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April 2023, Volume 29, Number 2

Food, Wine

Kroger’s October 2022 bid to buy Albertsons for $20 billion drew opposition from consumers and unions but benefitted private equity firm Cerberus, which made profits on a 2006 investment in Albertsons. Kroger and Albertsons have a combined 5,000 stores, more than Walmart’s 4,600 US stores.

If the buy-out is completed, Kroger-Albertsons would have annual sales of $210 billion, just below the $220 billion of Walmart grocery sales in 2021. Kroger has 2,750 stores under the Ralphs, Dillons and Harris Teeter labels, while Albertsons has 2,200 stores under its own name as well as Safeway and Vons. Kroger has been a leader in operating food processing plants that make its private label products, and Kroger and Albertsons operate over 4,000 pharmacies.

The UFCW, which represents 350,000 of the 710,000 workers employed by Kroger and Albertsons, opposes the merger, fearing job losses as stores are closed. Private equity firms often inject some cash after buying grocery chains, borrow more, and make changes before trying to resell the stores at a profit. Cerberus had trouble selling Albertsons because of its low profit margins until covid made the firm profitable.

Whole Foods, which operates more than 500 stores in the US, Canada and the UK, asked its suppliers to reduce prices in January 2023 in a bid to attract more shoppers to stores that in the past were known as Whole Paycheck due to high prices for organic products.

Chipotle, which employs 100,000 workers at 3,000 outlets, aims to double the number of restaurants to 7,000.

The FDA in February 2023 allowed drinks made from almonds, oats and soy to be called milk but recommended that plant-based milks specify nutritional differences with cow’s milk. Per capita milk consumption has halved since 1970 in US?.

Some 41 million US residents receive Supplemental Nutrition Assistance Program (SNAP) or food stamp benefits at a cost of $130 billion in FY23, double the $65 billion of FY18; the average benefit is $6 per person per day. Benefits were enhanced during covid at a cost of $100 billion, so that the share of SNAP benefits in at-home food and beverage sales topped 12 percent in 2022, almost double the seven percent of 2019.

SNAP work requirements were eased during covid to allow able-bodied adults 18 to 49 without dependents and not employed or in training to receive SNAP benefits. The pre-covid rule of only three months of SNAP benefits every three years for non-workers without dependents returns in May 2023.

The leading organic foods by sales in 2022 were berries and packaged salads each worth $1.6 billion; apples worth $0.7 billion; herbs worth $0.5 billion; and carrots, bananas and lettuce each worth $0.4 billion.

A study of the greenhouse gas emissions associated with selected foods found that beef and lamb are associated with more due to methane emissions, while catching groundfish such as cod and halibut releases carbon as nets drag the ocean floor. Soybeans and cassava are crops that are widely produced and have fewer negative environmental impacts.

The World Obesity Council projected that the share of obese people worldwide would increase from 40 percent today to over 50 percent by 2035. Overweight is defined as a body mass index of 25 to 29, and obesity as 30 or more. Nutritionists call for governments to tax processed foods high in salt, sugar and fat and subsidize fruits and vegetables.

Some 1.1 million tons of blueberries globally were harvested from 164,000 hectares in 2021. Most are harvested by hand, prompting efforts to develop gloves without fingers but with collection baskets attached so that pickers can pick with both hands.

Wine. California crushed 3.6 million tons of wine grapes in 2022, including 1.9 tons of red varieties and 1.5 million tons of white varieties; the others were raisin and table grape varieties. The leading varieties crushed were Cabernet, 15 percent of the crush; Chardonnay, 14 percent; and Zinfandel and French Colombard, eight percent each. The Chardonnay crush was down over 100,000 tons to 520,000 tons in 2022.

The average grower price was $911 a ton or $0.46 a pound. District 13 (Fresno) grapes accounted for a third of the crush, with grapes worth $357 a ton; a quarter of Fresno-area grapes were French Colombard. District 4 (Napa) accounted for 127,000 tons or four percent, with grapes worth $2,858; over half of Napa’s grapes were Cabernet.

About 2.7 pounds of grapes are needed to get the juice to make a bottle of wine, the average bottle cost of grapes was $1.23. Red varieties were worth $1,150 a ton, and white varieties $682 a ton.

Wineries often sell their excess wine in bulk to other wineries. In early 2023, there were over six million gallons of bulk Cabernet available, followed by over two million gallons each of Chardonnay and Pinot Noir.

US wine sales were $78 billion in 2021, representing sales of 450 million 9-liter equivalent cases; over 92 percent of the wine sold in the US was still wine. Some 35 percent of American adults drink wine regularly, meaning at least once a week, and these 85 million adults drink 90 percent of the wine drunk in the US.

About 60 percent of US wine drinkers are women and 40 percent are men. The demographic group drinking more wine is people over 60. Over 40 percent of US residents 70+ drink wine, and many older wine drinkers are buying more premium wines that cost $15 or more per bottle.

About 30 percent of American adults drink wine and spirits but not wine. Wine industry leaders have called for a renewed effort to persuade especially younger Americans among these 75 million Americans to switch from craft beer, hard seltzer, and spirits to wine. Some want wine labels to include calorie information; a five-ounce glass of wine has about 125 calories.

Wine industry leaders in January 2023 warned of overproduction in California despite the third consecutive smaller than usual crop after the record crop in 2018, noting that new plantings of Sauvignon Blanc helped to make it the third leading variety, after Chardonnay and Cabernet Sauvignon. California is on track to have 580,000 acres of wine grapes in 2025.

Bulk wine prices vary by region, from about $7 a gallon in the Central Valley to $15 a gallon in the Central Coast; bulk Cabernet in Sonoma is about $25 a gallon, and $50 in Napa. A gallon of wine is five bottles; three-fourth of the wine sold in the US in 2022 cost less than $8 a bottle. Wine that costs over $15 a bottle are 13 percent of the volume of wine sold in the US.

The US had 11,700 wineries in 2022, up 50 percent from 2013. The top 13 wine labels in 2022 accounted for a third of US wine sales, led by Gallo’s Barefoot.

Some wineries specialize in low-alcohol wines. Spinning cones can reduce the alcohol in wine by using centrifugal force to turn the wine into a thin film that includes the volatile compounds that give wine its taste from the liquid by steam. After the alcohol is removed from the liquid, the volatile compounds are added back. The US has since 2018 allowed up to 16 percent alcohol in wine.

The US has a three-tiered alcohol distribution system. Brewers, wineries and distilleries sell alcohol to distributors who in turn sell alcohol to retailers. The two largest distributors are Southern Glazer’s Wine and Spirits, with about $25 billion in sales in 2022, and Republic National Distributing Company, with $12 billion in annual sales.

Bordeaux has too much wine. Growers want E10,000 per hectare in government aid to remove 15,000 hectares of the 150,000 hectares of 370,000 acres of wine grapes in the region. Some want subsidies to turn wine already made into industrial alcohol to reduce supply.

China doubled tariffs on Australian wine in April 2021 in response to the-PM Morrison’s call for an independent investigation of covid’s origins. China took 40 percent of Australian wine exports before the doubling of tariffs, almost all red, and the result is a glut of red wine in areas such as Riverland, South Africa, a major wine production region, where some grape growers are switching to white varieties,

Most more expensive Arabica coffee beans are from the highlands of South America, while cheaper Robusta beans are from lower elevations in Asian countries such as Vietnam.

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