TradeUSA Newsletter

SAN FRANCISCO — The specialty food and beverage industry has recorded double-digit growth in recent years, driven by changes in consumer behavior, said Denise Purcell, head of content for the Specialty Food Association.

 “The consumer now is so aware of what they’re eating and what they’re putting     in their bodies and they want healthful foods and they want a food experience,” Ms. Purcell said. “That’s the norm now. It’s not so much a niche    category of consumers who know what specialty is and it’s a thing on its own. It    really is just food.”

Speaking with Food Business News before the Winter Fancy Food Show, held Jan. 22-24 in San Francisco, Ms. Purcell discussed recent product innovation in specialty food and beverage as well as the consumer trends propelling the segment’s growth.

“(Consumers expect) cleaner ingredients, minimally processed but still very flavorful,” she said. “They want to indulge when they want, but they still want it to be high-quality. They want it to be a healthy indulgence.

“The younger millennial consumer and the consumer who is just coming of age now, Gen Z, are very much of that mindset as well. This is the future consumer for the market, so we can see the growth being sustained.”

Among the latest innovations from 1,400 exhibitors at the annual show, a number of trends emerge, reflecting increased demand for authenticity, transparency and premium quality.

Article Published in Food Business News on 23rd January 2017

The grocery business in the U.S. is about $675 billion. Virtually every household shops for groceries and over 90% of households shop for groceries once a week or more. Many products are now regularly bought online that were thought to be impossible to be converted to online shopping. Yet online grocery sales continue to be a small fraction of the industry. Depending on who you ask, online grocery sales this year will be 1-3% of industry sales. Compared to other product classes, it’s minuscule. So why aren’t more groceries sold online?

One Big Problem: Perishables

Consumers are understandably reluctant to have someone else pick out their fruits, vegetables, meats, fish and chicken. Anecdotally, you never hear a consumer talk about how an online grocery service picked out better products than they could do at the store. The best you’ll ever hear is that it was “pretty good.” You never hear better than that and you could hear worse.

The Other Big Problem: Price

The profit margins in the business of selling groceries in stores is as thin as it gets. And online shoppers don’t want to pay a premium. The problem is, when you go to the supermarket, you do the picking and then you bring it home yourself. When you order online, they do the picking and they bring it to your home and someone has to pay those workers so online grocers have built-in disadvantages. Cheerios or Russet potatoes are the same online as in store and if the delivered price of online groceries isn’t competitive, it’s not compelling to consumers. Consumers don’t like shipping and service costs, and they generally won’t pay for a shopper to pick their apples or tomatoes. So the online services are stuck doing their customers’ work of picking the products while being unable to charge for it. (There is an offset to the higher labor cost in the form of lower real estate costs but clearly the savings in real estate don’t offset the higher labor.) When you add in the cost of handling returns, it becomes impossible. That’s why you never heard of an online grocer making a profit — it’s much too hard to compete against the legacy retailers and their lower costs.

What Could Change All These problems? Technology

If online grocers could avoid the extra labor cost involved in picking, it would make a substantial dent in their costs. If they could simultaneously give consumers the confidence and trust that they will get produce and other perishables of the same quality they would pick for themselves and at prices that can compete with supermarkets, it will drive consumer adoption of online grocery shopping. The only way I can think of how to do that is to use technology to pick produce and other perishables. Theoretically, anyone could create that technology but when you think about who’s best suited to do that first, the answer is the technology leader in retail, Amazon.

Amazon has a big initiative for online groceries with Amazon Fresh. But when you look at what Amazon is doing in groceries, they are also building Amazon Go, a tech-enabled physical store. It is one of the few businesses that Amazon is developing in brick-and-mortar retail. That makes me think that even Amazon believes that big-time consumer adoption of online grocery sales is a long way off. According to Uwe Weiss, CEO Blue Yonder, a machine-learning software company that aims to help retailers optimize fresh food replenishment and pricing, Amazon will take the lead in innovating grocery business technology. “Once Amazon’s growing grocery business reaches critical mass, the shift will happen immediately,” Weiss says. “All other retailers will have no other choice but to make it work any way they can.”

