UNFI completes SUPERVALU acquisition

Image result for unfi“United Natural Foods Inc. closed its $2.9 billion purchase of Supervalu Inc. on Monday, with Supervalu shares disappearing from the New York Stock Exchange as the first sign of the completed takeover.

In coming months, United Natural aims to sell Supervalu’s grocery store chains, including Cub Foods, and narrow its business to wholesale distribution similar to its own.

United Natural Foods (UNFI), based in Providence, R.I., is the nation’s largest distributor of organic and natural foods. With Supervalu, the company will more than double its size and expand its reach into traditional foods and grocery stores.

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Organic Food Joins the GMO Scuffle

Last week, we discussed the new law that Congress and President Obama passed that would require GMO labeling, and the industry pushback against the bill.  This week, the story continues with organic food producers who are roiled by non-organic but non-GMO packaging claims.

In the United States, “Organic” labeling laws are very strict and can require hefty investments in infrastructure and licensing.  However, “non-GMO” labels–not so much.  For organic food producers, this has become an unsettling situation, because annual sales of the Non-GMO Project-labeled food have skyrocketed from $7 billion two years ago to $16 billion today.  Meanwhile, the Non-GMO Project products tends to cost less than organic.

Thus, organic food companies are beginning to speak out with concerns, even though many of the first companies involved with the Non-GMO Project are in fact organic producers.  The Non-GMO Project started when organic producers wanted to test their foods for GMOs–a step not required by Organic labeling laws.

For the consumer, this creates a dissonance.  Most shoppers aren’t fully aware of the difference in expectations, or that the FDA has repeatedly stated that there is no health benefit to avoiding GMOs. “It’s a little frustrating, to be honest,” says Jesse LaFlamme, CEO and owner of Pete and Gerry’s Organic Eggs. “OK, it’s great that there’s a non-GMO symbol on there. But do you understand that that product might have been produced with pesticides, antibiotics, and with no regard for animal welfare?”

Laura Batcha, executive director of the Organic Trade Association, puts it this way: “Non-GMO is agriculture before GMOs were introduced, which is still chemical agriculture.”

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Major Producers Paying Farmers to Go Organic

With consumer demand for organic foods now outpacing supply, major companies like Kellogg’s and General Mills are now taking the next logical step to meet that demand: paying farmers to go organic. The move makes perfect sense from a profit perspective; organic foods are now at a 47% premium, and their sales grew 11% last year (4 times the growth industry-wide). Experts say this growth would have been even greater, if there had been more organic food to actually sell.

Given enough time, supply should theoretically increase on its own, but the large up-front costs associated with organic certification are a major hurdle for current conventional farmers. Inspection fees for the federally regulated organic label are paid by growers, who also have to cover the higher labor costs associated with organic farming methods when they abandon synthetic pesticides. Yields are also lower, which makes the switch a risky move as well. So Big Food is in some cases bridging the gap, providing start-up funding to help farmers transition and paying a premium for foods during that transitional phase.

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Organic Food Waste Bill

In efforts to achieve zero waste in landfills by 2030, iStock-9013928_Kitchen-Waste-Composting_s3x4.jpg.rend.hgtvcom.1280.1707Mayor Bill de Blasio has proposed a bill that would require businesses to separate food waste and regular trash. Hotels, arenas and large-scale restaurants would be required to create systems and comply to this proposal regularly.  The regulation applies to restaurants in hotels with more than 150 rooms, vendors in arenas and stadiums with seating capacity of at least 15,000 people, food manufacturers with a floor area of at least 25,000 square feet and wholesalers with at least 20,000 square feet. Mayor de Blasio believes “The commercial establishments in today’s proposal are already recycling plastics and metals, and by additionally recycling organic material, they will significantly contribute to reducing our city’s waste stream.” Exempt from this regulation are other food businesses like grocery stores, caterers, normal-sized restaurants and fast-food establishments. It is deemed that the sanitation department is set to publish this rule over the summer and is subjected to start after a 6-month grace period for businesses. Businesses will be given the option to arrange for collection by a private carter, transport organic waste themselves, or compost on-site, subject to compliance with the city’s sewer system. Business will be entirely liable for all costs and challenges associated with composting- space, price, arrangement.

