Welcome to the third edition of the Future Food News Review, with foodtech, agtech and food systems' leading journalists. This week's headlines were: Amazon's new private label food brand Aplenty, US government climate policies for agriculture, a $40bn SPAC for Southeast Asia delivery startup Grab, Increased funding to plant-based startups is not cutting meat consumption, Food workers are still getting Covid-19, Restaurants break up with single-use plastic, Mushroom-sourced bacon raises $40m, Hazard pay and grocery store closures.
The Future Food News Review is part of a collaboration between AgFunder and Food+Tech Connect to host meaningful conversations about the future of our food system on Clubhouse and other platforms.
The journalists joining this week are:
Ximena Bustillo - POLITICO (https://www.politico.com/newsletters/weekly-agriculture)
Sam Silverstein - Grocery Dive (https://www.grocerydive.com/news/amazon-unveils-aplenty-its-newest-private-label-food-brand/598223/)
Leah Douglas - FERN (https://www.motherjones.com/food/2021/04/a-year-later-conditions-for-many-food-workers-at-high-risk-of-covid-19-remain-the-same/)
Jenn Marston - The Spoon (https://thespoon.tech/restaurants-breakup-with-single-use-plastics-has-begun/)
Lela Nargi - The Counter (https://thecounter.org/funding-investment-plant-based-proteins-meat-consumption/)
Chloe Sorvino - Forbes (https://www.forbes.com/sites/chloesorvino/2021/04/15/maker-of-mushroom-sourced-bacon-raises-40-million-to-reach-grocers-at-scale/?sh=498070b472d1)
Louisa Burwood-Taylor - AFN (https://agfundernews.com/grab-confirms-record-breaking-40bn-spac-deal-archrival-gojek-nears-18bn-merger.html)
Errol Schweizer - Forbes/TheCheckOut (https://www.thecheckoutradio.com/podcast/episode42-ufcw)
Elaine Watson - Food NavigatorUSA
Sign up for the Food+Tech Connect newsletter here
Sign up for the AgFunder Weekly newsletter and research here
Danielle Gould:
And one thing to note, we are always trying to highlight as many diverse people, voices perspectives. So if you are a journalist or a writer in this space who wants to get involved and join us for future sessions, please reach out to Louisa or I to join us.
Danielle Gould:
I'd love to introduce our amazing crew of journalists that we have presenting today. We have Ximena Bustillo returning to us from Politico, Jenn Marston, a contributor for The Spoon. We have Lela Nargi who is a contributor to a lot of different publications, including The Counter and Civil Eats.
Danielle Gould:
We will have Sarah Mark joining us. We have Elaine Watson from Food Navigator USA, Sam Silverstein, joining us from Grocery Dive. And today this welcome them for your first one. Meghan Poinski from Food Dive, Leah Douglas from Fern and Chloe Sorvino from Forbes, and then Errol Schweitzer from the Checkout podcast and Forbes.
Danielle Gould:
So today we're going to have a deep dive into a couple of the big stories this week from Amazon's Aplenty launch to Grabs $40 billion, SPAC deal. The climate stewardship act. We're going to be talking about food and farm workers and their rights let's begin.
Danielle Gould:
Louisa, do you want to kick it off with the stories that you are going to share about the agriFood tech investment in China and Grabs 40 billion SPAC deal.
Louisa Burwood-Taylor:
Right. Exactly. Yes. So excited to kick things off with a little peak into what's going on in Asia. The first story I wanted to share was about Grab, Southeast Asia's largest deliver anything app. Food is a big portion of that. And they've announced plans to do what will be the largest ever SPAC transaction on to the last stop stock exchange, a $40 billion valuation.
Louisa Burwood-Taylor:
This is definitely you're the largest SPAC across any sector. And it's the latest one that we've seen in agrifood tech after AeroFarms, the vertical farming group recently announced they intend to do one, an app harvest, also Indoor Ag, but on the greenhouse side did one earlier this year.
Louisa Burwood-Taylor:
So for those of you that don't know SPAC's a Special Purpose Acquisition Company, and it's basically a vehicle for companies to list on the stock exchange and go public without having to do an initial public offering, an IPO, which can be a lengthy and expensive process with quite a bit of regulation around it and lots of scrutiny from investors.
Louisa Burwood-Taylor:
Whereas, with a SPAC they are essentially bought by an existing listed company, that's already done an IPO, but the sole purpose of that listed company is to find a promising company to essentially acquire and merge with. So according to the FT, you can get a really good price for your company. A good valuation with a SPAC.
Louisa Burwood-Taylor:
And SPAC's with tech companies have managed to get evaluation on average three times, 13 times, their previous year's revenue, which is about four times what you would get from a typical M&A acquisition of a tech company. So you can get quite a good valuation for your company doing a SPAC.
Louisa Burwood-Taylor:
It also gives smaller investors that have typically been shut out of IPOs in favor of larger investors, the chance to put money into an early stage venture and that could be quite a good thing for popular tech startup. Companies can also raise cash quicker and have a bit more certainty on what the share price and valuation will be earlier on in the process.
Louisa Burwood-Taylor:
Yes. So Grab will be listed on our SPAC at a $40 billion valuation. The SPAC that it's merging with is actually only worth about $500 million. So they're actually going to be raising an extra $4.5 billion from some of the really large institutions like BlackRock Morgan Stanley, slightly begs the question of why they need to do a SPAC when they're really good to going after those institutional investors like they wrote in an IPO.
Louisa Burwood-Taylor:
And it's a very different situation to a smaller company like AeroFarms or AppHarvest, who still some years for making a profit and they're in less well-known understood sectors for the public markets so SPAC seems to make a bit more sense.
Louisa Burwood-Taylor:
But it was really exciting. It's a really, really massive big deal. One thing, a word of caution is, it looks like we might be heading for a bit of a SPAC bubble at the number of listed SPAC entities is at record highs, and they've already been about 300 SPAC, IPOs this year already versus 250 across all of 2020, and about 70 in 2019.
Louisa Burwood-Taylor:
And there's a decent portion of those that did IPO and they never actually found the company to acquire. So there could be a bit of a bubble emerging and it looks also like regulators might be starting to come down there. But it is a really interesting way for AgriFood tech companies to give an exit to some of their investors.
Louisa Burwood-Taylor:
It's a big question, mark, a bit of a looming question around where investors or how investors are going to get their money back in some of these ag tech startups that are starting to get quite old now and have been around for quite a while. Definitely one to watch.
Louisa Burwood-Taylor:
I've probably has got over by two minutes Danielle. Do you think I can still talk about China? Or should we move on?
Danielle Gould:
Yeah. Just give us an update on China.
Louisa Burwood-Taylor:
Yeah. Okay. So we released a new report this week with Bits x Bites, which is an agrifood tech VC based in Shanghai. And we track all investment into agrifood startups in China. And it's been really interesting to watch what the trends are over the years. But in 2020 Chinese agrifood startups raised $6 billion, which was a 66% year on year increase.
Louisa Burwood-Taylor:
But what's really interesting here is that most of the investment in China's agrifoods startup space as being downstream and to a lot of premium branded foods, it's been into food delivery, e-grocery. And while those still accounted for some of the biggest categories.
Louisa Burwood-Taylor:
What we saw for the first time. It was real growth in investment upstream into farm tech and innovative food startups. And I think the reason for that is against a backdrop of the Chinese government and large corporations have really been investing more in that farmland and consolidating agriculture in China.
Louisa Burwood-Taylor:
China's typically made up of lots of small farms as in many Asian countries, so that this consolidation is going to be creating big agricultural enterprises that now will be able to do [inaudible 00:12:15] more easily. When you have bigger farmland, you can imagine you'd be able to deploy big technologies on there.
Louisa Burwood-Taylor:
And so some of the technology getting a lot of investment were things like drones. So using drones for applying chemicals has been growing and pace in China. So yeah, that's the China investment report. You can download it on [inaudible 00:12:34] amazon.com if you'd like to. That's me. If anyone has any questions or comments.
Danielle Gould:
Yeah. I'm curious with all this investment happening in China into the ag tech space. I mean, what broader implications do you think that's going to have for agriculture globally and just for the growth of the ag tech space?