One technology that will have a big impact is computer vision. There are already technologies that can look at a head of lettuce, see browning and manage stock rotation to avoid spoilage. The technology has not been widely implemented but it has important implications not just for groceries but for restaurants as well. It is coming.

Where Does Online Grocery Sales Work Best?

London has a combination of factors that make it the leader in online grocery. The population density is high, incomes are high, it has a lot of young consumers who work long hours, stores are not open late and deliveries are usually made in under two hours. Those factors make London an ideal market for online groceries and it is in fact the world leader in penetration.

The other factor that makes online grocery sales work so far is teaming up with an existing store. In London, Amazon delivers groceries from Morrison’s, a large chain with existing stores In Seattle, Amazon delivers health and beauty products from Bartell Drugs, a long-established, local family-owned business. That may be an important model because it doesn’t require a separate inventory cost for online sales.

What Won’t Increase Penetration: Apps

So many companies, both startups and established businesses, are developing technology to make it easier for consumers to order their groceries electronically. Oddly, that isn’t what’s preventing consumers from switching to online purchases of groceries; it’s the darn prices and the quality of perishables. Anyone who can get over those hurdles will see a massive shift in consumer habits to their site. Once that shift happens, apps will be important in determining winners and losers. But until consumers develop the trust to switch over, making it easier for them with apps won’t make the critical difference.

Where Does It Go From Here?

We have all heard over the years that certain products will never be sold online, but eventually consumers change because they like the convenience. I believe groceries will be no different and while it will take time before it will happen, it will happen; it’s inevitable and the need is there. If technology can solve the cost and quality issues, the business will explode. It has to happen over time.

My firm, Triangle Capital LLC, does mergers, acquisitions and capital-raising for companies in fashion, retail, apparel, accessories and consumer products.

Article Published in Forbes on 16^th January 2017 

Cost Plus World Market to open its store in Houston Heights, Texas. This is the latest store for the specialty retailer in the Houston market.

The new store is located in Yale Street Market at 195 Yale Street, and will have all the great merchandise for which World Market® is known.

The new Cost Plus World Market store opens just in time for the holidays to take care of one’s home entertaining needs, starting with Thanksgiving cooking essentials, seasonal imported foods and beverages available. And, for those getting a head start on Christmas, the store offers unique home décor, gift giving ideas, tabletop serving pieces, kitchen bakeware, and more, all at affordable prices.

To start the Houston Heights store’s grand opening celebrations, a ribbon cutting with city officials and members of the local chamber of commerce on Thursday, November 19, 2015 at 9:00 am officially marks the opening of the store. The first 100 shoppers through the door from Thursday, November 19 through Sunday, November 22, 2015, will receive a free reusable World Market tote bag and can enjoy live entertainment, food and beverage sampling and more throughout the weekend. In addition, the store will host a twice-daily raffle prize of a $250 World Market gift card throughout the grand opening weekend.

By ALISON GREGOR

Efforts by some have been ongoing for several years to transform Manhattan’s Midtown East from an office district rife with flashy, stylish hotels into something more residential. Now, with the construction of 100 East 53rd Street, the neighborhood will get another character-changing building.

The 63-story tower, being developed by a team that includes RFR Holding, Hines, and the Chinese investors China Vanke and China Cinda Asset Management, is going up on the site of a former YWCA, where about 10 years ago, RFR and its partners planned to build an upscale hotel called the Shangri-La.

To build a taller tower, RFR transferred unused air rights from the nearby Seagram Building at 375 Park Avenue. The hotel, which would have had more than 200 rooms and more than a dozen private condominiums, was to be designed by the British architect Norman Foster. That plan was derailed by the devastated global economy, and the project faced the threat of foreclosure.

