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JOURNAL REPORT

S HIGHLIGHT R8-12 MORINGA CONSUMER- TREES REGENERATIVE FRIENDLY grow in tropical and GRAZING products with less temperate climates uses cattle or sweetener may get and produce bison to enrich a boost from nutrient-rich leaves cropland. bitterness-blocking year-round. mushrooms.

THETHE NE NEXTXT HOTHOT TRENDS TRENDS IN IN FOFOODOD Yo u may not have heard of moringa or regenerative grazing yet. But there’s a good chance you will before long.

NEW SPIRULINA, JACKFRUIT PLANT WATERS blue-green has a meaty such as cactus algae, completes texture and absorbs water are popping the natural color the flavors in which up in mainstream palette for it is cooked. stores. food makers. ETTY IMAGES (6) /G TO CKPHO TO IS

the yuck factor in the U.S.,” Mr. Garfield ing of moringatrees in the U.S. as aware- BY JULIE JARGON AND ANNIE GASPARRO says. nessgrows. But cricketsaside,food expertshave She adds that moringa’sappeal extends OT TOOFAR IN THE FUTURE, when youreach fora identified the super-healthyfoods—and beyond its nutritional benefits to its “in- healthydrink,itmight be full of waterfromacactus. concepts—that arehitting supermarket credible narrative.” Female farmersin Your main course at dinner might be apear-likefruit shelves,and have the potential to become Ghana and Haiti grow moringaasameans from Southeast Asia that does aremarkable job of imi- the next açaí berryorcoconut water. of supporting their families,she says. tating meat. Thenextcandy bar your children biteinto Here’s a closer look at them. “People want to knowthe storybehind might be infused with mushrooms that help cut down their food, and this is aproduct that helps on the sugar needed to sweeten the treat. And their THE NEXT SUPERFOOD empower women.” breakfast cereal might be colored with algae instead of MORINGA N chemicals. THE NEXT BUZZWORD Whythe wave of exotic de- Looking Moveover, kale—there’sanew super REGENERATIVE GRAZING lights? Nutrition science—and green. Theleavesofthe moringaoleifera customers’ rapidly changing tastes—are forcing the food for the next tree,grown in Haiti, partsofLatinAmer- “Grassfed,” onceaprogressiveterm in business to search ever farther afield for new edibles. açaí berry icaand Africa, aredrawing interest from the food world, has become amainstream Everybody knows standards change—fat wasbad, forin- trend watchersfor their nutritional con- buzzwordused to attractconsumerswho stance, until the big no-nos became carbs and gluten—and or coconut tent. Theleavescontain high levels of want to eat beef that doesn’t come from each time they do,arash of newproductsappear that water. calcium, potassium and protein, as well cows raised in feedlots. It has expanded claim to be packed with good stuff and free of thingsthat as vitamins A, B, C, D and E. Because the from expensivemeat sold at Whole Foods cause harm. trees cangrowinboth tropical and tem- Market Inc.and steak burritos at Chipotle But nowit’snolonger enough to claim aproduct is sim- perateclimates and produceleavesyear- Mexican Grill Inc.toChili’sGrill &Bar, ply free of something that’sfrowned upon. Consumerswant to knowthat the bad round that canbeeaten fresh, cooked or which recently began offering grass-fed ingredient hasn’t been replaced with something equally bad or worse. And they dried without losing their nutritional burgers,and Annie’sMac &Cheese,which want to knowthe storybehind their food—howitwas grownorraised, and whether content, moringaisbecoming an attrac- uses milk from grass-fed cows. its production and distribution was kind to the environment. The less processed tiveadditive. Now, Ms.Abbottargues,it’snot enough and simpler the ingredients, the better. That hasleftfood and restaurant companies Shipping fresh leavesfromsofar away just to knowthe diet animals were fed, rushing to clean up their labels with ingredientsderived from natural sourcescon- would result in spoilage, so therecur- but also to understand the impact those sumers can understand and pronounce. rently isn’t anyfresh moringacommer- animals have on the environment. Foratrend to go mainstream, it has to provide health benefits, be easily com- cially available in the U.S.,according to Thereisagrowing movement called prehensible,makeeconomic sense forthe manufacturer,and of course tastegood, Melissa Abbott, vicepresident of culinary regenerativeagriculture, in which differ- says David Garfield, food-industryconsultant at AlixPartners. It’sevenbetterif insightsatHartman Group,afood con- ent farming practices areused to restore the product tells astory and has third-party verification, such as acertified-or- sulting firm in Bellevue,Wash. So it’s soil degraded by planting and harvesting ganic label. currently being sold as apowder and in crops.One way to regeneratethe topsoil Of course, not all foods that are popular on the fringe go mainstream. Cricket energy shots, barsand teas at retailers is to grazecattleorbison on land used bars, forinstance, haven’t takenoff in the U.S.,eventhough eating insectsiscom- including Target Corp.and Amazon. Ms. forgrowing crops,because their manure mon in 80% of the world and they arehigh in protein. “It will be hardtoovercome Abbottexpectstosee commercial plant- Pleaseturntothenextpage

INSIDE

The Supermarkets’ Best What’s Behind NotYour Father’s McNuggets Weapon: Produce the Commodities Glut Famous food products change to To counter online grocers, physical The boom-bustproduction cycle meet consumers’ health priorities storeshighlight their fruitsand has expanded acrossthe globe R4 vegetables R3 R2 As Crop Prices Fall, Farmers ABuck for Broccoli? Focus on the Seeds When Health Labels Hurt Paying your children to eattheir Newservices collectdatafrom Consumersexpecttolike“light” fruit and veggiesmay create good their members, giving growers and “reduced-salt”foods less long-term habits information about what works best R2 R3 R6 BigBets on No Frills The Battle AgainstFood Deserts AFood Empireina Aldi, aGerman deep-discount Asearchfor newsolutions to Changing World grocery chain, is expanding into manypoor Americans’ limited Cargill’sCEO reflects on GMO food, wealthier areasofthe U.S. access to healthyfood record harvests and climatechange R3 R4 R6 P2JW291000-0-R00200-1------XA

R2 | Monday, October 17, 2016 THE WALL STREET JOURNAL. JOURNAL REPORT | FOOD The Supermarkets’ Best Weapon: Produce In the battle against e-tailers, physical stores are placing their bets on fruits and vegetables

high traffic areas to grab at- BY SARAH NASSAUER The In-Store Edge tention and keep sales moving. Consumers arereluctantto But metal doesn’t have a BERNIE DAVE, aregional man- buy produceand other fresh “farmersmarket” feel, so the ager for Wal-Mart Stores Inc. food online. The percent companyisbuilding itsown near Detroit, starts his weekly surveyed who said theyhad versions with wooden exteriors store visits in the backrooms made an online purchase in that hide the metal frame,says of the produce departments. these categories in the prior Jamie Postell, director of pro- Mr.Davechecks the “crisp- 12 months: ducefor the company. ing” stations whereworkers “We are working on devel- keep lettucefresh longer by Clothing ...... 52% oping an ideal display,” Mr. washing it, cutting off the Books ...... 43% Postell says.“It is somewhat browned ends and culling any CDs, DVDs, Blu-Raydiscs ..... 31% of an art.” crushed leaves. It is one of sev- Wal-Mart has long strug- Beauty, cosmetics products 27% eral upgrades Wal-Mart is mak- gled to become known forthe ing to itsproduceareas—im- Children’stoys, durables ...... 22% best produce, not just low provinglighting,training staff Jewelry ...... 21% prices on bananas, onions or to bettercarefor fruitsand Petfood, pet supplies ...... 19% other staples.GregForan,Wal- vegetables,and putting produce Mart’sU.S.CEO of two years, Groceries (packaged food).... 18% in bins that mimic wood grain is pushing stores to change. and aim to givethe section the Sporting goods ...... 16% During asurprise visit to a feel of afarmersmarket. Groceries (fresh food)...... 12% Wal-Mart in Dearborn, Mich., “There has been a massive earlier this year,Mr. Foran Source:Morgan StanleyAlphaWise survey improvement on fresh from of 5,000 consumers in ﬁvecountries, spent “80% of his time in pro- April-May2016

wherewewereat,” says Mr. BFRESH duce,” says Mohammed Saleh, Dave,who started at the com- Bfresh stores bought branded green and wood cases to hold its produce, for a premium touch. THE WALL STREETJOURNAL. co-manager of the store. panymanaging stores nine Theexecutivewalked work- years ago. tiny 0.16% of the $670 billion Wal-Mart U.S. in a March call Bfresh, achain of smaller source.“Theglobal supply ersthrough newproducere- While Wal-Mart and other food and beveragemarket, ac- with investors. stores in cities meant to at- chain might be easier to exe- quirements. To draw shoppers’ retailers, including Ahold USA cording to Commerce Depart- AholdUSA—the U.S.-based tractyoung,urban dwellers, cutethan getting 20 items from eyes,the department should al- and Meijer Inc., arepouring ment figures. Only 4% of con- unit of Ahold Delhaize NV and who are“big Amazon custom- 20 places around Illinois to the waysuse ”color blocking,” al- money intoramping up online sumerssaid they purchased owner of Stop &Shop,Giant ers,” says Paul Kneeland, lead same distribution center,” Mr. ternating the color of fruitsand sales,the grocersare also some produce through online andPeapod,anearly online fresh merchant forthe new Castagnetto says.Tocontrol vegetables on display. The“wet buckling down on the basics of grocersinthe past year,a grocery-deliverycompanyin chain. In the two locations costs, the companyencourages wall” nowstartswith leafy the producedepartment. 2015 Nielsen survey found. the U.S.—is investing heavily to open so far,both in Massachu- farmerstosupply crops when greens,not baggedsalad, to That’sbecause high-quality Producealso is oftenpart makeits supermarket produce setts,producegetsmorespace demand is high, and ensures convey freshness. Seasonal fruit fruits, vegetables and other of “fill-in” trips,those mo- departmentsmoreappealing, than anyother department and full trucks by adding fresh should getprime placement in fresh foods are emerging as a mentsashopper dashes to the says John Ruane,senior vice makes up the largest chunk of juice, yogurt and other prod- front to spur impulse buying. physical store’sbest defense storefor alast-minuteingredi- president of fresh forAhold. sales, Mr.Kneeland says. ucts to deliveryroutes. “Wewant to be known for against growing competition ent and might not wait for an Aestheticsare particularly Even the containersthat having fresh all the time,” says from Amazon.com Inc. online order.Produceitself Pyramids fall important in the producede- hold produceout on the store Mr.Saleh. “Wehaveverylittle isn’t usually abig money- Over the past two years, partment because most pur- floor aregetting moreatten- room forerror.” Picky about produce maker, but it draws people to Ahold moved seasonal prod- chases areimpulsive, grocers tion. At Midwestern supercen- Manycustomersdecide stores to buy higher-margin uctsand easy meal additions say. “People go intothe pro- terchain Meijer Inc., managers Ms. Nassauer is a reporter wheretoshop based on the packaged food, apparel, elec- likecut vegetables to the front duce department with alist found metal cartsonwheels for The Wall Street Journal quality of the produce, and— tronics and other items—prod- of itsstorestomakeshopping that says ‘fruits’ and ‘vegeta- perfect formoving seasonal in New York. Email her at fornow—most shopperswant uctscustomersincreasingly faster,Mr. Ruane says.Ahold bles,’ versus specific products,” fruit and vegetable displays to [email protected]. to pick their ownripe toma- are buying online. Even Ama- nowtrains employees to ask says Michael Castagnetto,di- toes or perfectly green heads zonwantspart of the valuable “WIBI” (Would IBuy It?) when rector of fresh sourcing for of lettuce, saygrocers and in- market. It plans to build small stocking,toweed out products RobinsonFresh, which is dustry researchers. Shoppers stores that sell perishable that arepast their peak.Ahold owned by C.H. Robinson, an who don’t buy groceries online foods and allowshoppersto also is adding unusual items Eden Prairie, Minn., logistics most oftencitethe desireto order shelf-stable items for like yuccaand dragon fruit, companythat supplies produce Light in the Head pick their ownproduceasthe same-daydelivery, saypeople and storeworkershave and transportsother goods to reason, according to an online familiar with the matter. stopped stacking produceinto retailersincluding Wal-Mart. survey from MorganStanley Improving Wal-Mart’sfresh neat pyramids,acostly effort One way to grab attention is The low expectations of earlier this year. food is “a hugepriority forus that also candamageproduce, with a“local” moniker.That Online food and beverage because it’sabig traffic Mr.Ruane says. has Robinson Fresh working eating low-fat food sales aregrowing fast, up 20% driver,” says Steve Bratspies, Ahold has also created a with awider variety of farmers, since2013,but still makeupa chief merchandising officer for newbrand of storecalled oftenahigher-cost way to BY BECKIE STRUM

