Catastrophe Bonds

hurricane catastrophe

Catastrophe bonds, first issued in 1997, are a way for insurance companies to raise money to pay customer claims in the event of a catastrophic natural disaster. The insurance company issues bonds through an investment bank. The investment bank serves as a liaison between the insurance company and the investors, which are typically hedge funds, mutual funds, and pension funds. The investment bank invests the proceeds from the sale of the bonds and pays interest to the investors. It also dispenses the proceeds from the bond sales back to the issuer when a predefined disaster risk happens. The disaster risk could be the issuer’s actual losses, the issuer’s losses based on disaster parameters input into modeling software or the industry’s losses beyond a defined threshold. It can also be a specific condition linked to a natural disaster, such as an earthquake of magnitude 7.0 on the Richter scale.

Although investors risk losing their principal investment, some investors feel that the risk is worth it for the high yields and diversified portfolio of assets. Catastrophe bonds are not correlated with other financial markets. Since the financial crisis of 2008, and the collapse of Lehman Brothers, investment banks have been investing catastrophe bond collateral in Treasury money market funds, seen as safer than the investments in financial instruments made prior to the collapse.

Insurance and reinsurance companies make up 85% of the issuers of catastrophe bonds. The other 15% of issuers are states. California and Florida have the two largest catastrophe funds. These catastrophe funds were put in place to ensure that the insurance structure in the states continues to function after a major disaster. After 1992’s Hurricane Andrew and 1994’s Northridge earthquake, insurance companies, required by law to cover losses from natural disasters, paid out considerably more than they took in premiums. As a result, they either reduced coverage or left the state entirely. The California Earthquake Authority began issuing earthquake insurance on its own rather than requiring insurance companies to do so. The Florida Hurricane Catastrophe Fund reimburses private insurers for losses due to coverage of hurricane damage. Both issue catastrophe bonds to reduce the risk to state funds.

Today’s market size shows the total value of catastrophe bonds in the United States as of the first half of 2018. From 2010 to 2017 the amount in outstanding catastrophe bonds doubled and despite the historically high losses due to Hurricanes Irma, Harvey, and Maria in the first half of 2018, the catastrophe market continued to grow. In the future, catastrophe bonds may cover more than losses from natural disasters. Insurance companies are currently developing better catastrophe bond modeling to cover losses due to cyber attacks and terrorism.

Geographic reference: United States
Year: First half of 2018
Market size: $30 billion
Sources: Oliver Ralph, “Global Catastrophe Bond Market Size Climbs to a Record $30bn,” Financial Times, September 6, 2018 available online here; Andy Polacek, “Catastrophe Bonds: A Primer and Retrospective,” Chicago Fed Letter, No. 405, 2018 available online here; “Catastrophe Bond,” Wikipedia, December 10, 2018 available online here.
Image source: 12019, “hurricane-earth-satellite-tracking-92968,” Pixabay, March 13, 2013 available online here.

Recreational Vehicles

Recreational vehicle

With Spring right around the corner and summer not far behind, have you been thinking about taking a vacation? Do your daydreams of a relaxing getaway include camping? If so, you are not alone. More than 77 million households in the United States include someone who enjoys this activity.

Most campers use tents but nearly one-quarter prefer the safety and comfort of a recreational vehicle, or RV. While a large percentage either borrow or rent their motorhome or towable camper, 56% own theirs. Just a few years ago, in 2014, a majority of people who camped using RVs were baby boomers or older. By 2017, 70% of RV campers were Millenials and Generation Xers. RV manufacturers are taking notice. The recreational vehicles of today are not the rustic accommodations of yesteryear. Newer models are equipped with solar panels, USB ports, entertainment systems, and wi-fi signal boosters.

Today’s market size shows the total wholesale shipments of RVs in the United States in 1998, 2008, and 2018. Leading manufacturers include Thor Industries, Forest River, and Winnebago Industries. Ford Motor Co. makes the chassis, engines, and transmissions for most of the motorhomes in the United States. By state, the highest percentage of recreational vehicles were shipped to Texas, followed by California and Florida. Ohio and Michigan tied for fourth.

Shipments for 2018 were down from a high of 504,600 in 2017. They are forecast to drop farther in 2019. According to Frank Hugelmeyer, President of the RV Industry Association, “slowing sales were inevitable due in part to the fact that so many Americans have bought RVs over the past decade.” Another factor may be RV prices. They are expected to climb due to increases in the cost of raw materials and components, such as microwaves, stoves, and lighting as a result of the tariffs imposed on goods from China and Canada. While 83% of recreational vehicles are manufactured in Indiana, many of the components are imported from other countries.

Geographic reference: United States
Year: 1998, 2008 and 2018
Market size: 292,700, 237,000 and 483,700, respectively
Sources: Trevor Hughes, “Youth Movement Is Driving RVs,” USA Today for the Lansing State Journal, January 28, 2019, pages 1B and 2B; “Addition of 6 Million New North American Campers Since 2014 Showcases Continued Popularity of Camping,” The National RV Dealers Association News Release, April 11, 2018 available online here; The 2018 North American Camping Report, Kampgrounds of America, Inc. available online here; RV Industry Association Staff, “RV Industry Association’s 2017 Profile Now Available,” RV Industry Association, June 6, 2018 available online here; “Historical RV Data,” RV Industry Association available online here; Dale Buss, “RV Sales Boom Is Fueled By Millenials as They Overturn Stereotypes and Enjoy The Itinerant Life,” Forbes, December 29, 2017 available online here; Peter Valdes-Dapena, “RVs Are Back and Bigger Than Ever,” CNN Business July 12, 2017 available online here.
Image source: Airstream Inc., “Airstream Travel Trailer in Nature,” Unsplash, October 2, 2018 available online here. Use of image does not constitute endorsement.

Medical Marketing

Does it seem like you’re seeing more ads for prescription medications and medical services? You’re not imagining it. In 2016, the last year for which data were available, pharmaceutical companies alone bought 4.6 million direct-to-consumer ads, up from 79,000 ads in 1997. Spending increased nearly six-fold, from $1.3 billion to $6.0 billion during this time period. Total medical services advertising expenditures grew at a similar rate, led by cancer centers, mental health and addiction services, and cosmetic surgery services.

According to PhRMA, the largest pharmaceutical trade group in the U.S., direct-to-consumer advertising provides “scientifically accurate information to patients so that they are better informed about their health care and treatment options.”1 Around half of the consumers in a 2015 analysis by the U.S. Food and Drug Administration believed these ads did not contain enough information about the medications’ risks and benefits to be of use. That year, the American Medical Association (AMA) called for a ban on pharmaceutical and medical device advertising, saying that ads such as these encourage consumers to seek out more expensive treatments when less expensive, more appropriate, effective alternatives may be available. In addition, the AMA was concerned that increased spending on advertising led to higher prescription drug prices. Banning such advertising would not be easy, even if Federal lawmakers agreed that such a ban should take place. Several court cases throughout the years determined that this type of advertising is protected by the United States Constitution.

Today’s market sizes show total medical marketing spending and spending on a subset of that, direct-to-consumer advertising, in 1997 and 2016. Medical marketing includes advertising of prescription drugs, health services, and laboratory testing. It also includes disease awareness campaigns. Marketing to health care professionals by pharmaceutical companies accounted for most of the spending during this time period. However, as a percentage of total spending, this has been dropping. In 1997, 88.1% of medical marketing dollars were spent on free samples, direct physician payments for such things as speaking engagements and meals, and prescriber detailing, in which pharmaceutical sales representatives educate physicians about their products. In 2016, 67.9% of marketing dollars were spent this way. Direct-to-consumer marketing comprised the balance.

