Food & Ag Weekly Round-Up: October 13, 2016

NPR discussed the impact of climate change on the world’s coffee supply.

The Los Angeles Times discussed the launch of a company in L.A. that helps eliminate food waste at restaurants.

NewsFactor reported on Amazon’s grocery delivery service.

GeekWire discussed Amazon plans for grocery sites.

FarmProgress reported on the status of the corn and soybean harvest.


New TTB Ruling Relaxes Formula Requirements For Distilled Spirit Products

Last week the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) published Ruling 2016-3, TTB’s most recent effort to reduce regulatory burdens on industry members. Breaking with past regulations, Ruling 2016-3 approves general-use formulas for proprietors of distilled spirits plants producing vodka, whisky, brandy or rum products that incorporate certain specified harmless coloring, flavoring or blending materials. The TTB’s Ruling should help reduce regulatory burdens by streamlining the formula review process and allowing industry members to get their products to market without having to wait for additional formula approvals. A full copy of the TTB’s Ruling 2016-3 can be found here.

Particularly, TTB will now approve general-use formulas for the following spirits produced in accordance with applicable TTB Standards of Identity:

  • Vodka containing no harmless, coloring, flavoring or blending materials other than sugar (no more than 2 grams per liter), citric acid (no more than 1 gram per liter) or both.
  • Rum containing no harmless coloring, flavoring or blending materials other than sugar, brown sugar, molasses or caramel, if the blending materials are no more than 2.5 percent by volume of the finish rum product.

TTB also now approves general-use formulas for certain types of whiskey that contain sugar, caramel, or wine—if the flavoring or blending materials are no more than 2.5 percent by volume of the finished product. However, TTB makes clear that no coloring, flavoring, or blending materials of any kind may be used in the production of spirits that are designated as “bourbon whiskey” or “straight” whisky.

Finally, TTB will approve general-use formulas for certain types of brandy that contain sugar, caramel, fruit juice of the same fruit from which the brandy is distilled, or wine fermented from juice of the same fruit from which the brandy is distilled. As for other spirits, the total quantity of flavoring or blending materials may not exceed 2.5 percent by volume of the finished product.

TTB Ruling 2016-3 is a welcome step toward accomplishing the TTB’s goal of increased regulatory relief for distilled spirit industry members. We will continue to monitor developments in this area and keep you up to date on any future regulatory changes impacting alcohol beverage industry members. For more immediate information on this topic, please feel free to contact Andy Gilfoil.

Husch Blackwell Ag Attorneys Present at the Mississippi State Seed Tech Short Course

After taking a few years off, the renowned Mississippi State Seed Short Course returned for its second consecutive year in 2016. This year’s program was sponsored by the MSU Extension Service and the Mississippi Agricultural and Forestry Experiment Station, and was held at the MSU’s Bost Extension Center.

The program focused on ‘bin to bag’ and explored a litany of topics of interest to Seed Industry members and producers.

Husch Blackwell attorneys Matt Grant and Megan Galey gave a presentation to attendees focused on the Intellectual Property and licensing issues encountered by seed industry members in addition to a review of seed labeling responsibilities and their varying provisions across several seed producing states.

Attendance was heavy and the organizers have confirmed that the Short Course will return in 2017.

For more information about the Short Course, see the MSU extension website or contact Matt or Megan.

Food & Ag Weekly Round-Up: September 29, 2016

The Chicago Tribune discussed BuffetGo, a start-up that matches consumers with restaurants who have excess food at closing.

Bloomberg discussed falling grocery prices.

The New York Times reported on the drought impact in New England.

AgWeb reported on the impact the drought in Brazil will have on coffee prices.

The Iowa Farmer Today discussed preparations cattle producers should make for new regulations.

Food & Ag Weekly Round-Up: September 22, 2016

NewsOK discussed a U.N. conference on overuse of antibiotics.

The USDA announced a restoration program for Gulf-area agriculture.

Food Safety News reported on FSMA compliance dates.

Business Insider reported on a German grocery store chain coming to the United States.

Produce News discussed the merger of Associated Wholesale Grocers and Affiliated Foods Midwest.


What a Week! A Follow Up to Techweek Kansas City

Techweek KC

For the second year in a row, Husch Blackwell was proud to sponsor and participate in Techweek Kansas City. The week long celebration of entrepreneurs, startups and tech gurus was full of great content, networking opportunities and camaraderie. We applaud LaunchKC for gifting 10 deserving innovators with a grant to kick-start or supplement their budding business. Several food and agriculture startups were the recipient of the funding and Kansas City Office Managing Partner Jeff Simon was honored to serve as a judge for the contest.

