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Articles from 2019 In April


[email protected]: Blue Apron delivers better margins as business shrinks | Google's Wing gets first-ever drone delivery license

Image credit: Blue Apron Blue Apron IPO

Blue Apron delivers better margins as business shrinks

Meal-kit maker Blue Apron has continued to lose customers, but recently delivered earnings of $8.6 million before interest, taxes, depreciation and amortization. Executives have stated that their goal for the company is to eventually expand again by building off a more profitable foundation. Read more at The Wall Street Journal …

 

Google’s Wing gets first-ever drone delivery license

 

Google has seemingly beat Amazon in the race to offer drone technology that can deliver products to consumers in less than 30 minutes. The subsidiary is called Wing, and while Google has been developing the drone technology for several years it only recently became the first operation of this kind to receive approval from the Federal Aviation Administration. Wing could also potentially deliver groceries or medicine to people with limited mobility in the future. Read more at New Food Economy …

 

Burger King will roll out the Impossible Burger nationwide by the end of the year

Rolling out the Impossible Burger at all Burger King locations across the company will enable “the company to snag new customers while not eating into its core business of selling Whoppers.” The meat substitutes market may reach $6.43 billion by 2023, and the Impossible Burger’s well-received debut in St. Louis “was a bright spot in what would otherwise be a fairly downbeat earnings call for Burger King’s parent company.” Read more at Tech Crunch …

 

Plant-based meat companies have an identity crisis on their hands

There is a possibility that alt-meat companies will be barred from using the word “meat” on their product packaging at all in the near future. Meat industry-backed movements in statehouses nationwide are gaining steam, and plant-based meat brands such as Beyond Meat would be legally required to change their marketing strategies should the conventional meat industry’s efforts succeed. Read more at Quartz …

 

Dung beetles are key to healthy pasture. Now they may also help make produce safer

Dung beetles are prized in many livestock rearing operations, “particularly for their biocontrol of dung-breeding flies and their ability to reduce the development and survival of gastrointestinal parasites in pasture-raised cattle and sheep.” Now, efforts to incorporate dung beetles into large-scale livestock operations are underway—and they’re receiving backing from some governments such as those in Australia and New Zealand. Read more at Civil Eats …

Unlock the top 5 ways to be retail-ready for Amazon

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Are you looking for ways to strengthen your presence on Amazon and grow sales? Our April BrandCamp webinar, Amazon and Beyond: Course Correcting Your Online Strategy, features five key tips for succeeding and scaling on the platform, from product image best practices to leveraging Amazon paid search and delivery service partners (DSP). The episode lead, Brad Saksons of OMNi ePartners, is an e-commerce advertising strategist and digital media rainmaker with over 10 years’ experience executing cutting-edge marketing strategies across multiple digital channels.

With a constantly evolving marketplace, your omnichannel strategy needs constant refining. In the April 17 episode of BrandCamp, Brad unlocks these top five secrets to success for creating Amazon retail-ready brands. You can learn this key tactical advice for only $30 on-demand. So, what are you waiting for?

Watch today to:

  1. Understand how to take advantage of Amazon’s search algorithm to prioritize details on your page content (never underestimate the power of a good title!).
  2. Learn product title and image do’s and dont’s to improve customer experience; learn from best-in-class examples.
  3. Find out how to create an A+ content page for online and offline conversion.
  4. Find out how to stand out, leveraging Amazon paid search and Amazon DSP.
  5. Learn how to re-market to lost consumers and gain market share.

I'm in for BrandCamp on-demand!

BrandCamp logoTune in to our May episode (also only $30) to learn why email marketing is more important than ever for natural products brands. Join us as Justin Perkins, vice president of strategic partnerships at Care2, shares a peek at the Care2 playbook that has helped build a 50-million-person audience, as well as tactics you can start implementing to raise your email marketing game.

Slow growth for Amazon in-store sales, but online delivery is up

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While the big takeaway from Amazon’s first-quarter earnings report last Thursday was the announcement of free one-day shipping for Prime members, there was plenty of other news in the report and subsequent earnings call of interest to grocery retailers.

The company notched a record $3.6 billion in profit on almost $60 billion in sales during the first quarter of 2019, compared to a $1.6 billion profit on $51 billion in sales a year earlier. First-quarter sales rose 17% year over year, down from last year’s 46% sales growth.

Meanwhile, sales at the company’s physical stores—which include about 500 Whole Foods stores, as well as a growing fleet of Amazon bookstores, pop-ups and cashier-less Go convenience stores—grew just 1% to $4.3 billion from $4.26 billion a year ago.

In an earnings call with analysts, Brian T. Olsavsky, chief financial officer & senior vice president, Amazon.com, noted, “The physical stores’ revenue is principally Whole Foods revenue, but it excludes the online ordering component where people order on the Prime Now app and it’s delivered to them. That shows up in our online stores classification.”

