Raphael Stevens

Walmart is investing in vertical farming start-up Plenty and will start carrying its leafy greens in all California stores this year.
With the move, the big-box retail giant is diving into a trendy area of food tech that brings farm produce closer to customers’ kitchen tables to boost freshness, limit waste and promote sustainability.
Plenty CEO Arama Kukutai said the Walmart deal is a step toward making high-quality, pesticide-free produce more accessible and affordable.

Plenty uses vertical farming to grow a high volume of leafy greens year-round. It plans to use the technology to grow other crops, including strawberries and tomatoes.
Photo: Spencer Lowell for Plenty

Walmart said Tuesday that it is investing in vertical farming company Plenty and plans to carry the start-up’s leafy greens in all California stores later this year.
The big-box retail giant did not disclose the size of the equity stake or the terms of the commercial deal, but said a Walmart executive will join Plenty’s board. Walmart’s investment is part of a $400 million round of funding for Plenty led by One Madison Group and JS Capital, with participation from SoftBank Vision Fund.

With the move, the country’s largest grocer is diving into a trendy area of food tech that brings farm produce closer to customers’ kitchen tables to boost freshness, limit waste and promote sustainability.
Food and agriculture start-ups have become a hot area for venture capital during the pandemic, particularly as consumers eat at home more often and retailers face supply chain challenges. Indoor agriculture also has become a potential solution to unpredictable weather patterns and natural disasters, such as California wildfires, fueled by climate change.

Walmart traveled the world, met with vertical farming companies and learned about the newer mode of agriculture for the past four years, said Martin Mundo, senior vice president of produce merchandising in the U.S. Walmart sees the approach as an environmentally friendly way to ensure a reliable supply of high-quality and affordable produce year-round, he said.
Vertical farming comes with several key benefits compared with traditional farms, according to a report by Morgan Stanley Research on the future of food. Crops can grow faster and with a larger yield because they rely on synthetic light sources instead of sunlight and aren’t subject to sudden changes of weather. The crops also can be grown without pesticides, which eliminates runoff that can damage wildlife and soil quality. And consumers typically see longer shelf life for their purchases because crops don’t spend long hours on the back of a truck or endure temperature changes from transportation.
Plenty’s lettuce varieties, which include kale, arugula and spring mix among others, are grown without pesticides. The brand is sold by some Albertsons stores and Amazon-owned Whole Foods outlets and delivered by grocery companies Instacart and Good Eggs. To date, Plenty has raised more than $900 million, including the latest investment.

Plenty CEO Arama Kukutai said the Walmart deal is a step toward making fresh, clean produce more accessible and affordable.
“It creates the opportunity to actually get to scale, not just being a niche provider of expensive greens, as the category has somewhat been accused of in the past,” he said. “This isn’t just about high-quality, organic leafy greens. This is about getting to consumers on a more democratic and broad basis.”
San Francisco-based Plenty is one of several start-ups involved with vertical farming. Its competitors include Bowery Farming, AeroFarms, PlantLab and BrightFarms.
So far, lettuce and herbs have been the primary crops grown indoors — but the companies are chasing ways to grow more high-value produce.
Starting later this year, Walmart’s 250 stores in California will have leafy greens grown in a vertical farm in the city of Compton in southern Los Angeles. Some greens will be sold under Plenty’s brands and others will be sold under Walmart’s private label.
All of Plenty’s farms are in California so far, but the company plans to expand to the East Coast soon and start growing other kinds of crops, Kukutai said. He said Plenty expects to sell strawberries and tomatoes to customers next year.
Kukutai took the reins as CEO at Plenty this month, after investing in the company through his food and agriculture tech fund, Finistere Ventures. Other earlier investors include, among others: Eric Schmidt’s Innovation Endeavors, Jeff Bezos’ eponymous fund Bezos Expeditions and Driscoll’s, a major grower of fresh berries. The California-based company also has a deal with Plenty to grow its strawberries indoors.
—CNBC’s Lora Kolodny contributed to this report.

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J&J expects its Covid vaccine to generate $3 billion to $3.5 billion in sales this year.
The company beat on fourth-quarter earnings but missed on revenue.
Its revenue of $24.8 billion rose 10.8% over the same quarter in 2020, mostly driven by $1.82 billion in international sales of its Covid vaccine.