1 PhRMA spokesperson Tina Stow. Source: Susan Kelly, “U.S. Doctor Group Calls for Ban on Drug Advertising to Consumers,” Reuters, November 17, 2015, available online here

Geographic reference: United States
Year: 1997 and 2016
Market size: (Total) $17.7 billion and $29.9 billion, respectively
Market size: (Direct-to-consumer advertising) $2.1 billion and $9.6 billion, respectively
Sources: Lisa M. Schwartz, MD, MS and Steven Woloshin, MD, MS, “Medical Marketing in the United States, 1997-2016,” JAMA, Special Communication, January 1-8, 2019 available online here; Susan Kelly, “U.S. Doctor Group Calls for Ban on Drug Advertising to Consumers,” Reuters, November 17, 2015, available online here; Alison Kanski, “7 Things to Know from Dartmouth’s Medical Marketing Study,” MM&M, January 14, 2019 available online here; Margaret Rouse, “Pharmaceutical Detailing,” TechTarget, February 2011 available online here.
Image source: Martin Brosy, “Doctor with a Stethoscope,” Unsplash, July 30, 2018 available online here.

Auto Industry Economic Impact

auto industry camaroGeneral Motors’ announcement of the 2019 closing of assembly plants in North America created uncertainty for 14,000 families in Michigan, Ohio, Maryland and Oshawa, Ontario, Canada. These 14,000, both blue-collar and white-collar workers alike, are direct employees of General Motors. But sadness and uncertainty reverberated throughout many industries. According to the Center for Automotive Research, in the United States, more than 7 million private sector jobs are supported by the auto industry. Steel mills, logistics companies, grocery stores, restaurants, gas stations, and child care centers are just some of the businesses negatively impacted by plant shutdowns and layoffs,1 as automotive companies buy fewer supplies and services and workers cut back on expenses. Businesses in close proximity to auto plants, those that rely on workers spending money in their stores and restaurants, are more heavily impacted than some when plants close.

Today’s market size shows the amount of annual compensation of employees working in industries supported by the auto industry in the United States. In 2014, the last year for which data are available, 570,000 jobs were supported by the auto industry in Michigan, where auto industry employment accounts for more than 11% of the labor force.

1 According to General Motors, some of the workers that will be laid off at General Motors’ plants will be offered jobs at other manufacturing facilities either in Michigan or in another state.

Geographic reference: United States
Year: 2018
Market size: $500 billion
Sources: Eric D. Lawrence, “Pain of GM Closures Is Far-Reaching,” Lansing State Journal, December 3, 2018, page 6A; Jamie L. LaReau, “General Motors to Close Detroit, Ohio, Canada Plants,” Detroit Free Press, November 26, 2018 available online here.
Original source: Center for Automotive Research
Image source: AnSICHThoch3, “auto-chevrolet-camaro-road-1112183,” Pixabay, January 2, 2016 available online here. Use of image does not constitute endorsement.

Public Transportation in the Lansing, Michigan Area

Public TransportationThe Capital Area Transportation Authority (CATA) is the largest public transit provider in the tri-county area around Lansing, Michigan. The tri-county area consists of Ingham, Clinton, and Eaton counties. CATA has been operating public transportation in the mid-Michigan area since 1972 and has been twice named the best transit system of its size in North America by the American Public Transportation Association.

Ridership grew steadily during the 1970s, before leveling off during the 1980s and most of the 1990s. During the 1980s and 1990s, the number of rides fluctuated around 3-4 million annually. In 1999, CATA took over the Michigan State University bus service. Since then ridership has increased nearly 3-fold. In contrast, the population of the tri-county area grew by 22.6% from 1970 to 2010.

In 2013, CATA set a fourth consecutive yearly record for number of rides. By 2014, however, ridership was down overall despite seeing increased ridership on its Michigan State University routes and increased requests for its paratransit services. In the fourth quarter of 2014, gasoline prices fell which could account for the decreased ridership. Bus ridership both nationally and locally continued to decline in 2017. Nationally bus ridership dropped by 4.3 percent in 2017. CATA saw a ridership decline of 6.0 percent overall that same year.

According to the American Public Transportation Association, several factors contributed to the multi-year decline in bus ridership overall. Gas prices remained low and the ability to obtain car loans, including sub-prime car loans for those with poor credit, became easier. More employees are working from home. In 2016, 66% of employers allowed some of their employees to work from home occasionally; 40% allowed some employees to work regularly from home, a drastic change from a decade ago. The use of transportation network companies such as Uber and Lyft along with bike-sharing services and biking, in general, have become more popular. Customers who employ these services may find them more convenient to use, allowing them to get to their destination sooner than if they would take public transportation.

In response to the increased popularity of bike-sharing across the country, CATA partnered with Michigan State University and the cities of Lansing, East Lansing and Meridian Township to study the feasibility of bike-sharing programs in the region in 2018. Bike-sharing is one way of meeting a commuter’s need for transportation to and from a bus stop or transit facility in order to more easily access the public transportation system.

Today’s market size represents the number of rides annually on CATA vehicles in 1972 and 2017.

Geographic reference: Lansing, Michigan area
Year: 1972 and 2017
Market size: Less than 1 million rides and 10.2 million rides respectively
Sources: Pam Latka, “Fiscal 2017 Ridership Closes at 10.2 Million,” CATA Drives: 2018 Community Report, September 2018, page 5; Understanding Recent Ridership Changes, American Public Transportation Association, April 2018 available online here; “National Trend Leaves Its Mark on Ridership,” CATA 2016 Community Report, June 2016, page 3; “Ridership Trends Vary by Service Type,” CATA 2015 Community Report: Where Public Transportation Goes Community Grows, June 2015, page 3; “Passenger Trips Reflect Stable Demand,” CATA 2014 Community Report: Moving You Forward With Pride, June 2014, page 3; “Growth in Ridership Remains Strong,” CATA 2013 Community Report: Moving You Toward Your Dreams, June 2013, page 4; “Riding High with Record Ridership,” CATA 2012 Community Report 40th Anniversary Edition: Greater Lansing on the Move, August 2012; “CATA Demand Grows with Community Need,” CATA 2011 Community Report: Greater Lansing on the Move, August 2011; Tri-County Regional Planning Commission, “Tri-County Regional Growth: Choices for Our Future,” Draft Report, August 2002 available online here; “Ingham County, Michigan” available online here; “Clinton County, Michigan” available online here; and “Eaton County, Michigan” available online here.
Image source: “CATA Administrative Offices,” available online here. No copyright infringement intended.

Online Dating

Online dating

For many finding a spouse or someone to have a long-term relationship with is difficult. From the 1940s through the 2000s a large percentage of people met their significant other through friends. In addition, many couples met in bars and restaurants, at college, church, and their workplaces. When meeting people through these avenues failed, some people decided to expand their social network in nontraditional ways. Over the years this has included placing personal ads in newspapers, signing up for computer dating, and using online dating services.

What was likely the first personal ad appeared in 1695 in the Collection for the Improvement of Husbandry and Trade, a periodical published in London, England. A 30-year old gentleman wanted to “willingly match himself to some Good Young Gentlewoman that has a fortune of £3,000 or thereabouts.” Over the centuries, personal ads became commonplace in newspapers, including for most of the 20th century, however; few marriages resulted. In the United States, only about 1% of relationships that led to marriage began with couples meeting via these ads.

Before the Internet, in the 1960s and 1970s, several companies offered computer dating services. Applicants would fill out questionnaires and mail them to the company, then their responses would be compared to responses from other applicants via a computer. A person would need to wait days or weeks for a packet of information to arrive in the mail if the computer found one or more matches.

In the 1990s, personal computers and access to the World Wide Web became more prevalent and graphical browsers became more popular. In 1995, match.com became the first company to offer an online service similar to newspaper personal ads and computer dating services. For a fee users would be allowed to post profiles online—a picture, biographical information, and answers to a questionnaire—and then be able to browse the profiles of other users and contact those with whom they were interested in dating. Match.com’s initial target audiences were the gay and lesbian community and technology professionals. Women, in particular, were also encouraged to sign up with the belief that if there were a large pool of women to choose from, men would then be willing to sign up for the service also. In 2004, Guinness World Records recognized Match.com as the largest online dating site, with 15 million active members worldwide at the time and 42 million members registering with the service since its debut in 1995. Since the late 1990s, thousands of other companies have offered their own online dating services, both for the general public and catering to specific groups based on political views, religious beliefs, hobbies, lifestyle or profession. In 2010, more than 20% of opposite-sex couples met online. The internet overtook churches, neighborhoods, classrooms, and offices as a more popular place for couples to meet. That same year, nearly 70% of same-sex couples met online.

