Dive Brief:

• The Department of Justice’s antitrust division sent investigative inquires to Tyson Foods, JBS SA, Cargill and National Beef following anti-competitive accusations​, according to Bloomberg.
• The four companies are the largest meatpackers in the U.S., controlling more than 80% of beef processing. The DOJ is reportedly in contact with state attorneys general about the inquiry.
• National Beef told Bloomberg it received the investigative demand from the Justice Department but said “the request was very narrow in scope, which leads us to believe that the DOJ does not necessarily believe there is an antitrust issue.”

Dive Insight:

The largest beef processors in the U.S. receiving subpoenas for an antitrust probe is the latest issue for these companies. The meat industry has found itself embroiled in turmoil in recent weeks as it faces worker safety concerns and antitrust accusations amid the pandemic. 

The USDA is already investigating why a rise in beef prices due to pandemic hoarding didn’t translate into higher profits for farmers. But many thought a USDA probe wasn’t enough. 

About two months ago, cattle associations in 23 states sent a letter urging U.S. Attorney General William Barr and the DOJ to launch its own investigation into possible anti-competitive actions in the meat industry. Several senators and 11 state attorneys general also pushed the DOJ to investigate. After receiving all of that, President Donald Trump said he asked the DOJ to go forward. 

As coronavirus started to spread across the country in March, meat sales rose as consumers stockpiled, but that boost didn’t increase producers’ profits. Wholesale prices for processed beef jumped almost 20% at the start of the pandemic, while the price paid to ranchers dropped 11%, according to the Food & Environment Reporting Network’s Ag Insider.

Consolidation across the beef industry has led to concerns over the years about the authority companies have over suppliers when it comes to prices. Last year, the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America and other cattle ranchers filed a class action lawsuit accusing the beef companies of conspiring to minimize prices paid to ranchers for cattle to inflate their own profits. R-CALF USA’s CEO Bill Bullard told the Capital Press in March that the case is pending and has been joined by the National Farmers Union.

These subpoenas conclude an especially turbulent week for the meat industry. Current and former top executives at Pilgrim’s Pride and Claxton Poultry Farms were indicted on Wednesday on charges of conspiracy to fix prices on chickens sold to grocers and restaurants between 2012 and 2017. Those were the first charges from DOJ’s investigation into the chicken industry, which was disclosed last year when the department intervened in a price-fixing class action lawsuit that involved Pilgrim’s Pride, Perdue Farms, Tyson and Sanderson Farms. Poultry companies have faced multiple similar civil lawsuits in the past, and an investigation by the U.S. Securities and Exchange Commission. 

Price-fixing and antitrust accusations and investigations have gone on across the food industry in recent years with other lawsuits involving dairy, tuna and pork. Many of these cases have ended with guilty defendants and large settlements. 

At a time when coronavirus is still spreading in meat plants and supply issues could continue, scrutiny on the meat industry is continuing to mount. After plant closed because thousands of workers tested positive for coronavirus, Trump issued an executive order to keep doors open and the meat supply chain flowing. Although critics have cautioned that workers are still at risk in these plants, many have resumed production and stayed open despite opposition.

If workers continue to get sick and criminal charges are filed from this latest probe, the struggles facing these meat companies may be just getting started. 

Jack Daniel’s cans its signature summer refreshment

The Jack Daniel Distillery is launching a line of Jack Daniel’s Canned Cocktails in time for the start of summer, according to a release. The drinks will be available in select states in three flavors: Jack & Seltzer, Jack & Cola and Jack, Honey & Lemonade.

Each can is made with Jack Daniel’s Tennessee Whiskey. The Jack & Cola and Jack, Honey & Lemonade flavors are 7% ABV, while the Jack & Seltzer flavor is 5% ABV with 97 calories.

From spiked seltzer to hard kombucha, canned alcoholic drinks have grown increasingly popular. Nielsen research last year showed consumers want more ready-to-drink alcoholic beverages out of a desire for convenience. 

Jack Daniel’s has started to innovate more in the past year. The brand launched its first new flavor in years in October: The Tennessee Apple. The flavor was created with the fall season in mind, similar to how these new canned cocktails are releasing for summer. 

Brown-Forman Corp., which produces Jack Daniel’s, Old Forester and Woodford Reserve, has turned to whiskey innovation for new launches as sales in the category have grown in recent years. 

The company used data analytics to launch its Old Forester Kentucky Straight Rye Whisky last year. Last month, Brown-Forman partnered on a limited launch of a co-branded Lynchburg Lemonade pod made with Jack Daniel’s Tennessee Whiskey for the Drinkworks Home Bar system.

