DMA's Fall In-Person Palm Springs Meeting Canceled |
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We are committed to delivering the best gatherings in the business - but this fall, the risk is obviously too great for our valued customers, distributors and supplier partners. So, while we won't see you all in person until next spring, we will be announcing multiple opportunities for us to convene virtually in early November. Keep your eyes open for details and, of course, follow DMA on LinkedIn for the very latest news.
We are so grateful for your business and partnership and look forward to getting the DMA family back together in the new year!
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Derecho Could Derail U.S. Grains Sector
Favorable summer weather conditions in much of the Corn Belt were producing high hopes for yields in 2020, until a “derecho” hit the state in mid-August.
A derecho is a rare storm variety which features intense winds moving in a long-lived, straight line. They are often accompanied with severe thunderstorms, and the National Weather Service estimated 140 mph winds occurred in Des Moines, reported KCCI (Aug. 19). Full Story
In fact, the storm was so strong, Iowa's homes, cornfields, utilities, and government agencies lost an estimated $4 billion due to the derecho. The storm damaged 13 million acres of cornfields, with the state seeking nearly $3.8 billion from the federal government for agricultural losses, reported CBS News (Aug. 16). Full Story
“From cities to farms, Iowans are hurting, many still have challenges with shelter, food, and power," Gov. Kim Reynolds said.
Brian Rumbaugh, a farmer in Jasper County, said his entire crop was destroyed by the derecho. He said at first he hoped some of the corn might spring back following the storm, reported KCCI (Aug. 18). Full Story
“Obviously, it's totaled,” Rumbaugh said. “So, if you want to go 220 bushels of corn pushing three bucks an acre gone. The total amount says 400 acres of 450 is gone. There is $240,000 for just little old me.”
According to the Acreage report released June 30, USDA's National Agricultural Statistics Service estimated that there were 92.0 million acres of corn planted in the U.S. for 2020, up 3% from last year. Growers expected to harvest 84.0 million acres of corn for grain, up 3% from last year and 92% of all corn acres planted in the U.S. are biotech varieties, unchanged from last year. Obviously, those predictions will need to be updated in the wake of the storm.
StoneX Group also released yield survey results that display potential to see record-setting yields in the U.S. this year, according to the group's Arlan Suderman. “This is a survey-based yield,” said Suderman. “Last year, we just essentially pegged the final corn yield, and that's what we're looking for. We asked, ‘What do you think the final corn yield will be? What do you think the soybean yield will be based on what you see today?’ Our results came out 182.4 bushels per acre for corn and 54.2 bushels per acre for soybeans.”
Soybean area planted was estimated at 83.8 million acres, up 10% from last year, according to the USDA Acreage report. Soybean harvested area for 2020 is estimated at 83.0 million acres, up 11% from 2019. Producers planted 94% of the soybean acreage using herbicide resistant seed varieties, unchanged from 2019.
Meanwhile, the COVID-19 pandemic caused many farmers in the U.S. to give up on their corn crop before it was even in the ground, reported Aljazeera (Aug. 10). Full Story
With the economy contracting and demand for corn-based biofuel falling off, Colorado-based farmer Troy Schneider is not planting any cash crops under the sprinkler system. Based off his calculations, it would make more sense financially to grow grass for his cows.
"With the economy shut down and lack of driving, it drove the price down too much," he said. "Why even take a chance? You are going to lose money on everything."
The amount of corn is so large that even some purchases of U.S. corn from China in recent weeks failed to lift prices. In preparation for a meeting scheduled in the coming week about the China Phase 1 Deal, China is continuing to buy U.S. corn.
“Mathematically, it certainly makes sense for them to buy,” said Suderman. “The Chinese government can make money importing our corn at cheaper levels than what it is domestically, they can put it into their reserve, blend it with lower quality corn there, put it back out at auction and make money on it.”