As usage of personal computers and laptops gave way to mobile devices and smartphones, online dating apps flourished. In 2013, Tinder became the first online dating app that introduced a simple interface for accepting or rejecting a potential partner: swipe right for “yes” and swipe left for “no”. If two people swiped right, they were given each other’s contact information. Location-based services became part of some apps. Users could be matched with others who frequent the same public places, such as restaurants, bars, or concert venues. While some of these online services and apps have a reputation for facilitating hookups rather than long-term, meaningful relationships, 84% of users surveyed said they use these sites to find romantic relationships. Only 24% reported looking for hookups. In 2018 in the United States, nearly one in six relationships that led to marriage started through an online dating service or app. More than half of adults aged 18-34 know someone who uses online dating and a third know someone who entered into a long-term relationship as a result. College graduates and those earning more than $75,000 per year are most likely to know someone who uses online dating and who has entered a long-term relationship after meeting someone online.

More than 260 million people worldwide and tens of millions of people in the United States have tried online dating, and yet there is still a stigma attached. A Pew Research Center survey in 2015 found that 23% of people thought that those who use online dating services are desperate. However, this is down from 29% in 2006.

Today’s market size shows the total revenues of online dating services worldwide. Revenues for Match Group, which owns Tinder, match.com, and 40 other similar businesses totaled $1.3 billion in 2017, more than a quarter of the global revenue for the entire industry.

Geographic reference: World
Year: 2018
Market size: $4.6 billion
Sources: “Putting the Data into Dating,” The Economist, August 18, 2018, pages 19-21; “History of the Web Browser,” Wikipedia, December 18, 2018 available online here; “Match.com,” Wikipedia, December 16, 2018 available online here; Louise Matsakis, “Tinder’s Days as a Hookup App May Be Over,” Wired, April 23, 2018 available online here; “Timeline of Online Dating Services,” Wikipedia, September 4, 2018 available online here; John Hendel, “Old, Weird Tech: Computer Dating of the 1960s,” The Atlantic, February 14, 2011 available online here; Aaron Smith and Monica Anderson, “5 Facts About Online Dating,” FactTank: News In the Numbers, Pew Research Center, February 29, 2016 available online here; “Online Dating,” Statista available online here; Aaron Smith, “15% of American Adults Have Used Online Dating Sites or Mobile Dating Apps,” Pew Research Center, February 11, 2016 available online here; Hayley Matthews, “27 Online Dating Statistics & What They Mean for the Future of Dating,” DatingNews.com, June 15, 2018 available online here.
Image source: Athree23, “heart-love-keyboard-enter-button-3698156,” Pixabay, October 2018, available online here.

Natural Beauty Products

natural beauty productsWhat is your New Year’s resolution? Perhaps, like many, you plan to exercise more and eat less processed food and more organic, whole food such as fruits, vegetables, and whole grains. If you are a woman, maybe you want to incorporate more natural and organic personal care products into your daily care regimen.

The average American woman uses a dozen personal care products every day, one reason women, on average, are exposed to 83 more unique ingredients on a daily basis than men. The younger a woman is, the more likely she is to look for natural cosmetics and other beauty products. In a survey by beauty brand Kari Gran, 75% of women aged 18-34 said that buying natural beauty products is important to them. Fifty-four percent of women aged 55-64 said the same.

The top ingredients that buyers of natural beauty products try to avoid are fragrances, parabens, phthalates, sulfates, and gluten. Meanwhile, cosmetics companies are incorporating ingredients such as green tea, jojoba, moringa, rice, and sea buckthorn, to name a few, into their products. Individually, these ingredients are promoted as detoxifying, moisturizing, hydrating, anti-aging, and rich in antioxidants.

Today’s market size shows the total sales of natural beauty products in the United States in 2017 according to Nielsen. Despite the growing demand for “clean” and “natural” beauty products, there are currently no regulations defining these terms. Worldwide, organic personal care product sales are expected to rise to nearly $25 billion by 2025.

Geographic reference: United States
Year: 2017
Market size: $1.5 billion
Source: Rina Raphael, “The Beauty Industry Goes Au Naturel,” Fast Company, October 2018.
Image source: mohamed_hassan, “cream-skin-care-cosmetics-lid-3521957,” Pixabay, July 2018 available online here.

Edible Insects

edible insects

John wore clothing made of camel’s hair and had a leather belt around his waist. His food was locusts and wild honey.

— Matthew 3:4, New American Bible Revised Edition

People around the world have been eating insects for thousands of years. In 2018, the Asia-Pacific region accounted for nearly 43% of the edible insect market worldwide, followed by Latin America (22.7%), and Europe (20.2%). By country, some of the largest markets include Thailand, Japan, China, Australia, and Peru. In Thailand, many people enjoy deep-fried insects as snacks and typically wash them down with their favorite beer. Globally, traditional diets include around 1,900 insect species.1 Beetles are the most numerous (659 species); followed by caterpillars (362); ants, bees, and wasps (321) and grasshoppers and locusts (278). Several species of true bugs, dragonflies, termites, flies, cockroaches, and spiders among others are also considered edible.2

Insects are high in protein (nearly equivalent to that of beef, pork, and poultry), require significantly less land, feed, and water than livestock, and farming them emits significantly fewer greenhouse gases (2 grams of greenhouse gases per kg of weight for insects vs 2,850 grams of greenhouse gases per kg of weight for cattle). As a result, insects are considered by some to be an eco-friendly alternative to beef, pork, and chicken. According to Innova Market Insights, insect protein will become a popular meat alternative in 2019 as consumers continue to demand healthy and eco-conscious foods. Recently some high-end restaurants in the United States and Europe began incorporating insects into some of the dishes offered on their menus. But what about the “ick factor”? According to Christine Couvelier, a chef and food industry consultant, “cricket powder is the best way to introduce this.” Crickets, processed into a tasteless powder or flour, can be added to a variety of foods such as sausages, granola, soups, pasta, desserts or bread to give the foods added protein, vitamins, and amino acids. The increasing use of insects in sports and dietary supplements used by athletes is expected to help drive demand also.

Today’s market size shows the total worldwide revenues for edible insects in 2017 and 2024 according to Global Market Insights.3 The figure for 2024 is projected. Not all edible insects are consumed by humans. Grasshoppers are food for pet fish, turtles, and birds. In the aquaculture industry, black soldier fly larvae and maggots are substitutes for fishmeal. A variety of insects, including beetles, cockroaches, termites, and ants, are food sources for poultry. Demand for edible insects in this market is expected to grow in the next five years. Currently, soymeal constitutes 65% of poultry and cattle feed. Research is underway by some manufacturers of edible insects to potentially replace 10-50% of soymeal feed with black soldier fly larvae, grasshoppers, silkworms or mealworms. These insects have similar nutrient content to traditional soymeal feed. Leading firms in the edible insect market include EnviroFlight, Haocheng Mealworm, AgriProtein, and Entomo Farms.

1 Source: Agnieszka de Sousa, Hayley Warren, and Roni Rekomaa, “Bugs Are Coming Soon to Your Dinner Table,” Bloomberg, July 5, 2018 available online here.
2 Source: “List of Edible Insects of the World,” Wageningen University & Research, the Netherlands available online here. According to Yde Jongema, a taxonomist at the Department of Entomology of Wageningen University and Research, as of April 1, 2017, there were 2,111 species of edible insects in the world.
3 The North American Coalition for Insect Agriculture citing Research and Markets and Meticulous Research both predict that the edible insect market will reach $1.2 billion by 2023.

