WASHINGTON, D.C. - After nearly a month of deliberation, a verdict has finally fallen in the case of the Federal Trade Commission’s (FTC) attempt to block the merger between Sysco Corp. and US Foods, and the law has spoken in favor of the FTC.
"The FTC has shown that there is a reasonable probability that the proposed merger will substantially impair competition in the national customer and local broadline markets, and that the equities weigh in favor of injunctive relief," Judge Amit Mehta, U.S. District Court for the District of Columbia, said in a brief opinion, according to a report from Reuters.
The decision, which was announced yesterday afternoon, did not appear to be made lightly. As we previously reported both sides made their closing statements in an already extended trial on May 28th.
The FTC filed the antitrust lawsuit in February after voting that the union of the two largest food distributors in the nation would minimize the margin for competition in the market.
Though it looks as if the matter has been put to rest by Judge Mehta’s decision, the Reuters article stated that it remained unclear if Sysco would appeal the ruling. US Foods did previously state that any further injunction to prevent the deal would result in its backing out of the merger entirely, but neither side has made any definitive comments since the case’s resolution in court.
MEXICO & CA - The grape season in Mexico is wrapping up a strong season, shifting north as growers prepare to harvest in California. With the change in harvest locations just days apart, volume is not an issue as Independence Day approaches.
“We’re getting towards the end of the Mexico season with just Black Seedless and Red Globes left to harvest,” Tom “TW” Wilson, Grape Sales Manager for Giumarra, tells me. “Then we’ll transition to the San Joaquin Valley, which is starting this week. We have an overlap between our import deal from Mexico and the start of California, so it should be a nice, seamless transition.”
Sun World also reported an overlap in growth, saying retailers will want to push grapes during Independence Day week.
“The harvest in Mexico is slowing down. Coachella continues to pack Sugraone, while the area is almost out of Flame Seedless,” Sun World Sales Manager Jason Fuller commented, saying that the transition to the San Joaquin Valley could be tricky as basically all three colors will be available in all three growing regions this week. “Significant volume will become available the first week of July, but there will be available fruit in all areas. This means heavy retail movement will be needed for the Fourth of July ad week to help work through inventory.”
The market is reportedly pretty steady at the moment, with demand and volume balancing for this time of the year, according to George Matoian, Sales and Marketing Director for Visalia Produce.
“Demand is keeping up with supply, and we’re anticipating a strong crop,” George tells me, adding that Visalia, too, is wrapping up its Mexico harvest and moving into the San Joaquin region, with their summer royal black seedless about two weeks ahead of schedule. “It’s about up to par with last year, which was the earliest [harvest] we ever had.”
As of this morning, June 23, 2015, the USDA reported prices out of Mexico crossing through Nogales, Arizona for flame seedless are at $10.95 - $14.95 for large sizes, $9.95 - $12.95 for med-large of bagged 18-pound containers. Black seedless and red globes shipping out of the same locations are both priced at $14.95 - $18.95 for large sizes of bagged 18-pound containers. Large Sugraones of 18-pound bagged containers were priced at $12.95-16.95.
Out of Coachella Valley, California, flame seedless are at $18.95 - $20.95 for med-large sizes of bagged 18-pound containers, while black seedless were priced at $20.95 - $22.95 for med-large sizes of bagged 18-pound containers last week but did not have a price to give as of this week, according to the USDA. Large to extra-large Sugraones of 18-pound bagged containers were priced at $16.95-22.95.
“Demand is good and volume is good from what I’ve heard,” Justin Bedwell, President of Bari Produce, said, telling me that Bari will begin its own harvest in mid-July with heavy emphasis on the back-to-school promotions, which fall right after their peak season in late August-early September.
With the shift from Mexico to California having no lapse in time between harvests, there should be no gap in supply. Because of this, a hungry demand will be needed. Demand that is usually prompted by heat, according to TW, who said warm weather is what gets consumers out and looking to buy.
“You need good weather for demand to be good,” he tells me, which hasn’t been as abundant on the east coast as it has in the western region. “You need warm sunny days for consumers to be out and buying.”
But with forecasts looking to bring on that summer heat, the grape wave could ride along right behind it just after the 4th of July holiday, so stay tuned as we keep you up to date on all the latest in produce market news.
EUROPE - Will Ahold and The Delhaize Group have a deal in the next seven days? Maybe.
As we previously reported, the two retail chains stated that they could settle on a merger agreement by the end of the month, which is rapidly winding down. And while no one has signed on the dotted line just yet, they are in the final stages of negotiations according to a press release.
“Ahold and Delhaize Group would like to stress that while they are in the final stages of negotiations, no definitive agreement on a transaction has been reached,” Ahold said in the statement, adding that it expects to issue a press release on the matter in due course.
The Dutch financial media group Het Financieele Dagblad said that the deal would be structured 60/40, with Ahold gaining a 60 percent stake and Delhaize a 40 percent stake, together creating a group among the 10 largest U.S. retailers. It is estimated the two would be worth about 23 billion euros ($25.73 billion), possessing 6,600 stores worldwide.
According to Reuters, the group, while large, would still be behind market leaders such like Wal-Mart, Costco and Kroger.
A time frame for when Ahold and Delhaize will issue a full release on the topic was not given, however AndNowUKnow will continue to update you on the story as it develops.
AMSTERDAM, THE NETHERLANDS - After 15 years of a fruitful business collaboration, CHEP Poland has honored C.H. Robinson with its “Long Term Business Relationship – The Longest Transportation Cooperation” award during the CHEP anniversary gala in Warsaw, Poland.
“With this award, we want to differentiate C.H. Robinson as a business partner and show how together we changed the supply chain management process in the Polish market,” said Kinga di Salvo, Managing Director of CHEP Poland and Baltics.
After its acquisition by C.H. Robinson in 2012, Apreo Logistics helped to oversee CHEP’s growing domestic business by handling 100 to 200 shipments per year. Today, C.H. Robinson manages nearly 20,000 shipments per year, including domestic transportation, as well as cross border transportation between Poland and the Baltics countries, Czech Republic, Slovakia, and Hungary, according to a press release. The service portfolio has grown to include warehousing services where C.H. Robinson, among others, handles the refurbishing of returned CHEP pallets.
“CHEP Poland is one of our most valued customers in both the domestic and cross border markets,” said Arkadiusz Glinka, Director of Transportation at C.H. Robinson in Central Europe. “For over 12 years, we have grown together as organizations. Being honored with the CHEP award is a catalyst that enlightens our business relationship.”
CHEP works closely with its business associates to improve the supply chain of its customers and develop innovative service offerings that meet customer needs.
ST. LOUIS, MO - Monsanto Chief Executive Hugh Grant is finally firing back at rival Syngenta AG after the company repeatedly has denied Monsanto’s takeover bid, valued roughly at $45 billion.
Grant says he hasn’t at all been discouraged by Syngenta’s denials, continuing, “Despite the pace and the speed and the lack of engagement, I always tell the team I’m the exception because I’m the Scottish optimist. I’m going to be putting energy into putting this over the line.”
Grant has been pursuing the bid since April, as we’ve previously covered, and Monsanto now is lobbying shareholders of both companies. A deal would be “transformative,” Grant told The Wall Street Journal. “We’d reinvent ourselves one more time.”
Yesterday, Syngenta Chairman Michel Demare once again responded to the bid, saying it “significantly undervalues” Syngenta and underestimates the regulatory obstacles the combined super-company would likely face. “Monsanto has endorsed our strategy and has clearly demonstrated that it has great value. The only thing is they’re trying to buy it on the cheap,” Demare continued in his 12-minute addess.
“A serious proposal to buy Syngenta has to be made at full and fair value,” Demare said. “It has to recognize for shareholders the inherent combination benefits and it has to provide a high degree of certainty the transactions will be closed.”
Grant has coveted Syngenta since at least 2011, according to The Wall Street Journal. Sales in Monsanto’s seeds and genetic traits division—which accounts for more than two thirds of its revenue—grew by just 4% last year, compared with a 21% increase in 2004. Its herbicide division grew 13% last year. Monsanto hopes that acquiring Syngenta’s seed business would reignite that sector of their business.
“We’ll figure out another way of doing that,” Grant said. “This isn’t one where you fold up the tent and go back to how things were.”
Grant ended by saying that Monsanto’s pursuit of Syngenta could play out over several months.
PLANT CITY, FL - “Our industry is on the cusp of a major revolution in agriculture and robotics,” Gary Wishnatzki, Co-Founder of Harvest CROO and Owner of Wish Farms, tells me, as we discuss the latest developments with his automated strawberry picker. “We are moving into the next phase of growth with more opportunities on the horizon to enhance the program and offer varying prototypes for strawberry growers.”
