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News & Notes BRIEFS GOURMET NEWS APRIL 2019 www.gourmetnews.com NEWS & NOTES 6 USDA, FDA Agree to Regulate Cell-Cultured "Meat" The U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) and the U.S. Department of Health and Human Services' (HHS) Food and Drug Administration (FDA) have entered into a formal agreement to jointly oversee the production of human food products de- rived from the cells of livestock and poul- try. FSIS and FDA released a formal agree- ment to address the regulatory oversight of human food produced using this new tech- nology. The formal agreement describes the oversight roles and responsibilities for both agencies and how the agencies will collab- orate to regulate the development and entry of these products into commerce. This shared regulatory approach will en- sure that cell-cultured products derived from the cell lines of livestock and poultry are produced safely and are accurately la- beled. "Consumers trust the USDA mark of in- spection to ensure safe, wholesome and ac- curately labeled products," said USDA Deputy Under Secretary for Food Safety Mindy Brashears. "We look forward to con- tinued collaboration with FDA and our stakeholders to safely regulate these new products and ensure parity in labeling." "We recognize that our stakeholders want clarity on how we will move forward with a regulatory regime to ensure the safety and proper labeling of these cell-cul- tured human food products while continu- ing to encourage innovation," said Frank Yiannas, FDA Deputy Commissioner for Food Policy and Response. "Collaboration between USDA and FDA will allow us to draw upon the unique expertise of each agency in addressing the many important technical and regulatory considerations that can arise with the development of an- imal cell-cultured food products for human consumption." Under the formal agreement, the agen- cies agree upon a joint regulatory frame- work wherein FDA oversees cell collection, cell banks, and cell growth and differentia- tion. A transition from FDA to FSIS over- sight will occur during the cell harvest stage. FSIS will oversee the production and labeling of human food products derived from the cells of livestock and poultry. GN German Discounters May be Down, But They're Not Out Last year, traditional grocers in the US braced for the entry of Lidl and an ambi- tious expansion by Aldi, both of which threatened to transform the grocery retail- ing market in North America. Looking back, their impact was largely underwhelm- ing, but a new report out from Bain & Com- pany, "How US Grocers Are Standing Up to Europe's Hard Discounters," cautions that now isn't the time for incumbents to be- come complacent. While the popular nar- rative is that Lidl failed their launch, both they and Aldi continue to make slow and steady gains, which represent a mounting competitive threat for traditional grocers. Bain & Company's recent study of more than 17,400 consumers, conducted in part- nership with ROIRocket, found Lidl and Aldi have used their strong customer advo- cacy and ability to lure consumers into cross shopping as a wedge to build up their presence and popularity in the US: as many as 30 percent of shoppers at mass and tra- ditional grocery stores also regularly shop at Lidl and Aldi. Aldi continues to win over American shoppers. Its consumer advocacy rose to 55 percent in 2018 from 46 percent a year ear- lier. It outperformed in the two areas cus- tomers care about most: "best everyday low prices" and "best value for the money." This has translated into strong market per- formance and slow but steady gains. In a summer 2018 study, Aldi had more than 3 percent share of grocery spending in six of the eight markets studied, and saw share gains in the majority of those markets over the last two years. Similarly, Lidl captured 3 percent or more share in five of the seven markets studied in the summer of 2018, gaining spending from traditional grocers. As both Aldi and Lidl carefully plot their U.S. expansion, traditional grocers will need to similarly plan for dealing with these hard discounters, who remain a formidable com- petitive threat—particularly as they demon- strate an ability to learn as they grow. "Lidl and Aldi are just beginning to flex their competitive muscles," said Mikey Vu, a Partner with Bain & Company's Retail Prac- tice and a co-author of the report. "What we're seeing is that U.S. grocers can effec- tively stand up to these hard discounters, but that they need to remain vigilant and inno- vate in strategic areas to keep their edge." Convenience Counts Major grocers are investing in convenience across the board. From Amazon/Whole Foods resetting customer expectations of what speed can look like