UNITED KINGDOM – Bruno Monteyne, an analyst at Bernstein Research, is calling for Tesco’s new Chief Executive, Dave Lewis, to split the retailer into three separate stores: a high-end “Finest” store, the regular Tesco chain and a discount store. According to The Independent, Monteyne believes that a Tesco split would help stop the slow decline of the retailer.

“Splitting themselves into different channels allows them to use different strategies with different customers,” said Monteyne, a former Tesco Executive himself who was most recently the Supply Chain Director at Tesco Asia.  “Rip out 20% of the range, have cheaper shelving and cheaper products in the more deprived areas and give customers a better deal.  In London, where people want someone behind the counter who knows the difference between a parma ham and a Serrano ham, that requires more investment.”

Lewis is replacing Philip Clarke who stepped down as CEO last month. Since March 2011 when Clarke first took the job of CEO, Tesco's domestic market share has declined 1.3% to 28.9%. According to BBC, like-for-like sales figures over the past month were also down 3.7%, their worst mark in decades. For more on this decline, check out our previous articles by clicking here and here.

Discount grocers like Aldi and Lidl and upscale chains like Waitrose have pressured Tesco from both sides.  “By Tesco promising to have the same prices in the most affluent areas as the poorest areas, it’s basically tied its hands behind its back by committing to an uneconomical model,” said Monteyne.  “Tesco could probably be cheaper than Aldi in some areas, but national pricing would force them to do the same in Chelsea as well and Chelsea wouldn’t be successful.”

By splitting into three stores, the “Finest” store could compete with Waitrose and other high-end stores and a discount chain could go up against Aldi and Lidl.  Monteyne admits that most people in the sector have received his views as radical but he argues that this is exactly what Tesco needs, according to The Independent. 

As of 12:57 pm ET, Tesco stock is $0.59 up for a 2.90% increase in the U.S., and its stock is up $2.50 in the UK for a 1.02% increase. 

Lewis will be taking over the top spot at Tesco at the start of October.  It will definitely be interesting to see if he takes a ‘radical’ approach when the time comes.  Stay tuned to AndNowUKnow for the latest news on this and other retailers.

Tesco

FOWLER, CA - Bee Sweet Citrus is continuing to ramp up its summer import program at its Fowler, California facility. Mandarins, Lemons, and Navels are imported all summer long from Chile, Peru, and Australia starting in July and finishing through October. Over the last fifteen years, the company has grown to become the largest importer of Chilean citrus on the West Coast.

Every product is handled by hand as it’s brought into the facility with regards to repack, restyle, or reconfigurations. Bee Sweet has the ability and versatility to pack any style that the consumer wishes to use. The company’s strong partnership with its growers in South America and expeditors in Southern California allows fresh citrus to arrive at their facility in 25 days or less. Bee Sweet recognizes the importance of timely arrivals and keeping quality at optimal levels by examining every box before it ships out.

Bee Sweet is passionately committed to its import program and supplying fresh citrus year round to its customers. Navel oranges, lemons and mandarins 12 months out of the year!  No other shipper in the country carries all three commodities year round like Bee Sweet.  As volume continues to increase, Bee Sweet encourages its customers to provide their continued support to the company and to offer a growing effort to expand the program to greater levels of service. With its seamless ordering process, the company can help give your customers access to citrus items whenever they need it. Bee Sweet can carry you through the summer time.

Bee Sweet Citrus

MEXICO CITY – Mexico has created a special 5,000-member police force to fight agricultural, industrial and business crime.

The Wall Street Journal reports that the new force will be known as the Gendarmerie and is made up of new recruits with an average age of 28.  The Mexican army trained the new force with its commanding officers receiving training from police forces from Colombia, Chile, Spain, France and the U.S.

“The officers of the new gendarme force… are trained to serve the population on foot, and on horseback, in rural, urban, tourist and border zones,” President Enrique Peña Nieto said.

This should be good news for farmers. “If there is organized crime that could disrupt production, then the Gendarmerie will be there,” said Monte Alejandro Rubido, Director of the National Security Commission.

The Wall Street Journal reports that one example of the difficulties that farmers in Mexico have faced is in Michoacan where the Knights Templar cartel told lime farmers when to plant and took a cut on every product.  “The planters, pickers, packing house and distributors all had to pay a cut for the right to operate or ship to the criminals,” Rubido said.

Banana growers in the Mexican Gulf state of Tabasco have also come under gang pressure.  Rubito told the Wall Street Journal the when banana harvest season starts, extortion and kidnappings rise to some of the highest rates in Mexico.

The National Statistics Institute of Mexico estimated in 2012 that crime cost the country about $16.5 billion, or 1.3% of GDP.

The Gendarmerie will not be able to fix the problem overnight, but hopefully they will be able to help farmers working under these conditions.

CHINA - China is reopening its massive domestic market to California citrus growers after an almost 1.5 year trade embargo. According to ABC News 10, provided that California growers take certain preventative measures to ensure the health and quality of their exports, they once again have access to what has become the second largest export destination for California citrus.