Geographic reference: World
Year: 2017 and 2024
Market size: $55 million and $710 million, respectively
Sources: Kunal Ahuja and Shreya Deb, “Global Edible Insects Market to Exceed $710 Mn by 2024,” Global Market Insights, June 20, 2018 available online here; Agnieszka de Sousa, Hayley Warren, and Roni Rekomaa, “Bugs Are Coming Soon to Your Dinner Table,” Bloomberg, July 5, 2018 available online here; “List of Edible Insects of the World,” Wageningen University & Research, the Netherlands available online here; Sean Rossman, “Bugs in Your Food? Might Be on Purpose,” USA Today for the Lansing State Journal, December 23, 2018, pages 1B and 2B; Stacie Goldin, “Eating Insects in Thailand,” Entomo Farms, May 19, 2016 available online here; Kunal Ahuja and Shreya Deb, “Edible Insects Market Size By Product (Beetles, Caterpillars, Grasshoppers, Bees, Wasps, Ants, Scale Insects & True Bugs), By Application (Flour, Protein Bars, Snacks), Industry Analysis Report, Regional Outlook (U.S., Belgium, Netherlands, UK, France, China, Thailand, Vietnam, Brazil, Mexico), Application Potential, Price Trends, Competitive Market Share & Forecast, 2018 – 2024,” Global Market Insights, June 2018 available online here; Courtney Johnson, “Edible Insects Market Seeing Growth,” Natural Products Insider, July 15, 2016 available online here.
Image source: Satya Prem, “food-insect-nutrition-eat-protein-3348724,” Pixabay, April 24, 2018 available online here.

Hemp

Hemp seeds

Hemp, a variety of the cannabis plant, is a widely cultivated herb grown for its edible seeds, oil, and strong woody fiber used in cordage and fabrics. Unlike marijuana, modern-day hemp contains very small concentrations of the psychoactive substance delta-9-tetrahydrocannabinol (THC), less than 0.3%. Marijuana, on the other hand, typically contains between 5% and 20%, with some types containing up to 35%. Hemp contains higher concentrations of cannabidiol (CBD), however, than marijuana. CBD is the ingredient in cannabis thought to have medicinal properties. The Federal Drug Administration in the United States recently approved the CBD-derived epilepsy drug Epidiolex. Of all the products made from hemp sold in the U.S. in 2017, consumers spent the most on hemp-derived CBD, $190 million. One of the top food trends in 2019 is expected to be CBD-infused food and drinks, increasing demand. Spending on hemp-based industrial products totaled $144 million in 2017, much of which was spent by the automotive industry.

Hemp has been cultivated for thousands of years. Its fibers were found in pottery dating back more than 5,000 years in what is modern-day Taiwan. Textiles made of hemp were used in China as far back as 4000 BC and hemp paper was first used in 100 BC. The first recorded use of cannabis as medicine was in 2737 BC. In the 1500s, hemp was used for sailcloth for the English Navy. Because of this, English farmers and later farmers in the North American colonies were required to devote some acreage to hemp cultivation. The variety of cannabis that was grown in the American colonies was Cannabis sativa, an imported variety, not the indigenous hemp known to Native Americans. The plants were grown in tight clusters, thereby creating a taller plant with fewer branches and fewer female flowers. It’s the female flowers that contain high concentrations of THC. In the 18th-century, hemp was made into clothes, rope, bed ticking and sacks. During the American Revolution, it was in high demand for ropes and sails for the Continental Navy as well as for the state-sponsored fleets. Demand for it waned after the war but remained a flourishing domestic cash crop in the United States. After the Marihuana Tax Act of 19371 was implemented, which also taxed and regulated hemp, the popularity of hemp declined and many businesses shuttered. In the middle of the 20th century, calls for the prohibition of marijuana due to its intoxicating effects led to cannabis being banned in the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970 signed by Richard Nixon. No provision was made to exempt industrialized hemp grown for utilitarian purposes.

As the tide of public opinion toward cannabis turned and more and more states started to legalize medical marijuana, hemp was again looked at as a viable domestic crop. The Agricultural Act of 2014, signed by President Obama, defined industrialized hemp as separate from marijuana and authorized research and pilot programs for the production of hemp in conjunction with universities and state departments of agriculture. In 2015, seven states planted research crops. Twenty-seven states removed barriers to hemp production and Colorado, Oregon, and Vermont licensed farmers to grow hemp under state law. Unfortunately, Federal law still classified hemp as a Schedule I substance so farmers could still go to jail and have their property taken away for growing hemp. This changed with the Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, that President Trump signed into law in December 2018. This law amended the Controlled Substances Act to exempt the THC in hemp from being classified as a Schedule I drug, opening up opportunities for farmers to grow and sell industrialized hemp in the United States without the worry of losing their property or going to prison due to Federal drug policy.

Today’s market size shows the total sales of hemp products in the United States in 2017 and 2022 according to Hemp Business Journal estimates. *Future estimates vary widely among different groups when it comes to the largest sales category in the hemp industry, CBD-based products. Marijuana research firm Greenwave Advisors predicts that CBD product sales alone will reach $3 billion by 2021. Cannabis industry analysts at the Brightfield Group predict that sales will reach $22 billion by 2022. These higher estimates are bolstered by many factors, not the least of which is the signing of the 2018 Farm Bill into law. Also, products containing CBD are now more widely available, being sold at health food stores and in beauty aisles of mainstream retailers. More doctors are prescribing CBD products for conditions such as post-traumatic stress disorder (PTSD), anxiety, multiple sclerosis, and chronic pain. The Federal Drug Administration’s approval of Epidiolex will also fuel demand. An estimated $591 million was spent on hemp-based CBD products in 2018. Demand is expected to grow as consumers continue to seek natural remedies for ailments.

1 “Under pertinent provisions of the Marihuana Tax Act, 26 U.S.C.S. §§ 4751-4753, every person who sells, deals in, dispenses, or gives away marihuana must register with the Internal Revenue Service and pay a special occupational tax.” Also, a transfer tax was required to be paid and a form was to be filled out with the name and address of the buyer and seller and the amount of marihuana to be purchased. The form was to be filled out in triplicate, one copy going to the Internal Revenue Service, one copy to be kept by the buyer and the original to be kept by the seller. All copies and originals were subject to inspection by federal and state law enforcement. Source: “Marijuana Tax Act Law and Legal Definition,” USLegal available online here.

Geographic reference: United States
Year: 2017 and 2022
Market size: $820 million and $1.9 billion*, respectively
Sources: “The U.S. Hemp Industry Grows to $820mm in Sales in 2017,” Hemp Business Journal, May 20, 2018 available online here; “Hemp,” Merriam-Webster available online here; “The Truth Behind Hemp in the United States,” Ministry of Hemp available online here; Ben Swensen, “Hemp & Flax in Colonial America,” Colonial Williamsburg Journal, Winter 2015 available online here; “10,000- year History of Marijuana Use in the World,” Advanced Holistic Health available online here; Elisabeth Garber-Paul, “Exclusive: New Report Predicts CBD Market Will Hit $22 Billion by 2022,” Rolling Stone, September 11, 2018 available online here; Public Law No: 115-334. Agriculture Improvement Act of 2018 available online here; Daniele Piomelli and Ethan B. Russo, “The Cannabis sativa Versus Cannabis indica Debate: An Interview with Ethan Russo, MD,” Cannabis and Cannabinoid Research, US National Library of Medicine, National Institutes of Health, January 1, 2016 available online here; Brian S. Julin, “Welcome to Frequently Asked Questions About Cannabis Hemp,” 1994 available online here; “Titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (Public Law 91-513)” available online here; “Hemp vs Marijuana,” Ministry of Hemp available online here; “Marijuana Tax Act Law and Legal Definition,” USLegal available online here; Trevor Hughes, “It Won’t Get You High, But It Can Make You Full,” USA Today for the Lansing State Journal, January 14, 2019, page 1B.
Image source: ulleo, “hemp-cannabis-seeds-grains-healthy-2258608,” Pixabay, April 28, 2017 available online here.

Enterprise Drones

dronesUnmanned aerial vehicles (UAVs) have been in development since World War I for use in military operations. During World War I, the aim was to design an automatically guided, unmanned biplane that would act as a torpedo. The Kettering Bug, built by the U.S. Army, first flew in 1918 but was never used in the war. In the 1930s, the Navy continued experimenting with radio-controlled aircraft. The Radioplane OQ-2 became the first mass-produced UAV in the U.S. Fifteen thousand were manufactured for the Army during World War II.