Bloomberg also recently reported that China is ditching expensive Brazilian purchases and replacing previously done deals with American supplies, according to people familiar with the matter (Aug. 11). Full Story
Traders are washing out Brazilian purchases made earlier in the year as the price gap to American supplies widened, said the people, and some traders struck the arrangements to supply their own operations in China, while others are doing them on behalf of Chinese clients.
Brazilian soybean prices have surged as supplies dried up in a time where the American harvest is coming up and traders are expecting a bumper crop. Analysts surveyed by Bloomberg forecast yields will be the highest since 2016.
“This news reinforces our concerns of stronger competition for Brazilian soybeans in China,” Leandro Fontanesi, an analyst at Bradesco BBI, said in a report. “The 2020-21 U.S. soybean crop is expected to be 16% larger, contributing to an 8% increase in global soybean production, which could pressure Brazilian soybean prices.” Food Institute Focus
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Pizza Profits from Pandemic
Pizza sales and pizza-chain hiring have both been soaring during the COVID-19 pandemic, reported PYMNTS.com (July 27). Full Story
When the pandemic began in March, Domino's said it was hiring back 10,000 workers, and now, Papa John's announced it will be doing the same on top of the recently added 20,000 employees.
Pizza chains in general experienced an increase in demand as more consumers stayed at home, reported CNBC (July 27). Full Story
During the three months ended June 28, Papa John’s North American same-store sales went up 28%, according to its preliminary estimates. Shares of Papa John's, which has a market value of $3.1 billion, have risen 48% so far this year.
Domino's reported U.S. comparable sales rose 16% for its fiscal second quarter that ended June 14, compared to just a 3% gain in the same 2019 period. “The second quarter marked a rather unprecedented acceleration for food delivery in the U.S., and we were certainly no exception,” Domino’s CEO Ritch Allison said on an investor call.
As for why pizza is doing so well, QSR Magazine noted that "pizza brands came into the crisis, on a broad scale, already equipped to deliver and fulfill carryout service. No pivot needed. It was ingrained not just in their operations, either, but in core consumer behavior as well. The latter factor might just be the more critical, given the scale of restaurants catching up and the sales gap that still remains.”
Sixty-three percent of consumers sought out pizza during the pandemic, according to Datassential, while Pizza Magazine reported that 83% of consumers were already eating pizza at least once per month prior to stay-at-home orders.
In DoorDash's Deep Dish food trends report, make-your-own pizza was the number four most ordered item of the past six months, a trend that the company expects to continue into the second half of 2020. The item was particularly popular on the West Coast.
Pizza was also found to be one of the top foods Americans order because it is "Instagram-worthy."
Additionally, Pizza Magazine reported that more pizza stores opened in 2019, with the industry totaling 77,724 units—up 1.3% over 2018. Independent restaurants lead in total number of units nationwide, but that is shrinking. Chains saw units rise to 36,151 from 34,967 in 2018, while independents lost ground with 41,573 stores versus 42,026 a year earlier.
Pizza has become so popular that Popeyes is trying to lure customers away from it with a new social media campaign called "Popeyes instead of pizza," reported Fox Business (July 28). Full Story
The chicken chain is encouraging its customers to snag a family member's phone and autocorrect the word "pizza" with "Popeyes instead of pizza" to ensure Popeyes rises as the top choice over pizza when it comes to deciding what's for dinner. If customers screenshot the autocorrected text and post it to social media with the #LoveThatAutocorrect, they will receive a $5 discount on their next meal. Food Institute Focus
Despite COVID Challenges, Restaurants Adapt Across the Globe
The outlook for the U.S. foodservice industry is less-than-rosy for the 2019-2020 period, with Mintel predicting a 30% decline during the period. But not all the news is awful: Looking ahead, Mintel predicts total market sales to rebound to pre-pandemic levels by 2023, with limited-service restaurants, including fast food and fast casual restaurants, bouncing back more quickly and representing a notably larger share of the market. Full Story
“Dine-in restrictions will shift the focus to off-premise options in the short- and medium-term (end of 2020). During the short term, drive-thru, takeout, and delivery options will help mitigate sales declines. In the long term (1-2 years from now), continued investments in off-premise dining will help operators recoup sales, but foodservice will continue to be challenged in a recession as consumers cut back on discretionary purchases,” said Amanda Topper, Mintel’s associate director of foodservice.