Husch Blackwell hosted a networking reception at Tom’s Town on September 14 which was a great success. At the event we played a video that highlights the achievements of three KC area startups that we have had the pleasure of collaborating with – Blooom, RiskGenius, and DARI.

Teckweek Kansas City… We’ll see you next year!


Food & Ag Weekly Round-Up: September 15, 2016

Hoosier Ag discussed issues faced by independent seed companies.

Food Engineering reported on a new food traceability tool launched by Chicken of the Sea.

GeekWire reported on Whole Foods new store design.

Reuters discussed Bayer’s pending bid for Monsanto.

Food Safety News reported on States receiving funds from the FDA to help farms comply with produce rule.


Convertibles: Not Just a Sign of a Midlife Crisis

In your free time, while not grinding away at your corporate day job, you’ve developed an early-stage version of an application that allows users to chase small digital emojis around town while staring at a smart phone. You’re confident it’s the next big thing, and the opportunities to monetize are endless. The problem: you’re not independently wealthy and the Powerball odds are awful. Thus, the hunt for capital begins…

Often, the first place founders look for cash is from friends, family and their professional network. Incubators, accelerators and “angel” investors may also be sources of initial seed funding. In any event, the discussion with any potential investor quickly turns to how they will put their money in, and what they will receive in return. In exchange for their cash, investors can receive common or preferred stock (or units if the entity is a limited liability company). Common stock brings the highest risk for the investor as they could lose their entire investment should the company fail. Less risky is preferred stock that carries certain rights and privileges not associated with common stock. Such rights may include a preference on distributions of profits, preference to receive payment ahead of other equity owners upon liquidation, and perhaps a guaranteed rate of return over a stated period of time. Common and Preferred stock owners are shareholders of the startup, and have all the rights (and potential headaches) that traditionally come with that moniker.

A useful alternative to standard equity in early stage investment is convertible debt. Key features of convertible debt are: (1) principal amounts that are due at a maturity date; (2) a fixed rate at which interest accrues on the principal balance; and (3) a claim on the company’s assets that is senior to all equity holders, but junior to any bank or other secured debt.  Continue Reading

Food & Ag Weekly Round-Up: September 8, 2016

USAgNet discussed jobs in the Iowa beer industry.

Consumer Affairs discussed an app to reduce restaurant food waste.

CNN reported on an app that helps grocery shoppers find the lowest prices.

The Economic Times reported on the Bayer bid for Monsanto.

Food Safety News discussed the outcome of regional FDA meetings with industry leaders.

Captive Insurance Can Help Agribusinesses Come Rain or Shine (or Other Events Adversely Impacting Industry Participants)

Agricultural producers face liability risks generally experienced by most businesses – workers compensation, for example, and risks that can easily be covered by standard property and casualty insurance policies. However, agricultural growers and producers are also confronted with particular risks of losses and liabilities endemic to agriculture that go to the very heart of their businesses as farming operations.  As those involved in agribusiness realize, standard property and casualty policies may not be available to provide coverage for the unique risks and potential losses an agricultural producer faces – losses attributable to:

  • environmental matters;
  • animal diseases;
  • crop diseases;
  • pesticides and fertilizers; and
  • livestock and crop contamination, resulting in food borne illnesses for which there is liability and product recalls;

to name a few. Even if the commercial insurance is technically available, it is not available on practical terms because the premiums are so costly and the deductibles are so high the producers and growers cannot afford to pay them and still generate sufficient net income from their farming operations.  Further, if and to the extent carriers are willing to write insurance policies for these unique agricultural risks, they are of little value because the policy exclusions leave uncovered many of the very risks of which the producer is most concerned and for which it needs the policy.

Many large agribusiness companies have addressed their risk management issues through the formation and operation of single parent captive insurance subsidiaries as referenced in a previous post.  However, producers and growers have not embraced captive insurance despite the fact that it may represent a risk management tool tailor-made for the unique risks faced by crop growers as well as for the risks faced by livestock producers.  Most give as their reason for not pursuing captive insurance their belief that implementing and operating a captive insurance company is too costly, too complicated and draws their attention away from their primary focus – growing and selling crops or livestock or operating their related businesses. Continue Reading