Tuesday, January 27, 2015

This Map Shows Which States Are Utterly Obsessed With Mountain Dew

America's heartland is keeping Mountain Dew alive, even if the coasts ignore it.

Mainly on the strength of a die-hard fan base in the Midwest and South, Mountain Dew is the third-most-popular "liquid refreshment brand" in the country, behind only Coke and Pepsi, according to Beverage Digest, an industry trade publication.

Soda sales around the country are plunging, in part because Americans want healthier, natural food. But Mountain Dew's share of the $125 billion non-alcoholic U.S. beverage market actually grew last year, Beverage Digest found. This happened despite the soda's high caffeine and sugar content and a green color not often found in nature.

Just 20 percent of Mountain Dew drinkers are responsible for nearly 70 percent of its volume, according to Mountain Dew parent company Pepsi. And they tend to skew young and male and live away from the coasts.

Read more about how Mountain Dew will survive the death of soda here.

Rick Perry Says The Unemployment Rate Is 'Doctored'

After a two-year hiatus from politics, unemployment trutherism made its return to the Republican campaign trail on Monday, making a brief appearance alongside Rick Perry at an Iowa breakfast.

According to Bloomberg Politics reporter Dave Weigel, the former Texas governor told a gathering of the Republican Jewish Coalition that they couldn't trust the official unemployment rate coming out of Washington.

"It's been massaged, it's been doctored," Perry said, as quoted in a tweet by Weigel. (Weigel told HuffPost he was in attendance for the speech.)

Perry says official unemployment rate is unreliable: “It’s been massaged, it’s been doctored.”
— daveweigel (@daveweigel) January 26, 2015

Back in 2012, such conspiracy theories became known as unemployment or BLS trutherism, in reference to the Bureau of Labor Statistics, the division of the Labor Department that's responsible for producing the unemployment rate. After some surprisingly upbeat jobs reports that bolstered the campaign of President Barack Obama, skeptical conservatives either implied or said outright that the numbers couldn't be trusted.

Perhaps most infamously, former General Electric CEO Jack Welch accused the Obama team of cooking the books to make the recovery look stronger than it was:

"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers," tweeted Welch.

Then-Rep. Allen West (R-Fla.) concurred with Welch, asserting that "Chicago style politics" were at work.

"Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the Presidential election," West said.

As Ezra Klein explained at the time, the BLS is devised in such a way that the White House cannot meddle in its math, be it a Democratic or Republican administration. Betsey Stevenson, a former chief economist at the Labor Department, said that "anyone who thinks that political folks can manipulate the unemployment data are completely ignorant of how the BLS works and how the data are compiled."

Despite the fact that the unemployment rate has dropped all the way down to 5.6 percent, a presidential candidate could find plenty to criticize in the current economic recovery without resorting to conspiracy theories. The unemployment rate is higher, for instance, according to alternate BLS measures that include discouraged and involuntary part-time workers. Mitt Romney, who's flirting with another presidential run, has been speaking about how the economic gains have been going primarily to the wealthy -- a claim that has plenty of legitimate data beneath it.

European Central Bank Launches 1 Trillion Euro Stimulus

* ECB launches bond-buying program with new money

* Amounts to 60 bln euros a month together with existing schemes

* Program to run until end-September 2016

* National central banks to shoulder bulk of risk

* Euro tumbles in response

* Road to QE graphic: http://link.reuters.com/jum83w (Adds link to factbox, details Greek debt status)

FRANKFURT, Jan 22 (Reuters) - The European Central Bank took the ultimate policy leap on Thursday, launching a government bond-buying program which will pump hundreds of billions in new money into a sagging euro zone economy.

The ECB said it would purchase sovereign debt from this March until the end of September 2016, despite opposition from Germany's Bundesbank and concerns in Berlin that it could allow spendthrift countries to slacken economic reforms.

Together with existing schemes to buy private debt and funnel hundreds of billions of euros in cheap loans to banks, the new quantitative easing program will release 60 billion euros ($68 billion) a month into the economy, ECB President Mario Draghi said.

By September next year, more than 1 trillion euros will have been created under quantitative easing, the ECB's last remaining major policy option for reviving economic growth and warding off deflation. The flood of money impressed markets: the euro fell more than two U.S. cents to $1.14108 on the announcement, and European shares hit seven-year highs.