Chains are currently focusing attention on drive-thrus while COVID-19 changes where consumers eat as they opt for contactless access to restaurants. Shake Shack and Wawa are opening their first drive-thru only locations, and Starbucks, Chipotle, and Panera will add more drive-thrus to existing stores. Although some municipalities oppose drive-thrus because of the noise and wider footprint, the coronavirus may mark a wave of construction not seen since the 1970s, reported CNBC (Aug. 5). Full Story
“Look, in the moment of safety, people want to stay in their cars,” Shake Shack CEO Randy Garutti told analysts regarding the use of drive-thrus. “That’s not going to last forever. But obviously, this country has proven that the drive-thru in its old form works. We want to do in this new form.”
Shake Shack is planning to build a lane only for digital order pickup at some restaurants.
Dickey's Barbecue Pit launched ghost kitchens as a new franchise opportunity to help meet demand for at-home consumption. New kitchens serving delivery app customers will be opened in Chicago, Houston, and Orlando, FL, with the first virtual kitchen location in Providence, RI. Full Story
Some companies are even getting creative. Whataburger debuted a food truck to promote the chain's 70th anniversary. The truck will travel around Whataburger's existing market in 2021, with possible diversions for natural disasters and emergency events where people need food. Full Story
Across the pond, the UK government found an interesting way to help the industry stay afloat: it started paying 50% of the tab for dine-in meals under its “Eat Out to Help Out” program. The program was designed to protect food industry jobs by boosting demand. When people eat at participating restaurants, those establishments will charge half of the bill, up to about $13 per person, to the Treasury. Alcohol is excluded from the offer but there's no minimum spending requirement and consumers can use the promotion as many times as they like on the eligible days as long as they're opting for dine-in service, reported BBC (Aug. 13). Full Story
Preliminary data suggested the first week of the program increased restaurant visits. Reservations jumped 10% on Aug. 3, compared to the same day in 2019, OpenTable reported, and Springboard data show that across the UK from Aug. 3-6 retail foot traffic rose nearly 19% after 6 p.m. and about 10% during lunch, which is defined as 12 p.m. to 2 p.m. Although the initial data appears positive, industry group UK Hospitality and some restaurant owners, believe it's too soon to be fully optimistic, reported BBC (Aug. 7). Full Story
Casual Dining Leverages its Assets
Casual dining concepts have seen 58% less traffic since the start of the pandemic, whereas fast food restaurants only experienced a 30% decrease, according to a report from TOP Data. Full Story
However, staples in casual dining, including Applebees, Chilis, and Olive Garden, as well as chain steakhouses like Texas Roadhouse, are beginning to dominate America's return to sit-down restaurants. In order to achieve this, chains have had to pivot to solutions like curbside pickup, makeshift drive-thrus, and grocery sales, reported Forbes (Aug. 13). Full Story
For Chili’s and Maggiano’s Little Italy parent Brinker International, a virtual brand was an emerging opportunity. During Brinker's fourth quarter earnings call, CEO Wyman Roberts announced the launch of It's Just Wings in late June, which marks the company's first virtual brand—operating out of existing Chili's and Maggiano's locations. Same-store sales of company-owned Chili's restaurants themselves fell 32.2% during the recent quarter, and dropped 66.7% at Maggiano's restaurants, reported MarketWatch (Aug. 12). Full Story
It's Just Wings offers three styles of wings—boneless, bone-in, and smoked—smoked in-house. Each order includes curly fries and ranch sauce, with 11 additional sauce choices available. The CEO claims the concept hasn't been done by anyone else in the segment at this scale and expects the brand to exceed $150 million in its first year, "which would secure It’s Just Wings a spot in the top 200 restaurant brands.” It’s Just Wings is facilitated by the company’s exclusive partnership with DoorDash, which was announced last summer.
