TORONTO — Civil Works cocktail bar recently opened its doors on the mezzanine level of the city’s newest culinary destination Waterworks Food Hall, located in the revitalized heritage building at 50 Brant St., in Toronto’s King West neighbourhood. A partnership between Woodcliffe Landmark Properties and Nick Kennedy and David Hyunh of Team Civil (behind the award-winning bar Civil Liberties), Civil Works is a stylish cocktail bar that serves up elevated libations enhanced with water from around the world.
“This project is unlike anything we’ve done before — with Civil Works we’re writing a love letter to the working-class roots of this historic landmark while getting to work with Woodcliffe Landmark Properties and their design team. We’re excited to extend our curiosity and nerdiness to the broader Toronto community,” says Kennedy. “Civil Works feels like a world-class hotel lobby that the barbacks and kitchen porters took over. It will be jovial and sincere. And as always, we serve up really good cocktails.”
Kennedy created the menu alongside Elise Hanson, recent winner of the Most Imaginative Bartender competition. The robust narrative driven drink menu features cocktails, martinis, alcohol free drinks, a curated selection of wine and beer, and a special menu of spirits paired with custom water inspired from regions around the world.
Using methods developed by Kennedy, Civil Works demineralizes Toronto tap water and titrates it with minerals to re-balance its flavour profile to match regions from across the globe, allowing them to create water with distinct tastes that compliment specific spirits. As a result, Civil Works serves up premium cocktails and spirit pairings that transport guests’ palates on a global journey. For example, a bourbon and water is poured with water that has the same total minerality as the limestone content in Kentucky’s water.
The 100-seat, 2,000-sq.-ft. cocktail bar’s design, led by Toronto firm Futurestudio, was deeply inspired by the historic venue and features an imaginative Art Deco inspired design, embellished with modern details.
KANSAS CITY, MO. — Shippers of grain, food and other products expect to face better prospects for logistics in 2023, hoping much of the COVID-induced issues are in the past as well as a nationwide strike by railroad workers that was averted by legislative action.
“Logistics as we know it has been spun out of rhythm over the past two years, with supply and demand discrepancies, low reliability, global port congestion, labor shortages, capacity constraints and more all coming together to put pressure on rates,” shipping giant A.P. Moller – Maersk said in a recent report. “While the circle of inflation affecting freight rates and freight rates affecting inflation is set to continue in the short term, the outlook is positive for pressure coming down in the not-too-distant future — albeit not to the levels seen before COVID due to inflation’s impact on operational costs.”
Truck, rail, barge and ocean freight rates don’t always react to broad economic changes in concert. While the entire transportation industry appeared to crumble during COVID, normally any number of factors may affect each mode independently, regionally and in other ways.
The Council of Supply Chain Management Professionals said in its latest Supply Chain Quarterly that freight volumes for sea, air and trucks are expected to decline in 2023, and that freight rates for all three “are on track to drop from their pandemic high points,” noting a “severe rate of contraction in transportation prices measured in November.”
The US Department of Agriculture said in a recent Grains Transportation Report that third-quarter transportation costs for shipping soybeans to China and Europe from both the United States and Brazil declined from the second quarter. During that period, truck rates fell in both countries (with lower diesel fuel prices a factor in the United States) and ocean freight rates declined due to weaker demand for bulk commodities (in part related to COVID lockdowns in China).
In the United States, barge freight rates rose as lower water levels restricted movement on the Mississippi River, and rail freight rates also moved higher. The cost of US shipping corn and soybeans to Japan also declined from the second quarter.
In the United States, lower grain and soybean exports are an influence on freight demand and rates. The USDA forecasts 2022-23 US wheat exports down 3.1% from 2021-22 and down 22% from 2021, corn exports down 16% and 24%, respectively, and soybean exports down 5% and 10%.
“Quarter-to-quarter and year-to-year ocean freight rates decreased mainly because of falling global trade and shrinking demand from Asia for bulk grain products,” the USDA said.
Trade sources also have noted an oversupply of bulk freight capacity.
For ocean freight, not only has volume for bulk commodities decreased, but containers also are in oversupply, potentially leading to “an all-out price war” in 2023, according to one industry expert.
As with ocean freight, trucking capacity remains available, a stark contrast to conditions early in the pandemic.
