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Exports drive Century Pacific Food’s profit up by 12% to P1.9B

LISTED Century Pacific Food, Inc. (CNPF) generated a 12% jump in its net profit for the second quarter to P1.9 billion from P1.7 billion in 2023, led by the exports segment.

The company increased its April-to- June revenue by 10% to P19.59 billion from P17.79 billion last year, CNPF said in a regulatory filing on Wednesday.

For the first half, CNPF recorded a 14% climb in its first-half attributable net income to P3.63 billion from P3.2  billion in 2023, led by “favorable trends in commodity costs.”

January-to-June consolidated revenue rose by 13% to P37.74 billion from P33.41 billion last year due to the recovery of its original equipment manufacturer (OEM) exports.

The bulk of CNPF’s revenues came from the branded business, composed of marine, meat, and milk & other segments, catering predominantly to the domestic market. The OEM exports segment, including tuna and coconut exports, accounted for about a fifth of its business.

OEM export sales rose by 36% versus the second quarter of last year, bringing the segment’s six-month growth rate to 42% year on year. Coming from a soft 2023, the segment rebounded in the first half on the back of improving commodity costs and favorable foreign exchange market conditions.

“Following a high base, the branded segment delivered a 5% growth rate during the three-month period amid a strained consumer environment, laddering up to a 7% year-on-year increase in first-half sales versus the same period last year,” CNPF said.

Meanwhile, CNPF reiterated its outlook of aiming for a low double-digit growth for both its top line and bottom line for 2024.

On Wednesday, CNPF shares rose by 1.96% or 65 centavos to P33.75 per share. — Revin Mikhael D. Ochave

TCL’s growth reflected in big fridge

SCREENGRAB FROM TCL ELECTRONICS FACEBOOK PAGE

WHAT’S BIG, gray, and cool? TCL’s new refrigerator, that’s what.

On July 26, TCL had a live cooking demo with celebrity chef and award-winning cookbook author Myke “Tatung” Sarthou at his Quezon City restaurant, Azadore. The chef is a convert: he changed the fridge in his studio to TCL’s Free Built-in Series Refrigerator.

The fridge has a 170-liter freezer capacity, while the chiller compartments have a 351-liter capacity. It has zero-frost, and a freezer compartment that could be converted into a chiller.

Mr. Sarthou says, “Straightforward lang, I’m so impressed by the advanced cooling system, the convertible zone that I can adjust anytime I want to, and of course, the spacious interior that allows me to organize my ingredients efficiently, making meal prep a breeze for my daily content also.”

Mr. Sarthou, next to content creator Joyce Pring-Triviño, prepared chopped salad with toasted nuts, chicken steak with mushroom fried rice, and mango jubilee for dessert (they used the fridge during the demo, of course).

In an interview with BusinessWorld, the chef said that he switched his old fridge to this new one because, “Hindi siya nao-organize ng maayos (it couldn’t be organized well),” referring to his old fridge. “It turns out really messy, and ang daming sayang (it made me waste a lot of food).”

TCL Brand Manager Joseph Cernitchez told BusinessWorld in an interview that what they were proud of in the fridge was the precise temperature control. While other brands just have low, medium, or high settings, theirs are measured in centigrade, from -20 for the lowest temperature in the freezer, to -1 for the chiller.

TCL, better known for its televisions, released their fridge category only four years ago in the Philippines, and in 2022 to 2023, they grew 193%, according to Mr. Cernitchez. Currently it has a 25% to 30% market share, he said. “For 2023 and 2024, we’re trying to push it more,” he said.

TCL is a brand by the TCL Technology Group Corp., based in China and founded in 1981. Chinese brands, despite their ubiquity, don’t always enjoy stellar reputations due to perceptions of their low price and their quality (among other things). Mr. Cernitchez, speaking about the fridge (which costs about P70,000 — others in their category can cost up to the hundreds of thousands) said that almost all of their competitors have their parts manufactured in China, anyway.

“Some of our competitors, we’re the ones who manufacture their parts,” he said.

Their end-to-end model of manufacturing their own parts for their own products is one of the ways they keep their prices low. “We manufacture our products. Unlike with competitors, they ask other factories to build parts for them and they assemble everything in their warehouses.” — Joseph L. Garcia

San Miguel Food’s income rises 6% on stronger sales

LISTED San Miguel Food and Beverage, Inc. (SMFB) saw a 6% growth in its net income for the first half to P20 billion, led by higher sales across its categories.

Consolidated sales for the first six months rose by 4% to P192.9 billion, while operating income increased by 16% to P26.6 billion, SMFB said in a regulatory filing on Wednesday.