For Brinker, the idea of a virtual brand was in the works for about two years when the company put a small innovation team in place. Roberts said the team is tasked with looking at opportunities that can grow the company and drive it forward, ideas like food trucks and shared kitchens.
“We’ve tested some of those things and it’s clear to us the bigger opportunity is to leverage the assets we’ve already invested in,” he said.
Euromonitor expects a $1 trillion ghost kitchen market globally by 2030, which could replace up to half of all dine-in volume as early as 2022. As consumers rely more on delivery, existing companies are more likely to take advantage of their current space to reach them this way.
“This whole idea that casual dining is overcapacity, we want to turn the tables on that. It’s just underutilized. Leveraging those assets is our primary thought right now,” Roberts said.
Meanwhile, FAT Brands Inc. will pay about $25 million to acquire the Johnny Rockets brand. Johnny Rockets has about 700 locations, reported The Wall Street Journal (Aug. 13). Full Story
FAT Brands is betting that owning multiple chains will be valuable when casual dining recovers. Sales have already jumped in some markets thanks to outdoor seating and delivery, according to CEO Andy Wiederhorn.
“If working from home becomes a bigger component of daily life, that just adds to the demand to be able to socialize in some way,” he said.
Wiederhorn also noted that FAT Brands would consider bringing more casual dining brands into a portfolio that includes Fatburger and Hurricane Grill & Wings. He added that, by buying regional chains, FAT Brands can gain scale and negotiate better deals for advertising and supplies.
“There is an opportunity now to take casual dining chains and get a consolidation of similar concepts,” he said.
Breakfast Sales Slump Due to Change in Daily Routines
Breakfast sales continue to slump as people change their daily routines and opt for brewing their first cup of coffee at home while experimenting with new breakfast meals, like macaroni and cheese.
Although 2020 was expected to be the year of "breakfast wars," breakfast sales at QSR and fast food chains have been down thanks to the pandemic, reported Business Insider (Aug. 3). Full Story
Before the pandemic, breakfast was growing due to competition and new items on the market. However, McDonald's, Starbucks, and Dunkin' all recently reported that breakfast sales are continuing to slump even though sales throughout the rest of the day are improving.
"Breakfast...prior to the pandemic was the only day part that was growing," McDonald's CEO Chris Kempczinski said on a call with investors. "And so as a result, there were a lot of new competitors that were flooding into the breakfast day part. That certainly was one area of pressure for us."
McDonald's has actually grown its share of breakfast during the pandemic, but so few people are dining out for the meal that it is still the chain's most challenging type of day and it is bringing down overall sales. Starbucks and Dunkin' both have seen significant shifts in their breakfast business as people are working from home and aren't stopping to grab a coffee on their morning commute.
Customer visits at Starbucks were peaking at 9:30 a.m. and 2:30 p.m., with more customers getting afternoon snacks, while at Dunkin', sales shifted from early morning to mid-day, 11 a.m. to 2 p.m.
Starbucks is now trying to sell more snacks to accompany drink orders to make up for lost sales. Dunkin' executives said that espresso drinks and specialty beverages such as matcha lattes have performed well.
At Panera, the chain was working to build its breakfast business over the last few years and launched an unlimited coffee subscription service in February. In June, Panera pushed for more people to sign up for the service by offering free drinks.
"There's not much recovery in the breakfast day part right now. In terms of day part, breakfast has dried up," said CEO Niren Chaudhary. "If anything, we're seeing the consumption of coffee starting later in the morning than it used to, and kind of extend more through the day than it has done in the past."
Panera managed to break the 835,000-subscriber level on its $8.99-a-month program, including over 700,000 signups in July alone, reported Forbes (Aug. 4). Full Story
“We recruited about 100,000 members in February, so we are seeing a big acceleration on that,” said Eduardo Luz, Panera’s chief brand and concept officer. “To get to this level completely surprised us. What we’ve achieved in three weeks is three times what we projected.”