Many suggest the trucking industry is the best barometer for logistics, even if it may be less important than rail, barge and ocean vessels for agricultural commodities. The American Trucking Association said trucking accounts for about 80% of total freight spending. While more expensive per mile than other modes of transportation due to smaller load volumes, trucks are the key source of “quick” freight movement and the all-important “last mile.”
Spot freight rates (excluding fuel surcharges) for trucks peaked in January 2022 after more than doubling from May 2020 lows, according to DAT Freight and Analytics.
Year-over-year spot truck rates may be down more than 25% in the first quarter of 2023 and may be down 25% to 35% from their January 2022 peak by the end of 2023, Yan Krasov, CFA and partner at William Blair Investment Management, said in a recent Institutional Investment report.
Arrive Logistics forecast spot truck freight rates to hold “relatively stable” in 2023 (after falling in 2022) and contract rates to “normalize,” falling from pandemic highs as freight tonnage declines as economic conditions move toward pre-pandemic levels.
The impact of fuel prices on freight costs to shippers is an unknown for next year. The average on-highway diesel price reported by the Energy Information Administration was $4.754 per gallon as of Dec. 12, down more than $1 per gallon, or 18%, from the late June high of $5.81 per gallon, but still up more than $1 per gallon, or 30%, from a year earlier.
The much-forecast arrival of a recession in 2023 should help reduce freight demand and subsequently freight rates as consumers buy less (although the relationship is far more complicated than that). High freight costs were seen as a major contributor to rising US inflation and now may contribute to helping rein in inflation.
Prosecco has been the main growth engine for imported sparkling wine lately, accounting for more than 10 million case shipments to the U.S. last year, up from fewer than 8 million cases pre-pandemic, according to Impact Databank. Italy’s bubbly makers are ramping up production to meet demand. Last month, more than 500,000 hectoliters (5.6m 9-liter cases) of Prosecco DOC were bottled, a new record, according to the Consorzio di Tutela Prosecco DOC, and representing an increase of 13% year-on-year.
The United States remains the top market for Prosecco DOC sales, the Consorzio added, importing 42.9 million bottles between January and April 2024—up 4.7% compared to the same period in 2023—and making up nearly one-quarter of the 175.3 million bottles exported worldwide in the first four months of the year. The U.K. follows with 33.6 million bottles, Germany with 15.2 million, and France with 12 million bottles.—Daniel Marsteller
CALGARY, ALBERTA — Cargill, along with some of its customers, decided to renew a minimum $400 credit for beef producers certified with the Canadian Roundtable for Sustainable Beef (CRSB).
The program allows for top-up payments of Cargill’s cattle credits for animals processed during 2023 of at least $400. The credit will be paid to CRSB-certified operations regardless of whether their qualifying cattle were sold to Cargill.
“In 2024, CRSB will prioritize identifying long-term solutions to ensure certification provides financial value and enduring benefit to producer participation,” said Ryan Beierbach, chair of the Canadian Roundtable for Sustainable Beef and beef producer from Whitewood, Saskatchewan. “We think the CRSB Certified program is one important tool for the Canadian beef sector to demonstrate continuous improvement, and the CRSB hopes other organizations will formally recognize its value.”
Along with Cargill, other customers are funding the CRSB credit, including Centennial Food Solutions, Gordon Food Service, Intercity Packers, MacGregors Meat & Seafood, McDonald’s Canada, Metro, Recipe Unlimited and Walmart.
“With this funding, we want to recognize the commitment of Canadian producers in ensuring the viability of this program and their dedication to sustainable practices throughout a difficult production year,” said Eliza Clark, sustainability lead for Cargill Protein and Salt. “We are also grateful for the many Cargill customers who have contributed to our combined investment of this initiative. It is their support of programs like the CRSBCertified Sustainable Beef Framework that allows us to create and sustain high standards for sustainability practices across the Canadian beef supply chain.”
CRSB noted that the credit would be provided for another year to “fill the gap” for Canadian beef producers who made the upfront investment of becoming CRSB Certified but did not receive at least $400 credit in financial return for qualifying cattle processed in 2023 as part of the existing qualifying cattle credits.
The information from CRSB noted that producers who received $400 or more in credits last year will not qualify in the latest cycle.
CRSB made it clear that qualified operations do not need to apply separately for this credit and can expect payment to arrive during April 2024 as long as it maintains an active certification status at the beginning of the year.