SMFB’s food business, led by San Miguel Foods, registered a 3% increase in first-half sales to P87.8 billion, led by double-digit revenue growth in prepared and packaged foods along with “resilient poultry sales.”

The food business doubled its first-half operating income to P6.4 billion, while higher volumes, improved pricing, and lower raw material costs led to a 41% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) to P10 billion.

“Key products such as Tender Juicy Hotdogs, Purefoods Luncheon Meat, Magnolia dairy, and San Mig Coffee also maintained strong sales,” it said.

SMFB’s beer segment, led by San Miguel Brewery, Inc., saw a 1% increase in first-half consolidated revenue to P75.1 billion, carried by better sales volume in the second quarter.

“The company expects stronger performance in the second half of 2024, supported by targeted sales initiatives and increased focus on specific channels,” SMFB said.

Meanwhile, SMFB’s spirits business, led by Ginebra San Miguel, Inc., had an 18% sales increase to P30 billion for the first half due to a 10% volume growth. Operating income rose by 31% to P4.4 billion.

“SMFB has had a strong start to the year, and we remain focused on leveraging our strengths to drive growth and efficiency,” SMFB Chairman Ramon S. Ang said.

“We are also committed to supporting our nation’s food security and economic growth by expanding access to essential products. We are very optimistic about the opportunities ahead and confident in our ability to deliver continued value to all our stakeholders,” he added.

SMFB stocks gained by 0.32% or 15 centavos to P46.70 apiece on Wednesday. — Revin Mikhael D. Ochave

The fear factor behind that culinary F word

DEEP FRIED ROTIS, known as coin parotta on the streets of Tamil Nadu, are on the menu at London’s Rambutan restaurant. — INSTAGRAM.COM/RAMBUTAN_LDN

By Howard Chua-Eoan

WHEN is a restaurant like a handbag? A private dining room reservation — drink pairing included — for 12 people at the coming Kyoto residency of Danish chef Rene Redzepi’s Noma costs around $16,000. You can spend that much on a single pink Birkin bag from Hermes on the secondary market. Yes, used.

Despite the disparity in per-unit cost, restaurants have something to learn from the current state of the luxury industry. LVMH Moet Hennessy Louis Vuitton SE — which has made Chief Executive Officer Bernard Arnault one of the richest people in the world — last month suffered “the biggest bling bust” in a decade, according to my colleague Andrea Felsted. She’d been seeing signs of it months before. In April, she offered the big luxury houses some advice: Democratize or be prepared lose aspirational consumers to companies that know how to sell more affordable opulence.

The restaurant scene may ripe for a plebeian upheaval, too. Word of, ahem, mouth in New York, Copenhagen, London and other foodie capitals has diners choking over almost-extortionate tabs. The industry recovered dramatically after COVID, but in the pursuit of growth, it’s passed along tons of the cost to diners. The strategy has been to cater to ever-richer customers. But there aren’t enough plutocrats out there to eat all those caviar-bloated tasting menus.

There’s a lot to be done, but perhaps cooks and investors can head toward forbidden territory. Judging from movies, books, and social media, chefs aren’t afraid of spouting the F word — unless the initial leads to the sequence U, S, I, O and N.  I can barely say it myself because of all the bad multi-culti cooking that has been served to us under the name. Some of the excess persists — say, the Yorkshire burrito, an all-in-one Sunday roast wrapped in a Yorkshire pudding roll, or the chicken katsu from the United Kingdom’s chain bakery Gregg’s — though no one dares utter the word fusion.

There, I said it.

But all cuisines are to a large extent the product of historic fusions. Creative kitchens never really have borders and good chefs always looking to be inspired by unfamiliar flavors and products. For example, Portuguese seafarers kindled culinary innovation from India to China to Japan. Tempura originates from a cooking technique (and possibly word) used by the first Western European traders to visit Japan. India, Indonesia, and the Philippines have a dessert that sounds like bebinca — though the preparation varies from country to country. The egg custard staple of Cantonese bakeries, dan tat, is a Macanese version of Lisbon’s famous pasteis de nata. These cross-cultural innovations were the results of natural culinary impulses — to create delightful food, something shared with the fad for fusion in the 20th century. The better word, I think, is diffusion — the spread of ideas, condiments, techniques from one culture to another.

It’s still going on today. I was at a pop-up in north London and I asked the young French-trained British chef what made his dishes so refreshingly different. He smiled and said, a touch of Vietnamese fish sauce. Tempura cooking technique has also become ubiquitous in all kitchens, further popularized by Nobu, the global chain co-owned by Robert De Niro.