Consumers might be demanding more low-fat food, but new research suggests that perhaps they’d be better off not knowing they’re eating it. The Next HotTrends in Food In a Catch-22 for food manufacturers trying to appeal to health-conscious consumers, a recent study found that people Continuedfromthepriorpage THE NEXT MEAT ALTERNATIVE tended to like the taste of a food labeled “light” less than the fla- and left-behind forage act as natural fertilizers. JACKFRUIT vor of a supposedly higher-fat alternative, even though the two In the next three years, Ms.Abbottexpects, restaurantsand were actually identical. food companies will highlight that their grass-fed beef was In health guidelines issued early this year,official U.S. dieti- Joachim Schouteten, a researcher at Identical raised in aregenerative-grazing fashion. She adds,though, that tians sayAmericans eat toomuch meat. That’sgiving fodder to Ghent Universityin Belgium, and five other therewould have to be averification system designed to ensure newmeat alternatives aiming to replacethe usual meat replace- researchers enlisted 129 consumers to cheese the claim has meaning. ment, tofu,which has worn out itswelcome with manyconsum- evaluate four pieces of cheese that came labeled ers. from the same block of Belgian young THE NEXT INGREDIENT Thereare burgers made with protein extracted from yellow Gouda. The only information participants differently SOMETHING CONSUMERS peas,amolecule called heme that makes plantstastelikebeef had about the cheese came from four dif- elicits and faux pulled pork made from shredded jackfruit. ferent labels: “cheese,” “cheese with re- UNDERSTAND Equity-research firm Wedbush estimates the overall industry duced salt,” “light cheese” and “light different of plant-based alternativefoods,including replacementsfor cheese with reduced salt.” reactions. Food companies have long struggled to keep up with chang- meat and dairy, has $3.5 billion in annual sales.Analyststhere Participants liked the flavor of the two ing government guidelines and regulations by reformulating expect that to continue growing as aresult of increasing health cheeses with “light” labels less than the their products to remove unhealthy ingredients such as trans and sustainability concerns around meat, as well as newtech- taste of the others. They also tasted less fatty acids,sugar and salt. In some cases,though, shoppersare nologies—like the heme molecule—that make the texture and salt in the cheeses labeled “reduced salt,” though they liked them even more suspicious of the stuff companies put in, such as arti- taste of vegetables more similar to meat. almost as much as they liked the supposedly saltier versions, ac- ficial sweeteners. Of all the budding meaty cording to the study, which was published in the scientific journal Nowthe goal is “clean la- substitutes, food experts say Nutrients. bels”—listsofingredients Taste Trends jackfruithas the most poten- Participants also said they had expected to like both the “light” consumerscan understand U.S. food sales in these health-orientedcategories forthe 52 weeks tial to go mainstream because cheeses and the “reduced salt” cheeses less than those that and pronounce. So,food mak- ended July 2, and the percentage change from the prior 52-week period of itsmeaty texture and abil- didn’t carry those labels. ersare experimenting with ity to absorb the flavorsin “This negative effect of health labels on the expected liking adding natural ingredientsto SALES, IN BILLIONS PCT. CHANGE which it’scooked. Alarge could discourage taste-oriented consumers to even try or buy the mask bad flavors or enhance fruit with aspikyouter shell, product,” the researchers wrote. Companies “should be aware that good ones without swapping Gluten-free $61.3 12.5% it comes from trees grown taste-oriented consumers could interpret these labels as a warn- one bad ingredient foran- No artiﬁcial preservatives 12.2 5.8 mostly in SouthAmericaand ing sign regarding their flavor.” other. Southeast Asia, but it’sin- The study also found that more participants associated the “It’s a shift in thinking for No artiﬁcial colors 3.8 16.6 creasingly making its way to regular cheese with positive emotions like “glad” compared with food and ingredients compa- the U.S. Theinner flesh— the cheeses labeled light or low-salt. nies,” says Dave Donnan,a Grass-fed 0.4 50.1 somewhat pear-likewhen How, then, do producers let consumers know their cheese is partner at consulting firm raw—develops asavoryflavor low in fat or salt without saying it? “You look for more-general la- A.T. Kearney, where he leads Source: Nielsen THE WALL STREETJOURNAL. when cooked. bels that are not that linked to taste,” says Dr. Schouteten. the global food and beverage “People who want to avoid He says further research is needed to identify how labels affect practice. “They’renot just looking forareplacement forsugar, soyare looking foralternatives,and alot of the alternatives are what people actually choose to buy and eat. but how to change the taste profile” of products so that they highly processed,” says Ms.AbbottofHartman Group.“This is don’t need as much sweetener in the first place. just fruit that’s been minimally processed and seasoned with Ms. Strum is a writer in New Yo rk. She can be reached at Forinstance, one biotechnologycompanyisusing mush- things you have in your kitchen.” [email protected]. rooms to removethe bitternessincacao beans so that choco- latecan be made with lesssugar.Other companies aremoving THE NEXT NATURAL FOOD DYE to soyprotein and natural flavor enhancerstoreducesodium SPIRULINA levels in food. The Journal Report welcomes Themovetoward cleaner food labels is pushing out artificial THE JOURNAL REPORT your comments—bymail, faxor THE NEXT HEALTHY BEVERAGE food dyes likeRed No.40and Yellow6,which were popularized email. Lettersshould be ad- PLANT WATERS formaking Jell-O dessert bright redand giving Froot Loops ce- For advertising information dressed to LawrenceRout, The real itsneon glow. Food makersare responding to growing con- please contact Wall Street Journal, 4300 Route1 Thecoconut-water fad appearstohaveunleashed anew cate- cerns among parentsthat artificial food coloringsmay cause hy- Katy Lawrence at North, South Brunswick, N.J. gory in the drink aisle: plant waters.Fromaloe waterand maple peractivity and allergic reactions in their children. 212-416-4119 08852. The faxnumber is or [email protected] 609-520-7256, and the email water to artichoke water and cactus water, they are replacing While redand yelloware relatively easy to replicatewith addressis [email protected]. moresugarysportsdrinks and artificially flavored waters that natural spices like turmeric and paprika, blue and green have don’t appeal to consumers’ desirefor nutritious and natural given food makerstrouble—until now. Blue-green algae called beverages. spirulina areoften sold as ahealth supplement at vitamin shops REPRINTSAVAILABLE While U.S. soda sales fell forthe 11th year in arow last year, or as an energy shot in smoothies.But nowthey arebeing har- coconut watersales rose 27%, according to market research vested for use as a natural blue-green dye. FULL PAPER: The entireWall Street Order by: firm Technavio. In 2013,M&M’smaker MarsInc.received the green light Journal issue that includes the Food Email: [email protected] Some drinks aremorelikely to makeitfromhealth-food from U.S. regulators to use spirulina to color candy and gum. report can be obtained for $10 acopy. Order by: Mail*: Dow Jones LP stores to conveniencestoresthan others. Maple waterand cac- That waslater expanded to include cereal, icecream and Attn: Mailing Operations Dept. tus waterare moreappealing than, say, artichokewater,since more—completing the natural color palette for food makers. Phone: 1-800-JOURNAL 84 Second Ave. manypeople knowcactuses contain waterand viewmaple Mars said in Februaryitwould switch M&M’stoall-natural col- Fax: 1-413-598-2259 Chicopee, Mass. 01020-4615 syrup as tasty. orsby2021. Other small companies arealready using spirulina Mail*: Food REPRINT OR LICENSE ARTICLES: To Not only do these provide moreflavorthan plain water, they for organic candy, like Black Forest gummy bears. Dow Jones &Co. order reprints of individual articles or Attn: Back Copy Department for information on licensing articles also tout health benefitsbeyondhydration. Aloe-verajuices TheFood Marketing Institute, agrocery trade group,expects 84 Second Ave. from this section: claim to aid digestion and weight loss. Cactus-water makerssay the volume of spirulina used forfood and beverages to quintu- Chicopee, Mass. 01020-4615 Online: www.djreprints.com their drinks contain electrolytes and antioxidants. ple in 2020 from 2014, and the natural food-coloring industry JOURNAL REPORTONLY: Bulk orders of Phone: 1-800-843-0008 Some of these plant waters are already popping up next to to grow at an average annual rate of 6.8% in that time frame. this Journal Report section only may Email: [email protected] coconut waterinmainstream grocerystoressuch as Kroger. The take up to six weeks for delivery and can be obtained for $5 for one copy, *Formail orders, do not send cash. newplant waters aretaking aim at the coconut beverage, adver- Ms. Jargon and Ms. Gasparro are reporters in The Wall $2 for each additional copy up to 50, Checks or money orders aretobemade tising that maple water or cactus water contains significantly Street Journal’s Chicago bureau. They can be reached at and 25 cents for each copy thereafter. payable to Dow Jones &Co. less sugar. [email protected] and [email protected]. P2JW291000-0-R00300-1------XA

THE WALL STREET JOURNAL. Monday, October 17, 2016 | R3 JOURNAL REPORT | FOOD BigBets on No Frills Aldi, a German deep-discount grocery chain, is expanding into wealthier areas of the U.S.

cans of all stripes get more putsmultiple bar codes on its BY ANNIE GASPARRO budget-conscious and their food packaging so that ca- AND HEATHER HADDON traditionallow-to-middle-in- shierscan moreeasily and come niche gets crowded with quickly scan them, cutting ARE SUBURBAN consumers competitors. Aldi is going even down on the need formore ready to giveupthe familiar further in appealing to upscale staffers to handle customer ETTY IMAGES

groceryexperiencefor bare- tastes by stocking some fan- checkout traffic. /G bonesstoreswherethey have cier goods,such as organic Similarly,milk and eggre- ST PO

to do their ownbagging and foods. frigeratorshaveshelves that N leave aquarter deposit fora Bernstein Research analyst roll in and out from both the TO

shopping cart? Alexia Howard expectsdis- front and back so that employ- SHING

That’swhat Aldi and other counterstomorethan double ees canrestock 80 gallons of WA deep-discount chains arebet- their averageannual sales milk and 240dozeneggsin ting as they makeabig expan- growth to 15% between 2015 seconds. sion push acrossthe U.S. and2020,from6%overthe If Aldi customershavea