"All eyes were on Mario Draghi and he has delivered a bigger bazooka than investors were expecting," said Mauro Vittorangeli, a fixed income specialist at Allianz Global Investors, adding that the news marked "an historic crossroads for European markets."

The ECB and the central banks of euro zone countries will buy up bonds in proportion to its "capital key," meaning more debt will be scooped up from the biggest economies such as Germany than from small member states such as Ireland.

The prospect of dramatic ECB action had already prompted the Swiss central bank to abandon its cap on the franc against the euro. Denmark cut its main policy interest rate on Thursday for the second time this week after the ECB announcement, aiming to defend the Danish crown's peg to the euro.

Draghi has had to balance the need for action to lift the euro zone economy out of its torpor against German concerns about risk-sharing and that it might be left to foot the bill.

WILL IT WORK?

Economists noted that Draghi had said only 20 percent of purchases would be the responsibility of the ECB. This means the bulk of any potential losses, should a euro zone government default on its debt, would fall on national central banks.

Critics say this casts doubt over the unity of the euro zone and its principle of solidarity, and countries with already high debts could find themselves in yet deeper water.

"It is counterproductive to shift the risks of monetary policy to the national central banks," said former ECB policymaker Athanasios Orphanides. "It does not promote a single monetary policy. This path towards Balkanisation of monetary policy would signal that the ECB is preparing for a break-up of the euro."

A German lawyer who has been prominent in attempts to halt euro zone bailouts said he was already preparing a legal complaint against the bond-buying program.

Draghi said the ECB's Governing Council had been unanimous in agreeing that the step to print money was legally sound. There was a large majority on the need to trigger it now, "so large that we didn't need to take a vote."

"There was a consensus on risk-sharing set at 20 percent and 80 percent on a no-risk-sharing basis," he added.

One euro zone central banking source said five policymakers opposed the expanded asset-purchase plan: the central bank chiefs of Germany, the Netherlands, Austria and Estonia, along with Executive Board member Sabine Lautenschlaeger, a German.

Guntram Wolff, head of the Bruegel think tank, said the plan's size was impressive. "But the ECB has given the signal ... that its monetary policy is not a single one. That's a bad signal to markets and a bad signal to everybody in the euro zone."

The ECB is trying to push euro zone annual inflation back up to its target of just below two percent; consumer prices fell last month, raising fears of a Japanese-style deflationary spiral. But there are doubts, and not only in Germany, over whether printing fresh money will work.

Most euro zone government bond yields are at ultra-low levels and the euro had already dropped sharply against the dollar. Lower borrowing costs and a weaker currency could both help to boost economic growth but there is a question about how much further either can fall.

The ECB could create the basis for growth, Draghi said, but he put the onus on governments to follow. "For growth to pick up ... you need structural reforms," he said. "It's now up to the governments to implement these structural reforms. The more they do, the more effective will be our monetary policy."

Draghi was echoing the view of German Chancellor Angela Merkel, who said: "Regardless of what the ECB does, it should not obscure the fact that the real growth impulses must come from conditions set by the politicians."

The ECB has already cut interest rates to record lows and left its refinancing rate, which determines the cost of euro zone credit, at 0.05 percent.

Greece and Cyprus, which remain under EU/IMF bailout programs, will be eligible for the ECB program but subject to stricter conditions.

In practice, Greek debt does not currently qualify as another rule stipulates that a maximum 33 percent of the bonds issued by any country may be bought. The ECB and other euro zone central banks already own more than this, although they may start purchases once enough of their Greek bonds have matured to take the total below the 33 percent threshold.

Greece votes on Sunday in an election where anti-bailout opposition party Syriza is on track to emerge as the biggest party in parliament.

($1 = 0.8752 euros) (Writing by Mike Peacock and Paul Carrel. Additional reporting by Noah Barkin in Davos. Editing by Jeremy Gaunt and David Stamp)

Your Chipotle Could Be Getting Carnitas Back Soon

Carnitas lovers rejoice! (Sort of.)

Finding carnitas during the ongoing Chipotle pork shortage may not be as hard as you originally thought. The Mexican chain is rotating the menu item through all of its restaurants, according to Chris Arnold, a Chipotle spokesman. Though one-third of its restaurants won't be selling carnitas until the shortage ends, that one-third will change periodically, so no restaurants are out of the protein for "extended periods," Arnold wrote in an email.