Rambutan, a Sri Lankan restaurant in London where I’m a regular, has begun a series of collaborations called “Cousins,” bringing together chefs to meld and shape their cuisine with the styles and produce of the South Asian nation. The first guest chef in the series was Rahel Stephanie, the Indonesian cook with a cult following in the city. One of her contributions, a marvelous dip made of silken tofu and andaliman peppers — which are similar to mouth-numbing Sichuan pepper corns but with a distinctly brighter flavor. Andaliman are from Stephanie’s home region in Sumatra. It was a revelation — and piquantly delicious not just with the gundu dosas of Rambutan but with everything else on the menu. The influences are self-perpetuating. Chef-owner Cynthia Shanmugalingam noted that the fruit from which her restaurant takes its name was originally brought to Sri Lanka by traders from Java, which is part of Indonesia. She’s looking for future guest chefs who will find culinary congruences with her country’s cooking. Together, they’d collaborate to enhance each other’s traditions. No more the culinary chimeras of the unforgiving past.

That kind of creativity — melding, not grafting, influences — could make fusion respectable again; or, at the very least, make the impulses behind it more pervasive. There’s also a business application. Many cuisines from Asia, Latin America, and Africa are unjustly relegated to the cheap eats category, even when they require more prep work, kitchen technique, and culinary knowledge than goes into many middle-of-the road Western menus. This is an opportunity for them to raise their profiles and market value by collaborating with established restaurant developers looking for a way out of the beggar-your-customer race.

I tend to be unrealistic about these things, but I see hope. Wagamama, the fusion-y noodle chain now owned by Apollo Global Management, Inc.’s Restaurant Group, was once a relatively good choice for travelers stuck in airports or wandering aimlessly through global tourist hubs. The food — Japanese-inspired but with infusions of Chinese influence — has lost its culinary way since Alan Yau, its Hong Kong-born founder, sold it in 2018. The good news: Wagamama announced in June that its experimental noodle lab is partnering with a young chef to help revitalize its fare. That chef’s name: Rahel Stephanie.

I’m going to have to eat there again.

BLOOMBERG OPINION

Dennis Uy’s Chelsea optimistic after narrowing losses in 2023

DENNIS A. UY’S Chelsea Logistics and Infrastructure Holdings Corp. narrowed its 2023 net loss to P1.14 billion, improving from a P2.53 billion loss in the prior year.

“Our 2023 results reflect our unwavering commitment to delivering value to our stakeholders through strategic investments and operational excellence,” Chelsea Logistics President and Chief Executive Officer Chryss Alfonsus V. Damuy told the stock exchange on Wednesday.

According to the company’s annual report, Chelsea Logistics’ gross revenue reached P7.05 billion, up by 9.6% from P6.43 billion in 2022.

“As we continue to navigate a dynamic business environment, our focus remains on sustainable growth and innovation to meet the evolving needs of our customers,” Mr. Damuy said.

The company said its passage and freight segments continued to post an increase in revenues by 50% and 3%, respectively.

It said its cost of sales and services decreased to P5.6 billion, declining by 0.71% from P5.64 billion in 2022.

“These improvements in revenues were in part driven by the increase in average rates to cover the rising fuel prices in the early part of the year,” Chelsea Logistics said.

The company also said it benefited from the lifting of COVID-19 (coronavirus disease) restrictions, which allowed the company to carry more passengers.

“The continued financial progress we have made this year is a testament to our team’s dedication and strategic focus. We are optimistic about the future as we continue to strengthen our financial position and pursue opportunities for growth,” it said.

Further, the company will continue its re-fleeting and vessel modernization efforts, the company said, adding that it is planning to acquire new and optimally-sized tankers and roll-on/roll-off passenger (RoPax) vessels while also exploring new routes.

“The Company capitalizes on first-mover advantage by expanding into areas in the Philippines which show superior growth,” Chelsea Logistics said. — Ashley Erika O. Jose

Cravings returns

QUEZON CITY residents (and well, fans of Cravings from wherever they live) can get their cake fixes again. Cravings in Katipunan, a casualty of the pandemic, is returning, albeit in a new space in Maginhawa St.

Cravings is reopening in Maginhawa as The House of Cravings, pegged as a dessert bar and events place. While the Aug. 1 launch featured the brand’s signature lasagna and roast beef, the new House of Cravings is pulling out all the stops with a monthly Unlimited Cake and Coffee Buffet showcasing Cravings’ signature offerings. Selections will include their Chocolate Caramel, Devil’s Food Cake, Carrot Cake, Cherry Walnut Cheesecake, Mango Cashew Torte, and Strawberry Shortcake. To make the selection more exciting, seasonal favorites such as the unique Polvoron Cake and Dayap Cake will also be featured. Outside of the cake buffet, these will be offered on sale.

