Tariff Wars and Smuggled Gum

Welcome back Food Junglers. I’m switching the focus of this week’s issue to more business-related themes, with the occasional story on health being dropped in. Apart from the usual earning calls, Trump’s tariffs take centre stage and major food companies get ready for higher ingredient costs. Let’s dig in.

THE BREAKDOWN…

UN Funding: The United Nations’ World Food Programme is closing its southern African bureau that’s been leading a response to the worst drought in the region in four decades as it expects funding from donors such as the US to slump by two fifths.

Coffee Prices: Global coffee traders and roasters say they have slashed their purchases to minimal levels, as the industry reels from a steep surge in prices that suppliers have yet to convince retail stores to accept.

CEO Moves: Kroger CEO Rodney McMullen resigned from the company following a board investigation into his personal conduct, ending a more than four-decade career at the grocery chain.

Obesity Rates: Global rates of obesity are spiralling, with more than half of adults and almost a third of children and young people set to be affected by 2050, according to a new study.

Heinz Alcohol: Kraft Heinz is rolling out its first alcohol product for grocery stores, unveiling a new hard seltzer infused with Crystal Light, a powdered mix traditionally added to water.

Failed M&A: Seven & i Holdings’ founding family said it decided to pull its proposal to privatize the Japanese owner of the 7-Eleven convenience-store chain as it found it difficult to secure enough financing in a short time.

Smuggled Gum: Gum arabic, a vital ingredient used in everything from Coca-Cola to M&M's sweets, is increasingly being trafficked from rebel-held areas of war-torn Sudan, complicating Western companies' efforts to insulate their supply chains from the conflict.

Work Ethic: Starbucks CEO Brian Niccol is delivering a tough-love message to corporate workers: Step it up, get back in the office and take responsibility for improving the company’s performance.

A.I. Makeover: McDonald’s is giving its 43,000 restaurants a technology makeover, starting with internet-connected kitchen equipment, artificial intelligence-enabled drive-throughs, and AI-powered tools for managers.

Pessimistic Outlook: Campbell’s Soup – the maker of soups and snacks says it expects sales to rise 6% to 8% this year, instead of 9% to 11% as previously projected.

Tariff War: China imposed import levies covering $21 billion worth of U.S. agricultural and food products including soybeans, wheat, meat and cotton.

Potential M&A: Mars Inc. sold $26 billion of US high-grade bonds to help fund its acquisition of rival food maker Kellanova, in the biggest US corporate bond sale of the year.

Egg Syndicate: The US Justice Department has opened an investigation into the cause of soaring egg prices, including whether large producers have conspired to raise prices or hold back supply.

Global Food Prices: Global food commodity prices rose in February, driven by higher sugar, dairy, and vegetable oil prices, the Food and Agriculture Organisation (FAO) of the United Nations said last Friday.

CHART OF THE WEEK: