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kraft heinz
Big Food Raking in Huge Profits From Price Hikes as US Hunger Persists: Analysis
"It's shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes."
May 10, 2023
As the U.S. government on Wednesday released its latest inflation report, the watchdog Accountable.US put out a new analysis detailing how Americans face food insecurity while major food corporations are padding their profits with price hikes.
"Big Food's staggering increase in earnings shows they did not need to raise prices so high on consumers but did so anyway to maximize record profits," said Liz Zelnick, director of Economic Security and Corporate Power at Accountable.US, in a statement.
"It's shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes," she added. "It's clear that the food industry will not hold itself accountable. It's time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families."
"It's time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families."
The Accountable.US report takes aim at General Mills, Kraft Heinz, and Mondelez—three of the top "at home" food companies in the United States based on market capitalization—focusing on January through March, the first quarter of this calendar year.
General Mills is one of a few companies that dominate the U.S. breakfast cereal market, with brands including Cocoa Puffs, Cookie Crisp, and Lucky Charms. Kraft Heinz is known for not only ketchup and macaroni and cheese but also Jell-O, Kool-Aid, and Philadelphia Cream Cheese. Mondelez's top brands include Chips Ahoy! and belVita.
The companies' combined net earnings for the quarter rose by 51% year-over-year (YoY) to a combined $3.47 billion, and the trio collectively spent over $1.3 billion on shareholder dividends, Accountable.US found. Of the three, only General Mills saw its earnings drop from the first three months of 2022 to the same period in 2023—though the company still spent more on dividends this year compared with last year.
The first three months of this calendar year were the third quarter of General Mills' 2023 fiscal year. Accountable.US cited Reuters' March 23 report that the company "raised its fiscal 2023 forecasts for a fourth time after beating estimates for quarterly results, helped by price increases and steady demand for its packaged-food products."
The watchdog also highlighted that General Mills "saw its net earnings increase by nearly $2 billion YoY for the first nine months of FY 2023, as the company spent over $2.16 billion on its shareholders through a combination of dividends and stock buybacks."
For Kraft Heinz, the watchdog referenced Reutersreporting earlier this month that it "raised its full-year profit forecast on Wednesday on the back of higher prices and sustained demand for its packaged food items." The analysis adds that the company "saw its Q1 2023 net income increase by 7.1% YoY to $837 million and spent $491 million on shareholder dividends."
Accountable.US noted that during the first quarter of this year, "Mondelez—which touted price hikes for its double-digit increases in revenue and earnings—returned $928 million to shareholders through a combination of dividends and stock buybacks, after reporting $2.1 billion in profits, a 143% increase from last year."
\u201cAs the #Fed mulls even more rate hikes, #Powell needs to finally recognize rate hikes will do NOTHING to address the MAIN driver of inflation: corporate greed. Rate hikes will only put more banks on the brink of collapse and risk massive unemployment. https://t.co/y2JIqScCUM\u201d— Ryan Summers (@Ryan Summers) 1683728189
The group used its new analysis to call out the Federal Reserve, saying that "the findings are the most recent evidence that while inflation is slowing, the Fed's single-minded policy of repeated interest rate hikes [is] doing little to contain the primary driver of rising costs—corporate greed."
The report also emphasizes recent admissions from economists that corporate greed is driving inflation—which progressive organizations and experts have been stressing for months in response to the Fed's interest rate hikes.
As the analysis points out, The Wall Street Journalreported earlier this month:
Consumers have... been unusually willing to accept higher prices lately. Paul Donovan, chief economist at UBS Global Wealth Management, said businesses are betting that consumers will go along because they know about supply bottlenecks and higher energy prices.
"They are confident that they can convince consumers that it isn't their fault, and it won't damage their brand," Mr. Donovan said.
According to the consumer price index report released Wednesday by the U.S. Bureau of Labor Statistics, "the food at home index fell 0.2%" from March to April. While cereals and bakery products saw a slight increase, there were decreases for milk; nonalcoholic beverages; fruits and vegetables; and meats, poultry, fish, and eggs.
