Please be aware that our offices will close early on Wednesday, November 21 and remain closed through Friday, November 23rd in observance of Thanksgiving. We will resume normal operating hours on Monday, November 26 at 9am.
Recent studies have indicated that damage to the environment has progressed further than previously believed, so numerous corporations across industries are making changes to reduce waste and increase sustainability in their production processes. The produce industry is contributing significantly to this international shift, promoting more sustainable shopping and eating habits among its consumers.
One of the most prevalent efforts to this end is the recent “ugly produce” movement. As it currently stands, approximately 6 billion pounds of produce is wasted annually in the US. Much of the wasted food is perfectly safe to eat, but doesn’t meet the US Department of Agriculture’s appearance standards due to irregular size, shape, or surface imperfections like spots or minor bruising. Several grocery providers across the US have implemented programs like Imperfect Produce, Hungry Harvest, and Kroger’s Peculiar Picks that sell these items, which might otherwise go to waste.
Obviously, this movement is helpful in the global effort to limit wastage. It cleverly addresses the food waste issue and offers shoppers access to fresh, albeit slightly blemished, produce at discounted prices. However, the movement is the subject of controversy due to its perceived harm to food banks and independent farmers. Historically, grocery stores and suppliers would often donate some or all of their visually imperfect produce to food banks, who are obviously less choosy than the average consumer when it comes to the appearance of the food they receive. The arrival of the ugly produce movement concerned several experts, who speculated that consumers in search of a bargain would dip into supplies that were previously designated to food banks. Several food banks and other charities confirmed, however, that the quantity of wasted (but edible) food far outweighs the amount that food banks need to feed the underserved masses.
Another reason to embrace visually imperfect produce is that organic fruits and vegetables are treated with smaller amounts of less aggressive pesticides and are thus more likely to naturally vary in appearance. Recently, some experts have even asserted that visually imperfect fruits and vegetables may be tastier and healthier than their unblemished counterparts. Orchardist Eliza Greenman conducted an unofficial experiment on her pesticide-free apples, comparing those blemished from fighting off pests, excessive heat and fungus, with their unmarred equivalents. Remarkably, she found that the scarred apples had 2-5% higher sugar content. Likewise, another study found higher levels of antioxidant phenols and fruit acids in organic fruit when compared with those treated with more aggressive pesticides.
We’ve suspected the nutritional benefits of organic produce for some time. Although the spectrum of factors that contribute to antioxidant content isn’t fully understood, many of the antioxidants that naturally occur in fruits like apples develop in response to natural threats like pests and fungus. This means that attempts to artificially protect crops from these natural burdens makes our produce prettier, but potentially less flavorful and healthy.
In short, public embrace of “ugly” produce is good for the planet and apparently, good for our bodies.
Results of a GSP review have just been published as Presidential Proclamation 9813. This announcement lists changes to select products and countries. The GSP status of these identified articles is effective for goods entering on/after November 1, 2018.
We are proud to announce that our valued client, UI Global Brands, has reached $2 million in revenue!
We take immense pride in helping brands like UI Global to bolster their operational funds and give them room to grow. Our diverse assortment of financial, logistical, and supply chain management services offer our clients transactional security, faster payments, production management, and even collections on their invoices.
Financing in the newspace and aerospace industries can be decidedly complex for a variety of reasons. The industries’ top customers are massive corporations with exceptional negotiation power vis a vis their vendors. These imbalances coupled with a perpetual flow of new innovations create too much uncertainty and risk for traditionally conservative lenders such as banks. Smaller and newer players must therefore look outside the standard lending models and seek out new solutions flexible enough to keep up with their own innovations.
Join us at WeWork Queens Plaza on Tuesday, November 20, at 7pm to learn how you can use trade finance to supplement your operational funds and close the cash flow gap that often occurs when big customers pay on open terms. ETC’s own Joseph Stern will discuss a joint venture between US satellite manufacturers and a Russian space agency that sought to launch commercial satellites into space. This example demonstrates how even the most complex international transactions can be simplified with a strategic system of trade finance and logistical solutions.
