TIME food industry

This Is the Big Lie About Your Olive Oil

Bottle of olive oil
Sue Wilson—Alamy

New findings cast further doubt

The National Consumers League tested 11 different olive oils purchased at various supermarkets, and found that six of them, despite being labeled “extra virgin,” weren’t extra virgin at all.

This shouldn’t come as a surprise, given extensive reports of lax standards and outright fraud in the olive-oil business. In fact, the findings are better than some earlier studies that indicated some olive oils were adulterated with other kinds of oil, such as soybean oil, or were made with olives from countries other than Italy, despite label claims of “Made in Italy.”

These practices were revealed in a widely shared New York Times interactive feature last year that was based on a couple of different studies.

The NCL’s testing comes with a load of caveats. It wasn’t a “study” so much as a more-or-less random bit of testing. Puzzlingly, while the NCL listed the five oils that passed the test, it didn’t name the six that didn’t.

That’s because the companies whose products failed the tests made “a huge stink” over the results, said Sally Greenberg, the NCL’s executive director. Those companies complained that only a single bottle of each variety was tested, and so the results were unfair, since occasionally a single bottle will go bad thanks to exposure to light or some other environmental factor. She said the NCL might test the same products again in “six or seven months,” using a different lab, and if the results are repeated, the NCL will reveal which products failed. “If it happens twice, well then maybe we’re on to something,” she said.

In 2011, the University of California at Davis found that about 69% of the olive oil sold in the United States is adulterated.

The NCL tested olive oil purchased in supermarkets in the Washington, D.C. area. None of the products they tested contained any oil that didn’t come from olives, but six of them, despite labels indicated the contrary, didn’t meet the standards for calling it “extra virgin.” The testing included lab analysis and tasting by experts.

“The results of our olive oil testing reveal that, while consumers are buying and paying extra for olive oil labeled EVOO, too much of the olive oil bought off the shelf isn’t the real deal,” said Sally Greenberg, executive director of the NCL, in a statement.

The five that did pass muster were:

California Olive Ranch Extra Virgin Olive Oil

Colavita Extra Virgin Olive Oil

Trader Joe’s Extra Virgin California Estate Olive Oil

Trader Joe’s 100% Italian Organic Extra Virgin Olive Oil

Lucini Premium Select Extra Virgin Olive Oil

TIME Gadgets

You’ll Never Guess Who Just Perfected the Keyboard

KFC

Consider eating and typing solved

KFC is furnishing some German diners with Bluetooth-enabled paper keyboards so they can type into their phones and tablets with greasy fingers, obviating the need to hose down their devices with liquid detergent after lunch. It’s a brilliant, weird, slightly disturbing development.

The rechargeable “Tray Typer” replaces the usual piece of paper that comes atop food trays agh the fast-food chain. The product was developed by a company called Serviceplan and used by KFC as part of an ad campaign. Maybe the best thing about Tray Typer is that it’s reusable — after being wiped down, of course. Serviceplan claims that during the campaign in Germany, every single Tray Typer was taken home by consumers.

It seems unlikely that KFC will make Tray Typer a mainstay in its restaurants. It’s basically a constant reminder of how greasy its food is. Not that people don’t realize this, of course, but it’s usually not anything a food company, even one that’s essentially in the grease business, wants to continually highlight.

The Verge called the Tray Typer a “first world solution to a first world problem.”

This isn’t KFC’s first foray into the peripherals business, or even the strangest. In Japan last year, it offered keyboards, mice, and thumb drives in fried-chicken.

TIME Fast Food

Here’s How McDonald’s Became the King of Burgers

Signs are posted on the exterior of a McDonald's restaurant on April 22, 2015 in San Francisco.
Justin Sullivan—Getty Images Signs are posted on the exterior of a McDonald's restaurant on April 22, 2015 in San Francisco.

