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[email protected]: Amazon sold $2B in groceries in 2017-report | The unexpected story behind a top organic beauty brand

Gettyimages Amazon Fresh trucks

Amazon’s grocery sales increased after it devoured Whole Foods

Thanks in part to the addition of Whole Foods Market’s private label offerings, Amazon’s grocery sales now account for 18 percent of the U.S. online grocery market, according to a new report from One Click Retail. While most of its $2 billion in food and beverage sales in 2017 were packaged products, Amazon Fresh sales were up 35 percent in the last four months of the year, compared to the four months prior, the report says. The top categories for Amazon Fresh were dairy, meat, frozen, fresh vegetables and fresh fruit. Read more at The Wall Street Journal (subscription)…

 

The marriage ended. The company thrived.

Brad Black and Susan Griffin-Black have built EO products from a humble natural beauty brand that they started in their San Francisco home into a $50 million enterprise with a production facility that was once a high-tech film studio for “Star Wars.” But that’s not even the most interesting thing about their story. They started the company shortly after getting married in 1995. They divorced in 2007 but have continued running the business as co-CEOs—and the business has flourished. EO makes bath and body products from botanically derived essential oils and is one of the largest remaining independently owned natural beauty companies. Five years ago it launched a lower-priced line, Everyone, that’s sold mostly at Target. Read more at The New York Times…

 

Kroger is rolling out a new technology to nearly 200 stores that could change grocery shopping as we know it

Some 200 stores will replace price tags on endcap displays with Kroger Edge, a new digital technology that displays pricing and nutrition information, video ads and coupons, by the end of the year. By doing this, the retailer will be able to change prices and promotions instantly. Eventually, the goal is to have Edge communicate with shoppers’ smartphones to help them quickly select items as they’re in the store. Read more at Business Insider…

 

Hyper-personalized beverages

As far as beverages go, more brands this year will incorporate adaptogens, botanicals and protein into their products, and we may see the nitrogen infusion trend that’s started in coffee and beer expand into teas and juices, says beverage innovation firm Imbibe. The firm also predicts wider use of upcycled ingredients and products with big visual appeal. Read more at Prepared Foods…

 

Baltimore rebrands its food deserts: Now they’re ‘healthy food priority areas’

“Food desert” is a misnomer, according to Baltimore Mayor Catherine Pugh, who says the term implies that there is no food in a certain area, when it fact the problem is actually an imbalance between healthy and unhealthy foods. And in Baltimore, nearly one-quarter of the population lives in one. Read more at The Baltimore Sun… 

IdeaXchange

5 things to know before trying to secure a line of credit

Jeff Weddell

It should go without saying that small businesses are a vital part of the American economy. Both consumer and retail companies make up an important part of the small business community.

Currently, there are over 500,000 consumer and retail businesses that have revenues of less than $10 million a year. Many of these small businesses will seek to expand at some point by hiring new people, opening new stores or launching new products. All of these things take capital, and most businesses will need to borrow or raise equity to finance these expenditures. For larger and more profitable businesses, a loan from a bank may be a viable option; for others, a loan from an alternative lender may be more feasible.

There are a variety of lenders in the market today that offer an array of financing options. With all these options available to consumer packaged goods companies, there are strategies these companies should consider when seeking a loan. Here are the top five things businesses should keep in mind before they try to secure a loan, whether it’s from a 100-year-old bank or a 5-year-old alternative lender.  

1. Know your lender’s all-in annual percentage rate

Many lenders will mask their APR by quoting a low interest rate. But fees and charges add up and should be included in the overall cost of borrowing. Everything from an origination fee to the fee the lender charges you to wire your business money should be included in your total cost of borrowing.

2. Read the loan document carefully

Know what you’re getting yourself into and ask questions. The best place to start is in the negative covenants section; work your way around the document and make sure you understand it all.

3. Shop around

It should go without saying, but don’t put all your eggs in one basket. Make sure you exhaust your options and look for different types of lenders that offer different structures. If your assets are growing quickly, an asset-based lender could be a good fit. If you sell direct to consumer, a cash flow lender might be advisable.