However, the bureau's report also provides context from the past year: "The food at home index rose 7.1% over the last 12 months. The index for cereals and bakery products rose 12.4% over the 12 months ending in April. The remaining major grocery store food groups posted increases ranging from 2.0% (fruits and vegetables) to 10.4% (other food at home)."
The Accountable.US analysis notes that in January and February, "food-equity advocates warned that 'food insecurity for millions of American consumers is worsening' despite overall inflation easing, with higher numbers of food stamp recipients reporting 'skipping meals, eating less, and going to food banks to manage costs.'"
The U.S. Census Bureau has estimated throughout 2023 that based on household surveys, roughly 25 million people sometimes or often did not have enough to eat in the previous seven days. The U.S. Department of Agriculture reports that nearly 34 million people live in food-insecure households—though research published last month suggests that figure is likely an undercount.
Additionally, food insecurity figures don't provide a full picture of how many families struggle to stay fed, as Claire Babineaux-Fontenot, CEO of food bank network Feeding America, explained to CNN in March: "The nuance is that some people are not 'food insecure' because they get access to the charitable food system. That doesn't mean they're able to achieve self-sufficiency."
U.S. households are also contending with losing assistance related to the Covid-19 pandemic—including the end of the expanded child tax credit, universal free school meals, and increased Supplemental Nutrition Assistance Program (SNAP) benefits, formerly known as food stamps.
As Common Dreams reported in late February, while experts warned that the end to boosted SNAP benefits would cause a rise in U.S. poverty, Public Citizen president Robert Weissman declared that "a decent society would not let this happen."
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Global Investors to Big Food: Cut Meat to Avoid 'Protein Bubble'
Greenhouse gas emissions, resource depletion, and growing antibiotic resistance are just a few of risks associated with factory farming
Sep 26, 2016
Citing the environmental and public health risks of factory farming, a $1.25 trillion coalition of multinational investors has called on 16 global food corporations--including Kraft Heinz, Nestle, Unilever, Tesco, and Walmart--to cut their reliance on meat and diversify into plant-based sources of protein.
The campaign launched Monday is backed by a new briefing from the FAIRR (Farm Animal Investment Risk & Return) Initiative and responsible investment organization ShareAction, entitled, The Future of Food: The Investment Case for a Protein Shake-Up (pdf).
Our current food system is unsustainable, the report states, listing greenhouse gas emissions, resource depletion, and growing antibiotic resistance as among the negative consequences of "the factory farming model and the increasing overconsumption of animal products."
In fact, the briefing warns, if livestock production and consumption are not swiftly reduced, it will be impossible to reach the goals set out in the Paris climate agreement. An Oxford University study released in March projected that by 2050, food-related greenhouse gas emissions could account for fully half the emissions the world can afford if global warming is to be limited to less than 2degC.
According to the FAIRR/ShareAction report:
[T]he livestock sector currently accounts for 14.5 percent of global anthropogenic GHG emissions: more than the global transport sector. While there are certainly improvements to be made in production and distribution efficiencies, research indicates that these have only a small part to play; with, for instance, a reduction in food waste likely to lower food-related emissions by just 1 to 3 percent. In contrast, adopting global dietary guidelines with lower meat consumption would cut food-related emissions by 29 percent, vegetarian diets by 63 percent, and vegan diets by 70 percent.
"The world's over-reliance on factory farmed livestock to feed the growing global demand for protein is a recipe for a financial, social, and environmental crisis," said FAIRR founder Jeremy Coller, who also serves as chief investment officer for Coller Capital, one of 40 firms participating in the campaign. "Intensive livestock production already has levels of emissions and pollution that are too high, and standards of safety and welfare that are too low. It simply can't cope with the projected increase in global protein demand."
But while the current meat model is unsustainable, prospects are bright in the plant-based protein market, which Coller said is "set to grow by 8.4 percent annually over the next five years."
In turn, the investors want to know what companies are doing to avoid what Coller dubs the "protein bubble."
The FAIRR/ShareAction report points to strategies ranging from the further development of plant-based protein alternatives to more creative marketing around "less-meat" options--for example, "inspiring a modified dietary approach through appealing on-packet recipe suggestions that do not default to meat."