Up until now, the German prior five years. “They seem to question fortheir local store, MARK GAIL/THE chain and competitorslike Lidl have rolled up their sleeves they have to drivethere. Indi- Aldi stores stack cases of products rather than stocking individual packages on shelves. and dollar stores have mostly and planned to makeinroads vidual stores don’t take phone attractedcash-strapped cus- with majorexpansions,” Ms. calls as ameans of keeping olinaand Maryland, and has Thepush intothe suburbs chains Food 4Less and Ruler tomers. Nowthey’removing Howard says. costsdownand prices low. plans to open stores along the has caught the attention of Foods, which resemble Aldi intowealthier areas as Ameri- Still, she warns,the shop- Theresult? Prices canrun East Coast from Pennsylvania groceryexecutives acrossthe with theirbare-bones style ping experiencemay not reso- 25%to40% lowerthan tradi- to Georgia—a region where spectrum. Whole Foods Mar- and requirement that custom- natewith Americans and “it tional grocers. Aldi operates hundreds of lo- ket Inc.opened its own dis- ers bag their own groceries. Growth on the Cheap might be hardtore-create Customerssuch as Sam cations. count chain earlier this year, Kroger says itslargerscale has If the Aldi and Lidl discount their European” success. Bridgeland,a31-year-old con- “Everyone wantstosell gro- called 365 by Whole Foods,as helped save money,but it chains aresuccessful in their U.S. Indeed, forAmerican shop- sultant from Chicago, like ceries,” says ScottPatton, it felt pressuretolowerprices hasn’t been able to makethe expansion, theywill shakeupthe pers, especially those used to Aldi’s no-frills approach. “I Aldi’s divisional president. “It given increased competition. stores work,finding it difficult industry,mostly at the expense the cozinessofsuburban don’t care about the services,” gets people in stores.” Natural-food stores,like to understand and communi- of natural-food storeslikeWhole stores,Aldi’sstorescan be jar- he says. Amoveintothe suburbs is Whole Foods,will see their av- cate with that “value cus- Foods. Hereisone projection of ring.The outletsfeatureno- But Aldi—which opened its oneway forAldi to reach new erageannual sales growth fall tomer.” average annual sales growth of frills décor, skimpy in-store firstU.S.store in Iowa in customers. Another is to cater to 5% between 2015 and 2020 Fornow,the Aldi formula food in the U.S.: marketing and a limited as- 1976—is feeling much more to moreupscale tastes.Back in from 17% over the prior five appearstoberesonating with sortment of foods,morethan competition in itscoremarket the 1990s,Aldi sold no fresh years, partly because discount- consumers. On arecent visit to 2010 -2015 2015 -2020 90% of which arehouse- these days.Abroader rangeof meat andbarely anyproduce. ershaveadded morefresh and astore in Chicago, some shop- 17% branded. retailersare getting intothe Nowitsells fresh organic organic food to their offerings, perssaid they were willing to 15% Aldi, which has about 1,600 discount-food business, from ground beef,and as of this year, predictsMs. Howard. sacrificeluxuries likefreegro- locations in the U.S.,says the Target to dollar stores. all of itsstore-brand foods no “Wehaveatremendous cery cartsand plastic bagsfor majority of the latest 500 Lidl,another German dis- longer contain synthetic dyes. amount of respect forAldi and cheaper groceries. stores it has opened have been counter,has plans to come to Aldi recently added refriger- Lidl,” Rodney McMullen,chief “I come forthe prices,” said 6.1% 5% in large suburban retail cen- the U.S. next year,and has ated producefor the firsttime, executive of Kroger Co., re- SteveBryla,a70-year-old re- 2% 2.5% ters in middle-income or spentmorethan adecade and it’ssopopular it’scausing cently told investorswhen tiree. higher neighborhoods. studying the U.S. market. abackup in the aisle.“Every- asked about the newcompeti- NATURAL- DISCOUNTERS TOTAL Thecompanytakes anum- While Lidl hasn’t confirmed one’sstopping there,” Mr.Pat- tion. “Thereare certain cus- Ms. Gasparro and Ms. Had- FOODS GROCERY ber of measures to save on la- howmanystoresitwill open, tonsays.“One of the things tomersthat we believeliketo don are Wall Street Journal STORES INDUSTRY bor costs. Thequarter deposits it’sbuilding three regional we’reworking on is the turn at shop in that environment.” reporters in Chicago. Email Source:Bernstein Research prod shopperstoreturn carts headquartersand distribution the refrigerated section” to al- In 1998 and 1999,Kroger [email protected] or THE WALL STREETJOURNAL. to the holding bin. Aldi also centersinVirginia, North Car- leviate the traffic jams. bought deep-discount grocery [email protected].

What’s Behind the CommoditiesGlut ABuck for The boom-bust production cycle has expanded across the globe Broccoli? Why you may want to BY KELSEY GEE AND JESSE NEWMAN pay your children to eat

HARVESTSARE under way of their vegetables what areprojected to be the largest corn and soybean crops BY BECKIE STRUM in U.S. history, which soon will hit aglobal market already sit- ting on thelargest-ever grain Science says it’s OK to pay your children to eat stockpiles. their fruits and vegetables. Indeed, some farmersare hop- The strategy not only works in the short term, but ing foraweather hiccup some- can create healthful eating habits in children in the whereinthe world to curb yields long run if the little bribe is carried out consistently and breathe life into crop prices for several weeks, according to that recently hit multiyear lows. a study published earlier this Short-term They maybewaiting along year in the Journal of Health time. Economics. rewards It is adramatic turnaround “As a parent, imagine that for eating from four yearsago, when prices there’s something to do that formanycommodities were might be worth my effort, and fruits and soaring to the highest levels U.S. I get the long-term benefit,” veggies producershad seen in their lives. says Joseph Price, associate KER/BLOOMBERG NEWS

Backthen, extreme drought AC professor of economics at can create slashed production of major row Brigham Yo ung University. He

NIEL good

crops,forcing rancherstocull DA co-wrote the paper with cattle herds as feed costssoared. ‘Farmers are trying to find any place they can to dump their crops,’ says one co-op manager. George Loewenstein, professor habits in But now farmers face a prob- of economics and psychology the long lem of the opposite sort. Prices anddairyproducersrely on a at Carnegie Mellon University, forsome crops arehovering near Time of Plenty—and Peril steady supply of inexpensivefeed and Kevin Volpp, professor of term. multiyear lows as storage facili- U.S. annual farm production, in billion pounds. High output in the U.S. and grains.The Food and Agriculture medicine at the University of ties bulge with farm goods. abroad is undercutting prices. Organization projectsthat by Pennsylvania. To makespacefor crops like 2050,the world would need to For a year and a half, the Corn Soybeans Milk corn after a massive wheat har- 900 300 300 generate455 million metric tons researchers carried out a study of 8,000 children in vest last summer,Frank Riedl, of meat ayear to feed an addi- first through sixth grade at 40 elementary schools to 600 200 200 general manager at Great Bend tion 2.4billion people.That is test whether short-run incentives could create better, Co-op,aKansas grain elevator 300 100 100 around 40% morethan even this and lasting, eating habits in children. andfarm supplier,bought and 0 0 0 year’s massive production. At lunchtime, students who ate at least one serv- leased extraland on which to ’11 ’16* ’11 ’16* ’11 ’16* Along the way, however, pro- ing of fruit or vegetable, such as an apple, fresh buildbunkersthe sizeoffootball ducersare increasingly suscepti- peaches, pineapple, side salad or a banana, received a Beef Pork Chicken fields wherehecan heap millions 40 40 40 ble to missteps in the delicate 25-cent token that could be redeemed at the school’s of bushels of overflow grain. danceofsupply and demand store, carnival or book fair. “There’sanabundanceofcorn 20 20 20 across the world. The researcherssaw an immediatespikeincon- out hereinthe countryand we Forfarmerswho raise animals sumption, Dr.Pricesays. “These small incentives don’t have the storagebase for 0 0 0 forfood, calculating when to ex- produced adramatic increase in fruit and vegetable it,” he says. “Farmers are trying ’11 ’16* ’11 ’16* ’11 ’16* pand the businessisagamble on consumption during the incentiveperiod,”the re- to find anyplacethey canto market conditions that could be searcherswrote. “This change in behavior wassus- dump their crops.” HowWeGot Here months or yearsaway.Ittakes tained.” The boom-bust cycle of com- morethan ayear foracalf to ma- Two months after the incentives ended, many SUMMER 2012 |Severedroughtstrikes, corn prices top$8/bushel modity production in America turetothe point when it canbe more students than before the program started were has expanded acrossthe globe in WINTER 2012 |Cattle herds culled as costssoar impregnated, and nine months to still eating a fruit or vegetable at lunch. For schools recent years, as crop and live- FALL 2013 |Mild weather restorescrops, and Texas droughteases produceanew heir to be added to that provided the 25-cent incentive for three weeks, stock farmersinSouth America, WINTER 2014 |Ranchers rebuild herds as cattle, meatprices skyrocket amilk or beef herd. 21% more children were eating at least one serving of China and the Black Sea region Some able to weather the fruit or vegetable at lunch than before. FALL 2015 |Recordsoybean harvestadds to ample grain stocks have adopted farming practices lowerprices saycredit belongs The effect was even greater for schools that im- that largely mirror those in the SUMMER 2016 |Massivegrain, meatsupplies send prices plunging to marketing arrangements, such plemented the program for five weeks, which led to a U.S. breadbasket. That hasraised *ForecastSource:U.S. AgricultureDepartment THE WALL STREETJOURNAL. as long-term contractswith buy- 44% increase in consumption two months out. the potential risks and rewards ers or farmers, locked in well in Positive peer pressure played a role in getting the for producers looking to sell, as Prices forcereal grains and tion systems at Pennsylvania advance. children to adopt and then stick to the program. A weather,currencyswingsand meat globally declined in August State University,who focuses on “We’re producing a very per- health economist from Cornell University has even policy changes in far-off coun- and September from the year- agricultural markets. Thecurrent ishableproduct and have afew suggested that one way to establish the social norm trieshaveagreater impact on earlierperiod, according to the glut has “a lot to do with the de- hoursoratmost aday to sell” even quicker was by making sure the “cool kids” were U.S. food prices than ever before. United Nations’ Food and Agri- cisions that farmersmakeinag- themilk beforeitspoils,says the early adopters of the behavior, Dr. Price says. “The world is still expanding cultureOrganization, due in part gregate—producers can turn on Scott McGinty, president of Au- “Anything you can do to change the norm,” he adds. production area, and because of to large harvestsacrossthe the milk spigot relatively quickly rora Organic DairyLLC,based in The researchers also believe that the more often that, this cycle could go on Northern Hemisphere. Thebarn- and tend to be morereluctant to Boulder, Colo. students ate fruits and vegetables, the more they awhile,” says Dan Basse,president yard-wide glut stems from deci- turn it off.” “You have to be close to your learned to like them. Dr. Price draws an example from of Chicago-based commodities sions made globally to plant Also fueling increasing pro- market,” Mr.McGinty says,“or his personal life, saying he offered his son an incen- firm AgResourceCo.,who notes morerow-crop acres and to raise duction is agrowing global popu- theconditions that droveyou tive to practice hitting a baseball. The more his son that farmersworld-wide have bigger herds in response to new lation hungryfor moreprotein in into the business might be gone practiced, the better he got and the more he liked addednearly 180 million acres to demand andhigh prices during daily diets. Foods likeinfant for- by the time you get there.” playing, Dr. Price says. cultivation in the past decade, the most recent shortage. mula, pork,cheese and poultry Parents or schools could also try nonmonetary re- aboutasmuch as the combined “There’sanold industryadage arebecoming staples foragrow- Ms. Gee and Ms. Newman are wards, such as extended recess or gym class, Dr. acreageofthe entireU.S.Grain that money makes milk,and ing classofconsumerswho can Wall Street Journal reporters Price says. Belt. Still, “itjust takesone more money makes more milk,” affordmeals that seemed luxuri- in Chicago. Email them at drought in amajor production says Chuck Nicholson, a profes- ous to an earlier generation. [email protected] and Ms. Strum is a writer in New Yo rk. She can be area to curethis,” he says. sor of supply chain and informa- To makemoreprotein, meat [email protected]. reached at [email protected]. P2JW291000-0-R00400-1------XA

