Category Archives: Fattening of the Population

Is Diet Coke diluting and deluding itself with its latest move?

Given falling sales of soda, both the regular “sugary” kind as well as diet, Coca-Cola is once again trying to entice consumers with a new round of Diet Coke-branded beverages that will be available in the coming weeks. We’ve not tried them, and while we’re somewhat skeptical our preference for first-hand research means giving them a go.

Our concern is the potential risk to the Diet Coke-brand, which to date has focused on cola beverages. And while we understand the argument to be had with brand extension and consumer choice, we’ve also seen too much choice dilute a brand resulting in a company that needs to bring a brand “back to its core.”

At the same time, creating a new brand is no easy task. To us, it says Coca-Cola could have a tough time ahead as it tries to keep consumers coming back for its products as they look for healthier alternatives.

 

Starting in two weeks, you can buy Diet Coke in Ginger Lime, Feisty Cherry, Zesty Blood Orange and Twisted Mango.

They will come in a skinnier silver can, reminiscent of Red Bull’s. And the company may have had another drink in mind when it mixed up the flavors — LaCroix seltzer, which has attracted exactly the audience Coke is after.

Coke wasn’t shy about which customers it’s targeting.”Millennials are now thirstier than ever for adventures and new experiences, and we want to be right by their side,” said Rafael Acevedo, the group director for Diet Coke in North America. “We’re making the brand more relatable and more authentic.”

The company is not changing the classic Diet Coke formula, which will still be available in the traditional, squatter 12-ounce cans.

Coke has been paying special attention to its low- and zero-calorie drinks.Over the summer, the company replaced Coke Zero with a drink called Coca-Cola Zero Sugar.

But in general, consumer appetite for soda, both regular and diet, is shrinking. People are turning away from the artificial sweeteners used to flavor diet sodas — including the new Diet Coke flavors.

In a note published on Tuesday, the research group Cowen reported that diet soda sales fell 2% in the last three months of 2017. In that period, Diet Coke sales fell by 4% and Diet Pepsi (PEP) by 8%.

Source: Diet Coke’s new cans and flavors are Millennial-friendly – Jan. 10, 2018

There is how much sugar in the Christmas Tree Frappuccino from Starbucks?

A friend of mine once said if you don’t put on a few pounds during the holiday season, you’re probably not enjoying yourself. I’ve “suffered” from this most years, but in 2017 Starbucks is making it even easier to do so with its Christmas Frappuccino. The limited edition beverage packs a whopping 420 calories and 50 grams of sugar – that’s 1/4 cup of sugar in a 16 fluid ounce beverage. No wonder it goes down easy peasy, but then again “a moment on the lips, forever on the hips” means this holiday beverage and ones like it will keep our Fattening of the Population investing theme in vogue over the coming quarters.

The month of December is purely dedicated to holiday preparation. With all the tree-decorating, ugly-sweater-wearing, and carol-singing moments, it should come as no surprise that Starbucks jumped in on the holiday fun with the release of the new Christmas Tree Frappuccino. But before you spit out your almond-based eggnog for this delightful holiday drink, we’re here to present you with the nutrition facts.

The drink is unquestionably pretty, and we’re all about indulging during the holidays, but if you’re watching your sugar intake, the Christmas Tree Frappuccino might be on your naughty list. The frozen Winter drink starts with a Peppermint Mocha Crème Frappuccino base and is topped with matcha whipped cream, caramel drizzle, candied cranberries, and a festive strawberry tree topper.

A grande Christmas Tree Frappuccino made with whole milk has 420 calories and 50 grams of sugar.

But don’t write it off just yet! While the drink is only available from Dec. 7 through Dec. 11, a Starbucks spokesperson has clued in POPSUGAR on some ways to customize the festive drink for the calorie-conscious caffeine fiends out there.

Source: Calories in Starbucks Christmas Tree Frappuccino | POPSUGAR Fitness

Obesity, diabetes rises Africa thanks to fast food. — Quartz

Obesity, diabetes rises Africa thanks to fast food. — Quartz

As the incomes have risen in emerging economies, quick service restaurants ranging from KFC and Pizza Hut at Yum Brands to McDonald’s, and Burger King among others have looked to capitalize on this. What this means is our Fattening of the Population theme is global in nature and is expanding past China into India and taking root in the Africa, which is now home to the fastest growing middle-class.

Rapid urbanization, population growth and expanding economies which swell the ranks of middle-income families, are leading to more Africans indulging in fast foods.

And like seen in more advanced economies, this has led to an increasing overweight and obesity levels across Africa.