4. Don’t wait

Too often we see companies that say they “need the money yesterday.” Don’t wait until the last minute to start finding the right lender. If you’re expecting a large purchase order from a big retailer, start looking for help immediately. There’s no harm in having a plan and a backup plan.

5. Ask for references

Just as you would ask for a reference from a manufacturer or new hire, treat your lender like a partner. Make sure you do the due diligence on them, just as they would you.

There are a lot of lenders out there who are looking for borrowers. Some may have flashy technology or websites but lackluster products. Others may try to bury their real rates in paperwork they hope you never read. It is worth taking your time when you consider credit options. Ask a lot of questions and make sure your lender looks at you as a partner and not just a business they are trying to make a quick buck from.      

Jeff Weddell is head of business development at CircleUp Credit Advisors, the credit division of investment platform CircleUp.

General Mills' 301 Inc. invests in ready-to-eat organic food company Urban Remedy

Urban Remedy urban remedy Whole Foods

Urban Remedy, the pioneering plant-based food company offering an organic, non-GMO and ultra-fresh product roster of ready-to-eat meals, snacks and cold pressed juices, has closed a $17 million series B fundraising round with lead investment from 301 Inc. The company also announces that industry leader John Foraker will be joining the board of directors. The backing from 301 Inc. and partnership with John Foraker help Urban Remedy accelerate its mission to make fresh, clean food more accessible to an increased number of customers.

“We believe the future of food is fresh, clean and convenient,” said Paul Coletta, CEO of Urban Remedy. “We are on a mission to reimagine our industrialized food system and empower consumers to seek unprocessed, nutrient-dense healing food. Two consecutive years of over 100 percent revenue growth indicate that we are on the right path. Scaling a high-quality, fresh food business is very challenging. Our new partnership with 301 Inc. and John Foraker brings significant strategic resources and experience to our effort.”

Urban Remedy was founded in 2009 by licensed acupuncturist Neka Pasquale with the belief that food is healing. Neka continues to utilize the wisdom of Chinese medicine to craft modern-day food by using quality, organic ingredients that naturally lower inflammation and nourish the body.

“We are thrilled to partner with Urban Remedy, a company whose multi-channel go-to-market strategy thrives at delivering fresh, healthy food to consumers,” said John Haugen, vice president and general manager of 301 Inc. “Through retail stores, branded kiosks and direct-to-consumer delivery, Urban Remedy excels at providing convenient access to organic products. We are excited to help Urban Remedy achieve its mission to deliver food that’s healing to people and the planet.”

“I am a big believer in the Urban Remedy product and mission,” said, John Foraker, member of the board of directors of Urban Remedy. “I see Urban Remedy’s food at the helm of bringing consumers fresh, great-tasting meals and snacks that are better for the planet and better for their bodies. I am very excited to be a part of this systemic change in food culture.”

Urban Remedy is available at stores across California and nationally online.

Source: Urban Remedy

IdeaXchange

In a new year of promise, the fight for ODSP support continues

Mike Greene supplements regulation

One year ago, our country entered a period of unknowns.

We began 2017 with an uproarious question mark, unsure of what to expect from a new administration and its newly appointed leadership across government bodies. Here we are one year later, and, for the dietary supplement industry, the question mark of 2017 has evolved into a promising ellipsis that will allow us to continue the trajectory we’ve led to raise the bar for the industry. To maintain this forward momentum, we’ll need to make tough decisions, take responsible action and demonstrate a united effort. There are some promising signs.

The Council for Responsible Nutrition was encouraged last month when Reps. Andy Harris (R-MD), Derek Kilmer (D-WA) and David Young (R-IA) penned a letter to FDA Commissioner Dr. Scott Gottlieb, commending the agency for its enforcement actions against manufacturers of dietary supplement products that contain potentially harmful ingredients. CRN wholeheartedly supported the letter and applauded the ways it demonstrated to FDA congressional interest in and understanding of dietary supplement regulation. The letter recognized that while dietary supplements, “enter the market under the assumption that they are safe,” FDA plays an important role in enforcing the regulation that can identify when products are not meeting the agency’s standards. The letter clearly affirmed products adulterated with active pharmaceutical ingredients are not only illegal but pose potential risks to consumers. CRN couldn’t agree more.

