The Lempert Report LIVE

Global Rice Shortage, Plant Based Menus, The Hamburglar is Back

April 24, 2023 Phil Lempert Episode 75
The Lempert Report LIVE
Global Rice Shortage, Plant Based Menus, The Hamburglar is Back
Show Notes Transcript

Welcome to the Lempert Report LIVE. On today’s broadcast:

Phil:

Welcome to the Lempert Report Live. On today’s broadcast the appeal of Gen Z, how social isolation is changing our culture, one restaurant chain that is changing its menu to be 1/3 plant based, what’s going on with rice, a restauranteur that is changing the world and, on the bullseye,– what’s up with McDonalds? Let’s get started. So we've talked a lot about Generation Z over the past few years. The importance of this group of people that are born between 1977 and the year 2012 last week at the RDBA Virtual Experience. We spoke a lot about Generation Z, how they've shaped more than any other with the digital age, climate, anxiety, concern, global unrest, wars, financial insecurity, student loans, and of course, the educational disruptions due to Covid 19. McKenzie surveyed Generation Z and found them to have the least positive attitude and outlook and the highest percentage of mental illness of any generation. Sally, what are we gonna do to help this generation?

Sally:

Well, Phil, yes they are. They are born between 1997 and 2012. So they are aged 11 to 25. So some of them are in middle school, and then we have some that are a part of the workforce now and maybe even starting families. But this generation, they are deeply affected by influencers and social media and digital marketing. And so we have to think a little bit differently about how we market to them. And then they also are influenced by an economic crisis that started in 2008 with our financial crisis and now with the cost of living being unstable right now. So, we're looking at a new way of marketing to them. And what we're hearing is that 90% of Gen Z are influenced by influencers. So it's very important for these brands to think about who is representing their products out there. But the problem we're running into is that not a lot of healthy foods when it comes to food healthy foods and foods with a higher nutritional profile are making their way through all of this digital marketing.

Phil:

And also to throw out another stat, 60% of the 1 billion users who are in TikTok, according to McKinsey, again, are generation Z. So if in fact, what we want to have is we want to have good, healthy foods by this generation what they really need to do is focus on how to market and how to talk to them. And I think that there are some groups that do that certainly here in Southern California. Erewhon, as a supermarket chain, is doing it really well. But I haven't seen a lot of brand advertising. And we're gonna talk a bit more about brand advertising in a little bit. But that's really doing it well. There's this one product called Liquid Death. It's a water product, and they use cans with imagery of heavy metal music on it. And the reason that they came out with this product is they had the people from Monster energy drink, and they found the teens were walking around with cans of Monster after they finished the energy drink and had water in it because the can looked cool. It was just simple as that, they said.

Sally:

Yes. We are hearing that a more playful style of marketing is good for this audience that they appreciate authenticity and they also appreciate a sense of purpose. So I mean, with that, when you talk about that, can I think about the metal music and the influence of that, and it looks cool, but I also wonder, Phil, since this is a generation that is more concerned about the planet and social issues that maybe they're just putting water in it to reuse that can.

Phil:

That's excellent point, excellent point. And when we look at some of the findings from McKenzie, it leads right into our next story about social isolation. Loneliness has been on the rise in the US for decades. One estimate is that more than two outta three working adults consider themselves lonely. The US Surgeon General is calling this an epidemic. And it's comes at a significant economic cost, lost productivity at work, increased spending on physical and mental healthcare. Medicare alone spends an extra 6.7 billion a year caring for socially isolated older adults. And why are we just so lonely? I'm not lonely. Are you lonely?

Sally:

I don't think so, Phil, but you know, I get to talk with you and Tony every day. So, I mean, yes. You know, a lot of people are working remotely particularly since the pandemic. And for those people that have not gone back to work or have not entered into hybrid work situations, then you know, it's understandable that there is a great deal more of isolation. You know, it's costing employers approximately 154 billion annually. They're workers are, they're quitting or they're not productive. it has organizational effectiveness you know, cost. And so it really is weighing heavily on the on our productivity in the work environment. Some of the things that we've heard that businesses can do to help their employees with this is to make sure that you're having moments during the week where there is required interaction, either in the office or gathering online. You can do that. But also finding ways for workers to take time to share something that's actually from who they are, their personal life, rather than it just being all business.