The selection extends to Fudge Walnut Bars, Mango Butterscotch, and Red Velvet Brownies. Freshly baked croissants and Pain Au Chocolat add a touch of classic elegance, while Gelato Manila flavors and Homemade Chocolate Sauce with Bread-and-Butter Pudding offer delightful pairings.

House of Cravings will also offer savory items such as the aforementioned Classic Lasagna, Monte Cristo Sandwich, Beef and Mushroom Pie, and Chicken Pot Pie.

A retail area will focus on artisanal goods such as root chips and organic vinegar. Since they occupy the space once held by chef Waya Araos-Wijangco’s former restaurant, Gourmet Gypsy, she’ll have some representation from her Baguio base: Strawberry Balsamic Jam, Mango Kaffir Lime Jam, Rhubarb Ginger Jam, and Sugar-Free Chia Seed Jam.

This won’t be the brand’s only opening this year: next month, Cravings is opening Cravings Signatures, a take-out counter in White Plains, Quezon City. There customers can enjoy the Chocolate Caramel Cake a la mode, topped with the founder’s secret chocolate sauce, or savor the premium Baked Lasagna with five kinds of cheeses.

Cravings has been around for 36 years, established by Annie Guerrero in 1988. The family’s other business, the school Center for Culinary Arts (CCA)-Manila, followed in 1996. The family has had a hand in changing the country’s culinary landscape, if only by their graduates and the restaurants they founded.

Bea Trinidad, of the family’s third generation (interestingly just a couple of years younger than Cravings), talked to BusinessWorld about how Cravings as an entity, separate from CCA, contributed to the culinary scene.

“A couple of things that really stood out were the pastries,” she said. “You always see these things now,” she said, but before Cravings, one couldn’t just get a chicken pot pie or blueberry cheesecake in a snap.

“I would say that Cravings is very humble. They don’t really like to brag, but somehow, a lot of the dishes they have — people copy it, and it always starts with what is comforting at home, but then it’s different.”

Ms. Trinidad, the PR and Communications director at CCA, talked about the recent trimming down they’ve had to do (such as the closure of the flagship Cravings branch in Katipunan, Quezon City, as well as CCA’s move to BGC in Taguig). “Nowadays, traffic is a killer. We’ve been very intentional on where to really open,” she said.

“After the pandemic, a lot of restaurants really struggled. I think that was a big change. When we saw that people were ordering online, and the sales were better during the pandemic, we realized you don’t actually have to rush and be pressured to open.”

They plan to open another Cravings in Bonifacio Global City (BGC), at the site of their BGC facilities in the University of the Philippines – BGC campus. That place will serve the surrounding community. “Be intentional,” she emphasized.

The family had the option to go on operating just CCA and let Cravings become a memory. We asked Ms. Trinidad why the name, and everything that came along with it, had to be saved. “A lot of people were looking for it… there’s a nostalgic sense here. Let’s just bring back that word,” she said.

“I think ‘cravings’ is a word that people can resonate with. The things that you do for cravings — some people would call at 5 p.m, ‘I’m craving cake,’ and then we’ll get it delivered.” She told a story about an old woman alighting from her car at the new House of Cravings to say, “Matagal ko nang hinahanap ito (I’ve been looking for this for a long time).”

“You just realize that people have such a strong pull from it: a strong memory towards it.”

The House of Cravings is located at 28 Maginhawa St., Quezon City. — JL Garcia

The Fed’s wild ride has just begun

PEXELS-PIXABAY

HAS the US Federal Reserve gone too far in its fight against inflation, tipping the world’s largest economy into a damaging recession?

This troubling question has shaken global markets out of a long period of calm. Expect more turbulence before an answer emerges.

Two weeks ago, I switched allegiance from hawk to dove, dropping my support for higher interest rates and arguing for immediate cuts to avert a recession. Not a moment too soon, it turns out. Since then, evidence of a weakening labor market and moderating inflation has accumulated rapidly, strongly suggesting that the Fed is behind the curve.

Most notably, the three-month average unemployment rate reached 4.13%, up 53 basis points from its lowest level of the prior 12 months. This breaches the 50-basis-point threshold that, as recognized by the Sahm rule, has always indicated a US recession and much higher joblessness to come.

Beyond that, payroll growth has slowed along with hiring and quit rates, while initial and continuing jobless claims have risen. On the inflation front, the Fed’s preferred measure — the core deflator for personal consumption expenditures — registered its third consecutive benign monthly reading in June, up just 0.2% from May. Average hourly earnings were up 3.6% in July from a year earlier, compared with 3.8% in June, consistent with the slowing trend in the second-quarter Employment Cost Index.

