The Lempert Report LIVE
The Lempert Report LIVE
Insights into the Food Delivery Revolution and Pesticide Risk Reduction Efforts
Get ready for an enlightening journey as we unpack the seismic shifts happening in the food delivery marketplace. What if you could have your groceries at your doorstep in just 15 minutes? The sale of FreshDirect by Ahold could be the beginning of this revolution. We'll also delve into Ahold's strategic refocus on omni-channel strategies and what this could imply for the future of food delivery. Is it just a fad, or is it simply getting tailored to meet evolving consumer demands?
Next, we’ll pivot to some alarming findings you won't want to miss. Major food manufacturers have been rated an ‘F’ for their efforts in reducing pesticides. We’ll guide you through the Environmental Working Group’s 2023 Shoppers Guide to Pesticides and Produce and provide you with the must-know 'Dirty Dozen' and 'Clean 15'. Then, hold on to your headphones as we explore how the FDA is taking action, the importance of consumer awareness, and the potential for product reformulation in the food industry. And finally, hear why the legendary John Legend is taking a break from social media and why our #FoodNotPhones Initiative believes the real connection is offline. Don't miss out on this captivating conversation!
Welcome to the Lempert Report LIVE. Just a reminder, don't forget you can get up to the minute food news on SupermarketGuru. com. Just log on to the Food News Today tab, courtesy of our partner Cision. On today's episode, grocery Delivery's Big Story, CPG Not Doing Too Well on the Pesticide Report Card. New York says put back that Sugar. On #Food Not Phones, a stern warning from John Legend. And on the bullseye, It's all about simple package design. Let's get started.
Phil:So, Sally, last week we had this announcement that Ahold is selling Fresh Direct, and I think that this is going to really change a lot of the food delivery space. First of all, they're selling it to the turkey-based firm, Getir. Now Getir, keep in mind, and you might remember, came to New York in that 15-minute fast delivery syndrome that we went through. That lasted about half a minute. They had come to Boston, New York and Chicago and didn't do all that well. So what's curious to me is whether or not they're going to try to do the 15-minute delivery with Fresh Direct or leave it as it is. The thing that I'm probably most concerned about is Ahold said that the reason that they're selling it is to focus on Omni Channel. So when I look at the definition of Omni Channel, it means all channels, which includes delivery, obviously digital and in-store. So I'm not sure that that's what's going on behind here. They also said that market conditions appear to have prompted the grocer to rethink its strategy. In, I think it was 2022, Fresh Direct pulled back.
Phil:They had been in Philadelphia and Washington DC. They then cut that service. They just focused on New York. So I think that there's been some stuff going on for a while. Let's not forget that Ahold also owns PeaPod and PeaPod Labs. They put them together where PeaPod fell under Fresh Direct. It's not clear whether Getir is also acquiring PeaPod. My presumption is that they are. And also, when I look at Ahold, a lot has happened. They're in Giant. They closed three e-commerce fulfillment centers and I guess I'm just wondering is food delivery dead? Is it over? Certainly, during the pandemic, it reached double digits of a percentage of population using it. It's fallen down. We see what's going on with Shipt laying off people. We see Instacart's new direction, moving away from delivery into more services for grocers and other retailers. What do you think? Is food delivery a thing of the past?
Sally:Well, I don't think it's a thing of the past, Phil. We do enjoy our delivery and having that convenience and that service has really become a part of many people's lifestyles. But this is an indicator that something is changing. As you said, those delivery numbers were really really high, right around the pandemic, of course, and now they have fallen a little bit. And with Ahold making this decision, I agree with you.
Sally:I was confused about Omni Channel, and so doesn't that also include your delivery? But they're saying they want to focus on the in-person experience as well as the digital experience. So, you know, are we seeing consumers wanting to be in the store more now? It's also interesting that Getir was doing ultra-fast delivery, as you said, where you could get that in 15 minutes, which I believe we talked about when that was happening and our question was do people really need to get their food that fast? And now the company is saying that they are going to focus more on conventional grocery delivery, so we also might be seeing that. You know there aren't as many consumers out there that need to get their delivery in 15 minutes.
