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JOURNAL REPORT

© 2017Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Monday, October 16, 2017|R1

HIGHLIGHT S R5-7

The Search forSweet As traditional sweeteners come under attack, food companies are in hot pursuit of alternatives. It isn’t easy.

BY ANNIE GASPARRO

FOOD MAKERSARE RACING TO FIND survey released by market-research firm Niel- Yearsago, when consumersweretrying to acceptable alternatives to sugar.But it’shard sen earlier this year,22% of respondentssaid cut calories in general, artificial sweeteners to replace a taste that so many Americans they already restrict their sugar intake. Most such as aspartame (Equal) and later sucralose have growntolove. major food makers, including Mars Inc., Gen- (Splenda) gained popularity,and scientists Traditional sweeteners—from sucrose,or eral Mills Inc.and Kellogg Co., have pledged thought they had cracked the code.Now those table sugar,tohigh-fructose corn syrup—are to reduce sugar in candy, products have come under an increasing concern to consumersand law- children’scereals and other scrutinybyconsumer advo- makers, who see them as akey culpritin products. catesoverhealth concerns. America’sobesity and diabetes epidemic. Last year,the federal Souring on Sugar While thereisstill adebate Nowresearchersatfood giants, startups government called out As moreU.S. consumers snub among the scientific commu- anduniversities arelooking fornew ways to sugar consumption as a sugar and artificial sweeteners, nity,the Center forScience makefoods sweet without putting people’s problem in the U.S. Dietary natural alternatives gain ground in the Public Interest,CSPI, health at risk.Some aretesting out natural Guidelines,recommending warns that artificial sweet- zero-calorie ingredientslikemonkfruit and forthe firsttime that peo- 22% enersmay post aslight risk SouthAmerican root extractsthat aresoin- ple consume no morethan Americans who restrict their of cancer.Morethan half of tensely sweet that they canadd flavor without 10%oftheir daily calories sugar intake Americans surveyed by Niel- calories.Othersare manipulating granules of from added, or refined, sug- sen said they avoid those ar- sugar to makethem tastesweeter.They’realso ars. Americans currently av- 52% tificial sweeteners. developing newingredientsthat will block bit- erage13% of their calories Americans who avoid artificial One avenue researchers tertastereceptorsand makefood seem likeit from added sugar, the re- sweeteners likeaspartame areexploring is altering has moresugar than it does. port says. sugar itself. Nestlé, which Nestlé SA scientist Olivier Roger, who’s Regulatorsalso said last 22,000 adds sugar to chocolatebars, leading the food titan’ssugar-reduction effort year that food and beverage Food products containing icecream and less-obvious globally,says manycompanies areworking on makerswill be required to high-fructosecorn syrup productslikefrozendinners, finding answers.Adding to the urgency: Some disclose on nutrition labels says it has discovered away companies, like Nestlé, have self-imposed howmuch sugar has been 206 to makesugar particles dis- deadlines forlowering sugar content in food. added to products, as adis- Variations on howhigh-fructose solvefaster when people eat Butthereare big challenges to removing tinct item within the total corn syrup can be listedonlabels them. That allows people to what hasbeen akey ingredient in processed sugar content. TheFDA re- tastethe sugar immediately food foroveracentury. cently extended the dead- so that the product seems Forone thing,thereare side effectstore- line for the new labels to 19% sweeter,allowing the com- moving sugar: It not only adds sweetnessbut Jan. 1, 2020 from July 2018. Increase in 2016 sales of panytoreducesugar content also functions as apreservativeand adds tex- Cutting the amount of products with by up to 40%. ture, as well as contributing to the overall vol- sugar will be asteep task. natural/low-glycemic sweeteners Hershey,meanwhile,says ume of food. Whole recipes have to be re- Morethan 22,000 products Source:Label Insight, Nielsen it has patented technologies thought when it is removed. And afterfinding in the U.S. contain high- THE WALL STREETJOURNAL. that boost sweetnessbyal- an alternative, companies may face higher fructose corn syrup,accord- tering the surfaceareaand costs, supply constraintsorregulatoryhurdles ing to food labels cataloged shape of sugar particles in related to the substituteingredients. by Nielsen and Label Insight, aprovider of chocolate. It wouldn’t provide details of how “It’sverydifficult, very complex. We still food-label data. Even foods widely seen as shape impactstaste, but some scientistssay don’thavethe magic solution that would re- healthycontain added sugars. Forinstance, that when there’smoresurfaceareatotouch placesugar,” Mr.Roger says. among yogurt products, 86% contain added the tongue’stastereceptors, afood canseem Thepush comes amid awidespread effort sugarsofsome kind, as do 79% of shelf-stable as sweet with lesssugar.

to put the brakes on sugar consumption. In a juices and drinks. Pleaseturntothenextpage

ALA

KUCZ JOHN INSIDE

The FutureofProtein The GroceryStore of the Future The Seafood Shortfall The hunt formeatalternatives In Kroger labs, scientists hunt for Tj Ta te and AmyNovogratz on the is heating up patterns in data promisesand problems associated R2 R8 with sustainable seafood R6 Food Companies Revamp for a GLOBAL FOOD FORUM Digital World Wherethe FDAIs How DataScienceWill Enticing online shopperstomake Going Under Trump Transform Farming impulse purchasesisjustone Scott Gottlieb says it is about Hugh Grant of Monsantoand challenge theyare working to solve making the agencymoreefficient JamesC.Collins Jr.ofDowDuPont R4 R5 on newgene-editing technologies R7 When Restaurant Apps Don’t Trade in the Balance Work as Planned Archer Daniels Midland’sCEO says The Agricultural Agenda Starbucks and othersadjustas the U.S.food sectorisincredibly SonnyPerdue talks about the TPP, mobile orderscreatenew hassles productive. Fornow Naftaand climatechange R4 R6 R7 P2JW289000-0-R00200-1------XA

R2 | Monday, October 16, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | THE FUTURE OF FOOD The FutureofProtein (the Meatless Variety) Companies are racing to come up with meat-product substitutes. Care for some moringa or mealworm powder?

investing in plant-based protein BY JENNIFER MALONEY would help it meet consumer de- mand formorechoiceand keep tabs THE FUTURE OF PROTEIN could be on innovations. a meal worm, a fungus, an obscure Nestlé SA last month agreed to plant or a run-of-the-mill pea. acquire Sweet Earth Foods, a Moss “Ifwelook around the world, Landing,Calif., companythat substi- there’sabig consumer trend on tutes plant formeat proteins in moreprotein,” says Mehmood Khan, meals such as curries,stir fries, vicechairman and chief scientific of- breakfast wraps,burgers and pasta. ficer at PepsiCo Inc. “The question Nestlé didn’t disclose the terms of is: How are we going to do this in a the deal. manner that’s sustainable? Protein As shopperslook forhealthy, nat- isn’t cheap. And animal protein has ural ingredients, big food companies the greatest footprint on the planet.” areinvesting in startups that offer Themaker of Cheetos,Rice-A- alternatives to traditional dairyprod-

Roni and Quaker Oatsearlier this uctsaswell. T

year issued a request for proposals Kellogg Co.’sventure-capital fund MEA on “novel proteinsources” forits in Januaryannounced an investment OND