Phil:

And the other thing that what they talk about is the fact that when you're on Zoom, like we are now, you miss the other cues for body language. Cigna, the healthcare company did some research that found that workers who had the job resources of social companionship, good work life balance and satisfaction with communications were 53% less likely to be lonely than other people. Whitsons is a food service operator that runs a lot of school lunch programs. What they've decided to do after they had a concept restaurant called Veggabols. They've decided that they want one third of its menu to be plant-based by 2025. And they're making the schools have at least one plant-based offering. Do you think that this is gonna work?

Sally:

Well, I really hope so. I really love this concept. So what they did last year in New York, in a K through 12 school district, they piloted the Veggabols program. And this was a 100% plant-based program. So the menu was all vegetable and plant-based which is really incredible. So yes, the goal being that that we can reduce our impact, our negative impact on the environment, and also provide more nutrition for our students by offering more plant-based items. And this isn't like what we've already seen where, for example, my daughter is a vegetarian and you know, there will usually be a plant-based option at school every day, but meat is also served every day. So the difference here, I believe, is that meat is not going to be served every day in these cafeterias, and that could really reduce our negative impact on the environment. I believe they already saw from their pilot that the emissions saved from 49 account, the emissions saved were 80,820 pounds. Now that is equivalent to 90,966 miles driven. So we're already seeing that this type of concept can have a major impact.

Phil:

Absolutely. And also, if we can get students to go plant-based earlier in life, they're gonna carry that through for the rest of their life. And whether it's because of greenhouse gases, whether it's being healthier, whatever, we're all gonna win by doing that. We've got a major problem here in California but I don't wanna focus just on California. California is a major supplier of rice because of all the rains here. The rice crop this year is basically a third less, but then when we go overseas, China is the number one country that produces rice there. They've had droughts. So what we're gonna see is we're gonna see less rice that's out there, higher prices of rice, and it's predicted some people are predicting that it might be over by the year 2025 but I know at least in California, it's not gonna be over yet.

Sally:

Yes, this this crisis with rice production does seem to be something that is going to affect everyone worldwide. The war in Ukraine, and as you mentioned extreme weather issues, whether it's heat waves El Nino has a big effect on of this and as in California, there have been the atmospheric rivers, we've seen flooding across the globe. So there are a lot of weather issues here at play that are affecting this. Now the prediction is that it's going to get worse, but then it's going to get better. So let's hope that that's the way it is, that it's kind of like our eggs situation that we've seen where we saw our eggs go way up in price, but now they're starting to come down and things are getting better.

Phil:

So, sex sells. We know there's a fabulous story in the New Yorker about a new restaurant by Pinky Cole. It's in Atlanta, it's valued at a hundred million. They have some outputs now. We'll talk about that. It is called, and excuse the language, but it's called Slutty Vegan. And you know, basically they've got a lot of celebrities who have invested in it including Danny Meyer from Shake Shack. And this is another example I think of somebody who really knows how to market well to Generation Z as we talked about earlier. And frankly, here's an entrepreneur Pinky, who's at an early age you know was in the food service business and making money what she and her friend used to do back in high school. They would go to McDonald's, buy McChicken for a dollar, and then sell them to their classmates for$2. They would double the price. So what do you think about this whole concept?

Sally:

I think that this concept is very smart and very intriguing. Pinky Cole is 36 years old. She's had her company for five years. It started as a food truck in Atlanta, and then to their first brick and mortar. They have a lot of locations in the Atlanta area and in New York now. And this is a black-owned business. It is a plant-based food chain, which we have already talked about here on the show about the vegan movement within the black community and how that is really ramping up. So that is wonderful. And then what we were talking about earlier aboutGen Z and these younger generations about how they like playful marketing and authenticity and influencers. And so, this concept for me just kind of uses all of those things that Gen Z appreciate, particularly the playfulness. I mean, you can go on their website and you can see what some of the names of these items are. There's the Menage a trois, which is a vegan bacon, vegan shrimp, vegan cheese, onions, lettuce, and tomato with sauce on a vegan Hawaiian bun. So that's a plant-based burger with all of those things. They've got one called the One Night stand, a Fussy Hussy. It goes on. And they're really fun. And you know, I'm sure this makes for a lot of really great hashtags as well.

