MAD and Another Bankruptcy

Welcome back Food Junglers. It’s now only a matter of days before we find out who takes the top spot at the Oval Office, as the global food industry waits in anticipation. Let’s dig in.

This week:

🍖 Brazilian meatpackers are scolded by environmentalists.

🍽️ Another US restaurant chain declares bankruptcy.

🤑 US politics continues to receive more money from Big Food.

⛑️ The situation in Gaza is not looking much better.

😎 The biggest food conference is BACK in Copenhagen…

CLIMATE
AMAZON’S LAST STAND

Brazil’s environmental protection agency – IBAMA – has imposed a $64 million fine on cattle ranches and meat packers, including the world’s largest, JBS SA, for raising or buying cattle on illegally deforested land in the Amazon rainforest.

IBAMA said it had identified 69 properties that have sold 18,000 heads of cattle raised on deforested land, and 23 meat-packing companies that bought the cattle in the states of Pará and Amazonas

JBS denied such practices, stating that its geospatial monitoring system ensures the company does not acquire from farms involved in illegal deforestation, the invasion of indigenous lands or environmental conservation areas.

ZOOMING OUT: JBS and more than a dozen other major agribusinesses have pledged to eliminate deforestation from their supply chains by 2025.

However, given several corruption scandals particularly in the meat industry, it would not be surprising if those pledges have been regularly ignored.

BUSINESS
TGI BANKRUPT

World-renowned restaurant chain – TGI Fridays – has filed for bankruptcy protection, citing a problematic capital structure and fallout from the COVID-19 pandemic.

The company’s sales declined to $728 million last year, down 15% from the prior year, marking a consistent downward trend that has been evident for the chain over the past few years.

A loan from the Bank of San Antonio, intended to provide funding while TGI Fridays is in bankruptcy, has been lined up. However, all of the restaurant’s franchised operations, which are independently-owned, have stayed out of bankruptcy.

ZOOMING OUT: This is yet another shock that has affected the American food world, as bankruptcy filings by restaurant chains this year are on track to hit the highest levels in decades outside of 2020. And, after TGI Fridays and Red Lobster, I wonder who’s next.

POLICY
A FOOD-POLITICS MIX-UP

New reports show political spending from the food and agriculture sector has increased, with a record $178 million spent on lobbying alone in 2023 in the United States.

Affiliates of the largest chicken processor, Tyson Foods, for example, have spent $866,000 on the current election cycle as of June 30, which is already around 80% of what the company spent during the 2020 election.

The trend is expected to continue in 2024, as the country prepares to recognise its new leader. In fact, the current election cycle is on track to be the costliest in history in nominal dollars.

ZOOMING OUT: With election results looming and an updated farm bill in the works, the biggest companies in the country are fighting to keep their factories churning as cost-effectively as possible.

It would not be dramatic to say that the future of the American food industry could be decided within the coming months.

SUPPLY CHAIN
NO CHANGE IN GAZA

After more than a year of war, farmers in Gaza continue to have their fields damaged by tanks and their equipment destroyed. New reports from the region continue to shed light on the 2.2 million people who are struggling to feed themselves.

So far, the UN Food and Agriculture Organisation found that war has damaged 57% of Gaza’s farmland, destroyed 33% of its greenhouses, and killed 70% of its livestock.

Arif Husain, chief economist at the UN World Food Program, stated, “I don’t know of any place on this planet that has gone through something like this at this scale”.

ZOOMING OUT: An area that once grew eggplants, tomatoes, peppers and more has now been completely isolated, and only 20% of the food aid needed by the inhabitants of Gaza has been delivered.

Rescue operations have now ceased in the wake of a renewed Israeli offensive, so an improvement in the situation seems unlikely.

THE BRIGHT SIDE
MAD IS BACK

On this occasion, I’d like to use the Bright Side space to highlight a seminal event in the food industry: the MAD Symposium. After a five-year hiatus - due to pandemic and economic-related issues - the event is BACK.

Founded by multiple Michelin-star chef René Redzepi, the MAD Symposium brings together the most influential voices in food to discuss the industry's future, from financial pressures on restaurants to climate change’s impact on hospitality.

In what is essentially a food-focused TED conference, the event features talks, demos, and seminars for chefs, executives, students, scientists, botanists and environmentalists alike.

Past events have included talks from industry leaders, such as Shake Shack’s culinary director, Mark Rosati, and legendary food-truck chef Roy Choi. So, if you’re a food industry enthusiast, I highly recommend checking it out! Food Jungle approved ✅

BEFORE YOU GO…

• Dr Pepper has struck a deal to acquire energy-drink maker GHOST for more than $1 billion.

• Starbucks steps up efforts to enforce its return-to-office mandate with a warning: comply with the policy or risk termination.

• A New York woman has sued Subway for misrepresenting their food on their app, claiming that the chain's advertising is "grossly misleading".

• Human bird flu cases in California may be undercounted as farm workers avoid testing due in part to economic concerns.

TAKE A BREAK

Hi there everyone! It’s our pleasure to introduce another newsletter in the food space - BETTER BIOECONOMY - from a food technology enthusiast, Eshan Samaranayake.  

Like the team at Food Jungle, Eshan is doing his absolute best to advertise those who are making food healthier, cleaner, more sustainable, more animal-friendly AND accessible to all.

So, if you are interested in reading more on food tech, go check it out! Food Jungle approved ✅