💸 Food Dollar: The Best of Food Business News

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Stat: 2023, the most consumed foods worldwide Milk led with consumption of 79.3 kg, Rice followed closely with 78.4 kg, Wheat, with consumption of 67 kg, Potatoes and tomatoes also featured prominently, with consumptions of 32.9 kg and 21.2 kg, Maize 18.2 kg and sugar 20.4 kg, Seafood, consumed at 20.2 kg, Cassava 15.3 kg, Chicken and pig meat both recorded a consumption of 15.6 kg, Pulses 18.1 kg and eggs 9.7 kg, Staple crops like onions 11.8 kg, sorghum 15.2 kg, and sweet potatoes 6.9 kg.

Business: The 2024 product development trends, Tamarind is projected to be a key flavor, influencing various cuisines. Amidst eased inflation, consumers are leaning towards smaller, cost-effective packaging, particularly in meats. Generation Z's emerging buying habits are also a significant focus, alongside ongoing discussions about ultra-processed foods.

Pay: Walmart has announced significant changes to its pay structure for store managers and hourly workers, as reported by Bill Wilson on January 19, 2024. The new starting annual base wage for store managers will now range between $90,000 and $170,000, with the average rising to $128,000, a notable increase from the previous range of $65,000 to $170,000.

FOOD DOLLAR

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Stat: The global food and beverages market grew from $6,729.54 billion in 2022 to $7,221.73 billion in 2023, marking a compound annual growth rate (CAGR) of 7.3%. This market is anticipated to grow to $9,225.37 billion by 2027, with a CAGR of 6.3%​

McDonald’$: McDonald's aims to expand to 50,000 global restaurants by 2027, marking its quickest growth phase. This expansion aligns with their Investor Day announcements, which also highlighted goals for 250 million loyalty program members and the integration of Google Cloud for operational improvements. The growth strategy includes focusing on core menu items, improving burger quality, and enlarging the McCrispy chicken range. Digital advancements, such as AI and a universal software system for digital platforms, are key to enhancing customer experience and operational efficiency. McDonald's also anticipates a system sales growth due to this expansion, targeting a 4%-5% annual increase in unit count post-2024.Quote

FAT: FAT Brands is planning to take its sports bar concept Twin Peaks public as early as the second or third quarter of 2024. The IPO timing is subject to market conditions. FAT Brands, known for its acquisition strategy, added Twin Peaks to its portfolio and continues to seek additional brands, particularly in the sandwich, salad, and coffee segments. The company aims to leverage its existing manufacturing capabilities and focus on strategic and EBITDA-accretive opportunities with scalable and profitable brands. For more details, visit the article on Nation's Restaurant News [here]

Earnings: Recent months prove tough for Ark, Good Times, RCI. The three multi-concept restaurant operators showed significant declines, with at least one blaming more serious consumers.

Liability and Insurance: The Nation's Restaurant News article highlights that many restaurant operators lack a full understanding of risks and liabilities, such as safety hazards and cyberattacks. It emphasizes the importance of having proper insurance coverage, like workers’ compensation and cyber liability insurance, to protect against these risks.

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Stat: In the first half of 2023, there was a notable uptick in M&A transactions compared to the end of 2022, but there was a significant drop in the aggregate closed deal value. The total amount was approximately $3.1 billion, marking the lowest for a semi-annual period in the last five years. Middle market M&A activity increased by 8% from the second half of 2022, with 13 closed transactions. However, the deal values decreased by 32% to $640 million​

Farmers: The article from Capital B News discusses the challenges Black farmers face in adapting to climate change, especially with limited support from federal resources. It highlights the struggles of farmers like Anthony “AJ” McKenzie, who had to cease farming due to severe weather impacting his crops. Black farmers often find it difficult to access crucial USDA resources and equipment needed to combat the effects of climate change. Despite historical discrimination from the USDA, there are efforts to improve relations and increase program participation. The article also covers individual stories of Black farmers adapting their practices and seeking alternative livelihoods due to these challenges.