Louisa Burwood-Taylor:
It's exciting because the DGI is a Chinese company and that's a drone competent. That's used all over the world. China is obviously a leader in many different technologies. So if they're starting to get really more into the farm tech game, I think we could see some of these innovations advancing more rapidly for other parts of the world. And there's no reason to think they couldn't be exported from China to other parts.
Louisa Burwood-Taylor:
There's slightly different challenges they face. And as I mentioned, the farm size, the topography is very different there, but in terms of exporting to other Asian markets this could become a real powerhouse of ag tech innovation.
Danielle Gould:
Chloe, did you have a question for Louisa?
Chloe Sorvino:
I have comment more about SPAC I just wanted to say that it definitely has been a bit of a bubble, but the SCC did put out regulations earlier this week, that should probably stave off this huge pipeline right now. But I can't tell you how many founders and investors have told me, "I could get a SPAC and go public, within 30, 60 days." It just really cuts down on the time that it takes and the expense, of all of that.
Chloe Sorvino:
So it has been really interesting in terms of how it could democratize food exits and ag tech exits and more than just a conglomerate or a big, big company going public. But, we'll see how that tapering off ends up. Pat rates been around like nine months of this craziness, so.
Louisa Burwood-Taylor:
Yeah, absolutely. I think just, what's interesting or weird with Grab is that it ends up looking like an IPO, but they're just using this quick and easy mechanism as you said to do it. And I think that maybe that will be a sort of rare type of structure, but that might be where the regulators start to think that they should be using the IPO process. But yeah, it's definitely could be a great thing for investors on startups in this space.
Danielle Gould:
All right, well moving right along. Next, we have Sam Silverstein, he's going to share... Talk about two stories and we're going to quickly talk about... There's an interesting story around Farmstead partnering with DoorDash and a new delivery models are pretty interesting.
Danielle Gould:
And then the big news of the week, Amazon launching a private label brand and digging into what that means for the CPG world and for other retailers. So Sam, tell us a little bit about these stories
Sam Silverstein:
Hi everybody. I'll start with Farmstead and DoorDash, and then I can move on to Amazon. As you said, it's a really big story. But the interesting news that came out this week about Farmstead is that they're really looking to step up their presence, which is already formidable, but they're stepping up their presence in the online grocery space.
Sam Silverstein:
Farmstead is an e-gro serve based in California, that has been expanding pretty rapidly. They raised $7.9 million last year. And they went from their original market of the San Francisco Bay area to add a couple of more cities on the east coast. And they have their sights on many more cities this year.
Sam Silverstein:
And so what they've done now is tied up with DoorDash, which allows them to offer one hour delivery on top of Farmsteads own delivery service. And of course there's a big push for delivery to be as quick as possible with some companies like Gopuff getting it down to 15 minutes even or so.
Sam Silverstein:
And so Farmstead is obviously looking as well to give people easy access to online groceries. But they not only have decided to work with DoorDash for themselves, Farmstead, they're also working with door dash to allow companies grocers that use farms, that grocery OS, online ordering technology to sell their wares over door dash under their own brand names.
Sam Silverstein:
So this allows DoorDash to have more people coming through or potentially to buy groceries. And it allows more grocers to give themselves a presence online in the online delivery space.
Sam Silverstein:
That story came out this week, but I think probably the bigger story is Amazon's decision to really ramp up its presence in private label. They already have several private labels. I'll talk about that in a moment, but the big news is that this week they announced Aplenty.
Sam Silverstein:
Now, Aplenty is a new private label, specifically built around food brands that Amazon describes as being pretty healthy. These are going to be foods. They say that will not have artificial flavors, synthetic colors, high fructose, corn syrup, those kinds of things. And they're really looking... It it looks like they're looking to attract consumers who want to buy food conveniently, but also are looking for it to be better for them, more nutritious.
Sam Silverstein:
The brand is going to include sweets, cookies, salty snacks, frozen foods, baking mixes, pantry staples, lots of things that Amazon wants people to come to their website to purchase. But of course, there's the advantage for Amazon as with any retailer that private label can offer greater margins than selling national brands or other brand names.
Sam Silverstein:
For Amazon it's a chance to step up their presence in grocery, which has already been growing quite rapidly over the past few years, particularly in the past year. And we'll see where this goes, but definitely important development from Amazon.
Danielle Gould:
Go for it Errol, I was going to call on you.
Errol Schweizer:
Okay. That was a great reporting. I was probably the best article I've seen on this topic. The Aplenty brand is interesting because to me, it seems like it's really going after Good & Gather, Target, the latest Target rebranding for private label and simple truth. But a bit more watered down and almost like hipster with the funky fonts and the warm colors.
Errol Schweizer:
And it just to me, it also feels super watered down from what they're doing with the 365 brand in that the health claims are dicey, the ingredients are... Besides the no artificial colors or flavors, stuff still contains GMOs. I mean, it's still essentially slightly better for you. Slightly lesser evil junk food.
Errol Schweizer:
Then again, it's Amazon, it's going to be completely dominant. It'll probably be a multi-billion dollar brand within a few months, a few months considering their market share. And I also just want to challenge the mythology of the private label brands, having a better margin as...
Errol Schweizer:
I don't know if that's possible with Amazon considering their take from third-party brands is close to 30%. I do however think, this is a market share Grab, and I think this will help them leverage and put more pressure on these other third-party brands in the consumables categories. But otherwise great article.
Danielle Gould:
I'm sorry. I just wanted to give everyone context. So Errol oversaw private label grocery at Whole Foods for eight years. So he brings that perspective to the conversation. Sam, please go for your response.
Sam Silverstein:
I just wanted to note that not only will Amazon be selling Aplenty online, but it's going to be on shelves in the growing fleet of Amazon fresh grocery stores. And of course, they're looking to grow that quickly.
Sam Silverstein:
There are reports. Now we keep seeing more stores in the pipeline already. The 12th store opened last month and they only started opening the chain of stores last fall, last year.
Sam Silverstein:
So my sense is that Amazon is going to be able to use Aplenty as a way to define the Amazon fresh stores a little bit more for other grocery stores. And of course the fresh stores are interesting in that they are basically conventional grocery stores, but they're also a way for Amazon to showcase its product.
Sam Silverstein:
So I think we'll see where this goes, but I believe that the Aplenty brand along with the other private labels and Amazon has built up over the years, are certainly on the way for them to define themselves as they look to make a splash in grocery.
Danielle Gould:
Curious. I have a ton of questions on this. I'm curious if anyone else here has questions.
Megan Poinski:
It's really interesting because private label has been an interesting story throughout the pandemic.
Megan Poinski:
A lot of their growth has come more recently because at the beginning of the pandemic and at sometimes throughout, there haven't been the big brands on shelves yet consumers are looking for the big brands they grab, whatever else is there. Because private label tends to cost less, it could be setting itself up for large growth in the post pandemic period when it... If there is more of an economic slowdown.
Megan Poinski:
But there's a big question mark, as to whether that will happen and what's going to happen next with private label in general. However, stores have definitely been both [inaudible 00:22:01] the private label offerings during the last year, as well as TreeHouse Foods, which makes all private label offerings. They have been working on expanding their portfolio to get ready for what is to come.
Elaine Watson:
This is Elaine with Food Navigator. I think that this is interesting because it was my perception that during the pandemic, private label was possibly going to gain share that there seems to be a lot of activity.
Elaine Watson:
And yeah, I saw some data from the PLME. I think it was this week that said that the market share of private label, it actually remained pretty constant between, 2019 and 2020, which surprised me. I assumed it would have gained share, but it didn't. So apparently it's stuck at around 19.5% value share across all... This is excluding e-commerce, but this is measured bricks and mortar channels. And then volume has stayed the same at about, 23%, which surprised me because I...
PART 1 OF 4 ENDS [00:23:04]
Errol Schweizer:
23%, which surprised me because, I come from the UK market where you've got 45, maybe 50% of sales in many food retailers that are private label and here in the U.S. It seems to have stuck fairly stubbornly around that 19% mark. So it'd be really interesting to see what happens in the next couple of years.
Danielle Gould:
Errol, I'm curious on your thought and not just Errol, but everyone, what are the implications of this going to be for emerging brands? What is it going to look like for... We see what Amazon has done with fashion brands? They're one of the largest fashion retailers. They are able to use data to see what the trends are and then they create Amazon basics or under one of their other fashion brands. So what are those implications for food brands? Will it change how they think about their Amazon strategy [crosstalk 00:23:55] and also greater food system implications as well?
