomberg billionaires list. And so it's, it's really an interesting message that consumers are getting, you know, that, oh, we have to raise prices. Everything is more expensive because you know, of labor shortages and we don't have the supplies and because of, you know, the climate and what's going on in with the Ukraine. But still people are getting very, very wealthy.
Phil:Yeah. And, not everybody, retailers have continued to raise food prices, but farmer profits have remained stagnant or declined for decades. So the farmers aren't making the money, uh, these companies have their record profits. We keep on seeing all the time, you know, these announcements of what these CEOs are taking, down in profit. I just read an article over the weekend where the number two guy at Google, um, 20, I think it's 26.5 billion, a million dollars last year. Um, so for me, what I don't understand is, you know, certainly the government president Biden, everybody is telling these companies, you know, don't raise prices. We have retailers saying, if you're gonna raise prices, you gotta prove it to us. But in the meantime, you would think that with these record profits, what they would do is they'd keep prices low so that consumers don't freak out and, and consumers don't have to, you know, go to the gas station and pay a hundred bucks and it doesn't even fill up your car.
Sally:Yes. And a New York times article recently called it greedflation, you know, and this is when these large co corporations are raising their prices during times of extreme economic crisis. And, you know, when people are having a hard time.
Phil:Yeah. And we could just hope that a lot of these companies either wake up or the government does something, to keep them from doing this. So in the metaverse there's this consultancy of food and beverage marketing consultancy, by the name of SALT, who has announced that they're the first food and drink consultancy to launch in the metaverse. And it it's actually their office, an event space is within a British pub. It's called the salt arms. And, you know, they feel that they can work just as effectively with their clients in the metaverse and they can go into their offices. What do you think?
Sally:Well, I really love hearing about this because, you know, we've been talking about the metaverse a lot, a lot, and we've been talking about the opportunity for education in the metaverse the opportunity for bringing in new employees and training them in, in the metaverse. So for me, this is another great opportunity, to use this platform, um, for people to connect. And in this situation, I think of consultants, you know, my brother-in-law was a consultant, a financial consultant for companies for many years, and that put him out of town away from his family Monday through Friday, you know, going from Charlotte, North Carolina, to New York city. Um, and I think about, wow, so here's an opportunity for that type of work, that consulting to just happen right there in, in the metaverse.
Phil:Yeah, it makes a lot of sense. and also can keep down costs, consider. And we look at the amount of flights that have been canceled, u m, over this past weekend thousands. And, you know, the price of airlines are just going through the roof. They're t hey just keep on increasing. So, you know, I think that it's a great move and who knows, maybe t he Lempert Report w ill take place in the metaverse.
Sally:That would be fun.
Phil:And now it’s time for The Lempert Report. The Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2022 was announced last week by a group of Democratic Senators and Representatives in an attempt to control growing corporate concentration. We’ve all read and heard the reports of record profits by many agribusinesses this year.“Corporate profiteering and out-of-control consolidation by big agricultural firms have led to increased prices at every point on the food chain, from the farm to the grocery store,” said Representative Mark Pocan(D., WI—2nd) in a statement announcing the legislation.“Congress must do more to help local farmers be competitive while providing greater market transparency to the American consumer.” The legislation is welcomed by several farmers and ranchers contacted by Bryce Oates reporter at the Daily Yonder.“The Agribusiness Merger Moratorium Act would give those of us trying to build a better food system hope that some in Congress have seen how corporate monopolies, from seed to grocery store, are making it impossible to keep family farmers on the land,” Chelsea Davis, a Callaway County, Missouri, farmer and Chief Operating Officer of The Root Cellar, a Mid-Missouri local food hub told Civil Eats. Davis said that if we want our food system to be more sustainable and resilient, we have to make policy choices that would stop further monopolization at every stage of the supply chain.“These huge corporations don’t care about our rural or urban communities, our streams, and our rivers, or being good neighbors,” she said.“I just hope Congress and the President will act quickly because too many family farmers are running out of time.” The Daily Yonder writes that addressing corporate power in agriculture has been a major focus for many Democrats since 2021. A White House analysis on concentration in the beef, pork, and chicken industry states that four firms control approximately 55-85 percent of the market for these food products.“That reflects dramatic consolidation of the industry over the last five decades, as the large conglomerates have absorbed more and more smaller processors. In 1977, the largest four beef-packing firms controlled just 25 percent of the market, compared to 82 percent today,” according to the analysis.“In poultry, the top four processing firms-controlled 35 percent of the market in 1986, compared to 54 percent today. And in pork, the top four hog-processing firms controlled 33 percent of the market in 1976, compared to 66 percent today.” Sally, what's hot in job opportunities this week?