While the Dietary Supplement Health and Education Act has served as a solid foundation for modern industry, the law must be fully enforced in order to reach its full potential. CRN has long advocated for increased funding for FDA, and this is especially important now that the agency’s Dietary Supplement Division has been elevated to the Office of Dietary Supplement Products. The representatives’ letter questioned how FDA would allocate increased funding—were Congress to provide it—and recognized that FDA has more work to do. Congress will want to be sure that any added funding is put to good use.

Speaking on behalf of responsible industry, we appreciate our allies on the Hill asking FDA to be transparent about how it does what it does, and what the cost is to use its resources. Regulation must be straightforward, efficient and clearly communicated, and, with increased transparency, FDA can offer legislators who hold the purse strings a window to understand the reasons behind its choices. In an era of fewer regulation, we need to make sure we’re able to make the most of the ones we have.

From CRN’s perspective, the ODSP must receive increased funding to remove bad actors from the market. By separating those companies ignoring the laws from those respecting and embracing them, the office will ensure greater protection for the 76 percent of Americans who depend on and trust our products, and for the responsible companies that manufacture them.

Mike Greene is senior vice president, government relations, at Council for Responsible Nutrition, a leading trade association for the dietary supplement and functional food industry.

[email protected]: Eco-friendly packaging hits personal care | Instacart adds e-commerce tools with acquisition

The story behind the beauty industry’s most eco-friendly packaging

Julie Corbett and her company, Ecologic Brands, knew they were on to something when the recycled paper bottles they developed caught the attention of brands like Seventh Generation and Nestle, which wanted to package their household and personal care products in them. But the company had a hard time scaling; it struggled to refine its manufacturing process, which relied too heavily on manual labor. That’s when Seed Phytonutrients entered the picture with a proposal. The startup personal care brand, which focuses on supporting small-scale organic farmers, was being incubated by L’Oreal. It wanted a recyclable and compostable shampoo bottle that would hold up in the shower and was willing to provide an up-front influx of capital for Ecologic to develop it. What resulted was a water-resistant paper bottle that uses an interlocking design instead of glue, so that it can be composted. Its inner liner, made from recycled food-grade plastic, is 60 percent thinner than traditional packaging and can be shipped nested. Seed Phytonutrients, according to its website, has a full assortment of products coming this year. Read more at Modern Farmer…

 

Instacart acquires coupon and voice-shopping startup Unata

In a deal reported to be worth about $65 million, Instacart has acquired Toronto-based Unata Inc., which focuses on making and tracking digital coupons and circulars. That will equip Instacart, which has deals with grocers including Albertsons and Kroger, with new tools and a path to accelerate growth in Canada. Read more at Bloomberg Technology…

 

Health-conscious Nestle sells U.S. candy to Ferrero for $2.8 billion

In new CEO Mark Schneider’s first big sale, Nestle’s U.S. confectionery business will go to Italy’s Ferrero, which will become the third biggest chocolate company in the U.S. Nestle is working on shifting its business to focus more on health and wellness; in December, it paid $2.3 billion to acquire supplement company Atrium InnovationsRead more at Reuters…

 

Health Canada says processed food makers aren’t cutting enough salt

The voluntary guidelines that Health Canada came up with in 2012 with the hopes of reducing Canadians’ daily sodium intake by more than 30 percent have not been fruitful, according to a new agency report. Nearly half of the categories of processed foods that it targeted didn’t make any progress toward sodium reduction, while only 14 percent of categories met the final target for reducing sodium. Read more at CBC…

 

Erewhon to open in downtown Los Angeles

The natural grocer’s fifth store, a 9,500-square-foot space in a historic building in downtown LA, will be complete with a tonic, juice and coffee bar, pizza oven and a variety of organic foods. Read more at Gourmet Retailer…

Naughty Noah's brings vegan pho to health-conscious U.S. consumers

Naughty Noah's vegan pho

Texas-based Naughty Noah’s launched its line of vegan pho in September and is already planning an expansion of its product line this month. The company targets the consumer seeking both health and convenience, and currently offers three flavors of its pho—Original Beast, Chicka What and Victory Veg.

We spoke with JimmyTay Trinh, who founded the company with his sister Jenny Hoang, about the company’s trajectory and what it takes to bring new flavors to the American consumer.