Sam Silverstein:
Well, honestly, Elaine's point was spot on, Amazon motto of your margin is our opportunity. I think extends this and food there's just a bit less margin to play with. So in my experience, when you launch a private label, and this happened with Kroger and Simple Truth, you get this hockey stick growth for the first 18, 24 months, but then it plateaus, it's hard to cycle over that because it's all about gaining market share. You don't have any incremental trade spend to spend against it, to, promote it. And that's what I think you're going to see in retail grocery is, a lot of promotional activity from third-party brands, from the incumbent and single big food, et cetera. I've written about trade spend before too, and you're going to see a lot more of that in terms of emerging brands.
Sam Silverstein:
The point is always differentiation and innovation. If you have a good idea and setting yourselves apart and finding the financing, the challenges remain and, there's obviously a big investor appetite in certain categories and other categories. It's been very hard to raise financing over the pandemic. So I think it's a big question, mark. And I do think it's going to be challenging for emerging brands, especially over the next year to two to really grow and establish themselves. I think the economy is going to have to stabilize. And I think that customers, consumers are going to have to prove that they're willing to experiment and try new things. Because they're still, I think in pandemic buying habits.
Danielle Gould:
Great. Thank you for that. Louisa. You want to introduce our next story?
Louisa Burwood-Taylor:
Yes, great. Next up we have Ximena Bustillo from Politico and you're going to tell us about the climate stewardship act, which was introduced this week and across agriculture and agtech. Everyone is keenly watching what regulators are going to do regarding carbon markets, lots of innovation happening in that space. So, can you tell us what's been going on this week?
Ximena Bustillo:
There's definitely a whole lot to talk about this whole week has been a huge hodgepodge of lawmakers introducing bills on the house side and on Senate side to address climate change through agriculture initiatives. And so this began at the start of the week with Cory Booker and representative Abigail Spanberger introducing, or re-introducing rather the climate stewardship act, which expands existing voluntary programs that provided initiatives for farmers and ranchers to revive deforested land or take part in a wide variety of programs, as well as the goal of planting billions of trees over the next decade.
Ximena Bustillo:
But they, weren't the only one. So I want to expand this out a little bit more because we had a bipartisan pair of representatives introduce the farmers fighting climate change act, which does the same thing except focuses more on the climate stewardship program, which is a program that provides incentives, grants, loans for farmers and ranchers taking part in certain quote, climate stewardship actions. And then in the Senate, we had Debbie Stabenow and Mike Braun. Re-introduce the rural forest markets act, which focuses on family owned forests and allows them to enter carbon markets a little bit easier. And the news just keeps on coming, this morning at 8:30, I sat in on a press call with House Ag GOP members who in build their own package to address carbon markets, upkeep forest, and provide funding and incentives or equipment that can help provide a more greener agriculture.
Ximena Bustillo:
So where this is all coming from is, a lot of these bullets have already been introduced before they're being re-introduced this session. They were dead on arrival in the last session, meaning that they were introduced, they may be got assigned to committee and were never heard from again, but this time around a lot of lawmakers are really hitching onto Biden's $2 trillion infrastructure package, which talks a lot about climate change. And it talks about getting the American economy to net zero emissions with farmers, largely leading the charge, but there's not whole lot of clarity as to how that is going to happen or where that inclusion for agriculture is in terms of getting to that net zero goal. So there's open for negotiations across the board. And even Biden has said that this is very open to compromises on every provision.
Ximena Bustillo:
Like everything's up for grabs. So you have these different lawmakers introducing these different packages in these different bills. And they all say that they do have the hopes of attaching it to this larger vehicle, which is the $2 trillion infrastructure package, which is also, might be less than that. There's so many negotiations happening on that front as well, but it will be really interesting to see what will be included because there are still a lot of barriers to entry for all these programs, including costs, difficulty with applications, or just straight up exclusion of certain farmers or certain growers or certain foresters that aren't able to take part in programs that maybe they would like to or would be able to otherwise. And then on a separate other front, you have lawmakers like representative Cindy Axne who is taking a different approach and rather than introducing her own measure, she's encouraging lawmakers to include things.
Ximena Bustillo:
For her it's focusing on the biofuel sector because Iowa is a very large state for producing corn that goes into ethanol. And so she has this vision of biofuels being this transitionary phase to getting to that cleaner economy, but she doesn't necessarily have a bill or a piece of legislation pushing that through. It's more just her own advocacy. So I spewed a lot of bill names and whole lot of representative names out there, but it will be interesting to see how we transition from just all of these standalone items and even standalone packages to what will actually make it in. And whether those initiatives, after all negotiations will reduce those barriers to entry that I mentioned earlier.
Louisa Burwood-Taylor:
How does it typically work? Could there be you call these separate bills as you've mentioned, could they essentially get combined into something towards the end, Is that how it works?
Ximena Bustillo:
Yes. As they negotiate this larger infrastructure package, what will basically happen is individual bills will get basically grandfathered in to this larger package. And that's what we've seen in the previous coronavirus packages. Other spending on Nabi's bills is there actually a huge, huge bill made up of smaller bills. And so it's a large negotiation for what gets included and what doesn't get included, but then within that bills can change in those negotiations for themselves. So it's a little like a Russian doll of legislation.
Louisa Burwood-Taylor:
And what you've read so far of this bills, I had a quick glance at the climate stewardship act, but this carbon market thing it's such a hot topic at the moment in agtech and agriculture, understanding which player you should go with. It looks like at the moment you're going to have various different providers that are aiming to measure soil carbon on the farm, but then also be on that incentivization and monetization piece and creating a market for selling them.
Louisa Burwood-Taylor:
I personally think there's potentially some issue there having a private company doing all of that, and it's pretty open to fraud to where the government is going to come in and play a role is really what the big question mark is, but I'm not sure how much of a framework there is in any of these bills towards that.
Ximena Bustillo:
Well, again, that's a really good point is right now it is fairly privatized. And one of the things that the GOP house members were saying this morning is that they don't really want government intervention in the carbon markets. They want to keep it in the private sector. I would assume that the Democrats are probably going to argue a little bit separate approach since they are introducing more legislation that might intervene a little bit more in the carbon markets, might expand who was able to partake in this specific initiative as it is. There's a lot of unknowns when it comes to carbon markets and how that is going to play out, especially moving forward with an infrastructure package as we're seeing right now.
Louisa Burwood-Taylor:
Lots of question marks. Do anyone else have a comment or question?
Lela Nargi:
I was just curious, Ximena on what you think the implications might be for farmers and for food companies that are starting to invest in regenerative agriculture, but, aside from just the carbon marketplaces, there's a lot of infrastructure investment, a lot of investment and supply chain in order to shift agricultural practices. So are any of the bills looking to provide funding for that work?
Ximena Bustillo:
For sure. So the different bills help to provide funding for different programs that can in turn, increase the reach to farmers that are lower income, smaller farmers, farmers in more rural areas that maybe don't have as many access to resources, but that's a part of the debate. And the problem right now is making sure that you are increasing that access. Because again, there are a lot of barriers to entry right now and making sure that those barriers to entry are addressed, will be a part of larger conversations across the board across, what the GOP is introducing across what the Democrats are introducing. And they all, I think have that in mind, it's been a part of conversations in all press conferences with reporters, but again, it comes down to what will finally make it into that larger vehicle.
Lela Nargi:
I have a question there's been a lot of pushback, and Sarah Mock was supposed to be on here today. I'm sorry not to see her here. On the idea that voluntary having farmers sign up for these things voluntarily and keeping it along those lines is going to have any major impact. Is the conversation still strictly around keeping things voluntary at this point?
Ximena Bustillo:
I don't think so. I think that's a very good point and these bills right now, they do focus largely on existing programs, which are largely voluntary. There aren't a lot of additional mandates for what operations need to meet certain goals, but that is obviously something that could change. I don't know what the likelihood of that is right now, because all of these conversations are early and up and coming, even though these bills have been introduced before and have been dead on arrival before they're being renegotiated under this new framework of the Biden's infrastructure plan, which doesn't give a whole lot of guidance.
