The Rise of the Smoothie

  The global market for smoothies is projected to hit $9 billion this year. Driven by a new health-consciousness among consumers, today’s on-the-go convenience of gulping down your vitamins and minerals is appealing to more and more of us. Expect that trend to continue. From a niche market in America in the Nineties, the industry here at home has grown to over a $4 billion market today, which makes the United States the dominat domicile of all-things Smoothie. The sector is forecasted to grow 10%/year for the next five years, according to Research and Markets Group, an analytical business group. Food chains, service restaurants, beverage companies and consumers, not to mention the dozens of smoothie franchises, have made the fruit and/or vegetable drink as ubiquitous in America as McDonalds or Starbucks. For many consumers worried about obesity, eating right and living longer, the convenience of gulping down your daily FDA minimum requirements of fruits and vegetables can be a strong selling point. It sure beats the pants off swigging down gallons of unhealthy soda. Most of us consider smoothies a healthy but a sweet snack consisting of fruit and possibly yogurt or other ingredients like peanut butter or soy milk. The most convenient (and cheapest) way to make the drink is by using frozen fruit. Frozen fruit sales in the U.S. now top $1 billion/year, which is up 67% from five years ago, according to Nielsen. Sixty percent of that fruit went into making smoothies, which is up from just 21% back in 2006. The making of smoothies goes back to the 1930’s, 40’s and 50’s with the invention...

What’s happening to the movies?

Have you noticed that American movies seem to be long on bullets and increasingly short on words? That despite flop after flop at the box office, the same movies are coming out with sequels? Get used to it because, increasingly, American viewers are a distinct minority when it comes to the box office. After agriculture, the second largest U.S. export is entertainment. Films account for well over $31 billion of those exports and the numbers are increasing exponentially. The international box office accounted for a small portion of overall revenues a decade or so ago, but times have changed. Now it’s a 60/40 split in favor of foreigners. China, with a population of over 1.3 billion is the largest market for filmmakers in the world. For a long time, foreign countries only allowed a certain number of American films to come into the country. The idea was that the embargo would allow local filmmakers a chance to show their stuff among the local audiences. In some locales that is still the case, but less so in the really big markets. Conventional wisdom in Hollywood has it that there is an insatiable international appetite for American-made genre movies, which are heavy on action, explosions, guns, special-effects and the like. They are correct. Foreigners love action movies, children’s movies, sequels, Academy Award winners and big production budget films in that order, according to recent industry studies. And stars are not as big a factor as they once were. To be sure, some late greats such as Stallone and Schwarzenegger can still command an audience but its more about the story line...

The election investors ignored

Last weekend Japan held “snap” elections, which gave Prime Minister Shinzo Abe the mandate to continue his pro-growth economic policies. No one outside Japan seemed to care. The Nikkei stock market index fell 1.6% and traders moved on. That may prove to be a big mistake. Granted, given the precipitous decline in the price of oil and the calamity it is causing in Russia (well-covered in last week’s columns), investors may be forgiven for focusing on other more immediate concerns. Still, I believe that now that Abe has a clear mandate to continue his pro-reform, economic policies, Japan’s prospects for next year have been elevated considerably. And don’t forget that Japan is by far the greatest beneficiary of those falling oil prices. Japan is technically in recession at the moment. GDP over the last two quarters was dismal. And the third quarter1.9% decline shocked observers, who were actually expecting a rise. Economists pointed to a national sales tax hike that hurt economic growth. Back in April, the sales tax was increased from 5% to 8%, which hurt consumer spending. After the election, Abe announced that another hike in the sales tax (to 10%) would be delayed, if not suspended. Readers may recall the “three arrows” of Abe’s plan. They are: radical monetary easing (well over a $1 trillion so far in asset purchases), extra public spending ($17 billion plus) and a much-needed program of structural reforms. The last arrow is probably the most difficult and yet to be accomplished. Abe will need all the support of a renewed voter mandate to accomplish these changes. It is the main reason...