Phil:Or even want to. And when I look at the numbers, the ones who are winning here are Door Dash and Uber Eats. And again, the model is slightly different, because what they're doing is they're just providing delivery and letting the grocer do what they do best, which is picking the foods. Again, number one complaint on Instacart has been produce, number two has been meats, and now what we're doing is we're putting the choice, the selection, back in the hands of the grocers, which I think it's good, and let the delivery people deal with delivery. So a new report. CNN has reported on this, has come out where it talks about the fact that reducing pesticides in food that many major food manufacturers got a grade of F as in failing, and they looked at 17 major food manufacturers with an average grade of F and what they found is a lot of these companies set pesticide reduction goals for 2025 and 2030 to appeal to their shareholders, but they haven't done much.
Phil:And this report is called Pesticides in the Pantry: Transparency and Risk in Food Supply Chains. That's, who really measured all this and what they found is studies, you know, find that the highest amount of pesticides in some of the most popular foods are what kids eat berries and apples, in particular breast milk. Umbilical cord blood has been found where pesticides are in there from in utero. Long-term exposure to pesticides link to cancer, asthma, anxiety, parkinson's disease, depression, attention deficit and hyperactivity disorders. And you know EWG environmental working groups 2023 Shoppers Guide to Pesticides and Produce is out.
Phil:They used to call it the Dirty Dozen. That's come under a lot of criticism, so now the new guide is called Shoppers Guide to Pesticide Produce. There's two columns. One is Dirty Dozen, the other one is Clean 15. So in the Clean 15, avocados, sweetcorn, pineapples, onions, papaya, sweet Peas, asparagus, honeydew, melons, kiwi, cabbage. The Dirty Dozen number one is Strawberries, two is Spinach, three is Kale, collard and Mustard Greens, four is Peaches, five is Pears, six are Nectarines. And what they also found is the produce item that has the most amount of pesticides 103 types of pesticides Kale, collard and Mustard Greens. And you know I never liked Kale to begin with. Here's another reason for me not to like it. What do you think about this? Are we obviously not pushing these companies far enough to reduce the amount of pesticides that they're using?
Sally:Well, it certainly is very important and very important for consumers to have this information and, as we have seen with some of our reports recently, about how these companies are doing on working on making changes to more sustainable practices, to better farming practices, things that are in line with how we are dealing with climate change and how we have to change as a society.
Sally:So it is disheartening to see that not more effort has been made to reduce these pesticides, especially, as you're saying, these are a lot of foods that children eat, and also some children are starting from birth with these pesticides in their system because it is getting into the mother's womb. So this is really really important information, and the other side of this, too, is that, while we can recommend the consumers go for those organic products, which does limit the possibility of you being exposed to pesticides, it's not affordable for a lot of people, so it is something that we want to see these companies working towards. It also is very much wrapped up in climate change. We're hearing about pesticides because of the super storms that we are having, that pesticides are being used more, because the more that top soil comes off, then the less effective these pesticides are and they have to add more. We're also hearing that these pesticides, because of these super storms, are getting into our water resources, and so now we've got pesticides in the water that we drink, and so this is a big concern.
Phil:It is in, and I want to build on two points that you made. Number one very important to note what Sally said, that the use of organics limit the amount of pesticides, but there's over 100 pesticides that are approved for use in organics, so that's not a total solution. Number two is this climate issue is not being discussed. We talk about climate change. We talk about all the greenhouse gases, the methane gases and so on, but you're bringing up a really important point about as climate change happens, we are going to be using more pesticides. The rising soil temperatures degrade the pesticides, decrease their effectiveness. They require greater amounts of chemicals to maintain crop yields. The water, as you talk about being more contaminated than ever before, and also hotter weather, actually increases the pests metabolisms and that means that they increase their consumption of crops. So what we really really need to do and this report, as you so, is a very important report for all the manufacturers of food products as well as retailers to pay attention. So General Mills earned a B in 2021. This year, they were rated number one with a C rating. ADM, Archer Gent Daniels, Midland and Pepsi got C minuses. Conagra and Campbell Soup received a D. Lamb Wesson and Nestle received a D-, those companies that received an F. And again, this is just about pesticides, so let's limit the scoring to that. B and G foods, Cargill, Danone, Del Monte, General Mills, Kelanova, Kraft Heinz, Mars, Mondelez, P ost Holdings and James Smucker they all got Fs, and one quote that came out of this report as you. So this shows time and time again that farmers who use regenerative agriculture practices are increasing the retention of soil, preventing crop loss from storms, increasing the nutrient density of soil and ultimately creating more nutritious food. So we really want to support those companies, those farmers that are using regenerative agriculture. A lot of great things going on on the farm. We need to pay attention to that and also I'm sure that environmental working group is looking very carefully at that.