Today, Aby J. Rosen, a founder and principal of RFR, said the developers are ready to go forward with 100 East 53rd Street, which will have 94 condominium units. The developers will use the original designs of Foster + Partners, and will continue to work with Mr. Foster on the project. Excavation began in early 2014, and builders have already poured concrete up to floors in the 40s. Mr. Rosen said he hoped to have the building, which will have mostly one- and two-bedroom apartments with prices starting at around $3.35 million, done in the spring of 2017. He said he never would have considered working with another architect on the building.
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The new building’s amenities will include a fitness center, resident lounge and a lap pool. Credit DBOX

“We hired Norman a long time ago when we wanted to do this,” Mr. Rosen said. “I took Norman to the site, and he fell in love with it, sketched away, and within 10 minutes he had the design that he wanted.” Because the site is next to the Seagram Building, which was designed by Mies van der Rohe and Philip Johnson, Mr. Rosen said, “you need an architect with strong self-confidence — you really have to make it work next to one of the most important landmarks in America, so he understood that.”

The slender tower will have a 711-foot white undulating curtain wall designed to contrast with the dark bronzed look of the Seagram Building. The apartments will have high ceilings of around 10 to nearly 11 feet, according to Leonard Steinberg, the president of Compass, which will be marketing the building. “When it comes to a demand for residential in this neighborhood and this whole area, there’s been a whole resurgence,” he said. “On Park Avenue, on Fifth Avenue, people really live here, even on the weekend. So we decided, ‘Why don’t we do all of it residential?’ ”

The developers, though, plan to do something “really special” on the first four floors, Mr. Rosen said. Most likely, “the first two floors will be a high-end food court and a world class restaurant,” he said, declining to reveal more, except to say that it would be “neighborhood-transforming.” Many tenant amenities will be on the third and fourth floors. Building amenities will include a 24-hour doorman, keyed elevator access, a fitness center, yoga and ballet rooms, sauna and steam rooms, a 60-by-15-foot lap pool, a library and resident lounge.

The building will feature lofts on floors five through nine, and more traditional apartments on upper floors. One-bedrooms will range from 1,140 square feet to 1,815 square feet, two-bedrooms from 1,638 square feet to 4,607. Alcove lofts will be 1,034 square feet. “So a real variety of sizes, and that would automatically imply a nice variety of price points,” Mr. Rosen said.

There will also be three-bedrooms of 3,385 square feet and a four-bedroom penthouse of 6,760 square feet. Most units will be priced between $5 million and $14 million, with the penthouse to be listed for $65 million, he said. “The market is there for a certain type of buyer — one looking at one-bedrooms, or two bedrooms,” Mr. Rosen said. “We believe people want to have the best, but it doesn’t have to mean a three-, four- for five-bedroom pied-à-terre mind-set.”

Article published inNew York Times on Oct 26, 2015

Online retailer Amazon is planning to launch its own line of fashion apparel to cater to customers seeking low prices.

At the WWD Apparel and Retail CEO Summit, Amazon Fashion vice president of clothing and Amazon’s Shopbop unit CEO Jeff Yurcisin was quoted by Buzzfeed.com as saying: “For Amazon, we know our customers love brands, many of the brands in this room…and that’s where the lion’s share of our business comes from. “When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that.”

All this while, Amazon Fashion’s efforts have been focused on convincing clothing brands to sell their goods on its website for low prices and with improved presentation.

Amazon has considered food and apparel as two segments where it aims to tap opportunities in coming years. In late, it was reported that the firm intends to launch several private-label grocery products.

Last week, the online retailer had announced that it was hiring 100,000 seasonal workers to ramp up services for holiday shopping.

This number is a 25% increase from last year’s 80,000 during the holiday season.

Other retailers such as Walmart, Target, and Kohl’s are adding around the same number of short term employees as they did last year during the same period. However, Macy’s, J.C. Penney, and Toys R Us, are going slow on hiring than they did last year, reported The Wall Street Journal.

Earlier this month, Amazon had pumped Rs.12.37bn ($189m) into Amazon Seller Services in India, marking the online retailer’s biggest capital injection into its Indian flagship unit since 2013 when it entered the Indian shores.