Ximena Bustillo:
Like the white house back sheet is not overly specific to what specifically farmers need to do or what lawmakers need to require of farmers and ranchers. A lot of Ag organizations and institutions haven't even fully come out in large support of the Biden plan, because there are a lot of unknowns and what are the costs of these going to be? What are, how is this going to be funded? So there is a lot of hesitancy even from the Ag sector, not just, from the ground farmers and ranchers, but larger companies and institutions to automatically just jump on board largely because of that reason.
Danielle Gould:
Thanks so much Ximena. Next we have Jenn Marston from the spoon. He's going to be talking to us about, how restaurants are breaking up single use plastics. Jenn, tell us about that. And the break free from plastic pollution act.
Jenn Marston:
Yes. Well, we hope that the breakup will be severe and huge in the future, but really it's just started and, so the break free from plastic pollution act is legislation. That was well, the plastic pollution, 2021 act. It's legislation that was recently introduced it's building on previous legislation, but it would basically implement fairly big changes in the U.S. to curb our reliance on single use plastics. It would set some requirements, minimum contents around recycling, set up some national programs. That thing where restaurants specifically are concerned is a restaurant chain called Just Salad, which is based in New York, but has a bunch of, I think it's over 50 locations around the U.S. at this point. And they have typically, always just been a pioneer of sustainability in the restaurant. They have a number of different, their reusable bowl program is as old as 2006 I believe.
Jenn Marston:
They to raise more awareness about the break free from plastic pollution act. They recently penned this sign on letter and are sending it around to restaurants, trying to get restaurants, to come out and publicly support this idea of getting rid of plastics and especially single use plastics in the restaurant business. And they've gotten quite a bit of support. I don't know if they're not, last time I checked divulging the names of actual restaurants or anything, but I understand from Just Salad's chief sustainability officer, Sandra Noonan, that there's some fairly large chains on board at this point. I think there are a couple of reasons why that matters. One is just that there are efforts out there to pilot reusable programs to pilot circular delivery and that thing. I know McDonald's is doing some stuff, so is Burger King, Just Salad, I already mentioned, but all of these efforts in the restaurant business are pretty siloed at this point.
Jenn Marston:
And so it's hard to have a major impact across an industry that is responsible for quite a bit of trash, especially now with so many people doing delivery and takeout. It's possible that this bill, if passed through, would help to standardize some of these things. And I think it would also help to make them accessible to the restaurants that may be can't afford to do as much around sustainability. Somebody actually left a comment this morning on our spoon story about this saying, people are just going to sit around and wait for a law. And it's well, in an ideal world, every restaurant, on the block would be putting a lot of effort into sustainability. But the reality is we're coming off a year where a lot of restaurants are lucky to be keeping their lights on.
Jenn Marston:
So I don't know that it's fair to ask the smaller guys to, funnel a bunch of money. They probably don't have into these efforts. That's why we need bigger legislation and hopefully the influence of some of the bigger chains that do have the money and that can, maybe use it to help spearhead some of these efforts. So I feel I just gave a lot of information, but I think it's exciting. I think it's just the beginning here and there's going to be a lot around packaging and waste in the restaurant to talk about in the future.
Danielle Gould:
So what, how would the act... Is the idea to provide funding, to develop some of these systems or, I totally get, it's an issue that happens across the industry where this thinking about the circular packaging or, getting rid of single use packaging. I think everyone's trying [inaudible 00:40:27] write out whether you're in the restaurant industry that's B&G industry. So what are the incentives look like to help reduce the cost of that you think through these initiatives through...
Jenn Marston:
I think definitely one is to invest more in reusable programs and these programs I think more of circular delivery. It's also, I think a big push for this version of the legislation is also to curb plastic use more at its source. So instead of... And it's interesting, this is something Just Salad's been talking about for years, which is stopping the waste before it ever gets into the restaurant. So it also incentivize good design innovation in packaging, bring that more to the forefront of, if you're not going to use single use plastic, what are you going to use? What does material science have to say about that? And also just environmental justice is another big thing with this act, which is there's a very disproportionate amount of pollution from plastic that impacts a lot of communities of color, a lot of underserved communities. And so making, addressing that as another part of the bill as well.
Sam Silverstein:
Jenn, I was wondering if you could talk a bit about how this might affect plastic bags in the grocery industry, that's a major topic of discussion. How to reduce or eliminate the use of plastics so that people walk out of stores with sustainable bags for their products, but whenever people order or take away food from a restaurant, it's probably likely that the food will be put into a plastic bag for them. How will that be included in all of this discussion?
Jenn Marston:
I think that's a fantastic question. I think the bag problem is huge and the bill didn't specifically mention plastic bags, but I think it does seem like plastic bags are one of those things that is going to have to be addressed on a more government regulatory level. I know there're individual cities that have introduced a plastic bag ban, but if memory serves me correctly, it's a little bit difficult to enforce in some places. I think one of the things...
Jenn Marston:
And I was having a conversation with Sandra Noonan from Just Salad a couple of weeks ago about this, as far as getting rid of plastic bags is she mentioned, is there a way to show more businesses, especially restaurants that they can save money by not offering a plastic bag. And it's, part of it is changing this consumer perception around, do I need a bag to carry this box out of the store that changes with delivery, obviously because the customer's not in the restaurant. Grocery, I'm a little bit less familiar with, that's not really my area of specialty, but it does seem from what I've seen of plastic bag bans and New York. It seems the change to make that a widespread change. You would need some legislation in place. Otherwise it's hard to incentivize people.
Danielle Gould:
Well, thank you so much for that. If no one else has any comments or questions. We will move on to Leah Douglas. So you've been doing some amazing reporting over the past few months around outbreaks of COVID in food and meat packing plants. And you had an article this week talking about how it's so really impossible to understand the numbers. So Leah, please take it away.
Leah Douglas:
Thanks so much for having me. Yes. So I've been covering threat of COVID at food production facilities for the last year. And this past week, I published a retrospective on a year of collecting this data from states and companies as to how many workers had contracted COVID and what facilities were being most impacted by the spread of the virus. And the story is really looking at the top line is essentially after, 12 months of trying to collect this data and all the writing that's been done on this issue in crisis for workers, we still don't really know the extent to which, workers were sickened and by the virus last year and also the ongoing impact of the pandemic on the food system workforce.
Leah Douglas:
And there's a few reasons for that. The primary reason that I talk about in the story is the lack of standard reporting practices from states and public health agencies around workplace illness. And, in different states, there's been a lot of pressure from business interests, not to release identifying information about businesses that have had COVID outbreaks among their employees for a variety of reasons. And in the media industry, the industry has said there's confidentiality concerns around releasing that data themselves. And some states have complied with pressure from industry not to release that data at the state level as well. And in this story, I took a look at a subset of the data I'd been collecting for several months at about facilities that have had multiple outbreaks of COVID, which I found to be an interesting recurring phenomenon. I was seeing in a bunch of different states and tried to understand from at least one facility where that had happened, why we were seeing multiple outbreaks over the course of the year, because in an ideal world, an outbreak that facility, excuse me, that had an outbreak would adopt-
PART 2 OF 4 ENDS [00:46:04]
Leah Douglas:
... that facility, excuse me, that had an outbreak would adopt precautions so that the outbreaks wouldn't happen again in the future. So I spoke to a worker at a Tyson Foods chicken processing plant in Arkansas who spoke to some of the ongoing issues, accessing PPE and accessing time to quarantine, that workers continue to spread the virus amongst themselves because of some of those structural issues. Also reported that accessing testing was hard in the facility and the company's testing protocol wasn't catching all the positive cases. And as a result, the positive cases weren't being reported up the chain to the state. And so the information that was being made public, which the State of Arkansas does publish pretty good information on this, according to this worker and their advocate, was not comprehensive to how many people were actually sick at the facility.
Leah Douglas:
So I found this to be kind of an interesting place to look, to try to understand. There was a ton of attention on the spread of COVID in these facilities last spring and summer when it was definitely the most acute, but there have been ongoing lingering issues and outbreaks recurring. And the fact that we still don't know the extent to which that's ongoing makes it difficult to address, difficult to come up with the solutions that will really end the pandemic for these workers. And in the story, I talked to some folks about how to reach that phase and definitely vaccination is a really important chapter we're in right now. And these workers are getting vaccinated in a lot of different states and many folks have pointed out to me vaccination can't be the only strategy because this is a workforce with high turnover.
