All Posts By American Hellenic Chamber of Commerce

Global food prices rose 10 percent in May 2017 compared to May 2016, and 2.2 percent from April 2017, according to the UN Food and Agriculture Organization, which gauged the international prices of a basket of food commodities. Rising shipping costs and larger import volumes are expected to push the total cost of global food imports to more than $1.3 trillion for 2017. Vegetable oils, dairy products, and meats increased in price, while sugar and cereals dropped.

Sugar prices were impacted by higher-than-expected sugar output in Brazil, combined with a weakening of the Brazilian Real, which discouraged crush for ethanol in the domestic market in favor of more lucrative sugar exports. Expectations of larger exports from Pakistan and China’s decision to impose high duties on imports beyond its WTO tariff-rate quota commitment exerted additional downward pressure on international sugar prices.

Source: Specialty Food Association

Columnist James Green discusses the trends that are impacting struggling brick-and-mortar retailers and the strategies brands need to implement to survive.

Once upon a time, brick-and-mortar malls were the center of many people’s lives. Families would go to movies, adolescents would socialize with friends, and there were lots of places to buy everything from groceries to garments. Many of the anchor stores — like Sears, Macy’s or Best Buy — served as aggregators of brand-name products.

Things are far different for retailers today — so different, in fact, that brick-and-mortar retail is under a massive three-pronged attack:

1. People are staying home to watch entertainment

Movie attendance is down. Last September, Business Insider cited sales as flat year-over-year and expected attendance to fall by 3.5 percent, not because people are not watching entertainment — we consume tons of that — but because we consume (or binge) our entertainment at home. So it’s been very hard to get movie theaters to be the anchor tenant for a mall.

Impact on retailers: Fewer people visit malls.

2. We love our brands

Increasingly, brands have been selling directly to the consumer. Years ago, both Apple and the Disney Store pioneered this trend.

Today, more and more brands have their own stores and don’t sell through aggregators. Success in fashion retailing is Zara and Uniqlo, not Macy’s or Nordstrom. And if a fashion retailer is too small to own stores, then it sells directly to you online: American Giant is a classic example.

Brands that have successfully opened the direct-to-consumer channel have reaped benefits in sales and brand loyalty. Companies as diverse as Nike and Nestlé have called out these strategies in their investor calls. Nestlé CFO Francois-Xavier Roger touted the company’s success in direct-to-consumer by referencing an increase in e-commerce sales from 2.9 percent in 2012 to 5 percent in 2017.

The nail in the coffin of retail aggregation is the notoriously low profit margins — but margins are better on owned brands. This monumental shift in the industry has dramatically changed both the number of stores that brands maintain, as well as how brands as a whole engage with consumers.

Impact on retailers: Fewer people visit malls; stores are smaller and brand-centric as opposed to brand aggregators.

3. Convenience always wins out

Everyone wants instant gratification. If Amazon is prepared to ship something to you for free with your Amazon Prime membership — and let you watch free movies while you wait for it to be delivered — then why go to the mall?

Today, over 40 percent of all US households have Amazon Prime, and memberships are concentrated in the higher income households, which are the very people that kept malls alive.

Impact on retailers: Fewer people buying in physical locations.

The shift from physical store to e-commerce

What’s the upshot of all of this? More than 3,000 stores are expected to close this year. Many brands that seemed impervious are now imperiled. These include massive retailers such as Sears, Macy’s and Radio Shack. These closings have a direct correlation with our ability to bring in products to our homes — products that used to be bought or consumed in brick-and-mortar stores.

Recent government statistics say that online sales are only about 10 percent of total sales, but this percentage greatly underestimates the real number. For example, these numbers include gasoline sales (a product almost never sold online). The inclusion of gasoline warps categories like entertainment and clothing, where online is most prominent.

Today, the master of modern retail is clearly Amazon. But look to food delivery service Grubhub and the entire travel industry for inspiration about how to make online sales work.

It’s possible to be an aggregator, but each vertical tends to only support one or two of them. If you have Amazon in retail; Orbitz, Expedia, Priceline, Kayak in travel; and Grubhub in food delivery, how are you going to be the big winner in your category if you aggregate multiple brands?