Phil:So some interesting good news, in my opinion, is good news. I'm not sure everybody would agree. In fact, I know everybody's not going to agree with this, but the new dietary guidelines may soon warrant against ultra processed foods. This would be the first time that the guidelines committee is looking at the science on obesity and ultra processed foods, ultra processed being defined as industrially manufactured foods that have unusual combinations of flavors, additives and ingredients, many of which are not found in nature, products like chicken nuggets, sweetened breakfast cereals, boxed mac and cheese, frozen dinners, potato chips and obviously fast food. And to have the committee for dietary guidelines looking at this, I think is a huge step forward, because the science we've talked a lot about that here on Teal, our Live the science shows that people who consume a lot of ultra processed foods have higher rates of weight gain, obesity, cardiovascular disease, cancer, diabetes, other chronic diseases. And the dietary guidelines committee comes under a lot of criticism all the time, every five years when they come out, and it's a changing group. But we've reached. We've reached a point, a pinnacle, if you would, in my opinion, on ultra processed foods, on the foods that we're allowing in our food system.
Phil:If you look at the school lunch program, the school lunch program you can include Domino's, picha, lunchables, cheez-its, those kind of products, and I remember when we were working with Michelle Obama and Sam Kass on the on the school lunch program, I mean they were very adamant about trying to get these foods out. When the Obama's left the White House, change in administration took all that back and you know school lunch, you know, got a, got a bullet, if you would, with all these products that are over processed. In one case the turkey in a box of Lunchables, just the turkey, contains 14 different ingredients, including additives for texture, flavor and shelf life. Why turkey has to have 14 different ingredients?
Phil:For me, turkey is turkey. It should be one ingredient. Yeah, you have a little salt in it, a little brine, but 14 ingredients in turkey and that's not the whole Lunchables package. When you include, you know, whatever the starch is in it, whatever else it just, you know, compounds it to probably having 50 different ingredients. So good news. But the industry is fighting it. The industry is saying, you know, dietary guidelines should not be talking about ultra processed foods. Number one there are a lot of trade organizations that are saying ultra processed have a role in people's diets, regardless of all the signs since there. What do you think?
Sally:Yeah, it's a very important topic, you know, as we are hearing more and more research about the negative effects of ultra processed foods and, as we discussed on the show recently, you know that even some experts are. We're finding that they have ties to some of these food companies that are telling us that ultra processed foods are okay. So it can be confusing for consumers, I think, because there are a lot of processed foods that consumers rely on because they are affordable and they need to buy those lower cost items to feed their family. But also they may see that a product is fortified with something, you know, with ingredients and and there be some confusion there of was it good for me or is it not good for me.
Sally:So it is definitely a conversation that we need to have, and I'm really glad that you brought up kids in school and the school lunch program, because I think that that is a really great place to really start with this, because, if we think about all you know, so many children in the country rely on nutrition that they get from a school meal a lot of them, you know, facing food insecurity and sometimes that being the most well rounded meal that they get every day at school. So it is. It is very important that at that age that we are giving proper nutrition to kids in school, but also that we are training their palates to want to eat real food. Phil, you know these, these ultra processed foods that have salt, sugar and additives and all of these things, and you know, if we're eating those on a regular basis, then those are the types of foods that we're going to crave, instead of those whole foods like an apple or just turkey, like you said.