What’s the idea behind Naughty Noah’s, and why start with noodles?

JimmyTay Trinh: I was born in Vietnam. We came to America as an immigrant family that had nothing. My mother was a self-made entrepreneur. In 2007, I was 180 lbs at 5’7”, but I was able to drop to 150 with very little exercise. What I realized was that I needed to incorporate the traditional background and cuisine of my culture—Vietnamese cuisine—into my palate more than the American diet. I realized that diet could change everything. I’d gone to culinary school in New York, and my mom opened a Vietnamese pho restaurant. We were doing Vietnamese pho noodles, which is authentic to us, and we were seeing the health benefits of eating Vietnamese food.

After we found out we were pregnant with our son Noah, I was looking at the noodle space and said, “How come no one’s doing anything authentic in this space?” I’ve had my stint of ramen noodles. So I started researching the brand, and said, well now that Americans are catching onto pho and Vietnamese food, we’re going to start off with this line of products. It was three years in the making and we launched at Expo West. It’s authentic to us. We’re not Vietnamese people trying to do Mexican cuisine. That’s the goal for us, we’re building a legacy for my family, for our culture, and for the world—the world would be a better place if Vietnamese food were more a part of it.

Do you have any plans to expand your product line?

JT: We’ve been looking at other categories. We’re looking at spices right now and another line of noodles; we’re looking at either seaweed or some other type of natural, sustainable ingredient that’s not wheat. We’re also looking at teas or coffees. We’re looking at different categories and seeing what would be the best streamlined product that’s authentic to us and that would really refresh that category. We’re in conversations right now with a research and development group to figure out what the next best use is of Vietnamese cuisine that we want to bring to this space—is it beverages, is it ready-to-eat foods? Which aisle do we want to tackle next?

Your products are vegan, but pho is not traditionally even vegetarian. Can you talk about how you bridge authenticity with the dietary preferences that drive market demand?

JT: It’s my mother’s recipe—we just adapted it to the American palate. It’s authentic in that the spices we utilize in my mom’s restaurant are the spices in our package, and the rice noodles too. To give it a more modern taste and texture and feel, we put in avocado oil. We use avocado oil as a healthy fat to give it that modern kind of flair; we went through a couple iterations and the avocado oil really sits well with our product.

My mother serves beef bones, but vegan is kind of the future in some ways. So we said, how can we take a traditional recipe that relies heavily on bone broth, modernize it to the American palate and make it sustainable. I wanted to put something there as a base foundation and leave it up to the consumer if they want to add other proteins or vegetables. Being a vegetarian or vegan is an option, but not a must—it’s up to you.

What gives Naughty Noah’s that traditional beef flavor in your mom’s recipe?

JT: I can only say it’s a vegan beef flavor—what’s in it is proprietary.

What does your mom think of the recipe?

JT: At first she was like, what the heck are you doing? But she’s tasted it and she likes it. It really is her recipe.

Are there any lessons you would share with young entrepreneurs or businesses looking to bring new types of cuisine to the American market?

JT: One of the key things I would share is patience is super critical. As far as flavor profile, just be 100 percent authentic, and look at what’s in the space currently and how can you bring it to another level.

Hemp industry to AG Sessions: We're street-legal

Thinkstock Hemp plants

Despite the Jan. 4 announcement from U.S. Attorney General Jeff Sessions that it will broadly go after the budding marijuana industry, the Hemp Industries Association asserts that state-legalized hemp farming programs remain legal under the 2014 Farm Bill. 

Sessions said the Department of Justice would immediately rescind five memoranda issued under the Obama administration that provided guidance on criminal prosecution of marijuana-related offenses under federal law. The five memoranda collectively addressed the medical use of marijuana, general enforcement of marijuana laws, marijuana-related financial crimes, and marijuana issues on tribal lands. The best known of the memoranda was issued by Deputy Attorney General James M. Cole on August 29, 2013. In it, the Department of Justice announced a general policy of non-enforcement of federal marijuana law in states that had instituted their own "strong and effective regulatory and enforcement systems," which served to protect public health and safety and did not implicate certain federal law enforcement priorities.