“This program has reinserted Panera into routines, but the window has moved from 7 to 8:30 a.m. to about 10 to 11:30 a.m. That puts customers’ coffee runs closer to our sweet spot, which is lunch,” Luz added. The change in routine has yielded higher tickets for Panera as lunch customers usually attach a food item to the order.
While to-go coffee is pushed to later in the day, at-home coffee consumption is becoming more popular. Coffee propelled Nestle SA to a 2.8% increase in revenue, higher than investors expected, amid pandemic uncertainty. Nestle attributed part of its success to growth in Starbucks brand coffee and Nespresso, reported Bloomberg (July 30). Full Story
Meanwhile, parents are getting creative with at-home breakfast with 65% reporting serving their children mac and cheese for breakfast more often during COVID-19-related lockdowns than previous months, according to a survey from Kraft. Full Story
To promote the new trend, Kraft gave away limited-edition Kraft Mac & Cheese Breakfast Boxes until Aug. 7. Along with the mac and cheese, each box included a placemat for kids to color while the mac and cheese is being prepared and a magnet with breakfast topping suggestions, like crumbled sausage, bacon, or scrambled eggs. Food Institute Focus
Executives on the Move:
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Domino's promoted Art D'Elia to EVP and CMO. Full Story
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Meanwhile, Domino's also named Stu Levy as CFO and Cindy Headen as EVP, supply chain services. Full Story
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Bloomin Brands promoted Sheilina Henry to group VP of diversity and inclusion. Full Story
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Jack in the Box EVP and CFO Lance Tucker will resign and Dawn Hooper will be appointed principal financial officer. Full Story
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Tyson Foods will appoint Dean Banks CEO in October. Full Story
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Whataburger promoted Ed Nelson to CEO. Full Story
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McLane Co. Inc. named Tony Frankenberger president and CEO effective Aug. 28. Full Story
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Instacart named Casey Aden-Wansbury VP of policy and government affairs. Full Story
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Chicken Salad Chick promoted Jim Thompson to COO among several other appointments. Full Story
Foodservice Expansions, Closures, and Acquisitions:
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McDonald's will accelerate the closings of about 200 U.S. stores, mostly in "low volume" locations that were previously planned, including some inside Walmarts. In response to COVID-19, new safety procedures were introduced in all its restaurants, menus were modified, and new contactless ways to serve customers were developed, reported USA Today (July 28). Full Story
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Debt and COVID-19 impacted California Pizza Kitchen Inc. hard enough to spur Chapter 11 bankruptcy in the latest of several casual dining chain downturns. The pizza chain saw a decline in the last two years due to changing trends among customers, and with 75% of revenue coming from onsite dining, was not well-positioned at the beginning of the pandemic. Executives plan to respond by reducing debt and raising additional funding from lenders, reported Bloomberg (July 30). Full Story
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Meanwhile, California Pizza Kitchen asked for authorization to reject some unexpired leases and to abandon certain personal property amid its Chapter 11 bankruptcy filing as it tries to alleviate long-term debt. The company appears to have already closed its Wayne, NJ, location, reported NJ.com (Aug. 5). Full Story
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Sortis Holdings acquired Sustainable Restaurant Group (SRG) out of bankruptcy and will assume full operational control. SRG owns Bamboo Sushi, a chain with nine locations across four cities that markets a deep commitment to environmental and social change. Initially, Sortis will rehire furloughed workers and reopen the existing locations, and then pursue the growth plan that was interrupted by the pandemic. Full Story
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Dunkin' Brands Inc. will close up to 800 underperforming U.S. stores in 2020. The announcement included 350 stores in addition to the 450 located within Speedway gas stations, which the company previously announced. Additionally, international franchisees could close 350 low-volume stores by the end of the year, reported Boston Globe (July 30). Full Story
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Thirty-one Byron burger restaurants will not reopen, resulting in the loss of over 650 jobs. The company went into administration on July 31 and private equity firm Calveton purchased only 20 of the locations, allowing the brand to continue to possess a scaled-down high street presence, reported The Guardian (July 31). Full Story
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Paris Baguette is seeking multi-unit and area developers in Montreal. The company is attracted to the city's multi-cultural makeup and believes it's an ideal market for growth. Full Story
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Bojangles relaunched the brand to offer a more modern feel. The effort includes a new logo, packaging, in-store visuals, and advertising. Full Story
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Steak n Shake is putting 15 restaurants up for sale. The restaurants were closed over the past 12 months and are located in Alabama, Florida, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, Pennsylvania, and Texas. Full Story