With 7-Eleven serving value-focused coffee across 85,000 stores globally, the proposed deal for Japan’s Seven & i Holdings would significantly bolster the Canadian convenience store group’s coffee to-go reach
7-Eleven operates 85,000 stores globally, including 23,000 in Japan and approximately 13,000 in the US | Photo credit: 7-Eleven
Canadian convenience store giant Alimentation Couche-Tard has sent a ‘friendly, non-binding proposal’ to acquire 7-Eleven owner Seven & i Holdings Co., Ltd.
The proposed deal for Seven & i would see Couche-Tard acquire 7-Eleven’s 85,000 stores globally, including 23,000 in Japan and approximately 13,000 in the US.
Coffee is a key part of 7-Eleven’s convenience retail offering and its acquisition would significantly boost Alimentation Couche-Tard’s value-focused hot and cold beverage reach.
While Couche-Tard did not disclose the sum of its offer, news of the deal prompted shares of Seven & i to jump by 23% on 19 August 2024, valuing the retail conglomerate at approximately ¥5.6trn ($38bn).
In a press release, Seven & i confirmed it had received the preliminary acquisition proposal and formed a Special Committee of the Board of Directors to review.
Founded in the US in 1927, 7-Eleven began selling fresh-brewed coffee in the US in 1964 and holds claim to inventing the coffee to-go format with ‘coffee by the cup’. Today, 7-Eleven maintains a focus on value, with some beverages costing less than $2 for 7Rewards loyalty members.
In 2014, the convenience chain was reported to be selling more than one million cups of coffee globally every day. According to Fairtrade, 7-Eleven sold 80 million cups of coffee in Australia alone during 2022.
In 2009, the convenience store chain further developed its food and beverage proposition with the launch of 7CAFÉ in Hong Kong, a sit-in café concept serving barista-prepared beverages and hot meals. 7CAFÉ, which serves 100% Rainforest Alliance-certified arabica coffee, is now present within 700 7-Eleven stores in Hong Kong and has also launched Malaysia and Singapore.
In 2023, 7-Eleven rolled out self-serve bean-to-cup coffee machines across its US stores, offering customers a choice of origins, blends and decaf, milks and syrups, alongside a nitro and iced coffee range.
Alimentation Couche-Tard operates more than 16,700 convenience, quick service and petrol station outlets in North America, Europe and Asia through its Circle K, Couche-Tard and Ingo quick-service businesses.
Its largest business, Circle K, is one of the largest convenience brands with a coffee offer in North America, with more than 7,100 stores across the US and a further 2,100 in Canada, serving over 120 million cups of coffee annually via its bean-to-cup self-serve coffee machines.
In January 2023, Circle K launched a nationwide marketing campaign in the US to ‘bust perceptions on convenience store coffee’, with consumers taking part in a blind coffee tasting giving it a ‘resounding vote of confidence’ in its products.
Originally founded in the US, 7-Eleven launched in Japan in 1974. Japanese supermarket chain and Seven-Eleven Japan parent company Ito-Yokado acquired a 70% controlling stake in the business in 1991, before making it a wholly owned subsidiary of its newly formed Seven & i Holdings company in 2005.
Seven & i, which also has interests in supermarkets, financial services, franchised restaurants and entertainment, posted 2023 revenues of ¥17.8trn ($127.2bn).
Data is king, especially as the industry slowly but surely embraces the move towards full digitalisation.
Increased digitalisation, and the mountains of data that comes alongside the transition also requires additional regulation and collaboration.
With this in mind, TFG spoke to Jonathan Dixon, Head of Surveillance at eflow Global.
1. Please give a quick introduction for our readers. Who are you, what is your background?
I’m Jonathan Dixon and I’m Head of Surveillance at eflow Global. In the first part of my career, I worked in business analysis, focusing on data and management information (MI). The second half of my career has been dedicated to trade surveillance. I’ve had the opportunity to work with a range of institutions, including tier-one banks, consultancies, crypto exchanges, and vendors.
Throughout these years, I’ve spearheaded the implementation of trade surveillance systems, the development of comprehensive risk assessments, and building and leading specialist teams.