snacks and beverages.PepsiCo is fo- in Kuli Kuli, an Oakland, Calif., com- BEY cused primarily on plant-based pro- panythat makes smoothie mixes and Beyond Meat says the firm’s plant-based burger patties are designed to look, taste and cook like the real thing. teins but said it would also consider barsfromthe protein-rich leavesof insectsormycoprotein—an ingredi- the moringatree, cultivated in West These products, such as overnight cricket powder that is used in pro- ent made from fermented fungus. Africa, the Caribbean and elsewhere. oats, granola and hummus-based Where’sthe Beef? tein bars, cookies and dog treats. Indeed,companies from startups General Mills Inc.’sventure-capital sandwich spreads,now represent U.S. retail-store sales of products made Thecompanyalso makes whole- to conglomerates areexpanding fund, too, has invested in such com- 27% of PepsiCo’s net revenue. from meatsubstitutes areforecastto roasted crickets, acrunchysnack their portfolios to serve consumers panies as KiteHill, aproducer of nut- In itssearch fornew protein rise steadily through 2021: that comes in flavors such as Texas concerned not just about what they milk-based cheeses and yogurts; and sources, the companysays it is look- BBQ and sour cream and onion. The PROJECTED eat, but how their food is grown. Purely Elizabeth, whichsells granola ing for ingredients that are afford- $900 million roasted cricketswereahit this year Agrowing number of U.S. con- and hot cereal made with ingredients able,easy to pronounceand have at theSeattle Mariners’ Safeco Field, sumersare looking forhealthy, mini- such as kaniwa, aprotein-rich seed minimal impact on the flavor and whereconcession stands served mally processed ingredientssourced growninSouth America. texture of a drink or snack. them in a4-ouncecup with chile- in away that is kind to the environ- Alternatives to traditionally “Ask anybody who enjoys cook- 600 lime seasoning for$4. Aspireisnow ment. raised animal productsare coming ing,” says Dr. Khan, a former endo- in talks with an NBAteam, Mr.Ash- While U.S. per-capitaconsump- from some surprising sources. Take crinologist. “Takeanything with pro- our says. tion of meat and poultry combined jackfruit, forexample.Itisn’t high in tein; if youmishandle it, it either “There’sdefinitely apsychological 300 grew 6% from 2014to2016,accord- protein, but when cooked it has a curdles, denatures, gels, tastes bad. hurdle,” he says.“Alot of insectsare ing to the U.S. Department of Agri- texture similar to pulled pork.Then It is not easy to cook with.” just simply grosstolook at. This culture, consumption of meat substi- there’sMemphis MeatsInc., which is In some cases,PepsiCo has taken isn’t an overnight shift.” tutes is also growing.U.S.retail- developing technologytogrowmeat aconventional ingredient and given 0 Meanwhile,BeyondMeat is ex- storesales of productsusing meat from self-reproducing animal cells. it a new form. ploring protein sources beyond the substitutesclimbed 16% over the Cargill Inc.invested in the company The company’s latest innovation 2011 ’13 ’15 ’17 ’19 ’21 humble pea. same period to $700 million in 2016, in August. is apatentedprocess that makes Source:Euromonitor International “People don’t liketoeat thesame according to research firm Euromon- PepsiCo’s request, posted on a oatssoluble in watersothey canbe THE WALL STREETJOURNAL. thing everyday,” Mr.Brown says.A itor International. Thefirm projects websitethat helps match projects consumed as aprotein-rich bever- mix of proteins can create a better that meat substitutes,including fro- with researchers, notes that the age. Theresulting drinks don’t have Mohammed Ashour, chief execu- mouthfeel and amorecomplete zen, refrigerated and shelf-stable companyhas already done “exten- the viscosity or granularity one tive of aTexas companycalled As- amino-acid profile. The company is products, will reach $863 million in sive work” on ingredientsincluding might expect from mixing oats and pire Food Group, is aiming to intro- also looking to increase the stability annual U.S. sales by 2021. soy, moringa, duckweed, cricket water, PepsiCo says.The companyis duceAmerican palates to insects—a of itsamino acid supply by diversify- “The consumer is demanding powder and mealworm powder.But developing productsmade with protein source consumed by two bil- ing the crops it uses. moreand moreplant-based solu- don’t expect aQuaker cricket bar “SoluOats” forthe U.S. and other lion people around the world. Among other crops,itisconsider- tions,” says Ethan Brown, chief exec- soon. Thecompanysays that “exten- marketsthat vary by seasoning,fla- “Weare growing in numbersand ing lentils,mung beans,mustard utiveofBeyondMeat, aLos Angeles- sive work” could mean reading the voring and texture.Some mayin- we aregrowing in appetite,” Mr. seedsand lupin beans,alegume area companythat uses peas to research literatureonagiven sub- clude additional protein from dairy. Ashour says of the world’s popula- eaten in the Mediterranean. The make burger patties with a texture, ject. Food companies are also looking tion, noting that raising livestock re- company’snextproduct will likely tasteand sizzle similar to ground Thecompanyhas set goals for foringredientsthat addresscon- quires much morewater,land and use acombination of protein beef. lowering the amountsofsugar,fat cerns that meat production—because fossil fuels per pound of meat pro- sources. The company last year sold a 5% and sodium in itsproductsand is of the amount of land, waterand en- duced than insect farming does.“We staketoTyson Foods Inc., the larg- shifting itsportfolio to include more ergy it requires—won’t meet the have to start shifting howthe Ms. Maloney is a reporter for The est U.S. meat companybysales.Ty- of what it calls “everydaynutrition” world’s growing protein needs. world’s resources are used.” Wall Street Journal in New York. son, which raised some eyebrows productscontaining whole grains, That’swherethe use of insects In anewly expanded indoor facil- She can be reached at jennifer. with the move, said at the time that fruits, vegetables,dairyand protein. could come in. ity in Austin, Aspireproduces a [email protected].

spokesman says. gredientsderived from mushrooms that block The Search forSweet Forinstance, Nestlé’s Mr.Roger says,“if you bitterness. They canbeadded to coffee drinks removesugar from icecream, youhaveanice and dark chocolatetoreducethe amount of Continuedfromthepriorpage add something to makeupthe volume,orits cream that is very,veryhard.” sugar. Or they canoffset the unwanted after- DouxMatok,anIsrael-based food-tech com- chocolatebarswould shrink.Replacing sugar Adding fiber,however, cansoftenit. “You tasteofthose natural zero-calorie sweeteners. pany, says it has patented technologythat in- with more of the other ingredients—such as have to have acombination of different ingre- But even when they find the right combina- tensifies the sweetnessofsugar by attaching milk or cocoabutter—can add fat, and that’s dientstoovercome different gaps that we have tion of ingredients, it canbedifficult to source sugar molecules to what it calls acarrier that viewedasanegative. when we reducesugar,” he says. them. One all-natural sweetener that has re- targetscertain tastebuds and makes the If youtakeout 30 grams of sugar,you have Sugaralso actsasapreservativebecause it cently become apopular candidatefor testsis sweetnesslinger.That canreducethe sugar to put in 30 grams of something else,and it binds with water, not allowing bacteria to asyrup from yacon, aSouth American root content in food by up to 40%, depending on the also hastobehealthy, says DouxMatok Chief grow.Removing it from bread canenable mold that is relatively hardtofind in the U.S. Even product, the companysays. TechnologyOfficer AlejandroMarabi.“Every to grow faster. if it works great, it’scurrently tooexpensive, category has different challenges.Chefs and one food-companyscientist says. More than sweetness food scientistsevery daywill have recipes they Lookingtonature Some companies arefinding solutions closer Even if scientistsfind away to reducesugar, tryand test,” he says. Some researchersnow saynatural, high-in- to home.Ahold DelhaizeNV, aEuropean grocer that isn’t the end of the problem. Forone Sugaralso serves alot of functions in food tensity sweetenersthat come without calories with nearly 2,000 stores in the U.S.,says it re- thing,ifyou take out sugar,you end up with a beyond making it sweet, and they aren’t easy arethe futureofsweetness. But current alter- moved 500,000 pounds of sugar from itsown product that isn’t, well, as big as it used to be. to replicate. “What manypeople maynot real- natives such as steviaand monkfruit canhave brands in 2015 and2016.For itsjuices,food Thehigh-tech sugar Hershey has developed izeisthat sugar plays several roles in choco- abitteraftertaste. scientistsfound sweeter varieties of apples and allows the companytouse less, but it needs to late,” like affecting the texture, a Hershey Researchersaround the world aretesting in- other fruits, says Jacqueline Ross, director of product development forAhold USA. “It’sim- portant to take out [added sugar], but also to HowSweet It Is Big Business not replaceitwith something else that maynot Added sugar is the norm in manyfood categories, sparking ahuntbyconsumers forhealthier options. 2016 category sales, in billions of dollars be liked, likeartificial sweeteners,” she says. Allison Fickett, adietitian and regulatory Pct. items with added sugar Pct. of consumers looking forlow sugar in these products Juice&drinks manager at Daymon Worldwide,agrocery con- $7.4 sultancy, says some of the company’sclients 100% arereducing added sugar in productsthat con- Snack bars tain fruit by picking it when it’sriper and cook- $3.4 ing it abit longer to enhancecaramelization. 80 Yogurt That method “doesn’t requirereformulating or investing in newfood technology,” she says. $7.6 EveCrampon, senior product developer at 60 Cereal Stonyfield yogurt, says she and her team have $8.6 worked formorethan two yearstoreducethe sugar in itsyogurt. They screened the thou- 40 Salad dressing sands of strains of bacteria cultures until they $2.1 found the right combination that produced a lesstart yogurt and thus required lessadded 20 Bread sugar.“Finding the right strain that would be $14.5 mild withoutposing other challenges took a while.Wehad to test alot of strains,” she says. 0 Condiments Juice&drinks Snack bars Yogurt Cereal Salad dressing Bread Condiments $1.2 Ms. Gasparro is astaff reporter in The Wall Street Journal’s Chicago bureau. Email Source:Label Insight, Nielsen THE WALL STREETJOURNAL. [email protected].