A new report from the Malabo Montpellier Panel, a group of international agriculture experts, says African children are increasingly exposed to high-sugar, energy-dense, processed foods that are cheap in cost but lower in nutrients. Obesity among 7- to 11-year-olds increased from 4% in 1990 to 7% in 2011 and is expected to reach 11% in 2025.The change in eating habits is also seen among older middle-class Africans, who are increasingly desk-bound and are not engage in much physical activity such as sports.

Africa now has the fastest growing middle class in the world with current trajectories showing they will grow to 1.1 billion by 2060. Over the last few years, big fast food brands like Burger King, McDonald’s, KFC, Pizza Hut, and Subway all set shop in the continent in the hope of taking advantage from the expanding middle class who have disposable income and a palate for processed food. Given that, an obesity epidemicis now unraveling in countries like Egypt, Ghana, South Africa, and Nigeria.

Source: Obesity, diabetes rises Africa thanks to fast food. — Quartz

CDC findings show 40% percent of cancers linked to Fattening of the Population

CDC findings show 40% percent of cancers linked to Fattening of the Population

We have shared many a data point on the hidden costs associated with our Fattening of the Population investing theme. Recently the Center for Disease Control and Prevention reminded that us the vast majority of people do not realize the degree to which obesity and being overweight leads to cancer and other healthcare issues. We see this as proof positive of the pain point created by our Fattening of the Population theme, one that screams for solutions as simple adopting our Food with Integrity theme to ones that fit with our Disruptive Technology theme and the fountain of youth aspect of our Aging of the Population theme. We expect our Fattening of the Population theme to come to the forefront of the healthcare debate as people look to wrangle costs lower and adopt a more preventative posture to health issues.

 

 

An unhealthy diet may affect more than just your waistband, a new Centers for Disease Control and Prevention (CDC) ‘Vital Signs’ report shows. In a press release on Tuesday, the CDC stated that 40 percent of all U.S. cancer diagnoses can now be linked to overweight and obesity.

The study presents daunting results, as nearly two-thirds of American adults are currently defined as overweight or obese.

“A majority of American adults weigh more than recommended – and being overweight or obese puts people at higher risk for a number of cancers – so these findings are a cause for concern,” said Brenda Fitzgerald, CDC director.

Many Americans are unaware of the connection between obesity and cancer, despite findings that link nearly 630,000 of the 2014 cancer diagnoses to obesity. And while these cancers increased by 7 percent from 2005 to 2014, the rates of non-obesity related cancers dropped.Out of all cancer diagnoses, nearly 55 percent of female cases and 24 percent of male cases were linked to overweight and obesity. These cases statistically affect older adults, mostly between the ages of 50 and 74-years-old.

Source: CDC: 40 percent of cancers linked to obesity, overweight | Fox News

The U.K. moves from fighting sugar to fat and calories 

The U.K. moves from fighting sugar to fat and calories 

We’ve known for some time the hidden costs of obesity here at Tematica as it’s one of the factors behind our Fattening of the Population investment theme. The fight to limit sugar has led beverage companies to change drink sizes as well as alter formulations, which has stoked demand at flavor companies given the need to preserve taste. We see this latest move to fight calories as having a similar impact, and it means we’ll continue to keep those flavor companies on the Tematica Select List.

The British government has a new enemy: calories.After cracking down on sugar and salt, Public Health England said Friday it now wanted companies to slash the calories in food to tackle an obesity epidemic among children.It plans to set calorie targets for fast food and other meals popular with kids by the start of 2018.”

Ready meals, pizzas, burgers, savory snacks and sandwiches are the kinds of foods likely to be included in the program,” the government’s health body said in a statement.Dominique Lemon, spokeswoman at Public Health England, said the program would cover food sold at all kinds of outlets, from grocery stores to coffee shops and fast food restaurants.

The government has already set similar targets for sugar and salt content.The initiative could force food manufacturers to slash the size of their products and use different ingredients.

It’s been down this road before, introducing a sugar tax on soda makers last year.The U.K. introduced the tax as part of an effort to reduce childhood obesity. Drinks with total sugar content above 5 grams per 100 milliliters are affected by the levy with a higher rate ($0.30 per liter) for drinks with over 8 grams. The measure appears to have worked. Rather than risk higher prices damaging sales, Coca-Cola (KO) and Pepsi (PEP) have already reduced the sugar content of many products.