2. How does eflow Global utilise technology to enhance regulatory compliance and operational efficiency for its clients?
I would say there are several facets to this question. At a high level, we offer trade surveillance, eComms surveillance, best execution, and transaction reporting solutions to fulfil the regulatory obligations that firms face under the likes of the FCA, SEC and FINRA, in addition to specific regulations such as MAR, EMIR Refit and MiFID II, to name just a few.
Our utilisation of technology is relatively novel, particularly through highly configurable, contextual parameterisation. This means we don’t just look at parameters related to potential market abuse, but also the surrounding context. For example, instead of only examining a price movement in a given instrument, we consider the instrument’s volatility over the previous 90 days. This helps us determine if the movements in question are significant relative to their typical behaviour.
Our technology also offers advanced graphical visualisations and highly efficient, automated workflows. These tools facilitate the escalation of alerts between users and management and provide valuable management information. Together, these features help build a truly holistic regulatory solution.
By combining trade surveillance, which is retrospective, with e-comms surveillance, which is prospective, we have created a comprehensive tool for our clients. The trade surveillance element monitors orders placed and trades executed, while the e-comms surveillance tracks communications to identify potential indications of market abuse before it’s taken place. Combining these two perspectives allows us to build a holistic picture that greatly reduces the volume of false positives compliance teams need to review and helps them to get to their risk quicker.
While our technology uses AI and machine learning to improve efficiency, it’s also important to state that we don’t rely on it solely to reduce false positives. This is because we believe in maintaining accountability for setting parameters and thresholds, which helps firms to avoid the pitfall of deferring to a computer’s decisions without explanation. Instead, we provide efficient methods to minimise false positives by analysing market conditions and how trades were executed in context.
3. What are the key challenges that financial institutions face today in terms of compliance?
The first challenge is the size, scale, and scope of the data that firms are dealing with. They are expected to process data from disparate sources and in huge volumes. So, how do they deal with and integrate this data into trade surveillance systems? And how do they then analyse, draw inferences and generate alerts from it?
Each of our regulatory modules are built upon a single system architecture, known as PATH. This is data agnostic, which is critical in addressing these challenges. This means it can consume vast amounts of data from multiple disparate sources and run our trade surveillance, eComms and best execution platforms on top of it. Essentially, we can ingest the data, process it efficiently, and use it to drive all of the required alerts.
When it comes to ensuring firms adhere to regulatory rules, there are two key elements. The first is maintaining compliance by conforming with their risk assessments. While firms must ultimately own this process – by identifying potential risks in their trading activities and conducting assessments to mitigate these risks – eflow provides a platform that facilitates quicker identification of these risks and generates the necessary alerts.
Collaborating with clients is also a step key to share insights from other similar firms, such as buy-side firms and retail brokers, for example. This helps us provide industry-standard guidelines and assist clients on their compliance journey. However, clients must still take responsibility for their own risk management, and our role is to help them identify and address these risks more efficiently.
4. Can you discuss any recent trends in the financial compliance industry and how eflow Global is adapting to these changes?
There are two main points to address here. Firstly, on a general level, it’s crucial for firms to have robust risk assessments and processes in place. This was highlighted by the fines imposed on Citigroup and ADM Investor Services in 2023. These fines were not for actual abuses taking place, but for failing to have adequate risk assessments and processes to mitigate those risks. Citigroup, for example, was fined £27.766 million for not having risk assessments related to algorithmic trading and high-frequency trading.
This does not mean their algorithms were causing market abuse, but rather that they lacked the necessary processes to mitigate potential risks. Regulators like the FCA are not just penalising firms for committing abuse but also for failing to have preventive measures in place.
We help mitigate these risks by providing a platform that inherently supports compliance and risk management. Our system ensures that firms can effectively manage and mitigate their risks, simply by using our technology.
Secondly, regarding the future of technology in regulatory compliance, the FCA’s ongoing Tech Sprint is a significant development. This initiative focuses on how AI and machine learning can solve various problems within the trade surveillance space. I am actively involved in this effort, and it underscores the regulator’s interest in not just current risk mitigation practices but also future capabilities. AI will play a crucial role in this.
While there are concerns about AI being used to perpetrate market abuse, as demonstrated by Apollo Research where AI used insider information to make a trade and then cover it up, the real value lies in using AI to identify causal relationships between different asset classes, products, and markets.
