Welcome to the Lempert Report Live. On today’s broadcast– Snap Benefits ending, and what that means for supermarkets, is Sprouts Markets the best partner a brand can have? 2023 might just be the year of dining alone, Congress comes to farmers’ aid, and on Food Crimes we celebrate National Margarita Day– or do we? And on the bullseye Coca-Cola goes out on a limb, and I think its about to break. Check out Food News Today on SupermarketGuru.com for the most up to the minute newsfeed courtesy of our partnership with Cision. But first, out of the ridiculous file: An Oscar Mayer Wienermobile was parked at a Sonesta Suites hotel in Las Vegas to help celebrate Super Bowl. Thursday before the game weekend even started, thieves sawed off its catalytic converter. Seriously folks? Stealing from the Weinermobile? That just ain’t right. According to the Las Vegas Metro police, over 2,600 catalytic converter thefts were reported in 2022 in Las Vegas alone. Nationwide its over 10,500. Lets get started. So, Sally, on this emergency SNAP benefits, it's expiring because the pandemic is over, even though, in my opinion, it's not quite over yet. S o, here's the basis. Basically, you've gotta make$17,424 a year or less to get SNAP benefits for one person t hat equates t o$ 234 a month, two people$ 430 a month. But now what's gonna happen, because these benefits, because of the pandemic, are expiring, a lot of people are g onna go hungry. Tell us more about that.
Sally:Yeah, so Phil, this extended program to the SNAP program, started during covid to help people. And now, 3 2 states are preparing to phase out this emergency food stamp plan. I believe 18 states have already done this, but this is gonna leave about 30 million Americans that are on food stamps, right now. At the end of the month they're going to be affected dramatically like this. T h e average that individuals are gonna lose is about$82 a month in benefits. And this coupled with what we're seeing at the supermarkets as far as pricing, par ticularly on, m uch need ed pro ducts, staple products like eggs and dairy, th is is really going to affect a lot of people in a negative way, I believe.
Phil:It is. And when we talk about SNAP, you know, I mean, a lot of people that are young and for whatever reason they might be out of work. But also there's a lot of people, a lot of senior citizens, who are on SNAP that are trying to make it through their social security, through SNAP, through Medicare, Medicaid and so on. And this is really gonna take a big bite out of that. In fact, what we find are recipients that are now getting$281 a month, that's gonna go back to$23. T hat's what they were getting before the pandemic. Yo u g o from$281 to$23, mi llions of Americans are gonna have some severe problems. And the question is for su permarkets that now, and it depends on th e supermarket where they're located, they've got 20 to 30% of their volume coming from SNAP recipients. What happens to the supermarket once you start taking away that money? And we've seen, you know, sales, obviously during the pandemic increase in most supermarkets, you're gonna see a trickle effect of not only are these people gonna get hungry, they're not gonna be able to buy food, but the supermarkets are going to lose a huge influx of capital as a result of it. So it's something that, you know, I wish and nobody asked our opinion, b ut I wish that they would've phased it out gradually versus just the end of March. I think it's gonna hurt a lot of people. Talking about helping people. There's a report in Modern Retail that I found fascinating, w hy food s tartups are flocking t o Sprouts F armer's Market for their first major retail launches. I t talks about a lot of the brands that are there. Also it's important to note, S p routs has, I think it's 38 1 s tores throughout the country. So it ha s b ecome a major retailer, if you would. An d it, w hat they did is they talked to a lot of these sta rtups an d they said that Sprouts buyers wor k qu ickly and are enthusiastic about innovative and better for yo u pr oducts. And then, t he CEO, Jack Sinclair, great guy, met him, li ked him, is s aying that what he wants to do, and he has put in innovation centers in stores, is to generate buzz and to underscore the s hop pers that there's always something new to get excited about. So here's a retailer that is really curating products, making it exciting for customers, and also helping up a lot of these smaller companies.
Sally:Yes, I love the Innovation Center's idea, you know, where they have a rotating array of products that are new. A ccording to Sprouts, they have talked about how their customers are into natural and specialty foods, and so they're a little more willing to try new brands. They're looking for new things and they're willing to pay a little more money for these products. So this is a great opportunity for these new products. Som e of them are finding it, ea sie r to get into Sprouts and get more brand awareness than in Whole Foods. Whole Foods has been known for doing this for these type of products. So, I'm re ally excited about this program that they're doing, and I hope that it brings some new products to the forefront and gives them an opportunity to grow within other retail stores.