Phil:Right. And also, you know, besides all of that, in addition to all of that, we're ruining our kids taste buds, and I would even say, from baby boomers on down, we've ruined our taste buds to really think about sugar, salt and fat, and that's what we think food should taste like and it doesn't. FDA has also proposed banning Brominated vegetable oil. Now, this is a particular ingredient that's found in fruity and citrus flavored soda, and you know they have a big concern over the animal studies. There's clear adverse effects. The FDA says the ingredient is potentially harmful to the thyroid, liver and heart and it could cause neurological problems. I'm not sure that drinking one of these sodas is worth having neurological problems. The FDA has also said that a lot of these companies have already reformulated their beverages to replace it. California was the first state to ban it in October, which means that a lot of food companies and again, california is the biggest state in the nation. So you know these food companies are not going to have two different formulas for their sodas, with and without. You know California and not, so I think that it's going to be great. This ingredient has already been banned over in the European Union and in Japan for a while Pepsi good for Pepsi got rid of, you know, bdo back in 2019. So that's terrific for them, but the reality is that, you know, fda has to move faster on this because there's a lot of consumers who have been consuming these products. In the case of people that might be drinking two, three, four sodas a day, this really, you know, opens up a delt of you know, health problems for them. So let's get rid of this.
Phil:And talking about sodas, New York City just passed a bill with mandatory warnings on high sugar items in restaurants. It's a three tiered phase in program. Soda package, snacks anything pre-packaged needs to carry a warning label as of June 2025. Then, in December 2025, the policy expands to foods with identical pre-packaged versions. That's really about fountain drinks. And then phase three, the city will require a high sugar icon and warning on menus, which is really interesting.
Phil:And you know the question is whether or not, when you start doing this in major cities like New York City, whether or not it expands to the rest of the nation, because we know we have a sugar problem. There's no question that we have a sugar problem. So, you know, I applaud New York. I'm sure that they're gonna come under a lot of criticism that, whether it's the sugar companies, whether it's the lobbies or trade associations, are gonna try to ban the ban from happening. We've seen that before. When Bloomberg was mayor of New York and he was trying to put things in, a lot of the food companies went at odds with him. But I think it's a great move. When we look at eliminating brominated vegetable oil, when we look at labeling sugar we've seen that in Mexico before with very good effects. This is something we should be doing, isn't it?
Sally:I agree, Phil, with the health related issues that we have in this country, with diabetes and obesity and heart conditions.
Sally:We clearly do have a problem with our diets at, particularly related to sugar.
Sally:There's a lot of sugar in our food and you know it is important to make sure that consumers are aware how much sugar is in the food that they're getting. It will be interesting to see how logistically this plays out, what that means for those chain restaurants. How are they gonna implement this with those foods that are not prepackaged and having the correct information to share with their customers? But you know something else that I think will be interesting to see, particularly when we talk about soda, phil, is that you know, if this happens in New York City and if we were to see it happen in other places in the country, I wonder if these restaurants might consider offering, you know, more alternative beverages to soda, like sparkling water is really popular right now. You know why can't we put some sparkling water, different flavored sparkling waters in those soda machines you know are offering? You know different types of unsweetened iced tea, green teas you know drinks like that that are not these sodas that have so much sugar in them.
Phil:Yeah, between the sugar, between the brominated vegetable oil, all that, it's just a path of destruction. On #Food Not Phones today, we wanna talk about John Legend. So you know, Sally, what is John Legend's take on social media and what is he recommending for us?
Sally:I love this, Phil, and I love John Legend. You know if you don't, if you are listening, you don't know how who John Legend is, but he is a singer-songwriter that has 12 Grammy Awards and he's received 33 Grammy Award nominations. So a lot of people know who John Legend is. And then that he has been pretty open about struggles with mental health and anxiety, and one of the steps he's taking is you know he's said that I'm going to take a break from social media for my mental health. He's talking about how it's not just the process of posting on social media for people, which he primarily does on TikTok and Instagram, I believe is what he said. He also said that he believes X is very, very toxic, so he won't be doing that at all.