Chipotle suspended sales of carnitas last week after discovering that one of its pork suppliers wasn’t meeting its standards for responsibly raised meat. The news that the hottest fast food chain in the country was out of one of its few menu items made headlines, with carnitas fans taking to Facebook and Twitter to ask when the protein would be coming back.

When chipotle is out of carnitas pic.twitter.com/gVYZcIAP6N
— abby bova (@abby_bova) January 10, 2015

A carnitas fan mourns the loss.

The announcement also reminded Chipotle fans why they’re drawn to the chain in the first place. The burrito chain’s popularity has skyrocketed in recent years, in part because it sells itself as a fast food restaurant with a conscience -- hawking humanely raised meat and sustainably grown beans. At the same time, traditional fast food chains like McDonald’s are struggling to draw diners into their stores.

Despite Chipotle’s success, the carnitas shortage, which is now in its second week, highlights the challenges of running a large chain committed to serving humanely raised meat when there isn’t a lot of it out there.

Carnitas only make up about 6 percent of the entrees chipotle sells, Arnold said. The spokesman had some advice for those die-hard carnitas fans who want to make sure their local Chipotle is carrying the pork:

“The best way to know for sure would be to go.”

Sheryl Sandberg On Facebook's Latest Effort To Get 4 Billion People Online

Think there are already a ton of people on Facebook? Think again.

Facebook's Chief Operating Officer Sheryl Sandberg sat down with Arianna on HuffPost Live at Davos Friday to discuss the social network's initiative, internet.org, which seeks to bring online resources, like Facebook and Wikipedia, to areas of the world that aren't connected to the Internet yet.

According to recent research by McKinsey & Co., 4.4 billion people don't have Internet access.

"It's really exciting because we believe that when people see the power of data, they will improve their lives," Sandberg said. "And we see that all over the world."

Sandberg stressed the importance of bringing these resources to women, who are well poised to pass technology on to the next generation.

"We know the benefits of getting women connected are at least as good as the benefits of getting men connected, and possibly, and probably, more," she said.

Below, live updates from the 2015 Davos Annual Meeting:

live blog

Oldest Newest Share + Today 12:42 PM ESTHow Data Can Make Our Cities Safer And Smarter

Dan Koh, chief of staff for the city of Boston and Arianna's former chief of staff, writes:

Michael Lewis' book Moneyball: The Art of Winning an Unfair Game, documents how the Oakland Athletics, a baseball team with a near league low million payroll, won over 100 games by focusing on the most valuable, not the most expensive, skills. Perhaps just as importantly, general manager Billy Beane had people on his team that bought into his philosophy.
On 6 January 2014, Mayor Martin J. Walsh took over as the first new mayor in the city of Boston in 20 years. He set out to change how government was operated -- and measured. Although the concept of Moneyball originates in baseball, its philosophy directly applies to governing.

What Obama Didn't Say About Rising Wages

By Jason Lange

WASHINGTON, Jan 20 (Reuters) - When President Barack Obama called attention on Tuesday to rising U.S. wages, he noted employers had not planned so many raises in years. But what he left out is that government data suggests actual wage increase are stuck in low gear.

"Today, thanks to a growing economy, the recovery is touching more and more lives," Obama said in his annual State of the Union address.

The president was not entirely triumphant in his speech, calling on Washington to help lift more Americans out of poverty by raising the minimum wage. He also said reforms to the country's education system were needed to help more people get high-paying jobs.

But in making a case that America had broken out of the economic doldrums, he said: "Wages are finally starting to rise again."

While it is true that earnings are rising, the problem with that statement is that multiple government surveys suggest income growth remains much slower than before the 2007-09 recession.

Average hourly earnings in the private sector rose just 1.7 percent in the year through December, according to the U.S. Labor Department.

On the eve of the recession, which began in December 2007, earnings were growing more than 3 percent every 12 months. Since 2010, they have averaged about 2 percent growth.

Obama also noted that a bigger share of small-business owners planned to raise wages than at any time since 2007.

That was an apparent reference to data from the National Federation of Independent Business from December, which genuinely lifted hopes workers were poised to get a pop in their paychecks.

But even relatively upbeat data on actual earnings suggests workers are not getting much in the way of raises.

A separate Labor Department survey on employment compensation showed wages growing 2.1 percent in the third quarter compared with a year earlier. That was the fastest pace since 2009, but still well below growth rates in 2007, when they were consistently above 3 percent. (Reporting by Jason Lange; Editing by Peter Cooney)

10 Most Hated Companies In America

This story was originally published by 24/7 Wall St.