Because the definition of “marihuana” under the Controlled Substances Act does not distinguish between marijuana and industrial hemp, the rescinded guidance memoranda all implied inclusion of—and effectively gave some protection to—industrial hemp farming programs. The collection of federal memoranda had established a general policy of federal non-interference in otherwise state-legal enterprises engaged in cultivation, processing and sale of marijuana, as well as industrial hemp plants and products. The Jan. 4 announcement by Attorney General Sessions has given rise to questions about the continued sustainability of industrial hemp in states where such activities are legal.

“This decision is a step backward for U.S. cannabis policy," said Joy Beckerman, vice president of the board at the Hemp Industries Association, "and boldly ignores voters who overwhelmingly support marijuana legalization. If anything, the threat by the Department of Justice to crack down on state-legal marijuana could result in spurring Congress to once and for all act to fully and finally protect the growth and expansion of the new American hemp economy.” 

The Hemp Industries Association (HIA), a trade association representing hundreds of hemp businesses, asserted that industrial hemp remains protected under exemptions to the Controlled Substances Act, per section 7606 of the Agricultural Act of 2014 (the “Farm Bill”), which permits the cultivation of industrial hemp by institutions of higher education and under state agricultural pilot programs, as defined for purposes of research. Additionally, the U.S. Consolidated Appropriations Acts of both 2016 and 2017 include a provision that disallows the use of federal funds “to prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with the [Farm Bill] within or outside the State in which the industrial hemp was grown.” This further precludes the Department of Justice from pursuing legal action against Farm Bill compliant hemp farming, processing, manufacturing and commerce, asserts the HIA.

Hence, while the recent developments by the Department of Justice regarding marijuana are concerning, the HIA stands firm that industrial hemp business activities will continue to expand and flourish in the United States.

“As we extol our optimism regarding industrial hemp, we must also make it clear that the HIA does not support the recent rescission action by the Department of Justice,” said Colleen Keahey, executive director of the Hemp Industries Association. “This rescission stands to impact important business relationships that exist between industrial hemp brands and hemp product manufacturers, and the legal retail marijuana market. Marijuana retailers reach a focused pro-cannabis market where hemp clothing, food, paper, plastics and hemp-derived CBD product sales are known to perform well,” she continued.

The HIA acknowledges that the recent action by U.S. Attorney General Sessions is cause for concern; however, this change does not give way to concern for the hemp industries. The HIA will share calls-to-action regarding necessary amendments to the U.S. Industrial Hemp Farming Act (H.R. 3530), related hemp legislation, including Industrial Hemp Banking Act (H.R. 4711), as well as the association’s position on the next Farm Bill. The HIA will continue to be work with fellow hemp organizations in support of pro-hemp policies to ensure the Farm Bill offers more comprehensive language to improve and expand upon the reintroduction of industrial hemp as an agricultural commodity in the U.S. 

Source: Hemp Industries Association

Unboxed: 7 natural brands that celebrate healthy grains

And you thought grain free was the next hot thing.

While products that eschew grains, such as those certified for the Whole30 and paleo diets, have certainly gained traction in the past several years, there's also been a quiet emergence of products that laud nutrient-dense grains. Perhaps it’s the popularity of plant-based foods that's driven this trend—if a brand doesn’t want to use meat, dairy or eggs in a product formulation, protein and fiber-dense grains are a sterling way to get more nutrition in.

Data show that grain sales are up, too. According to estimates collected by Nutrition Business Journal, sales of dried grains are expected to grow 7.1 percent to $643 million in 2018.

The following novel products celebrate the humble grain, and familiarize consumers with lesser-known varieties such as barley, amaranth and red quinoa.

GOED executive director to step down

Adam Ismail GOED

Announcing his departure from the trade association he helped found, GOED Executive Director Adam Ismail said he leaves a more sophisticated industry than he discovered when the organization launched 10 years ago.

With sales growth, consolidation and more money coming into the space, the omega-3 market may have matured, but the sophistication is revealed in a constant parade of new products, Ismail said. “Larger companies are playing a bigger role, and yet there's still a lot of innovation happening.”