He continued, “Last quarter I told you that our growth in store sales, including both shopping and also online deliveries, was closer to 6% in Q4. And it’s a similar number in Q1. So, again, we’re very happy with both the recognition of the Prime benefits at Whole Foods and also the purchases. And you may have also noticed that we lowered prices for the third major round of price cuts since we joined forces with Whole Foods in the summer of 2017.

“More Prime members have adopted the Whole Foods benefit than almost any other benefit we’ve offered them,” Olsavsky said. “And they’re saving, as a result, hundreds of millions of dollars. We continue to expand the coverage for delivery. We have delivery from 75 U.S. metros through the Prime Now app, and we also have pickup in over 30 metros through the Prime Now app.”

“We are also continuing to invest in our other grocery initiatives,” added David Fildes, director, investor relations, Amazon.com. “Amazon Fresh, Prime Now—which offers grocery as one of the components of the selection there for the two-hour or even one-hour delivery capabilities. We’ll keep investing in those areas and other initiatives as well where we can get food through — Amazon Pantry, Amazon Go. There’s a number of initiatives there. So we’re excited about what we’ll be able to continue to bring to customers on that space.”

As for that highly touted one-day free shipping, Amazon announced it will spend $800 million in the current quarter to reduce free delivery times for Prime customers to one day from two. Olsavsky said faster delivery times will increase the number and types of products customers are willing to buy from Amazon.

“We really think it’s going to be groundbreaking for Prime customers,” he said on the conference call. “We have the capability because we’ve been at this for more than 20 years.”

Amazon didn’t offer a timeline for the project’s rollout, which will begin in the U.S., but Olsavsky said, “we expect to make steady progress quickly and through the year.”

Thursday’s strong results and faster shipping announcement bolstered Amazon’s shares by almost 1% Friday morning while shares of Target and Walmart fell 5.4% and 3%, respectively.

Supermarket News logoThis piece originally appeared on Supermarket News, a New Hope Network sister website. Visit the site for more grocery trends and insights.

3 lessons learned from New Leaf Community Markets' newly launched house label wine

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New_Leaf_Common_Vines_display (1).jpgThe wine section at New Leaf Community Markets has a new store-branded offering: the house wine, named Common Vines, available in a 2017 chardonnay and a 2017 pinot noir at an affordable $13.99 price point.

This new leap for the retailer comes largely thanks to its partnership with Bargetto, the local winery behind the product. “They have an excellent reputation, they exemplify the region and, personally, I've always been a fan of their wines,” says Oliver Carter, the store’s wine buyer. “This partnership also demonstrates two businesses in a community, working together to show our passion for great products.”

Carter estimates that the process from inception to shelf took about six months to a year. And it wasn’t very difficult, he says–just a series of meetings to develop the product and how it would be styled. Going forward, shoppers might see a Common Vines rosé or sparkling wine produced by Bargetto or another winery in the Santa Cruz or Monterey region. “One of the cool things about Common Vines is that we want to support a variety of local wineries,” Carter adds. “Wine shoppers have their favorites, but they also like to try different producers and varieties.”

While the process was fairly straightforward for Carter, he does have some tips to share with retailers looking to bring their own private label wine–or any product–to shelf.

1. Keep it local

Partnering with producers who have a good local reputation is key, he says. Plus, it’s easier to have meetings and develop relationships when partners are in the same region.

2. Align values 

“We want to find producers who have the same values as our store,” says Carter. “Bargetto, for example, is a family business that promotes its sustainability initiatives, and is in the process of becoming biodynamic. This is in line with our store’s commitment to sustainability.”

3. Go with what works 

“If I had my own wine shop, I wouldn’t make any money because I’d only sell wines that I like,” Carter says. “You can get as esoteric as you want and have fun, but you also have to think about the customer. Do the research on what’s popular and mainstream.”

Unboxed: 8 nutritional powders with ultra-clean labels

Nutritional powders are the ultimate clean label supplement—no non-nutritive fillers, binders or gelatin to be concerned about (well, maybe a natural sweetener or two). We also convened a panel consisting of a millennial, a Gen-Xer, a mother of young children and a middle-aged man to taste them both within smoothies and alone in water to help you better sell these powders to your customers.