The Janssen Johnson & Johnson COVID-19 vaccine.
Allen J. Schaben | Los Angeles Times | Getty Images

Johnson & Johnson on Tuesday projected that its Covid vaccine would generate $3 billion to $3.5 billion in sales in 2022, after posting a mixed fourth-quarter report that slightly beat on earnings’ estimates but missed on revenue.
Here’s how they performed compared with what Wall Street expected, based on analysts’ average estimates compiled by Refinitiv:

Adjusted EPS: $2.13, vs. $2.12 expected.
Revenue: $24.8 billion, vs. $25.29 billion expected

On an unadjusted basis, J&J’s fourth-quarter profits surged to $4.74 billion, almost triple the $1.74 billion it earned during the same quarter the previous year. Its revenue of $24.8 billion rose 10.8% from $22.48 billion during the same quarter in 2020, mostly driven by $1.82 billion in international sales of its Covid vaccine.
The company’s shares fell by almost 2% in premarket trading.
CFO Joseph Wolk told CNBC a strengthening dollar negatively impacted top line sales by $150 million to $200 million. Hospital staffing shortages caused by the omicron Covid variant also generated uncertainty in the company’s medical devices business, particularly with elective procedures, Wolk said. The consumer health division was hit by supply constrains in raw materials, labor shortages among third party manufacturers and higher transportation costs, he added.
“We think those are short lived,” Wolk told CNBC’s Meg Tirrell on “Squawk Box.” “We think the second half of 2022 will be stronger than the first half, but some of these dynamics continue into the early part of this year.”
J&J reported $93.77 billion in sales in 2021, a 13.6% increase over the prior year. The company’s pharmaceutical division generated $52.08 billion in revenue, a 14.3% year-over-year increase. J&J’s medical devices business reported sales of $27.06 in 2021, a 17.9% increase compared with 2020. The consumer health section posted $14.63 billion in revenue, a 4.1% increase.

J&J said it expects to generate $10.40 to $10.60 in earnings per share this year and $98.9 billion to $100.4 billion in revenue.
CEO Joaquin Duato will lead J&J’s earnings call this morning for the first time in his new role. Duato officially took the reins from Alex Gorsky earlier this month.
The fourth-quarter results mark the end of a difficult year for J&J. Public confidence in the company’s single-shot Covid vaccine took a hit in December, when the Centers for Disease Control and Prevention recommended Pfizer and Moderna’s vaccines over J&J’s shot. The CDC found dozens of people, mostly younger women, developed a rare blood clot condition after receiving J&J’s vaccine.
In June, J&J lost its appeal to have the Supreme Court review $2.1 billion in damages that a lower court awarded to women who said asbestos in the company’s talc powder caused ovarian cancer.
J&J is also splitting its consumer product business from its pharmaceutical and medical device operations to create two publicly traded companies. J&J expects to complete the transaction by the end of 2023.

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Pfizer and BioNTech are launching a clinical trial to evaluate the safety and efficacy of a vaccine that targets the Covid omicron variant.
The study will evaluate up to 1,420 participants ages 18 to 55.
Pfizer CEO Albert Bourla has said the company will have the omicron vaccine ready by March.

A ten year old child receives the Pfizer-BioNTech Covid-19 Vaccine for 5-11 year old kids at Hartford Hospital in Hartford, Connecticut on November 2, 2021.
Joseph Prezioso | AFP | Getty Images

Pfizer and BioNTech on Tuesday launched a clinical trial to evaluate the safety and effectiveness of a vaccine that targets the Covid omicron variant, as concerns grow that the current shots aren’t holding up against infections and mild illness caused by the strain discovered just over two months ago.
Pfizer CEO Albert Bourla told CNBC earlier this month that the company will have a vaccine that targets omicron ready by March. The vaccine will also target the other Covid variants that are circulating, Bourla said.

BioNTech CEO Ugur Sahin said there’s growing data indicating that the efficacy of the current vaccine against infection and mild-to-moderate disease from omicron is waning more rapidly compared with prior strains of the virus. The goal is to develop a vaccine that provides durable protection against omicron, Sahin said in a statement Tuesday.
The Centers for Disease Control and Prevention found in a study published last week that a booster dose of Pfizer’s vaccine was 90% effective at preventing hospitalization from omicron 14 days after the third shot was administered.
Booster doses are also up to 75% effective at preventing symptomatic infection from omicron two to four weeks after the third shot, according to data from the U.K. Health Security Agency published earlier this month. However, the study found that boosters weaken substantially after about 10 weeks, providing 45% to 50% protection against symptomatic infection.
“While current research and real-world data show that boosters continue to provide a high level of protection against severe disease and hospitalization with omicron, we recognize the need to be prepared in the event this protection wanes over time and to potentially help address omicron and new variants in the future,” Kathrin Jansen, head of vaccine development at Pfizer, said in a statement.

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Pfizer and BioNTech’s clinical study will evaluate up to 1,420 participants ages 18 to 55. In addition to evaluating the omicron vaccine, some people will receive a fourth dose of the current vaccine.

