Nestle: Too big to fail?
Apparently. I saw this piece by Chris in Paris and wanted to put a different take on it.
See, Nestle is in the Pumpkin Pie Business via its Libby Brand and heavy rains have supposedly hurt their crop.
Nestle — which sells nearly all the canned pumpkin in the U.S. — says poor weather hurt its harvest, creating a potential shortage of its Libby’s pumpkin pie products through the holidays.
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Nestle is the largest national brand for canned pumpkin products, with 80 to 90 percent of the market, the company said.
It plants a special strain of pumpkin at a farm in Morton, Ill., which provides nearly all its supply. Nestle estimates if you turned all the pumpkins it grows on the farm to pie, it would total 90 million pies.
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The company had a wet harvest last year, too, which meant it didn’t have a surplus to carry over into this year and led to spotty shortages in late summer and early fall. The harvest started in August and it began getting products on its shelves soon after, but it won’t be able to meet its normal demand.
So the recap - there is a single farm that supplies all of the pumpkins for the Libby brand which us an estimated 80-90% of the market. Weather hurt them last year as well contrinuing to a shortage this year.
This is another reason why industrial farming is a problem.
The good news is you can always use, heaven forbid, fresh ingredients or some other brand and it has also been good news for organic farmers.
But what’s bad news for commercial growers in the Midwest has been good news for organic pumpkin concerns on the West Coast. Organic pumpkin makes up only about 3 or 4 percent of the overall canned pumpkin market, but in Oregon the crop was so good that organic pumpkins are able to fill at least a little of the gap left by the Libby shortage.
Still, wheather it is pumpkin pie filling or something else, we need a food supply that comes from diverse suppliers. That Libby has up to 90% of the market is amazing and for all you free marketers out there called a monopoly.
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There are good monopolies and there are bad ones. The bad ones are in existence because of government regulations and/or subsidies that create an uncompetitive market for others. Libby is probably a good monopoly. The pumpkin business does not appear to be subsidized and hopefully isn’t protected by myriad regulations. What Libby has most likely done is corner a niche market by providing a product at a cost that potential competitors can’t beat. That is a win for consumers. If the trend of bad harvests continue, I am sure you will see others entering the canned pumpkin market.
A free-market does not necessarily prevent all monopolies, it protects consumers by making sure the playing field is level so the product going to market is cost efficient and not of inferior quality. A free market allocates resources where they can be the most beneficial. It would make no sense for others to invest in the pumpkin pie filling market if their money can be put to a more beneficial use elsewhere.
No, Mike, Libby is not the Monopoly. Nestle is the Monopoly and it is a very bad one, responsible for the death of millions of infants. It is because of lack of governmental regulations.
Well, that is rich Mike.
What research makes you think Industrial farming is somehow on the same playing field as other farms. Oh, it isn’t like someone decides poof they want to be an industrial farm. They grow and acquire over time. I’d be willing to bet that the Libby pumpkin farm didn’t’ get there through pure free market alone.
But feel free to take the blue pill, wake up in your own bed and believe whatever you want to believe.
I will look into the potential of subsidies as time permits.
We should be grateful that it’s just a shortage. There could be millions of cans tainted with botulism or salmonella. You know, like the giant peanut butter producers put out.
aside for the monoplistic aspect - that is sort of the point - Be it peanut manufacturers or Meat Packers. Endless examples. All the more reason to buy local where possible.