[email protected]: Kraft Heinz sued for insider trading | FDA commenters not confused by plant-based 'dairy' labels

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Insider trading lawsuit hits Kraft Heinz

A Connecticut trading firm has sued Kraft Heinz alleging insider trading after private-equity firm 3G Capital made $1.2 billion selling “millions of shares months before a $15.4 billion write-down and revelation of a federal investigation sent Kraft Heinz’s stock price plummeting.” The lawsuit seeks class-action status and Kraft Heinz has thus far declined to comment. Read more at Chicago Business …

 

Confused by almond milk? FDA commenters sure aren’t

 

The dairy industry has been taking aim at plant-based brands marketing themselves as milk or cheese by arguing that the terminology is misleading and confusing for consumers. However, a recent analysis of more than 7,000 random comments that FDA received as part of a rule-making process found that 76 percent of the commenters were in favor of allowing plant-based substitutes to use dairy terms. Read more at New Food Economy …

 

Unilever rides DTC wave from razors to mustard

Post acquiring Dollar Shave Club in 2016, Unilever is applying its learnings from the company’s disruptive business model to serve its other brands. Even one of Unilever’s oldest subsidiaries, a niche mustard brand called Maille, is seeing an uptick in sales because of the direct-to-consumer model’s ability to cater to consumers’ very specific interests. Read more at WARC …

 

Forget Tide Pods: P&G bets water-free soap ‘swatches’ are the future

Proctor & Gamble Co. has developed a way to make soap-based products—such as laundry detergent, hand soap and shampoo—function without the use of water. These products will be marketed toward “younger and environmentally conscious consumers,” but the company will face the challenge of convincing them that these water-less soaps are just as effective as the soap that comes out of a regular bottle. Read more at The Wall Street Journal …

 

Does your food label guarantee fair farmworkers’ rights? This one does

The Agricultural Justice Project is a nonprofit in Gainesville, Florida, that has offered worker-justice-related certification and labeling since 2011. AJP’s Food Justice Certification program “requires that an employer offer workman’s comp, disability, unemployment coverage, social security, unpaid sick leave, maternity/paternity leave” as well as a USDA Organic certification as its baseline. Read more at Civil Eats …

IdeaXchange

Why you should be optimistic about compostable packaging

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Optimism about packaging in today’s single-use culture can feel hard to reach. Rather than crumple up our dreams of a more sustainable future and toss them out the window, we’ve always felt inspired to find a better way. Cars aren’t going away, but they can become electric. Industry is here to stay, but factories can be run on natural gas and solar. Single-use packaging has become a staple of consumer culture, but we can make it better.

We acknowledge the problem but are committed to participating in the solution. This is the spirit behind our pioneering of compostable films and ultimately weathering its challenges. While our temporary switch to conventional films can feel disheartening, it is decidedly a “slow down to speed up” tactic.  

To be sure, we faced a setback, but we’re not feeling pessimistic in the slightest–and neither should you. We’re feeling more energized than ever before. One big reason why is that we are not alone in our quest our commitment. With the OSC2 packaging collaborative, we’re among peers committed to solutions. With Elk Packaging we have a mission-aligned, strategic packaging supplier.

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Elk’s sustainability initiative is spearheaded by Jeanne Cloutier, one of the unsung heroes of sustainable packaging innovation. Jeanne is a wealth of knowledge, drawing from years of practical experience on both the brand and packaging manufacturer side. Her technical chops and operational tenacity have been instrumental in moving the industry forward. If Jeanne were to teach a course on the future of packaging, we would sign up.

This Earth Week, we wanted to share some of Jeanne’s insights with you as a short-format interview. The bottom line is that there are a lot of reasons to feel optimistic right now. After reading this, we not only hope that you’ll agree, but that you’ll feel inspired to join us in action.

headshot_medium.jpgJeanne, tell us a bit about yourself–how did you get into the world of sustainable packaging?

My background is in supply chain management. I used to be a buyer for a few different brands in the natural food space. In these roles, I got to see up close what large amounts of packaging looked like before it was used to temporarily hold product before ultimately ending up in the landfill after being used once. When I was at Alter Eco, we realized that our annual packaging purchase for one of our categories was over a mile high if you stacked the packages, empty!

On a personal level, what really got me motivated was living in developing countries over a decade ago. I saw the trash that I created burned in front of me and literally had to face the mess that I had made with my choices. As a packaging buyer, I knew that I held power to create change, and if what we needed didn't exist, we simply needed to invent it. So, we that’s what we did, and now I’m bringing what we learned to the rest of the industry.

After leading the compostability charge at Alter Eco you helped cofound the OSC2 Packaging Collaborative. Why did you feel a coalition of brands tackling this issue is important?

Working on compostable packaging at Alter Eco was an isolating experience. I was told “no that won’t work” over and over from suppliers to packers to labs, and had to overcome functional, economic and marketing claim challenges over the span of 5 years. These were all elements I knew could hinder others' efforts, especially those who didn’t have the amazing support I did from Alter Eco’s founders.

There is no real precedent for what we are doing at OSC2, save for the very dawn of the petroleum-based plastic packaging age 60 years ago. We take for granted the fact that petroleum-based packaging is effective at maximizing shelf-life, cheap, and easy to work with. In fact, it is over-engineered to overprotect a brand’s product and carries the unintended consequence of literally lasting forever, while harming life outside of landfills. Considering this, I think that it is insane that we are not required to make labelling claims for the negative elements of current packaging! “This wrapper will not decompose for 1,000 years and has unknown consequences for life on earth.”