To be truly hated, a company must alienate a large number of people. It may irritate consumers with bad customer service, upset employees by paying low wages, and disappoint Wall Street with underwhelming returns. For a small number of companies, such failures are intertwined. These companies managed to antagonize more than just one group and have become widely disliked.

The most hated companies have millions of customers. With such a large customer base, it is critical to keep employees happy in order to promote high-quality customer service. Poor job satisfaction among employees can lead to unsatisfied customers. McDonald’s and Walmart have risked alienating workers, and therefore also customers, by not adequately addressing protests against their employees’ low wages. While pay may be low enough to put some workers below the poverty line, executives at these companies often make millions. The total compensation of McDonald’s CEO Donald Thompson, for example, was nearly $9.5 million in 2013 and nearly $13.8 million in 2012.

Layoffs, or even the prospect of layoffs, can also contribute to low employee morale. Sprint announced it would cut 2,000 jobs late last year. Workers at Comcast can reasonably expect layoffs should its planned merger with Time Warner Cable receives government approval.

Many of the most hated companies angered the public because of quality issues with their products.. Comcast has long been one of the worst companies in America in terms of customer service and satisfaction. Another example is the General Motors recall scandal. GM announced a recall in early 2014 due to faulty ignition switches in a number of its cars, now believed to have cost 42 people their lives. The company’s problems were compounded by the realization that it had known about the defect for over a decade.

Nothing harms the long-term reputation of a company in the eyes of investors more than a steep drop in its share price. In the past 12 months, shares of Sprint have fallen by more than 50%, as hopes for a tie-up with rival T-Mobile were dashed while the company had little success in retaining customers.

It is worth noting that some of the companies on the list may have performed very poorly by some measures but relatively well by others. A few of the most hated companies have had good stock performances. Others have relatively satisfied customers. All of these factors were taken into account in compiling the final list.

Click here to see America’s most hated companies

Several companies from last year list have improved their public perceptions enough to be removed from this year’s list. For example, J.C. Penney is in the midst of a modest turnaround. Abercrombie & Fitch’s controversial long-time CEO Michael Jeffries resigned last December. However, the retailer still has problems attracting teenage customers.

To identify the most hated companies in America, 24/7 Wall St. reviewed a variety of metrics on customer service, employee satisfaction, and share price performance. We considered consumer surveys from a number of sources, including the American Customer Satisfaction Index (ACSI) and Zogby Analytics. We also included employee satisfaction based on worker opinion scores recorded by Glassdoor.com. Finally, we reviewed management decisions and company policies that hurt a company’s public perception.

These are America’s most hated companies.

Fewer People Are Having Trouble Paying Medical Bills, Thanks To Obamacare

The number of Americans struggling to pay medical bills fell last year for the first time in nearly a decade -- the latest sign that Obamacare is making health care more affordable.

Sixty-four million people, or approximately 35 percent of the U.S. population, said they had trouble paying bills or were stuck paying off medical debt in the past year, according to a new survey by the Commonwealth Fund released on Thursday. That was down from 75 million people, or 41 percent of the population, in 2012. This marks the first time that figure has fallen since 2005, when Commonwealth started keeping track.

Commonwealth attributed the drop partly to expanded access to affordable health insurance made possible by Obamacare. The survey found that the number of uninsured Americans dropped to 29 million people last year, or 16 percent of the population, from 37 million, or 20 percent, in 2010.

The Commonwealth survey, which polled 6,027 U.S. adults in the second half of 2014, is in line with several other studies finding that the uninsured rate is falling.

“These declines are remarkable and unprecedented in the survey’s more than decade-long history,” Sara Collins, the lead author, said in a press release. “They indicate that the Affordable Care Act is beginning to help people afford the health care they need."

As the chart from Commonwealth shows, the percentage of Americans reporting problems paying off medical bills or medical-related debt rose from 2005 to 2012. Rising health-care costs, stagnant income growth and the aggressiveness with which providers go after people who haven't paid their bills all contributed to this growth, according to Commonwealth Fund president David Blumenthal.

The Affordable Care Act has reversed what had been a "deterioration" of the American health-care system, according to Blumenthal.