The Journal Report welcomes REPRINTSAVAILABLE Follow The Experts>> your comments—bymail, faxor email. Lettersshould be ad- FULL PAPER: The entireWall Street Order by: dressed to LawrenceRout, The Journal issue that includes the Food Email: [email protected] This Journal Report doesn’t stop here. Join us online with The Ex- Wall Street Journal, 4300 Route1 report can be obtained for $10 acopy. perts—a group of industry, academic and cultural thinkers who weigh in on North, South Brunswick, N.J. Order by: Mail*: Dow Jones LP 08852. The faxnumber is Attn: Mailing Operations Dept. the latest issues raised in this and future reports. Phone: 1-800-JOURNAL 84 Second Ave. 609-520-7256, and the email Fax: 1-413-598-2259 Chicopee, Mass. 01020-4615 Read what they have to say at WSJ.com/Experts. Posts featured [email protected]. throughout the week include: Mail*: Food REPRINT OR LICENSE ARTICLES: To  “Get Ready for Food as a Management To ol” by John Sullivan, a professor of manage- Dow Jones &Co. order reprints of individual articles or Attn: Back Copy Department for information on licensing articles ment at San Francisco State University and a talent-management thought leader from Silicon 84 Second Ave. from this section: Valley. Chicopee, Mass. 01020-4615 THE JOURNAL REPORT Online: www.djreprints.com  “It’s Time to Let the Free Market Work for Water,” by Sam Ori, executive director of the JOURNAL REPORTONLY: Bulk orders of Phone: 1-800-843-0008 Energy Policy Institute at University of Chicago. For advertising information this Journal Report section only may Email: [email protected]  “Why One Cardiologist Has Drunk His Last Diet Soda” by Dr. Harlan Krumholz (@HMKY- please contact Katy take up to six weeks for delivery and Lawrence at 212-416-4119 can be obtained for $5 for one copy, *Formail orders, do not send cash. ale), a cardiologist and the Harold H. Hines, Jr. Professor of Medicine and Epidemiology and $2 for each additional copy up to 50, Checks or money orders aretobemade Public Health at Ya le University School of Medicine. or [email protected] and 25 cents for each copy thereafter. payable to Dow Jones &Co. P2JW289000-0-R00300-1------XA

THE WALL STREET JOURNAL. Monday, October 16, 2017|R3

Thank Youand Congratulations President Trump!

Congratulations to the Trump administration and AgricultureSecretary SonnyPerdue (pictured left, at lastweek’ssecond annual Global Food Forum) for increasing America’sfood exports by 9percent in the past12months —including beef by 25% and dairy by 16% —after recent years of decline.

We salute the Trump Administration’sconstancyof focus on exports,deregulation and other keydrivers of success for farmers and food processors of America.

Anthony Pratt Executive Chairman, Pratt Industries

Pratt Industriesisone of the largest corrugated boxmanufacturers in the United States. Our boxessavemoneyand save the environment. www.prattindustries.com P2JW289000-0-R00400-1------XA

R4 | Monday, October 16, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | THE FUTURE OF FOOD Food Companies Revamp for aDigital World Big brands learn new tricks to spur impulse buys, aid search results, drive reorders

Mondelez, which hired avice BY ANNIE GASPARRO AND presidentofglobal e-commerce HEATHER HADDON about ayear ago, says snacks are relatively underdeveloped in e-com- AS CONSUMERS increasingly shop merce today, generating just 2% of forgroceries online,giant food overall online grocerysales in the brands are scrambling to keep up. U.S. and 15% in China. Consider just one small fact: Con- Thecompanyistrying avariety sumerswho buy groceries online of strategies to drivesales online, usuallystick to alist of must-have including subscription options on items.That has leftsome big food Amazon, whereshoppersget alower companies scrambling to find new priceonproductssuch as belVita ways to persuade them to add that breakfast cookies in exchangefor last-minute chocolate bar or bottle signing up for automatic reorders. of water. Mondelezsays it is aiming to gen- Hershey Co., forinstance, is erateatleast $1 billion in e-com- working on a technology to make it mercerevenue by 2020,upfrom easier foronline shopperswho pick about a third of that now. up their ordersatstorestothrow in Campbell Soup recently created apieceofcandy or apack of gumat an e-commerce businessunit for the last minute. As customersarrive North Americaand named Shakeel at thestore and an employeepre- Farooque, a veteran of Amazon and pares to bring their groceries out to eBay, to lead it. Thecompanysays it their car, an offer would pop up on a is working with retailers to capture smartphone app,suggesting they moresales online and investing in a add something extratotheir orders. network of distribution centersin The idea is to mimic the experience ON states such as Texas and Ohio to bet- in the checkout lane,where56% per- ter serve e-commerce customers. It

cent of shoppersalways or often SHEPPERS aims to generate$300 million in on- B

purchase asnack,the companysays. RO line sales over the next five years. Figuring out howtodriveimpulse purchases is just one of the chal- merce representsasmall segment of An advantage lenges that multibillion-dollar food food and beveragesales today, at Online Shopping Onebenefit big food companies brands face as they gear up to win about 4%, it is expected to account The percentage of shoppers who buy groceries online at leastoccasionally is have online is that storebrands, customersonline.They also have for 8% of such sales, or $70 billion, expanding rapidly,led by millennials: called privatelabel, aren’t as popular more competition from startups on by 2021, according to Inmar Willard as they are in stores. General Mills the internet, where it is possible to Bishop Analytics,aChicago-area says that in the U.K.,whereonline 50% Allshoppers Millennials (age 18–38) Gen X (39–52) build aconsumer following without consulting firm. shopping is moreprevalent, itsmar- amassivemarketing budget and Onebig challengefor behemoth Boomers (53–71) Mature (72+) ketshareisalmost 30% higher fore- wherenewerbrands perceived as brands such as Campbell’s chicken- commerce than in physical stores. 40 less processed and morehealthful noodle soup and MondelezInterna- Companyexecutives saygetting tend to be popular. tional Inc.’sOreocookies is that productssuch as Cheerios cereal and As food makersand retailerstest they don’talways have the kind of Progresso soup into the customer’s newtechnologies and develop e- leverageonline that they areused to 30 firstonline order is apriority for commerce strategies to compete in having in brick-and-mortar stores. them because people often reorder this changing landscape,the overall Fordecades,such brands controlled past purchases out of convenience. grocery-shopping experiencefor cus- grocery-storeaisles,commanding 20 General Mills saybest-selling tomersislikely to shiftdramatically, prime shelf spaceand funding ex- productstend to come up early in food executives and analysts say. pensiveadvertising displays.Online, search results, though manyretailers “Food is changing like it’s never however, the playing field is more 10 offer paid search advertising that changedbefore,” Kroger Co.Chief level, as the internet has provided a can drive placement. ExecutiveRodney McMullen told in- quick,cheap and easy sales platform In addition to paying forplace- vestorsearlier this month. “It will be for newer, trendier food companies 0 ment, some food manufacturersare anytime,anything,anywherethat to reach consumers. 2015 2016 2017 striking partnerships with other they want it.” David Ciancio,senior customer Source:Food Marketing Institute, U.S. Grocery Shopper Trends, 2017 THE WALL STREETJOURNAL. brands to giveshoppersdiscountsif strategist forconsumer-datafirm they purchase two productsto- Critical segment Dunnhumby,says that foods viewed more“list-driven” shopping,says software for retailers, is to provide gether.Companies areusing cus- Amazon.comInc.’srecent acquisi- as healthful and consumed as part of Paul Weitzel,vicepresident of Inmar virtual shopping to consumers who tomer analytics to figure out if afro- tion of Whole Foods Market Inc.and aroutine—such as breakfast bars Willard Bishop. ownVRheadsets. By one dayen- zen-dinner buyer might also buy its big push into the grocery indus- made with ingredients perceived as Hershey CEO Michele Buck, who abling people to virtually unwrap snackcakes,for example,says Bill try is generating a new sense of ur- simple or nutritious—do better on- took the helm in March, said on an candy bars and look inside boxes of Bishop,co-founder of consulting gencyamong food makersand tradi- line because they arehabitual and earnings call in July that the com- cereal while they shop,the technol- firm Brick Meets Click. tional supermarketstokeep up with thereforeripe forautomatic reorder- panyplans to continue working with ogy could make food look more ap- “There is a tremendous focus on the e-commerce giant. ing.Processed foods and items retailerstofind waystodriveim- pealing than on a2-D computer paying to moveup[in search re- Campbell Soup Co., Conagra bought on impulse,such as candy, pulse purchases online. “I can’t tell screen, InContext says. sults]. The question is, is it worth- Brands Inc., KraftHeinz Co.and oth- typically suffer in the transition to you I have the answer to that right Elsewhere, Instacart,anonline while,” said Mr.Bishop.“Youhaveto ers, have said they areinvesting online, he says. now,” she said, but “weare dou- grocery-deliveryservicethat part- get to the granular data.” moretobuild sales online,hiring e- Manywebsites have no way of bling-down” on e-commerce. nerswith manymajor retailers, is commerce expertsand making ad- presenting impulse-related food Some companies arelooking to- working with hundreds of brands, Ms. Gasparro and Ms. Haddon are justments to their supply chain and itemsaspop-ups when shoppers ward newtechnologies to help them ranging from large companies such reporters for The Wall Street Jour- distribution systems to servee-com- check out, and buying online doesn’t drivemoreonline sales in general. as Unilever and PepsiCo Inc.to nal in Chicago. Email them at an- merce needs. offer immediategratification. As One idea, from InContext Solutions, smaller niche sellers, to put samples [email protected] and Thestakesare high. While e-com- such, online shopping lends itself to which has developed virtual-reality of items in customers’ deliveries. [email protected]. When Restaurant Mobile Apps Don’tWork as Planned Starbucks and others found On-the-Go Ordering online ordering initially The number of food orders placed via mobile app, text increased congestion and message or the internet for pickup or delivery has morethan frustrated customers doubled overthe pastfive years. similarproblem about nine Digitalfood orders placed BY JULIE JARGON months ago at its 1,000 cafes annually,inbillions with the highest volume of 2.5 RESTAURANT-CHAIN APPS mobile orders. Congestion was arereshaping abusinessbuilt getting worseinthe area on human interaction. But wheredrinks arehanded off, 2.0 these newsystems don’t al- as customerswho ordered on- ways work as planned. line showeduptopick up 1.5 Soon after McAlister’s Deli, their orders. Many customers achain of sandwich shops,in- who came intothe cafesto 1.0

