Why making a profit is no longer enough for big brands

When you’re one of the world’s largest confectionery brands, you’re under the microscope. We live in a time where a more discerning, informed public are not only interested in the products a company is producing, but how they are making them – where are they sourcing their ingredients? What sort of packaging are they using? What are the products nutritional health benefits?

It’s not lost on Nestlé’s Oceania director of eBusiness, strategy and marketing, Martin Brown. It’s his job to not only sell the company’s message in the local environment, but make sure it is adhering to the best practices he and other strategists have put in place.

Brown knows that the younger consumers are the ones driving the conversation – and not only in terms of whether a product tastes good or not.

“If you look at the diversity of our population and the expectations, it is the younger consumers that are shaping our industry,” said Brown. “They are shaping a couple of key forces that are really important for us to consider. One is, they make choices on brands and consumption based on beliefs. They’re very much looking at the actions of the brand – what is behind the brand – particularly with the supply chain.”

No longer is it good enough to make a great tasting product under the banner of a worldwide known and trusted brand. A lot of food and beverage companies – and those in peripheral arenas like packaging – are employing people whose sole purpose within the conglomerate’s structure is to look after sustainability and traceability. This is because companies like Nestle know that social media and other modern trends have a huge influence on purchasing decisions.

Nestlé is looking at a variety of ways of making sure that it not only provides products from sustainable sources and can be traced back to the farm, but it is also taking steps to reduce its carbon footprint.

“As a company that operates 10 factories in the region, we have plenty of scope to influence that commitment. Part of those commitments is accelerating the use of renewable energy,” said Brown. “For instance, we use the spent coffee grounds in our Gympie factory as fuel to drive the energy in that factory.

“At our Smithtown factory, which is the home of Milo, we use sawdust from the local timber industry to power 85 per cent of the energy in that plant. These are good examples of clever renewable energy sources. We’re also committed across all of those operations to have zero waste to landfill by 2020 and are pretty close to achieving that.”

Globally, Nestlé has signed up to the RE100, which is a group of companies that have pledged to use 100 per cent renewable energy. The accord means that Nestlé has agreed to zero net greenhouse gas emissions by 2050 as part of the pledge to hold to the 1.5˚C maximum temperature increase through climate change.

When it comes to another hot-button issue for consumers – recyclability – Nestlé is committed to meeting its 2025 responsibility of its packaging being reusable or recyclable. Currently, 50 per cent of the materials it uses is recyclable, while 40 per cent is partially recyclable.

“We’re going to focus first on the 10 per cent that is non-recyclable,” said Brown. “We’ve got a negative list of materials that we are removing from all of our packaging. The cardboard is fine, however not all of the substrates used in flexible packaging are recyclable.

We have multi-layers of material that are not recyclable. That’s where we need to find solutions.”

These solutions will not appear out of thin air. Investment is needed, and Nestlé doesn’t mind putting its hat in the ring when it comes to spending money to find the answers that will lead to more sustainable packaging. Brown also realises that there are other issues that need to be addressed with packaging – recyclability is but one aspect.

“This is where the science comes in with regard to coming up with new packaging solutions because they’re not available right now,” said Brown. “We’ve invested in the Nestlé Institute of Packaging to work with the science community and the rest of the packaging community to develop novel solutions that are fully recyclable and/or compostable. These will be the replacement solutions for that 10 per cent non-recyclable packaging.

“If we can come up with solutions that meet consumer expectations of quality, tamper-proof food safety, and is relevant in a category that can fully eliminate packaging, that would be a good thing. We’re trialling those solutions already.”

Another hot topic is food trends. Two that have caught the eye of Nestle’s hierarchy are confectionery products with less sugar [see box story Satisfying the Sweet Tooth], and plant-based proteins. Again, it is the younger consumer driving the issue. In the case of the latter, it is not about getting rid of meat altogether, but about replacing one or two meals a week with plant-based proteins. Brown thinks there are many reasons for the growing trend.

“There’s health reasons,” he said. “They may also connect the dots between meat and greenhouse gas emissions. Ultimately, for them, it might be about living in a more sustainable environment. With our Harvest Gourmet products, and along with the rest of the plant protein industry, we are providing alternatives that make that transition seamless in a way that is pretty surprising. We think that it is going to grow quickly as a market opportunity.”