Bourla told CNBC earlier this month he doesn’t know if an omicron-specific vaccine is needed right now or how it would be used. However, Pfizer will have the vaccine ready as many countries are asking for it as soon as possible, he said.
“The hope is that we will achieve something that will have way, way better protection — particularly against infections,” Bourla said.
The omicron variant has dozens of mutations, many of them on the spike protein that the virus uses to invade human cells. The current vaccines, developed in 2020 against the original virus strain, target the spike. It becomes more difficult for vaccine-induced antibodies to block the virus as the spike mutates further and further from the original strain detected in Wuhan, China.
Omicron, first detected in Botswana and South Africa in November, has spread faster than earlier variants, causing an unprecedented wave of infection around the world.
World Health Organization Director-General Tedros Adhanom Ghebreyesus said Monday there have been more than 80 million Covid cases reported to the WHO since the omicron variant was identified just nine weeks ago — more than were reported in all of 2020.
However, people generally don’t get as sick from omicron compared with the delta variant. But because omicron has mutated so far away from the original strain vaccines were developed to fight, it’s causing more mild breakthrough infections, raising concern that it will result in disruptions to essential services as many people call out sick.

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Many consumers looking for Covid-19 at-home tests may be stunned by the high prices — if they manage to find one.
While states warn against price gouging, sellers say they’re just covering their costs and meeting demand.

Rapid at-home Covid-19 test kits are handed out to people at Chelsea Community Connections in Chelsea, Massachusetts, on December 17, 2021.
Joseph Prezioso | AFP | Getty Images

When Ja’Kiem Crayon tells customers the price for a single Covid-19 at-home test at the Manhattan-based pharmacy where he works, he’s often in for an argument.
“They come in, they’re like, OK, give me five,” said Crayon, who works at Tisane Pharmacy and Cafe on Manhattan’s Upper East Side. “And I’m like, well, they’re $25 apiece. And then the eyes pop out of the head.”

Crayon said customers often point to examples of lower prices at large chain drug stores, where a single test might sell for under $10 — if they’re in stock. It’s an assertion pharmacy workers across the country have been fielding as state attorneys general warn against price gouging during a crisis amplified by a constrained supply of tests. But Crayon and others say the mismatched supply and demand has forced wholesale prices up that they then have to pass down to consumers.
“The vendors that sell to us have been raising their prices tremendously,” said Crayon, adding that customers “forget that we’re a mom and pop shop.”

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Until recently, the pharmacy was able to get single swab test kits for $11 each, Crayon said earlier this month, but its vendor is now selling them for $18. That’s raised customer prices from $16 to $25, “just to see kind of a profit back,” he said.
Jimmy Azhari, manager of Milford Pharmacy in Connecticut, has also fielded customer complaints over high test prices, but he chalks up the cost to what it takes to even have them on the shelves. Some customers ask why he would sell the On/Go rapid test for $35 when they could buy it on Amazon for $25. Azhari said Amazon takes at least two weeks to ship the tests.
“I mean, this is paying for, you’re paying for the convenience to have it now, instead of 15 days from now, where you can easily spread it in these 15 days not knowing if you have it or not,” he said.