Modern unmanned aerial vehicles, or drones, began being developed by the Air Force in the 1960s and 1970s for surveillance flights. By the late 1990s, engineers were working on arming them with missiles. After September 11, 2001, the CIA began flying armed drones over Afghanistan. The military continues to use ever more sophisticated drones of various sizes in its operations.

Drone kits for hobbyists were sold in the late 1990s and early 2000s. The first commercially successful consumer drone was released in 2010. The Parrot AR Drone was the first ready-to-fly drone controlled by Wi-Fi using a smartphone. It sold more than 500,000 units. Its successor, the AR Drone 2.0, had an improved piloting system, which made it easier for newcomers to use. According to Goldman Sachs, consumer drones are expected to generate $3.3 billion in revenue by 2020, up from $700 million in 2014.

Recognizing the potential of drones beyond military or consumer use, the Federal Aviation Administration issued permits for commercial drones in 2006. These permits removed some restrictions placed on consumer drones. At first, few companies requested commercial drone permits. Today’s market size shows the number of commercial, or enterprise, drones shipped in 2017 and 2023 in the United States. The shipment figure for 2023 is estimated.

Drones are used by civilian government entities, such as police and fire departments, and various industries throughout the United States. The construction industry spent the most on drones in 2016, $11.2 billion. The agriculture industry followed, spending $5.9 billion. Some uses for drones in the construction industry include mapping, surveying land, inspecting buildings, and monitoring on-site activities. Agriculture uses include monitoring crop health, assessing drought impacts, and analyzing the soil. According to Technavio, Aeryon Labs, 3D Robotics, DJI, Parrot, PrecisionHawk, DroneDeploy, Yuneec, Cyberhawk Innovations, Strat Aero and Dragonfly Innovations were the top manufacturers of enterprise drones in 2018.

Geographic reference: United States
Year: 2017 and 2023
Market size: 84,000 and 1,465,000 respectively
Sources: Nicholas Shields, “UberEats is Eyeing Drone Deliveries,” Business Insider, October 24, 2018 available online here; John Sifton, “A Brief History of Drones,” The Nation, February 7, 2012 available online here; Kashyap Vyas, “A Brief History of Drones: The Remote Controlled Unmanned Aerial Vehicles,” Interesting Engineering, January 2, 2018 available online here; Ed Darack, “A Brief History of Quadrotors,” Air & Space, May 19, 2017 available online here; “Drones: Reporting for Work,” Goldman Sachs, 2016 available online here; John Patterson, “An Aerial View of the Future – Drones in Construction,” Geospatial World, September 5, 2018 available online here; Meg Gerli, “Agricultural Uses of Drones,” November 9, 2017 available online here; Michael R., “Top 10 Drone Manufacturers in the Global Commercial Drone Industry – Flying High in a Competitive Business,” Technavio Blog, March 20, 2018 available online here.
Original source: Business Insider Intelligence estimates.
Image source: StockSnap, “mountain-sky-clouds-nature-drone-2574006,” Pixabay, August 2, 2017 available online here.

Fortune-Telling Industry in South Korea

fortune telling tarot cardsWhat will the future hold? A question many of us ask ourselves, especially at this time of the year. While most people just ponder this question idly, many in South Korea seek out more definitive answers, they believe, from fortune-tellers who offer services such as face-, palm-, and tarot card reading and saju, an ancient practice of analyzing the cosmic energy at the hour, day, month, and year of a person’s birth from Chinese astrological records and texts. Saju and face-reading are recognized academic pursuits in South Korea.

According to Paik Woon-san, head of the Association of Korean Prophets, there are more than 300,000 fortune-tellers in South Korea and 150,000 shamans, many of whom offer fortune-telling services. Two-thirds of people surveyed by Trend Monitor, a marketing firm, said that they visit a fortune teller at least once a year. Most visit between December and February to learn what is foretold for their lives in the new year. The practice of going to soothsayers is passed down within families. It is “one possible way by which to make sense of the world,” says Andrew Eungi Kim, a professor at Korea University.

Today’s market size shows the estimated revenue earned in the fortune-telling industry in South Korea according to the Korea Economic Daily, a newspaper.1 Whether people seek out fortune-tellers for entertainment or for decision-making guidance, some who may have sought face-to-face interactions at brick-and-mortar businesses are now downloading mobile apps. Handasoft’s most popular fortune-telling app, Jeomsin, has been downloaded more than 3 million times.

1 The source does not provide a date. It states, “[T]he otherworldly in South Korea will soon be a 4trn won ($3.7bn) business”. The editors of this blog interpret “soon” to mean in 2018 or 2019. The source article was written in February 2018.

Geographic reference: South Korea
Year: 20181
Market size: $3.7 billion (4 trillion won)
Source: “In South Korea Fortune-Telling Will Soon Be a $3.7bn Business,” The Economist, February 24, 2018 available online here.
Image source: MiraCosic, “tarot-cards-magic-fortune-telling-991041,” Pixabay, October 16, 2015 available online here.

Greeting Card Publishers

I’m dreaming of a white Christmas
With every Christmas card I write
May your days be merry and bright
And may all your Christmases be white
— Lyrics from “White Christmas,” by Irving Berlin

greeting cardThe holiday season. That time between Thanksgiving and New Year’s Day. Or is it between Halloween and New Year’s Day? The retail holiday season seems to start earlier every year. It’s the time of year when we hear terms such as Black Friday and Cyber Monday, when advertisements for gifts for young and old alike are more numerous and sales abound in stores and online. For many people dates on the calendar are filled with shopping, trips to see Santa, holiday baking and decorating, religious services, parties, and get-togethers with friends and family.

Amidst all this busyness, some will find quiet time to sit down and address Christmas cards to their friends and loved ones, wishing them well in the new year and letting them know they are thought of warmly. Much has changed since 1875 when the first Christmas card was printed in the United States. Nowadays more people are sending greetings online, but paper greeting cards have not fallen out of favor. According to the Greeting Card Association, consumers in the United States buy 6.5 billion greeting cards annually, approximately a quarter of which—1.6 billion—are Christmas cards,1 the most popular type of seasonal greeting card. Valentine’s Day cards and Mother’s Day cards are a distant second and third, with 145 million2 and 133 million units sold respectively.

Today’s market size shows the number of greeting card publishing establishments in the United States in 2006 and 2016 according to the U.S. Census Bureau’s County Business Patterns survey. While there were fewer establishments in 2016 than there were in 2006, the number of people employed rose from 12,765 to 13,842 over this time period. The average yearly wages for workers in this industry, however, dropped dramatically, from $49,442 in 2006 to $34,199 in 2016.

1 Including boxed cards.
2 Not including classroom valentines.

Geographic reference: United States
Year: 2006 and 2016
Market size: 132 and 99 respectively
Sources: County Business Patterns, American FactFinder, United States Census Bureau, various years available online here; “About Greeting Cards – General Facts,” Greeting Card Association, July 2016 available online here; John Hanc, “The History of the Christmas Card,” Smithsonian.com, December 9, 2015 available online here; “White Christmas Lyrics – Irving Berlin” available online here.
Image source: BiljaST, “christmas-new-year-happy-3003907,” Pixabay, December 2017 available online here.

Train Batteries

train

Steel Rails, chasing sunshine ’round the bend

Winding through the trees like a ribbon in the wind

I don’t mind not knowing what lies down the track

‘Cause I’m looking out ahead

To keep my mind from turning back

— Chorus from the song “Steel Rails” by Louisa Branscomb

Worldwide, passengers traveled a total of 3.7 trillion kilometers by train in 2016. That same year, more than 9.9 trillion tonne kilometers of freight were shipped. The vast majority of passenger kilometers traveled, 80%, were in Asia and Oceania1; the fewest were in America, which includes both the United States and Canada. Two regions were nearly evenly split on the percentage of tonne kilometers of freight shipped by rail: Asia and Oceania with 37% and America with 31%. The Russian Federation followed with 23%. A total of 1.1 million rail lines allow for the transport of passengers and freight worldwide, more than a third of which are in America, followed by Asia and Oceania (28%) and Europe (24%).2

Whether a train is transporting passengers or freight, all use batteries either as backup power, for engine starting, as storage systems to capture energy recovered from braking or to power the trains themselves. Today’s market size shows the estimated sales of train batteries in 2018 and projected for 2025. The market is expected to grow at a compounded annual growth rate of 5.15% during this time period as more people around the world become dependent on rail transport.