with Amazon Go, to Walmart offering free curbside pickup at 1,800 locations retailers are recognizing the need for improving their omnichannel ex- perience and making online to offline shopping a seamless, convenient experi- ence for shoppers. For these traditional grocers, winning on convenience means winning the more valu- able customer. According to Bain & Com- pany's research, 26 percent of respondents report shopping online for groceries—and these customers are spending more money with more frequency than customers whose purchases are limited to physical stores. On average, customers who shop online spend $122.00 per month compared with the $63.00 a month spent by customers who strictly shop in-store. The good news for in- cumbents here is that this is a prime area for differentiation from the hard discounters— only 1 percent of Aldi shoppers surveyed re- port buying groceries online. Digital Differentiates A second area of investment for traditional grocery retailers looking to innovate in 2018 was in the data and analytics space. Kroger acquired a research firm to take its analysis of grocery data to the next level, and Ama- zon is expected to integrate high-frequency, real-time data across platforms. As the cost of data plummets while overall computa- tional power and ability rises, established grocers will need to be increasingly strategic about how and where they use advanced an- alytics and digital technologies. Slightly troubling for incumbent grocers is the frequency at which these technologies are being adopted and prioritized. Accord- ing to Bain & Company's research, only 5 percent of grocers surveyed named analytics as an important priority. As leading grocers gain ground, followers will need to spend exponentially just to stay in the game. "While hard discounters' expansion into the U.S. turned out to be less overwhelming than expected, it still will prove tumultuous for traditional grocers who are slow to dif- ferentiate," said Kent Knudson, a Partner in Bain & Company's retail practice and a co- author of the report. "As we've seen over the past year, the hard discounters know how to pivot their strategies in real-time as they get a feel for the U.S. market. They are still a force to be reckoned with." GN Trend Expert: Consumers Buying Experiences, Not Objects We're now in a consumer-centric period of retail where the consumer is in control, said Tom Mirabile, trend expert for the International Housewares Association (IHA), during "Top Trend 2019: New Consumer Insights and How to Thrive in the Retail Revolution," his annual keynote address at the 2019 International Home + Housewares Show. As a result, housewares suppliers and retailers need to focus all their efforts on what the consumer wants, how the consumer sees themselves, and how the industry can help create solutions for them. "We need to stop looking at objects and start looking at what those objects deliver," said Mirabile. "People aren't buying objects, they're buying experiences." The entirety of Mirabile's presentation is online at www.housewares.org. Owned and operated by IHA, the International Home + Housewares Show was held March 2- 5 at McCormick Place and featured more than 2,200 exhibitors and 60,000 total attendees from 130 countries. Good Omen Bottling, LLC Sweeps Great International Beer, Cider, Mead & Sake Competition Good Omen Bottling, LLC ® , took home gold, silver and bronze medals at the 22nd annual Great International Beer, Cider, Mead, & Sake Competition. In the category for fruit and spice ales, Wild Tonic ® High ABV Kombucha placed first with Backwoods Bliss™ Bourbon-aged Jun Kombucha, second with Strawberry Blood Orange Jun Kombucha and third with Hoppy Buzz™ Jun Kombucha. St. Pierre Expands Imported French Croissants Portfolio St. Pierre is expanding its portfolio with new full-sized Butter Croissants and Chocolate Croissants. The croissants are individually- wrapped and branded in packs of eight with a suggested retail price of $4.99. Made in France using high-quality ingredients and classic techniques, the new croissants reflect the brand's commitment to producing authentic European-inspired bakery items. Since the cronut debuted several years ago, the croissant has been slowly gaining traction as a versatile on-trend pastry and has been the source of inspiration for new croissant concepts like the Croiffle and the Cinnamon Croissant Loaf. Hispanic Culinary Celebration Dates Announced ¡Latin Food Fest! celebrates its 7th annual Hispanic culinary celebration March 29-30 in Los Angeles, California, and August 16-17 in San Diego, California. With more than 20,000 attendees, ¡Latin Food Fest! is California's largest food festival. For information about how to join the fun, email alice@latinfoodfest.com.