Azhari said that on top of the higher prices he’s seen from vendors, he has to pay extra for expedited shipping, which adds to the ultimate cost for the customer. He said express shipping alone for an order for 200 double swab test kits could cost at least $600.
State attorneys general across the country have warned retailers against price gouging for at-home tests amid the shortage. But retailers say they aren’t the ones to blame.
That’s why Connecticut’s attorney general, William Tong, for example, has supported legislation that would allow his office to go after suppliers for excessively increasing prices. The AG’s office said in May that many state investigations of alleged price gouging ultimately found wholesalers were the ones who initially raised prices, forcing retailers to up their prices as well.
In New York, the AG’s office told CNBC that retailers accused of price gouging have the opportunity to provide evidence that their own prices have increased.
Price gouging can also sometimes be ambiguously defined, which California Gov. Gavin Newsom recently attempted to address through an emergency order. Under the order, retailers may not sell at-home test kits for more than 10% charged on Dec. 1 and sellers who haven’t previously sold the products can’t sell them for more than 50% of what they bought them for. But, the order provides an exception for those who had to pay more for tests they plan to resell.
Paul Shah, who owns Manhattan-based East Village Farm and Grocery, said earlier this month that his wholesaler used to sell single tests for $7 to $9, which the store would mark up by about a dollar. But recently the wholesaler offered to sell the store single tests for about $14. Shah said he declined the order and complained, but his supplier showed him an invoice showing his costs rose to $13.50 for each test.
Shah’s taken to selling packages of sick day essentials, combining Covid at-home tests with goods like a thermometer, tissues, masks, hand sanitizer and Gatorade on food delivery apps. The packages sell for $59.99 to as much as $124.99 depending on what combination of goodies buyers select, and they include two tests a piece. Shah said he got the idea to package the tests with other goods to provide more value to customers while offsetting the 20% fee he says he pays to platforms like Grubhub-owned Seamless.
While large pharmacy retailers can sell tests for less because they’re able to buy in bulk, they often run out much more quickly, Shah said, noting that his store has always maintained at least some tests in stock at any given time.
“I think the majority of the time, all these larger places, whenever they had the product, it was sold cheaper than us. But 95% of the time, they did not have the product,” Shah said.
Jordan Berkowitz, president of test and personal protective equipment distributor Sunline Supply, said while he understands why consumers believe they are being price gouged, that doesn’t account for the massive demand and risk sellers are experiencing.
Berkowitz said he’s lost nearly $5 million in deposits from more than 10 different test shipments he placed last year that never showed up. And while his testing business remains profitable even with those losses, he said it takes a lot of vetting to find reliable sources for tests. And even then it’s still possible to get scammed.
“When you ask me if I think it’s price gouging, I lose millions of dollars taking chances on inventory that I never get,” said Berkowitz, who said last week he had a $10 million loan racking up interest as he waited to receive pending test kit orders. It puts him between “a rock and a hard place.”
“Either I don’t pay the money, I don’t get the product and they’re upset because I don’t have it. Or I pay more for it and I say I need you to pay me more for it, and they are upset because they have to pay more,” he said. “So it’s kind of a lose-lose for us in that regard.”
Berkowitz said the surge in demand has meant “there’s like 10 different places where our costs go up, our risk goes up, our overhead is up.” Those include costs for customer service representatives, financing fees on loans to purchase orders that have not yet come through, and dealing with riskier or less known suppliers to source product.
Berkowitz said Sunline sells tests on its site for about $15, though some go for even less. But he remembers just a few weeks ago listing them for about $7 or $8 apiece. And he foresees prices continuing to climb until supply can catch up to demand, something that could be complicated by an anticipated reduced workforce in China where some materials are manufactured during Lunar New Year.
“We’re expecting it to be like kind of a bloodbath of supply for another two months probably, is my guess,” said Berkowitz. “It’s all going to get worse, honestly, on the price side. For us and for everybody else.”
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WATCH: Covid-19 test demand sees sharp increase amid holiday season and omicron variant spread

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It comes shortly after the latest disclosure that an event was held during lockdown to celebrate Johnson’s birthday on June 19, 2020.
The London police chief said that while the force did not typically investigate lockdown breaches long after the event, the decision to open an investigation followed evidence provided by the Cabinet Office.
Senior civil servant Sue Gray had been expected to publish the results of her own investigation into the “partygate” scandal in the coming days. However, the Met’s investigation may now mean Gray’s report is delayed.

Prime Minister Boris Johnson leaves 10 Downing Street on January 19, 2022 in London, England.
Dan Kitwood | Getty Images News | Getty Images

LONDON — Metropolitan Police Commissioner Cressida Dick said Tuesday that the police will investigate alleged parties held at Prime Minister Boris Johnson’s Downing Street offices due to an apparent breach of Covid-19 rules.
It comes shortly after the latest disclosure that an event was held during lockdown to celebrate Johnson’s birthday on June 19, 2020.

The London police chief said that while the force did not typically investigate lockdown breaches long after the event, the decision to open an investigation followed evidence provided by the Cabinet Office.
“What I can tell you this morning is that as a result firstly of the information provided by the Cabinet Office inquiry team and secondly my officers’ own assessment, I can confirm that the Met is now investigating a number of events that took place at Downing Street and Whitehall in the last two years in relation to potential breaches of Covid-19 regulations,” Dick said Tuesday.
Several other events that appeared to have taken place at Downing Street and Whitehall were deemed not to have reached the threshold for a criminal investigation based on the information available, Dick said.
Johnson has so far resisted calls to resign from across the political spectrum, despite public anger over a long and growing list of alleged lockdown breaches.

Dick acknowledged “deep public concern” about allegations of lockdown parties in breach of the government’s own Covid guidelines.

The investigation marks an about-turn for the Met, which had previously faced sharp criticism for dismissing calls to look into the claims.

Gray report to be delayed?