Sally:When we talk about the great resignation or the great migration, however, you're looking at it. I think the companies have got to really think about what is financially motivating generation Z and millennials. A new study reveals that younger generations may feel more optimistic about the future and are making plans to work beyond traditional retirement age, gen Z and millennials may not be saving and investing in their futures, but instead they're spending more cash on things like taking vacations. A new study from fidelity found that 55% of 18 to 35 year olds halted retirement savings in 2020 and 45%. Don't see a point in saving until things return to normal. However, 39% of those 18 to 35 year olds do plan on retiring later than they did pre COVID working those extra years to make up for the financial pain of today's high inflation, high cost of housing, student loan debt and high credit card debt. So the question is for these companies, trying to figure out how to attract and retain new employees is do 401ks and savings plan matter right now to these generations, or would they find it more meaningful to have hiring benefits such as cash advances or maybe paying off student loan debt,
Phil:Which is something very important that certainly Congress keeps on talking about, but not doing anything about w e can only hope. I spoke with Mark Detelich, Chief Product Officer at Syndigo about the metaverse and he shared what he thinks we should be looking at for the complete interview. Just log on to Supermarketguru.com and click on"Exploring the Retail Metaverse". So when we look at the leading brands, the, the CPG companies, if you would, people that are leaders like P&G, they all have this concept of the first moment of truth. When a shopper's faced with how to select a product that's on the shelf, how does the metaverse change all that?
Mark:Sure. You know, I mean, I think that the metaverse gives you the opportunity to create, um, a very personalized experience. First of all, um, as a shopper and sort of curate almost the experience that, that you wanna have with products that are relevant to your lifestyle and, and, and your needs. So for example, I am on a paleo diet. I wanna see foods in my aisle that are paleo friendly, right, and be able to, um, engage in a shopping experience like that, that, that initial, um, moment of kind of the traditional, um, purchase cycle of doing research and, and narrowing down my options and finally making a decision to buy those activities and behaviors are still there, but the metaverse gives us the opportunity, um, to create these experiences that make it much easier to search and find a product that you're trying to, to, to purchase and evaluate it with all kinds of additional, um, context and information that can really tell the story about the brand or that product and help that chopper make a buying decision to put that in his basket and maybe even, um, build the basket with additional products or services that are related to what they're purchasing in the first place.
Phil:On today’s Bullseye it’s all about Google. It’s common knowledge that Google has wanted to get into the business of selling us things– just like Amazon does– for years. But they just haven’t seemed to make it work, or get us to see Google as that type of service. According to Yahoo Finance, e-commerce is projected to reach$2.27 trillion in 2025. Well, they are trying once again– this time with a couple of new innovations and a twist, that just might work. At their recent Google software conference they announced that the Google marketplace will be a free marketplace for merchants. No commissions, no fees. A huge twist from the Amazon model of fees and more fees that many merchants complain about. And Google’s move might just attract a strong following of merchants. Unlike Amazon, Google doesn’t seem to want to be a retailer or a delivery service(they tried that with Express in San Francisco in 2013 and had secured major retailers including Target and Walgreens.) This time Google just wants to expand their search and information tools and make them very very shopper-friendly. The technologies include shoppers using photos to search for retail products and a feature that lets shoppers go from merchant listings on Google search to checkout in one click. Similar initiatives that TikTok and Meta have also discussed implementing. Google is setting its sights high– and will also help shoppers buy and research NFTs, homes, cars, mortgages and even which college you want to go to. Morgan Stanley Bank published last fall research that showed consumers were using Google and YouTube to research and price-shop more often than people used Amazon, eBay or Walmart. Sally, do we have any insights from our viewers today?
Sally:We have a comment from hobokeneddy McCarthy, love the name. And this, this is, this is a very interesting one to me. You know, fellow, I was at, my neighbor's house the other day, and they have a huge, beautiful vegetable garden that takes up their entire front yard. And they were just kind of letting people in the community come and pick some vegetables and things out of there. But hobokeneddy McCarthy says now more than ever, people need to grow their own food between the GMOs and the price gouging. It's only going to get worse and learn how to do home canning
Phil:Hobo. I agree with you<laugh> I agree. And also let's not forget all the research that show that when people garden, when they raise their own vegetables, their stress level gets reduced. Getting closer to nature, getting a little dirt on your hands is one of the best ways to counter these stressful times that we have. So hobo. Thanks for, thanks for commenting. And remember, go to SupermarketGuru.com, check out our past archives for the Lempert Report LIVE, and don't forget to sign up for our newsletters. We'll see you here back next week. In the meantime, again, don't forget. Go to SupermarketGuru.com.