Article published in Retail Business Review on Oct. 29, 2015

The United Nations Conference for Trade and Development (UNCTAD) in Switzerland has adopted a new agreement on olive oil that comes into effect January 1, 2017.

The new agreement is based on the text adopted in June by the International Olive Council Members but includes changes that make certain points clearer, the IOC said in a press release.

Since January, the IOC had been operating under a temporary extension to the International Agreement on Olive Oil and Table Olives (2005).

This new text takes into account developments in the worldwide olive oil industry and reasserts the role of the International Olive Council (IOC) as a center for information and documentation dissemination regarding olive oil products, as well as reiterating IOC as a forum for industry stakeholders, the IOC said.

In addition, the text emphasizes the standardization of national and international legislation about the physical, chemical and organoleptic characteristics of olive oils, olive pomace oil and table olives, in a bid to “prevent obstacles to trade.”

See more: New Draft International Agreement on Olive Oil and Table Olives

The UNCTAD formally adopted the text during discussions in Geneva last week.

According to the IOC release, the new agreement is simple, more rational and more condensed than previous versions and features a modified system for calculating the distribution of participation shares that aims to encourage consumer countries to join.

“It is aimed at facilitating the participation of importer countries,” it said.

“The next text will enter into force on 1st January 2017 and will remain in force until 31 December 2026. It is the culmination of two years of discussion by a special working group set up in 2013 and followed by the proceedings at the international conference.”

The agreement will be open for signature by government and contracting parties throughout next year and the Secretariat General of the United Nations will be the new depositary of the agreement.

The current executive director of the IOC is Frenchman Jean-Louis Barjol, who has served in this position since January 1, 2011 and whose contract will come to an end on December 31, 2015, completing a five-year term.

The meeting in Geneva was the sixth conference held since 1956 to negotiate the agreement the IOC is mandated to administer.

Article published in Olive Oil Times on Oct. 14, 2015

By Wendy Logan

Earlier this month, with preliminary harvest forecasts looking strong for California’s olive growers, the California Olive Oil Council reported an expected yield of a record 4 million gallons (15.14 million liters) of olive oil.

The prediction represented a huge jump from the 2.4 million gallons (9.1 milliom liters) produced in 2014.

Some, like The Olive Press’ Nancy Cline, concurred, reporting, “We’re very excited about seeing this bumper crop for 2015. The olives are coming in and we’re operating the press 24 hours a day. The oil is looking magnificent and we’re delighted.”

Not so fast say a few others, whose high fruit yield may not translate into the jump expected in oil volume.

“That prediction might be a bit aggressive,” said California Olive Ranch CEO Gregg Kelley. “I can tell you we do see a large crop from a tonnage perspective. So on that front, all the news is true, and the quality is fantastic. We haven’t seen quality this high across the board for two or three years.

“But on the flip side, though our yields are high, heavy tonnage often indicates lower fat content,” Kelley cautioned. “It’s fine — we’ll likely net out about what we expected.”

Having begun in early September, COR won’t complete their harvest until mid-November. With the weather still a big factor in the harvesting process, Kelley said it’s wait-and-see on oil yield until then.

At the Cobram Estate California operation, Adam Englehardt was just coming from the processing plant when reached by phone. His take was similar to that of Kelley: “It’s better than last year, but I’d be surprised if it’s quite the bumper crop expected. I think people are seeing the tonnage on the trees and assuming. Some jumped the gun. But a heavy crop usually produces less oil than a light one.”

“The tonnage out of our fields is pretty good — average to above-average. But the yield is less than at this time last year, based on the fact that there’s not a lot of oil in the fruit yet.”

Weather is always a factor, Englehardt noted, with a warm, dry spring in 2015 and a lack of adequate irrigation stressing the trees. It’s not so much that they don’t bear fruit, he stated, reiterating that such conditions do not help to maximize the olives’ oil yield.

Article published in Olive Oil Time on Oct. 15, 2015