Sally:But it's not just the posting, it's all of the stuff you're taking in. When you go onto that social media app and you start scrolling, you're taking on a lot from the world. Everybody is giving you all different kinds of information, with different emotions, or trying to sell you something or, you know, making feel a certain way, and it is a lot to take in. John Legend is telling us I'm gonna pause from social media and you know he is hoping to see some results, with his anxiety being reduced as a result of that, and that's what we have been talking about with our #Food Not Phones Initiative for our next event that is coming up, Thanksgiving Day. We just wanna encourage people to join us in this initiative and to take a look at your screen time behavior, your phone use behavior, and maybe pause from that phone use when you are sitting around the table having dinner with family and friends and focusing more on our human interaction, our face-to-face connection, which is so important. And let's see what happens.
Phil:Absolutely and coming up next week, what we're gonna do on Food, not Phones is we're gonna reveal our survey that was done courtesy of Acosta, with their consumer panel, and lots of surprises coming in to that survey about how people are using their phone, who's using their phone while they're eating, why they're using it. So be sure to join us next week for Food, not Phones, where we take a look at the Acosta survey. Thanks, ali. On today's bullseye, minimalistic package design in the food industry has emerged as a significant trend. It reflects broader shifts in consumer preferences and market demands. Now this trend is characterized by simplicity, clean lines, a focus on essential elements and often leads to a more elegant and modern aesthetic. Marking professor Lan Anh Tan, the Texas Christian University professor, along with colleagues, took to explore whether shoppers actually prefer minimalistic package design and they analyzed over 1,000 CPG brands, including foods and health and beauty products. What they found was that the simpler the packaging, the higher the retail price. Their conclusion that shoppers are willing to pay more for simple design. The reasons that they found was that the pared down design sent a subtle message of purity, which made the survey participants assume that the products had fewer ingredients, less preservatives, added colors or artificial flavors, whether or not it was actually true. Let's dig a bit deeper. Minimalistic packaging often uses fewer colors, simple graphics and clear typography. This approach makes it easier for consumers to identify the product and, frankly, understand what it offers, and it simplifies their decision-making process. In today's supermarket, with over 40,000 products, shoppers are saturated with visually complex designs and therefore minimalistic packaging stands out. Now. This distinctiveness helps brands position themselves as unique and, as we see, premium. For brands that go across categories, these minimalistic designs can adapt more easily to different product lines, enabling a cohesive brand image across diverse offerings. Now there are also other benefits for the brands that go well beyond attracting shoppers, and those relate to cost.
Phil:These simple designs often use less ink and simpler materials, which can be more environmentally friendly. This aligns with the growing consumer preference for more sustainable products. Simple packaging often means less material use overall contributes to waste reduction. These simplified designs can be less expensive to produce and benefiting the companies through lower production costs. Fewer design elements can mean faster and more efficient, and therefore less production processes.
Phil:More products are being sold online and too often the digital versions of packaging are less than appealing, especially for those shoppers who have laptops or older monitors. Minimalistic packaging can be more effectively showcased in online retail environments. They pop out. Simple designs tend to display well on these digital platforms, which is really very important for competing in this flat e-commerce platform Talking about online. With the rise of social media, visually appealing, clean designs are also more shareable and can easily adapt to digital marketing strategies.
Phil:But there could be a downside to this trend as well. The risk is that too many brand managers will review this research and jump to adopting minimalistic designs, and that could lead to a lack of differentiation in the marketplace. The trend and the shift towards minimalistic packaging in the food industry is a multifaceted trend. It's influenced by consumer behavior, environmental concerns, economic factors and technological advancements. Be cautious while the design trend certainly offers many benefits, it also presents challenges that brands need to navigate to effectively leverage this trend. And let's remember, design trends constantly evolve. It adapts and then impatures. What's hot and packaged design today might not be so hot tomorrow, but for now it's clearly a winner.
Sally:Be sure to visit SupermarketG uru. com for the latest marketing analysis, issues and trends, and don't forget to join us back here next Monday at 2:30 pm Eastern for more.