As the iconic burger chain turns 75, it faces some of its biggest challenges ever

It is in no way surprising that McDonald’s recent troubles have drawn so much media attention. It’s not just because it’s a huge company, it’s because it is one of a small handful of corporations that are closely associated with the idea America itself, part of our national identity. And that has been the case for most of McDonald’s 75-year history.

There are many reasons for this, but the chief one might have been expressed best by the quotation TIME chose to open its September 17, 1973 cover story on McDonald’s: “The destiny of nations depends on the manner in which they nourish themselves.” The quote came from The Physiology of Taste, written in 1826 by Jean Brillat-Savarin.

 McDonald's 1973
TIME

The cover story was titled “The Burger That Conquered the Country.” At the time—and for decades thereafter—nobody could seriously argue the title’s point. McDonald’s has faced stiff competition all along, from Burger King, from Wendy’s, from Taco Bell, and from any number of other fast-food chains. But none of those competitors ever came close to McDonald’s, especially in terms of image. McDonald’s—even now, when it faces some of its greatest challenges ever—is America’s burger joint.

In the 1973 article (in which McDonald’s main product is rather quaintly referred to as a “ham burger”—two words), TIME declared that if Brillat-Savarin’s quote was correct, “America’s destiny manifestly depends to no small degree on the ham burgers, French fries and milkshakes served beneath the golden arches of McDonald’s.”

Though it would grow much, much larger in the years ahead, McDonald’s was by 1973 a fully realized entity. It employed 130,000 employees in nine countries, and operated 2,500 outlets in the United States. And although Time declared that it “gone from a uniquely American to a truly global operation,” its image remained fully American, as it still does 42 years later—for better and, in some respects, worse.

Our destiny since then has manifested itself largely in our waistlines, a concern that in 1973 was just starting to creep into the national dialogue. The company most often cited by health-conscious critics of our food economy is, of course, McDonald’s. Our economic destiny meanwhile has in recent years manifested itself in the form of a growing wealth gap, with low-wage retail jobs taking the place of vanishing, high-wage manufacturing jobs. The company most-often cited in discussions of this problem (along with Wal-Mart) is, again, McDonald’s.

In the past few years, these trends have hit critical mass, to McDonald’s detriment. Consumer tastes for quick meals remained static for decades. Now they’re changing. Largely motivated by health concerns, but also by the desire for higher-quality eats, diners are increasingly opting for “fast-casual” outlets like Chipotle and Panera Bread. In response, McDonald’s is grasping for solutions that might not exist.

MORE These Are the States With the Most McDonald’s

At the same time, the company is facing pressure on the labor front. In 1973, most of its employees were teenagers working as burger flippers and “window girls.” Now, most of it workers are adults, many of them trying to support families. Last month, the company said it was raising wages and increasing benefits, though that applies only to employees of company-owned outlets, not to franchisees, meaning that most McDonald’s workers aren’t affected.

Officially, McDonald’s traces its history only back to 1955, when businessman Ray Kroc joined the company as a franchise agent. But the first McDonald’s (“McDonald’s Barbecue Restaurant”) actually opened on May 15, 1940, in San Bernardino, Calif. Kroc, impressed by the company’s production-line methods, purchased the chain from the McDonald brothers in 1961, and set about turning it into a burger leviathan.

The chain now includes about 30,000 outlets (14,000 in the United States) in 119 countries and employs about 1.7 million people.

By 1987, TIME was declaring “McDonald’s as a corporation looks more and more like a case study in how to concentrate on providing one service exceedingly well.” Despite all the grief it was taking from critics of its fatty, salt-laden fare and its monolithic corporate image, the company was still largely beloved. “McDonald’s has become such a pervasive reference point in American life that many consumers think of the company as a public institution—one that is often more reliable than the post office or the phone company,” wrote Stephen Koepp.

The company’s growth continued more or less unabated until after the 2008 recession, when the restaurant industry as a whole was hit hard—fast food included. As recently as 2005, TIME was describing fast food as a “quintessentially American dining experience” and a “perfect expression of those bedrock values of efficiency, thriftiness and speed.” Total spending on fast food had quadrupled in the preceding decade.