As labor and more cost effective in-field and harvesting technologies remain an important part of the conversation, Gary and Bob Pitzer, Chief Technical Officer and Co-Founder, are working to adapt more versatility to their innovation. Harvest CROO machines work with traditional strawberry beds and mimic the way human pickers harvest strawberries.
The harvester is not only going to be picking the berries but also pack the fruit right on the machine, Gary notes.
“There is so much more potential for what we are going to be able to do, in addition to solely picking the strawberries and minimizing time spent in the field. One of the elements we are anticipating is better forecasting of the crop,” Gary says. As the robotic strawberry harvester moves through the plants every few days, it will record images from flowering plants to green berries in order to give the grower a better idea of the current state and timeline of the crop.
In regards to precision agriculture, the machine will also be involved in scouting as it travels through the field, taking images of plants which will then be aligned with a database of hundreds of images that can provide early warnings of things like pest presence which will help growers manage and even reduce pesticide usage.
“Our goal is to identify as many different variables in the early stages of the crop as we can. We hope that these technologies will help improve the health of the crop and minimize harm while saving time and money in the long run,” Gary tells me.
“There has been a tremendous reception for our strawberry harvester among some of the largest strawberry growers in the U.S.,” Gary says. Harvest CROO has opened a funding round for those in the industry that want to invest in the program and have also established an early adopter program which gives investors priority during the initial phases of the launch as well as a 9 percent discount for the first three years.
Right now Gary and Bob’s plan, near term, is to develop an updated version of their picking apparatus which they will roll out on small scale in the coming year with test runs this summer in California. Next winter they will test the updated prototype in Florida.
Gary recently made a trip to California and traveled all of the major strawberry districts in the state to share the program with growers.
“There is a real need for advancements in robotics and everyone we’ve spoken with during this first round of the prototype update is receptive. The demand is so great for a solution to alleviate the labor shortages we are having, and it isn’t just an East Coast or West Coast problem – it’s worldwide,” Gary continues. “Once we get this project streamlined, it will open the doors for other opportunities. Labor related issues are going to be addressed through robotics and why shouldn’t it be us?”
The company currently has 2 patents filed and looks to patent more of their proprietary technology as the program moves forward and new ideas take form.
The essence of the invention is that it has the potential to be applied to other crops. At present, the harvester is only a solution for strawberries, but Harvest CROO’s team of engineers that Gary and Bob have been assembling will be looking to branch out into other categories in the future.
The stars are aligning for advancements in robotics as the technology becomes more available and the need for innovation in agriculture presses on. Stay tuned as we keep you up to date on all things technology.
MISSISSAUGA, ON - This year, Chantler Packaging celebrates its 85th anniversary in the industry.
“We have built some tremendous relationships with our partners in the food industry over the years,” Grant Ferguson, Chantler Packaging’s VP of Sales and Marketing, said in a press release. “There are a variety of customers out there with different needs and we enjoy solving them.”
Starting with two brothers back in 1930 as Chantler and Chantler and selling some of the first injection moulding machinery imported to North America, the company remains a family-run business with Roy Ferguson serving as CEO. According to Chantler Packaging, the business extended from moulding to flexible packaging in the 1960’s for the industrial, floral, and agricultural industries.
After 85 years, the company now packages and ships food for buyers, distributors, and grocery retail chains throughout Canada, USA, Mexico, and Spain. Today, the company stated it continues to use industry insights and expert engineering to develop food packaging solutions.
Developers of PrimePro®, an atmospheric packaging modified to absorb ethylene gas to extend produce shelf-life, and the EnduroPouch™, a package with strong handles using minimal materials, the company defines its brand with strategy and engineered solutions to address concerns about food waste and carbon footprints.
“Low packaging costs cannot simply be the only concern for stakeholders,” Ferguson said. The company stated that it did not miss that this milestone falls when CBC News reports on a recent Value Chain Management International study illustrate food waste cost has increased 15% since 2010, the time of the last study. “Decreasing food waste and lowering carbon footprints are significant factors that save food, the environment, and overall costs in the long run.”
This is an issue that Chantler Packaging said it takes seriously when creating packaging solutions, and will continue to do so.
Congratulations on eight-and-a-half decades in the business!