R4 | Monday, October 17, 2016 THE WALL STREET JOURNAL. JOURNAL REPORT | FOOD The Battle AgainstFood DesertsRages On As many poor Americans continue to have limited access to healthy food, companies and the government struggle to find new solutions

that use charitable contribu- income areas that are farther BY HEATHER HADDON tionsand taxincentives for than one mile from alarge AND ANNIE GASPARRO funding—an attempt to side- grocerystore or supermarket, step theproblem of turning a and 11.5 million of these peo- FRUSTRATED WITH yearsof profit. Other companies areex- ple have incomes belowthe hit-or-missefforts, retailers perimenting with online food- poverty level. and the government arestill deliveryservices that bring In 2011, executives from searching forways to address groceriestohouseholds that Wal-Mart Stores,Inc., Wal- food deserts. aren’t served by supermarkets. greens BootsAlliance Inc., Su- These areas,which canbe “Wethink it’simportant, so perValu Inc.and other grocery in either remoterural regions we’renot going to giveup, but stores joined with the Obama or dense inner cities,don’t of- we still have alot of work to administration to announcean ferlow-income residentsbig do,” Kroger Co.Chief Executive initiativetoopen morethan supermarkets where they can RodneyMcMullen said earlier 1,500 stores in areas designated getfresh, healthyfood. The this year when asked about the as food deserts. TheWhite stumbling block preventing profit struggles of one of its House sought hundreds of mil- MSTEKER/BLOOMBERG NEWS supermarket chains from mov- banner stores serving lower-in- lions of dollarsinpublic and WA

ing intothese areas is profit— come areas.“Theway Iliketo privatefunds toward financing EMILE their margins are already ra- talk about it, we’velearned and taxcreditsfor companies A sign on a Dollar General freezer case of ice cream and other desserts welcomes food stamps. zor-thin, and stores in food more of the thingsnot to do to open in areas that lacked ac- desertssubsist on apatchwork than the ones to do.” cess to agrocery store. come neighborhoods—includ- debit-cardreaderstoprocess some shop with fresh food of government subsidies and Thegovernment spending inginNew Orleans and Chi- SNAP benefit-cardtransactions, available there.” food-stamp paymentsfrom A struggling effort has ended up being far more cago—through afoundation acompanyspokeswoman says. Logistics arealso impor- low-income customers. TheU.S.AgricultureDe- limited, and manyofthe brick- that relies on charitable contri- Other retailershope to be tant. Time is scarce in low-in- Nowsome big supermarket partment estimates that 23.5 and-mortar stores haven’t butions.The effortsare boosted included in afederal pilot pro- come neighborhoods where players areopening test stores million Americans liveinlow- generated enough sales to stay by local taxincentives to break gram next year that will allow people work shiftjobs or mul- afloat. Earlier this year, Wal- ground. Thecompany, based in food-stamp recipientstouse tiple jobs and aren’t home at Mart said it wasclosing 154 Austin, Texas,provides loans theirbenefitswith online gro- mealtimes. “Long work times UnhealthyFare stores, many of them smaller andtraining to local food pur- cery sellers. Providing access cut intocooking,” says Mr. Food-stamp use at storesthattypically offer little or no produce stores designed to serve veyors to act as potential sup- to fresh foods in food deserts, Thurow,whose research has and other fresh foods has jumped. The dollar value, in billions, and neighborhoods with lowvol- pliers. TheChicagostore began along with cost savings, moti- focused on poor mothersin percentage of total food-stamp redemptions at these twotypes ume, like food deserts. hiring employees in July and vatedthe AgricultureDepart- Chicago. Long work hoursmay of retailers: Kroger,the nation’slargest opened in late September. ment to conduct the test, an also makeitachallengetoget food retailer afterWal-Mart, agencyspokeswoman says.Un- to stores,evenifthey’re 2007 2015 AMOUNT PCT. OF TOTAL has been experimenting with a Online option likewith FreshDirect, recipi- nearby, he adds. chainofseveral dozenno-frills Some grocersare extending entswould payfor their gro- Mari Gallagher, a Chicago- $0.49 1.6% Combination stores called Ruler Foods, online groceryshopping to ceries directly online with their based consultant who re- grocery /other* $4.58 6.6% which serverural areas in the low-income neighborhoods. SNAP benefits, not through searches food desertsagrees Midwest. Companyexecutives FreshDirect, the online deliv- hand-held devices at delivery. that “plopping down agrocery $1.31 4.3% have said that itspilot has eryservicemost associated Some observerswarn, store is not a silver bullet.” Conveniencestore proved difficult to makeprof- with affluent urban foodies, though, that providing access But at least having the op- $3.49 5.0% itable,although it intends to started apilot in two ZIP to healthier foods is only part tion can do a lot of good, she *Primary businessissale of general merchandise, but also sell avariety of food products; open atotal of eight more Codes in poor communities in of the problem. For instance, adds.Astudy she conducted in includes independent drugstores, dollar storesand general stores stores this year. New York’s Bronx borough to education on nutrition is cru- 2014 in rural Iowa found that Source:U.S. AgricultureDepartment “We’restill trying to under- deliver groceries two years cial,says Roger Thurow,se- nothaving ready access to a stand the economics of the ago. Feedback so far has been nior fellowatthe Chicago supermarket fueled obesity Income Link model to gettowhereitactu- positive, and the companyis Council on Global Affairs, who amongadults, and shorter ally performs at [a return on collecting datatofurther as- writes about nutrition. heightsand worsegrades Frequency of fresh producepurchases, based on household income investment] that we’re happy sess the pilot’s effectiveness, Fast food is oftencheaper among children. Frequently Sometimes Hardly ever with,” Mr.McMullen told in- says FreshDirect Vice Presi- than fresh goods,and poor “Wecan’t choose healthy vestors earlier this year. “We dent Larry Scott Blackmon. consumersmay not have the food if we don’t have access to 5% 2% Lowerincome Low-medium continue to makeprogress, Part of the trick forFreshDi- time,transportation or incen- it,” Ms. Gallagher says. 71% 24% 80% 18% but we do not think we’vefig- rect wasfiguring out howre- tivetocook healthymeals for ured it out.” cipients of the government’s their families if they don’t Ms. Haddon and Ms. 10% 2% 5% 6% Some stores mayget new $75billion Supplemental Nutri- know its importance, he says. Gasparro are reporters in Medium-high High sourcesoffunding so that low tion AssistanceProgram, or “There’sall these variables,” The Wall Street Journal’s 88% 89% profitswon’t sink fledgling ef- food stamps,would payfor Mr.Thurow says.“It’snot as Chicago bureau. Email Source:“The Power of Produce,”Food Marketing Instituteand 210 Analytics LLC, based on forts. Whole Foods said it groceries.The company’sdeliv- simple as putting agrocery [email protected] or online panel of 1,327 U.S. consumers in April 2015 THE WALL STREETJOURNAL. would open stores in low-in- erypeople canuse hand-held storeorfarmersmarket or [email protected].

Prepare, Eat, Enjoy NOTYOUR FATHER’SMCNUGGETS The pleasureofself-made meals How famous food products keep evolving to meet consumers’ changing health priorities BY BECKIE STRUM

Food makersand restaurantsare alwayshustling to tailor their sweetenersthat replaced sugar,and nowexternal factors like A scientific experiment has tackled an eternal question nagging products to the latesttrends in health, hoping that old-line brands what the animals making up the food atewhen theywerealive. city dwellers and busy parents: Cook, or order takeout? can stay relevant in this era of fast-paced change in food. Hereare some popular foods and howtheyhaveevolved over To someone with a GrubHub addiction, the first part of the In the 1980s and 1990s, consumerswerefocused on low-fatdi- the yearstokeep pacewith changing consumer demands on study’s findings may surprise. Ta ste tests showed that when it etsastheyweretold reducing fatintakewas the mostimportant health and wellness. comes to healthy food, people like their own preparation better thing they could do to improve their health. But that eventually —Annie Gasparro than the same recipe ready-made. gave waytoconcerns about sodium, then sugar,then the artificial Email [email protected] “The mere act of preparing foods leads to higher likings because people overvalue objects that they have put effort in,” say a team of European researchers in a paper published earlier this year in Health Psychology. COCA-COLA CHICKEN MCNUGGEGGETS Their findings underscore what other Healthy food researchers dub the “IKEAeffect,” a 1886 |Cokeisinvented 1983 |Invented reference to the Swedish company that tastes better 1982 |Diet Coke is introduced 2003 |McDonald’scomes outt sells assemble-it-yourself furniture. when we 1985 |New Coke debuts, with all-white-meatchicken “When people prepare things—if they in one of the biggestproduct 2015 |Announces plans to build, for example, a cupboard—people prepare it fiascoes ever reduceantibiotics like it more,” says Simone Dohle of the ourselves, a 2005 |No-calorie Coke Zero 2016 |Removes University of Cologne. Dr. Dohle co- debuts, claiming to taste artificial preservatives wrote the prepared-foods research pa- study finds. morelikethe originalinal recipe per with Sina Rall and Michael Siegrist than Diet Coke of the Swiss Federal Institute of Te ch- nology in Zurich. 2014 |CokeLife, BURGER KINGFRENCH FRIES But the preference for self-made meals changes when the food sweetened with 1953 |The chain opens, with original fries recipe is unhealthy. We like our own concoction less when we know in- anatural gredients like fat and sugar went into it, according to the study. zero-calorie 1997 |Alters its fries, coating them with starch To reach that conclusion, the three researchers enlisted 120 sweetener and 2001 |Changes the formula again to have lessof women, mostly German students, to taste two very different cane sugar, acoating after customers complained about shakes. comes to the U.S. the previous recipe Half of the participants tasted a low-calorie smoothie made 2011 |Changes again, making the from raspberries, milk and sugar. Some measured and blended it friesfries thicker themselves, while others tasted one the researchers made ahead 2013 |Introduces Satisfries, aversion of time. with lessfat and fewercalories Those who had to mix their own rated the raspberry smoothie 2014 |Drops Satisfries higher on a scale from “do not like at all” to “like very much” than those who drank it pre-made. They also estimated that it was healthier and had fewer calories. “Psychologists explain this as ‘justification of effort’ because participants have put all this effort into making a milkshake,” says Dr. Dohle. The effect was particularly pronounced for those women who OREEOOC COOOKIEOKIES said they were on diets or had other dietary restraints, the re- 1912 |Invented searchers found. 200606 |Replaces In contrast, the other half of participants tasted a high-calorie trans fatwith milkshake of chocolate ice cream, milk and cream, which they ei- nonhydrogenated ther mixed themselves or received already prepared. vegetabletable oil Those who made the chocolate milkshake on their own rated it worse than those who drank the prepared version—evidence that 2015 |Introduces people are turned off when they know exactly how much in the thin veersions,rsions, way of unhealthy ingredients is in their food, the researchers calledOreo Thins, wrote. with jusust The study lends credence to the avalanche of advice in coun- 40 caloriesories tries with rising rates of obesity that people should cook at home per cookie more. It also shows that when people cook at home, they are TRIX CEREAL more likely to lean toward healthier recipes. 1954 |Invented “There’s this second process: If you prepare something, you 2005 |Begins increasing whole grains to an eventual 11 grams become more aware of all of the ingredients you put into your aserving from lessthan 8grams food,” Dr. Dohle says. “Food preparation could be a way to foster healthy eating habits.” 2007 |Begins cutting sugar from 13 grams aserving to 10 grams MPANIES 2015 |Removesartificial colors and flavors CO Ms. Strum is a writer in New Yo rk. She can be reached at THE [email protected]. P2JW291000-0-R00500-1------XA

THE WALL STREET JOURNAL. Monday, October 17, 2016 | R5

Export Food, NotJobs

Let’s startanational conversation about howtodouble the sales of the American food production industryand create millions of newAmerican jobs.

At the inaugural Global Food Forum hosted by The Wall Street Journal in New York City on October 6, Anthony Pratt, Executive Chairman of Pratt Industries, delivered the sponsor’s opening remarks. Here are the keypoints:

• America is the world’s food superpower and food production is its largest industry.Ithas sales greater than the auto, movie, technology,and oil and gas industries —employing 4million Americans and should get the attention it deserves.

• As big as it is, we can double the sales of the food production industry to $1.8trillion and create millions of new American jobs.

• America can do this by selling into the greatAsian middle-class boom, as 2.5billion morepeople have access to greater disposable income.

• America can capturethis opportunity by exporting moreadded value fruit, vegetables and meat, along with ﬁnished processed food such as infant baby formula —thereby playing to one of America’s greatest strengths, food safety.

• Food produced and packaged in America ensures its cleanliness and safety.