But even then, fast-food chains—McDonald’s definitely included—saw the writing on the wall, and were working to change their images. Consumers still wanted to dine out, but they were looking for a more pleasant experience, and healthier food. Stores were redesigned, menus were upgraded. Then the recession hit.

Fallen Arches,” read a headline in Fortune magazine last November. “Can McDonald’s Get Its Mojo Back?” The company “has risen to the top of the fast-food chain by being comfortably, familiarly, iconically ‘mass market’ and so ubiquitous as to be the Platonic ideal of ‘convenient,'” wrote Fortune‘s Beth Kowitt. “Neither of these selling points, however, is as high as it was even a decade ago on Americans’ list of dining priorities. A growing segment of restaurant goers are choosing ‘fresh and healthy’ over ‘fast and convenient,’ and McDonald’s is having trouble convincing consumers that it’s both. Or even can be both.”

MORE This Is Why Shake Shack Will Never Be McDonald’s

So much for “providing one service exceedingly well.” If people don’t want that one service, what’s a company to do? McDonald’s is still looking for answers, from making burgers more customizable to adding various new menu items (and subtracting others) to launching attention-getting promotional campaigns with varying degrees of success.

Kale, of all things, provides a nice microcosm for McDonald’s challenges. Several months back, the company made fun of the trendy, often-mocked “superfood” in TV advertisements. Over a camera close-up of the lettuce on a Big Mac, the narrator intoned: “This will never be kale.” Earlier this month, McDonald’s started test-marketing a breakfast bowl consisting of turkey sausage, egg whites, and … kale.

It seems that McDonald’s still hasn’t decided which one service it wants to provide exceedingly well. But America will likely be watching.

TIME beverages

These Are the Top 5 Energy Drinks

Cans of Monster Beverage Corp. energy drink are displayed for sale at a convenience store in Redondo Beach, California, U.S.
Bloomberg—Getty Images

Rankings with buzz

Monster Beverage’s stock tanked on Monday before quickly turning itself around and ending the day up by more than 4% after the company released quarterly numbers that looked pretty terrible. While the energy-drink maker’s business slipped a bit, most of the drop in profits had to do with the company paying off its former distributors as it moves distribution to Coca-Cola, which has taken a big stake in Monster in order to get a toehold on the market as sales of traditional soft drinks continue to fall. Investors in the end seemed to realize that nothing actually looked any bleaker after all.

Monster reported $4.4 million in profits, compared with $95.2 million a year ago. Revenue was up, but only slightly, and a bit less than most analysts were expecting.

Despite all the short-term pain, Monster is banking on long-terms gains thanks to its relationship with Coca-Cola, which will soon own 17% of the company. That deal, announced last August, is expected to close in the current quarter. Monster is a close No. 2 to Red Bull in the market for energy drinks. While there are many small players in the market (including ones owned by big companies), Red Bull and Monster dominate, and it looks like a Battle Royale is shaping up between the two.

Market-share-wise, here’s how things break down according to the most recent figures available (2014) from Euromonitor International:

Red Bull – The original, launched in 1997, Red Bull enjoys about 43% of the market.

Monster – A 39% market share. The company clearly hopes to surpass Red Bull with Coke’s help, though Monster executives noted in their earnings call last week that both Red Bull and Rockstar have gained share recently.

Rockstar – A strong-but-distant No. 3, the independent Rockstar has about 10% of the market.

NOS – This Coke-owned brand is named after nitrous oxide, and is often sold in containers meant to look like nitrous tanks. Its market share is about 3%.

Amp – Owned by PepsiCo, Amp also has about 3% of the market.

 

TIME Security

Has Your Browser Been Hijacked by Fraudsters?

Heartbleed Extensions
Chromebleed

It's not unlikely, according to a sobering new study

Illicit “ad injectors” are infecting a not-insignificant proportion of Web browsers, according to a study by Google and the University of California.