It’s easier to focus on your own brands if you have them and let other brands worry about theirs. Take a look at this list of companies, and tell me what they have in common: Amazon, Apple, Walmart, Staples, Home Depot and Netflix. Don’t know? According to Trellis, they sit within the top 10 most successful e-commerce companies, and they all show double-digit e-commerce growth.

If you want to survive in the new world, you need to have a plan to ensure growth of online sales.

If doing business in the retail industry is uncomfortable, it’s because nearly every standard business practice around engaging customers and selling to them is being disrupted. The store model from 25 years ago doesn’t work for the showrooming of today.

Understanding how to make the shift from physical store to e-commerce is important, and once you make that shift, there are strategies and technologies that help you realize sales in what we all find ourselves in: a whole new retail world — a world where you’d better be online and you’d better be selling your own brand.

Source: www.marketingland.com

There is no question that the retail industry is under-going a tremendous amount of change. Record numbers of store closings. Legacy brands going out of business–or teetering on the brink of bankruptcy. Venture capital funded start-ups wreaking havoc upon traditional distribution models and pricing structures. Discount-oriented retailers stealing share away from once mighty department stores. And, oh yeah, then there’s Amazon.

In assessing what is driving retailers’ shifting fortunes most observers point to a single factor: the rapid growth of e-commerce. But they’d be wrong.

To be sure, online shopping has, and will continue to have, a dramatic impact on virtually every aspect of retail. One simply cannot ignore the dramatic share shift from physical stores to digital commerce, nor can we under-estimate the transformative effect of e-commerce on pricing, product availability and shopping convenience.

Yet a far more profound dynamic is at play, namely what some have termed “digital-first retail.” Digital-first retail is the growing tendency of consumers’ shopping journeys to be influenced by digital channels, regardless of where the ultimate transaction takes place. It’s obvious that this shift helps explain the success of Amazon and other e-commerce players. But when it comes to how traditional retailers need to reinvent themselves, several factors related to this phenomenon need to be better understood and, most importantly, acted upon.

Digitally-influenced brick & mortar sales dwarf e-commerce. While e-commerce now accounts for (depending on the source) some 10% of all retail sales, both Forrester and Deloitte have estimated that web-influenced physical store sales are about 5X online sales.

Source: www.forbes.com

Plastics and packaging are nearly synonymous. Packaging of all types from food and beverage to consumer goods to durables makes use of plastics because of its durability, consumer friendliness, sustainability and recyclability into myriad new products.

PET is one of the primary materials used for packaging, and the PET packaging marketing is forecast to reach 21.2 million tons by 2021 with sustainability and lightweighting expected to play a major role in the development of the industry, according to a report by Smithers Pira. In 2016, PET packaging amounted to just under 16.7 million tons, representing a 3.8% increase from 2015. Growth for 2016 was projected to reach 4.8%, amounting to 17.5 million tons, with demand coming from new product developments in markets such as preserved foods (think Milacron’s Klear Can and Sonoco’s TruVue); thermoformed food containers; fruit juice containers; and other beverage packaging.

However, recent studies of consumers’ food-buying habits are showing that many are moving away from canned goods and toward fresh fruits and produce and prepared meals from the supermarket deli counter. Additionally, big-name food brands are losing shelf space to local or regional brands and smaller start-ups. Market research firm Nielsen said in a May 1 Wall Street Journal report that “sales for packaged food and products—reflecting the number of items sold—fell 2.4% in the first quarter of 2017.

Another recent market study from Ceresana focuses on global plastic films. The report from the international market research and industry consultancy noted that “packaging is supposed to be light and handy, neat and durable, microwaveable and also environmentally friendly.” Oliver Kutsch, CEO of Ceresana, said, “sales of plastic films will presumably reach a volume of about $250 billion until 2024. That’s a lot of packaging, and there are several “megatrends” that are driving this sector.

Millennials aren’t just changing the employment picture—they are changing food tastes, as well, which is having an impact on the major processed food producers and the packaging industry. A number of surveys have revealed that millennials want fresh produce and meat; they want simple food—real food—and are moving away from processed food with too many ingredients including additives and preservatives that promise a longer shelf and refrigerator life. They also look to sustainability in packaging: Is it recyclable? Compostable? Biodegradable?