Currently, lead-acid batteries are the predominate battery used in rolling stock, but as lithium-ion batteries become more economical and efficient and demand for maintenance-free batteries increases, they are expected to be the type of battery most used by the end of this time period. In the future, demand for environmentally-friendly bullet trains and autonomous trains with advanced features such as automated doors, infotainment systems, and passenger information systems will spur sales of train batteries as these types of trains require significantly more power.

1 Excludes Russia and Turkey
2 Includes Turkey

Geographic reference: World
Year: 2018 and 2025
Market size: $470.5 million and $703.2 million, respectively
Sources: “From a Market Size of USD 470.5 million in 2018, The Train Battery Market is Projected to Reach USD 703.2 Million by 2025, at a CAGR of 5.15%,” Cison PR Newswire, October 18, 2018 available online here; “Rail Transport in the World,” International Union of Railways, September 7, 2018 available online here; Fred Lambert, “Bombardier Unveils a New Battery Powered Train,” Electrek, September 14, 2018 available online here; “Rail,” available online here; and “Wayside Energy Storage Systems,” available online here.
Image source: axiepix, “train-tracks-winter-snow-trees-613386,” Pixabay, January 27, 2015 available online here.

Global Art Market

artThe rich are getting richer, and this bodes well for the art market worldwide, a network of artists, gallerists, auction houses, fairs, museums, art critics, and collectors. Growth in global wealth, robust consumer confidence and increased supply were three reasons behind the recent 12% growth in global art sales. Global wealth has increased 50% since 2010, much of that in Asia. In 2010, Asia was home to 24% of the world’s billionaires. In 2017, 41%. Twenty-six percent live in China, a country that accounted for a third of global art auction purchases and 21% of all art sales worldwide in 2017, second behind the United States with 42%.

Although art sales rebounded in 2017, gallery closings outpaced gallery openings that same year. Several factors contributed to galleries shutting their doors including high rent and art fair fees, changing consumer preferences, and larger galleries recruiting talent away from smaller galleries. Some more-established art galleries whose names and reputations are synonymous with their owners also face an uncertain future in the coming years as owners retire or die and have no one to take over their businesses.

Today’s market size shows total global art market sales in 2017. The auction sector saw the highest growth due to several high-end works being sold in 2017. Post-war and contemporary art continued to lead the market with a 46% share, followed by modern art with 27%. Dealer sales accounted for more than half of sales by value in 2017.

Geographic reference: World
Year: 2017
Market size: $63.7 billion
Sources: Nate Freeman, “The Art Market Grew to $63.7 Billion in 2017, and Other Key Takeaways from Art Basel Report,” Artsy, March 13, 2018 available online here; Stephanie Gommel, “Art Dictionary: The Art Market,” Hatje Cantz, January 13, 2014 available online here.
Image source: Image by Steve Johnson, Stocksnap.io, accessed October 2, 2018 available online here.

Posted in Art

E-Cigarettes

e-cigaretteElectronic cigarettes, or e-cigarettes, are devices designed to release nicotine vapor without actually burning tobacco, thus, without smoke. They are battery operated devices which, in many cases, look like cigarettes but use a battery to produce heat which then atomizes the nicotine in a specially made cartridge. The liquid in the cartridge may contain flavorings such as cherry, mint, or cotton candy to name a few. Vaporizers are similar to e-cigarettes, except that instead of a disposable cartridge, the liquid is stored in either a refillable tank or a prefilled capsule.

E-cigarettes were first sold in 2007. By 2016, 35 million people worldwide vaped, a five-fold increase from 2011. According to a report in the Annals of Internal Medicine, 10.8 million people in the United States vape. In contrast, the number of tobacco smokers worldwide numbered 1.11 billion in 2016 and in the United States, 37.8 million. These numbers aren’t exclusive. Researchers found that in the United States many users both vape and smoke traditional cigarettes.

While overall youth tobacco use dropped 20% from 2011 to 2017, e-cigarette use among high school students in the U.S. increased 900% from 2011 to 2015, according to the Centers for Disease Control and Prevention. In response, on September 12, 2018, the Food and Drug Administration (FDA) gave several e-cigarette product manufacturers 60 days to formulate plans to reduce the use of their products by minors or have their products removed from the market. FDA Commissioner Scott Gottlieb stated “e-cigarettes may present an important opportunity for adult smokers to transition off combustible tobacco products. But these public health opportunities are put at risk if all we do is hook another generation of kids on nicotine and tobacco products through alternatives like e-cigarettes.”

In November, a week before the deadline imposed in September, the FDA announced it would ban convenience store and gas station sales of all flavors of e-cigarette liquids except for tobacco, mint, and menthol. The Family Smoking Prevention and Tobacco Control Act that was signed into law in 2009 prohibits any restrictions to “the sale of any tobacco product in face-to-face transactions by a specific category of retail outlets.”1 As a result, lawsuits seeking to block the ban were predicted. A few days after the FDA announcement, Juul Labs announced a halt to all sales of its flavored e-cigarette liquid2 at brick-and-mortar stores throughout the United States, more than 19,000 locations, including those locations not a part of the FDA ban.

Today’s market size shows e-cigarette sales in the 52 weeks ended June 16, 2018, in the United States.3 In terms of dollar sales during the 4 weeks ended October 6, 2018, Juul Labs led with a 75% market share, followed by British American Tobacco (10%), Altria Group (6%) and Imperial Tobacco (6%). All other e-cigarette makers combined had a 5% share of the market. Globally, the market for e-cigarettes and related products is estimated to be worth $22.6 billion, up from $4.2 billion five years ago.

1 Family Smoking Prevention and Tobacco Control Act, Public Law 111-31, Sec. 906.d.3.A.i
2 Mango, cucumber, creme and fruit flavors.
3 Original source of data: Nielsen. Nielsen tracks sales at mass merchandisers and convenience stores.

Geographic reference: United States
Year: 2018
Market size: $1.96 billion
Sources: Angelica LaVito, “Popular E-Cigarette Juul’s Sales Have Surged Almost 800 Percent Over the Past Year,” CNBC, July 2, 2018, updated September 11, 2018 available online here; “Smoked Out,” The Economist, September 15, 2018, page 72; Teresa W Wang, et. al., “National and State-Specific Unit Sales and Prices for Electronic Cigarettes, United States, 2012-2016,” Centers for Disease Control and Prevention, August 2, 2018 available online here; Lisa Rapaport, “Almost One in 20 U.S. Adults Now Use E-Cigarettes,” Reuters, August 27, 2018 available online here; “Current Cigarette Smoking Among Adults in the United States,” Centers for Disease Control and Prevention, September 24, 2018 available online here; Lora Jones, “Vaping – The Rise in Five Charts,” BBC, May 31, 2018 available online here; WHO Global Report on Trends in Prevalence of Tobacco Smoking 2000-2025 – Second Edition, World Health Organization, 2018 available online here; Emilie Ikeda, “E-Cigarettes Ubiquitous at Schools Despite All Efforts: ‘You Won’t Find a Kid in Georgia Who Hasn’t Vaped Before,'” Fox News Channel, June 7, 2018 available online here; “Differences Between E-Cigs and Vaporizers” available online here; Jayne O’Donnell, “FDA to Limit Sale of Sweet-Flavored E-Cigarettes in Hope of Curbing Teen Vaping ‘Epidemic’,” Lansing State Journal, November 9, 2018, updated November 10, 2018 available online here; “Family Smoking Prevention and Tobacco Control Act Table of Contents,” U.S. Food and Drug Administration, January 7, 2018 available online here; Ashley Welch, “Juul to Halt Sales of Flavored E-Cigarettes in Retail Stores,” CBS News, November 13, 2018 available online here.
Original sources: Wells Fargo, Nielsen. Nielsen tracks sales at mass merchandisers and convenience stores.
Image source: Rolandmey, “e-cigarette-steam-evaporator-health-1881957,” Pixabay, December 5, 2016 available online here.