Many economists — including Claudia Sahm herself — argue that the Sahm rule doesn’t necessarily apply this time: Strong labor force growth, rather than firing, has driven the rise in the unemployment rate. “A statistical regularity is what I’d call it,” said Fed Chair Jerome Powell, when asked about the rule. “It’s not like an economic rule where it’s telling you something might happen.”

They might be right, but I wouldn’t base monetary policy on that assumption. The Sahm rule worked just fine in the late 1960s and 1970s, when the labor force was also growing quickly. It reflects a fundamental economic process: A deteriorating labor market tends to be self-reinforcing. Unemployed people and those worried about their job security spend less, which leads businesses to cut back further on hiring. When the Sahm threshold has been breached, unemployment has always gone much higher. The smallest trough-to-peak rise was nearly two percentage points.

What, then, should the Fed do? The longer it waits, the greater the potential for damage: Monetary policy is tight and becoming tighter as price and wage inflation moderate. It needs to get to neutral. Federal Open Market Committee members’ estimates of the neutral interest rate range between 2.4% and 3.8% (I’d put myself in the top half of that range). This means there’s a long way to go from the current effective fed funds rate of 5.3%. And if a recession materializes, the Fed will need to go into accommodative territory — to 3% or less.

An immediate rate cut is in order, but that’s very unlikely. It wouldn’t be consistent with Chair Powell’s deliberative manner, and the Fed rarely makes such moves outside of its regular policy-making meetings — only when a severe shock changes the economic outlook dramatically or threatens financial stability.

That brings us to the next policy-making meeting on Sept. 17 and 18. The Fed could cut by either 25 or 50 basis points, depending on what the economic data show between now and then. After that, the path is unclear. It could be a gradual series of 25-basis-point cuts ending below 4%, or a steeper descent into stimulus if the Sahm rule holds.

Uncertainty about the trajectory of monetary policy will probably remain high for many months. So prepare for more volatility in stock and bond markets.

BLOOMBERG OPINION

Vista Land unit issues $50-M senior guaranteed notes

VILLAR-LED Vista Land & Lifescapes, Inc. said its subsidiary VLL International, Inc. has issued $50 million in senior guaranteed notes as part of the company’s fundraising initiatives.

VLL International’s $50 million new notes issuance forms a single series with the recently completed $300 million notes issuance, Vista Land said in a regulatory filing on Wednesday.

The new notes are guaranteed by Vista Land, Brittany Corp., Camella Homes, Inc., Communities Philippines, Inc., Crown Asia Properties, Inc., and Vista Residences, Inc.

Both the $50-million and $300-million notes issuances were issued under VLL’s $2-billion medium-term note program.

VLL International recently completed the $300-million notes issuance due 2029 priced at 9.375%. It was issued on July 29.

Vista Land grew its first-quarter net income by 11% to P3 billion, while consolidated revenue increased by 11% to P10 billion.

The property developer has earmarked a P30-billion capital expenditure budget for 2024, with 98% allocated for the construction of residential units and land development. The remaining 2% is for land acquisition and the construction of investment properties.

Vista Land has business interests in residential and commercial property development through its units, such as Camella Homes, Communities Philippines, Crown Asia, Brittany, Vista Residences, and Vista Malls.

On Wednesday, Vista Land shares were unchanged at P1.44 per share. — Revin Mikhael D. Ochave

Philippine companies show more interest in AI use despite skill gap

FREEPIK

THE PHILIPPINES shows promise in enabling industries with artificial intelligence (AI) amid a high level of curiosity about these technologies and despite the digital skills gap, experts said.

Erika Fille T. Legara, managing director and chief AI and data officer at the Department of Trade and Industry’s (DTI) Center for AI Research, said at a recent European Chamber of Commerce of the Philippines forum that the growing interest in AI among industries is encouraging.

“Through various digitization initiatives, we hope to empower businesses and consumers to fully leverage the benefits of a digitally ready and AI-ready future. These forces bring both opportunities and challenges, requiring innovative policies and strategies,” she said, reading the speech of DTI Undersecretary Rafaelita M. Aldaba.

This is despite challenges faced by firms on the adoption of new technologies. The Descartes Institute ranked the Philippines’ digital preparedness at 82nd out of 124 countries, with digital skills at zero, while Oxford Insight said the government’s AI readiness placed 65th out of 193 countries.

Meanwhile, Electronic Lab reported that the country ranked first globally in terms of AI interest measured by monthly search volumes per 100,000 people.

These reports and data help the government in identifying skills gaps for the development of strategic programs and initiatives.

“It’s also important from the perspective of education [and] government because it tells us, we’re lacking in this aspect, what we should do. It’s an indicator,” Ms. Legara said.