"Resuming trade before the start of the 2014 citrus shipping season is the result of a lot of effort by a number of USDA employees, who worked very closely with their foreign counterparts to resolve China's concerns," said Secretary of Agriculture, Tom Vilsack.

Joel Nelsen, President of California Citrus Mutual, said that word of this agreement was incredible news for the $2 billion California citrus industry. Before the ban roughly $30 million in citrus was shipped to China each year by California growers, a number that Nelsen said he expects to rise to $50 million in the near future.

"We were hoping to get (exports) reopened in November in time for the 2013-14 navel orange season . . . but that didn't happen," Nelsen said. "As a result, there were several million packages of fruit that were not exported to China. We were still able to do a little bit of business in Hong Kong, but we lost mainland China."

China first instituted the citrus ban after discovering brown rot, a soil fungus, on several shipments of navel and Valencia oranges and lemons in April 2013. Provided that growers agree to prune their trees to remove branches close to the ground, increase ultraviolet scans during the packing process and apply copper, a metal which impedes the growth of rot fungus, to trees early in the season after the first rainfall, Chinese officials were comfortable reopening their ports to California citrus.

This is certainly great news for California citrus producers. Despite having to work under less than ideal conditions due to the California drought, growers have proved resourceful in raising an excellent looking crop. Nelsen agrees on this point explaining that he expects yield to remain good despite weather complications. Now that Fall crop will have a massive new market to trade with, something which is good news for growers and Chinese consumers alike.  

California Citrus Mutual

CALIFORNIA - A magnitude 6.0 earthquake shook Northern California early Sunday causing widespread infrastructural damage and power outages in Napa and in the surrounding counties of Solano and Sonoma. Though the quake’s epicenter was about 9 miles south of Napa, vineyards in the area have reported minimal damage.

The temblor occurred at 3:20 a.m. and was felt as far south as Santa Cruz and into Sonoma County, according to LA Times, while NY Times reports shaking could be felt in Salinas. It was reported to be Northern California’s strongest earthquake to hit since the infamous magnitude 6.9 Loma Prieta earthquake in 1989. The U.S. Geological Survey (USGS) states that the earthquake occurred within 44 miles of a set of major faults along the San Andreas Fault system that forms the boundary between the Pacific and North American tectonic plates.

Governor Jerry Brown has since declared a state of emergency, noting that public safety officials are doing all they can to help residents. “Those living in affected areas should follow their guidance and instruction,” said Brown in a statement.

Reports suggest numerous antiquated buildings were damaged during the quake, while Pacific Gas & Electric says 20,786 homes and businesses were left without power. Many of these damaged buildings were in an older area of Napa, USA Today reports. Homes and buildings away from the city’s center suffered less damage. USGS says the estimated damage could be up to $1 billion.

“The regions around Yountville, St. Helena, and Calistoga seem to have experienced minimal damage and disruption,” said Clay Gregory, President and CEO of Visit Napa Valley, according to USA Today. “For travelers coming to the Napa Valley, most businesses are open as usual.”

USGS predicts that the probability of a strong and possibly damaging aftershock this week is approximately 36 percent. There is a smaller chance at around 5 to 10 percent that an earthquake equal to or larger than the main shock will occur in the next 7 days. Approximately 15 to 50 small aftershocks are expected in the same period and may be felt locally.

Stay tuned to AndNowUKnow for any further updates on the situation.

U.S. Geological Survey

UNITED STATES - Several high profile produce industry league members took a stand for ALS awareness last week by taking the #IceBucketChallenge and sending us their videos to share with the produce community. Since then we have had even more produce leaders from Rick Antle to Nora Trueblood and many more decide to take on the challenge. 

Watch as these brave produce leaders take on the cold for a great cause below!

If you want to challenge someone in the industry, click here to send us your video!

Tanimura & Antle, led by Rick Antle, CEO: 

Barbara Keckler, Marketing Manager at Potandon Produce:

Nora Trueblood, Marketing Director at Allen Lund Co.:

Steve Ottum, COO at Potandon Produce:

John Toner, Vice President, Convention & Industry Relations for United Fresh:

Terri Mouton, Director of Marketing at Frieda's:

The ALS Association reports that as of August 24th, they have received $70.2 million in donations compared to the $2.5 million they received in the same time period last year.  Joining existing donors, 1.3 million new donors have also contributed.

The ALS Association’s mission includes providing care services to assist people with ALS and their families and a global research program focused on the discovery of treatments and eventually a cure for the disease.

Stay tuned for more produce industry video challenges. Thank you to those that have donated and we're looking forward to more videos!

CLICK HERE TO DONATE TO ALS ASSOC.

Tanimura & Antle

Allen Lund Company

Potandon Produce

Frieda's

United Fresh

REEDLEY, CA - This week, DJ Forry has begun harvesting two of its new domestic pomegranates: the Red Elite and the proprietary Rubliee varieties. So far, reports out of the fields are incredibly positive.

“We're very excited about our early season pomegranate varieties this year,” Ray England, Vice President of Marketing at DJ Forry tells me. “This is our first year harvesting the Rubilee and Red Elite varieties and volume has been great so far, especially for a first season run. The color on these pomegranates is outstanding. Just looking at them, you're immediately struck by the lush red of both the seeds and the pomegranate's skin.”