Brown said that Nestlé is looking to develop a range of meat alternatives – from chicken breasts to mince – that will give customers versatile options for food consumption. Then there are dairy alternatives, too.

“You can expect we will bring plant-based dairy options across a range of our beverage products,” he said. “We’ve seen that it is becoming popular in the way people are adopting plant-based milks into their out of home coffee consumption. That is definitely an opportunity for in-home coffee consumption as well.”

And what about another, albeit minor, trend of insect-based proteins? Brown acknowledges that it is an idea the company might look at in the future, but there is nothing in the pipeline at the moment.

“We’re aware of insect-based proteins. They’re probably not mainstream enough for us to look at yet,” he said. “We’re blessed at being in a pretty resource-rich environment so we’re not quite yet at the insect level. It’s an imaginative solution, which is arguable very sustainable and we should never rule it out.”

Brown is confident that Nestlé is on target to not only continue meeting the needs of its traditional consumers, but also encompass new food technologies and trends that will be entering the food chain over the next 5 to 10 years. It is not only about keeping the taste great, but making sure the brand keeps its reputation.

“As we continue to offer more choice and lift the nutritional credentials of all our products, it is important to remember that any change has to be underpinned by great taste. And with that, will come trust – something that is very important to any brand like Nestlé.”

Social responsibility
Chocolate and coffee – two items that tick all the endorphin boxes when consumed. Debating traceability of products, sustainability in packaging, and energy efficiencies during the production process are all well and good, but what’s the point if the key ingredients no longer exist? No ingredients means no products. Coffee beans and cocoa plants are grown in a narrow window of land on the equator. The main producers are in sub-Sahara African and the equatorial climate of South America. A recent article in Business Insider titled Chocolate is on track to go extinct in 40 years, concentrated on how the aforementioned strip of land is set to shrink due to climate change. Cacao plants, which product the cocoa for chocolate, need certain temperatures to grow and that is starting to change. However, that is not the main issue, because if humanity does get to reverse the more undesirable effects of climate change, there is another more urgent problem – will there be cocoa farmers to produce the crop?

It is an issue that the likes of Nestlé and Mars are taking head on. They realise without cocoa, a large portion of their business is affected. It is with this in mind that Nestlé’s Martin Brown explains why the company’s attitude towards its primary producers is holistic. The company knows that trying to buy the biggest amount of cocoa at the cheapest price possible is short-sighted. Long-term viability is needed and is something that the company champions. With more than 70 per cent of the world’s cocoa being produced on two million small farms in Ghana and Cote d’Ivoire, logistics can be challenging.

“The reality is that a lot of these communities are in undeveloped economies and live in challenged social spaces, so we have to help them resolve things such as unsafe work practices,” said Brown. “They’re complicated problems to solve that need total integration by the government across all industries.”

Brown said that in 2014 Nestlé was one of the first major companies in Australia to use 100 per cent sustainable cocoa. He said the company is committed to paying a premium to all farmers it buys through. The company also likes to make sure its suppliers are in compliance when it comes to eliminating unsafe child labour work practices and ensuring children go to school.

“We are also eliminating the use of unsafe pesticides,” said Brown. “We’ve built schools in farming communities to ensure that their kids are getting educated. We’ve distributed new cocoa plants. We’ve renewed the cocoa plantations to drive productivity in their farms. We’ve educated farmers on how to look after their farms better.”

A lot of actions undertaken by food conglomerates are driven by consumer expectations. However, Brown also knows that goodwill in these communities goes a long way. Because if climate change does get addressed, and the standard of living is accelerated, there are other issues that will also need addressing. Only collaboration between the farmers and businesses will solve them.

“There are a numbers of reasons why the cocoa supply has been under threat,” said Brown. “First, cacao trees are at their most productive between 2-20 years of age. If they are not renewed and the tree is not continuously replenished, productivity drops, and drops away sharply.”

