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January 2018, Volume 24, Number 1

Wine, Food

The wildfires that destroyed over 8,500 structures and killed almost 50 people in October 2017 in Napa and Sonoma counties had little effect on vineyards. Grape vines are resistant to fire, and 90 percent of wine grapes had been picked; the remaining 10 percent may suffer from smoke taint. E&J Gallo Winery bought the 600-acre Stagecoach Vineyard above the eastern hills of Napa Valley in 2017.

World wine production fell eight percent in 2017 to 247 million hectoliters, the lowest in decades. Over 70 percent of the world's wine is produced in Europe, including 45 percent in three countries: Italy (39 million hectoliters), France (37 million hectoliters), and Spain (34 million hectoliters). Wine production was down in these three countries in 2017 due to late frosts, heat and drought, down 19 percent in France; 23 percent in Italy; and 15 percent in Spain.

The US produced 23 million hectoliters of wine in 2017; Australia 14 million; Argentina, 12 million; China and South Africa 11 million each; Chile 10 million; and Germany eight million.

Champagne. France's National Institute of Origin and Quality (INAO) is considering expanding the area in which grapes can be grown for Champagne, which could increase land prices in northeastern France. Vineyards around Mailly-Champagne, one of 17 towns that label grapes as Grand Cru, are worth almost $1 million an acre, compared to $5,000 an acre for farm land outside Champagne.

The vineyards surrounding 319 towns are currently in the Champagne district and can label their sparkling wines Champagne. The vineyards surrounding 40 towns nearby may be added to the Champagne district by 2021. The Champagne district boundaries were drawn in 1927, when wheat was more profitable than grapes.

New Zealand. Wine Marlborough reported that 3,000 workers were employed seasonally in the local wine industry, including guest workers imported under the Recognized Seasonal Employer. These guest workers, most from Vanuatu, do three-fourths of the vineyard work in the area.

The RSE was begun in 2007 and capped at 5,000; in 2017, the cap was 10,500. Marlborough produces about two-thirds of New Zealand wine grapes.

Food. Amazon paid $14 billion to buy the 470 stores of Whole Foods in summer 2017, and immediately lowered prices on staples such as milk, eggs and bananas. Many analysts expect the entrance of Amazon into the food business to change the century-old grocery business, which involved 25,380 stores with sales of $440 billion in 2016.

Most analysts believe there are too many traditional grocery stores for ever-fewer consumers. They expect younger shoppers to choose fresh, local and new items rather than the processed food marketed by multinationals who advertise heavily. New delivery mechanisms and direct links between farmers and consumers via social media may upend models based on mass market appeals.

So-called Big Food firms that make cereal and other packaged goods are responding to the consolidation of supermarkets and millennial shoppers by reducing salt and sugar in their products, creating organic and natural foods, and developing new items for adventure-seeking consumers.

About 10 percent of the world's residents are obese. Pacific Island nations such as Tonga and Gulf oil exporters have the highest shares of obese residents, over 40 percent of adults, while African and Asian countries have the lowest obesity rates, as less than five percent of residents of Bangladesh, Japan, and Burma are obese. A third of US adults, some 74 million, are obese, as are almost 30 percent of Mexican adults.

Most studies find that overweight adults who lose five percent of their weight over six months, 15 pounds for a 300-pound man, regain five pounds of the lost weight within a year or two.

Big Food multinationals sometimes support researchers who say that lack of exercise rather than too much sugar is the major cause of obesity. Nestle and other multinationals support the Nutrition Society of Malaysia, which praises sugary breakfast cereals as giving energy to children who exercise.

Restaurant News reported that the 200-unit Cheesecake Factory was the top-rated casual dining chain in 2017, earning higher ratings than the Melting Pot, Red Lobster and Olive Garden. The first Cheesecake Factory restaurant opened in Beverly Hills in 1978 with faux Egyptian columns and large portions. Today, the average Cheesecake Factory restaurant has sales of over $10 million a year.

Most of the world's banana exports are from Latin America, which has so far escaped from the soil-borne fungus that has attacked a third of African and Asian banana plantations, eventually killing the plants.

Greek labor costs dropped by 22 percent between 2010 and 2017, but the Greek economy remains unable to export in many sectors, including branded olive oil. Most Greek olive oil is sold in bulk to Italians who brand it; 80 percent of the olive oil leaving Italy is branded, as is half of Spanish olive oil exports.

Greece is the world's third largest producer of olive oil, but only four percent of branded olive oil sold world-wide is Greek. Branded olive oil can be worth E3 or more a liter, while bulk is worth less than E0.25 a liter, but producing branded oils requires investments and third-party checks that Greece's many small olive farmers find difficult to make.

Salmon. Most of the world's salmon consumed by people is raised in fish farms. Norway produced 1.2 million metric tons of salmon in 2016, but its farmed salmon production fell in 2017 due to sea lice, parasites that eat the mucus and skin of the fish before moving on to the muscle and fat, making the fish vulnerable to infections and sometimes killing them.

Norway in Fall 2017 imposed new restrictions on salmon farms to protect the dwindling number of wild salmon. The salmon raised in fish farms tend to be aggressive in the search for food, while wild salmon are often more aware of dangers that lurk in the ocean. When farmed salmon escape and mix with wild salmon, they pass on an aggressiveness trait that can increase mortality in the oceans where wild salmon spend two or three years.

Sea lice and the genetic impacts of escaped salmon threaten the $8 billion a year Norwegian farmed salmon industry that is dominated by Marine Harvest. Salmon farmers say that their fish is sustainable and that they do not use antibiotics in fish feed, while their critics say that farmed salmon are toxic.

Cashews. Cashews, today a $6.5 billion a year business, are native to Brazil, but some were taken to India during the 1500s, which is the largest producer and consumer of cashews. The Indian cashew industry, based in Kollam in Kerala, has been overtaken by Vietnam, which exported almost 350,000 metric tons of cashews in 2016, compared with India's 80,000 exported tons.

The Kerala government developed cashew processors in the 1970s and mandated a minimum wage that improved the lives of workers in the cashew industry. When Vietnam decided to expand cashew production, and developed machines to roast, crack, and shell cashews, processors in Kerala avoided mechanization to preserve jobs.

Phillips-Connolly, Kate and Aidan Connolly. 2017. When Amazon ate Whole Foods: big changes for Big Food. International Food and Agribusiness Management Review: 20 (5) 615 ? 622.