Turkeys

turkeyAccording to the National Turkey Federation, 45-46 million turkeys are killed each year to supply the demand for turkey on Thanksgiving Day in the United States. Year-round, per capita consumption of turkey was 16.4 pounds in 2017. Most of the turkeys sold in supermarkets, 99.9%, are the Broad Breasted White variety. This variety, a cross between the White Holland and the Broad Breasted Bronze breeds, first became popular in the 1960s as breeders wanted to supply the most meat at the lowest price. Broad Breasted Whites were bred for high breast meat content. As a result, they cannot walk well, cannot fly and males cannot sire offspring naturally. Breeders must use artificial insemination.

The other 0.1% of turkeys sold are American heritage varieties. There are 10 varieties recognized by the American Poultry Association’s turkey Standard of Perfection of 1874. They are Standard Bronze, Bourbon Red, Narragansett, Jersey Buff, Slate, Black Spanish, White Holland, Royal Palm, White Midget, and Beltsville Small White. These turkeys are “bred for fine flavor, beauty … and a good yield of meat from the food provided.”1 These varieties have been bred over hundreds of years in the United States and Europe. They more closely resemble wild turkeys in that they can run, fly, and breed naturally.

Because of the popularity of Broad Breasted Whites, heritage varieties nearly became extinct in 1990. An effort to revive the breeds began in 1997. That year there were only about 1,300 breeding birds. In 2016, there were 14,500. Large commercial farms raise Broad Breasted Whites for sale to supermarkets. American heritage turkeys are mostly found on smaller farms that raise a limited number yearly. Heritage turkeys are therefore much more expensive than Broad Breasted Whites.

Today’s market size shows the number of pounds of turkey produced in the United States in 2017.2 This was a 2.2% increase over 2016. Due to oversupply, with prices hitting a seven-year low, several companies planned to scale back production in 2018. The top 5 companies in terms of production were, in order: Butterball, Jennie-O Turkey Store, Cargill Protein, Farbest Foods, and Kraft Heinz Co.

1 Source: “Heritage Turkeys,” Heritage Turkey Foundation available online here. The meat content is close to a 50/50 ratio of thigh meat and breast meat.

2 Source: WATT PoultryUSA, March 2018, page 54. The USDA reports production was 5.98 billion pounds (total farm production minus condemnations) in 2017. Full source citations below.

Geographic reference: United States
Year: 2017
Market size: 7.433 billion pounds
Sources: Austin Alonzo, “Top US Turkey Producers Growing Amid Challenging Markets,” WATT PoultryUSA, March 2018, pages 54-57 available online here; “Heritage Turkeys,” Heritage Turkey Foundation available online here; “U.S. Meats Supply and Use,” World Agricultural Supply and Demand Estimates, United States Department of Agriculture, October 11, 2018 available online here; Adam Gabbatt, “Taste of Thanksgiving Past: Why Heritage Turkeys are Making a Comeback,” The Guardian, November 21, 2017 available online here; Jennifer Calfas, “Here’s How Many Turkeys Are Killed Each Year for Thanksgiving,” Time, November 16, 2017 available online here; “Turkey Breed Facts: Broad Breasted White,” Local Harvest, January 27, 2011 available online here; Virginia Van Zanten, “The 4 Best Places to Order Your Heritage Thanksgiving Turkey,” Vogue, November 12, 2015 available online here.
Image source: PublicDomainPictures,”celebration-christmas-cuisine-315079,” Pixabay, April 5, 2014 available online here.

Video Games

video gamesThe number of active gamers worldwide exceeds 2.3 billion, 46% of whom buy video games. Video game enthusiasts not only play video games, they read about them and discuss them in online communities. They also watch esports and their favorite players on video game streaming services.

Video games have come a long way since Atari’s Pong debuted in arcades in 1972. Graphics have improved greatly, from 8-bit in the 1970s, 3D in the 1990s and high-definition in the early 2000s to augmented and virtual reality currently. Video game enthusiasts have a wide range of genres to choose from: action, adventure, role-playing, strategy, simulation, sports, logic, and trivia, to name a few. Gamers can play against the computer, with a few friends, or as part of a team in massively multiplayer online games.

Worldwide, mobile games are expected to generate 51% of video game sales in 2018, console games 25% and PC games 24%. Smartphone game revenue is projected to reach $56.4 billion in 2018, more than 80% of total mobile gaming revenue.

Today’s market size shows the projected global sales of video games in 2018 and 2021. Overall, sales increased by 13.3% from 2017 to 2018. Smartphone game sales grew the most, 29.0%, followed by tablet games (+13.1%) and boxed/downloaded PC games (+4.5%). Console game sales rose 4.1% over this time period. Browser PC game sales, however, dropped 13.9%. Which games are most popular? God of War for the PS4 topped sales with nearly 4.6 million units sold in 2018, followed by Monster Hunter: World (PS4, 4.3 million) and Far Cry 5 (PS4, 3.5 million).

Geographic reference: World
Year: 2018 and 2021
Market size: $137.9 billion and $180.1 billion respectively
Sources: Leo Sun, “The World’s Top 5 Video Game Markets,” Lansing State Journal, August 25, 2018, page 3B; Tom Wijman, “Newzoo’s 2018 Report: Insights Into The $137.9 Billion Global Games Market,” June 20, 2018 available online here; “Video Game History,” History, 2017 available online here; “Global Yearly Chart,” VGChartz available online here.
Original source: Newzoo.
Image source: Pexels, “candy-crush-device-electronics-game-1869655,” Pixabay, November 29, 2016 available online here. Use of image does not constitute endorsement.

Shopping Mall Churches

church pewsJCPenney, Sears, Macy’s. Household names. Retailers that have been around for more than 100 years and in many cases have been anchor stores in shopping malls around the country, attracting shoppers to the mall itself and to the smaller retailers therein. In recent years, with the rise in popularity of online shopping, large department stores such as these have struggled to make a profit and have closed hundreds of stores leaving many malls with no anchor to draw shoppers. Smaller traditional mall retailers such as Claire’s, Gap, Banana Republic, J. Crew, and Abercrombie & Fitch have not fared well either. Combined, these stores closed more than 400 locations in the first 8 months of 2018 alone. Overall more than 5,000 stores closed during this time period.

Faced with a dwindling supply of brick-and-mortar stores to occupy the empty retail spaces, mall property owners have looked elsewhere for tenants: theaters, restaurants, medical and wellness clinics, and gyms, businesses that will draw in foot traffic on a daily basis. Because churches are not open every day, they were not considered a preferred tenant. Until now.

Storefront churches have existed since the late-1800s in urban African-American neighborhoods. In addition to religious ministry, these churches offer educational and financial resources to the community. In the 21st century, storefront churches are being established in predominantly Latino and Asian neighborhoods as well as in poorer rural communities throughout the United States. There has also been an increase in storefront mosques and temples in recent years. Churches in malls and open-air shopping centers are a newer concept than storefront churches, but evangelization to the greater community by establishing a presence in their respective venues is a priority for both.

Today’s market size shows the number of malls and open-air shopping centers that have at least one house of worship in them as of August 2017.1 Some malls have more than one, such as The Outlets in Loveland, Colorado. It houses three churches and a synagogue. In some cases, churches have been buying neglected mall properties to house their own congregations and, in some cases, others’. In 2015 Hope Church bought Grand Cities Mall in Grand Forks, North Dakota. The mall is now home to their congregation, as well as congregations from two other churches, a women’s pregnancy center, a music school, an indoor playground, and a lightsaber combat academy.

1 Since then, at least one more mall has welcomed a church congregation. In mid-September 2018, Impact Church opened in Lansing Mall in Delta Township, Michigan.