Leah Douglas:
Vaccination, as we know is... We're not at herd immunity or anywhere close in most places. So there have to be other... Engineering controls is what the public health folks call it, masks and distancing and such in place at these facilities to curtail the spread of the virus and other ways as well. So I think it's an interesting point to be kind of talking about this issue. It's faded in a lot of ways from the top-line crises of the pandemic, and we are definitely in a better place this spring than we were last spring, absolutely, in terms of workers getting sick, but it is a continued issue that we still don't know the extent to which this is an ongoing problem and the severity of the problem in different places.
Louisa Burwood-Taylor:
Yeah. I mean, you're absolutely right. It does seem to be crazy that they haven't been able to get a handle on this. I'm wondering if in any of your reporting and speaking to these workers or some of the companies, if you've seen any kind of indications that there might be more deployment and adoption of robotic in some of these factories. Obviously that would reduce the dangers around COVID.
Leah Douglas:
That's a great question. And I can't say that I have heard that. I think it was interesting in the reporting for this story what I heard a lot was that the fundamental conditions in the facilities are essentially the same as they were pre-COVID or even in the beginning of the crisis when it was really acute. And as it relates to that question, I think, to extrapolate, the essential way that the work is done hasn't changed. There's still the same number of workers in the facility, the same very little distance between workers in the facility. I'm sure that there are plants that are adopting varying levels of technology and that was true before COVID as well. But in terms of a direct response to this crisis, more or less what I've heard is that there hasn't been widespread adoption of those types of changes that would materially change how workers are experiencing the plants.
Danielle Gould:
Leah, there was such a light that was shown on how just criminal the working conditions are. Why is there no pressure on these companies to change what the conditions are? And what's needed in order to do that?
Leah Douglas:
Well, that was definitely a takeaway from talking to advocates for the story that a tension that a lot of folks were pointing me to, a tension, is that the main condition that advocates told me would really materially help curtail the spread of the virus at this point is distancing workers more in the facility and allowing for more distance, particularly on the processing line where, as I'm sure we've all seen and heard, these are, especially in meat packing plants, very cramped environments. And that's part of what fueled the spread of COVID so quickly, especially last spring and summer.
Leah Douglas:
And in order to just space people out more in the types of processing environments, the processing speed would have to decrease, sort of. Fewer people needs to go slower and that of course would affect or could affect how much production the plan was putting out. And that's like an example where the interest of the industry, which is to maximize production and the interest of the worker advocate was just to reduce the amount of illness are directly in tension with one another. And there is definitely policy work being done on line speeds. In particular, both in rulemaking at the Department of Agriculture and also through bills that are being proposed. And this was an issue far before COVID, so there's a whole advocacy environment around that. But it is directly in tension with sort of the bottom line of the companies, which I think is why it's sort of has reached a stalemate, or we haven't seen those changes adopted voluntarily by the industry as well.
Danielle Gould:
Ximena. It looked like you had a question earlier?
Ximena Bustillo:
Yeah. Great reporting from Leah. I definitely love reading all this. I also covers sections of farm workers and your reporting has informed a lot of mine. So definitely wanted to put that shout-out out there. I mean, a lot of my reporting there's also seems to be this tension of how far federal mandates can go versus local government at multiple levels, state versus county versus just the employer itself. And I was curious, Leah, if in any of your reporting, there had been any clarity as to who is in charge or who can be the best to create any sort of mandate or enforcement or recommendations to change these working conditions.
Leah Douglas:
That's a great question. Also, hi Ximena. It's so fun to not just talk on Twitter. And I think the advocacy that's ongoing I think is really pushing for federal standards. I think that's where there can be some uniformity achieved sort of in one go. And not that it's easy by any means. Folks are still really pushing the Department of Labor to pass an emergency... It's called an Emergency Temporary Standard, which would essentially create enforceable guidelines for how these companies should protect workers from COVID and get some enforcement teeth to what's previously been, or so far in the pandemic, has been voluntary guidelines. So that's one place where there's a lot of attention on what a federal mechanism can do. Some states have passed their own version of those standards, not too many, but a handful. And so there is room there for the state to step in where the federal government hasn't yet. And this is an area we're probably going to see some ongoing discussion.
Leah Douglas:
There's already some some impatience bubbling up in the advocacy world. There was a lot of confidence that President Biden would make this temporary standard pretty immediate and step to address COVID for all workers. This isn't just food system workers. But there's been for sort of not entirely clear reasons, some foot dragging on actually getting that across the finish line. So I think that's the main area of focus, but there are things that can and have been done at the more local level as well.
Danielle Gould:
Thank you so much, Leah. Next, we have a story from Chloe Sorvino from Forbes about Atlas Food Co. They raised $40 million to create bacon from mushrooms. And there's a lot of interesting parts about this story, especially this idea of whole cut alternative meats. So Chloe, tell us about this story.
Chloe Sorvino:
Hey, thank you. And before I get into mushroom bacon, because I'm kind of coming out of book leave just to kind of cover a select few news, and this was a Series A $40 million raise, which is why I covered it this week, but I want to go back to what Leah was saying earlier and Louisa's question. Leah's reporting's been so amazing on all of this. And the data is really so powerful. Louisa, though, asked about robotics. And I do think that future is here more than we all realize. And I say it with a grain of salt, but JBS, which is... it's USA division includes its Australia division. It's the world's largest meat packer. They have an almost completely automated plant in Australia and there's another in Brooklyn. I know Tyson's been really trying to build its next chicken plant to be almost very significantly automated.
Chloe Sorvino:
And I think this is the unfortunate thing because... and I think there ends up being pressure. That the response is kind of becoming replace with robotics and not make these jobs better. These are such dangerous jobs and such unsafe jobs, and they have been for so long. We've been turning a blind eye to them for so long in that way. And with publicly traded companies coming in and getting pressure from investors, all these ESG concerns are kind of just... I don't know. I'm seeing a lot of this, like with also deforestation and the pressure's just kind of getting shunted to these other problems. I've been trying to talk to the union, UFCW, about this because I can only imagine that they're going to be trying to make sure that robotics aren't coming in and completely replacing a lot of jobs.
Chloe Sorvino:
But I do think it's going to start to become part of these discussions and the challenges that I think the workplace labor are going to have to face is as they get pressure from management. Going back to mushroom bacon though. So yeah, Atlast. It was a big week for mycelium in general. Atlast, something I've been tracking for a while. It's a spin off from Ecovative. It's a really fascinating founder and I won't take up too much more time explaining it all, but he is an off the grid inventor type in upstate New York who was a student at Rensselaer Polytechnic and pretty much discovered and invented a whole sub category of materials science all about mycelium. And so this company's been around for a long time, but it recently has spun off to try to create and commercialize mycelium ingredients and create a more clean ingredient and a less processed ingredient in this kind of alternative protein emerging industry.
Chloe Sorvino:
So Atlast it raised 40 million, as I said. It's got some pretty interesting investors. Everyone from Lisa Feria of Stray Dog Capital to the founders of Applegate, the organic meat company, to the founder of Stonyfield Organics, the milk company, and even Robert Downey Jr.'s venture firm. But it really is they seemingly have potentially cracked the code on these whole cuts, as Danielle was talking about and we can open that up a bit more to the overall debate, but it's one that's potentially really interesting to watch and it could be really important in terms of clean and less processed and more actual sustainable ingredients moving forward. I also will say that I do want to learn more about how the mycelium is produced at scale, and I will be visiting the plant soon that is coming out because I want to make sure that it's not really mimicking some of the other issues of mass industrialization. So I'm excited about that, but happy to keep talking about any of it.
Danielle Gould:
What do you think is most interesting, Chloe about the company and the potential for the mycelium based, plant based products?
Chloe Sorvino:
I mean, mushrooms inherently are just way more sustainable. They obviously do need to eat something, but there really should be a way that it could really... Maybe not taking up wasted products, but it really could be a way to really create a sustainable protein source at scale. I think that's what's most exciting for me and also... I mean obviously there are still fragrances, there's coconut oil on this. This is not a perfect, completely not processed thing. Just I think the starting point is just so much more strong than you get when you have like a soy protein isolate combined with canola oil and a bunch of this other shit.