Color is a key selling point for pomegranates because it is the first thing that customers notice about the fruit at the retail level.

“Color is what the customer first looks at, what draws them in,” Ray explained. “This puts our pomegranates in a great position and we're very confident that they'll be a bit hit with consumers.”

If this first run is a successful one, DJ Forry says it plans on expanding the amount of acreage devoted to these two varieties for next season. While the overall pomegranate market may be slightly down at this time of the year, the strength of DJ Forry's own crop puts them in good standing to make this a reality.

Congratulations DJ Forry on an excellent start to this years harvest! I'll be looking forward to yet another great pomegranate season this year.  

DJ Forry

TEWKSBURY, MA - News broke this weekend that Arthur T. Demoulas had placed a $1.5 billion offer on the table as his latest and final bid for the remaining 50.5% of the Market Basket ownership shares owned by Arthur S. Demoulas' side of the family. According to the Boston Globe, this most recent offer was strengthened by the inclusion of a letter from a yet unreleased private equity firm stating that it is prepared to back Arthur T. Demoulas' offer with $500 million in capital, with the remainder of the offer coming from his private fortune.

With the release of this news, many expected a formal deal to follow closely after. The Governors of Massachusetts and New Hampshire for example released a joint-statement attesting that they expected an agreement to be reached within a matter of days.

“In briefings today, all parties report that they are optimistic that an agreement will be reached to sell the company to Arthur T. Demoulas and to restore him to operating authority on an interim basis until the sale closes,” read the statement from Massachusetts Governor Deval Patrick and New Hampshire Governor Maggie Hassan. “We are hopeful that employees will return to work, and the stores will reopen, early next week.”

According to the Boston Globe, Market Basket's Board of Directors had originally scheduled a meeting for Sunday night intended to hammer out the details of an Arthur T. Demoulas' acquisition, but it was canceled after the retailer's shareholders made it evident that they would refuse to sign off on a stock purchase agreement at that time.

What is to happen next is both simultaneously clear and also uncertain. On one hand, most industry experts agree that the best offer on the table is Arthur T.'s, however with the cancellation of the Board's meeting no one is clear about when a decision will be made.

According to John Davis, a Harvard Business School Professor, the only thing that is clear is that something needs to happen soon to put Market Basket back on track.

“Everybody is surprised that it’s taken this long, and I don’t think more weeks of nothing happening is prudent or is even fiscally possible for the company,” Davis said. “There has to be some arrangement if they make a deal...for Arthur T. to be reinstated and for the company to get back on its feet.”

Whenever a deal is reached you can count on AndNowUKnow to bring you the news and analysis first. Stay tuned.  

Market Basket

CASTROVILLE, CA – The United States Department of Agriculture (USDA) hosted a custom training session at Ocean Mist Farms’ headquarters in Castroville, California.  More than 45 staff members from five departments participated.

Arlin Valenzuela, Ocean Mist Farms Quality Assurance Manager, invited the USDA to come and train the staff on the ways in which the agency inspects and grades product at both shipping and receiving, according to a press release.

“The session was highly beneficial and allowed our team to better understand our specifications compared to the USDA’s and any variations between the two,” Valenzuela said.  “It supports our culture of quality and our strategic initiative to consistently innovate our product quality assurance specifications and procedures.”

Throughout the training session, several of the more than 30 commodities that Ocean Mist Farms grows were specifically reviewed in depth.  Staff members from field harvesting, quality assurance, food safety, sales and senior management were all in attendance.  The training session was designed to enhance consistency and reliability of product inspections, benchmarked to USDA specifications at all levels companywide.

Valenzuela said that the USDA rarely holds custom training sessions at a company’s headquarters.  Mike Morelli, Senior Training Specialist, and Dave Horner, Standardizations and Master Trainer, conducted the training for the USDA.

It's always good to see produce companies take the initiative to enhance product quality assurance. 

Ocean Mist Farms

NETHERLANDS - Scientists in the Netherlands have published an article in Nature, exploring the possibility of cultivating tomatoes capable of growing under constant light exposure. These scientists have isolated a gene in wild tomato species, the type III light harvesting ​chlorophyll a/b binding protein 13 (​CAB-13) gene, which confers a much higher degree of light tolerance than that enjoyed by traditional tomato species.

As Gizmodo documents, modern tomato varieties require roughly eight hours a day of darkness in order to halt the growing cycle. A lack of this rest leads to the growth of yellow spots on the tomato plant and eventually death.

These scientists however postulate that the increased resistance the type III gene confers could negate the need for this rest cycle, allowing the tomatos to grow at a continuous, uninterrupted rate without negative consequences on quality.

What does this mean for growers? It means a 20% increase in crop yields if these scientists are proven correct.

Gizmodo does note however that this new breed is still a ways off. Before growers have a viable variety to work with, researchers would first need to work out if there are any other genetic factors at work in conferring this light resistance to these wild tomato plants in addition to how the protein, sugar, and electrolyte balance of traditional varieties would react under these growing conditions.

Regardless of the challenges, this is certainly a compelling idea. I know I'll certainly be following how this research progresses as we move into the future.