Phil:Absolutely. And, and really every retailer should be doing this. Now I know that there's a lot of retailers, H-E-B, Hy-Vee, and so on that have these events where local brands can come and pitch to get on their shelves. I think that's fabulous. And the more of th ese retailers that do this, it just helps everybody, to your point. It helps the consumer, helps Sprouts have something that's different, helps the brand. It's great versus just that mentality of piling it high and selling it cheap and taking whatever anybody brings you. And then, you know, if it doesn't sell, they throw it out. So Sprouts, buyers and merchandisers are really getting behind these products and helping them succeed. And I think that's a major role for retailers, especially these days, and especially as they've gotta compete online, where if you go on Amazon or any of these sites, you're just seeing product after product after product. There's no emotion to it. Sometimes the information's correct, sometimes the information isn't correct. Let's bring back some passion, if you would, to supermarkets. Talking about passion, there is a food writer and cookbook author by the name of Angelo Comsti, that has issued his 2023 trends. O ne of his trends has nothing to do with the foods that he's talking about. It's about solo dining. He says that eating alone is no longer a taboo as more people are finding joy in solo dining. So I guess, you know, you don't w ant t o deal with other people, just leave me alone. G imme food! He also said it's become totally fashionable thanks to the pandemic, a nd you can check out thousands of TikTok videos with the hashtags#solodate and#diningalone. What do you think? Is this go nna b e a trend? Ar e w e gonna see these hashtags, you know, grow and do something interesting?
Sally:Yeah, I think this is really interesting. A nd Angelo Comsti talks about how this trend could be attributed to the popularity of a South Korean trend, ca lled Ha nbok, which comes from two words meaning alone and ba p m eaning food. And so this became a popular trending concept an d h ashtag in South Korea. An d maybe that's where it started. He a l so talks about the pandemic that you mentioned, and now people being more willing to eat alone. On TikTok there are 9.6 million hashtags of#diningalone and 201.5 million of#solodate. So clearly it is catching on in some way. And I'd love to see how restaurants respond in creating this dining experience for them. Like is there a smaller, more intimate table or are we looking back at that trend that we saw a few years ago, you know, before the pandemic where we saw big community tables where the peo ple that were ea ting alone could come and join other people at a table. I'll be curious to see how that plays out.
Phil:Yeah, I agree with you. Because based on what he's saying, it's that, you know, I want that small table by myself away from people so I don't have to relate. And then when we look at the community table, that whole premise i s, you know, I don't know anybody. I don't have friends. I don't have a date. So if I sit at this community table, maybe I'll meet somebody that is worthwhile talking to. So I agree with you. It'll be interesting to watch to see if it actually happens. Y o u know, just by observation, I have noticed more people eating alone than probably hav e in a long time. And again, I would point to the pandemic as a result of that. But we'll see. Or are we just getting more antisocial and we don't wann a dea l with people?
Sally:I think it's all moms. Phil. I think moms want to eat alone.
Phil:O kay. Y eah.
Sally:Just a theory.
Phil:Politico, w ho I have great admiration for, in terviewed fo ur m embers of congress, who we re w orking farmers, and they as ked t h em c ertain questions. So the first question that they asked is,"what's driving up costs for your farm?" So obviously Senator John Te ster, pr obably the only working farmer in the Senate. Joh n Rose from Tennessee, he was the former Tennessee Ag Commissioner. He has beef cows on his farm. Then we've got Jim Costa from California, an almond Farmer, who represents Fresno, a critical agriculture district in California's Central Valley. And Doug La Malfa, a rice farmer in Northern California. So what's interesting is what most of them said was the price of fuel. The price of fuel and the availability of parts and cost for tractors. They talked about that. They talked about the cost of fertilizer in it. I love the fact that they're talking right to farmers. Bu t, you know, Cos ta ad ded one thing that I found really interesting, that we've got a problem in this country, he said we've not been able to address successfully, and that's the amount of food waste, whether it's in our schools or other products. One of the things I wan na lo ok at in this Farm Bil l re authorization, is how we can do a better job with the impact of food waste. Something that we talk a lot about to consumers that it, y ou know, they're saying,"oh, the price of food is through the roof". Well, look at your cupboard, look at your habits, because 40% of all of our foods is wasted in this country. And a lot of that has to do with how we deal at home. So i t's a problem. But now, Joh n T ester just put in an o th er bill in the Senate that relates to far mi ng. What's that about?