The survey also found that, for the first time since 2003, there has been a decline in the number of people putting off health care because of the cost. In 2012, a record 80 million people said they didn't visit a doctor or clinic for a medical problem, didn't fill a prescription, skipped a follow-up, treatment or test, or did not get needed specialist care, in order to avoid paying for it. That number fell to 66 million in 2014.

Medical-bill debt, which is often expensive and unexpected, can significantly harm people's credit ratings, as a recent study from the Consumer Financial Protection Bureau pointed out. Nearly 20 percent of credit reports are hurt by overdue medical bills.

Consumer Prices Just Fell The Most In 6 Years. Start Worrying

Good news, consumers: Everything's on sale! The bad news: Low, low prices aren't always such a great thing.

The U.S. consumer price index tumbled 0.4 percent in December from the month before, the Bureau of Labor Statistics reported on Friday, led by a 9.4-percent crash in the cost of gasoline. It was the biggest one-month drop for consumer prices since December 2008, when the world was still gripped by the financial crisis.

Please note the context there: Sometimes prices fall not because of angel kisses and unicorn dreams, but because everything is going to hell.

Is everything going to hell right now? Maybe not. Probably not? But some scary things are happening. The price of crude oil has been cut in half in a matter of months. The Swiss National Bank on Thursday gave up trying to keep panicky investors from buying the safe-haven Swiss franc, causing turmoil and bloodshed in currency markets. Interest rates around the world keep plunging to record lows, in a year everybody expects interest rates to rise because of booming economic growth and demand for loans.

Meanwhile, U.S. consumer prices are up just 0.8 percent in the past year, the weakest 12-month stretch since 2009. The euro zone is in outright "deflation," which is the opposite of inflation -- prices fall instead of rise. Japan, the World Deflation Champion for two decades, is tottering on the edge of it again.

Everybody loves falling prices, but sometimes we love them too much. If prices fall and fall and keep falling, then we'll put off buying stuff because we expect that stuff to be cheaper tomorrow and even cheaper the day after that. When everybody's sitting around not buying stuff, you can have what is known as a depression. Depressions are not good.

To fight off the risk of a depression, central banks around the world have cut interest rates to zero and, in some cases, less than zero, to try to get people to pull money out of banks and spend it on clothes or Google Glass or meth or something, anything.

It's working OK for the U.S., at least. The Federal Reserve got out in front of the deflation thing early and has managed to keep the U.S. economy humping along. Job growth is steady and improving, and wages might some day start rising, which could encourage people to spend more. The Fed expects this recent bout of falling prices to be temporary.

The Fed is so darn confident that all of this stuff will pass, in fact, that it's planning to start raising interest rates, pulling support away from the U.S. economy, just at the moment the rest of the world is having a bit of a moment. Should be interesting.

Target To Close All 133 Stores In Canada

Target is pulling out of Canada, the retail giant announced Thursday.

The chain plans to close all 133 of its stores in the country, and has received initial Canadian court approval to go through with the liquidation process. The decision comes after a review by company executives found that Target Canada wouldn’t become profitable until at least 2021, according to a statement by Brian Cornell, the company’s CEO.

“We have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” Cornell said in the statement, noting that it was “a very difficult decision.” About 17,600 people work at Target Canada.

Target expanded into Canada in 2013 and has been plagued by problems ever since. Canadian shoppers were greeted with empty shelves during Target's first few weeks of operation in the Great White North as the chain couldn’t keep up with demand. Shoppers also complained that prices at the big-box store were too high.

Despite efforts to slash prices -- Target Canada eventually became cheaper than Walmart, according to one study -- and fewer inventory problems, Target’s botched first few weeks in the country left a bad impression and it’s been difficult to turn sales around. After a little more than a year in the country, Target had lost more than $1.5 billion in Canada.

Executives were hoping the holiday season, a crucial time for retailers, would give Target Canada a boost, but Cornell said performance wasn’t good enough to convince executives it made sense to stay in the country.

"Simply put, we were losing money every day," the CEO said in a Q&A on Target's website.

The Canada exit comes as Target is struggling in the United States as well. Once a favorite of middle-class shoppers looking for hip items on the cheap, Target is still working to regain trust after a massive credit card hack at the end of 2013 that compromised personal information of up to 70 million customers.

The chain is also suffering from some of the same ills plaguing other big-box stores. With shopping sites like Amazon and drugstore and pharmacy chains offering many of the same products in a more convenient setting, Target and others are struggling to lure shoppers out to the suburbs and into their stores.