Omega-3s suffered no small degree of turbulence during Ismail’s tenure, and Ismail said the lessons GOED learned have relevance for the entire industry. Omega-3s were battered by negative news reports in 2013, including one study that linked high omega-3 levels to prostate cancer. A coalition of ingredient suppliers formed through GOED in response to the negative news and falling sales launched Omega-3s: Always a good idea, reaching consumers across multiple mediums with messages about health benefits. The program showed measurable results in targeted markets, and the category has returned to growth status (sales increased at 1.9 percent in 2016, by Nutrition Business Journal estimates, after years of negative growth).

Ismail says relying on science was key for GOED in that campaign, but communicating the findings proved more complicated. Consumers struggle to decipher conflicting headlines and it's difficult not to get lost in that chatter, he said. That was a challenge for the Always a good idea program, and it’s a challenge for the industry at large, Ismail said. “To me it was the same problem the whole industry faces, which is that nutrition science is complicated and it’s hard to explain and we have to find ways to do that accurately and more simply,” Ismail said.

As he prepares to leave his trade association role, Ismail said he sees a growing need for supplement industry associations to take a greater role on a global stage. “The industry needs to address global issues, not just national or regulatory lobbying issues," he said. "The industry, and the associations, must also contend with trends that are splintering nutrition into fortified foods and pharmaceuticals. Nutrition isn’t dominated by supplements any more.”

Ismail leaves GOED at the end of the February, after the organization’s bi-annual conference in Seattle. Ismail declined to name his next employer and said that GOED is looking at candidates for his replacement.

[email protected]: Suppliers see room for growth for organic foodservice | Newman’s Own’s philanthropic model faces tax challenges

Thinkstock/Mikos organic foodservice

Foodservice still hard sell for organics

While certified organic products have enjoyed strong growth in the retail setting (about 9 percent in 2016), it hasn’t had the same success in the foodservice arena, according to several suppliers. Supply challenges and price likely play a role, as well as the challenge of making visible the use of organic ingredients on a menu and elsewhere in a foodservice setting. But some suppliers suggest that use of organic ingredients in foodservice is growing. Read more at The Packer…

 

An obscure tax law might force Newman’s Own to put itself up for sale

Newman’s Own Foundation is shining light on a provision in federal tax law that could impact for-profit companies with similar business models in which 100 percent of their profits go to charity. The foundation is facing a 200 percent tax hike that would damage its ability to give grants at the level it has been doing, company leaders say, unless it divests 80 percent of its ownership of the food business. The foundation has distributed more than $500 million to charities, and is funded by 100 percent of the after-tax profits generated by sales of Newman’s Own food products. Federal tax law bans foundations from owning more than a small stake in private businesses—which Newman’s Own Foundation does, because founder Paul Newman left ownership of the company to the foundation when he died in 2008. The foundation received a five-year extension on the five-year grace period allowed by the IRS to divest the business, but that expires this November. The Newman’s Own team has been working with lawmakers on an exemption to the law barring foundations from owning private businesses and even garnered bipartisan support for such a provision in the new tax bill late last year, but it was shot down by the Senate parliamentarian at the last minute. Read more at CNBC…

 

What the future of food means to Dan Barber and Kimbal Musk

Dan Barber, co-owner of Michelin-starred Blue Hill, and food entrepreneur Kimbal Musk have both help shepherd the farm-to-table movement mainstream. Yet they have different philosophies about sustainable eating. To Barber, seed breeding is an example of a technological advances that will advance the organic movement. To Musk, who runs, indoor-based growing technology provides just as much promise. Read more at Fast Company…

 

What are ‘asynchronous meals’? This new intuitive eating is poised to take over mealtimes in 2018

Cultural intelligence and insight firm Sparks & Honey mentioned the term “asynchronous meals” in its latest trend report, referring to the overarching shift in cultural thinking that food choices and ways of eating are deeply individual. It encompasses sub-trends like snacking, intermittent fasting and personalized nutrition. Read more at Bustle…

 

Frances McDormand to make screenwriting debut for ‘The Omnivore’s Dilemma’

Michael Pollan's book that changed the public conversation about food more than a decade ago is being made into a movie. Actress Frances McDormand and writer/director Sam Hoffman are writing the screenplay. Read more at Hollywood.com…