The processed food producers want to satisfy these changing consumer tastes. To do that they are looking for advanced packaging technology that plastics provide, such as multi-layer barrier film that blocks oxygen and prevents food spoilage. This means less food waste, which is a big goal for many in the packaging industry.

Read More Here.

Source: www.plasticstoday.com

The GMO debate rages on.

As part of the budget deal that prevented a government shutdown last week, the FDA will fund a new campaign to combat what they perceive as misinformation about GMOs in our food.

The budget deal gave the FDA $3 million dollars to provide “consumer outreach and education regarding agricultural biotechnology,” which includes information on genetically engineered food. They’ll supposedly use the money to try to show the positive side of GMOs—which make up 80 percent of maize and soybean crops planted in the U.S.—including their “environmental, nutritional, food safety, economic, and humanitarian impacts.”

In April of last year, more than 50 food industry groups signed a letter expressing their support for the proposed campaign, hoping that it would “better inform the public about the application of biotechnology to food and agricultural production,” arguing that “all major scientific bodies, including all federal health agencies, have said that genetically engineered foods are safe.”

There was a plenty of pushback against the campaign before this budget passed: State Representative Nita M. Lowey of New York argued that a community outreach program of this kind would be nothing more than a state-funded propaganda campaign for the GMO industry.

It’s still unclear what kind of educational programs the FDA plans to implement, or even when they will launch, but the parameters are broad for what they’re allowed to do: All they’re required to do is collaborate with the Department of Agriculture, and distribute “science-based educational information,” to the public.

There does seem to be a gap between the public and scientific perception of GMOs: Pew found that 88 percent of members of the American Association for the Advancement of Science agree that GMOs are safe to eat. Only 37 percent of the American public agrees.

But the politicians who advocate for this campaign aren’t just looking to inform the public—they have their own interests in mind, too: Take State Representative Robert B. Aderholt, a Republican from Alabama. His campaign received $10,000 from Monsanto in 2016, a company that would greatly benefit from a public more open to eating genetically modified food.

Even if GMOs are safe to eat, they still have problems. For instance, soy farmers who plant genetically modified crops use 28 percent more herbicide than those who don’t. And last October, a thorough New York Times report found that GMO crops don’t significantly increase food production, as promised.

Now that the federal government has taken a clear side on the complex debate over whether or not GMOs are helping  our economy and our health or not, it seems as though we can look forward to a future shaped by genetically engineered products—whether we’re ready for them or not.

Find our FDA Services here.

Source: www.forbes.com

The shake-up in the food and beverage industry continues. A recent Hartman Group report, The New Playbook in Packaged Food, examines the top players, analyzes the factors afflicting the underperformers, and seeks answers to the question “what’s the winning brand portfolio strategy for tomorrow?”

The food and beverage industry is under more pressure than ever before to generate organic, volume-based topline growth. Some even say the total market is essentially now a zero-sum game. But this belies the enormous turbulence and reshuffling of market shares below the sector’s surface. It is clear the future of corporate growth is in rebalancing into the medium- and long-term pockets of growth revealed through careful market analytics.

As of the end of 2016, we are seeing a mix of positive and negative signs from our analysis of top players, reflecting the likelihood for continued shake-ups in the industry.

On the upside:

• 60 percent of top 25 firms are growing at or above inflation.
• 80 percent of the top 25 firms have at least positive topline growth.

On the downside:

• The industry topline growth rate has softened 31 basis points compared to 2011-2014.
• Among the top 25 firms, the high performers’ topline growth average has also softened compared to 2011-2014.

Overall, the highly bifurcated nature of these patterns identical to what we saw two years ago. In fact, the biggest “improvement” we can identify here is that the underperformers are underperforming less than they were two years ago.

Cutting costs will surely continue at all of the big firms, yet many will find their financial scalpels approaching the bone in the next two years. Therefore, don’t believe this trajectory is sustainable for probably 25-50 percent of the firms depicted in the report.