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Tasty Restaurant Group will acquire five Burger King restaurants in Iowa. The company plans to manage the portfolio and daily operations at the stores. This acquisition will boost Tasty Restaurant Group's Burger King restaurant count to 72 locations across 10 states. Full Story
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Little Caesars Pizza will open its first restaurants in Colombia. The first two restaurants will be located in Bogotá and are scheduled to open this month. Full Story
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Pret A Manger asked staff to reduce their hours by about 20% to help the company reduce costs while saving jobs. The sandwich chain relies heavily on office workers and commuters and its foot traffic remains down significantly. The company appointed advisory firms to help with restructuring, it's negotiating with landlords to reduce rent, and the chain is in the midst of consultations with the employees from the 30 locations that won't reopen, reported BBC (Aug. 9). Full Story
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Buffalo Wild Wings inked a multi-year deal as the official sports bar for the League of Legends Championship Series. Full Story
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Domino's Pizza Inc. plans to hire 20,000 new workers for positions including assistant manager, customer service representative, and pizza maker. The company said it will continue to open new locations and that existing stores remain busy, explaining the need for the hiring drive. Full Story
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U.S. major restaurant chain transactions contracted 11% in the week ending July 26 versus the same period in 2019, according to The NPD Group. Although not great news, the results were a modest improvement from the 12% decline reported in prior week. Customer transactions at major quick-service restaurant chains were down 11% during the period, while full-service restaurant transactions were down 24% during the period. Full Story
Leisure/hospitality is one of the sectors offering the most jobs this summer, according to Monster and ZipRecruiter. Chipotle announced in mid-July it was hiring 10,000 workers, while Dunkin' is looking to add 25,000 staff members. A large chunk of those jobs will be at drive-thrus and filling mobile orders as consumers pivot to takeout, reported CNBC's Acorns (Aug. 6). Full Story
Selected Restaurant Results
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McDonald's reported same-store sales were down 30% during the second quarter but were improving as sales were down 39% in April and only down 12% in June. The company said 97% of its 39,000 global restaurants were now open, compared with 75% at the start of the quarter, reported Yakima Herald-Republic (July 28). Full Story
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Starbucks Corp. reported improving same-store sales, down 16% in June compared to a 65% drop in April when compared year-over-year. The company noted 97% of company-operated stores were open, including 99% of Chinese and 96% of U.S. stores. However, some franchised locations remained closed, reported Seattle Times (July 28). Full Story
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The Wendy's Co. reported a 4.4% decline in U.S. same-store sales in second quarter 2020, with global same-store sales down 5.8%. The company noted breakfast accounted for about 8% of the quarter's U.S. sales, reported MarketWatch (Aug. 5). Full Story
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JDE Peet's experienced store closures and furloughs in its cafe chain, but at-home sales boosted second quarter results. Total reported sales decreased by 2.9% over the half year. As with many companies this year, Peet's saw walk-in locations dip but e-commerce sales rise. Full Story
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Restaurant Brands International reported revenue fell 25% during second quarter 2020. The company reported same-store sales decreased 13.4% for Burger King; decreased 29.3% for Tim Hortons; and increased 24.8% for Popeyes Louisiana Kitchen, reported MarketWatch (Aug. 6). Full Story
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Sales from Dickey's Barbecue Pit rose 7.4% in July over June, growing past anticipated sales numbers by $1.6 million. The restaurant chain attributes this resilience to its More for Monday program and the Upgrade Your 'Cue promotion, which provides more options for select sandwiches, all of which saw increased sales. Full Story
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Same-store sales increased 28% in Papa John’s second quarter, with CEO Rob Lynch saying pizza will remain resilient in the face of the pandemic and associated challenges. He argued a family of four could enjoy a pizza dinner for $15, and this inherent value proposition will help the economy amid a 10.2% unemployment rate, reported MarketWatch (Aug. 7). Full Story
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Despite sales losses, BBQ Holdings said Famous Dave's proved resilient throughout the pandemic due to a quick transition to counter service. It saw sales of company-owned stores fall 23% and franchise store sales fall 31% in second quarter. However, its to-go sales more than doubled at company-owned stores. CEO Jeff Crivello said the chain was experimenting with off-premise concepts for three years, reported the StarTribune (Aug. 13). Full Story
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Foodservice Forum Goes Virtual
Due to the rapid escalation of the COVID-19 pandemic, Cleveland Research Company has made the decision to move our annual Foodservice Forum from a physical conference to a virtual event this year. On September 29-30, we will have CRC analysts and guest speakers presenting real-time updates and thought-leadership on the future of our foodservice industry.