Next, if the farming methods to optimise the layout of a farm – from ventilation between trees, right fertilisation methods, pruning and cropping of the trees – isn’t maintained, the productivity of the tree is reduced. Then there is the issue whereby farmers might not grow the crop anymore because they are not getting the economic outcome of it that another crop might provide.

“Another reason why you might have a compromised future with the cocoa crop is that the next generation don’t want to farm,” said Brown. “The next generation might leave farm communities because the conditions are just not good enough. They are not liveable and those meant to be taking over the farm have higher expectations of quality of life. And that should be everyone’s expectation – that the next generation gets to lead a higher quality of life or has the opportunity.”

Getting the specifications right for an F&B build

For food and beverage facility owners, navigating compliance requirements when building or renovating a new building can be tough at the best of times, especially in a constantly changing regulatory environment. Bill Franks is a founding shareholder of food and beverage construction specialist Total Construction and is also member of the Australian Institute of Building. He has been involved in the industry for more than 30 years, and has some interesting insights on how some of these pitfalls can be avoided, especially for some of the smaller, up-and-coming food and beverage enterprises.

“Whereas a big multinational company has a team of people checking compliance, if you’re a mum-and-dad business, or own an industrial unit where you want to produce food for sale, you don’t have access to that kind of resource,” he said. “For starters, it’s important to understand which regulations you need to comply with. A commercial building comes under the Building Act and National Construction Code (NCC); what was known as the Building Code of Australia.”

A couple of regulations in particular, can cause issues because people don’t know some of the minute details – the fine print – that can be hidden in the regulations.

“For example, Section J (energy efficiency) of the NCC, along with essential fire services, have been catching people out for a number of years now,” said Franks. “Plus, with the ‘Access to Premises’ standard, a minor addition or alteration to a commercial building can now involve some serious upgrades to services like water, electricity and insulation just to mention a few.”

Franks adds that, while a lot of people know that buildings require fire sprinklers, there are other accessories that need to be added, too. “For example, water pressures have changed, and sprinklers now require water storage tanks and a set of pumps, which can sometimes cost around a half a million dollars.”

Then there is disability that needs to be added to the mix of potential changes some sites that are being renovated. In some cases, councils will require a lift to be installed, doorways and corridors widened and disability amenities added to satisfy current building codes.

Other considerations that need to be considered when planning to convert a brownfield site into a food and beverage facility include the noise and odour impacts. Many councils insist on obtaining noise and odour statements as part of the any submission. Although the consultant fees to produce these statements can be relatively low, the resulting adaptions to the building can be significant. In one instance a client was required to install 6.2m high exhaust flues to ensure that odours from their cooking processes were dispersed effectively and not impinge on neighbouring residential properties.

“You may say that is fair enough,” said Franks, “however, the residential properties were almost a kilometre away, yet the odour report indicated that with the right conditions the cooking odours could travel that far.”

Any new facility in the industry will need to comply with a Council’s Health Department requirements, so this means effective drainage, washing and waste disposal areas need to be well-defined to comply. Generally, to accommodate new drainage runs and wash areas in brownfield sites, a company needs to cut into the slab. Also, depending on the amount of drainage required, the existing slab could end up looking like “swiss cheese”. These drainage runs will then need to be reinstated and pinned back into the existing slab. In some instances, combining this with set down areas for any freezers, it can be cheaper to lay an entire new slab.

Apart from Council and NCC requirements, brownfield sites can also have issues with the roof weight capacity, as the majority of industrial units available are only designed to support roofing sheets and not much else. To enable the roof to support numerous services and insulated panel ceilings etcetera, the roof structure generally needs to be strengthened – sometimes dramatically.

Then there is another set of key criteria in deciding on premises to convert – power and gas availability. Again, the majority of industrial units only have access to approximately 100amps supply and no gas feed. Food and beverage facilities can require in excess of 500amps and a reliable gas supply to effectively run their operations. The time and cost associated with upgrading and installing these feeds can be exorbitant, and have caught out many proponents, causing delays in establishing operations.

So, what can you do to make sure your building ticks all the boxes? “The first thing is to establish the scope of the development, then work out where it might be non-compliant and if your budget stretches to bringing it up to standard,” said Franks. “You can find a copy of NCC online, but it can be difficult to make sense of it if you’re not a lawyer or building professional. My advice would be to get a report from a building certifier and engage an appropriate food and beverage builder to advise. By enlisting theservices of professionals, you can avoid a host of problems in the future.