When we deconstruct the winners and losers in broad strokes by the master category their core business serves (beverages, snacks, meals), we do find an interesting pattern that all should take note of: the winners are almost all beverage companies, and the losers are mostly companies with core revenue skewing heavily to center-store meal categories. (Of the top 25 firms, only one is a pure play snacks firm, so the positive impact of snacks is buried in this analysis.)

In The New Playbook in Package Food analysis we: a) reiterate some themes discussed in our last industry review regarding the continued need for portfolio rebalancing at the brand level, b) introduce a simple portfolio segmentation tool to track your firm’s topline performance (i.e., the relative urgency of rebalancing) and, finally, c) address a burning issue within the portfolio rebalancing process: the need for big companies to operationalize separate playbooks for legacy brands and for small, emerging premium ones. One key finding: Simply acquiring fast-growing insurgent brands is not enough to guarantee that top companies are maximizing their long-term scale potential.

Source: www.forbes.com

The Specialty Food Association (SFA) will celebrate 65 years at the leading edge of food with LevelUP, a new, immersive experience debuting at the Summer Fancy Food Show in New York City (June 25-27). LevelUP will showcase global food innovations, premier industry research, and the future of food and commerce.

“We can’t think of a better way to celebrate our 65^th anniversary than to present LevelUP, an interactive journey showcasing the future of food and our industry,” said Phil Kafarakis, SFA president. “We know through our research that SFA members are looking to us for an enhanced show experience – a chance to take it a LevelUP! The LevelUP show concept represents a new way of viewing what’s ahead for specialty food. It’s an innovative and immersive addition to our Fancy Food Show format and one that will inform, entertain, and engage our attendees.”

The LevelUP experience will include:

• Shaping the Future of Food for 65 Years – Follow the history of the specialty food industry and the SFA
• Consumer & Category Forecasts presented by Hartman and Mintel – Learn how specialty foods will fare over the next five years
• The Future Market™ presented by Future Market – Discover factors that will drive food commerce tomorrow and shop the store of the future
• Taste Tomorrow – Sample leading-edge products, from seaweed pastrami to cellular milk
• World Food Trends in partnership with SIAL Paris – Share in global innovations and trends new to the U.S. market
• Product Picks – Preview a curated selection of on-trend products from onsite Fancy Food Show exhibitors
• What’s New, What’s Best: 2017 sofi™ Award Winners – Celebrate this year’s Gold and New Product winners
• Tomorrow’s Products Today: Exhibitor Locator – Create a map to find the hottest products at the show

A full lineup of speakers and programming will also run over the three days of the show. Three “Super Sessions” are planned, to be led by national-level industry thought-leaders. Shorter insight-provoking “Excite” talks will also run throughout the show. The speaker line-up will be announced soon.

“Specialty food is now a $127 billion industry. The industry’s unprecedented growth will continue as we remain committed to meeting consumers’ drive for integrating high-quality innovative foods into their daily lives,” said Kafarakis. “The SFA is leveraging our 65 years of experience with an understanding of trends to promote phenomenal member products and growth that extends beyond traditional retail channels. You’ll see that in action at LevelUP. We expect people will leave the Summer Show and LevelUP experience inspired and excited about our dynamic industry – and ready to play their part in the innovations of the future.”

SOURCE:  http://www.specialtyfood.com

Στις 30 Μαΐου 2017 λήγει η προθεσμία για τις Αμερικανικές εταιρίες εισαγωγής τροφίμων και ποτών για να συμμορφωθούν με το U.S. FDA και το νέο κανονισμό FSVP – Foreign Supplier Verification Program.

Ο νέος κανονισμός FSVP κατατάσσεται κάτω από την ευρύτερη κατηγορία του Food Safety Modernization Act (FSMA). Συνεπώς, οι Εισαγωγείς FSVP (FSVP Importers) υποχρεούνται να ακολουθήσουν συγκεκριμένες ενέργειες για να επιβεβαιώσουν την φερεγγυότητα και αξιοπιστία των τροφίμων/ποτών που εισάγουν. Απώτερος στόχος τους είναι η διασφάλιση της εισαγωγής προϊόντων, των οποίων η παραγωγική διαδικασία είναι σύμφωνη με τους Αμερικανικούς κανονισμούς διασφάλισης ποιότητας.