We’re excited to announce that Meté Gumus, Managing Director/General Manager of FoodServiceDirect.com, will be our keynote speaker.
In addition, CRC analysts will provide a macroeconomic update and inform attendees on key foodservice industry topics such as:
- Trends within foodservice distribution, restaurants, and non-commercial
- How to engage operators in a post-COVID world
- Impact of COVID-19 on food-at-home vs. food-away-from-home
Our goal is to leave attendees with actionable ideas for the opportunities and challenges facing the foodservice industry today, so you can better grow your business in the coming year.
You can view the full agenda/speaker bios and register on our website. We’d love to have you join us!
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Dairy Market Outlook by Schuman Cheese and Optimally
The spread of the pandemic and the shift in food consumption behavior over the past few months has caused some of the highest dairy market volatility in history. There was a $2.00 range for cheddar block on the CME—it was at its low of $1.01/lb. in April and its high of $3.00/lb. in mid-July. The move lower in April signaled an immediate cut in milk production as farmers prepared for lower milk checks well below their breakeven. Then we moved to record highs in June and July while producers were trying to pivot and produce more milk, which was a bit more difficult due to the summer heat.
This range is certainly unprecedented, and with the abundance of government purchases, strong exports, and stabilized foodservice demand, price reacted accordingly. Total cheese disappearance surged after low prices in April and was supported by strong exports in May, June, and into July while domestic demand and milk production was still down versus last year.
As we look forward, exports in August and probably into September will likely be reduced as futures were never at a point where they were competitive globally. However, starting is September government purchases of dairy will also slow to roughly half of what they were the previous four months. This is net price negative and helps to explain why we have come off our highs of late.
That being said, it is possible that government assistance will persist throughout the Presidential election in November and there is money earmarked for Agricultural purchases in both versions of the next coronavirus relief bill. The Farmers to Families Food Box program was extended into at least October, with additional money in the budget to extend the program further if USDA decides. Several Section 32 direct food purchases have also been issued in recent weeks with the possibility of more to come. The current government induced demand will keep dairy product demand, especially cheese, stronger than expected in the upcoming months, but as prices have increased, export demand has suffered. A saying on Wall Street is to “never fight the Fed.” With dairy, never fight or underestimate the impact USDA purchases can have on dairy markets. Full Story
Meanwhile, Schuman Cheese launched a vegan cheese line under the Vevan brand. With flavors including Ched, White Ched, Mozza, and P’Jack available in melts, shreds, and blocks, there’s bound to be a solution for you and your business. Take a look at the sell sheet to learn more. Full Story
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Help Restroom Users Feel Safe on the Way Out
With 64% of office employees saying they will remain more concerned about touching restroom door handles after the end of the COVID-19 pandemic, it’s important to make sure your bathrooms aee prepared for traffic. The Pacific Blue Safe-T-Guard Door Tissue Dispenser and Trash Receptacle from Georgia-Pacific Pro is the perfect solution for a number of reasons, including:
- Converts the restroom door into a touch-free exit
- Easily installed and eliminates the need for an unsightly trash bin by the door
- Encourages a more hygienic, touch-free and uncluttered washroom experience
- Enhances the hygienic perception of the washroom and promotes cleanliness
- One-at-a time portion-controlled dispensing reduces waste at the source and curbs excessive paper towel usage and floor litter
- Serves as a hygienic barrier between clean hands and doors
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P&G Launches CleanPLUS Experience Program
P&G Professional has recently launched their CleanPLUS Experience Program, aimed at helping restaurants and their guests during COVID-19. Both external and internal P&G research found that a majority of restaurant patrons expect more thorough cleaning—and 58% would prefer to see the brands used to clean.