For instance, let’s imagine that an aviation parts supplier has a longstanding relationship with an aeroplane manufacturer. If the manufacturer wins a new global contract that means they’ll be purchasing large volumes of parts from the supplier, the stock price of the supplier is highly likely to increase. The question is whether AI will be sophisticated enough to identify the causal effect of these individual events and join the dots.
By understanding these relationships, AI can help firms identify and mitigate risks more effectively. It’s not about using a black box to decide what alerts should be generated, but about using AI to identify these relationships and get to the root of the risk.
Ultimately, firms need to make a concerted effort to understand their risks and mitigate them effectively using SaaS solutions. While we would like firms to choose eflow’s technology, the key is to use explainable methods to identify and manage risks as efficiently as possible.
ARLINGTON, VA. — Nestle USA, a business unit of Nestle SA, is investing in regenerative agriculture practices across its DiGiorno supply chain to reduce the company’s overall carbon footprint.
Nearly two thirds of the company’s carbon emissions come from ingredient sourcing, which is largely based in agricultural practices, according to the company. The investment will impact over 100,000 acres of wheat-producing farmland, which is nearly double the amount of acreage used to grow the wheat sourced for DiGiorno products.
Nestle has partnerships with ADM and Ardent Mills, the two primary wheat flour suppliers for DiGiorno products, to support wheat farms in Kansas, Missouri, North Dakota and Indiana. The initiative supports Nestle’s plan to achieve net zero emissions by 2050, starting with the goal of sourcing 20% of ingredients from regenerative farmland by 2025 and 50% of ingredients from the same by 2030.
“At Nestle our aim is to help leave the world better than we found it, and as the world’s largest food and beverage company, we have a tremendous opportunity to help create a regenerative, healthy food system while also working with the local farming communities that employ it,” said Steve Presley, chief executive officer, Nestle Zone North America. “To do this we need to find solutions that create shared value throughout the ecosystem — value for us, value for farmers, value for our consumers and value for the planet. This investment in wheat producers is just one example of how we are bringing this commitment to life across our supply chain.”
In an overview of farmers who have implemented regenerative farming practices in 2022, ADM reported that over 50% of participating wheat farms utilized cover crops or live roots, sequestering more than 3,800 metric tonnes of CO₂e. That amount of CO₂e is the equivalent of taking nearly 850 gas-powered cars off the road for a year, according to the company.
Nestle also is reviewing its tomato supply chain by supporting regenerative agriculture verification efforts in partnership with the nonprofit Leading Harvest, with the eventual goal of sourcing sustainably grown tomatoes. Leading Harvest uses their Farmland Management Standard measuring system to monitor and audit 13 key principles of regenerative agriculture, including soil health and conservation of resources.
“Many tomato farmers in our supply chain have already been doing the work to implement regenerative farming practices in their fields, and they’ve made great progress so far,” said Emily Johannes, head of diverse and sustainable sourcing, Nestle USA. “We are now working to verify these efforts throughout the supply chain in a way that is effective and efficient for our brands and the farmers. Third-party verification is a critical component of this work because it helps us, and others, remain accountable.”
MINNEAPOLIS — Seaboard Foods LLC will pay nearly $15 million for two settlements involving pork price-fixing allegations.
The first settlement reached — filed July 17 with the US District Court of Minnesota — detailed $4.96 million in monetary relief for the Commercial and Institutional Indirect Purchaser Plaintiffs (CIIPPs).
The settlement is one of several already reached in this consolidated litigation. The CIIPPs alleged that pork processors, including Seaboard, partnered with data aggregate consultant Agri Stats in a conspiracy to constrain supply and fix the price of pork since at least 2009. Other companies to have reached an agreement with the CIIPPs include JBS USA, Smithfield Foods and Hormel Foods, bringing the total relief to over $59 million with Seaboard’s settlement.
The second and more recent settlement to be reached by Seaboard totaled $10 million. The settlement was filed July 30, also with the US District Court of Minnesota.
According to the court document, the Consumer Indirect Purchaser Plaintiffs (IPPs) named in this lawsuit were the first to file a complaint against the pork industry and have been litigating this case for over five years now.
Similar to the other lawsuit, the Consumer IPPs alleged pork processors, such as Seaboard Foods, stabilized the price and supply of pork by using reports from Agri Stats, the culling of herds and the use of exports.
After this settlement, the Consumer IPPs will have received close to $110 million in relief. Earlier, Hormel settled with $4.465 million, JBS with $20 million and Smithfield with $75 million.