• Food exports areAmerica’s greatest opportunity to expand the food industry,address trade imbalances, compete foralarger shareofthe world’s expanding global food market and grow jobs hereinAmerica. Pratt Industries was proud to be the lead sponsor of The Wall Street Journal Global Food Forum

Pratt Industries, one of the largest corrugated boxmanufacturers in the United States, proudly supports the American food industry! www.prattindustries.com P2JW291000-0-R00600-1------XA

R6 | Monday, October 17, 2016 THE WALL STREET JOURNAL. JOURNAL REPORT | FOOD As Crop Prices Fall, FarmersFocus on the Seeds Newservices collectdatafromtheir members, giving growers information about what works best

santoand SyngentaAGpatent BY JACOB BUNGE Out of Whack the genes they insert into Corn seed prices have nearly plantstoprotect their invest- U.S. FARMERS,boggeddown quadrupled overthe pasttwo ment.But in 2014, the firstof in one of their toughest decades, while crop prices have those genes—one that enables patches in years, arelooking ended up back roughly where soybeans to withstand the for a little magic—in seeds. theystarted. Seed priceper acre popular herbicide glyphosate, Some arereturning to the plantedvs. crop priceper bushel, marketed by Monsantoas old-fashioned variety,bred indexed to 1996=100: Roundup—saw itspatentpro- without genetic engineering, tection expireafter 20 years. and back in fashion as farmers 400 strivetosavemoney following Newer varieties three straight years of falling Now, academic plant spe- prices formajor crops like 300 Seed price cialists likeDonald Dombek, corn and soybeans. director of the Crop Variety Others, meanwhile,are join- Improvement Program at the ing newsubscriber-based ser- 200 University of Arkansas,are vices that collect seed and putting the formerly patented other detailed crop-related data gene intonewersoybean seed from their farmer members, 100 varieties,which farmerscan who then use the datatodeter- buy forabout $28 to $34 a mine which seeds and pesti- Crop price bag, versus $44 to $68 a bag cides will work best on their forbig companies’ latest vari- 0 fields and at the fairest price. eties in the region. Mr. Theplungeincropprices— 1996 ’00 ’05 ’10 ’15 Dombek figuresthe university KER/BLOOMBERG NEWS Note: Crop prices areannual average, most

corn has roughly halved since AC will sell about 190,000 acres’ the start of 2013,while soy- activefutures contract. worth of generic Roundup-re-

NIEL Sources: U.S. AgricultureDepartment (seeds);

beans have fallen by one- DA FactSet (crops) sistant soybean seeds across third—has chipped away at Asign along afield in Illinois shows the brand of Monsantoseed from which the corn wasgrown. THE WALL STREETJOURNAL. the region this year,which farmers’ financial cushions works out to about 5% of Ar- and led manytore-examine quadrupled over the past 20 “Farmershavebasically vices,and it expectstohave betteradvice on seeds,offi- kansas’ totalsoybean acreage. their costs across the board. years, and soybean seed costs crowdsourcedthe largest 25 million acres enrolled next cials say. “The scale of our Another plus: Unlikethe have soared as well, according seed-performancedatabase year. proprietaryfield research is latest soybean seeds marketed Plows and pencils to data from the U.S. Agricul- that’severexisted,” says Some farmersare wary of unmatched,” aClimate by Monsanto, Syngenta, Du- “People aresharpening ture Department. Charles Baron,co-founder and taking adviceonseeds from spokeswoman says. Pont Co.and other companies, their pencils,” says Brian Mar- Farmerstodaymust con- head of product forFBN. thesame companies that sell Some industrywatcherssay farmersusing the University shall, who farms about 4,600 sider thousands of seeds with Membersofthe servicehave them.FBN,for itspart, con- the rise of these types of data- of Arkansas variety cansave acres of corn, soybeans and varying characteristics,with contributed information on tends that itsindependence analysis services in general the seeds they nowharvest wheat near Maysville,Mo. some bred to flourish in cer- morethan 2,100 seed variet- makes itsservicemoreattrac- could help farmersshave costs and replant them next year, “When corn was double what tain climates or soils,and oth- ies,ranging from corn to cot- tivetofarmers. and raise bigger crops. Some yielding further savings. it is now, and soybeans were a erstoresist plant diseases and ton, riceand oats. Thecom- also assert that lowcrop Seed industryofficials, lot better than what they are bear different grain varieties. panycharges$500 ayear and Inside advice prices have slowedadoption of however, don’t expect current today, youdidn’t have to be as Agrowing number of farm- requires memberstoshare Officials forMonsanto’sCli- the services. “When you look generic versions to displace good with a calculator.” ersthus areturning to new data on their owncropper- mateunit saythat itsprivacy at wherecurrent corn prices the big companies’ topbrands, Manyfarmersalready have typesofagricultural data- formances to access seed policies keep farmers’ data are, people can’t fathom which use high-tech breeding found waystostretch the fer- analysisservices,such as data. Membership has tripled confidential and that their spending moreonthingsthey technology to produce plants tilizer applied to their fields FarmersBusinessNetwork in the past 12 months to dataisn’t used to priceseeds aren’t certain will drivehigher capable of producing big har- and have switched to generic Inc.,aSan Francisco-based about 2,800 farmers, Mr. andpesticide products. The yields,” Piper Jaffray &Co. an- vests. That meansthe compa- versions of popular pesticides. startup backed by Google Baronsays,and morethan companysays itsdeep re- alyst Brett Wong says. nies’ newest seeds typically Now, they’rescrutinizing Ventures and other Silicon nine million acres of farm search on seed performance— Farmerslooking to lower yield the biggest crops. seeds—often the most expen- Valley investors. FBN allows fields areenrolled. Monsantoisthe world’slarg- their seed costs, meanwhile, “We’renot attempting to sivecomponent in raising a farmerstoquerythousands of Topseed companies like est supplier of seeds and crop could find help thanks to an- competewith the big seed crop each year.Seeds have their peersabout seed and Monsanto Co.havedeveloped genes in terms of sales—al- otherdevelopment,arecent companies,” Mr.Dombek says. multiplied in variety,complex- pesticide performance. The similar services,capitalizing lows Climatetodrawon milestone in agribusiness: “Weput this out thereasan ity and cost in recent decades. idea, also being pursued by on their ownexpertise in 40,000 acres of research fields Seeds with biotech genes are alternative for our farmers.” As genetic engineering has en- such startups as Farmers plant science. Monsantosays across20states, in addition starting to go off patent, abled plants to survive herbi- Edge and Granular Inc.,isto it has about 14 million acres’ to thousands of other crop clearing the way forgeneric Mr. Bunge is aWall Street cides and fend off pests, corn- createaConsumer Reportsor worth of farms paying forits field trials conducted by Mon- versions with lowerprices. Journal reporter in Chicago. seed costshavenearly Kelley Blue Book of seeds. ClimateCorp.suiteofser- santoitself.That translates to Seed developerslikeMon- Email [email protected]. AFood Empire In aChanging World Cargill’s CEO reflects on GMO food, record harvests and climate change

ture, and how Cargill can re- that permanent? “I have to BY JACOB BUNGE spond to climate change. Ed- invest, do Iredo my barn? ited excerpts of the But if in 2020 nobody cares FROM THE Minneapolis sub- discussion follow. anymore, am Igoing to be urbs, Cargill Inc.runs one able to makemyreturn?” of the biggest food empires Different needs Going back to the supply the world has ever seen, WSJ: In developed countries chain, that is the chal- spanning the supply chain like the U.S., more people are lenge—different partsofthe from farm to table—ship- seeking food produced with world have different needs, ping fertilizer to farmers, less intervention, from or- and thereare different buying the crops that are ganic produce to cage-free trends,and howcan we LIFFE/BLOOMBERG NEWS

grown, processing grain into eggs, challenging companies meet those needs doing TC feed forlivestock and poul- like Cargill to respond. But in businessin70different RA

try, and producing burgers developing parts of the countries? CHRIS and nuggets forthe world’s world, many people are just David MacLennan saysCargill mustbeagile to meet different needs and trends around the world. biggest restaurant chains starting to add meat to their Personal choices and retailers, including Wal- diets and are looking for WSJ: How do you know and understand the con- come up over time, but you WSJ: How do you see climate Mart Stores Inc.and cheap, safe food. How does what’s the right thing to do? sumer on what they want in still need people to go into change affecting food pro- McDonald’sCorp. Cargill succeed on both ends MR. MACLENNAN: More peo- their food. farming. duction and what you’re do- As consumer tastes shift, of this spectrum? ple are making their food ing at Cargill? Cargill is striving to make its MR. MACLENNAN: When in- consumption choices based WSJ: Big harvests have pres- Getting it there MR. MACLENNAN: Climate immense size an advantage comes rise to several thou- on their value system. So it’s sured farmers’ incomes, and WSJ: Right now farmers are changeishere, and it’sgoing rather than a hindrance. It sand dollars, people change part of, “I want to feel some farmers in places like bringing in what could be to changehow and where has revamped its corporate their dietsfromacarbohy- healthy or identify with the South America have strug- another record corn and soy- food is grown. Today, the U.S. structure and portfolio of drate-based diet to one food that I eat.” The fact is, I gled to get financing. What bean harvest in the U.S., and corn belt is in Iowa,Illinois, businesses as it responds to that’smoreprotein-based. think the food industry could about the farming model may supplies of poultry, pork and Indiana. In 50 years, it may consumer concerns in devel- In places likeNorth Amer- have handled the non-GMO need to change to ensure beef are swelling. As grain be in Hudson Bay, Canada. oped countries about food ica, whereasaconsumer debate in a more construc- people can stay in business? bins fill around the world, is What does that mean for ingredients and animal wel- youhaveplenty of protein, tive way. MR. MACLENNAN: Farmers food security meaningfully supply-chain companies and fare, while investing to pro- plenty of choices,you have If youthink back afew aretechnologists. Many, improving as a result? food production, and trying vide more Western-style di- people who want to know, years, the strategywas,let’s manyfarmershaveaniPad MR. MACLENNAN: Not at the to get in front of it? How ets to developing parts of “What’sinmyfood, who fight it at the ballot box. in their harvester or in their rate that it needs to. The farmers grow the food, the world. made it, who supplies Washingtonstate,Califor- combine,and they’reusing production areas—North where they grow it, the need We spoke with Chief Exec- them?” nia, Colorado,they had bal- precision agriculture. And America, South America, the for analytical tools to help utive David MacLennan Forus, that’swhereyou lot initiatives on GMO label- we actually do alot of this Black Sea, where food is them respond to periods of about growing demand for have to be agile.Non-GMO, ing.The message[of those in terms of sustainability grown—it’s really unbeliev- great weather or horrible foods produced without ge- is that heretostay? Talking initiatives was], people and which partsoftheir able. You are looking at a weather—that’s where Car- netically engineered crops, to an eggfarmer, want to know. But the idea farm have the most nutri- fourth successive year of gill can play a role. further investments needed McDonald’sisgoing to cage- [of the food companies] tious soil, the most mois- bumper crops, great growing in food-shipping infrastruc- free eggs—his dilemma is,is was, let’sfight it at the bal- ture, whereIneed to plant weather and significant sup- WSJ: Free trade has been one lot box, and the science the seeds.They use GMOs plies. It’s keeping the price of Cargill’s guiding principles shows that GMOs arenot as atool forincreased pro- of food down. That’s a good since the company started Challenging Times bad foryou. But people who ductivity. thing. At the same time, 151 years ago. How much is Cargill’sannual revenue. Afterseveral ﬂush years, sales fell morethan don’t want GMOs don’t trust And fewer people are go- we—food and farming sup- at stake in the U.S. election? 10% in ﬁscal 2015 and 2016. the science. ing into farming. The world ply-chain companies—need MR. MACLENNAN: It’s one of There’sagrowing group needs farmers. There’s the to do a better job of how do the critical issues. $150billion of people who don’t want farm industry and the food we get it to where it’s We have worked diligently GMO ingredients. So let’s industry. One of our ques- needed. with Secretary of Commerce 125 develop asupply chain for tions is, how do we make it Infrastructure in Brazil for Penny Pritzker, who’s been a that, rather than say, exciting? Feeding the world the agricultural economy is big supporter of the Trans- 100 “You’rewrong if youdon’t is exciting, it’s a noble pur- not yet where it needs to be. Pacific Partnership, Agricul- want GMOs.” pose, but how do we commu- That’s one of the areas that ture Secretary Tom Vilsack— 75 If youthink about con- nicate that to a new genera- needs investment. Ports, the administration’s been sumption choices,health tion, where people are river terminals. It’s great if great. I don’t know where 50 care and food areincredibly interested in tech, or in con- Brazilian farmers can grow this election will go, but I intimateand personal sulting? corn and beans and get it to hope that when a new ad- 25 choices.And people need to You have to make it excit- China to feed that country or ministration is in place there and want to trust products ing, to come work at a food get it to the Middle East. But is a more open issue around 0 that areproviding them company. Technology and if you don’t have the infra- TPP. I think it would be 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 with those choices and in- modern farm techniques structure, the barges and tragic if we go backward rel- Note: Foryears ended May31. gredients. Our mind-set is have helped take some pres- ports to get it out, it doesn’t ative to trade, and I think Source:Cargill Inc. THE WALL STREETJOURNAL. we’regoing to empathize sure off, because yields have do any good. the world needs it. 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THE WALL STREET JOURNAL. Monday, October 17, 2016 | R7

PAID ADVERTISEMENT

Export Food, NotJobs

BY ANTHONY PRATT Executive Chairman of Pratt Industries

wasdelightedtobepartofthe ﬁrst dollarshavebegun to decline. Last year,there wasactually Global Food Forum held by The Wall Street almost 10% declineinthe valueofU.S.agricultureexports, compared to 2014 —whileAsia’s totalfood imports contin- IJournal.PrattIndustries wasexcited about ued to rise,especiallyhigh-protein food, whichthe Asian our sponsorship,which is atestament to the middleclass craves.The reasons forthis declineare complex,and part of theissue is America’s traditional focuson Journal’s leadership in reporting about food. exporting bulk commodities likesoybeans.

