Despite Drops in World Food Price Index, Inflation Remains Stubborn

Last Week’s Moves

BLS Cash Index  559.12 (-0.06%)          BLS Industrials Index 563.25 (-0.80%)        

BLS Foodstuffs Index 552.77 (+1.02%) BLS Fats and Oils Index 832.47 (+2.92%)   

BLS Livestock Index 686.44 (+0.43%)

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Welcome to your weekly food & beverage report, where we cover everything you’ll need to know for the week ahead. This week, the United Nations food agency sees a drop in the world food price index, Biden’s federal marijuana pardon has food and bev companies feeling optimistic, and eggs continue to have a record year. Let’s dig in. 

September marked the sixth consecutive month of drops in the World Food Price Index 

After posting all-time highs earlier this year, the United Nations food agency’s world price index continued its decline, with September marking its sixth consecutive month of price drops. According to Reuters, the latest drop in the index can be attributed to a 6.6% month-on-month fall in vegetable oil prices, combined with increased supplies and lower crude oil prices. Despite The Food and Agriculture Organization’s (FAO) data showing continual drops in the index, this September’s prices are still 5.5% higher than this time last year.

• Some notable exceptions… Inflation is still here, and is the main culprit behind sugar, dairy, and meat prices stubbornly holding their price tags, dropping by less than a percentage point. The FAO’s cereal price index rose 1.5% month-on-month this past September, as wheat prices climbed 2.2% due to concerns of dry crop conditions in both the US and Argentina. Recent severe flooding in Pakistan bumped rice prices up by 2.2%, as speculation to the degree of the full impact still circles. 
   

President Biden’s decriminalization of marijuana at the federal level has food and beverage companies riding high– or feeling burnt out

Down and out… In its second-quarter earnings call, Constellation Brands (STZ) reported a writedown of $1.1 billion in the value of its investment in Canopy Growth (CGC). Constellation Brands holds nearly 40% stake in Canopy Growth, a cannabis manufacturing company that’s feeling bolstered by President Biden’s announcement pardoning all prior federal marijuana simple possession offenses. 

• A ripple effect… Prior to the President’s announcement, federal legislation had been slow to see action. Delays prevented growth in the cannabis category that Constellation Brands and other companies were hoping to see. 

Iconic and chronic… West-coast rapper, entrepreneur, and most recently “your favorite uncle for shizzle,” Snoop Dogg is diving deeper into the food and beverage industry. His most recent launch introduces Snazzle Os to the market, a new onion ring-esque marijuana-infused snack containing 100mg of THC per bag. Snazzle Os represent the culmination of Mr. Dogg’s partnership with Tsumo Snacks, a company that makes savory snack-style cannabis edibles. 

• Keeping it local… Perhaps a nod to his home state, Snazzle Os are currently only available in California. More broad-reaching however are the rapper’s other business endeavors, including Indoggo gin (created in partnership with Trusted Spirits), an addition to the 19 Crimes wine brand with his California blend, and just this August, the premier of his Snoop Loopz cereal. 

Other stories…

• What the cluck… Due to low inventories, high demand, and a brutally persistent virus, egg prices have hit their third all-time-high this year, currently sitting at $4.18 in the midwest.  
• Getting in the spirit... Boston Beer Co.’s Truly Hard Seltzer will be launching the brand’s first spirits-based seltzer, Truly Vodka Seltzer, available nationally on October 11. 
• Slow but steady… According to an Intouch Insight survey, compared to other fast food restaurant drive-thrus, Chick-fil-a is the slowest– but yet still the most popular option for consumers. 

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input. 

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