Geographic reference: United States
Year: August 2017
Market size: At least 111
Sources: Esther Fung, “For Some Struggling Malls, Churches Offer Second Life,” The Wall Street Journal, October 10, 2017 available online here; Eric Lacy, “Lansing Mall’s Church Ready for First Service, ” Lansing State Journal, September 10, 2018, page 1A; Esther Trattner, “Sick Stores: These Are The Chains That Are Dying Off Fastest,” MoneyWise, August 24, 2018 available online here; “Let the Church Say Amen,” Independent Lens, 2017 available online here; Kate Taylor, “Thousands of Americans Are Going to Church in Dead Malls,” Business Insider, June 19, 2017 available online here.
Image source: miltritter, “church-pews-religion-christian-1398784,” Pixabay, May 18, 2016 available online here.

Pumpkins

specialty pumpkinsPumpkins. The quintessential autumn vegetable. Carved into jack-o-lanterns for Halloween. Baked into pies for Thanksgiving and Christmas. Used as a flavoring in everything from coffee and creamers to ice cream, beer, and rum. In the 52 weeks ended August 25, 2018, pet parents spent more than $109 million for pumpkin-flavored dog food, a 124% jump from the previous 52-week period. For several years now pumpkin has been the most popular Halloween costume for pets.

Today’s market size shows the total production value of pumpkins in the United States in 2017. That year, growers harvested 69,340 acres, down from 71,400 acres in 2016, but well above the 45,900 acres a decade ago. The production value of pumpkins for the fresh market was $172.1 million in 2017, far above the $13.6 million for pumpkins harvested for processing. In acres harvested, the top 5 states were Illinois, Ohio, Indiana, California, and New York. Nearly 80% of Illinois’ pumpkin harvest is grown for processing.

In recent years the demand for specialty and heirloom pumpkin varieties has grown. Some popular varieties include Big Mac, Blue, Cotton Candy, Valenciano, Festival, Cinderella and Fairytale. The Cotton Candy and Valenciano varieties have a white hue. The Fairytale variety turns a shade of mahogany when mature. The Cinderella, so named because of its resemblance to Cinderella’s transformed coach, is a French heirloom variety that was cultivated by the Pilgrims.

Geographic reference: United States
Year: 2017
Market size: $185.8 million
Sources: “Quick Stats,” United States Department of Agriculture, National Agricultural Statistics Service available online here; Ana Serafin Smith, “Halloween Spending to Reach $9 Billion,” National Retail Federation Press Release, September 20, 2018 available online here; “Pumpkin Spice Sales Growth Makes a Hot Return in Late-August” available online here; “Pumpkins: Background & Statistics,” United States Department of Agriculture, Economic Research Service, September 13, 2018 available online here; “Historical Highlights and Related Releases,” National Retail Federation available online here; Tess Koman, “55 Fall-Flavored Things You Can Eat Right Now,” Delish, September 12, 2018 available online here; Lizzie Fuhr, “8 Funky Pumpkin Varieties for a Festive Fall,” PopSugar, October 5, 2012 available online here.
Image source: Renee_Olmsted_Photography, “pumpkins-halloween-stems-autumn-956428,” Pixabay, September 25, 2015 available online here.

Meat Substitutes

Meat substitutes soy medallions cauliflower potatoesIn the 2000s, documentaries attempted to expose the animal welfare, environmental, and economic impacts related to large-scale industrial farming. More recently, studies have been published linking the decreased consumption of meat and the increased consumption of fruits, vegetables, and whole grains to lower death rates, reduced production of greenhouse gases, and healthcare-related savings. According to a study published in PNAS, adopting global dietary guidelines such as these could reduce deaths by 5.1 million by 2050, reduce greenhouse gas emissions by nearly one-third, and save $700-1,000 billion per year in healthcare costs. The Global Burden Disease study, led by the Institute for Health Metrics and Evaluation, found that six of the top 10 risk factors for early death worldwide were linked to a poor diet. Researchers concluded that a diet high in red meat and sugary drinks and low in fruit, vegetables, and whole grains contributed to 30.8 million deaths, or 21% of the global population in 2013, up from 25.1 million in 1990.

According to GlobalData, 70% of the world’s population is either reducing their consumption of meat or eschewing meat altogether. In the United States alone, the percentage of people who describe themselves as vegan jumped six-fold from 2014 to 2017. In Great Britain, the number of people identifying as vegan jumped 350% over the past decade. In Portugal, the number of vegetarians increased 400% over the same time period. Faced with increased obesity, Type-2 diabetes, and heart disease in their populations, countries such as Canada and China have proposed or implemented new nutrition guidelines calling for their citizens to eat a plant-rich diet. In the past 30 years, China’s meat consumption has quadrupled; however, China’s new food guidelines encourage its population to halve their meat consumption by 2030.

In 2017, 26% of consumers in the United States reported reducing their meat consumption in the past 12 months and 36% reported buying plant-based meat substitutes. According to a California Walnut Board study, 83% of Americans would be interested in making meatless recipes if the taste and texture would be similar to meat-centric dishes. According to Chuck Jolley, president of the Meat Industry Hall of Fame, the popularity of plant-based meat substitutes is one of the six biggest challenges for animal agriculture in 2018 as more of these products are sold in mainstream grocery stores and restaurants. Whether people are concerned about animal welfare, environmental issues or their health, the percentage of people giving up meat completely is quite small. Of the countries mentioned above, in the United States, 6% of the population identifies as vegan; in Great Britain, 3.25%;1 and in Portugal, 0.6%. Of course, not all consumers of meat substitutes are vegetarians or vegans. According to Beyond Meat’s executive chairman, Seth Goldman, 70% of consumers who purchase their Beyond Burger2 product are flexitarians, meat eaters who are reducing their meat consumption.

Today’s market size shows the global sales of meat substitutes in 2017 and projected for 2018, 2023 and 2025. Real meat will continue to have a place at the table in most households around the world. Global sales of meat substitutes were a small fraction of the $90 billion real meat market in 2017.

1 Figure is for 2016.
2 Mention of the company and its product does not constitute an endorsement.

Geographic reference: World
Year: 2017, 2018, 2023 and 2025
Market size: $4.2 billion, $4.6 billion, $6.4 billion and $7.5 billion respectively
Sources: Zlati Meyer, “Missouri Is First State to Regulate the Word ‘Meat’,” USA Today for the Lansing State Journal, August 29, 2918, page 3B; “Plant-Based Diets Could Save Millions of Lives and Dramatically Cut Greenhouse Gas Emissions,” March 21, 2016 available online here; Madlen Davies, “Poor Diet Is the Biggest Cause of Early Death Across the World – With Red Meat and Sugary Drinks Responsible for One in Five Deaths,” Daily Mail, October 6, 2016 available online here; Becky Schilling, “The Future of Plant-Based Foods,” Supermarket News, September 21, 2017 available online here; Michael Pellman Rowland, “Millennials Are Driving The Worldwide Shift Away From Meat,” Forbes, March 23, 2018 available online here; “Why the Global Rise in Vegan and Plant-Based Eating Isn’t a Fad (600% Increase in U.S. Vegans + Other Astounding Stats),” Food Revolution Network, January 18, 2018 available online here; Chris Bennett, “Flesh and Blood: What’s the Future of Fake Meat?” Drovers, August 13, 2018 available online here; Elaine Watson, “An Estimated 70% of Beyond Burger Fans Are Meat Eaters, Not Vegans/Vegetarians, says Beyond Meat,” FoodNavigator-USA.com, January 12, 2018 available online here; Chuck Jolley, “Six Greatest Ag Challenges for 2018,” Feedstuffs, December 6, 2017 available online here; “Vegan Society Poll,” Ipsos MORI, May 16, 2016 available online here; “Number of Vegetarians in Portugal Rises by 400 Percent in 10 Years,” The Portugal News Online, December 10, 2017 available online here.
Original source: Figures for 2017 and 2025 are from Allied Market Research.
Image source: Kalhh, “cauliflower-potato-soy-medalions-943005,” Pixabay, September 17, 2015 available online here.