Compostable packaging requires a shift in mindset. We must think of the package as an ingredient itself, the last one in your product. This ingredient needs to match the barrier properties of the product, and also survive downstream logistics. At the same time, these sustainable materials are designed to break down, not last forever. This needs to be taken into consideration in the life of the product.

Can you imagine being disappointed in a banana peel that turned brown “too early”? We have the ability to accept that packaging is not meant to last forever, but cognitively our wires are stuck in a divergent position. When thinking about compostable packaging, we “need” it to look just like petroleum based (forever) packaging, and also need it to “go away” when we want it to. One can’t have it all.

Taking this all into consideration, the nexus of our group at OSC2 is that there is a packaging operations skills shortage at most brands that we can collectively fill. We have simply been spoiled by this “forever” packaging and have never needed to deeply consider all of the different aspects that goes into essentially replicating nature, including our expectations. We’re here to provide resources and create community to effect change.

What are some of the best materials out there today?

Hands-down it is Futamura’s NatureFlex line. They make a cellulose product from North American sustainably managed forests and it works well in laminations as well as monolayers and prints great. Cello is our “original” packaging material and was widely used before petroleum based plastics came into play in the 1950s.

There is a lot of headway being made in PHA as well, a material are known to degrade in marine and anaerobic environments. We expect to hear a lot about these in the near future for flexible laminations.

Lastly, commercially compostable PLA materials are having a heyday as they are the low cost darling of sustainable films. Recent progress has been made in very large scale non-GMO sources, as well as achieving amazing barrier improvements.

What applications are the currently available materials best for?

Ideally, they are all best for temperature controlled dry goods and confectionary items, followed by stable commodities (think rice) and fast moving, high value small format items.

What are some of your favorite examples of successful commercializations of compostable films?

Alter Eco truffle wrappers, because it “only” took us a year and a half to qualify and have had zero issues in the market since 2012!

Guayaki pioneered the use of compostable films for their loose leaf tea line and have been in them for well over a decade. They don’t get enough credit for accepting all the common reasons folks are scared away: increase in cost, slight increase in spoilage (meaning occasional bag failure), and limited marketing claims. They did it anyway, which is exactly the right leadership and message to other brands and they are as popular as ever.

We are also seeing successful commercializations in tea overwraps, bakery items, grains, microwave popcorn (!), coffee beans, chips, ballpark peanuts and feminine hygiene products among others.

How have you seen the materials improve since you started focusing on sustainable packaging technologies?

I’ve seen improvement both in functionality, breadth of offerings, and offerings that batter match conventional analogs. Also, there have been improvements in downgauging (making the packaging thinner), which is key to achieving ASTM D6400, the compostability standard.

What is most misunderstood about compostable films in your opinion?

Unfortunately there are a lot of misconceptions around environmental marketing claims. Just because the materials are certified compostable (Commercial or Home) it doesn’t mean that certification carries over to a finished, multilaminate structure with inks, adhesives and coatings ... even if all components are certified! The entire structural recipe is considered a “novel item” which needs to be re-tested in order to make the compostability claim, mainly due to disintegration.

This is very disappointing to folks who are raring to go, and can be a conversation killer in product development meetings due to the uncertainty of testing and/or timeline of execution. Certification is not impossible by any means, but it only draws out transitions or product launches.

What are you most excited about right now in the world of sustainable packaging, whether or not it is commercially available?

On the demand side, I am loving that the sense of urgency has finally arrived! That we realize we need to change what we are doing as brands and as consumers. Folks finally get that their packaging will outlive their teeny consumption experience by a thousand fold.

It’s refreshing to work with brands like ReGrained who are leading the charge by putting action and money behind doing what’s right all the way down to the last iota of their responsibility, packaging.

What are the top actions food manufacturers/brands can take action to move the needle on packaging progress?

Realize that this is not a fad, and compostable packaging is not going away (except after it is composted). As a start, get educated in the form of joining the OSC2 packaging collaborative. Put talent and resources into understanding the materials and fitness for use. Align with upstream materials suppliers and manufacturers and ask to be provided with sustainable packaging choices.

And finally, how about consumers?

Arm yourself with science-based information for the full spectrum of topics: materials themselves, ecology, waste management issues. Don’t rely on bite sized information from Instagram alone for your education.

For the rest, keep true to your values and vote with your dollars and your votes.

Keep questioning, always question! My number one question is always: “Do I really need that?”

Have some big ideas or thoughts to share related to the natural products industry? We’d love to hear and publish your opinions in the newhope.com IdeaXchange. Contact the editor at [email protected] for more information.