We hope you’ll join us for a fun and informative evening! Click here to RSVP.
A back-to-back letter of credit (LC) is a common, but often overlooked, form of trade financing.
In a typical back-to-back LC scenario, an intermediary trading company receives an inbound LC from the buyer’s (applicant’s) bank and, using that first LC as collateral, issues a second, outbound LC in favor of the supplier (beneficiary).
Back-to-back LCs are surprisingly simple to coordinate, as both LCs are nearly identical. The only differences between the two LCs in a back-to-back LC model are the credit amount vs. the unit price and the expiry date/period for presentation/latest shipment dates. The unit price is how much the product will cost the final customer, whereas the credit amount accounts for the wholesale costs. The timing of the two LCs must be staggered to allow time for each party to process and transport the shipment.
The additional layer of security that back-to-back LCs provide comes not only from the presence of two separate, albeit nearly identical LCs, but also from the fact that both LCs are available at the intermediary’s bank. This centralized method of monitoring reduces risk and secures all parties involved in the multi-tiered transaction at hand.
Back-to-back LCs therefore help build trust between buyers and sellers of goods around the world, reduce credit risk, and speed up cash flow. They’re beneficial to the intermediary trading company insofar as the company does not need to disclose to its supplier the details of the ultimate buyer of the goods or even the price at which they were sold.
Big brands, particularly food brands, have been merging with and acquiring smaller brands for decades. In recent years, food and drink executives have continued to strategically acquire small brands, but struggle to boost productivity among those acquisitions without damaging or cancelling out any of the fundamental qualities that made the small brands worth buying.
This struggle to maintain the appeal of a small brand while operating under a massive international conglomerate like Coca Cola or Hershey has become increasingly challenging as consumer priorities evolve. When a big brand acquires a smaller one, consumers tend to be concerned, at least initially, about the product remaining consistent. Over time, however, other issues often arise. A strong company culture and drive to innovate, both of which are often crucial to a small brand’s success, can get lost when a big brand takes over.
A prime example is the trajectory of natural food brand Kashi since it was acquired by Kellogg Co. in 2000. Prior to the acquisition, Kashi was one of the first brands to usher in the now-lucrative and popular industry of healthy foods made from simple, ethically sourced ingredients. Though the partnership worked for a while, Kellogg’s impulse to control Kashi’s internal operations eventually took hold, which hindered Kashi’s ability to constantly innovate and improve its products. Before the acquisition, teams of three or four people made decisions about everything from suppliers to pricing to new product development. In an attempt to take more decisive control, Kellogg’s convoluted Kashi’s processes, slowing down their decision-making capability and complicating attempts to change or grow.
To be clear, no one is saying that big brands shouldn’t acquire smaller ones. There is immense potential value in giving young, fresh businesses the resources that big brands have. However, when acquiring a young company that’s found a niche and an audience, one should be aware of what makes the small brand appealing to consumers and make every effort to maintain and support those qualities, while still facilitating increased production and global reach.
Some of Walmart’s recent acquisitions, notably Bonobos, are perfect examples of this. When Walmart initially acquired Bonobos, there was considerable public backlash. Fans of the online men’s wear brand were concerned that quality would plummet in favor of lower prices when Walmart took over. Walmart wisely remained “hands-off”, allowing Bonobos to uphold its central values as a company: high quality, a good fit, and inclusive sizing. As a result, Walmart indicates that its online sales have increased substantially since it acquired Bonobos among other ecommerce brands last year.
Needless to say, it’s a tough balance to strike, but since changing a formula that works for a small brand is a bad idea, it’s obviously important for big brands to rigorously research whatever businesses they plan to acquire. It’s also important to keep key team members from the smaller business involved and give them input on how the business moves forward after the acquisition, rather than commandeer operations entirely. Simply creating an open line of communication can do wonders to not only maintain the acquired brand’s growth and success, but also to establish a positive working relationship between new management and the people who made the business successful in the first place.