Food is vital forAmerica’s economy—apowerful engine IbelieveAmerica canleverageanimportant advantage forjob creation employing 20 million Americans. Ameri- if it pivots towardsmorehigh-valueagricultureexports canfood is also crucial to global food security: Exporting likefruit and vegetables and processedexports likemeat, American-producedfood to aneedyworld helpswell- dairy and infantformula. That’sbecause Americanfood being,without exporting Americanjobs. standards arethe highestinthe world. And theover Butthe food production industry is neglected. In fact, 2.5 billion Asians joining themiddleclass want safe,clean Bill Gatessaidtome(and Iagree)thatthe Americanfood food producedand packaged in America. industry doesn’tget theattentionitdeserves.Yet last Food processing and packaging also means more facto- year,food manufacturing saleswere$850billion, making ries and thereforemorejobsfor America.And forsmall food production thebiggest nongovernmentindustry in food processors, export is easier and less riskythan theUnited States —biggerthan movies,tech, auto,and trying to setupfactories overseas.InChina alone, the oil and gas. demand forinfantmilk formula hasgrown by about 15% So food’s worthfocusing on. And that’swhy we spon- annuallysince 2010 and is currently$27 billion. American sored this forum. We want to shineaspotlightonAmeri- milk cows arethe most productive globally, so our dairy ca’s food industry to identifyhow it cangrow, invest and exportshavethe potential to take off.The U.S. hasless generate even more qualityjobsfor thenation. We pro- than a2%shareofthe global marketfor infantformula, pose starting anational conversation, including industry, wheresafetyiscritical. governmentand civilsociety. Another big focusfor food export must be California — Onegoalistodoubleour food production salesto thefruit and vegetablesaladbowlofAmerica.It’salso the $1.8 trillion, creating millions of newAmericanjobs. A closest mainland Americanstate to Asia, making shipping challenging goal, butachievablegiven thehugefood ex- cheaper.Tohelp California, we must addressthe most port opportunity. And when we increase manufacturing important food production issues it faces—the ongoing here,wesupportAmericanjobs. droughtand, what manyCalifornian farmersconsideran Thebig opportunitytogrowexports is thatAsia has even greaterchallenge, thelabor shortage.I’vebeentold over 2.5 billion peoplecoming into themiddleclass who thatinsomeareas,upto20% of cropsare leftunpicked want safer, cleanerAmericanfood. So Asia is amassive op- becauseoflabor shortages, as it’s backbreaking work. portunity, with countries likeChina, Indonesia, Vietnam, Couldtechnology help?It’salready starting with dra- Koreaand India wanting more high-qualityfood. If we maticadvancesinroboticharvesting and processing view theseAsian economies as major valued customers technologies.Technology canalso tackle waterissues, and forour safe and nutritiousfood, America canbegin to ad- is being used in Israeland Australia to help boost water- dressits $550 billion imbalance in goods traded with Asia. useefficiency. Butweare notalone in seeing this opportunity. In fact, Improving freightand logistics efficiency on theWest in thepast15years America’s shareofglobal exportshas Coastwill also improveour competitive edge. slipped,with countries likeBrazil, NewZealand and sev- All theseideas areupfor discussion, so let’sgivethis an eral otherslifting their food-export game and nipping at “all-of-society” focusand create avision fornew,sustain- our heels. able jobs and investmenthere, whilehelping America By comparison, unbelievably,America’s food exportsin boost global food security.

The Wall Street Journal news organization was notinvolved in the creation of this content. P2JW291000-0-R00800-1------XA

R8 | Monday, October 17, 2016 THE WALL STREET JOURNAL. JOURNAL REPORT | GLOBAL FOOD FORUM

chemicals or preservatives or things that you have to have. The Food Conflict Can you go all the way and make everything totally clean? MS. MORRISON: We do believe that consumerstodaywant simplicity,and they want ConsumersFace cleaner labels.Sowehave, similar to Panera, been taking out the artificial colorsand flavors, BPA[bisphenol A, a Two CEOs on what people think they should eat chemical oftenused in packaging] out of our cans, reduced vs. what they actually want to eat high-fructose corn syrup. Thingsthat areonconsumers’ Changing consumer tastes Moreimportant, when you are niches. The largest single minds. and priorities are shaking up look under the hood, thereare niche in the marketplacetoday Food is art and science. So, the food industry. The hunger all different kinds of families. is that the consumer wants youtakesomething out, you

for healthier and fresher fare That hasfundamentally trans- food that is both good for have to work with the recipe LACIO/DOW JONES (4) is growing, as well as trans- formed the way people eat. them and is simply good. to make sure that you’re pro- PA parency about what food con- Each of ourorganizations, viding delicious food with GABE tains. What opportunities— MR. MURRAY: What does that Denise’sand mine,and each of cleaner labels.And so we work DENISE M. MORRISON | ’We do believe that consumers today and challenges—does this mean for you? Are you going our brands, we have to figure at that constantly. want simplicity, and they want cleaner labels.’ changing situation create for in other directions? out who we are, what we We do not have preserva- bigcompanies that put food MS. MORRISON: One of the stand for and what consumer tives in our soup.Westerilize on the plate? most fundamental shifts that we’re in alignment with. Pan- it. It’scooked forsafety.We Matt Murray, deputy editor has happened is the changein era isn’t the place for the av- call that “prepared with care.” in chief of The Wall Street consumers’ preferencefor erage, or foreverybody.Itis It’salso amatterofeducat- Journal, spoke with Denise M. healthier food. We see this foraconsumer that is particu- ing people.They want to know Morrison, president and chief manifested in both fresh food, larly interested in resolving what’sintheir food. We have a that conflict. Food that’sboth website and an app, whatsin- good and good for you. myfood.com,wherepeople can At The Wall Street Journal’s recent MS. MORRISON: Health and actually go and click on any Global Food Forum, Journal editors and wellness does mean different productthat we make, and reporters talked with leaders in the thingstodifferent people.We find out right down to where business of food about the principal tend to treat eating and diets thefood is sourced, howit’s opportunities and challenges they face. as one sizefitsall. But the hu- made,what ingredientswe Highlights of the conference appear on man body is very personal- use, and why. these pages and, with additional ized. And so afood regime for So, there’s an education to interviews and video excerpts, at WSJ.com/LeadershipReport. me could look different than that. It’snot perfect yet, but the one for Ron. it’sagood start. And we’ll Ithink that with technology continue to build out more executive officer of Campbell and natural and organic.And a that’s coming there’s a whole products on it and enhance Soup Co., and Ronald M. Sha- desirefor cleaner labels.That world opening up to have a the information as we getinto ich,founder, chairman and has prompted acquisitions deeper understanding of the moretraceability and ethical chief executive of Panera that we’vemade in the past impact of nutrition for better sourcing. RONALD M. SHAICH |‘We have to figure out who we are, Bread Co., to get their take on five years. living, better-quality living. MR. SHAICH: Ithink in our case what we stand for and what consumer we’re in alignment with.’ the state of the food business MR. SHAICH: Today’sconsumer it came down to a fundamen- and where they think it’s is really in conflict between MR. MURRAY: Are you talking tal commitment. And it came in, there’sacertain fundamen- We’renot taking aunilat- headed. what they thinkthey should about technology for me, the from the very top, from the tal commitment. eral position that we’rere- Here are edited excerpts of eat and what they want. Or- consumer, or for you, the com- board, andfrommeasthe We simply said, “We’re go- moving all GMOs.Weare say- their discussion. ganizations that canresolve pany? CEO, that we really wanted ing to take anything out of ing we very much support that conflict forthem—give MS. MORRISON: There’sbeen clean food. therethat people essentially GMO labeling. New tastes them food that is both what 69 million wearables sold this We wanted it free of anyar- question.” MS. MORRISON: GMO,for me, MR. MURRAY: Let’s start by they want and [what they be- year.People areliterally track- tificial colors, anyartificial is moreatransparencyissue talking about your customer. lievethey need]—arethe or- ing everything.People arebe- flavors, anyartificial preserva- MR. MURRAY: What about than an ingredient issue. Whoare you trying to serve, ganizations of the future. coming moreempowered, and tives and any artificial sweet- GMOs? You’vegot 90% of the soy, and how are they changing? knowing what’sgoing into eners. MR. SHAICH: We’vebeen corn and sugar-beet crop in MS. MORRISON: Our customers MR. MURRAY: How contradic- their body. We essentially introduced around this debate. I’veseen this country that’s GMO. Peo- arereally different today. tory is the consumer in want- the policytwo yearsago. We argumentsonboth sides of it. ple have been eating that for Mom, Dad and two kids and a ing both healthy food and food Cleaning up meals said, “Ifwe’regoing to do this, Our viewiswesimply arenot morethan 20 years, and it’s Labrador retriever are24% of that’s not as healthy? MR. MURRAY: You’ve both had let’smakeitcomprehensive. trying to draw the conclusion fine.But they want to know families. The family has defi- MR. SHAICH: Let me start and different clean-food and label- And let’smakeitsothat the on GMOs,fromour perspec- what’s in their food, and they nitely changed. Iwould say saythat Ithink we all know ing efforts. How hard is it to consumer doesn’t have to read tive. What we want is GMO la- have the right to know. So we that we focus on two cohorts, thereisnosuch thing as an take ingredients out? There’s a label.” beling. For us it’s a matter of have declared that we are la- baby boomersand millennials. average. Thereality is there got to be a certain amount of They know when they walk transparency. beling.

The Nutrition Mission at the FDA Robert Califf and Susan Mayne say the agency can—and should —give consumers more incentives to eat healthier