Is there a doctor in the house?

A doctor shortage in America has been predicted ever since the first Baby Boomers started to retire.  Now, that shortage is coming into question as technology and non-doctor, medical professionals are stepping forward to fill the gap. The Association of American Medical Colleges predicts the nation will need 90,000 doctors by 2020 and 130,000 physicians by 2025. It is understandable how that organization arrived at that number. Just compute the proportion of Americans who will reach the age of 65 between now and 2030. Add to it the number of Americans newly-insured, thanks to the Affordable Care Act, and you come pretty close to those numbers. However, those figures simply represent the demand side of the equation assuming everything else remains the same.  To be sure, there will still be a shortage of general practitioners, those front line physicians who are our first stop in accessing medical treatment and services.  But a whole host of breakthroughs in medical knowledge, technology and treatment protocols are reducing not only the hours required to treat an aging population, but also the location of such treatment. As a result, fewer patients visit hospitals today and when they do, their stay is reduced by a variety of outpatient choices.  This pares down on the number of doctor visits each patient requires. In addition, many surgical procedures, thanks to advances in knowledge and technology, can be accomplished today through minimally invasive procedures that require less recovery time and therefore less doctor time. Take my upcoming knee replacement, as an example. I have only seen my orthopedic surgeon once and will probably not see him again...

OPEC’s oil ploy

OPEC’s oil ploy Over the last four months Americans have received an early Christmas present. The price of oil has dropped precipitously, benefiting both corporations as well as the consumer. But that could be a two-edged sword for this nation. Brent crude, the global oil benchmark in the futures market, has declined 23% since its June price of $115/bbl. Today it is trading below $83/bbl. providing an enormous windfall in cost savings for all of us. The retail price of gasoline has dropped 15% during the same time period to a national average of $3.17/gallon. Every one-cent decline in gas prices equals about a $1 billion drop in energy spending, according to economists. So we have all just received what amounts to a tax cut that has gone directly into our pockets. That’s the good news. The bad news is that many of the same economists believe the reason prices have fallen so quickly is the deteriorating state of the global economy. Slower growth equals less demand for oil, all things being equal. As such we find ourselves with an oversupply of oil. Now usually, OPEC, which controls the lion’s share of oil production worldwide, would begin to throttle down the amount of oil produced per day. There would be meetings and all the disparate members of this energy cartel would decide what cut backs are necessary in order to prop up energy prices. This time around no such agreement is contemplated. Instead, Saudi Arabia, the energy colossus, has been quietly telling the oil market that they would be quite comfortable with even lower prices for an extended period...

The United States of Scotland?

Will the ghost of William Wallace finally see the British thrown out of his country once and for all? If the latest polls on the outcome of the September 18th referendum on Scottish Independence are any indication, Scots are in a dead heat over the political and economic future of their country. Last weekend for the first time, polls showed that the majority of voters in Scotland were leaning towards independence. Since then new polls show the public vacillating between yes and no on a daily basis. The news has shocked the world and galvanized the three major British political parties to implement a no-holds-barred program of damage control. The U.K. Prime Minister David Cameron, Liberal Democrat leader Nick Clegg and opposition Labour Party chief Ed Millbank dropped whatever they were doing and headed for the Highlands on Wednesday. The British leaders are pulling out all the stops in trying to convince Scottish voters to stay with the Union. Even Harry Potter has been enlisted or at least his author, JK Rowling, is backing the Union, which has been in effect for 307 years. On the financial front, the polls caught “The City” (England’s Wall Street) by surprise. For months, European financial institutions had been discounting the referendum as a non-event, just another opportunity for those dour Northern people, who talk funny, to blow off a little electoral steam. No one seriously considered that Scotland would actually embrace independence. For most of the week both the British pound and the UK stock markets have been declining. And they should, because if Scotland does decide to fly the coop, there...