As food pricing concerns dominate national conversations, the issue impacts adjacent spaces like a grocery chain megamerger, labor and union activity, and even fast-food buying habits.

  • The proposed Kroger-Albertsons merger racks up legal fees.
  • Strikes and unionization lock up the labor landscape.
  • Convenience and value plays fill up the drive-thru lanes.

“Your body can make carbohydrates. Fat is important too, but we have no problem getting it … Protein is where the value is.”

Peter Rahal, Founder, RXBar (Food Dive)

Merging Developments

As we approach the two-year anniversary of Kroger announcing plans to buy rival grocer Albertsons, the merger date is nowhere in sight. The two companies only recently agreed to put the plans on hold while addressing antitrust lawsuits from the U.S. Federal Trade Commision (FTC), Colorado and Washington state.

  • On August 26, Kroger and Albertsons squared off with the FTC in a federal district court in Portland, Oregon. Associated Press reporter Dee-Ann Durbin distilled the two sides of the case: Kroger and Albertsons seek to compete with Walmart and Costco; the FTC worries that there will be less competition for the rest of the grocery market.
  • Kroger contested the constitutionality of FTC’s lawsuit because the trial is being conducted by the FTC, rather than the judicial branch. The Supreme Court threw out a case under similar circumstances earlier this year.
  • Nevertheless, Kroger has taken several steps to appease regulators, promising to cut prices by $1 billion at Albertsons stores (Bloomberg). BoiseDev editor Don Day calculated the price cuts would amount to roughly 4¢ per shopping trip. But how much could Kroger cut prices if it didn’t employ so many lawyers and bankers?
  • The Wall Street Journal covered the pivotal role of C&S Wholesale Grocers in the merger. C&S, which operates Piggly Wiggly and Grand Union stores primarily in the Southeast, will buy 579 stores to maintain competition in local markets. The sale would make C&S the eighth-largest grocer in the U.S.
  • The New York Times highlighted how the FTC is using the labor market as an indicator of whether the deal will be competitive. Of particular concern is that past mergers have resulted in job losses as spun-off stores have a high rate of failure.

Our Takeaway: There’s ample reason for regulators to be concerned about a loss of competition when the two chains merge, but the new company will still be a far cry from Walmart’s 23.6% share of the grocery market.

State of the Unions

Strikes and unionization are two topics that continue to populate the labor conversation in every corner of food production from transportation to foodservice to specialty crops.

  • More than 9,000 Canadian National rail workers returned to work after a work stoppage that ended on August 23. Several food and ag sources monitored the situation carefully as grain, fertilizer and other agricultural goods were at risk. “Moody’s has estimated the stoppage could cost Canada more than $250 million per day and disrupt shipments of vital products,” reported Progressive Grocer. 
  • The Scoop posted a detailed overview of the entire Canadian rail worker situation. 
  • Teamsters shared two recent union wins at natural foods distributor UNFI and Mondelēz: “Greedy Mondelēz executives thought they could bully us into accepting a subpar deal, but we held their feet to the fire. I want to thank and congratulate everyone involved.”
  • Agri-Pulse detailed perspectives concerning a recent federal court ruling that deemed unionization protections unconstitutional for migrant workers on H-2A visas.This was a feud between the Biden administration (Department of Labor) and a handful of West Coast growers groups over whether migrant workers holding visas for temporary labor can unionize. 
  • Foodservice Director reported on a Cornell University dining workers strike. Students at the Ivy League campus in Ithaca, New York, will not receive hot meals for lunch until the dispute over a labor contract is settled. We heard gazpacho pairs well with Botany 101. 

Our Takeaway: We’re seeing a second wave of post-pandemic collective bargaining. From the workers’ side, it’s keeping pace with inflation. From the employers’ side, it’s adding to concerns around an economic slowdown.

Hot-to-go

Foodservice companies are finding new ways to serve up customer satisfaction in an increasingly competitive industry. Here are a few ways companies are delivering on value and convenience:

  • Chick-fil-A redefines fast-food convenience with bold two-story drive-thru concept | QSR Magazine
  • Opinion | Starbucks and the curse of the highly complicated coffee order | The New York Times
  • Ditching the drive-thru for on-the-go healthy groceries | Progressive Grocer
  • KFC’s saucy summer continues with the Sauce Serve Truck | Little Black Book
  • How Wingstop is outpacing its fast-food competitors | CNBC
  • Checkers & Rally’s are the latest fast-food chains to jump into the $5 meal deal race | Fortune
  • Why CAVA rejects the ‘value wars’ label in today’s restaurant landscape | QSR
  • Walmart+ launches first-ever dining benefit with Burger King | Walmart
  • Why Starbucks, Dunkin’ Donuts and KFC are teaming up to test reusable cups | Trellis

Worth Reading

Cracking the (Bar)code

As retailers seek new ways to optimize inventory management and drive consumer sales, The Wall Street Journal examined why QR codes are poised to supplant barcodes as the standard for product packaging. Put simply, QR codes can store significantly more data than their outdated counterpart, and multiple consumer brands have already successfully tested this technology. However, hardware requirements and consumer apathy are expected to delay industrywide rollouts for at least a few more years.

Vertical Convenience

7-Eleven and indoor vertical farming company Plenty Unlimited entered a partnership to offer more fresh produce options in convenience stores in California. Agriculture Dive reported that by using minimal soil and special lighting, Plenty claims its vertical farms can yield up to 350 times more produce per acre and reduce water use by up to 90% compared with traditional farming.

Something’s Fishy

Despite salmon being a “nutritional powerhouse,” Food Manufacturing detailed recent lobbyist concerns regarding ambiguous fish farming practices. The labeling of fish to consumers as wild-caught salmon is typically well-marked, but farmed fish labels operate in a hazy area. In response, the USDA will propose new standards for farming fish, including salmon and other marine species, that outline what constitutes organic fish farming. With other countries asking similar questions, global standards for fish farming may be next on the discussion block.

Very Pro Protein

Food Dive interviewed Peter Rahal, founder of RXBar, about the launch of his new brand David, a protein snack bar brand. With 28 grams of protein, modest calories and zero sugar, Rahal aims to make David the top protein bar in America. After watching the brand he sold to Kellanova struggle to respond to the rise of keto diets, he’s all in on the macronutrient, saying “I’m building a business that is less fragile in the face of trends.” Aside from the trend toward grab-and-go nutrition, of course.

Artificially Illustrated
AN AI-GENERATED IMAGINING OF THIS WEEK’S TRENDING TOPICS
Mashed potatoes and gravy on a cone
Ding, ding, ding! “The Sauce Serve Truck is coming, THE SAUCE SERVE TRUCK IS COOOMMMIIINNNGGG!!!”

Midjourney illustration by Heyward Coleman.