Elaine Watson:
Yeah. This is Elaine from Food Navigator USA. I've been writing about AtLast and also another company doing something similar called Meati for the past couple of years. I agree with Claire. I think it's kind of super interesting because this whole cut space is pretty untapped in the market. The thing that's interesting to me about this is kind of the consumer messaging angle because they're using mycelium. So we think about mushrooms as having these kinds of fruiting kind of cups, the things that stick out with the stalk and the dome at the top, but that's kind of not what they're doing. It's mycelium, so they're kind of like the root-like kind of fibrous structure that kind of grows underneath or in some species you don't get that kind of dome cup at all. And so they look like these kind of foamy looking slabs of meat. And they've got this kind of strapline on the AtLast website, which is mycelium equals mushroom.
Elaine Watson:
And in their first consumer product, they've got the phrase meat made from mushrooms tastes like bacon, but I don't think consumers actually know what mycelium is. It's not like they're taking the domes of mushrooms and kind of cutting them up. They're actually kind of... In Atlast's case, they're using solid state fermentation. So they've got these huge trays. They've got various kind of wood like material because that's what's... And the oyster mushroom mycelium species they're using is a wood digesting species. You can grow them from byproducts of the paper industry, things like that, plus some other nutrients. They've got these trays and they're growing this kind of foamy white stuff. So it's not like what a consumer would recognize as a mushroom, but it's basically kind of nutritionally and structurally the same thing. It's just kind of growing in a different form, but it's not quite... If you've got a kind of a picture of a mushroom in the consumer's mind, it's not quite like that.
Elaine Watson:
And the other company that's doing something similar, Meati Foods, they've just raised $18 million this week. And they're also going to commercial scale production next year. And they're using the submerged fermentations. So they've got kind of tanks with kind of liquids and then they're kind of getting this material out of it. And then it's a great kind of blank canvas for you to then add other things. But they're not all quite the same. I think Meati's got a lot more protein in then Atlast's. So with Atlast, you can maybe infuse it with additional protein or add other flavors, colors, fats, and that kind of thing because it hasn't really got any fat in it. So I think it's pretty exciting, but I don't know how the consumer messaging is going to work because it kind of is mushrooms, but it isn't. So I'm fascinated to see how they talk to consumers about it.
Sam Silverstein:
The technology's been around for decades in various forms. There's a brand called Quorn, Q-U-O-R-N, that has pretty good penetration, natural and specialty channels. That's sort of been doing the same sort of vat-grown fungal byproducts. And you consider that the fungal kingdom is larger in the number of species than either the animal or plant kingdoms, there's probably plenty other potential to look at this. And the good news is you can't call this plant based because it's from a fungi. I'm curiously optimistic about this type of technology since it's already proven in the marketplace. And probably there's a lot of options you can make with interesting consumer goods, especially if the feedstock is somewhat sustainable. So thanks for pointing that out.
Megan Poinski:
Yeah. I was also going to bring up Quorn because they have been around since the 1980s and they have bigger penetration internationally than they do here, but they are able to make almost everything in terms of substitutes. They have not done anything that's really in the whole cut market, at least that I've seen. But I think that will be really interesting to see just kind of how some of these products turn out, how they... the texture and thickness, how they feel in the mouth, how they cut. That sort of thing. But what Quorn has done is they just have kind of rebranded their own word for what their mycelium is. They call it Mycoprotein. They take a lot of time to explain it on their website and kind of talk through what it is, but it's really, really very interesting. And I'm looking forward to seeing what comes next.
Elaine Watson:
There's one thing I'd say about this that I think is different to Quorn is the way that it grows, so that this... Quorn, because the texture of it you have to kind of bind it together and it's... Whereas from what I can understand from talking to the guys at Atlast the thing that's pretty cool about this is you can have something that's a bit kind of tougher. They've got this kind of biofabrication process that's tuneable so you can adjust the various growing conditions and make something that's more dense, that's more porous, that has areas that have more areas where you can suck up fat and things. And then you can kind of slice it. So it actually grows in a slightly different way and is potentially much more like a whole cut of meat then the Quorn product. So I think it's got a lot more potential in that kind of whole cut space.
Elaine Watson:
I'm just wondering if you all think just in terms of using the word mushroom in consumer branding, because I feel like if it's plant-based meat so much nowadays is about, "Let's not just appeal to the vegans necessarily, but we need to convert more meat eaters into eating these meat alternatives for various reasons," mushroom, I think still makes a lot of people think of the portabella sandwich thingy at fill in the blank whatever restaurant or something. So it'll be interesting to see how that is handled in the branding, in addition to having to kind of clearly explain the process without sort of overburdening consumers with the technical lingo, but still making it as transparent as possible.
Elaine Watson:
I think that's going to be the major challenge in this space, especially as more of these products come onto the market. I mean, Nature's Fynd has got a product from these extremophile microorganisms, and that's a kind of fungi as well, and they're marketing their first consumer product as containing nutritional fungi protein. So again, I don't know what that means to consumers or whether it's enticing or not, but I think that's a big question in this space and especially as more of these products come onto the market, how do you make it engaging in advertising to consumers while also being sufficiently transparent about what it is?
Chloe Sorvino:
Yeah. And with Nature's Fynd, you obviously also have like the Bill Gates, back to question two, coming in here. And I just want to say, I don't think I said this earlier, but to answer Danielle's question earlier, whole cuts are the vast majority of meat sales. Way bigger than ground beef, ground porks, those sausages. So this is really getting at a way bigger potential piece of the pie and that's a little bit, I guess, of a segue into Lela's story that we're going to be talking about next. But I think that's why I'm so excited about it because it really is the potential to get at so much more of the overall consumption.
Louisa Burwood-Taylor:
Yeah. Before we get into Lela's story, just quickly, Chloe. So I was on another Clubhouse from yesterday and someone was saying that mushrooms are actually really big emitters of CO2 and he was in a mushroom grow house and he had like a CO2 monitor or oxygen monitor. It was as if he were like climbing to the top of Everest or something, with the amount of oxygen in there. So I'm just wondering when you said it's more sustainable, what's that based?
Chloe Sorvino:
That's part of why I'm really intrigued about what will happen when I go to the actual facility and what I will be wearing, what goggles, what actually protective gear there will be. I've never seen an industrial white button farm, but I've heard that they are equally way more industrial than a lot of people think. And a lot of vegans who eating mushrooms would think. No, I hear that. And I think that's why there are a lot of lasting questions with it, but I think where also the subject really matters.
Louisa Burwood-Taylor:
Yeah. Cool. Great. Okay. So thank you everyone for your comments on that one. So next up, Lela Nargi from The Counter. And you did an article a couple of weeks ago now, but we thought it was just so interesting we really wanted you to speak to it today, which is about the groundswell of investor funding in plant-based proteins that we've been talking about each week here on the Future Foods News Review. But apparently it hasn't led to a decrease in meat consumption. So can you tell us more?
Lela Nargi:
Sure. Thank you. Thanks Louisa. And just before I go on with this, I just want to say, Chloe, to your point about CO2 emissions, I'm working on a fungi story right now and of course in a natural setting fungi, they emit CO2, but it's all sort of part of Earth's functioning to keep our temperatures in balance. And this is like an ongoing question for scientists about how that actually works naturally. But it's such an important conversation to be having in terms of industrializing sort of any of these potential crops for our food system. We don't know what all of the potential sustainability issues are. And at the same time, I think the idea of using fungi is kind of interesting, especially when I talked to some sources for these stories around protein, more generally who bring up issues of sustainability, not just around, as I'll talk about in a minute, not reducing companies not committing to reducing meat production, but also issues around having monocultures and what that means for ecosystems and having better labor standards and things like that.