The DTI recently launched the National AI Strategy Roadmap 2.0, three years after the launch of the initial framework.

“This upgraded roadmap incorporates the latest technologies, particularly generative AI, recalibrates our strategic actions, and addresses emerging concerns such as ethics and governance of these AI systems,” she said.

Monchito B. Ibrahim, executive member of the National Innovation Council, said there is growing enthusiasm about and engagement with AI in the Philippines.

“The high levels of interest in using it indicate a potential growth that could overcome the current hurdles in digital readiness and human capital,” Mr. Ibrahim said at the same forum.

“AI’s potential to boost economic growth is undeniable,” he added. “But as AI automates tasks, repetitive jobs in manufacturing, data entry, and even transportation logistics, this raises concerns about unemployment and income inequality.”

He added that AI comes with risks, including biased algorithms and malicious actors using these technologies for cyberattacks or financial manipulation.

“It is therefore imperative that we invest in cybersecurity measures to safeguard our economy’s AI power defense,” Mr. Ibrahim said.

IMPACT ON JOBS
Ms. Legara said the rapid digitalization brought by the coronavirus pandemic has “revolutionized” job structures, introducing entirely new jobs and expanding skill sets among traditional roles.

Paul Vincent W. Añover, assistant secretary for Employment and Human Resources Cluster of the Department of Labor and Employment (DoLE), said as the digital economy expands amid advancements in AI, it opens doors to new jobs and roles in areas like digital marketing, data science, and other tech-driven fields.

He added that the agency is committed to preparing the workforce for both the challenges and opportunities presented by AI.

“However, concerns about job displacement are there. They are understandable, particularly in traditional sectors,” he said, adding continuous learning and skills acquisition are crucial.

He said there is growing demand for skills related to product design, development, and AI-specific competencies, making it imperative for our workforce to adapt.

DoLE is focused on generating job opportunities and providing the necessary support for skills development, including public-private partnerships, labor market information dissemination, and training programs, he added. — Aubrey Rose A. Inosante

The number of top-ranked restaurants in California continues to fall

ATELIERCRENN.COM/

IN THE last several weeks, a handful of big businesses have announced they’re leaving California, namely Chevron and Elon Musk’s SpaceX and X.

Likewise, the state’s restaurants have taken a little hit in the latest Michelin Guide release. The number of starred dining rooms has continued to drop; there are now 85, compared with 87 in 2023 and 89 in 2022.

Nothing changed at the top of the list: there are still six 3-star restaurants, the highest ranking, designated as “exceptional cuisine.” Five of those top-of-the-line spots are in Northern California, including SingleThread Farms in Healdsburg and San Francisco’s Atelier Crenn. “With each Guide reveal, we have the opportunity to come together with our colleagues throughout California to celebrate the advancement of gastronomy in our great state,” said William Bradley, chef and director of Addison in San Diego, the only three-star restaurant in southern California, after the announcement.

This year’s list features three new two-star spots, serving “excellent cuisine.” The Scandi-accented Sons & Daughters in San Francisco features a $295 tasting menu, with dishes such as cured trout in fish bone broth, while Aubergine, in scenic Carmel, has an internationally influenced menu and a 4,500-bottle-strong wine list. Both were upgraded from one star.

A new showing on this year’s list is the reopened Vespertine in Los Angeles, where chef Jordan Kahn has diners move across floors over the course of a meal. The restaurant also received a Green star, Michelin’s designation for an eco-minded establishment.

It was a good night for Mr. Kahn. His live-fire-focused Meteora was one of seven new one-star spots (a “very good restaurant”) in California. Another is San Francisco’s 7 Adams, from chefs Serena and David Fisher, who manage to serve a five-course, Cal-Italian menu in San Francisco for $87. There are 66 one-star spots this year; last year there were 69.

More notable than the new additions, though, were the places that dropped, particularly in Los Angeles. N/naka, chef Niki Nakayama’s inspired Japanese restaurant, may have garnered a cult following, but dropped from two stars to one; so did the revered Sushi Ginza Onodera, one of the few outposts of the famed Tokyo counter.

“It’s important for restaurants to maintain consistent quality,” said the chief inspector for Michelin Guide North America, who spoke on condition of anonymity because of his job. “If a restaurant’s culinary standards are observed to no longer be aligned with its current distinction, this could impact their retention the following year.” He added that the decision to demote a restaurant comes only after multiple visits.

In fact, in years past, having the word “sushi” in your restaurant name practically guaranteed a star — last year eight spots had sushi in their title, and at least one star to their credit. This year it’s down to five. Besides the demotion of Ginza Onodera, places that fell off the starred list entirely include the revered eight-seat Sushi Yoshizumi in San Mateo and Sushi Takodoro in San Diego; both specialize in Edomae sushi, a traditional style, with fish flown in from Japan, particularly Tokyo Bay.

