Welcome to Food Week May 31 and the beginning of Pride Month. Counter-intuitive trends in a time of inflation include expensive beer and higher tips. Organic growth has slowed; is this caused by inflation? Consolidated industries are helping drive price increases but, in the case of baby formula, helped cause the shortage. We have a link to the story of a billion pounds of government cheese and much more. Enjoy!
MACRO
Strong jobs report as employment continues to grow. Hospitality a key driver.
Organic food sales grew only 2% in 2021. When you factor in inflation, that is an actual loss of volume. The end of pantry stocking and supply chain may have had an impact but it is worth watching to see where the trend is headed.
While everyone is worried about inflation, there are few signs that people are trading down. Here, beer makers describe the tendency,
The baby formula shortage was largely driven by industry consolidation. When two companies have 80% market share, it only takes one having a problem to mess up the entire industry.
In addition to the loss of life, the Buffalo supermarket murders have left the community without a grocery store.
RESTAURANTS AND FOODSERVICE
The diners may be back but independent restaurants are still digging out from the pandemic. More than 40% are behind on rent.
This will surely fascinate an economist somewhere but increases in tip amounts is outpacing inflation. Do diners think they are bribing workers to stay in restaurants.
Back in the 80s, government cheese was kind of a joke about how federal bureaucracy was out of control. Forty years later there are still more than a billion pounds of cheese in storage. Price support regime makes this fairly inevitable.