Sally:So, this bill is more about our farmland and who is buying our farmland and what what he's interested in doing is, n ot allowing our US a dversaries, th at would be China, Iran, North Korea, and, and Russia would not allow them to buy up our farmland. Now this is controversial because critics of it say, well, basically if they're offering a bigger price, then people should have the right to sell their land for th at price if they want. Snd then John Tester's response to that he still wants you to have the right to sell your personal property, how ev er you want, just not to these four countries because they actually propos e a nat ional security threat.
Phil:And to that, you know, the Air Force recently said that a proposed Chinese grain facility was close to its base near Grand Forks, North Dakota. And that presented a national security concern. I happen to like Tester a lot. He's gonna be running for reelection next year. I hope, you know, he gets reelected. I think think from an ag standpoint, he gets it. He understands it. He' s not about any BS. I re a lly like him a lot. And to be honest with you, I'd never really thought, I know that China, for example, you know, bought up Rockefeller Plaza in New York City and they've bought a lot of real estate, offi ce buildings and so on, both in New York and in other cities. I never really thought about the farmland until I read about this bill. And I think he's on to s om e th ing. And frankly, maybe it's controversial and I'd love to know what our viewers think, but I think he's dead on. I mean, it's not only buying up the farmland and whether it's a national security risk, but even just growing our foods. Let's take care of the US farmers first. And as it is, we import a lot of food from China. W e import all of our manure for our cows and chickens and so on from Russia. M a ybe it's time that we really looked at who's running agriculture here and step up. And good for Tester and you have my vote, not that I can vote in the Senate, but if I could, he would hav e my vote. You know, February is Black History Month. You found some black-owned restaurants during Black History Month and how we can access them. Tell u s a bit about that.
Sally:Yes, it's so easy and, you know, P hil, I took my daughter to the mall this weekend to go shopping and I was really excited about a couple of the stores we went to and bought something. T h ey were taking donations for certain b la ck organizations. One was for a m e n tal health organization and one was to help black girls with opportunities. And I also love that so many people are using the Roundup method now. Instead of saying, do you wanna donate a dollar? Do you wann a$2? The rounding up m et hod seems like it would compel people more. They don't feel like it's hurting their wallet so much. So I just wanted to say that first, that that is fantastic. But also if this month or any ti me o f th e year, if you wanna go and support black-owned businesses, you can go on Uber Eats, DoorDash, caviar, whichever platform you use, probably you can search on Yelp, you can search on Google, you can just look for black-owned restaurants. And there you can look locally what is in your area and support them. And I think this is just a wonderful thing that I did not even know was happening on these sites. So, hopefu lly they're promoting it better because I haven't heard a lot about it. But, yes, it' s a gr eat opportunity to support our black-owned businesses.
Phil:And also, we always talk about ethnic cuisine, a nd we look outside the U S borders, w hat's gonna be hot, you know, Pakistani foods this week, T hai Foods the next week and so on. A n d it would be great to be able to look at some of the cultural foods right here in the US t hat exist and be able to try them. And those delivery services, as you described, make it really easy and really simple for us. Al s o there are a couple apps Eat Okra, b oth for the iPhone and the Android. You can get that, that'll have it. There's the Nat ional Black Guid e, th at has just under 1300 food, dining and health and fitness organizations. And Eat blackowned.com f eatured over 4,000 blac k owned eate ries around the world. So an o ther way to celebrate Black History Month without getting political and just getting like some go od f ood for a change. So than k s Sally. This Wednesday is National Margarita Day– so lets celebrate– but heads up- retailer and shopper beware. Full A bit of history: The earliest occurrence of the famed cocktail was in 1938 by the father of the drink Carlos“Danny” Herrera. He made it in his restaurant located in Baja California, for a famous customer named Marjorie King, a dancer on the hit American theatrical Broadway“Ziegfeld follies” because she was allergic to spirits but not tequila. The margarita he created was triple sec, tequila, and lime juice. Ten years later in 1948, Margarita Sames, of Dallas high society, said she created the drink in her vacation home for her guests in Acapulco, Mexico in 1948. Tommy Hilton of Hilton hotel fame, who was friends with Margarita attended the party, and then brought it back to his hotel chains and put it on the menu. Jose Cuervo, tequila brand, claimed they invented it and was running ad campaigns for the drink in 1945, with the catchphrase,“Margarita: It’s more than a girl’s name.” Today there are a lot of variations– some people add Cointreau or Grand Marnier, some people prefer blanco or reposado tequila. But basically the recipe is always the same. Tequila, an orange liqueur, and lime juice. That is until now. PThis brand– BIG SIPZ sent me their version of a margarita. And I’m really confused. The larger package makes 3– 3.7 oz drinks– has 15% alcohol by volume and the ingredients are: malt beverage with natural flavors and certified color– the package front says Margarita Fresh Lime” and retails for$3.99. The 200 ml single serve size is marked as“classic lime” with 16% alcohol by volume and its ingredients are Agave wine(which is made from fermented blue agave and then fortified by blending with blanco tequila- with natural flavors& certified colors with a retail of$2.99. Why not straight tequila that has a much higher alcohol content? And whats with the malt beverage? Remember what happened to wine coolers when they changed from wine to malt. The triple sec? the fresh lime juice? This is no margarita and it is misleading to consumers and a food crime in my book. Retail buyers take a look at the ingredients BEFORE you put it on your shelves.
Sally:So how does it taste, Phil?
Phil:Well, Sally, as you know, I'm a margarita drinker. I,, like tequila and neither of these tastes like a margarita. Neither o f' em tastes like tequila. It's i t, it reminds me when I was in camp, m any years ago and they had a concoction, a, a d r i nk and we used to call it bug juice. And, and we called it bug juice b ecaus e all the flies and stuff would always be around, you know, the open pictures of it. And I t hin k that the bugs liked it better than we did. Don't try it, don't try it. On today’s Bullseye– Coca Cola has announced that it will raise prices again in 2023– the reason? They have“earned the right to price with the consumers’– through enhanced marketing and an agile packaging approach that balances premium and small entry level pack sizes for broader consumer appeal– according to the company. What does that even mean? CEO James Quincey on an investor call last week discussing the company’s 4th quarter earnings, explained that even though the inflationary environment appears to be cooling Coke is expected to see elevated inflation across its operating costs. He went on to say that‘it’s not our strategy to think of our business as commoditized where prices flow up and down in a kind of mechanical way. We need to do our own pricing by delivering for the consumers value they appreciate through the marketing, innovation, revenue growth management, the pricing and packaging work, etc. He explained on the call that Coca-Cola has“earned the right” in part through increased marketing spend and creative campaigns that“link occasions and passion points to drive engagement”. I don’t know about you, but I’m really not that passionate about any soft drink– certainly not one that keeps on increasing pricing. So let me get that right– rather than offering shoppers the same or discounted pricing– they are taking the money to spend in advertising? In Coke’s 4th quarter organic revenue grew 15%. They are forecasting revenue growth of 708% in 2023 primarily led by the price increases and mix of products. primarily from price increases and RGM initiatives. Unit sales however declined 1%. Reference point: Quincey owns over 32,000 units of Coke stock worth over$20 million. His makes$18,701,100 as chairman of the board and CEO of Coca-Cola according to Wallmine. Now I understand just who has that passion! The Lempert Report is all about inspiring ideas, making our industry think and challenging each other. Let’s think about“being the shopper” and how we can bring our supermarkets and restaurants closer to meet their needs. I hope you’ll come back to join us on next week’s installment of The Lempert report LIVE when we focus on the biggest and best insights– and the things that really matter. Be sure to visit SupermarketGuru.com for the latest marketing analysis, issues and trends and don’t forget to join us back here next Monday at 2:30pm Eastern for more.