Another famed restaurant that suffered in this year’s rankings is Gary Danko, a Bay Area institution almost since it opened in 1999; it’s held a Michelin star since they were first awarded in San Francisco in 2008. This year, that star was taken away.

In Los Angeles, a couple of high-profile spots have closed or are closing and were cut from the list. Earlier this year, Walter and Margarita Manzke shut down their lauded, extravagant tasting-menu spot Manzke, citing financial issues. Later this year, star chef Curtis Stone will transform his small, stylish dining room Maude into a bakery, the Pie Shop; in a statement he said it was to make room “for new endeavors.” These closures come as the state is dealing with a $27-billion-plus deficit, driven in part by the exodus of some tech jobs.

California restaurateurs have been hard hit by increased operating costs from rent to food costs and especially labor. In January, the state’s minimum wage was raised to $16 per hour,  one of the highest in the country;  fast food workers’ wages were set at a minimum of $20 per hour, making salaries even more competitive. In the Los Angeles area, there’s also been an ongoing impact from last year’s long-lasting Hollywood strikes.   

It’s not just high-end tasting-menu spots that were hit on this year’s list; in fact, the news was worse for lower priced spots. At the event, Michelin also announced its Bib Gourmand, or cheap eats picks. There are 132; a year ago there were 142.

Michelin has been giving out stars statewide since 2019; this year’s awards took place at the Ritz-Carlton in Half Moon Bay.

A month ago, the guide announced it’s latest expansion, an inaugural guide in five Texas cities — Austin, Dallas, Fort Worth, Houston, and San Antonio. A representative for Houston First, the city’s tourism board, revealed it was paying the guide $270,000 for three years of coverage, according to Eater.

As it happens, Chevron, SpaceX, and X are all headed to Texas. — Bloomberg

Driverless transport in airports

PORT AUTHORITY OF NEW YORK AND NEW JERSEY

With Manila’s international airport set to undergo improvements starting this September, I wonder if the planned upgrade will include autonomous transport — driverless vehicles to move around staff, crew, passengers, cargo, supplies. The airport has four terminals. It needs to find an efficient way to move around people and goods in its vast compound.

Autonomous or automated transport lowers labor costs and mitigates labor-related issues. It can also result in higher productivity and efficiency. While capital investment in equipment and systems is high at the start, operating cost can be lower in the long run. If done right, and with proper safety systems in place, autonomous transport can also minimize accidents.

These are all hypothetical, of course. No system is totally error-free. Mistakes and accidents can still occur. But there are lessons to be learned from New York, Tokyo, Singapore, and many other airports around the world that have all embarked on autonomous or driverless transport systems, either for staff, luggage, or passengers — either as mass transit or for personal mobility.

In July, it was reported that New York’s John F. Kennedy International Airport started using self-driving shuttle buses to transport passengers from parking lots to the AirTrain terminals. The shuttles, which carry eight passengers each, run a route that is 1.5 miles long. The shuttles do not have drivers. But they have “safety attendants” that can manually drive them when needed.

In Tokyo, The Japan Times reported that Haneda Airport was testing “a driverless vehicle” that can tow up to 13 metric tons of cargo containers. The autonomous transport can pull six containers at a time between aircraft and airport buildings for over two kilometers, said the Times. The system is jointly developed by All Nippon Airways (ANA) and Toyota Industries.

In Singapore, The Star reported that a self-driving bus would transport workers around Changi Airport’s restricted area by the third quarter of 2024, under a two-year proof of concept. The autonomous buses are to be used airside, or the part of the airport where the loading and unloading of aircraft, as well as take-offs and landings, take place, The Star said.

Also to be tested at Changi is the use of self-driving buses in “a live operational environment alongside non-autonomous vehicles,” The Star said. It added that there were about 2,500 airside vehicles at Changi at present, which include cars, vans, minibuses, tractors, and forklifts. Driverless baggage tractors and baggage handling vehicles are undergoing testing to date.

The Star noted that at the Hong Kong International Airport, a driverless shuttle bus service has been transporting staff around the airport’s restricted area. It also reported that driverless shuttles will soon be transporting people between Hong Kong Port and SkyCity, a business and entertainment complex adjacent to the airport.

Also in Hong Kong, the South China Morning Post reported that the Hong Kong government contracted a consortium to plan and design a new railway line in East Kowloon that will most likely run driverless trains. The estimated length of the proposed railway is about seven kilometers. It would link eight stations from Choi Hung East to Yau Tong East.