Through the CleanPLUS Experience Program, guests and employees can be reassured that all restaurant areas are cleaned and disinfected using P&G Professional products that have been trusted by Americans for generations, such as Dawn Professional, Spic & Span, Comet, and Safeguard. Many may have seen last week’s press release by Dunkin’ Brands announcing it became one of the first partners for the P&G Professional CleanPLUS Experience Program for its nearly 12,000 U.S. locations.
Traditional sanitization/disinfection products may clean and/or disinfect, but do not keep working after initial contact, leaving surfaces vulnerable to re-contamination. New Microban technology provides 24 hours of protection from bacteria growth even after multiple touches*.
Available in RTU sizes, Microban is marketed and distributed by P&G Professional.
*When used as directed, effective for 24 hours against Staphylococcus aureus & Enterobacter aerogenes bacteria
For any questions or interest on P&G or the CleanPlus Experience for chain operators, please contact James Kennedy via email at kennedy.jh@pg.com. For any distribution needs or questions, please contact Taft Sales via email at sales.tl@pg.com.
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Tork Solutions Will Serve You During and After Pandemic
Tork believes it has a solution ready for you and your business as you adapt to the current public health crisis and the future. The company put together a guidance to help restaurants navigate reopening and to provide customers with a sense of security by emphasizing heightened sanitation processes. By leveraging a Tork napkin dispensing solution to best fit your needs, you can ensure your employees and customers feel safe as they enjoy a meal. Full Story
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Pillsbury Launches Golden Buttermilk Baked Biscuits
Pillsbury’s NEW! Golden Buttermilk Baked Biscuits have been reformulated to deliver a superior biscuit preferred by patrons when compared to our previous biscuits. The improved taste and texture now deliver a better biscuit experience for patrons and operators.
Not all biscuits are created equal. Biscuit liking is driven by 3 things: texture, flavor, and appearance. Pillsbury’s enhanced Golden Buttermilk Baked Biscuits have improved all 3 to deliver a scratch-made appearance with and enhanced dual texture that is crisper on the top with a soft, tender center and a light and fluffy texture with the perfect balance of sweetness and saltiness.
Pillsbury’s Golden Buttermilk Baked Biscuits also provide benefits for the Back-of-House. Improved tolerance means they maintain their softness over a 2-hour hold time, which can minimize waste. The Easy-Split versions also split more easily and consistently making them easier to use for sandwiches.
Available in 4 different sizes: 1.0-oz, 2.25-oz, 2.25-oz Easy-Split, 2.85-oz Easy-Split.
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Get Ready for the Food Institute 2.0
The Food Institute has been serving the food industry for more than 90 years with news, market data, and trends in the foodservice, manufacturing, and retail sectors. In 2020, the company has undertaken new initiatives to better serve our members and the industry at large:
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We launched the Food Institute Podcast series, featuring interviews with top industry executives.
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A Weekender Newsletter debuted to provide a review and preview of key events impacting the food industry.
- Our new website will be deployed Aug. 24 to include more interactive content.
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We revamped our Food Institute Report for professionals and e-members to better focus on industry research and major food trends.
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1515 East Woodfield Road, Suite 820
Schaumburg, IL 60173
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