troduced mobile ordering a buy something sawthe long /REUTERS few months ago, it found it linesand turned away,con- 0.5 had aproblem: Thecounter tributing to an overall decline

wherecustomersplacetheir in transactions. KHURSHEED 0 orders in the shops was often In an effort to reducethe cloggedwith patrons who had crowding,Starbucks has MMAD 2013 ’14 ’15 ’16 ’17

ordered meals ahead of time changed the way itsbaristas MOHA Source:NPD Group Inc. through the McAlister app. handle orders. Previously, or- Starbucks changed the way it handles mobile orders after drink pick-up areas became clogged. THE WALL STREETJOURNAL. “Peoplewho placemobile ders would show up on a dis- ordersthink they have to wait play screen that made no dis- Starbucks cafeshavetwo thought the app would appeal years, like Domino’s Pizza ask about deals or coupons. in line,” says Paul Macaluso, tinction between those made espresso machines, but often to people making small orders, Inc.,are facing newchallenges Another problem several president of McAlister’s,which online and those made at the only one wasinuse at atime. but customersfound they as technologyevolves.The restaurant chains have experi- is owned by Focus Brands Inc. registersinthe cafes. Now, Now, during peak traffic peri- were able to gettheir food pizza chain is one of the few enced is that customers often “They feel bad about cutting baristas can see which orders ods at certain cafes, a barista just as quicklyatthe drive- restaurant companies to allow end up at the wrong location the line.” were made online,and they uses one machine to make through as they could by or- voice ordering through Ama- to pick up their order,because They also felt frustrated. To cannotifycustomersonthe drinks formobile customers dering ahead, says Liz Wil- zon’sAlexa and Google’sHome they tend to placeorders fixthe problem, McAlister’s app when those ordersare while another uses the second liams, Taco Bell’schief devices. while in transit, and the soft- built cubbies with sliding ready,sothat those patrons to makedrinks forin-store financial officer. The challenge is that voice ware selectsthe location clos- doorsthat open to the kitchen, don’t need to mill around the guests. So now, she says, Taco Bell technologydoesn’t always est to them to fill the order, so that employees canpass cafe waiting for their drinks. Starbucks says it has plans to aim the app at people work well with coupons,and rather than the destination takeout ordersontoshelves In addition, the newsystem shavedone minuteoff wait who want to placelarge or- morethan three-quartersof they intended. wherecustomerscan pick allows Starbucks to track how times forall customersat dersbut might worryabout ordersinthe pizza industry “Inaccurate location is our them up without standing in long it takes to fill mobile or- some of itscafes,though it clogging up drive-through involvecoupons.“If it’salocal topuser error right now,” says line with people ordering food. ders,and adjust staffing ac- won’t sayhow long wait times lines with complicated re- coupon that’sonly available in Kira McCabe, associate direc- New signs in the store direct cordingly. For instance, if the are. It also says customer-sat- quests. It plans to introducea one or two stores,the voice tor of digital media and mar- customers who placed online datashowthat it is taking lon- isfaction scores at those stores version of the app soon that assistant has a hard time fig- keting at Tropical Smoothie orderstothe pickup area, and gerfor mobile orderstobe have improved significantly. will allow customers to name uring out which coupon you’re Cafe, which is adding a “con- employees were given extra filled during aparticular shift, “Wegot faster at making food apickup time,sothey canpick talking about,” says Dennis firming location” buttontothe training that includes guiding acafecan add staff during and beverages for all custom- up even the largest orders Maloney, Domino’s chief digi- ordering processinits next to-gocustomerstothe right that shifttospeed up service. ers,” Mr. Brotman says. without delay. tal officer. “Some people give app update. area. Thecompanyalso “re- “Weare looking forwardto up and move to another plat- “Wehaveahighly mobile To further improvecus- thought the entireproduction Thinking big communicating howeasy it is form like desktop or mobile,” audienceand they’redis- tomer flow,soon an updated methodology,” says Adam Taco Bell,aunit of Yum to placegroup ordersonline,” he says. tracted,” Ms. McCabe says. app will allowpatronsto Brotman, the company’sexec- Brands Inc., had adifferent Ms. Williams says. Domino’s is working to find choose to pick up their food utive vice president of global concern about itsapp.Specifi- a solution, Mr. Maloney says, Ms. Jargon is a Wall Street curbside or in the restaurant, retail operations and partner cally,people weren’t using it Coupon, location snafus but until it does it is offering Journal reporter in Los An- Mr. Macaluso says. digital engagement. because itsdrive-through ser- Some companies that have 20% off on platforms including geles. She can be reached at Starbucks Corp.noticed a Forexample,almost all vicewas so fast. Executives offered digital ordering for Alexa and Home if customers [email protected]. P2JW289000-0-R00500-1------NS

THE WALL STREET JOURNAL. NY Monday, October 16, 2017|R5 JOURNAL REPORT | THE GLOBAL FOOD FORUM Wherethe FDAIs Going Under Tr ump Commissioner Scott Gottlieb says it isn’t about more or fewer regulations. It’s about efficiency.

Food and Drug Administra- important in informing con- nutrition-factslabels,menu la- tion Commissioner Scott Gott- sumers. So we intend to do beling,and thereare others, lieb serves apresident who that. We’retaking amore that we’re fully committed to regularly speaks of rolling back wholesale look right nowin- implementing these; and when JONES

business regulation. Dr. Gott- side the agencyatthe full we talked about what aspects W

lieb has postponed Obama-era rangeofclaims that product of it we were going to tryto DO food-labeling rules, pleasing developerswant to makeon push out alittle bit to givein- O/ CIA