The pieces of software replace the ads you’re supposed to be seeing with different, unapproved ones, hurting not only Internet surfers, but advertisers like Amazon and Wal-Mart (and many others), as well as publishers who lose revenues, the study authors said.

Ad injectors make their way into browsers through software downloads and browser extensions. Many users might not even know their browsers are afflicted with them. Google says it has identified more than 50,000 browser extensions and 34,000 software applications that send the fraudulent ads to browsers, pushing aside the ads that were supposed to show up.

Most alarmingly, about a third of the injectors are equipped to steal account credentials and hijack Web searches, returning results meant to benefit the fraudsters. More than 1,000 networks distribute the injectors, Google said, with many of them pushed by “affiliates” who get paid some pittance whenever somebody clicks on one of the ads.

The ads come from so-called “injection libraries,” often via legitimate ad networks. Advertisers big and small end up paying for injected ads they have no knowledge of.

Sometimes, the ads appear even on Web pages, such as Wikipedia, that don’t normally feature advertisements.

Google says that so far in 2015, it has received more than 100,000 complaints about injectors in its Chrome browser. The study indicates that all the major browsers are vulnerable.

And you’re not safe if you’re on a Mac. According to the study, 5.1% of all pageviews involving injected ads came from a computer running Windows. Macs accounted for 3.4%.

Fixing the problem isn’t easy. Google says it stepping up its monitoring of extensions for Chrome to ensure that they don’t run afoul of policy. Other browser makers do the same. But with so many extensions out there, much of the responsibility falls on users themselves to be hyper-vigilant when downloading software.

 

TIME Fast Food

Here Is What’s Going On With All Your Favorite Fast Food Chains

a fast food tray full of hamburgers
Getty Images

It's a war out there

The fast-food business may never have been in more flux than it is now. Higher food costs and increased competition are hitting the whole industry, while erstwhile mainstays (and not just McDonald’s) are dealing with ever-more-fickle consumers and new trends toward healthier fare. Given all that, it might seem surprising how well the industry as a whole (leaving out McDonald’s) is doing. Here’s a snapshot look at several of the biggest players.

McDonald’s
One-year stock performance: down 5%

This is the big one. Tastes are shifting and lifestyles are changing, taking consumers away from the same-ol’, same-ol’. People seeking quick meals are looking for more quality, for which they’ll pay a little (but not too much) more at places like Chipotle, Starbucks, or the prepared-foods counter at the supermarket. And when they just want a burger, more of them are opting for higher-end fare like that served up by Five Guys and others. Or else they’re going to Burger King or Wendy’s, both of which have been concentrating on upgrading their image.

In response, CEO Steve Easterbrook is trying to remake the company. He’s initiated a global restructuring, slashed costs, and revamped menus—including all-day breakfast, new toppings, pastries (to keep more people from fleeing to Starbucks and Dunkin’ Donuts), and the new, $5 Sirloin Third Pound Burger. It will be a while before we can know how successful these initiatives might be, but it was more than clear that something radical needed to be done.

Yum Brands
One-year stock performance: up 18%

Yum gets half its revenue from China, where it has about 7,000 Pizza Hut and KFC outlets in about 1,000 cities. Growth in that market had served the company well for years, and might again in the future, but for now, the company’s reliance on China is a problem. For one thing, consumer tastes are shifting there, just as they are in the United States and elsewhere. KFC and Pizza Hut are no longer novelties as both foreign and domestic competitors gain strength. A scandal last summer involving bad meat from a KFC supplier didn’t help matters.

But that doesn’t mean things can’t be turned around. The company’s stock got a big boost last week, when billionaire investor Daniel S. Loeb took a “significant stake” in Yum, citing its potential in China as a major draw.

Subway
One-year stock performance: n/a

Probably because it’s a private company, Subway often gets left out of examinations of the fast-food biz. But it’s the second-largest chain in the world, with about 43,000 locations (about 25,000 of them in the United States), and it brings in somewhere around $20 billion in revenue.

