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July 2021, Volume 27, Number 3

Food, Wine

Americans spent $1.7 trillion on food in 2020, down from $1.8 trillion in 2019 due to an almost 20 percent drop in food spending at restaurants and other away-from-home outlets, from $980 billion or 54 percent of US food spending in 2019 to $813 billion or 48 percent of US food spending. Food service spending is for food that is purchased for immediate consumption in restaurants or cafeterias.

Spending for food consumed at home reached a record 67 percent of all food spending in April 2020.

Online grocery sales topped $96 billion in 2020, over seven percent of the $1.3 trillion in US grocery store sales. Online sales may fall as consumers return to shopping in person, but grocers are building infrastructure to support online shopping, expecting sales to increase over time.

Picking and delivering items ordered online is labor-intensive when done in supermarkets in competition with other shoppers. Apps developed to increase the efficiency of warehouse workers are being adapted for workers who fulfill online grocery orders in supermarkets. Picker-shoppers say that they have a minute to find, purchase and prepare each item for an online order, and that the apps do not anticipate realities such as other shoppers who slow them down and having to contact customers to deal with out of stock items.

App developers want grocery stores to weigh and price produce rather than have customers select and weigh their items, and to group holiday- and birthday-related items in one section of the store. Some apps expect picker-shoppers to use multiple tote bags and fulfill several orders simultaneously as they move through grocery aisles. Some stores plan automated warehouses only for online orders in order to raise the picker rate from 60 items per hour to 600 items an hour.

Sweden’s Oatly, a maker of dairy substitutes made from oats that was founded in 1994, went public in May 2021 in an IPO that valued the firm at $10 billion, reflecting growing sales of plant-based or healthy living foods. Nestle, Unilever and other food firms are launching plant-based milk substitutes and plant-derived meats.

Americans had 400 pounds of vegetables per person available in 2019, down from 417 pounds in 2000. Americans shifted toward leafy green vegetables such as romaine and leaf lettuces and away white potatoes.

US dollar stores are adding fresh fruits and vegetables. Family Dollar, which has 7,000 US stores, is offering apples, oranges and potatoes at 100 of its stores, while Dollar General pledged to add fresh produce in 10,000 stores. German discounter Aldi aims to have 2,100 of its 12,000 square-foot stores open in the US by the end of 2021, making it the third largest grocer by store count.

The OECD reported that French, Italians and Spanish adults spent two hours a day eating and drinking, while Canadians and Americans spent an hour a day eating and drinking.

There is growing interest in indoor farming, which involves producing high-value and fast-growing vegetables in greenhouses and other structures year-round with the help of artificial light. Kentucky-based AppHarvest began to harvest tomatoes grown hydroponically (without soil) in January 2021, and plans 11 more greenhouses in Appalachia by 2025.

New Jersey-based Bowery, the largest US vertical-farming company, and specializes in producing herbs and leafy greens. Some organic farmers want USDA to deny indoor produce an organic label, arguing that organic produce must be grown in soil and that indoor farms are divorced from the local environment.

Indoor farming, also known as protected culture farming or controlled environmental agriculture, is expanding as investors look for opportunities to produce local and organic produce. There are believed to be 2,300 indoor US farms using hydroponics in summer 2021, and investors in these and other indoor farming operations attracted almost $1 billion in 2020.

Wine. Global wine consumption fell three percent to 235 million hectoliters or 6.2 billion gallons (one hectoliter is 26.4 gallons) in 2020, the third consecutive year of falling wine consumption. There was 17 percent less wine sold in China, seven percent less in Spain and six percent less in Canada; wine consumption was flat in the US. Wine consumption peaked at 250 million hectoliters in 2006-07.

The largest wine-consuming countries are the US, which accounted for 33 million hectoliters (8.7 billion gallons) or 14 percent of global wine consumption in 2020, followed by France and Italy, 25 million hectoliters each; Germany, 20 million; UK ,13 million; China, 12 million; and Russia, Spain and Argentina, about 10 million each.

Per capita wine consumption varies across countries. Those 15 and older in Southern European countries such as France and Italy consume an average of almost 50 liters or 13 gallons of wine per person per year. A gallon is five 750 ml bottles, so 13 gallons is 65 bottles or about five bottles a month. Americans who are 15+ drink an average 12 liters of wine a year, which is 3.2 gallons or 16 bottles a year or more than a bottle a month. Americans consume half as much wine per person as UK residents.

Covid reduced sales of premium wine and champagne in 2020 as restaurants closed and many events were cancelled. The US levied tariffs on EU wines in a dispute over aid for Airbus, China raised tariffs on Australian wine, and Brexit complicated imports of EU wines to the UK.

Global wine production was stable at 260 million hectoliters or 6.9 billion gallons in 2020. The EU produced 63 percent of the world’s wine, including 49 million hectoliters in Italy, 47 million in France, and 41 million in Spain, so that these three countries produced 53 percent of the world’s wine. The US produced 23 million hectoliters, about nine percent of the world’s wine, and Argentina, Australia, Chile, and South Africa about 10 million hectoliters or four percent each.

Some 105 million hectoliters of wine, 45 percent of the world’s wine, was exported from the country where it was produced. The leading wine exporters by volume were Italy, 21 million hectoliters exported; Spain, 20 million; France, 14 million; Chile and Australia, eight million hectoliters each; and Argentina and the US, four million hectoliters each. France was the leading wine exporter by value, exporting wine worth E8.7 billion in 2020 and followed by Italy, E6.2 billion, and Spain, E2.6 billion.

The three largest wine importers by volume were the UK, Germany and the US. These three countries accounted for about 40 percent of wine imports by both volume and value.

The world had 7.3 million hectares of vineyard in 2020, including grapes grown for raisins and table grapes. About 45 percent of the world’s vineyards are in the EU, including 960,000 hectares in Spain, 800,000 hectares in France, and 720,000 hectares in Italy. China has 785,000 hectares of vineyards and Turkey 430,000 hectares, but most of the grapes in these countries are used for raisins and table grapes.

The US had 405,000 hectares of vineyards, including 60 percent with wine grape varieties. Argentina and Chile each have about 210,000 hectares of vineyard, Australia 145,000 hectares, and South Africa 120,000 hectares.

Climate change is leading to warmer winters and earlier plant bud growth in Europe. Late frosts, as occurred in April 2021, are expected to reduce wine production in France and Italy in 2021, the two countries that normally account for over a third of global wine production. Vineyard owners tried to prevent frost damage by spraying water over the vines and lighting straw bales and other devices, drawing complaints of air pollution.

Most of France’s winegrowing regions, including Bordeaux, Burgundy and Champagne, were affected by the April 2021 frost.

E&J Gallo, which bought 30 wineries from Constellation, closed the Clos du Bois winery in Geyserville in May 2021 after sales of Clos du Bois wine fell by over half. Constellation bought Clos du Bois in 2007. Windsor mayor Dominic Foppoli, the so-called prince of the wine country, was accused of sexual assault in April 2021 and forced to resign.

Tobacco firm Altria in July 2021 sold Chateau Ste. Michelle Wine Estates to private equity firm Sycamore Partners for $1.2 billion.

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