Under the direction of Cornell, who became the company's CEO in July 2014, Target has tried to fight back, offering free shipping during the holiday season and launching a line of smaller stores in urban areas. Target is also getting back to its roots, focusing more on efforts like designer collaborations, which have led some to nickname the chain "Tar-zhay."

This story has been updated to include further detail.

How To Pack For Davos, Like A Boss

A conundrum: You're going to a conference in the Swiss Alps, bigshot CEOs will be there, so will A-List celebrities. It will be snowy and cold. You want to look fantastic. You don't want to wipe out on the ice.

So what do you bring?

Welcome to the annual puzzle of packing for the World Economic Forum, a power-player conference that draws thousands of the world’s business, media and political elites. Past attendees include Google CEO Eric Schmidt, JPMorgan Chase chairman and CEO Jamie Dimon, Japanese Prime Minister Shinzo Abe and actor Matt Damon.

They'll need to pack a clever mix of ski vacation garb and chic business attire.

“They’ve tried to keep it casual, but most people go for business meetings and in business meetings you don’t want to feel like an underdressed shmo,” Henry Blodget, the editor-in-chief of Business Insider, told The Huffington Post in an email. “Also, there’s a chance you’ll meet Charlize Theron or Angelina Jolie, etc., and even billionaires don’t want to blow that one.”

Here are some a few tips for getting by at this year’s conference, which runs from January 21 to 24:

Dress warm

It’s cold in Davos. Being 5,052 feet above sea level in the middle of January can be frigid. Temperatures are forecasted to drop next week to about 30 degrees Fahrenheit, and it may get even colder. Pack a winter coat, hat, gloves, scarves, warm boots, and thermal underwear.

Bring a day bag

Participants at the conference end up swapping slush- and salt-encrusted boots for slick dress shoes. Parkas come off and jackets come on. Sure, you can probably fit a pair of dress shoes heels in your purse. But will that be enough?

“Unless you’re Mick Jagger or Bono or a twenty-something tech god, you’ll want a suit,” Blodget said. “You’ll also want a hat, gloves, and a jacket -- it’s cold. And boots! You’re tromping around in ice and slush and salt, so you don’t want to be slipping around and ruining your dress shoes. If you’re the confident sort, you can stick with the boots 24/7, but most people carry dress shoes around and swap whenever they go inside.”

That means a knapsack-sized day bag, equipped with all your changes of clothing, could be a good addition. It may behoove men to learn how to properly fold a suit.

Get an outlet converter

In Europe, electric outlets are different. In place of the two vertical slits on American plugs are two circles. That means you will need an adapter to make sure your laptop and phone stay charged. Fortunately, they sell for as little as $2 on Amazon. In the past, the conference has provided power strips that fit with American plugs, but why risk relying on that?

Wear boots or shoes you can walk in

As Forbes’ Clare O’Connor found, it’s really difficult to book a place to stay in Davos proper. You’ll probably get stuck outside the main town.

You’re not getting a hotel room in Davos proper your first time around. They’re booked up months, if not years, in advance. No-one told the newbie this. When I started my online search back in November, I had two choices. First: a studio apartment swathed in fur throws, dotted with expensive candles and owned by a woman called Mitzi who thought Forbes might cough up $1,000 a night (ha!). The other option: a basement hostel so grim I’d rather have tried my luck sleeping on the chairlift. So I’m staying 15 minutes down the road in the resort town of Klosters. Yes, admittedly a first world problem of the highest order, but the mark of a clueless newbie if there ever was one.

Now, go hit Davos like a boss:

Chipotle Pork Shortage Is Proof Of A Larger Problem Facing The Food Industry

Americans increasingly want grocers and restaurants to carry meat they can feel good about eating. But that meat is scarce, as Chipotle's pork problem revealed this week.

Chipotle, which has won over diners partly for its commitment to sustainability and animal welfare, recently discovered that one of its pork suppliers wasn’t meeting its “Responsibly Raised” standards. Chris Arnold, a Chipotle spokesman, explained in an emailed statement that the chain refuses to sell pork that comes from conventional farms because such pigs “generally do not have access to the outdoors, [and] spend their lives in densely crowded buildings,” among other issues.

But there is so little quality pork on the market that, for now, Chipotle has stopped offering the meat in hundreds of its locations.