Source: U.K. to food industry: Cut the calories in pizzas and burgers – Aug. 18, 2017

Woeful Earnings from Kroger Has Us Tightening Position in UNFI

Woeful Earnings from Kroger Has Us Tightening Position in UNFI

While many have been focused on the retail environment —and we count ourselves among them here at Tematica — we’ve also been watching the painful restaurant environment over the past few months. It’s been one characterized by falling same-store-sales and declining traffic – not a harbinger of good things when paired with rising minimum wages.

For those that are data nut jobs like we are, per TDn2K, same-store sales for restaurants fell 1.1 percent in May, a decline of 0.1 percentage points from April. In May, same-store traffic growth was -3.0 percent. Now for the perspective, the industry has not reported a month of positive sales since February 2016 – that’s 15 months! One month shy of the bad streak the May Retail Sales Report has been on. Clearly not a good operating environment, nor one that is bound to be friendly when it comes to growing revenue and earnings.

Reading those tea leaves, we’ve avoided that the restaurant aspect of our Fattening of the Population investing theme, and with Ignite Restaurant Group filing bankruptcy, Cheesecake Factory (CAKE) warning about its current quarter outlook we confident we’ve made the right decision.

But people still need to eat, and we’ve seen consumers increasingly flock back to grocery stores in 2017. Year to date, grocery retail sales are up 1.7 percent through May. Breaking down the data, we find that in recent months those sales have accelerated, with March to May 2017 grocery sales up 2.8 percent year over year and standalone May grocery store sales up 2.2 percent year over year.

Yet, when grocery company Kroger (KR) reported in-line earnings for its latest quarter, it lowered its 2017 EPS outlook, cutting in the process to $2.00-$2.05 from the prior $2.21-$2.25, with the current quarter to be down year over year. Aside from price deflation in the protein complex and fresh foods, the company cited its results continue to be pressured by rising health care and pension costs for employees, as well as the need to defend market share amid “upheaval” in the food retailing industry. We see that as company-speak for Kroger and its grocery store competitors having to contend with our

We see that as company-speak for Kroger and its grocery store competitors having to contend with our Connected Society investment theme that is bringing in not only Amazon (AMZN), MyFresh, and FreshDirect into the fray, but also leading Wal-Mart (WMT), Target (TGT), and Safeway among others to expand their online shopping capabilities, which in some cases includes delivery. Another reason not to get off the couch when shopping.

Candidly, we’re bigger fans of companies that focus on profits over market share given that short-term market share led strategies, often times with aggressive pricing, tend to sacrifice margins, but focusing on profits tends to lead to better market-share over the long-term. We’ve seen the “strategy” that Kroger is adopting many times in the past and while it may have short-term benefits, increasing prices later on, runs the risk of alienating customers.

Getting back to Kroger’s guidance cut, that news sent Kroger’s shares down almost 20 percent on Thursday and led to United Natural Foods (UNFI) shares to fall more than 3.5 percent, while Amplify Snacks (BETR) slumped by 2 percent. In our view, most of Kroger’s bad news was likely priced into UNFI’s mixed guidance last week when it reported its own quarterly earnings. Without question, 2017 has been a rough ride for UNIF shares despite the Food with Integrity tailwind, but despite Kroger’s guidance cut, management shared on the company earnings call that it continues “to focus on the areas of highest growth like natural and organic products.” Even Costco Wholesale (COST) recently shared it has room to grow in packaged organic food items, excluding fresh), which plays to the strengths at both United Natural Foods and Amplify Snacks.

 

Tightening Our Position in UNFI, But Staying the Course with BETR

With our Food with Integrity thematic tailwind still blowing and UNFI shares down just 7.5 percent relative to our blended cost basis on the Tematica Select List, we’ll remain patient with the position. That said, from a technical perspective the shares are near support levels and if they break through $38.50 the next likely stop is between $33 and $34. Therefore, to manage potential downside risk, we’re instilling a stop loss on UNFI shares at $38.50. As we do this, we’ll acknowledge the tougher operating environment and reduce our UNFI price target to $50 from $65, which still offers upside of just over 25 percent from current levels.

  • We are keeping our Buy rating on United Natural Foods, but trimming our price target back to $50 from $65.
  • We are instilling a stop loss at $38.50 to manage additional downside risk near-term.

With regard to Amplify Snacks, with today’s close the shares are down just 6 percent from our late April Buy recommendation. Generally speaking, these single digit stocks tend to be volatile and require some extra patience, and that’s the tact will take with BETR shares. Our price target remains $11.

  • We continue to have a Buy on Amplify Snacks (BETR) shares and our price target remains $11.