With its human mascot, weight-loser Jared Fogel, Subway has for years pitched itself as the “healthier” alternative to greasy burgers, pizza, tacos, and fried chicken. And that has largely worked—but fast-food is increasingly competitive for all players, and Subway isn’t immune. Nation’s Restaurant News reported in February that growth was slowing and revenues were nearly flat.

Starbucks
One-year stock performance: up 14%

Yes, it’s a coffee chain, but it’s also a fast-food chain (sort of), as McDonald’s surely believes. Starbucks has been adding various foods to its menu for years, and its expected to keep adding more. That helped it boost store traffic by 3% in its latest quarter. The size of customer purchased also rose – by 4% (people aren’t ordering extra lattes—they’re buying sandwiches and salads.)

The company’s recent clumsy attempt at curing America’s racial ills doesn’t seem to have hurt it much. Last month, a Goldman Sachs analyst said that although Starbucks’ breakfast offerings have performed only so-so, there’s huge potential in its plans to expand its lunch menu.

Burger King
One-year stock performance: n/a

Things are looking a bit better for Burger King than they were a few years ago, even though the chain hasn’t made any big changes. Even as executives were focused on the merger with Canadian coffee chain Tim Horton’s, sales stabilized, and in its most recent quarter, the company reported total sales at Burger King were up by 9.6% and same-store sales were up by 4.5%.

Burger King has been revamping stores and adding some menu items, like the heavily advertised chicken fries. But most of its efforts have gone into overall marketing and operations.

Wendy’s
One-year stock performance: up 2.2%

The No. 3 burger chain has been rejiggering its menu some, and pushing its online promotional efforts in an effort to update its brand to appeal to a younger crowd. It recently announced it will start selling organic Honest Tea drinks, and it’s testing a veggie burger that people seem to actually like. In the meantime, the company is working to spin off more of its stores to franchisees, which will help with both costs and profits in the future, but in the near term is tending to tamp down revenue.

Still, Wendy’s, which will release its first-quarter results on Wednesday, has reported same-store sales growth every quarter since the beginning of 2013.

Dominos
One-year stock performance: up 46%

The pizza chain’s TV commercial might elicit sniggers (“We’ve changed from Dominos Pizza to Dominos), but the strategy of adding new menu items like pasta and sandwiches — along with improving its pizza somewhat — seems to be working. In its latest quarter, Dominos reported that sales were up 11%, and same-store sales were up 16%

TIME Hewlett Packard

Here’s Why Carly Fiorina Is Such a Controversial Figure

Key Speakers At The Bloomberg Washington Economy Summit
Andrew Harrer—Bloomberg/Getty Images Carly Fiorina is the former CEO of Hewlitt-Packard and ran unsuccessfully for a Republican Senate seat from California in 2010.

Her record at Hewlett-Packard is mixed, to say the least

As a now-official presidential candidate, there’s no way Carly Fiorina can ignore her tenure at Hewlett-Packard, which she ran as CEO for six tumultuous years before the board ousted her in 2005. By that time, the company’s stock had lost about half its value and tens of thousands of people had lost their jobs.

Fiorina took H-P’s helm in 1999 at the height of the tech boom. She left after the boom went bust. It seems likely that H-P, a giant in office equipment, would have faced huge challenges no matter who was running the company. But most observers—including the company’s board—have concluded that she made a bad situation worse than it might otherwise have been.

Fiorina came to H-P after quickly rising through the executive ranks at AT&T and later its spinoff, Lucent Technologies. Her record at that point was, by all accounts, stellar. When she started as CEO, she was the first woman to head a Fortune 20 company. Her ascension was presented as a major historical turning point.

Right away, she began planning to restructure the company, and took heat for laying off thousands of workers. The decision to spin-off a division that made technical testing equipment into what became Agilent Technologies predated her arrival. She managed that spinoff in a successful IPO.