“We would rather not serve pork at all, than serve pork from animals that are raised in this way,” Arnold said. "Replacing the supply we have lost in these ways will take some time, but it is important to us to maintain our high standards for pork and we will continue to see some shortage while we work to increase the available supply. "

Chipotle’s predicament illustrates the challenge in running a big chain committed to humanely raised meat. Less than 5 percent of meat in the U.S. is raised according to humane standards even using the broadest definitions, according to Andrew Gunther, the program director of American Welfare Approved, which certifies farms as humane.

Chipotle occasionally runs into this issue with beef as well, substituting meat from conventional farms when there isn’t enough available from suppliers that meet its standards. But in the case of the pork, the chain won't budge on its requirements. In an email, Arnold said that the differences in animal welfare are greatest with pork.

Other big chains taking a stab at selling humanely raised meat are also struggling for supply. Carl’s Jr. launched its “All Natural Burger” in December, and the chain is sourcing its grass-fed, antibiotic- and steroid-free beef from Australia because there isn’t enough supply in the U.S., the company’s CEO told USAToday last month.

And the market for this meat is only getting more crowded. Smaller chains with a similar feel-good ethos -- Shake Shack, Sweet Green and Native Foods -- are growing increasingly popular as diners demand fresh, natural and ethically raised food.

The problem is that the mass meat market, particularly the segment that caters to fast-food restaurants, is driven largely by price, said Aaron Allen, the founder of Aaron Allen and Associates, a restaurant consulting firm. "That's really the way that the industry has been oriented for the last three to four decades: How do we get it cheaper? Quicker?" Allen said. In that kind of environment, there's little reward for suppliers to spend the time and money ramping up their quality standards.

In the case of pigs specifically, converting farms to raise animals more humanely is expensive and may not be financially feasible for many farmers, said Adele Douglass, the executive director of Humane Farm Animal Care, another program that certifies farms as humane. The most controversial pig farming practice is keeping pigs in "gestation crates," which leave them with barely enough room to do anything other than lie down.

Increasing standards would mean putting the pigs into group housing or larger group pens that give them more room to move, Douglass said. Chipotle's pork suppliers also have to give their pigs outdoor access or house them in deeply bedded pens, and keep them free of antibiotics

In Douglass’ ideal world, the government would step in and offer farmers loans or grants to convert their farms. But short of government intervention, companies can help speed up these changes. The bigger the restaurant chain, the more influence it has over suppliers and the whole system. Gunther noted that restaurants can make long-term commitments to suppliers that agree to overhaul farms and raise animals more humanely.

“These companies can build these supply chains if they think it’s a good idea,” Gunther said. “It can be done, it just requires commitment.”

The risk in this approach is that restaurants might not want to get locked into a specific supplier and a specific price for a long period of time, making them less flexible.

Still, there’s hope. McDonald’s announced in 2012 that it would stop using pork that came from farms using gestation crates by 2022. The announcement came after controversy over the crates became too loud to ignore -- several states had already banned or restricted their use.

At the time, McDonald’s said it would work to help U.S. suppliers comply with the directive, but it was impossible to make the switch immediately.

“There are not enough sows housed in non-gestation crates right now,” Bob Langert, McDonald's vice president of corporate social responsibility and sustainability, told Reuters.

Finance: Stock market quotes, news, currency conversions & more

Tuesday, January 27, 2015

This Map Shows Which States Are Utterly Obsessed With Mountain Dew

Monday, January 26, 2015

Rick Perry Says The Unemployment Rate Is 'Doctored'

Sunday, January 25, 2015

European Central Bank Launches 1 Trillion Euro Stimulus

Saturday, January 24, 2015

Your Chipotle Could Be Getting Carnitas Back Soon

Friday, January 23, 2015

Sheryl Sandberg On Facebook's Latest Effort To Get 4 Billion People Online

live blog

Wednesday, January 21, 2015

What Obama Didn't Say About Rising Wages

10 Most Hated Companies In America

Monday, January 19, 2015

Fewer People Are Having Trouble Paying Medical Bills, Thanks To Obamacare

Sunday, January 18, 2015

Consumer Prices Just Fell The Most In 6 Years. Start Worrying

Saturday, January 17, 2015

Target To Close All 133 Stores In Canada

Friday, January 16, 2015

How To Pack For Davos, Like A Boss

Thursday, January 15, 2015

Chipotle Pork Shortage Is Proof Of A Larger Problem Facing The Food Industry