 

 

 

Fattening of the Population Isn’t Just in the US

Investors, especially those in the US, tend to have an in-country perspective, but the reality is our investment themes play out on the global stage even Fattening of the Population. As more countries recognize obesity as a disease, this will likely change the way it is treated, which could expand the universe of contenders for investment.

Experts at two recent endocrinology meetings are calling for more countries to formally recognize obesity as a disease in order to strengthen the fight against this epidemic of the 21st century.Speakers at the European Congress of Endocrinology (ECE) 2017 and the recent European Congress on Obesity (ECO) 2017 both stressed the fact that recognition of obesity as a disease in Europe remains a much–needed step forward.

Source: Call for More Countries to Recognize Obesity as Disease

Fattening of the Population takes to the skies

Fattening of the Population takes to the skies

A man in Australia is suing American Airlines after he was seated next to two obese people for a fourteen-hour flight – an ordeal which he claims caused permanent back and neck injuries.Michael Anthony Taylor, 67, said the airline refused to let him move seats, leaving him “crouching, kneeling, bracing or standing” for much of the flight from Sydney to Los Angeles.He said his uncomfortable position during the flight exacerbated his scoliosis and caused lower and upper back injuries as well as bruising to his neck. “I don’t hold any malice towards the people in the seats next to me – they’d paid for a ticket too,” he told Sydney’s Daily Telegraph.

Full Article: ‘Squashed’ Australian sues American Airlines after he was seated between obese passengers for 14 hours

 

We can’t say we agree with this man’s perspective that it wasn’t the passengers’ fault and their girth causing his pain and suffering — but as airlines shrink seat size and leg room at the same time that people are getting larger and larger, the buttons are going to burst.

It creates an interesting issue with airlines, many of which now have policies for obese customers, but the question remains what happens to the customer sitting in the middle that has to deal with overflow.

Can McDonald’s Digital Strategy Reverse It’s Sales and Traffic Woes?

Can McDonald’s Digital Strategy Reverse It’s Sales and Traffic Woes?

The last several years have been a dark time for McDonald’s as its domestic same-store sales fell 1.3 percent in 2016. Worse yet, the number of customers its been drawing has been dropping every year for the last four years. After tinkering and tinkering with its menu, what does McDonald’s management think will turn things around? Mobile ordering, curb side delivery and other delivery methods like GrubHub. Normally, we’d applaud a company adopting Connected Society strategies, but after seeing the buildup of orders that Starbucks has to contend with and the prospects of getting cool to cold McDonald’s food delivered, we’re going to say the Golden Archers needs to focus on the quality of its food to lure back diners.

Chris Kempczinski, McDonald’s USA President, admitted that the chain has lost “hundreds of millions” of visits to competitors since 2012, a trend the company is trying hard to turn around with initiatives like the new mobile app.

Customers will be able to access their app profiles — which can include their preferred payment methods and a customized list of menu favorites — on the touch-screen ordering kiosks McDonald’s has introduced to some U.S. stores already, the company says.

And for those who don’t feel like going out in public to get their food at all, McDonald’s says it’s experimenting with different delivery models, including partnering with third parties like GrubHub.

Source: McDonald’s Banking On Mobile Ordering & Curbside Pickup To Win Back Customers – Consumerist

Pie Tops Sneakers Are More Sizzle Than Steak

Pie Tops Sneakers Are More Sizzle Than Steak

On this week’s Cocktail Investing, we touch on issues that are plaguing fast food restaurants, better known as quick service restaurants. While some might focus on improving the food or getting in tune with consumers that are shifting their preferences more in line with our Food with Integrity investing theme, some QSRs like Pizza Hut, a division of Yum Brands, is rolling out gimmicks like the new Pie Top shoes. Yeah, you can place an order through the Pie Tops, but that sure sounds like a novelty item especially when the shoes go out of style in today’s crowded athletic shoe market from Nike, Under Armour and Adidas.

Pizza Hut is stepping up its game with high-top sneakers that allow their wearers to order pizza with a push of a button and rolling out a major discount offer for people who cannot get the special shoes.

The high-tops, which of course are being called Pie Tops, are the latest marketing stunt from a major pizza chain hungry for a bigger piece of America’s pizza-ordering pie.

While the Pie Tops are not for everyone, they will appear in a major marketing push. Basketball star-turned-analyst Grant Hill appears in a new TV spot set to air beginning March 3 and throughout the upcoming NCAA March Madness basketball tournament. The shoe concept will also be featured in NCAA March Madness integrations through the company’s deal with Turner.

Source: Press a Button on These Sneakers to Get Instant Pizza Hut Delivery – Print (video) – Creativity Online