If whiskey sales continue to rise and these seasonal launches pay off, then more new whiskey-themed launches are likely to be on the way from Brown-Forman. 

— Lillianna Byington

Peanut butter’s squeeze is on

The two top-selling peanut butter brands have both decided it’s time to put the squeeze on traditional jars.

Smucker’s Jif and Hormel’s Skippy are both making the move to squeezable pouches this summer. The pouches are multi-serve with resealable caps. 

“Jif lovers enjoy their Jif in a variety of ways—in smoothies and snacks, as a key ingredient in cooking and baking, or even eating it ‘straight up’ with a spoon,” Rebecca Scheidler, vice president of marketing for Jif, said in a press release. “With our new squeezable pouch, we’re making it even easier and quicker for Jif lovers everywhere to get their Jif fix.”

Jif’s squeezable creamy peanut butter will be in a 13-ounce tube, which is slightly smaller than its 16-ounce jar. It comes to retailers and will be available online next month, and consumers who can’t wait to get their hands on a pouch can sign up for email updates.

Skippy’s new squeeze pouches will be hitting shelves later on this month, according to a company press release. The Hormel brand will put its creamy peanut butter and its creamy Natural Peanut Butter Spread in 6-ounce resealable packages.

“We know consumers are looking for new ways to enjoy the peanut butter they love while still delivering on taste and product benefits,” Skippy Brand Manager Jennesa Kinscher said in the press release. 

Considering peanut butter’s staple role in most American children’s diets, it makes sense to put it in easy-to-serve pouches. A pouch makes it easier for a kid or parent to make a snack or sandwich. It’s more convenient and less clunky to take peanut butter as an on-the-go treat. And for baking and smoothies, a squeezable pouch simplifies the process of measuring and adding to a mixing bowl or blender. 

Once only used for baby food, squeezable packages have become more popular in recent years. Aside from the convenience factor, squeezable packages are more economical, requiring less raw materials, being cheaper to manufacture and easier to ship and store. Other brands have seen success by adding a squeezable package. These include Chobani, which uses a squeezable pouch to market its plain Greek yogurt as a condiment, and Daisy, which introduced a squeezable pouch of sour cream in 2015.

Competition in the segment is stiff, and these brands are known for taking being competitive to the extreme. Last month, Smucker sued Hormel in federal court. The Ohio-based spreads, coffee and pet food company said the Skippy maker was trying to block its rollout of a no added sugar Jif variety because the new Jif jar would have a light blue lid, and Skippy uses teal for the lids of its creamy variety. 

Given the fact that both companies announced the launch of the same new packaging innovation just days apart, squeezable peanut butter is something consumers do want. If these products are successful, it may be the beginning of the end for the peanut butter jar — at least for creamy varieties.

— Megan Poinski

Catch the rainbow in your beer stein

If you’ve ever wondered what a rainbow tastes like, a new craft beer will soon be available to give the popular Skittles candy some competition.

Clown Shoes, a Massachusetts brewer, is introducing its first-ever beer made with terpene additions called Rainbows Are Real. Terpenes are aromatic oils produced by a variety of plants, including cannabis and hops, and they are said by some to have therapeutic benefits.

“The idea of enhancing aroma and boosting flavors is exciting,” Dan Lipke, head brewer at Clown Shoes, said in a statement. “When you add in the potential health benefits, it really made me want to take on a project like this.”

Rainbows Are Real, an IPA, is brewed with the terpenes linalool, found in flowers and spice plants, and beta-pinene, which has a wood-green pine smell. The aromatic compounds enhance floral and pine notes and supplement sweet, citrusy hops, according to Clown Shoes. 

The New England brewer is not the first to try terpenes in its beers. In 2017, Lagunitas Brewing developed a new IPA made with marijuana terpenes from the cannabis plant. That beer, called SuperCritical, was a limited release.

The new offering is the latest in the craft beer space to try and push the limits with a brew that is different and has a clever name to grab the consumer’s attention. Rainbows Are Real takes it a step further through the addition of terpenes to tap into natural, organic compounds that could potentially help consumers relax.

Craft makes up more than 25% of the $116 billion U.S. beer market, according to the Brewers Association. The segment was poised for another strong year in 2020. But the coronavirus pandemic forced many craft breweries to shutter their brewpubs and taprooms, a major source of revenue and a key way for consumers to sample new beers. The longer the pandemic’s impact lingers, the higher the risk of closing for thousands of craft brewers. 

As beer establishments slowly reopen and customers come back, brews like Rainbows Are Real could be just what people need to relax in an otherwise trying time for both the industry and the country.

— Christopher Doering