The politics of food can be Safety and Applied Nutrition, concerned about thingsinour ulatorydefinition that said atouchy subject. On the one satdown with The Wall Street food supply like too much so- [the product] couldn’t exceed a hand, most people care deeply Journal’s Matt Murray, to dis- dium. Howdowehelp pro- certain amount of totalfat, about guarantees that their cuss the challenges surrounding mote health by working with saturated fat, etc.,containing food is safe. On the other, not food and public health. Edited industry to makeahealthier beneficial nutrientsaswell. many like being told what they excerpts follow. food supply? Often people fo- Some of that sciencehas should and shouldn’t eat. cus on the food-borne illness, changed over time.I’veworked Issues such as these are at Healthy eating contamination side of things, in nutrition policyfor almost the heart of what the Food and MR. MURRAY: There’s alot of but don’t think about the three decades,and the monu- Drug Administration sees as its confusion or conflicting infor- chronic diseases. mental shiftinhow we look at mission. Robert Califf, commis- mation outthere. How can the In our countrytoday, the that scienceisreally striking. sioner of food and drugs at the FDA make things better? topkillersare heart disease, My training wasinnutrition FDA, and Susan Mayne,direc- MS. MAYNE: We have abig cancer,diabetes—diet-related biochemistry, and the term tor of the FDA’s Center for Food public-health mission. We’re chronic diseases. I want to be “fat” really doesn’t mean any- surepeople realizethat thing.There’spolyunsaturated, healthy eating is a tool to re- monounsaturated, saturated, duce the rates of these really omega-3’s, omega-6’s. Each ROBERT CALIFF | The FDA is ‘trying to nudge society in the prevalentchronic diseases.I one of those means something right direction with enticement and better information.’ want consumerstobeconfi- specific to me. dent in the safety of produce But what’sdifficult is tak- and fruitsand vegetables,and ing that complexity and giving that’s one of the things we’re it to consumers in a way that The Wall StreetJournal working on. they understand. What thesci- encereally shows is that the thanks the sponsors of the MR. MURRAY: Are there things type of fat matters,and that Global Food Forum for their that have FDA approval right higher-fat foods canbe now that aren’t optimal? healthyaslong as the predom- generous support. MS. MAYNE: Manyindustries inant sourcesoffat aremono- have been trying diligently to unsaturated and polyunsatu- reducesodium in food. The rated fatty acids. question is,what arethe alter- So,under the old regulatory natives? Industryhas indi- definition of healthy, certain catedtoustheremay be some foods would not have qualified, challenges we might be able to while the dietaryguideline says help with, making surethat these are healthyfoods.That’s thereare healthyalternatives. whythe FDAwantstorelook at With the updated nutrition- this issue of the term healthy. factslabel—added sugarswill What should it mean?What do now be declared—I would ex- people believeabout that? This pect that some companies will is again aregulation to really be using fruit as a sweetener, makesurethat that reflectsthe rather than thingslikehigh- most current science. fructose corn syrup.Soby MR. MURRAY: What are the putting something on a label, things most concerning to you SUSAN MAYNE | ‘In our country today, the top killers are we canhelp incentivizea in the American diet? heart disease, cancer, diabetes—diet-related chronic diseases.’ healthier food supply. MR. CALIFF: Thedietarypat- tern. Alot of it is tied to so- ple say if you eat 2,000 calories MR. MURRAY: Isn’t the evidence Food labeling cioeconomics,whereyou have of salad, that’s preferable to that, here in New York, after MR. MURRAY: Talk alittle so-called food desertswhere 2,000 calories of Twinkies. Mayor Bloomberg introduced about the redefinition of the people can’t even gettoa MS. MAYNE: Calories areim- it,people ate more? That it term “healthy” and how that placethat has generally portant, and FDAhas done had the opposite effect of process is shaping up with re- healthyfood. And it worries many thingstotry to make what was intended? FORMORE INFORMATION, PLEASE VISIT: gard to food labeling. me alot that thereseems to this really clear.The firstis MS. MAYNE: There’sresearch GLOBALFOOD.WSJ.COM MR. CALIFF: What’s healthy in be an inverserelationship be- the updatetothe nutrition- around this as well, and one of the long run, Iwould bet, as tween the priceoffood and its factslabel, wherecalories will the thingsstudies have indi- we getbetterdata, will de- nutritional value. That is, the be displayedmuch more cated is if you only give calo- pend somewhat on your genes thingsthat arebest forus prominently, along with serv- rie information but don’t tell and what youeat. I’ve inter- tend to be moreexpensive. So, ing-size information. people what anormal amount preted what we’redoing at the poor people areeating much Other changes include of calories is,they have ahard FDAasmostly trying to nudge worse diets. menu labeling,which comes to time interpreting it. Putting society in the right direction us through the Affordable Care “700 calories” on an entree with enticement and betterin- Good and bad calories Act,wherenow menus will didn’t mean things to people formation. Hopefully,it’sbe- MR. MURRAY: There’s alot of have to display calorie infor- who didn’t knowwhat normal ©2016Dow Jones &Co. Inc.All rights reserved.2C8415 ginning to work. debate about calories and the mation for chain restaurants calorie intakeis. So this is be- MS. MAYNE: Healthyhas areg- quality of calories. Alot of peo- with 20 or more locations. ing implemented. P2JW291000-0-R00900-1------XA

THE WALL STREET JOURNAL. Monday, October 17, 2016 | R9

The Pratt Group Our corrugated boxessavemoneyand save the environment Thank Yo u!

Thankstoall whoparticipated in theinaugural Global Food Forum hosted by The Wall Street Journal.The team at Pratt was proudtosponsor aconference with so manygreat leadersto raise theproﬁleofthe important issues facing theAmericanfood industry.Wehavestarted anational conversation thatwehope will lead to lasting changethatbolstersAmerica’s economyand global food security. We believeinthe Americanfood industry!

At Pratt,wealso believein: Creating NewJobs Pratt employs11,000 peopleinwell-paying,green-collar manufacturing jobs.

Investment Pratt hasinvested$5billion in sustainableinfrastructure, including anew state-of-the-artpaper mill thatopenedearlier this year,which bringsustoa totalof67factories in America.

Growth Our proﬁtsare reinvested in growth, enabling us to create additional jobs, open more factories and fund philanthropic activities.

Recycling We arethe solemajor Americanpaper companyinthe industry to produce only100 percentrecycledpaper.Asaresult, we save approximately 68,000 treesaday —that’senoughtocover about 120football ﬁelds —and divert more than 1.5million tons of wastepaper from landﬁlls every year.

Sincerely,

ANTHONY PRATT ExecutiveChairman of The Pratt Group

Learn how your company can beneﬁt from using Pratt Industries’ 100% recycled packaging, and join us in making your business more proﬁtable and environmentally friendly! www.prattindustries.com

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R10 | Monday, October 17, 2016 THE WALL STREET JOURNAL. JOURNAL REPORT | GLOBAL FOOD FORUM

MR.FRANK: Datascienceinag- ricultureisprobably at the top The Problem With of the list forus. We think that by understanding the soil conditions,the weather,and being able to track year after year exactly howall of these All-or-Nothing GMO things combine to impact the ultimateharvest, this will changeagriculture. It’ll change it forthe equipment compa- Monsanto’s Mike Frank says there is a danger in nies,it’ll changeitfor the seed companies,for the crop-pro- making this a debate of good vs. bad tection companies and forthe fertilizer companies.This is Thefood industry is con- aconsumption standpoint, And so it’s not one system going to be an extremely im- stantly adapting to changes in they’resafeinthe environ- is good and one system is bad. portant change that’s coming consumer tastes and priorities, ment, and they offer farmers Ithink all of the systems are quickly to agriculture, and it’s and today abig part of that is real benefits. And so,froma good. And ultimately,inorder very exciting. adjusting to resistance among scientific consensus stand- to feed agrowing planet, we Ialso think it’sthe integra- consumers to foods made with point, there’sreally no argu- need everyfarmer on the tion of solutions.Alot of the genetically modified ingredi- ment on that from my per- planet, whether they’reor- solutions that farmersuse are ents. spective anymore. ganic or conventional, or they very fragmented. They go buy Mike Frank,senior vice Now, some people do want use GMOs,tobemoresuccess- their seed from one supplier, president and chief commer- to buy organic or non-GMO, ful going forward. they buy their fertilizer from cial officer of Monsanto Co., a and Ithink that’sgreat. We another supplier,and their global leader in seed sales and sell alot of seed that’snon- MS. CHUNG: Do you think it’s a crop-protection products. crop genetics, talked with The GMO. good thing for people to want With datascience, being able Wall Street Journal’s Chicago Oftenwhat happens is, to know where their food to provide in aseamlessway bureau chief, Joanna Chung, there’saconversation that it’s comes from, and have more in- that solution on the square about the GMO debate and kind of good versus evil, or formation about it? meter,that’sgoing to be very what other technological ad- good versus bad. Farmers ev- MR. FRANK: Yes. It’sgreat that important. vances are in store for agricul- erywhere, whether they’reor- consumersare interested in So,it’snot just the datasci- ture. Edited excerpts of their ganic or conventional or using where their food comes from. ence, it’salso howcan you

conversation follow. GMOs,they’reall trying to do Themorethe agricultural in- LACIO/DOW JONES (3) bring it together in away that the same thing: They’retrying dustry and the food compa- PA the farmer canultimately

How GMOs fit in to producesuccessfulhar- nies canhelp educatethe pub- GABE translate it into the field in a MS. CHUNG: Why is it that the vests, they’retrying to man- lic and givethem honest, MIKE FRANK | ’It’s not one system is good and one is bad. I practical way? non-GMO side of the debate agepests, they’retrying to do factual information, so that think all of the systems are good.’ seems to have prevailed? theright thing in the environ- consumerscan then choose MS. CHUNG: In terms of global MR. FRANK: If you look at the ment, and they’retrying to what they want, then Ithink or in theWestern world has Most farmersmakedeci- markets, what are the hurdles scientific journals,the regula- createaviable business that’sfantastic. the luxuryofmaking economic sions at the field level. They’ll to offering our technology and tors around the world, they’ve model, so that they can hand I also think affordability is choices. And that’s great. But go in with the same seed, the our experience with agricul- all come to the same conclu- it down to the next genera- averyimportant issue.Alot if the idea is that it should all same fertilizer rate, the same ture in markets like China? sion—that GMOs aresafefrom tion. of our population in the U.S. be one way,and it should be a pesticides, and they’ll kind of MR. FRANK: China has 20% of way that’s more costly, then I treat the field as a field. the world’spopulation, and think that is a problem. Agricultureischanging 9% of the arable land. They Biotech Boom Growing in the U.S. Families want to feed them- dramatically right now. Big want to trytobeself-suffi- Acreage in biotech crops around the globe by year. The genetically engineered shareofthe these crops selves and their children dataisreally impacting agri- cient, but they’renot. So the Developing countries had aslowerstart but have by year in American agriculture healthy, nutritious and afford- culture. And so,our viewis reality is China importsalot caughtuptoand passed industrial countries. able food. So, it’s a matter of, that in the very near future, of grains from around the howdoyou createthe envi- farmerswill farm on the world. Alot of our soybeans 500million acres 100% ronment so that farmers and squaremeter—they’ll make go to China. food companies canultimately seed decisionsand fertilizer And this is the same in Eu- 400 bring that to the consumers? decisionsand pesticide deci- rope.Alot of people think, 75 Developing countries Soybeans sions on [the level of]the well, Europe doesn’t have 300 Industrial countries Cotton MS. CHUNG: Ithink what you’re squaremeter [as opposed to GMOs.Europe is not self-suffi- Corn 50 saying is that in order to meet the entirefield]. And that’ll cient either. all those demands of afford- makefarming moreefficient And so,whether it’sChina 200 abilityaswell as nutritious andmoreproductive. or Europe,most of the grains 25 food, that we’re going to con- they’reimporting areGMOs. 100 tinue in the direction of having The next big thing Their regulatorshavelooked more technological interven- MS. CHUNG: What are you most at thescienceofitand said, 0 0 tion in our food. excited about, in terms of the yeah, this is fine.But because 1996 2000 2005 2010 ’15 2000 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 MR. FRANK: Wordsliketechno- next technological advances? of political and societal pres- logical intervention, that Or what are the most near- sures,they haven’t allowed Source:CliveJames and ISAAA,Brief No. 51: “Global Statusof Commercialized Biotech/GM Crops: 2015” Source:U.S. AgricultureDepartment sounds kind of scary. We need term advances that we’re their farmersaccesstothe THE WALL STREETJOURNAL. innovation. probably going to see? tools.