 Αξιολόγηση και Έγκριση προμηθευτών

Ο κανονισμός FSVP του FDA απαιτεί οι – χαρακτηριζόμενοι – FSVP Εισαγωγείς (Importers) να εισάγουν τα προϊόντα τους από εγκεκριμένους διεθνείς προμηθευτές, παρόλο που τους επιτρέπεται – προσωρινά – να εισάγουν και από μη εγκεκριμένους προμηθευτές.

Για να εγκρίνει ένας Εισαγωγέας FSVP τον προμηθευτή του, πρέπει να εξετάσει τη συμμόρφωσή του με τους κανονισμούς ασφάλειας παραγωγής τροφίμων που διέπουν το FDA. Ανάμεσα στα κριτήρια αξιολόγησης συμπεριλαμβάνονται το ενδεχόμενο ο προμηθευτής να έχει λάβει:

• προειδοποιητική επιστολή συμμόρφωσης από το FDA ή/και
• ειδοποίηση σχετικά με την ασφάλεια των τροφίμων κατά την εισαγωγή τους σε Αμερικανικό έδαφος (Import Alert) ή/και
• οποιαδήποτε άλλη ειδοποίηση σχετικά με τη συμμόρφωση της εταιρίας με τους κανονισμούς του FDA

FSVP και Εμπορικό Ρίσκο
Τα πιστοποιητικά FSVP πρέπει να εκδίδονται από «Εγκεκριμένους Συνεργάτες», οι οποίοι χαρακτηρίζονται από την εξειδικευμένη εκπαίδευση, την κατάρτιση ή την απαιτούμενη εμπειρία που θα πρέπει να έχουν για να εκτελέσουν τις δραστηριότητες που τους έχουν ανατεθεί και τη δυνατότητα κατανόησης των αρχείων που πρέπει να ελέγχονται κατά την υποβολή τους. Το πιστοποιητικό FSVP πρέπει να περιλαμβάνει την ανάλυση κινδύνου και τις κατάλληλες δραστηριότητες που θα πρέπει να ακολουθούνται για την διασφάλιση της αξιοπιστίας των προμηθευτών ή έστω την ελαχιστοποίηση του σχετικού κινδύνου. Για παράδειγμα, η διαδικασία ελέγχου της αξιοπιστίας ενός διεθνούς προμηθευτή περιλαμβάνει ελέγχους, αξιολόγηση πιστοποιητικών και σχετικών εγγραφών που συνδέονται με τη διαδικασία παραγωγής, δειγματοληψία και δοκιμές.

Βεβαίως, τι χαρακτηρίζεται ως “κατάλληλη” διαδικασία ελέγχου για έναν συγκεκριμένο προμηθευτή εξαρτάται από το είδος του τροφίμου που παράγει αλλά και το ιστορικό συμμόρφωσης του προμηθευτή με τους κανονισμούς του U.S. FDA.

Διορθωτικές ενέργειες
Σε περίπτωση που ένας Εισαγωγέας FSVP αντιληφθεί τη μη συμμόρφωση κάποιου από τους διεθνώς εγκεκριμένους προμηθευτές του, ο Αμερικανός Εισαγωγέας πρέπει να διασφαλίσει ότι θα ληφθούν τα απαραίτητα διορθωτικά μέτρα. Για παράδειγμα, κατάλληλο διορθωτικό μέτρο θεωρείται και η διαδικασία άρσης της προειδοποίησης εσφαλμένης εισαγωγής (Import Alert) που έχει εκδοθεί για τον διεθνή προμηθευτή κατά τη διαδικασία εκτελώνισης των προϊόντων του. Επιπλέον, οι εσφαλμένες ετικέτες αποτελούν μία από τις μεγαλύτερες αιτίες προειδοποιητικών επιστολών και κρατήσεων κατά την εισαγωγή των προϊόντων σε Αμερικανικό έδαφος.

Γιάννης Μωύσογλου
Υπεύθυνος Εξαγωγών “TradeUSA”, Ελληνο-Αμερικανικό Εμπορικό Επιμελητήριο

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