For more information on the bill, click here

Whole Foods Announces a Whole New Concept

Popular sustainable grocer Whole Foods announced today that they are currently working on a sister concept that will provide budget friendly option for Millennials. The new concept will offer the same core values of Whole Foods, providing organic, sustainable options but with out the premium price tag. Whole Food’s co- CEO, Walter Robb states that their goal is to create a “uniquely branded store concept unlike anything that currently exists in the marketplace.”

Whole Food’s has often faced criticism for their high prices and have even been teased with the nickname “Whole Paycheck” as many cannot afford to shop there. Additional details about the chain will be released to the public before Labor Day and sources say that the new chain has the potential to be just as big as the original Whole Foods concept.

Trends in the industry show that healthy is what consumers want and companies are willing to do whatever it takes to get customers in the door. As we previously posted earlier in the week Panera Bread joined the vast list of food companies vowing to clean up their menus. Operations are removing artificial ingredients from their menus, sourcing food that is free of GMO’s and introducing healthier options.

To read more about Whole Food’s new concept, click here

Big Gains for Organic Food

In 2014, US sales of organic food increased by 11%, to reach a total of $35.9 billion.  The Organic Trade Association, which released the survey, also noted that organic foods accounted for 5% of total foods sales.  Produce, which accounts for 36% of organic food sales rose $13 billion–a 12% increase over 2013.

Regionally, the rise was unilateral;  while the West Coast and Northeast purchase nearly 90% of their groceries from organic sources, the increase in sales was seen everywhere.  “We really moved beyond… the old assumptions about organic being niche and having sort of a cultural blanket over it,” said chief executive of the OTA, Laura Batcha.  “O.T.A.’s consumer survey has… found that organic doesn’t have any demographic… regional or partisan boundaries.”

Batcha noted also that the growth was “striking” because of major shortages in supply–less than 1% of farm acreage in the US is devoted to organic agriculture.  What was once the domain of specialty retailers like Whole Foods, organic foods have now gone mainstream: Walmart started offering organic products in 2013, and eight of ten parents claim to buy organic products.

In New York City, the rise is most apparent with the expansion of concepts such as Organic Avenue and Digg Inn.  Organic Avenue raised almost $10 million in 2012, and closed another round in 2013 for an undisclosed amount.

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Darrow’s: Farm Fresh Takeout Enterprise

115 East 18th St (Union Square)        Tel. 212.321.0997

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Their Success…The increased aversion to processed, unhealthy fast food is causing New York City diners to become more and more aware of their health and what they are putting into their bodies. Darrow’s has made it its mission to provide diners with an abundance of healthy options without being entirely vegan, vegetarian or raw. Health and nutrition is at the very core of this operation with a menu that consists of healthy salads and sandwiches, side dishes, and plates geared towards specific health benefits; ie. Antioxidant Plate, Protein Plate, Immunity Plate or Detox Plate.

Chefs Taylor Thorne and David Kupperberg, who had already been familiar with creating predominantly plant-based recipes, created the nutritious recipes at Darrow’s with the assistance of nutritionist Julie Starr. This team worked hard to create and develop a healthy yet flexible menu. In keeping with the ‘farm fresh’ motto, Darrow’s sources as much as they can from local farmers markets, including their neighboring Union Square Green Market. Darrow’s currently serves breakfast, lunch and dinner with dessert options coming soon!

The two-story space consists of a take-out counter, juice bar and grab and go on the first floor, and a full-service cocktail bar and dining room on the upper level. For convenience, there are iPads at each of the tables on the upper level if you don’t want to wait in line downstairs. Each of the menu items on the iPad are shown with respective photos and prices, and at the end of the meal the guest can simply swipe their credit card directly at the table. The live plant wall, large windows and reclaimed wood décor give the space a very relaxing and calm vibe.

Take Aways…Darrow’s provides its guests with an array of healthy alternatives that consist of recipes made using nutritious, locally sourced and organic ingredients. Darrow’s mission to provide balanced meals that make the guest feel good about what they are eating is clearly evident. What stands out most about Darrow’s is the flexibility provided by both the menu items and the dining experience.