Phil:

Absolutely. Absolutely. I give her so much credit. Yeah. But you know, in the article it points out that even though she's got this huge following the the author or the columnist was there and overheard a mom saying to her child we love coming here, but never pronounce the names. Thanks Sally. On Lost in the Supermarket I sat down with Hanneke Faber the Global President of the Nutrition Business Group at Unilever, with sales of over$12 billion and sells in more than 150 countries. She is also a member of the Unilever Leadership Executive Committee. She has been recognized by Fortune Magazine as one of the most influential international women in business. The topic? Unilever’s quest to fix the food system. For the complete episode just log onto SupermarketGuru.com. Here’s what she had to say. Talk to us a little bit about the evolving balance that you've seen between retail and the purchase of foods for home preparation, delivery, eating out, and how Unilever has adapted with these changes that we've seen over the past two or three years during the pandemic.

Hanneke:

Yeah, great question. So I think the great news overall is that the food market is in, is in good shape around the world. So it's growing robustly and we think it will continue to grow robustly for many years to come. driven fundamentally by population growth. and then within that you know, now post a pandemic, we think eating out is gonna grow ahead of eating in eating in and obviously eating at home. We saw a nice boost from Covid where we all relearned how to cook at home. but the demographics are just in favor of away from how we eating around the world. There's urbanization, people are moving to cities. about 55% of people lived in cities in 2020. That's projected to go up to about 70% by 2050. And when you're in a city, you just have more access to eating out. people are entering middle class, more women are working, all those people are traveling more, there's more tourism and all those things. drive eating out and eating in restaurants. So while we think the whole food market will grow probably about 45% a year the, the food service market will grow a little faster, probably seven or 8% a year. but both are very exciting numbers.

Phil:

On today’s Bullseye– lots of news from McDonald’s. The hamburglar is out of retirement and staring in McDonald’s new TV spots. Why you might ask? Well, McDonalds has decided to tweak its recipes on the Big Mac, McDouble, cheese burgers, double cheeseburger and hamburger. What they’ve done is to add more Big Mac sauce to the Big Mac, add onions to burger patties while they are being cooked(guess someone took a look at White Castle), changed its cooking process to make hotter an meltier cheese and have softer, more pillowy buns toasted golden brown, buns. The new recipes are already here in Los Angeles and expect to roll out nationwide in 2024. Chad Schafer, Chef and Senior Director of Culinary Innovation was quoted as saying,“I’ll always remember my first burger from McDonald’s. And now my culinary team and I have the best job in the world: thinking about ways to bring even more of that iconic McDonald’s taste to fans.”. When I was 16, like many of you, I worked at McDonald’s. The path to success was to make your way up the ladder to different positions. Back then you start out making milk shakes and depending on your skill worked you way up the ladder to finally making Big Macs. Those days you stacked the burger, had a contraption that would add just the right amount of sauce, then assembled a paper band around the burger before you finally wrapped it. In 2018 McDonald’s announced it was switching to fresh beef for its Quarter Pounders– maybe that should be part of the reformulation on all it’s burgers? Probably help the taste more than just a more pillow like bun? 2022 was a record year for the chain that saw its US sales increase 10.3%- so why did McDonald’s restructure in early April with hundreds of layoffs and pay reductions for some employees? McDonald’s temporarily actually closed its US offices as they notified corporate employees in marketing and operations that their positions were being eliminated. Since the start of the pandemic McDonald’s has accelerated new restaurant opening, enhanced its digital platform added AI to its drive thru’s to improve order accuracy and of course, dealing with labor shortages, was able to eliminate that human position and replace it with technology. Back to the hamburglar. I never got that campaign and never will. Maybe it’s his position that should be eliminated? 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.