Senior civil servant Sue Gray had been expected to publish the results of her own investigation into the “partygate” scandal in the coming days. However, the Met’s investigation may now mean Gray’s report is delayed.
That’s according to the terms of reference of the Gray investigation, which states: “As with all internal investigations, if during the course of the work any evidence emerges of behaviour that is potentially a criminal offence, the matter will be referred to the police and the Cabinet Office’s work may be paused.”
Sterling dipped 0.3% lower on Tuesday morning. The British currency stood at $1.3449 shortly after 11:45 a.m. London time, near a three-week low of $1.3441.
“Throughout the pandemic the Met has sought, as I have said, to take a proportionate approach. I should stress the fact that the Met is investigating does not mean that fixed penalty notices will necessarily be issued in every instance and to every person involved,” Dick said.
“We will not be giving a running commentary on our current investigations, but I can assure you that we will give updates at significant points as we would normally do.”

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IOT: Powering the digital economy

There is a significant degree of skepticism about many of the sustainability-related claims businesses make.
Yet the fact they are making them at all points to a shift in the mindset of some investors.  
During a recent panel discussion chaired by CNBC’s Steve Sedgwick, figures with experience of sustainability and business spoke to the above points.

From high-profile figures such as Greta Thunberg to events like the COP26 summit, discussions about sustainability, the environment and climate change are perhaps more visible than ever before.
As the 2020s progress, corporations around the world are attempting to burnish their sustainability credentials by announcing net-zero goals and plans to reduce the environmental footprint of their operations.

While there is a significant degree of skepticism about many of the sustainability-related claims businesses make — concrete details are often hard to come by and the dates for achieving these targets are sometimes decades away — the fact they are making them at all is instructive, pointing to a shift in the mindset of some investors.  
During a recent panel discussion chaired by CNBC’s Steve Sedgwick, Judy Kuszewski, chief executive of sustainability consultancy Sancroft International, spoke to the above point.
“One of the most exciting and most, perhaps, unexpected developments that we’ve seen in the last couple of years or so is that climate change is actually a topic that investors are looking carefully at right now,” she said.
They were “really asking questions about the company’s strategy and their future fitness to … deal with the inevitable changes that are ahead of us,” she said.
Examples of investors focusing on topics such as climate change, sustainability and the environment include Follow This, a Dutch organization which describes itself as “a group of responsible shareholders in oil and gas companies.”

Slowly but surely, the effect of such groups is starting to be felt in boardrooms. In May 2021, for example, Chevron shareholders voted in favor of a proposal put forward by Follow This to “encourage” the oil giant to cut its emissions. 
The same month also saw ConocoPhillips and Phillips66 shareholders vote for similar proposals advanced by Follow This.

Read more about clean energy from CNBC Pro

Another member of CNBC’s panel, Jos Delbeke, sought to highlight how attitudes were changing in the wake of 2015’s Paris Agreement, a landmark deal which seeks to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”Delbeke, who is the former director-general for climate action at the European Commission, said: “I think that the pressure that originally came towards the public authorities has now, since Paris, gradually widened … to involve the private sector and in particular … dealing with risk and looking for opportunities.”
There was a lot of work ahead of us, said Delbeke, who also holds the position of European Investment Bank climate chair at the European University Institute.
He went on to note how the general public was “very wary of greenwashing,” a term which environmental organization Greenpeace UK calls a “PR tactic” used “to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact.”
For Delbeke, capitalizing on the moment was key. “We have this trust that is now being expressed towards the public and the private sector,” he said.
This needed to be nurtured, he argued, going on to acknowledge that greenwashing might provoke a backlash. “I think that is a lot of what is at stake here: that companies going for net-zero can … demonstrate, in a very credible manner, that they are going to net-zero,” he said.
Referencing the European Union’s emissions trading system, Delbeke said that “the monitoring and the compliance was terribly important to create … trust in the system.”
“It’s good to have a concept of putting a price on carbon but … ‘is it credibly done?’ is what the general public is asking.”

During the discussion, Sancroft International’s Kuszewski hammered home the point that while uniform standards for measuring companies’ performance existed, they weren’t being consistently applied.
“There isn’t really a need for new standards,” she said. “There’s a need for consistent application of the standards that we already have, whether those are around sustainability reporting and indicators — far and away the most used one is the Global Reporting Initiative, which is used by 10,000 companies annually.”
The GRI, Kuszewski explained, incorporated the Greenhouse Gas Protocol, which in turn defined Scope 1, 2 and 3 emissions. These refer to direct greenhouse gas emissions; GHG related to the production of electricity bought and used by a firm; and all remaining “indirect” GHG.
“There is good agreement across the landscape about what the … frameworks and the measurement protocols should be,” Kuszewski said. “It’s about application.” More