some food manufacturers. But labeling or are making on la- dustrymoretime to come into LA at the same time, he says, the beling whereFDA hasn’t compliance, to giveusmore PA FDA is working to implement playedarole,and making a time to come up with waysto GABE another law passed under the decision from a public-health implement these thingsso ‘We introduce innovation and efficiency by issuing regulations.’ former administration: the standpoint where it is impor- we’rebeing efficient and not Food Safety Modernization tant for us to step in. overly burdensome. wholesale changeinhow we back to the politics of this, undue costs on industry, that Act, which will require compa- “Healthy” might be one of Theadministration’sfully approach food safety.But I what we want to do is make we’redoing this in an efficient nies to develop plans to pre- those claims. We might make committedtothe ethos of think from the standpoint of surewedothis efficiently. way and providing very clear vent foodborne illness. Dr. adecision that that claim is food safety.And FSMA wasan the policyand the politics of That’sthe key from my stand- rules that people could actu- Gottlieb talked about his job moreofacommercial claim important, broadly bipartisan, this,because youkeep going point, that we’renot imposing ally implement. with Wall Street Journal re- and doesn’t really convey porter Jacob Bunge. Edited ex- something important from a cerpts follow. public-health standpoint to a consumer.Idon’t knowwhere MR. BUNGE: You are part of an we’regoing to come out on administration looking for that. But we’regoing to priori- ways to roll back regulation. tizefromapublic-health Does this mean that food be- standpoint which claims we comes less safe?” think we should be providing DR. GOTTLIEB: Icertainly don’t more adjudication of. look at it that way.Itistrue If amanufacturer can’t we areundertaking an effort to makeaclaim around some at- look acrossalot of regulations tributeofthe health of afood wherewecan makeregulations product, then they’regoing to Anadditional two billion people moreefficient. Wherethings innovate in areas where they might be outdated we’regoing canmakeclaims.And invari- to need to pull certain regula- ably it is around portion size tions or updatethem. But and tasteand convenience. will requirehousing by 2030. thereisalot of opportunity to look acrossour regulatory portfolio to trytofind efficien- 1 in 6 cies in what we do.Thereare Over that same time period,the global middleclass will increase to nearly five some thingswedothat maybe People sickened by billion people. Addtothatthe fact that interest ratesare settoriseand it’s no don’t makealot of sense,rela- food annually in U.S., wonder businesses andindividualsturntoCME Grouptohelpmanage their tivetothe modern world. We according to the CDC have aregulation that estab- risksand navigate fluctuatingborrowingcosts.That, in turn, enables lendersand lishes astandardofidentity for property developers to keep pacewithpopulation growth.Thisishow thehousing cherrypie.I’m not sureFDA in industry canfind solutions that makeshelter more accessible around theworld. amodern, risk-based environ- And those areall important ment needs to be regulating attributes.They provide value This is howthe world advances. Learnmoreatcmegroup.com/finance. the contentsofcherrypie. to consumers. But remember,weintro- But I’dliketosee more duceinnovation and efficiency manufacturerstrying to inno- by issuing regulations.Sopart vate around things that actu- of what FDAdoes is issue reg- ally deliver health attributes ulations to trytocreatea to people,because I’m the FDA moremodern framework for commissioner,and Ithink in newtechnologies,new ways of order to allowinnovation doing business. It isn’t aques- around thingsthat produce tion of regulations or no regu- public-health benefits, we lations.Ithink it is aquestion need to allow people to make for us of smart regulations. claims around those public- health attributes. MR. BUNGE: With the example of the cherry pie, the Obama MR. BUNGE: What happens to administration tried in certain the Food Safety Modernization ways to drive more transpar- Act now? ency in food with regulations DR. GOTTLIEB: Implementation around labeling. What hap- is moving forward. We’ve re- pens to that under your cently made again certain ac- watch? commodations to push out DR. GOTTLIEB: We’re commit- certain deadlines related to ted to the food labeling regu- FSMA to make sure we get it lations, if that is what you’re right. These areveryimpor- talking about. Menu labeling tant laws.FSMA is an exceed- and nutrition facts. ingly important changeinthe This isn’t just an issue of whole posture of the FDA to- transparency. This is an issue ward food safety,toanenvi- of public health. There is evi- ronment of preventivecon- dencethat thereispublic- trols, as you know. health value in providing this We need to makesurewe information to consumersina getitright. And thereare cer- restaurant, or providing infor- tain aspectsofthat implemen- mation in abetterway on the tation that certain sectors nutrition-facts label. weren’t really ready to accom- This wasacomprehensive modate. Theproduceindustry rethinking of the nutrition- had certain concerns around factslabel. We have imple- us going ontothe farms and mented some delays in the im- whether or not they were plementation of those ready forthe inspections.And regulations. But those delays so we talked about pushing were required to makecertain out another year the actual in- adjustmentstomakesurethat spectional regime and doing they’resustainable forthe morereadinessinspections for long run. the next year. Youtalk about them as Therewereconcerns transparencyinitiatives.Ilook around how we were going to at them as public-healthinitia- assessagricultural wateron tives.Isee evidenceofpublic- the farms. So we’ve extended health benefit in providing adeadline on the imposition this information to consumers. of arequirement on howwe’re We’regoing to go forwardand going to do that. We’re going provide it to them. to go back and take a look at that and makesurewehave MR. BUNGE: What is your oper- the right tools for doing that, ating definition of “healthy,” the right standards for doing and why is it important for that so they canactually be FDA to regulate this? implemented by producers. DR. GOTTLIEB: There’sa There are aspects of FSMA broader question. “Healthy” is we’recontinuing to look at obviously aterm that is be- very closely to make sure we coming used in certain label- getitright. I’vebeen at the ing.Itisasubject of litigation agency before. I worked with in California. three different commissioners. There’sabroader principle And Iwill tell you, when you of what role FDAplays more get it wrong the first time, it generally in the regulation of is very hard to unwind that. labeling. When certain claims that might be important to MR. BUNGE: How do you think providing information to con- about providing an atmo- sumersget made in the ab- sphere of predictability for the senceofascientific frame- companies that have to plan work and getlitigated in state and invest for years in the fu- courtsand torts, outside our ture in this industry? review, I think that isn’t what DR. GOTTLIEB: Well, you come wasintended. Ithink we have to forums likethis and you a role to play. talk about what you intend to Iwant to see the agency do.Ithink we’vebeen pretty CME Group is atrademark of CME Group Inc.The Globe logoisatrademark of ChicagoMercantile ExchangeInc.All other trademarksare the propertyoftheir respectiveowners. step in to adjudicate some of transparent. I’vebeen pretty Copyright ©2017CME Group.All rightsreserved. the important claims that communicativewith the press. product developerswant to Iwas very clear from the out- makeonlabeling that could be set that with respect to FSMA, P2JW289000-0-R00600-1------XA

R6 | Monday, October 16, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | THE GLOBAL FOOD FORUM Trade in the Balance Juan Luciano of Archer Daniels Midland says the U.S.food sectorisincredibly productive. Fornow.

Feeding the world while through the river in barges— stable forthe past 50 years. dealing with the complexities incredibly efficient—versus And Ithink the lessgovern- of global trade has never been maybe 15% in trucks.The Bra- ments touch on those things, so difficult. And no industry zilian situation is the reverse. the better. The more we send has abigger stake in succeed- But Brazil has committed $14 pricesignals that areincor- ing abroad than the U.S. food billion in infrastructure. China rect, the moremistakes the sector.Matt Murray, deputy has committed $1.4 trillion in farmer will make in terms of editor in chief of The Wall the new silk road. planting what we need. Street Journal, sat down with Think about the productiv- Juan R. Luciano,chairman, ityofthis.Today, atowboat MR. MURRAY: In terms of

president and CEO of Archer with bargesofsoybeans can Nafta, are there food issues (3) DanielsMidland Co., to dis- push the equivalent of nine that need adjustment?

cuss thechallenges through football fields down the Mis- MR. LUCIANO: When Italk to JONES theprism of ADM. Edited ex- sissippi River.You canpush the Mexican officials,they re- W cerpts follow. one metric tonofgrain 652 alizeNafta wasput together, /DO CIO

miles with a gallon of fuel. It like, 23 yearsago. And there LA MR. MURRAY: What’s your is incredibly efficient. were thingsthat weren’t on PA

sense of today’s trade atmo- our radar screen 23 yearsago, GABE sphere? whether it’ssustainability or ‘This was the first year that I’ve been to China and Mexico twice before February.’ MR. LUCIANO: I continue to be Trade Outlook e-commerce or thingslike optimistic.But, of course,a The U.S. agricultural trade that. Theconsumer has shifted let alone 2050, what do we MR. LUCIANO: We have bought tailor food for you? That will companythat has been around surplus is forecasttodecline by significantly. need to learn faster? acompany, Biopolis,which is a be the next revolution. for150 years, we arepretty $100 million in fiscal 2018 from Ithink everybody acknowl- MR. LUCIANO: Think about corn microbiology company. It is a paranoid. This wasthe first fiscal 2017. edges that we probably need yields,for example.The next genome company. We’relook- MR. MURRAY: What are the year that I’vebeen to China to open up,look at all those feeding of the world won’t ing much moreatpersonalized black swans you worry about? and Mexico twice before Feb- Exports Imports Balance things, and put it back to- come from moreland. It will nutrition, the impact or the in- Climate change? Superbugs? ruary. We spent a lot of time $150 billion gether again. I don’t expect a come from intensity,from teractions between the micro- MR. LUCIANO: On this task of making sure that we clarified massiverevolution. TheU.S. yields. So, I bet a lot on tech- biome in your gut with either feeding the world, Iworry the message, if you will. hasbeen incredibly blessed nologies.Farming has become your food or your pharmaceu- about two things. One is,right 100 with two very peaceful part- so full of datanow.Sensors ticals. nowwehaveanabundanceof MR. MURRAY: Meaning, what- ners. Ithink we need to lever- arealmost free,soyou can People aretaking amore crops.Inventories arevery ever happens, we’reaglobal agethat and continue with have asensor in everybushel, proactive approach to health. high in the world. It could lead company, global trade ties are 50 that advantage. asensor in everyacre. Youcan If you have heart disease and us to this sense of compla- still central to the industry? predict much better. Agricul- diabetes,you caninfluence cency, that everything is going MR. LUCIANO: I think the mes- 0 MR. MURRAY: ADM is in 160 ture has become high tech. those with food, with func- to be all right. We can’t. We sageisthat trade flowsinthe countries. It is a volatile time tional food, personalized nu- need to produce more food in food industry, or free trade in 2012 ’13 ’14 ’15 ’16 ’17* ’18* in the world. What does it MR. MURRAY: Is there anything, trition. So,weare putting a the next 40 yearsthan we pro- the food industry, is essential. *Reflects forecasts mean for your company? just as an engineer, that really lot of research intocan we get duced in the last 10,000.It Source:U.S. Department of Agriculture MR. LUCIANO: There are diffi- excites you about the future of ingredients, microbiology in- hasn’t been done.And it needs MR. MURRAY: Even though the THE WALL STREETJOURNAL. cult challenges; feeding a the industry? gredients, that we can use to a lot of things. U.S. is coming off record har- growing population. By 2050 vests, as apercentage glob- But those 240locks and we will have to feed 10 billion ally, isn’t it bound to decline in dams in the Mississippi River, people. It looks like we’re go- coming decades? Brazil is rap- they datefrom1930,some ingtohavetime.Iworrymore idly increasing, including in from 1903. So far, we have an about the next 10 years. areas like corn. China is pick- advantage. But we need to pay I’m very optimistic about The Large Seafood Gap ing up. The U.S. role in the to- attention to it. this convergence of technolo- tal food trade globally has got gies from computing science, to change, right? MR. MURRAY: Are there things from biological scienceand Tj Ta te and Amy Novogratz say innovation is MR. LUCIANO: Yes. Obviously, in trade conversations that get physics science. I’m an engi- we’re going to feed the world you concerned? neer so Ilovetechnology. The the key to increasing production with moreyield. So,itisn’t MR. LUCIANO: Iworryabout potential is,for the firsttime, that much about shifting of whether we’regoing to define we’re going to get the ability Seafood has abig role to land right now. Thecritical trade as being good or bad de- to learn faster.Idon’t think play in feeding arapidly grow- point will be howdoyou turn pending on whether we have a that happened in the previous ing global population. But God-given advantages into net positivebalancewith a industrial revolutions. there aren’t enough wild fish competitive advantages. certain country. in the sea to do the job. So fish Todaythe U.S. sends about In food, it changes, but the MR. MURRAY: And when you farming, or aquaculture, with 55% or 60% of production basic trade flowshavebeen think about the next 10 years, its promise of sustainable sea- food, will have to fill the gap. The question is: Can it? The Wall Street Journal’s Matt Murray sat down with Tj Tate,director of the sustain- able-seafood program at the National Aquarium, and Amy Novogratz,co-founder and managing partnerofAqua- Spark, an aquaculture invest- ment fund, to discuss the promise and problems of sus- ‘We need to improve our practices,’ says Amy Novogratz. tainable seafood. Edited ex- The Wall StreetJournal cerpts follow. thanks the sponsors of the Tough goal MR.MURRAY: Tj, what’s unsus- Global Food Forum for tainable about our seafood ecosystem today? their generous support. MS. TATE: Themost unsustain- able thing has to be the lack of knowledge, the ignorancein howfar we’vecome in tech- nology, in the need forgrowth, in innovation, and that it has to be the solution for feeding our future populations.

