Chocolate Chess Games: Nestle ups the ante in India after Kraft acquires Cadbury

With Kraft foods recent acquisition of English chocolate giant Cadbury, Nestle SA is moving quickly to improve profits in what is currently their most profitable market.

Cadbury's British pedigree and strong presence in India, both historically and financially, signify a threat to Nestle, but the Swiss conglomerate apparently has a plan in place to ameliorate that empirical significance.

The Times is reporting that Nestle has announced plans to create and R&D facility on India where it will experiment with local flavors towards the goal of creating products that will establish their already strong sales position in one of the globe's most populous nations. 

According to the The Times, Nestle saw a 20% rise in profits throughout their Indian market last year and openly estimates that, over the next 10 years, 45% of their sales will be made in "emerging markets" like India.

Interestingly, Nestle overall is reporting an 18% rise in earnings (EBIT) from last year in the half-yearly earnings report that they released this August.

While it woud be a jump in reasoning to assume that India alone created the almost $1.2 billion difference in earnings for Nestle from last year to this one, it is not so hard to posit that Kraft's purchase of Cadbury has spurred a sudden need for Nestle to reinvest in a market that has provided sales figures of such numeric significance.

We can only hope that this bold R&D move by Nestle will provide American shoppers with a mass-marketed, microwaveable Chicken Tikka Masala, basmati rice and Hot chocolate meal available at supermarkets in the near future.

Or do we?

UPDATE: "Fish Wars" Episode II: Attack of the Salmon Clones

As the FDA's hearings on AquaBounty's genetically modified fish kicked into high gear this week, new and more vociferous arguments were made on both sides of the issue.
CNN.com's "Eatocracy" blog (which has been doing the best reporting on this story) has a story positing the argument from both sides of the scientific perspective.
While many of the arguments discussed in the story that are bing made against AquaBounty's case are presented in our previous post, some scientists make the case that the inherent containment of farming the new strain will prevent any future damage to the eco-system. It's an intriguing point that will have to be explored by the FDA, who plan to announce their ruling in a matter of weeks.

From our perspective though, the question remained as to what the effect would be at restaurants and supermarkets should the FDA approve AquaBounty's request or allow the EU to begin marketing it's genetically altered bluefin internationally.
So, last week we spoke to a local chef, and future host of her own show on The Food Network, Anne Thornton (who admittedly is our cousin) about her take on serving any version of genetically altered fish. As bluefin is a much more hot-button topic amongst NTC restaurants due to its higher marketability, the chef was very keen to discuss it;

"A chef is only as good as her/his ingredients, so I would only use the highest quality ingredients in my food. Farm raised blue fin tuna have been pumped full of hormones so that they reproduce at astronomical levels. I don't use fish, fowl or meat that has been pumped full of hormones or antibiotics. Blue fin is not an unexchangeable good. I think that the food industry should respect the fact that Bluefin in the wild are endangered, and create a demand  for other fish that are similar in taste and texture and can be found in abundance such as Atlantic Char."

Her take is clearly akin to the one voiced by Rick Moonen on salmon last week and goes a step further by identifying other market-worthy fish that would alleviate the burden on North Atlantic salmon and tuna.
So now we have to ask the question, who has the more potent ability to establish new trends in retail "fishmongering" and commercial fishing; chefs and restauranteurs or the FDA?
I guess we'll find out soon...

(Ed note; Ms. Thornton asked that we also mention her TV show "Dessert First with Anne Thornton" debuts Sunday, October 24th at noon on The Food Network. So... check your local times and listings)

New Advances in Genetics and Farming Might Give Atlantic Fish Like Tuna the Actual "Blues"

In late August, Scientists for The EU announced that an experiment, conducted with the Spanish Institute of Oceanography, into breeding Atlantic bluefin tuna in captivity had yielded the successful creation of a genetically modified species.

This new advancement makes bluefin easier to produce, breed to size and cheaper at market allowing the new strain of bluefin to be bigger and cheaper than the popular tuna we know. 


As most of bluefin's appeal has gone beyond its taste to the its relative scarcity and the resulting cachet of its high price both at market an on tables in fine-dining restaurants, it was inevitable that this breakthrough would meet with some resistance.


In reality, The EU's announcement has been a large metaphorical stone thrown into the waters of a scientific and gastronomic argument that is already rippling with growing negativity towards farmed, and often genetically-altered, fish.


A few weeks ago, The New York Times devoted a portion of The Week in Review to an explication of what the ability to farm bluefin will do to the environmental sustainability of commercial fishing throughout the Atlantic. 