Lela Nargi:
So a lot of questions, but super interesting. Thank you. So yeah. So right. This is a story from a couple of weeks ago and the Good Food Institute released some data showing that investors were super excited to funnel some money into alt-meat, alt-protein. It was a high of $3.1 billion that was actually invested over the course of the past year, 2019 to 2020. Most of that going to alternative meat sources, sort of like what Beyond and Impossible are engaged in as opposed to like fermentation and cell based meat. At the same time there's all this optimism that this means that the market is about to shift, that consumers are really starting to embrace plant-based products, and that a lot of people... There was a report from food dive that said that people identifying as meat eaters dropped in that same time period from 85% to 71%, which sounds great. And then you have this other kind of interesting statistic, which is-
Danielle Gould:
And you have this other kind of interesting statistic, which is that, again in this same time period, meat sales were up 19.2%. So even though there's a lot of optimism that people are embracing these plant-based products and maybe becoming introduced for the first time and willing to try them again, it's not just a one-off cut kind of situation. Meat is scaling up too. Not only are we continuing to eat lots of meat in this country, but when we can't get it here in the States from line shutdowns. We're getting more from Brazil, which definitely happened during the pandemic.
Danielle Gould:
So the really big question is, are we building a parallel system to this one that we are proposing to remedy? And that's the really big question mark. So there are a lot of questions around that, and I'm definitely going to be keeping my eye on the sustainability issues going forward.
Danielle Gould:
Well, I love this story so much. I think when I saw [inaudible 01:10:02], she's like, yes, out loud. I feel like I've talked in this Clubhouse way too much already over the past few weeks about this kind of issue where the funding frenzy around this is just making more profits, creating distraction, and taking away from this industrialized subsidize meat production system, which is continuing to have business booming and business more than usual.
Danielle Gould:
The one thing I will say is, I think that the Nielsen numbers, they are bigger in part because of the shift this past year to grocery from food service with the COVID shutdowns. However, it is completely true that meat sales are increasing and that this industry is continuing to thrive as alternative meats are seemingly making gains. They're barely taking a bite out of anything. And it's really kind of framing my book, which is why I was so excited to see this talked about.
Danielle Gould:
Well, cool. And it's such a Catch-22 too, I think, right? Because we really need to talk about the fact that we're... No companies are committing to producing less meat, right? McDonald's, Cargill, whoever it is, Tyson, not... I reached out to all of them, no comment. And so at the same time, the folks who you would really want to, or expect to be sort of flagging this issue, don't want to say too much about it because they don't want to play into the hands of big meat that's going to hop on any opportunity to create dissension among consumers. Right? That there's really any need to stop eating meat. So, it's kind of a frustrating space to report on right now.
Errol Schweizer:
It's a great article, Lela's. It's one of the best I've seen recently on the topic. And I think the investor frenzy is driven a lot by the fear of missing out, Beyond tried to raise funds for almost a decade in the private markets and eventually went public. And now it's like Lemmings over a cliff. And there's a lot of clueless ness in that investor world about what they're investing in and a lot of misperceptions. The fact that belief that maybe grocery stores are like accordions, that you could actually fit so much more product on the shelf, as opposed to reducing other products. Kroger and Whole Foods have both twin line Beyond Meat, with meat.
Errol Schweizer:
And it's felt grow beyond meat sales, but there's disincentive for the retailers to see a decline in their meat sales. And I think it also misses the point of why aren't plant-based advocates advocating for workers in these meat plans? Why aren't plant-based advocates advocating for better regulation of these big meat companies or breaking up the monopolies? Like what Claire Callaway has written about and Leah Douglas and Food and Power. So I think that there's this feeding frenzy. It's really driven by greed and delusion among many of these investors, and it's sort of overshadowing the fact that there are some really good products out there doing plant-based whole food nutrition. There's some really committed long-term investors, Chris Kerr, who've been in it for a decade. But it's good to see you shop this out. Thank you.
Danielle Gould:
They're not trying to get big meat packing broken up, because they want to get acquired by the same people. Everyone's so intertwined. It's a mess.
Danielle Gould:
For sure. Yeah. And thank you for your nice words about it. And for sure, when you look at this, you think there's all this action in sort of plant-based meat. And yet at the same time, the same massive global corporations stand to gain, right? They're going to make a profit no matter what, and so it becomes increasingly important to sort of point out that point, I think.
Danielle Gould:
Yeah. And I think, building on this shell, Simon has been publishing a lot on LinkedIn recently and bringing up some really interesting points around with when you see these companies having partnerships with the McDonald's of the world, you could argue great it's... You're being able to access a wider demographic. But at the same time, you're actually helping to rehab these fast food companies that are supporting, in large part, are supporting this, the industrial meat complex. And so I thought that was just a really interesting point that she had brought up and I know we do talk about this a lot, but I think it's so important because this is where so much of the money in the food space is going. And there's also this idea that we're doing it to save the planet, right? There's this techno saviorism, techno optimism complex that's happening. And a lot of it is coming down to profits. So I really appreciated this story, Lela, a lot. And Chloe, there's never enough conversation about this, so never apologize for adding your comments on this.
Danielle Gould:
Well, and actually one of the best things about reporting the story was that one of my sources, she was dynamite introduced me to the word criminogenic, which means that companies are always going to, we have to expect them to always be bad actors unless they're regulated, because competition spurs them to cut corners constantly, right? And so to your point about these big corporations and what they stand to gain at the same time that we're possibly patting McDonald's on the back for embracing plant-based meat and quote unquote, "saving the planet" or doing their part there. Civil eats had a story yesterday about the biggest producer of potatoes for McDonald's french fries and how there's this whole toxic wasteland situation brewing in Minnesota around agricultural pollution that they're putting into incredibly sensitive and vulnerable waterways. So these things are happening concurrently.
Danielle Gould:
Yeah. And I think one of the things I'm a big advocate for and very public about is that we have to think systemically. That we are going to need all different kinds of solutions in order to feed our planet or feed people in a way that doesn't destroy our planet and actually allows us to live more in harmony with our planet. You have a lot of companies that are raising a lot of venture capital, and they're looking for very quick growth right now, or you have a lot of big companies that are looking to rethink their supply chains to be more regenerative and biodiverse, but you have to think systemically. It can't just be about going after market share. It has to be okay. How do we grow systems that are scaling entire systems, not just single ingredients? How do we think holistically about a welfare of the farmers, all the food workers that are involved in getting food to our plate? How do we think more holistically about the environmental implications? So thank you all for engaging in these stories. Oh, sorry Jenn, you had something to say.
Jenn Marston:
Oh, just one quick thing, your comment. And I think this has kind of been a subtle theme in a lot of the discussion today is I think I hear so much cause I'm covering tech and innovation constantly. This sort of savior thing, and I think absolutely it can be a distraction from what are we doing about the systems in place? What are we doing about the ethics? What are we doing about company's responsibility to their workers, to the planet? And I think moving forward, like definitely for the meat industry, but I think this is applicable across all of food is it's going to become more important to talk about innovations. It can't always be some savior that just swoops in and fixes everything. I mean, there's much more fundamental issues that have to be addressed that, especially in the meat industry, people aren't doing right now. And I think that something there is really going to have to change or to everybody's point, we're just going to end up repeating the same system over and over again.
Danielle Gould:
Hell yes. More conversations about ethics.
Jenn Marston:
Absolutely, food innovation.
Danielle Gould:
Well I was going to say one thing that comes up Jenn, to your point over and over in my reporting on multiple stories is the question of monitoring and oversight. And what's it going to take? Right? A lot of states are disincentivized to monitor and really make sure that the ag sector is doing what it should, because it's big business in their state. So the question lurking in the back of my mind for so many stories is when is any kind of oversight and monitoring really going to happen? We'll see.
Louisa Burwood-Taylor:
Absolutely. And you actually, I was a little bit disheartened. There was a conversation I was listening in to yesterday with some plant-based protein companies and a question came up around labeling and declaring what the ingredients were in their packaging. And essentially, what was the conclusion on this conversation was, well, at least it's less bad than meat. At least some of our ingredients are less bad than meat or the environmental credentials are less bad than meat, but it didn't feel there was a responsibility to go even further, and that it should be have a positive benefit delving into where they're getting the ingredients from and so on. And the practices behind that, it just seemed like we just need to get rid of meat at all costs. And that's very dangerous road to be going down.
Lela Nargi:
And that there's a sort of kick the can kind of philosophy that happens too. If we're not going to have so much meat being produced here in the U.S. Well on the sly, these corporations are not even really on the sly, we'll just move production to Brazil. And then that country and their workers and their communities will suffer like the degradation instead of us.
Megan Poinski:
And also just sentence in really quick, a lot of plant-based meat is not less bad than meat, at least as in what has been found so far in terms of health anyway.