As ShareAction campaigns manager Clare Richards declared in a press statement: "Evidence suggests that plant-based protein sources are better for your health, your wallet, and the planet. Consumers increasingly recognize these benefits; and now this coalition of forward-thinking investors are doing the same."
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The United States of Monsanto?
Why is it that so many politicians are all about letting states make decisions on controversial issues—until some states want to do something that Big Food companies oppose?
Mar 11, 2016
This week thousands of Americans took time out of their busy days to call their Senators to demand that they vote against the DARK Act, a bill sponsored by Kansas Senator Pat Roberts, which would prevent consumers from knowing if the food they eat and feed their families contains genetically engineered (GMO) ingredients. Their support for GMO labeling was echoed by more than 600 organizations, including farming and fishing groups and food companies, representing tens of millions of members and customers who this week also urged the Senate to reject this troubling bill.
GMO crops are created by transferring genetic material from one organism into another to create specific traits, such as resistance to treatment with herbicides, or to make a plant produce its own pesticide to repel insects. Unlike traditional plant and animal breeding, which tries to develop better varieties by selecting traits from the same species, genetic engineering techniques can insert specific genes from any plant, animal or microorganism into the DNA of a different species.
The DARK Act passed out of committee last week by a 14-6 vote and is expected to hit the Senate floor any day now. The House already passed a similar bill in July. If passed in the Senate, it will block state laws that require labeling of GMOs, instruct the USDA to implement a voluntary labeling program and kick off a USDA propaganda program to sell the public on GMOs.
But an overwhelming majority of Americans--over 90 percent in many polls--support GMO labeling. Three states-- Vermont, Connecticut and Maine--have passed laws to that effect. Now, some in the Senate want to thwart these efforts. Why is it that so many politicians are all about letting states make decisions on controversial issues--until some states want to do something that Big Food companies oppose?
As with most battles brewing inside the Beltway, the answer can be found at the end of a paper trail--a green paper trail. Monsanto, a leading manufacturer of GMO seeds (and the herbicides used with them) has spent millions of dollars over the past several years to block GMO labeling efforts, most notably state and local ballot initiatives in California, Colorado, Hawaii and Oregon that failed.
Follow the Money
Since 1999, the fifty largest agricultural and food patent-holding companies and two of the largest biotech and agrochemical trade associations have spent more than US $572 million in campaign contributions and lobbying expenditures, much of it to create a favorable political context to allow GMOs to proliferate. The Grocery Manufacturers Association (GMA), which represents food companies like Kraft and PepsiCo, has spent millions of dollars lobbying in favor of the DARK Act too. Washington's Attorney General recently accused the GMA of maintaining an "egregious" plot to conceal the identity of the corporate donors behind its $11 million campaign to defeat that state's 2013 food-labeling initiative.
What's happening here is painfully obvious. The public is rejecting GMOs, a dubious technology upon which Big Food has built its empire, and now it's pulling out all the stops to protect its market shares and its profit margins.
The public is rightfully suspicious of GMOs. We simply don't know enough about their long-term effects, so it's logical that consumers would want to know whether or not they are eating them. Support for GMO labeling is so strong in fact that Campbell's recently announced it would label GMOs in its products, and even withdrew its support for anti-labeling efforts. But we can't rely on individual corporations to decide these matters for us.
And "voluntary" labeling is not the answer, either, since it effectively upholds the status quo and translates to very little, if any, labeling at all. While there is talk of amending the DARK Act to include an amendment to encourage voluntary labeling, it's crucial to note that this so-called "compromise" will do little to help consumers know if the food they're eating contains GMOs. This clearly won't do.
Reclaiming Democracy
Industry's attempt to block GMO labeling laws is yet another symptom of a democracy hijacked by corporate interests. We the people have elected our leaders to Congress to represent our interests, because we live in a democracy--not a nation controlled by a corporate oligarchy. At least, that's the way it should be. That's why we're urging the Senate to reject the DARK Act and any compromise that results in anything less than on-package labeling that tells consumers if a product contains GMO ingredients.
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