GRAND JUNCTION, MI - Blueberry growers’ cooperative, MBG Marketing – The Blueberry People, has announced the appointment of Orrin “Larry” Ensfield as the company’s new President and CEO. This announcement comes on the heels of then CEO Bob Hawk turning his resignation in to the MBG Board of Directors, who immediately tapped former Vice President and COO Ensfield.
Board Chairman Bill Fritz commented, “The Board is very pleased to have someone with Larry’s industry and organizational familiarity to step in and take the reins as we continue through the 2015 harvest season and move into the future.”
Ensfield joined MBG in 2008, when he was hired as Director of Operations, adding his 30-years of experience at Campbell Soup Company’s agricultural division, and leading IQF plant operations at Coloma Frozen Foods. According to a press release, Larry has been instrumental in further development of MBG’s fresh market activity, and under his operating leadership, MBG successfully launched two IQF value-added facilities over the past two years.
In an address to the company’s employees, Ensfield stated, “I am honored to accept this position and I anticipate a seamless transition. With the support of the MBG Board, a strong management team, and our dedicated employees, I expect to serve our cooperative’s best interests with a focus on maximizing grower returns.”
In this new role, Ensfield will also serve on the Board of Directors of the Naturipe Farms family of companies on MBG’s behalf.
BOISE, ID - The five-year-long lawsuit between the Associated Wholesale Grocers (AWG) and the United Potato Growers (UPG) has come to a close.
According to a report from the Southeast Missourian, AWG and UPG have come to a settlement agreement in the amount of $25 million, to which U.S. District Judge B. Lynn Winmill in Idaho gave his preliminary approval late last week.
As we’ve previously reported, AWG filed an antitrust lawsuit against UPG in 2010, claiming that the group acts as a potato "cartel," controlling 80 percent of the potato market. According to the Courthouse News Service, the lawsuit also claimed the group used both physical and non-physical intimidation to compel independent growers to join, as well as conspiring to raise prices by limiting production with methods like restricting the number of acres planted.
The Southeast Misourian reports that the defendants continue to deny the claims, stating that they focused on helping their members navigate the fluctuating potato market while running an effective cooperative, and settlement negotiations have continuously tried and failed throughout the years that the case has carried on. With the estimated value of potato sales for the year of 2012 being about $3.7 billion and pages of documents from the defendant's side alone adding to more than 3.5 million pages (105 of which AWG gained access to in March), the closing of the case is no small feat.
Under the agreed settlement, anyone who purchased fresh potatoes without intentions for resale in a 10-year timespan from stores in the following states will be eligible for part of a $5.5 million reprimand:
- Arizona
- California
- Florida
- Iowa
- Kansas
- Massachusetts
- Michigan
- Minnesota
- Nevada
- New York
- North Carolina
- Tennessee
- Vermont
- Wisconsin
Anyone in the U.S. who purchased potatoes from the growing groups directly, or their members and subsidiaries, will soon be eligible for part of a $19.5 million reprimand.
In addition, the growers groups are barred from restricting acreage or taking other actions to reduce potato crops grown by members for seven years.
CALIFORNIA - AmazonFresh is now being made available to Amazon Prime members in select markets for a $7.99 per delivery fee, on top of its $99 per year Amazon Prime membership. This new pricing tier for AmazonFresh is being used as a way make the service more appealing to an audience that might not otherwise think they could afford the service. Prior to this change, the cost for an AmazonFresh Prime membership was a heftier $299 per year.
You can check out the pricing plans on the AmazonFresh website now, where Prime members who pay $99 per year to participate in Amazon’s long-running membership rewards program can now pay for AmazonFresh on a per-order basis. The website says that for orders over $50, the cost per delivery is now $7.99. The previous pricing plan I mentioned where users pay $299-a-year, also known as Prime Fresh, includes free delivery on orders over $50. Amazon recommends that customers who buy groceries more than twice a month are best served by Prime Fresh.
Those who subscribe to AmazonFresh will receive all Prime benefits in addition to the grocery sevice, including the free two-day shipping on millions of items, Prime Music, Prime Instant Video, Kindle Lending Library access and more. Currently, AmazonFresh is available in select zip codes within the New York metro area, Philadelphia metro area, Seattle, and both Northern and Southern California. The new pricing plan that allows Prime members to try the service without the more expensive subscription is currently only showing up for those in California, however.
In the other regions, the site instead notes that AmazonFresh is still free to all Prime members through September, after which they’ll be asked to sign up for the “upgraded tier of Amazon Prime,” which refers to the $299 annual fee.