And it's not good...


Environmentalists argue that farming bluefin is not only deeply harmful to the ecology of fishing in the ocean but also harmful to the quality of the farmed fish as well. As bluefin will be ranched with other popular species that require different patterns of movement and temperatures, health factors like waste and overfeeding could arise throughout a plethora of farmed fish species.


And bluefin isn't alone. 


A small company named AquaBounty Technologies Inc. based in Waltham, Ma is currently waiting for approval from the Food and Drug Administration to sell their genetically altered Atlantic Salmon species to market. 


AquaBounty's fish has a shorter, multi-seasonal growth period and would be a cheaper alternative at market to salmon that is fished for in the less reliable North Atlantic.


Pressure has been on The FDA from both sides of the decision and the argument to AquaBounty's approval has a lot in common with what is being said against the new species of bluefin.

An instance of the opposition from the restaurant world is celebrity chef Rick Moonen, an authority on seafood ecology in the US and chef/owner of his own seafood restaurant in Las Vegas, who has written an excoriation of AquaBounty and the FDA for cnn.com's "eatocracy" blog. 


Moonen takes an almost vitriolic stance against the FDA's apparent approval of AquaBounty's Atlantic salmon, and even terms the new species "Frankenfish," while warning strongly against the appeal of cost and accelerated growth rate of genetically modified fish;

"In those conditions it becomes necessary to use antibiotics on an already unstable fish in order to control bacterial infections and other diseases -- and to protect the investment of carnivorous fish farming. The byproducts of all this -- a wonderful stew of feces, unconsumed fish food and dead fish called, sweetly, "effluent" -- create a suffocating blanket that spreads across the ocean floor, resulting in a massive dead zone surrounding the farming area. It kills clams, oysters, eel grasses -- where young fish feed and grow -- and more."

Moonen's opinions are echoed throughout the restaurant and retail food industries. 


Most recently, Whole Foods Markets unveiled a color-coded "Sustainability Rating System" for every species of fish that is offered in their seafood sections. Species in the "Red" category are, according to a company press release, described as "suffering from overfishing, or... current fishing methods (that) harm other marine life or habitats." 


Whole Foods is also hoping to use their new rating system towards achieving their (concurrently announced) goal of not having any "Red Rated" fish for offer by Earth Day 2013. 


As the major criticisms of both AquaBounty and The EU's genetic modification programs seem to fit perfectly in Whole Food's "Red Rating" criteria, it appears that the FDA will have a lot of decisions to make before April 22nd, 2013 for Whole Foods and chefs like Moonen to see a turn for the better.

A Looming War Over Yogurt?

According to a story in today's Minneapolis St. Paul Business Journal (it's also been picked up by the AP), General Mills is prepared to fight hard over their right to license the Yoplait yogurt brand that its had the rights to since 1977.
A French company named Sodima, that actually owns and produces Yoplait, is attempting to use what they believe is an "out-clause" in their contract with General Mills and terminate their relationship, effectively ending the Minneapolis-based food giant's ability to market and sell the popular yogurt.
While General Mills will apparently petition with the SEC to hold up the requested divorce, I think it's fair to expect a much lower profile for Yoplait on supermarket shelves in the coming weeks as conglomerates like General Mills have strong ties and agreements with food retailers that allow their brands to be presented more prominently. Without any stake in Yoplait's future "Point of Purchase" sales, General Mills will more than likely allow the yogurt to be moved out of prime eye-lines on shelves throughout the country (if Sodima even finds a way to distribute it all).
It's more than conceivable that devotees of "French Yogurt" will have to look harder for their fix.
Let's just hope the Greeks don't get as combative as the French and pull Fage Yogurt from the coolers as well...
International intrigue indeed.

Welcome to The Gastro Business...

In the coming months we hope to use this space as a place to examine how socio-economic realities and business decisions in financial markets have causal effects, both large and small, on what we eat. Whether we shop for a meal to cook at home for ourselves or choose to have one placed on a table in front of us at a restaurant, our tastes and limitations of choice are being dictated to us by a subtle deluge of market forces that, at first glance, would seem entirely unrelated to the business of food.
Our palates, perceptions and pocketbooks are impacted daily by world events that could have occurred months, or even years, previously.
Or ones that occurred that morning.
By tracking these events and their effects, we can watch them seep inevitably onto our dinner tables from a much more informed perspective.
We hope you'll join us.
-The Editors

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