MR. MURRAY: Ignorance of the consumer, you mean? MS. TATE: Exactly. ‘I think you have to have government’ involved, says Tj Ta te. MS. NOVOGRATZ: It’shardto getclear information about notnecessarily environmen- productsoffish that are seafood, whereitcomes from, tally friendly.But even if that’s caught from the wild harvest how it’s produced. not your thing, we don’t have and then putting that back But when you’retalking enough of it to get there. into the feed so that for wild- about unsustainable seafood, harvest fish, everysingle part it’s also the fact that we just MR. MURRAY: Is it aproblem to of that fish should be utilized. don’t have enough. We’retak- get it? Or is it just simply a ing as much as we canfrom technical hurdle that you have More challenges the oceans and we’recurrently to overcome? MR. MURRAY: What are the producing awhole lot of aqua- MS. NOVOGRATZ: It’s just that other challenges for the kind culture, but we’repredicted to we’retaking fish from one of aquaculture world you envi- need to actually triple the part of the ocean ecosystem sion? amount of aquaculturewe’re and kind of emptying it. It just MS. NOVOGRATZ: We need bet- producingbythe end of the isn’t sustainable. It’s also ex- terways to battle disease. century. pensive. We’reworking with aPolish So we’relooking at replace- companynow that uses MR. MURRAY: Simply to feed mentsfor fish meal. Forexam- phages that canpotentially re- the growing population? ple,we’reworking with acom- place antibiotics in fish farm- MS. NOVOGRATZ: Yeah. pany that’screated amicrobial ing. alternative to fish meal that’s Thereisnow moreand MR. MURRAY: So what needs to almost an identical amino-acid moretechnologyaround land- happen? profile. based systems that do things MS. NOVOGRATZ: We need to MS. TATE: But also when you’re well with no pollution whatso- improveour practices.We talking about the innovation ever. Formoreinformation, please visit: need to bring in some of the side and it comes to feed, back And we’refinally getting to better technologies for aqua- in the day in aquaculture, we aplacewherethose kind of globalfood.wsj.com culture. We need to lower the used to just feed and feed and deep, submersive, open aqua- [environmental] footprint of feed. Feed is 60% to 70%of culture technologies that you aquaculture as we grow it. the operational cost of afarm. canuse out in the open ocean So they had to getsmarter areactually getting to the ved. MR. MURRAY: Better practices with their feed usage, which point where they’re commer- reser like what? What are the big means that thereare cameras cially viable and cost effective.

rights hurdles? in the water. When [fish farm- So technologyisabsolutely All MS. NOVOGRATZ: If we really ers] see the fish swimming changing aquacultureand nc.

,I aregoing to triple our aqua- around and the fish swim by changing it quickly. cultureproduction, it’spre- thefood, they stop feeding. ompany dicted that we’ll need 300 mil- Forshrimp,for example,if MR. MURRAY: Fish farming his- &C lion more metric tons of feed they don’t hear the crunching torically has been an environ-

Jones to be able to do that. So feed of the food, they stop feeding. mental challenge, right?

Dow is a huge issue. The technology has helped MS. TATE: Actually theenvi-

017 Currentfeed forfish is in us gettothe level of not wast- ronmental challenges are one

©2 largepart made up of wild- ing, but actually utilizing what of the thingsthat arebeing codfish meal and fish oil. It’s we have—and using those by- Pleaseturntothenextpage P2JW289000-0-R00700-1------XA

THE WALL STREET JOURNAL. Monday, October 16, 2017|R7 JOURNAL REPORT | THE GLOBAL FOOD FORUM

growerdecode whereishis most profitable land, his most Data ScienceWill productive land. And then we can replicate that completely across those 1,000 acres. Meeting the fears Transform Farming MR. BERMAN: For most of the world, food is about emotion. How do you meet the average Hugh Grant of Monsanto and James C. Collins person who doesn’t care a whit about what you just said, (3) buthas avery emotional reac-

Jr. of DowDuPont on the impact of new gene- tion? JONES MR. COLLINS: It’s starting at a W editing technologies and big data very local level. It’scertainly /DO CIO

starting about sharing the LA About two decades ago, ge- only much faster and more ef- It will allowustodothe benefits and the opportunity. PA