Chickens Without Antibiotics WhereOur Food ComesFrom Jim Perdue on the impact of the change—on The problem is that most of the time, we have both the chickens and the market no idea, says Randall Fields of ReposiTrak

How can meat companies The food industry has be- best respond to rapidly chang- come so globalized that much ing consumer priorities about of the U.S. public doesn’t even animal care and healthy prod- know where its food comes ucts? from, much less whether it is Forinsights into the ques- safe.Randall K. Fields, CEO tion, The Wall Street Journal’s of ReposiTrak Inc., acom- Jason Anders spoke with Jim pany that helps retailers and Perdue,chairman of Perdue suppliers in the food, phar- Farms Inc. maceutical and supplements Here are edited excerpts of industries comply with fed- their conversation. eral requirements, sat down with John Bussey, associate Slashing antibiotics editor of The Wall Street MR. ANDERS: We’re at this Journal, to discuss some of unique moment wherecon- the challenges. Edited ex- sumers arescrutinizing like cerpts follow. never before what goes into the food they eat. And there’s JIM PERDUE | ‘We have a goal to double the activity of our Organic concerns RANDALL K. FIELDS | ‘Because of the opacity of the supply abig focus on antibiotics. chickens in the next two years.’ MR. BUSSEY: If Ipresented chain, the risks are higher than any of us would like.’ They’re avery effective tool you with a head of lettuce in for fattening chickens and They also have to have pas- we do about 20% of their vol- a package that said organic, only way it’sgoing to work. pounds of that comes from fighting off disease, but there’s ture access.They have to have ume.And they came to us would you as a consumer be Consumers can’t get it done. outside the U.S. one way or an increase in attention now full light, six hoursofsleep at oncethey sawwhat we were interested, or would you see it another.And because of these and some debate over whether nightorthereare density dif- doing and they wanted no-an- as a lethal weapon? MR. BUSSEY: What are com- multiple pointsofdistribution all this exposure to antibiotics ferences.And thereare en- tibiotics-ever chicken. MR.FIELDS: It’smuch closer to panies doing right or wrong whereagrowerinChina sends in the food chain is weakening hancements,thingsthat the So they made acommitment the latterthan the former. in analyzing their sourcing? it to abrokerinChina, who our ability to use them to fight chickens can play with in the over five years. Oncethey Most heads of lettucehaverel- MR. FIELDS: We’vebeen disap- sells it to abrokerinEurope, disease in humans. house.That maysound funny, made their statement, then you atively indeterminateorigin. pointed at the general level of who then sends it to the U.S., So you have been on avery but what we have found is had alot of other [chains make So,for people who knowtoo compliancetobasic standards there’sabsolutely no way to long journey to banish antibi- that the organic chickens are similar statements]. You’re much aboutthe supply chain, acrossthe industry. If youtake knowwherethat came from. otics. We want youtotell us twiceasactiveasour chickens seeing sort of adomino effect it’snot something you’dbe alook at all the facilities that Here’sastunning fact: Sev- how you did it. were in our houses which have because nowsomebody large willing to eat without alot areactually food-safety au- enty-some-odd percent of the MR. PERDUE: We had enough no windows. enough canprovide enough no- moreknowledge. dited, it’s10% to 12% of all the ingredientsthat go intosup- evidencethat this wasbecom- When we embarked on the antibiotics-ever product to sat- In supermarketsand other facilities registered with the plementsand vitamins are ing an issue that wasnot a no-antibiotics-ever program, isfyalarge customer. retail food sources, they don’t Food and Drug Administration. sourcedinChina or India. How fad. We needed to do some- we went to an all-veggie diet. have a lot of transparency in And there’salot of companies manyofyou will nowquit? thingabout it. We called it We replaced the animal by- Humane treatment their supply chain. Their job that do businessthat aren’t Project Wheaties. The reason products with moresoybean MR. ANDERS: The other piece is to keep aproduct on the registered. Food-safety officer we called it Wheaties is be- meal. We replaced the lard of this that people arevery shelf. So if they’reshort on So,interms of asafeprac- FROM THE AUDIENCE: Mark cause Ibelieveaconsumer with corn oil or soybean oil. focused on now is animal wel- cantaloupe, their buyers will ticeand audit, not enough of Baum, with the Food Market- will let us do to our chickens We found it actually gave it a fare. Walk us through some of call the broker who in turn that is being done.It’ssopa- ingInstitute. As an industry, what they’d do to their kids. better flavor. what you’re doing on that will find cantaloupe.Maybe it per-intensivewhen youhave we’reonly as strong as our What we were doing to our front. comes from a farm that they thousands of suppliers, it just weakestlink. So, in an era chickens,weweregiving them MR. ANDERS: Is the price of MR. PERDUE: We have agoal to should be doing business hasn’t been done till now. The where we’re sourcing more antibiotics everyday in the Perdue chickens any higher be- double the activity of our with, and maybe not. Because consequenceisanunsuper- globally, and locally—because feed, regardlessofwhether causeyou made this no-antibi- chickens in the next two of the opacity of the supply vised supply chain. Not every- of consumer preferences—that they were sick or not. But a otics push? years. We’reputting windows chain, therisks arehigher where. Manycompanies do exposes us. What can we as an consumer—they don’t put an- MR. PERDUE: If it is or isn’t, back in our chicken houses, than any of us would like. this just right. But in general, industry do to advance acul- tibiotics in the cereal every it’s because of the market in fornaturallight. We’reput- It’s going to get fixed. It’s there’snot enough compliance. ture of food safety throughout morning. general, and whatever pre- ting enhancementsinthe either going to getfixed be- the supply chain? mium we mayenjoythat the houses,asImentioned. Bales cause,under the newFood MR. BUSSEY: Amajority of MR. FIELDS: If IwereCEO of a MR. ANDERS: You’re still in the consumer is willing to giveus. of hay. Swings. Safety Modernization Act Americans say they would not food firm, the food-safety per- business of sellinglarge chick- Most of the time youinvest in Reducing stress. We’re go- [signed intolaw in 2011], the buy afood product from son in my companywould be- ens. How do you get the chick- things hoping down the road, ing to use CO2combined with Food and Drug Administra- China. But alot of our food come an officer and adirect ens big without using the anti- they will pay off with market oxygen to put the chickens to tion and their partnersatthe comes from China. People just report. He or she would be- biotics? share, and that’s most impor- sleep beforethey arekilled, Department of Justicewill are not aware of where their come as important to me as MR. PERDUE: When we took it tant to us. versus electricity. dress a few executives up in food comesfrom, right? my general counsel. Iwould out, therewas no differencein What we’vefound is that We givechickens what they orangeand silver,orbecause MR. FIELDS: Absolutely cor- givehim the ability to pull on the growth. We had been us- this has created somewhat of need, which is aroof,food and there’s pressure from retail- rect. We [Americans] eat on thecordofthe bus and stop ing it because we had always arevolutioninthe last couple water. Thequestion is,what ers—wesee that—toimprove average2,000 pounds of food thebus at anymoment. Until used it, which is not agood of years. Chick-fil-A,for exam- does achicken want? That’s the compliance and safety of per person per year.That’sa that’sdone,honestly,wedon’t reason to do anything. ple,isacustomer of ours, and the question we’re asking. thesupply chain. That’sthe big number.Almost 400 have acultureoffood safety. P2JW291000-0-R01100-1------XA

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now. Measures for protecting intellectual property, or mak- HowU.S.Farmers ingsurethat we have afree and open internet also weren’t included. There wasn’t an internet when we negotiated Nafta. So this is achancefor MayGain From TPP us to raise the standards of some of our current trade agreementswith existing trade partners, as well as es- Darci Vetter argues that the trade pact would tablish newand very high expand access for American agriculture standards with other partners. Staying competitive The White House is in an TPPthat not enough people most protected markets, the MS. BLUMENSTEIN: You say the uphill battle to win support in understand, from what you’re highest tariffs,the most diffi- U.S. in away is uniquely posi- Congress this year for the telling me. cult barriers are often in that tioned here. We almost under- sweeping 12-nationtrade MS. VETTER: Ithink TPP really agriculture sector. estimate the diversity of what agreementknown as the provides an opportunity for If youlook at both Canada the U.S. produces. Trans-Pacific Partnership, or U.S. agriculturetoaccesssome andJapan, which have some MS. VETTER: We areblessed TPP. Darci Vetter,chief agri- very high-income, high-value very closed markets, forthe with good supplies of water. cultural negotiator in the of- markets, but also to getafoot- firsttime in afree-trade agree- We have rich and fertile soils. fice of the U.S. Trade Repre- hold intoemerging economies ment everyproduct without ex- We cangrowcold-weather sentative and akey figure in in Southeast Asia through clusion wasonthe table and crops and tropical products. the negotiations, is helping to Vietnam and Malaysia. Viet- wasliberalized in some way. The vastness and the rich- lead that charge. nam and Malaysia right now Never beforeinafree-trade nessofour agriculturepro- She sat down with Rebecca buy our feed grains,skim-milk agreement had Japan opened duction is oftenunderesti- Blumenstein, deputy editor in powder and basic commodi- itssectorsfor beef,pork, mated. But because of that, chief of The Wall Street Jour- ties. But as their populations wheat, rice, dairyorsugar.All when we do negotiatethese nal, to discussTPP and why grow and morepeople enter of those productsare on the ta- agreements, you see benefits she thinks it will level the the middle class, we see a ble in TPP,with significant new on everything from grains and playing field for U.S. farmers huge opportunity to send access.Inour previous trade staple productstospecialty

and food companies. them moreprotein, fresh agreementswith Canada, they LACIO/DOW JONES crops—tree nuts, fruits. Edited excerpts follow. fruits and vegetables. didn’t offer anyaccesstodairy PA

or poultryoreggs. We will GABE MS. BLUMENSTEIN: Anthony Sensitive spot MS. BLUMENSTEIN: Let’s talk have access in all three sectors DARCI VETTER | ’You see benefits on everything from grains Pratt, executivechairman of MS. BLUMENSTEIN: You were about Japan. You were saying if TPP is entered intoforce. and staple products to specialty crops—tree nuts, fruits.’ paper and packaging company the lead negotiator for the ag- every country has a sensitive the Pratt Group, said earlier riculture section of the Trans- sector. Japan is famously pro- MS. BLUMENSTEIN: Many peo- session. And agricultureisre- means,and the income returns today that he’s concerned that Pacific Partnership. You also tective of rice. But you got ple aren’t optimistic about the ally critical in that fight. to the averageAmerican farm exports from the U.S. are slip- were born and raised on a them to blink a bit on this. prospects for TPP. What hap- Igrewuplistening to price family that will come from ping abit. Are you concerned? farm in Nebraska, so you have MS. VETTER: Ithink it’simpor- pens if it isn’t passed? reportsevery morning about TPP.Thereare certainly party MS. VETTER: Well, I think the a unique perspective on agri- tant forpeople to remember MS. VETTER: I’m an eternal op- whether pork-belly futures differences on trade in gen- slippageinrecent numbers, in culture. It seems the success of that the second part of agri- timist. And thereisinfact a were up or down, and what eral. Typically anytrade part, is by value,and reflectsa thenegotiations on agriculture cultureisculture. And when narrow windowtobeable to the priceofwheat and corn agreement that passes does so real drop in commodity prices. is kind of ahidden story in youlook around the world, the approveTPP in the lame-duck was. But in that same report with abipartisan effort. And But if we don’t move forward everymorning,U.S.farmers we will be looking forthat with thesefree-trade agree- and ranchershear about same effort here. ments, we will fall behind. Feeding the World whether there’sadrought in During our TPP negotia- Global trade in agricultural products morethan Top10agricultural exporters in 2015 Brazil or toomuch rain in Rus- MS. BLUMENSTEIN: Could we tions,Australia and Japan doubled from 2005 to 2014 beforeadecline last sia. They firmly understand talk a bit more about Canada completed and implemented a year.Annual totals: Pct. of that they arecompeting in a and Australia, which are part bilateral free-trade agreement. world global commodity market. So I of TPP? You said earlier that And so today, apound of beef exports Total (In billions) $2,000 million think there’sareal opportu- we really haven’t renegotiated from the U.S. going to Japan 10.4% $163 1,750 U.S. nity to continue to build the trade pacts with them since pays a10% higher tariff than European Union* 10.0 158 support and momentum, and the North American Free that same pound of beef com- 1,500 Brazil 5.1 80 there is time to get this done. Trade Agreement. ing from Australia. 1,250 MS. VETTER: You’re right that And Australia, one of our China 4.6 73 MS. BLUMENSTEIN: We’re not we already have free-trade key competitors in Southeast 1,000 Canada 4.0 63 hearing alot about agriculture agreementswith several of the Asia in dairyand wine,has the 750 Indonesia 2.5 39 andthe benefits of trade in the countries that arepart of TPP. Asean free-trade agreement, current discourse. And TPP gives us a chance to wherethey will have zero-tar- Thailand 2.3 36 500 MS. VETTER: Ithink that’s update those agreements. iff access forwine and dairy, Australia 2.3 36 250 *Excludes right. Although Iwould say When we negotiated Nafta, and we will fall behind. If we India 2.2 35 shipments we’vebeen working very we didn’t put inside trade implement TPP,wewill stay 0 within the EU. Argentina 2.2 35 closely with agriculturestake- agreements the labor and en- on alevel playing field with 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 holderswho aregetting the vironmental commitments our competitorsinthat region. Source:World Trade Organization THE WALL STREETJOURNAL. word out about what this that we put in agreements If we stand still, we won’t.

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