She quickly turned her attention to remaking Hewlett-Packard. The plan was to directly take on IBM as an end-to-end, computing-and-services business. One of her first moves was to announce the acquisition of the tech services division of Pricewaterhousecoopers for $14 billion. When Wall Street balked, she withdrew the offer. After the dotcom crash, IBM picked up the division for $4 billion.

She next set her sights on Compaq Computer in 2002 for $19 billion. That decision continues to haunt both Fiorina and H-P.

Taking on Compaq was controversial from the get-go. A bruising-but-unsuccessful proxy battle ensued. Walter Hewlett, a board member and son of company co-founder Walter Hewlett, vehemently opposed the deal. Outside observers and some big shareholders that it would dilute the company’s core, profitable printer business. It did much more than that, with H-P’s results sinking every quarter. Eventually, it led to 17,000 more people being laid off as Dell Computer, much more highly focused on the PC market, came to dominate.

Upon her exit, H-P gave Fiorina what was widely considered a “golden parachute” worth about $40 million.

When she was finally ousted, the board insisted that it wasn’t because of corporate results, but because of her “management style.” Fiorina, who was often described as imperious and distant, took a lot of criticism for giving herself big bonuses even while laying people off, and for hitting the speaking circuit even while the company was in a tailspin.

That presents perhaps Fiorina’s greatest challenge, since it’s her record as a manager that she is now citing as a reason to elect her president. An even greater challenge? The fact that so many lists of history’s “worst CEOs” include her name.

Read next: The GOP’s First Big 2016 Test: Fitting Candidates on the Debate Stage

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TIME Food & Drink

The Words on This Bud Label Are Causing a Major Uproar

Budweiser Beer
Douglas Graham—CQ-Roll Call,Inc.

Again

The maker of Budweiser and Bud Light, like other producers of mass produced American beers, is stuck in a branding quandary. Many of the people still drinking beer are opting for craft brews.

One seemingly logical response is for Anheuser-Busch InBev to strengthen its base and maybe even bring a few expatriate drinkers back by positioning Bud as fuel for regular guys as the beer of the working man and the frat boy. Given modern cultural currents, this has inevitably led to trouble.

In the most recent incident, nobody had to look far. They merely needed to pick up a bottle of Bud Light bearing a label that hews to the brewer’s “up for whatever” marketing campaign. It reads: “The perfect beer for removing ‘no’ from your vocabulary for the night”—accompanied by the #upforwhatever hashtag.

Some denizens of Reddit picked up on the label and reacted predictably, mocking not only the cloddishness of the label message, but Bud Light itself. “‘No'” always means ‘No’,” one Redditor remarked. “Especially if the question is: do you want a Bud Light?” The implication is that Bud is encouraging drinkers to get stewed and go nuts.

The message doesn’t seem to comport with Anheuser-Busch InBev’s (and every other booze-peddler’s) exhortation to “Please Drink Responsibly.” And maybe that’s the point. Given the ubiquity of “no means no,” as well as the ubiquity of the backlash against such “politically correct” notions, it almost seems like the brewer had to know exactly what it was doing here.

In response to backlash, Anheuser-Busch InBev said the company “missed the mark” with the campaign. “We would never condone disrespectful or irresponsible behavior,” said Anheuser-Busch executive Alexander Lambrecht in a statement.

This is just the latest entry in the “up for whatever” campaign, which itself is part of a larger positioning effort. You’ll recall the ad that debuted during the Super Bowl this year wherein craft-beer enthusiasts were mocked as fussy, pretentious elitists (this even though Budweiser itself makes craft beers under different labels.) Bud declared itself “Proudly a Macro Beer.”

Last month, the company deleted a tweet that had suggested it was a good idea to pinch people who weren’t wearing green on St. Patrick’s Day. After the backlash, the company issued a statement saying it “would never condone disrespectful behavior.”

TIME

This Is What the Less Sexy Abercrombie Will Be Like

Abercrombie & Fitch Open Munich Flagship Store
Hannes Magerstaedt—Getty Images Male models outside Abercrombie & Fitch during the opening of Abercrombie & Fitch flagship store on October 25, 2012 in Munich, Germany.