netically modified organisms ficiently. same kind of thingsthat we’ve We talk about trying to feed GABE came into popularuse. And To find out more about the always been able to do.The 10 billion people by 2050 and ’We need to get in front of this,’ Hugh Grant says. the technique quickly drew fire potential of these new technol- breeding work that we do ev- needing to maintain the pro- from critics for introducing ogies, The Wall Street Jour- eryday,much faster.Wecan ductivity curvethat we have DNAfrom one organism into nal’sDennis Berman spoke do in six months nowwhat today. another. with Hugh Grant, chairman used to take us six or seven We’regoing to feed alot of Now there are new technol- and chief executive of Mon- years. folks, but we’re also going to ogies on the rise that promise santoCo., and James C. Col- MR. GRANT: Like gene editing, createalot of economic stabil- to reshapethe world of agri- lins Jr.,chief operating officer data science is going to touch ity,which leads to political culture. of the agriculture division at broad swaths of our life. What stability and leads to prosper- Data scienceismaking it DowDuPont. we areseeing is moreeffi- ity. Explaining that story and possible to getamuch more What follows are edited ex- cient, more specific, accurate talking about howwemove detailed look at things like cerpts of the conversation. applications of fertilizer,a the world forwardfromasta- howfertilizer can be used much deeper understanding of bility perspective, it all starts more effectively. The road ahead disease in plantsand address- with agriculture. Potentially more controver- MR. BERMAN: What about ing disease at a much earlier sial is anew technique known Crispr [a kind of gene editing] stage. MR. BERMAN: Agene-edited as gene editing that lets scien- is new and potentially exciting food or gene-edited seed that tists remove negative traits for you? MR. BERMAN: What does that creates afood—should that be from an organism or add posi- MR. COLLINS: Ithink the real look like for afarmer in the labeled as aGMO or not? I tive ones without introducing aspect of Crispr is the fact field? Is that being able to ap- know this is a somewhat con- any foreign DNA. that technologythat we’ve ply different levels of nitrogen troversial topic. What’s your Proponents say the method known for hundreds of years, or fertilizer or pesticide on a view? `We’re going to feed a lot of folks,’ says James C. Collins Jr. is simply what farmers have some of our oldest technology, square-inch-by-square-inch MR. COLLINS: Let’sbeclear. been doing for centuries— is actually nowour newest basis? Thetechnologythat we’rede- corn. We’ve identified a corn to breed a corn hybrid. To go breeding for certain traits— technology. MR. GRANT: Youplant your ploying is the capability that hybrid in Argentina that has a from aseed to truckloads of good seed in the best land, already existed in mother na- desired trait that’s already in seeds, it’s about seven years. and you plant more of it. And ture.We’vebeen using these corn. Mother natureput it TheCrispr,the gene-editing Bountiful Harvest in land that’ssandy or gravely tools forhundreds of years thereand we’reoptimizing stuff,isfaster,but the rate- World-wide acreage plantedwith biotech crops, by year or burns off early in the through the normal breeding that trait in corn in North limiting step is going to be spring, you reduce your seed- process that we’ve used. America. how fast can you produce the 500 million ing rates. We’renow at the Gregor Mendel taught us seed. point wherewe’refarming one this, and you learned about it Finding the right label And that’sgoing to take Total accumulatedacreage: 5.31 billlion 400 seed at a time. in your high-school biology MR. BERMAN: So, not aGMO. time.You canhavehundreds MR. COLLINS: I’ll give you one class. Hugh? of editsinone seed. But for 300 otherexample.For afarmer MR. GRANT: We’renow getting the seed to bring a new vari- who,say,grows 1,000 acres, MR. BERMAN: But again, from ready to sell seed forthe ety is still going to be six, 200 he doesn’t know today which an emotional standpoint, it spring of 2018.We’ll be 22 seven years. So we gettime to of thosethousand acres is his does feel different when asci- yearsintoplanting GMOs com- figure this out. But to your most profitable and most pro- entist is turning genes on and mercially.Twenty-two years. earlierquestion, howdowe 100 ductiveand which isn’t. He turning genes off literally as if So billions of acres,trillions of avoid what the last 22 years 4.2 gets a 1,000-acre snapshot. he or she is God. meals.Ittook us 22 yearsto looked like? As we enter intothis digital MR. COLLINS: Themain point getlabeling figuredout for We need to getinfront of 0 world and we start to use thereisthat we’reworking GMOs.Itshouldn’t take that this as an agricultural,asa 1996 2000 2005 2010 2015 data, as yousuggested, on a within the genome of corn, for long for gene editing. business, community.Weneed

Source:International Servicefor the Acquisition of square-meter or square-inch example. We’re not introduc- Here’show Iwould think to do betterjob explaining it Agri-biotech Applications (ISAAA), 2016 THE WALL STREETJOURNAL. basiswe’reable to help our ingany non-nativeDNA into about it. It takes seven years to the consumers.

The climatequestion MR. BUSSEY: Give us your view The Large Seafood Gap on climate change and whether or not human activity is con- ContinuedfrompageR6 MS. NOVOGRATZ: Ithink it’s tributingtoclimate change. overcome,because you’re definitely an opportunity for MR. PERDUE: Farmersand pro- not going to get a permit to moreinnovation. People ducershavedealt with climate put your farm in acertain want aquacultureproduced changetheir whole lives and placeuntil all those regula- locally so youdon’t have to theircareers. Nothing affects tors have looked to make transport it. So it’sdefinitely our production as much as surethat you’renot going to bringing moreinnovation weather changes. Now, it environmentally degrade an into the space. doesn’t really matter to me area. MS. TATE: It’s also an oppor- whether we determine what MS. NOVOGRATZ: Which is a tunity where perhaps we’ve the cause is or not. Ithink good point. We’retalking overfished some species,let’s from aconservation perspec- about all the challenges.But sayonthe Northeast coast of tive, agricultural producers, we’reactually at aplace the United States. ranchers, forestersought to be wherethere’sreally,really doing everything they canto well done aquaculture right MR. MURRAY: Well, you’re in be good stewardsofthe land, now. Baltimore. You work with the which Ithink is good. Chesapeake Bay a lot. MR. MURRAY: But the U.S. is MS. TATE: Exactly.And so MR.BUSSEY: But it does matter not the biggest player in this if you believe that human ac- space? tivity is contributing to climate MS. NOVOGRATZ: The U.S. is Fish Supply change from apolicy-making tiny. It’s1%ofthe world’s Aquacultureishelping fuel growth ‘The farming community liked the TPP. They felt like it was an opportunity to sell more.’ standpoint, because that could aquaculture. in the supply of fish forhuman lead to certain policy-making. consumption. Do you believe that human ac- MR. MURRAY: Why is the U.S. The Agricultural Agenda tivity is contributing to climate slow on this versus other Capture Aquaculture change? countries? 175 million tons MR.PERDUE: Idon’t knowthat, MS. NOVOGRATZ: TheU.S. Agriculture Secretary Sonny Perdue talks about nor that Ithink that it has firstofall doesn’t consume a 150 been proven to be that. There ton of fish. 125 the TPP, Nafta and climate change arescientistsonboth sides of Andoriginally therewere that. And frankly,frommyper- alot of U.S.-based founda- 100 Farmers are facing uncer- principles of trade relation- MR. PERDUE: Our economyis spectiveitdoesn’t matter tionsthat were focused on 75 tainty over anumber of large ships and inject those intobi- one of the most open econo- whether Ithink that or not. I ocean conservation that kind issues. Trade deals may have a lateral deals as we go forward. mies in the world. Ithink there would lovetohear what you of said that aquaculture is a 50 big impact on how they sell needs to be more parity re- think our operation and agri- badthing and we shouldn’t their goods overseas. Immigra- MR. BUSSEY: What might hap- garding free trade vis avis the culturewould changeifwe have it. It changed about 25 tion laws may restrict their ac- pen to Nafta? What would you U.S. and our other trading thought humans were causing somewherebetween five and 0 cess to workers. like to see happen to the agree- partners. As youknow, Japan it. Ithink farmersare some of 10 yearsago when conserva- 2009 ’10 ’11 ’12 ’13 ’14 To sort through these ques- ment that would enhance the just raised their tariff on our the best agriculturalists. Some tionistsstarted to realizeif Source:Food and Agriculture tions, The Wall Street Jour- ability of the U.S. to sell its beef to 50% because their cus- of our forestsconsume CO2. we really areconcerned with Organization of the United Nations, 2016 nal’sJohn Bussey spoke with products to Mexico? tomersliked it so much. We’re So Ithink we’redoing our part our ocean’s health, we need THE WALL STREETJOURNAL. Secretary of Agriculture Sonny MR. PERDUE: Most people in simply asking the international in agricultureoverany kind of to get behind fish farming. Perdue. Here are edited ex- theagricultural sectorsinall marketplacetoremovethe climatechangeorCO2 accu- thereare opportunities there cerpts of the conversation. three nations believethat barriersaswehavehere. mulation. MR. MURRAY: Is there a gov- wherewedon’t have the har- Naftahas been essentially pos- ernmentalsolution? Or is it vest of wild oysters that we The trade picture itivefor agricultural interests. MR. BUSSEY: The administra- MR. BUSSEY: What have you really up to private industry used to.Well, an oysterisac- MR. BUSSEY: Trade is atopic Thereare little irritantsthat tion has said that for every learned about Donald Trump? to grow the presence here? tually a very simplistic type that youhave written on, you we must addressinthere. new regulation you’ve got to MR. PERDUE: Iwas fascinated MS. NOVOGRATZ: There’sa of aquaculture. And it’safil- have sung its virtues, praised Overall, we began with aphi- get rid of two regulations that by his hardconcern foragri- big collectivecoming to- terfeeder.Soit’sactually the opportunities for our farm- losophy. First, do no harm already exist. What does that culture, understanding what gether of all different stake- cleaning thebay.The more ers to export abroad. Yet this with agricultural interests. But mean in your realm? agricultural producers have holders around aquaculture oysterfarms we have,the administration pulled outof Ibelievewecan increase op- MR. PERDUE: Iembracethat. done.Ithink he understands globally right now. better. the Trans-Pacific Partnership. portunities forU.S.producers. We will have afall agenda. As that agriculturehas been very MS. TATE: Ithink youhaveto What they found out is What was wrong with the TPP youknow, this is done twicea significant to the U.S. econ- have government. Youhave that they can grow different as far as the farming commu- MR. BUSSEY: You see the agree- year in Washington. Interest- omy. to have NGOs.You have to species and not just have the nity is concerned? ment, as far as the farming ingly,Ifound out in Washing- Obviously,President Trump have the venture capitalists. oysters. They can grow sea- MR. PERDUE: Broadly,the farm- community is concerned, stay- ton, it is just as difficult to get is an interesting sort, and we You have to have the educa- weed with it. Or if you’re in ing community liked the TPP. ing intact, with tweaks? rid of a regulation as to get have alot of conversations tors. the Northeast youcan do They felt likeitwas an oppor- MR. PERDUE: That’smyhope. oneinplace. So that’swhat we within the cabinet about policy clams,mussels,oysters,kelp. tunity to sell more. Thepresi- I’m not the U.S. trade repre- aredoing with the Federal and issues. But he was very MR. MURRAY: When you think So it doesn’t always have dent obviously haddifferent sentative. Ambassador Lighthi- Register. supportivewhen Iwent in to about how the oceans are to be about that huge aqua- ideas about that regarding the zeris. Itry to stay in his ear to We’vegot to getrid of un- see him regarding Nafta, un- changing, what climate culturefarm. Therecould be fairnessofit. Similarly to let him knowwhat ag produc- clear regulations.Farmersare derstood the things that we change is doing right now, some small farms that are other global types of deals erswould liketosee. pretty much BoyScoutswhen were communicating.I’ve what’s the challenge as you literally just columns of wa- that we’veentered into, he felt it comes to complying with the found him to be aprettygood build up aquaculture with ter, and within those col- likeitwasn’t fair to the Ameri- MR. BUSSEY: Back on the TPP rules.But we need to have listener when it comes to busi- changes in the environment? umns of water are huge fac- can producer and American for just amoment. What ele- transparency, clarity in the nessissues and willing to Is it an opportunity or does tors that arecleaning up that economyand decided to with- ments of it would you like to regulations thereand promote changehis mind when you it make it harder in some space around the water and draw from that. Ithink we can keep in the conversation in them and educate people in makeaproposal that’smean- ways to develop more aqua- growing an ecosystem take some of those long-held Washington? the compliance. ingfuland persuasivetohim. culture? around that water column. P2JW289000-0-R00800-11FFFB5178F