Journal: The article discusses the potential of functional foods in targeting gut health, focusing on how diet influences digestive physiology and metabolic processes. Key areas impacted by diet include satiety, macronutrient breakdown and absorption, sterol metabolism, colonic microflora, and the gut immune system. The intestinal microflora is a primary focus for functional foods, with probiotics (beneficial live bacteria) and prebiotics (non-digestible oligosaccharides promoting beneficial bacteria growth) being highlighted. Benefits of these include alleviating lactose maldigestion, resisting pathogenic bacteria, stimulating the immune system, and potential cancer protection. However, more research is needed to fully understand and develop these functional foods.

FOOD DOLLAR

9 ways Gen Z likes to eat

Stats: Gen Z

1. Diet and Eating Patterns: Approximately 72% of Gen Zers followed a specific diet or eating pattern in the past year, with popular choices including calorie counting (27%), clean eating (26%), mindful eating (19%), and plant-based eating (19%).

2. Snacking Behavior: Around 77% of Gen Z report snacking at least once a day, with 34% snacking two times a day. Common reasons for snacking include hunger or thirst (30%), boredom (27%), and needing more energy (25%).

3. Online Grocery Shopping: Over one-third of Gen Z shops online for groceries at least once a week, significantly more than Baby Boomers (35% vs. 11%). When shopping online, 71% find it easy to locate nutrition information, and 56% pay attention to food and beverage labels.

4. Environmental Concerns: One-third (33%) of Gen Z said that environmental sustainability impacts their decision to buy foods and beverages. Approximately 50% believe that their food choices have a significant or moderate impact on the environment.

5. Health Benefits Sought: The top health benefits sought by Gen Z from foods, beverages, and nutrients include more energy or less fatigue (38%), improved sleep (35%), emotional or mental health (33%), and digestive or gut health (29%).

6. Mindful Eating: Over two in five Gen Z respondents practice mindful or intuitive eating for stress management. However, 40% of Gen Z scored low on a mindfulness index regarding their eating practices.

7. Sustainability in Food Choices: Gen Z is highly interested in vegetarian, vegan, and conscious eating options. A significant portion (73%) believes their generation is most concerned about the environmental impact of food choices.

8. Meat Alternatives: About 19% of Gen Z embraces plant-based eating habits, with meat alternatives becoming increasingly popular. Gen Z's interest in plant-based foods is partly driven by environmental sustainability concerns.

9. Health Consciousness: Gen Z is highly conscious of eating foods that bolster their physical and mental health. They look for menu items made with organic, fresh, and sustainable ingredients.

FOOD DOLLAR

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The summary of restaurant chain acquisitions in 2023 highlights a year marked by significant deals, despite not being the most active in terms of volume. Key points include:

1. Subway's Acquisition by Roark Capital: Subway, after being on the market throughout the year, was acquired by Roark Capital for $9.6 billion, including an earn-out provision. However, this deal faces uncertainty due to an FTC investigation into Roark's extensive ownership.

2. Cava's IPO: Cava, a fast-casual Mediterranean chain, successfully went public, raising $318 million. This was a notable achievement in a challenging market and was followed by Gen Korean BBQ's smaller IPO.

3. Bain Capital Acquires Fogo de Chao: Bain Capital purchased the Brazilian steakhouse chain Fogo de Chao for a reported $1.1 billion, preventing its planned public offering.

4. Darden's Purchase of Ruth's Chris Steak House: In a strategic move, Darden Restaurants acquired Ruth's Chris for $715 million, despite potential challenges due to rising beef prices.

5. Pollo Tropical Sale to Garnett Station Partners: After a difficult search for a buyer, Pollo Tropical was sold to Garnett Station Partners for $225 million.

The year also saw trends such as an emphasis on international expansion, with major chains like McDonald's, KFC, and Papa Johns acquiring stakes in overseas locations. Additionally, there was a rise in the creation of "brand platforms," where small chains were acquired and consolidated under a single umbrella, as seen with 1000 Degrees, Xperience Restaurant Group, and Craveworthy Brands.

Looking forward to the next year, there is anticipation for more activity in the market, with potential names like Insomnia Cookies, Jersey Mike’s, and Panera Brands being involved in deals or public offerings. The completion of the Subway deal also remains a point of interest.