Danielle Gould:
Yeah. Well, we're going to keep having these conversations, Lela, thank you so much for sharing. And just to be clear to, I mean, I see a bunch of plant-based people from plant-based companies. I think that everyone, we try to have nuanced conversations here about these topics. And so just to appreciate everyone engaging in the conversation. We have one last story that we're going to share right now from Errol Schweizer, who has interviewed the UFCW local 77, seven 70 president John Grant about hazard pay and grocery store closings, and also interviewed a retail clerk from Kroger. And this is an important topic that we've been talking about. We do try to talk quite a bit about the food and farm workers in these conversations. So Errol, tell us about your story.
Errol Schweizer:
Yeah. Thanks everybody for sticking around. This has been an amazing session. I just want to appreciate all the other writers and just deep thinkers. Just honestly, I'm in a much better mood than I have been all week now. So it's great to hear everybody's thoughtfulness. So yeah, this this was a really intense interview. It was two UFCW folks. This is a sort of like a continuation of the Forbes piece I wrote on Kroger's hazard pay. What I call it, their roulette. They've decided to close seven stores to protest the hazard pay mandates that have been voted on by city councils and Seattle and a number of California cities. And so I figured I'd reach out to the trade union and see how this came about and their motivations and what the vibe was like.
Errol Schweizer:
And it's intense, it's intense. And this sort of ties up, I think, the issues we're talking about and how we frame food system work. And that the worker's voice not only needs to be included, but should be centered. And the voice of organized workers that these trade unions, who I feel more than any other organized institution throughout COVID-19 have effectively advocated and defended the safety and work standards and pay of essential workers throughout the food system. And they're far from perfect, and that's not the point, but they're driven and they've been pushed by their membership. And that's really what we dug into here. The fact that up to 30% of black and people of color essential workers had been infected by COVID and the grocery industry over 18% across the board. Obviously, closer to 50% of the packing house in the sectors that Leo covers. Workers have had to deal with hostile customers and getting spat on and people throwing carts at them, not wanting to follow mask mandates.
Errol Schweizer:
There's been a lack of what they feel respect and acknowledgement from big companies that they work for in terms of the efforts. And there's hidden costs for food workers in terms of many of them are part-time retail clerks. If they're the sole income source in their family, sometimes because they're an essential employee, they're working two or three jobs. You're commuting all over the place. So imagine that in a place like California. They're having to do extra laundry because of fear of contamination. And then at work, in addition to stocking and ringing up customers and all the other stuff you have to deal with, they're doing all these wipe downs and cleanings and enforcing social distancing, et cetera.
Errol Schweizer:
So there was a really strong effort by rank and file retail clerks to say we need to get paid better. We're risking our lives are doing all this extra work that's not covered by our collective bargaining contracts. And they held these town halls all over California and in Seattle, where hundreds of members would call into city council hearings, and they really pushed elected officials to take action. They motivated their community members like the folks that they live around to support them. Folks really stepped up to say, Hey, we need to do more for these workers that are keeping everybody fed that are keeping these grocery stores running. And that's how they pass these mandates. And they've done other stuff too. Like they've developed apps and checklists that can get uploaded right to the department of health. They just created this and these incredible relationships of solidarity in terms of mutual support.
Errol Schweizer:
And they're talking about, well, this is more than just how we get treated at work. This is about food access, and the fact that they're closing stores in working class communities. We need to look at transportation and why folks aren't able to get to grocery stores. We need to look at healthcare and the fact that all these folks are getting sick, and they're not getting taken care of. And really what they're trying to say is that their unions have been these organized institutions for support and mutual aid. When they stand together, they're stronger together. When they stand together, they're smarter together. They're able to accomplish more. They're able to take up broader issues.
Errol Schweizer:
So for me as somebody in food retail all these years. I've never been unionized and I've luckily worked for some great, great organizations. It was inspiring to see how folks at rank and file are thinking about this and taking action. But then also just really heartbreaking what they're going through. And talking to Maria Hernandez, this retail clerk, who's been with Kroger for like 20 plus years and she's losing her job. [inaudible 01:25:39] her mom has to commute and she has kids. And she's got to now work in a store that's much further away from home. Where as the store in her neighborhood is one [inaudible 01:25:50] I wouldn't buy other food [inaudible 01:25:55] workers, as opposed to just seeing them [inaudible 01:26:00] different [inaudible 01:26:03] agents of [inaudible 01:26:05] going to these more of those radio podcasts.
Danielle Gould:
Errol, you cut out a little bit there. Sam, I'm curious if you've been looking at this space at all, if you have any thoughts.
Sam Silverstein:
So generally speaking, the issue of the way that grocery workers have been treated and how they've managed during the pandemic has been a constant storyline for us throughout the pandemic. And indeed we have heard a lot from the UFCW about their concerns regarding the way that the grocery chains have interacted with the workers. For sure, issues, such hazard pay, have been storylines throughout the year in different ways. At the beginning, it was actually something that the grocery chains were promoting and were pointing out that they were able to give extra pay to workers, and that this was a sign of how much they value their workforces. As the year went on, of course, that storyline began to shift as hazard pay began to go away. But we've seen more recently that it has kind of quieted down. Unions have been a bit more vocal about issues like getting workers access to vaccines. So I imagine that this back and forth between the grocers and the people who represent the workers is going to continue to evolve as the pandemic does.
Errol Schweizer:
Yeah. And they're continuing to push back against these store closures. And I think the fact that the union was really pushed by their members to take greater action, I think is a key piece here. And the fact that as you guys have been documenting, the Brooking Institute did a great report about this, the huge profits of grocers, particularly after they ended the hazard pay payouts in May and April almost a year ago. Yet it was windfall. And now this year, the excuse is well, our comps are going to be down. Our profits are going to be down. Which is I think legit, like the numbers are going to take a hit, but when the numbers were up there was this real extractive relationship with their work crews, which is now I think really soured a lot of folks in those stores towards how they're being treated. So, yeah, I do appreciate the coverage, centering it with, with the workers, and seeing workers as union members and not unions as separate from their members is actually super important too, in terms of the framing. Thanks.
Danielle Gould:
Chloe. I know you also did some reporting on this. Anything that you want to add?
Chloe Sorvino:
I was just going to say to that, to Errol's point earlier, just now about the profits and the mass products that have been extracted, it was almost like they were doing this with the understanding that it may never happen again for a really long time, because grocery is such a historically low margin business that doesn't change much at all. I don't know. I don't know if there really was that much of it. Maybe I'm being a little too cheeky, but it really was. The time is really important.
Errol Schweizer:
Yeah. And it builds off of the last seven years of massive shareholder buybacks, where they've essentially redistributed the wealth that they've generated to the upper echelon of their executives and investors. That's essentially what these share buybacks were. I think Kroger had done like 7 billion of them, 7 billion dollars worth in the last five years. So look, folks, it's class war. Who's winning, who's losing here. And when we're talking about automation and COVID-19 and meat plant workers, it's a lot of the same patterns that we're seeing in terms of the degradation of work and how people are treated doing what we're saying is essential, but acted like it's expecting towards them, like they're expendable.
Danielle Gould:
Great. Well, thank you so much for everyone's reporting on this and Errol for you sharing this. Everyone make sure that you are tapping on each of these journalists, following them. You can go to food tech connect, that club backslash chat, and we've shared all of the stories. They are also all included in our newsletter and we'll be tweeting them out. Thank you so much to everyone for joining us for this hour and a half and change. It's been a really wide ranging conversation, and we really appreciate all of your insights and perspectives. I didn't say this up at the top of the hour, but we always want to highlight as many diverse voices and perspectives as possible. So if you in the audience know anyone, or you are someone who is a journalist or a writer, wants to get involved with future sessions, please reach out to Louisa or I. And thank you so much, everyone. This has been such a great conversation. We'll be posting the podcasts on Monday, and we look forward to seeing you next week.
Louisa Burwood-Taylor:
Yes. Thank you so much to everyone.
Louisa Burwood-Taylor:
Thank you.
Danielle Gould:
Have great weekends.
Louisa Burwood-Taylor:
You've been listening to future food with me, Louisa Burwood-Taylor. For news and insights on the food tech and ag tech industries, go to agfundernews.com. And if you enjoyed the podcast, please subscribe and leave a review.