Meanwhile, the use of autonomous transport at the Miami International Airport (MIA) and the Los Angeles International Airport (LAX) is a little different. A company called WHILL, in collaboration with Envoy Air, deploys self-driving wheelchairs that allow passengers with disabilities to get to their boarding gates on their own.

And at the Phoenix Sky Harbor International Airport, a company called Waymo provides fully autonomous ride-hailing services between the airport and downtown. The driverless car service runs 24 hours, and uses all-electric Jaguar I-PACE vehicles. The services run to and from the airport and downtown Phoenix and the East Valley.

In Hawaii, the Daniel K. Inouye International Airport in Honolulu has reportedly started an 18-month autonomous shuttle pilot program to transport airport staff within the airport’s restricted areas. Four autonomous and electric shuttles that can transport 11 passengers, including a shuttle attendant, between the airport’s C and G Gates with several stops.

Over at Heathrow Airport in the UK, it uses driverless pod cars that transport passengers between Terminal 5 and the business car park. According to airport authorities, these pods are energy-efficient and provide a smooth, on-demand ride for passengers. They also help reduce congestion by eliminating approximately 50,000 bus journeys annually. Heathrow is also testing autonomous baggage dollies at Terminal 5.

With all these ongoing testing programs in various airports all over the world, and given the long timeline for the Manila airport’s upgrading, perhaps in about three years’ time driverless shuttles will also be moving about the Philippine airport compound. With four terminals in operation, driverless shuttles might make more sense instead of an airport monorail.

Inevitably, there will be safety concerns. To date, no major errors or accidents have been reported involving driverless airport shuttles and cargo handling transport. But the potential for technical failure will always be a concern, as with anything automated. Continuous monitoring and improvements can help ensure that driverless transport operates without accidents.

More important, people will have to learn to be comfortable with autonomous transport. Otherwise, acceptance and effective use may be compromised. One research study notes the importance of calibrating public trust so that airport staff and passengers can feel safe and confident using new technologies like driverless transport.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

BSP could still cut rates next week, Recto says

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) may still cut benchmark interest rates at its policy meeting next week, Finance Secretary Ralph G. Recto said on Wednesday.

“I expect a reduction in rates within the year. It could happen in August, it could happen off-cycle, it could happen in the next board meeting. I would prefer lower rates so we can borrow domestically at lower rates as well,” Mr. Recto, who is also a member of the BSP’s policy-setting Monetary Board, told reporters on Wednesday.

“The Fed (US Federal Reserve) will probably do a rate cut in September, then us in August. The difference is just one month,” he added.

The Finance chief said he expects 50 basis points (bps) worth of BSP cuts this year. “But (that) could even be higher, but it depends on what the Fed does also. It depends on our inflation expectations,” he added.

The Monetary Board in June kept its policy rate at an over 17-year high of 6.5% for a sixth straight meeting.

BSP Governor Eli M. Remolona, Jr. said on Tuesday they are now “a little bit less likely” to cut rates at their Aug. 15 policy review amid “slightly worse than expected” inflation.

Headline inflation quickened to 4.4% in July, the fastest pace in nine months or since the 4.9% recorded in October 2023 and marking the first time that it breached the central bank’s 2-4% annual target range since November.

Mr. Recto said he is also open to an off-cycle cut if necessary.

“I’m definitely open to reducing interest rates. That is the objective. Whether it’s a regular cycle or off-cycle. I think the BSP governor also said that we could do an off-cycle. There’s no meeting in September, but he can call for an off-cycle. It depends. Like I said, it all depends on our briefings. We will get market updates,” he added.

Meanwhile, Nomura Global Markets Research said it still sees the BSP starting its easing cycle this month as the spike in July inflation is likely temporary.

“In terms of monetary policy, the July consumer price index (CPI) outturn does not change our latest view that BSP’s rate-cutting cycle could begin in August given its pickup is likely to have been temporary,” it said in a report.

“BSP also retained in its post-CPI statement that headline inflation will start easing in August and assessed that the balance of risks to the inflation outlook has “shifted to the downside.”

Nomura expects the central bank to slash benchmark rates by 25 bps at its meeting next week.

“If inflation has indeed already peaked, then BSP may not have to wait for its next meeting, which is two months away (Oct. 17),” it added.

Meanwhile, it expects full-year inflation to average 2.8% this year, well below the BSP’s 3.3% forecast, noting that this outlook was primarily due to the impact of the recent cut in tariffs on rice imports.

“Assuming full pass-through, we estimate the tariff cut could lower headline inflation sharply to around 2.1% in August before settling between 1.7% and 2.1% by the fourth quarter. This suggests the pickup in July is likely to have been temporary and will prove to be the peak,” Nomura said. — Luisa Maria Jacinta C. Jocson

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