In addition to monetary relief, Seaboard will also provide discovery materials, authenticate documents and provide testimony, as stipulated in the two settlements.
CHICAGO — The US Food and Drug Administration plans updates on sodium reduction targets, the “healthy” claim for food product labels and front-of-pack nutrition information later this year, said James Jones, FDA deputy commissioner of Human Foods, at the IFT FIRST expo in Chicago.
“Nutrition is really a very big priority for us,” Jones said in a July 16 morning keynote at the event. “This is an area where I think some of the things that we are doing will lead the people like yourselves – innovators – to innovate in a way that allows your company or your customers to meet the framework that we’re creating. So, we have a number of activities ongoing in the nutrition space.”
In October 2021, the FDA unveiled voluntary 2.5-year goals to reduce sodium in commercially processed, packaged and prepared foods to reduce excess sodium intake by consumers. The overall target is for an approximately 12% reduction across 164 categories of packaged food, and through the end of April 2024, the results look promising, according to Jones.
“We’ve got data from the first year and a half of the goal, and the data is pretty encouraging,” he said. “We are seeing significant progress towards meeting this goal. This is a voluntary goal. As a regulator, I’m very suspicious of voluntary efforts, but when a voluntary effort works, I’m all in. So, we are going to be issuing a second goal of a similar reduction in the not-too-distant future.”
A paper on the new sodium reduction target is currently being reviewed by the Office of Management and Budget, and the effort stands to be “the first of our major nutrition activities that will hit the street,” likely later this summer or early fall, Jones said.
“I am very hopeful that some of the very smart people in the room here will help either your company or your customers achieve these goals,” he told attendees. “We have seen this work in other countries, where you’ve had these slow, gradual reductions in sodium. The consumer doesn’t even know they’re getting less sodium, which allows your company to manage it much more easily. Even though the reformulation challenge may be very big, the customer aspect of it doesn’t become so difficult because your customer doesn’t notice that the sodium in their diet is going down.
Also scheduled for release from the FDA in the early fall is an updated definition of “what’s eligible for the term ‘healthy’” on packaged food labels, Jones said, noting the new rule will “align much more closely to the Dietary Guidelines for Americans, which has evolved significantly since the first definition was released 30 years ago.”
The FDA in late September 2022 issued a proposed rule to update the definition of “healthy” as a voluntary nutrient content claim, set in 1994. The current definition specifies limits for total fat, saturated fat, cholesterol and sodium, and qualifying foods also must provide at least 10% of the Daily Value for one or more of the nutrients vitamin A, vitamin C, calcium, iron, protein and fiber. In reporting earlier this year on the planned update, the FDA said the proposed changes to the “healthy” claim definition better reflect current nutrition science, federal dietary guidance (namely the 2020-25 Dietary Guidelines for Americans) and the updated Nutrition Facts label.
“We’re then going to follow the definition with the development of a logo,” Jones said. “It’s all voluntary. If you want to use the ‘healthy’ definition because you make foods that are eligible, you can but you don’t have to. One of the things we have lacked heretofore is there’s really no easy way for a consumer to recognize what meets the criteria for ‘healthy’.”
The FDA had issued notices in May 2021 and March 2022 that it was conducting research on a symbol that the food industry can use to label food products that qualify for the proposed “healthy” definition. Such a mark may be “particularly helpful for those with lower nutrition knowledge to identify foods that can be the foundation of a healthy eating pattern,” the agency explained.
“We’re going to develop a logo that – if you choose to and your product is eligible – you will be able to use on your food,” Jones said. “So, consumers will have an easier time recognizing a healthy food because they’ll see a logo that will exist across categories and within categories. We’re very excited about that.”
Later in the fall, the FDA expects to issue a proposed rule on front-of-pack (FOP) labeling for packaged foods, Jones said. The agency has been conducting consumer research, including focus groups in 2022 and 2023, to gather feedback on whether FOP labeling – in tandem with the required Nutrition Facts label – would provide shoppers with convenient “at-a-glance” nutrition information that adds more context in making food purchase decisions. In a note posted earlier this month, the FDA said the findings are under peer review.