Things are changing drastically

Don’t expect your sales clerk at Abercrombie & Fitch to be unattractive or even average looking, at least not right away. But as of late last week, looks will no longer be a requirement for the clerks at the image-challenged clothing chain to measure up (way up) in terms of “appearance and style.”

Since controversial CEO Mike Jeffries left in December, the company has been trying to refurbish its exclusionary cachet. It’s a challenge because the whole company was built on that image. Abercrombie is attempting to let go of some of its more cringe-inducing policies while maintaining its preppy reputation.

But the chain wants to reach more customers, and being too exclusionary—a tactic that worked for years—won’t get it there. Salespeople can even have mustaches now, though they are still banned from sporting too-wacky hairstyles or wearing “extreme” makeup. When new stores open, no longer will there be shirtless, musclebound men greeting shoppers. Advertising will be less overtly sexualized.

Stores will still play music, but will now favor more mainstream (and less assaultive) over thumping dance-club fare. Lights in the famously dim stores are being turned up. Store managers are getting much more freedom to make decisions on things like displays and layouts.

All that micromanagment and hyper-image-consciousness worked well for Jeffries’ 22-year reign as CEO before he was ousted in December. But what was once cutting-edge started to stall. At the same time, criticism mounted about the company’s “Look Policy.” It has paid out some settlements in lawsuits lodged against it from rejected job applicants. One case was heard by the Supreme Court in February: a lawsuit by a Muslim woman who said she was turned down for a job because of her head scarf.

Sales and profits declined, and are declining still—same store sales were down in six of the past eight years, according to Bloomberg News. Profits fell by 5% last year.

In 2006, Jeffries famously declared that his store was for “the cool kids,” and the “not so cool kids” could shop elsewhere. Now the trick is to lure back those not-so-cool kids. After all, they wear clothes and have bank accounts, too.

TIME Economy

Love K-Cups? You’re Killing the Coffee Business

<> on March 5, 2015 in Miami, Florida.
Joe Raedle—2015 Getty Images In this photo illustration, Keurig Green Mountain Inc. K-Cup coffee packs are seen on March 5, 2015 in Miami, Florida.

Less wasted coffee means fewer sales for roasters

Single-serve coffee can now legitimately be called “wildly popular,” with more than one in four Americans using the brewing machines initially popularized by Keurig Green Mountain’s K-Cups.

You might think that’s a boon to the coffee-roasting business, but it turns out to be just the opposite. Why? The machines are much more efficient. Just think about how often you make a pot of coffee in an automatic-drip maker, only to end up pouring some portion of it down the drain. The less coffee you waste, the less you buy.

On one hand, this is better for consumers who are saving money. Less waste is also better for the environment, especially in parched regions like California. But roasters are feeling the pinch. “The coffee market has lost its best consumer: the kitchen sink,” Hernando de la Roche, a senior vice president at financial services firm INTL FCStone Inc., told Bloomberg. “Roasters are telling us that single-cup coffee has been reducing demand.”

Reducing demand, reducing waste — the difference is academic when it comes to toting up revenues.

Meanwhile, coffee bean inventories are rising, putting pressure on commodity prices. That’s thanks in part to recent rains in Brazil — the world’s top coffee-producing country — that have reversed two sequential years of falling yields.

At the retail level, total coffee sales are falling lately, down about 1.5% over the past year. Single-serve pods represent the only category where sales have grown in supermarkets, drugstores, and other non-restaurant outlets. Whole-bean, ground, and jarred instant coffee sales are all flat or falling.

Americans still love their joe, of course: it’s the most popular beverage other than water. Still, consumption fell over the past year as measured by the number of Americans who drink coffee daily, down from 63% in 2013 to 59% in 2014, according to the National Coffee Association. Some of that drop is thanks to people — especially younger ones — switching to tea and other beverages perceived as being healthier.

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