R8 | Monday, October 16, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | THE FUTURE OF FOOD GrocersImagine the Store of the Future Straight from Kroger labs: Mullen told investorslast month. customized ads, smart shelves, Retailanalystssay that Kroger and other grocerycom- sensors that deploy cashiers panies need to do even more to maketheir discountsand stores appealing to shoppers siCo Inc. as Amazon ramps up itsat- BY HEATHER HADDON Kroger,the nation’slargest tempt to grab moreofthe supermarket chain by revenue $800 billion U.S. grocerymar- FOOD RETAILERS areracing and storecount, competes ket. Thee-commerce power- to leverageone of the most with food sellerssuch as Wal- house,whose recent acquisi- important weapons in their Mart Stores Inc. and a grow- tion of the Whole Foods chain battle to keep people coming ing cohort of online food- makes itsambitions in the to grocery stores: data. shopping rivals,chief among food-retailing spaceevenmore “Dataisthe newbattle- them Amazon.com Inc.The plain, spends 12% of its sales ground,” says Stuart Aitken, Seattle-based companyisgen- on technologyeach year,com- chief executiveof84.51˚, erally upending retail business pared with lessthan 3% at Kroger Co.’sdata-analytics with itscompetitiveprices, most grocers, according to es- unit, whose name derives from quick deliveries and the data timates from the U.K.-based the longitude of the division’s analytics it uses to target cus- consumer-analytics firm Dun- Cincinnati headquartersand tomers based on their buying nhumby. because its 750 employees do and shopping habits. “Grocerycompanies need to so-called longitudinal studies, Food industryexecutives think of themselves more like OGER

researching habitsofcustom- knowthey have to be smarter KR tech companies,” says David ers over long periods. andfaster to compete. Kroger Kroger’s Scan, Bag, Go system allows customers to check out items in store aisles as they shop. Ciancio,senior customer strat- Working from a small host has invested billions over the egist at Dunnhumby. of research facilities,Kroger’s past decade and a half to hire memberscan scan goods on primarysupermarket, down Amazon declines to com- app developersand datascien- engineers out of leading uni- Digital Tools theirmobile devices while from 61% adecade earlier,ac- ment on itsinvestmentsand tists are mining consumer in- versities and away from com- Percentage of food shoppers they arestill shopping and pay cording to Hartman Group Inc. grocery strategy. formation to devise the gro- panies recruiting talent with who use asmartphone to do the through an app as they exit research forthe Food Market- cery store of the future. They the same kinds of specialized following either beforeorduring thestore.Wal-Mart, the big- ing Institute. Risky investment aretesting apps forshoppers’ skills—including data analyt- avisit to the grocery store: gest U.S. food seller by stores Mining customer dataisin- Sellinggroceries is alow- mobile devices that will high- ics,logistics and app-develop- and sales,also has devel- creasingly seen as the key to margin business, meaning that lightsales based on whether ment. Recent innovations de- Use digital coupons oped—but not yetdeployed—a maintaining market share for big investmentsintechnology the customer eatsmeat or veloped in Kroger’s labs 52% patented facial-recognition supermarkets. Large regional can be risky. Sometimes com- needs help finding recipes for include infrared sensorsthat Check weekly sales specials technologythat it says could chains,such as Michigan- panies invest in new features chicken, forexample.Want to monitorthe number of cus- be used to detect dissatisfied based Meijer Inc. and Califor- their customersdon’t want to 48% makefish tacostonight? An- tomersinastore and auto- customersand respond to nia’sRaley’s Supermarkets, are use,says Michael Halula Jr., other app will populatea matically deploycheckout Look up recipes their needs. hiring consultants to harvest retail practicedirector forthe user’s digital shopping list clerks as the number grows. 43% “We’regoing to makeshop- data from their customers. Americas forTeradata, adata- with the necessaryingredients This tool alone,Krogersays, ping with us faster,easier and But Kroger has ahead start base analytics firm. “Too often available at the store. has reduced wait times by sev- Read reviews of products/brands moreenjoyable,” Wal-Mart on manyofits competitors. it is the ‘Field of Dreams’ sce- For store managers, mean- eral minutes acrossits stores. 32% Chief ExecutiveDoug McMil- Wal-Mart’sadvance intothe nario,” Mr. Halula says. while,aprogram is in the In-house equipment at most Use the in-store item locator lon told investorsand employ- grocerybusinessinthe late Kroger’s digital spending is works to allowthem to liter- Kroger locations remotely 23% ees this summer. 1990sprompted it to start a weighing on profits, which is ally see howproductsare sell- monitorsthe freshnessofcer- Not all of the supermarket customer-loyalty program in one reason the companyre- ing in agiven aisle,using aug- tain produceand notifies man- Comparepricing* industry’s tech-driven efforts part to keep closer tabs on its cently loweredits financial mented-reality apps on their agersthe second acooler 22% areabout increasing sales. shoppers. TodayKrogeruses outlook this year.The grocer’s phones that showthe prices blows out. Set to roll out at Costco Wholesale Corp., for 850 algorithms to personalize stock has lost morethan a and sales figuresfor the prod- stores next year: shelves with Find nutritional value* example,uses itsability to the coupons it mails to 12 mil- third of its value this year. ucts found there. sensorsdesigned to recognize 22% track everypurchase to inform lion households.The company But executives insist that and communicatewith apps *Note: Scan QR codes or barcodes itscustomersoffood-safety canuse purchase datatode- technology is critical to keep- Whiteboard fever on the mobile devices of cer- Source:Food Marketing Institute, recalls.And at Wal-Mart, termine whether someone has ing Kroger competitive. “Weplayinavariety of tain customers. Theapps con- U.S. Grocery Shopper Trends, 2017 stores areusing virtual-reality gone on adiet, had children or “This is the obsession,” spaces,” says MattWiley,ade- tain dataabout each cus- THE WALL STREETJOURNAL. headsetstotrain employees to retired, and to market differ- says Chris Hjelm,Kroger’s veloper at 84.51˚,during abe- tomer’s shopping habits, and deal with situations from holi- ent productstothose custom- chief information officer; it is hind-the-scenes tour that theshelves,inresponse,dis- will use the device to ring up day-shopping crowdstospills ers accordingly. Some Kroger “the customer experiencein wound continuously through play banner ads customized groceriesasthey shop,then in the beverage aisle. coupons have aredemption our stores and howtechnology groups of employees brain- forthem, forsuch productsas payfor their purchases Supermarkets increasingly rate of 65%, compared with a can be a part of that.” storming ideas on white gluten-free or nondairy prod- through an app. need to wooshopperstotheir national average of about 5%, boards.The analytics unit also ucts. Kroger also is rolling out Other retailersare using stores. Only 47% of 2,145 gro- executives say. Ms. Haddon is a reporter for does consulting forsuch firms awirelessscanning deviceit similar devices and other tech- cery shopperssurveyed in “Weknowour customers The Wall Street Journal in as Procter &Gamble Co., calls Scan, Bag,Goat400 nologytowoo customers. At Februarysaid they shopped better than anyone,” Kroger Chicago. Email her at: General Mills Inc.and Pep- stores next year.Customers Wal-Mart’sSam’sClub stores, formost of their food at one ChiefExecutiveRodney Mc- [email protected].

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