“It will identify a number of nutrients – saturated fat, sugar, sodium – and bring some information to the front of the pack,” Jones said. “One of the things that I think all of us know is that consumers make most of their food purchasing decisions in a split second. It is not happening, for most consumers, by turning a (product) around and studying the label. The FDA label is on the back of the package, which is filled with all kinds of useful information. So, by bringing some of this information to the front of the pack, you can help consumers make much more informed choices related to the products that they are buying.”
LONDON — Nestle SA has extended its reign as the world’s most valuable food brand, securing the top spot in Brand Finance’s recently published “Food & Drink 2023” report.
Analyzing factors like brand strength, revenue and royalty rates to determine brand value, Brand Finance’s annual report has consistently ranked the Vevey, Switzerland-based company No. 1 since it was first published in 2015.
“As an iconic global brand, Nestle continues to raise the bar, setting new benchmarks for the industry and inspiring trust among consumers worldwide,” said Savio D’Souza, valuation director for Brand Finance. “With a rich heritage and a portfolio of trusted brands, Nestle has built a legacy of success and an unmatched global reputation.”
Nestle’s brand value increased 8% from $20.8 billion to $22.4 billion over the last year. Brand Finance attributed some of the uptick to strong sales growth across Nestle’s brand portfolio and promising plant-based product innovations, such as whole grain cookie dough from Toll House and new non-dairy milks. In September, the company further explored dairy alternatives through the development and testing of a novel product that was formulated with animal-free dairy protein from Perfect Day.
The report also cited the performance of Nestle’s coffee business, which saw high single-digit growth in organic sales during the first six months of fiscal 2023. Nestle expanded the unit, and its global coffee alliance with Starbucks, following the acquisition of Seattle’s Best Coffee in October. Brand Finance said the company’s Nespresso is the fastest growing non-alcoholic drink brand globally with a 208% value increase, now at $2.9 billion.
“Nestle’s ability to meet evolving consumer preferences, stay ahead of trends, and effectively launch new products has been a driving force behind its continued brand value growth,” Brand Finance said.
Some of the company’s success in identifying consumer preferences comes from its Project Tasty stock-keeping unit (SKU) rationalization program. Nestle began the initiative in 2021 to reduce its portfolio complexity and increase the availability of its high-performing SKUs amid pandemic-era supply chain issues. The program helped identify and eliminate underperformers in Nestle’s catalogue of 100,000 SKUs, of which nearly 33% were generating 1% of total sales, and was subsequently expanded from evaluating individual product lines to entire brands and categories. Project Tasty’s broadened focus is expected to result in a positive impact for fiscal 2023, said Ulf Mark Schneider, chief executive officer of Nestle.
“We are seeing the first expected benefits come in as planned, in particular higher service levels for the company overall and for our high rotation items, in particular,” Schneider said in a conference call on April 25.
After Nestle, Brand Finance ranked Yili as the second most valuable food brand. The Chinese dairy producer has continuously held the position since it overtook Danone in 2020.
Yili’s value gains, rising 17% to $12.4 billion, were fueled by solid domestic sales and improved international revenue. The brand’s value also was aided by the opening of its Global Smart Manufacturing Industrial Park, in Hohhot, China. The facility incorporates some of the world’s most advanced and large-scale technology, according to the report.
“Yili has fostered strong customer loyalty in its local market by consistently delivering products of exceptional quality and perceived health benefits,” Brand Finance said. “Yili’s focus on quality, innovation, and environmental responsibility has contributed to its world-leading reputation in the dairy industry.”
The snack category saw some of the largest growth among food brands, with the segment’s top five brands raising their value by an average of 40%. Four brands from Frito-Lay, a unit of Purchase, NY-based PepsiCo, Inc., were ranked in the upper echelon of snacking, including Lays (also the No. 3 most valuable food brand), Doritos, Cheetos and Tostitos. Want Want, a Chinese rice cracker brand, also was featured in the report’s top five most valuable snack brands.
Among non-alcoholic beverage brands, Coca-Cola Co., Atlanta, once again sits at No. 1. The brand’s value decreased 5% to $33.5 billion in 2023, but it retained its advantage over No. 2 ranked PepsiCo, which had an 11% decline.
“With a rich history, iconic brand story, and a steadfast dedication to customer experience and satisfaction, Coca-Cola has remained a global leader,” D’Souza said. “The brand continues to boost its international reputation and capture the loyalty of generations across the globe through ingenious and powerful marketing campaigns, product evolutions and innovative digital strategies.”