“The key to ensuring you mitigate risks in your project is to involve your builder early in the process commonly known in the construction game as early contractor involvement or ECI.”

According to Franks, having a builder involved during the scoping and design stage can allow critical cost items in any build/fit out be identified and alternatives discussed.

“For instance, you may have a plan to construct a mezzanine level in your operations, this although perfect for the intended process flows can be extremely costly to construct,” he said. “Sometimes, a client cannot see the forest for the trees so to speak – they are so intrenched in their business that they only see one aspect of the project – being to increase efficiencies in their production.”

Involving a builder with process engineering capability in the food and beverage industry, such as Total Construction, can allow a different set of eyes to see the requirements and suggest alternatives to the building layout that just don’t reduce the need for costly building works, but can improve the process flow overall.

How ECI works to develop an achievable budget.
First, a site investigation is carried out by the builder on the existing and proposed facilities to detail and identify all services required and what is available at the new site (power, gas capacities). It is important to note that to increase power or gas supply to a site can be very costly to the project and create delays. Another area that needs consideration in the case of an existing building to be fitted out is the structure’s integrity. Having to strengthen this to cope with the additional weight of fit out and services can often blow out project costs.
Then a workshop is carried out with all stakeholders to identify required efficiencies, confirm proposed outputs and flag any potential limitations. As part of this workshop, all production processes are mapped and detailed for both the existing and proposed operations.

A list is made of the capacities and dimensions of all equipment both existing and new is developed. This helps to identify all utilities and services that are required. It also sets the benchmark for power and gas requirements at the proposed site.

This process helps identify potential bottle necks in current processes and helps highlight any potential hygiene requirements in the new fit out. Getting all this data captured is critical in maximising efficiencies of the new facility.

A review of the buildability of the facility is done and sketch design layouts are completed to optimise process flows to best fit the client’s objectives. A building/fit out SWAT analysis is carried out and build/fit-out costs are derived. Through close consultation between the builder and client, this process allows savings to be identified early on in the design and layout of the facility.

A detailed design including all services and requirements is then developed and put to the market for live market costing. This will give the client a firm understanding of what they can get for their dollar.

Finally, this is where working to a budget comes in – once the ideal building and fit out costs are established it is possible to derive further reductions in the overall project spend through rationalising the design. This includes, but is not limited to, reducing the number and sizes of rooms, freezer/cool room capacities and locations, and finishes in the design. This can be done while keeping future expansion capability intact in the design and maintain the client’s required production output for the new facility.

The importance of food and beverage labelling

Food labelling – it can be a minefield. In an era of food allergens, many imported products, as well as a bevy of health and safety regulations, food and beverage manufacturers have their work cut out for them to make sure they create products that meet a wide range of food regulations.

It’s something not lost on Fiona Fleming who is the managing director of the Australian Institute of Food Science and Technology (AIFST), which is the body for food industry professionals who work in many different fields within the food and beverage industry. Fleming knows that food labelling can be a difficult subject to navigate, especially for those just starting out in the industry.

What are the main issues surrounding food labelling? Correct labelling of imported foods and declaration of food allergens provide significant challenges, according to Fleming. Australia does appear to be the food allergy capital of the world, with Melbourne leading the way.

There is no single reason for this, more a myriad of causes – peoples’ diets have changed, more sufferers are reporting their allergies and, in the case of Melbourne, some researchers believe low levels of vitamin D contribute due to the city’s cooler climate and children spending less time outdoors in the sun.

READ MORE: Six reasons why food labelling is important

Whatever the reason, consumption of a food allergen can have fatal consequences for those who are allergic to that food or foods. For someone with a severe allergy, exposure to the allergen can cause a life-threatening reaction called anaphylaxis which affects the whole body, often within minutes of exposure.

“They key allergens of concern in Australia and New Zealand are egg, milk, peanut, fish, crustacea, peanuts, soybeans, sesame seed, tree nuts, wheat and other gluten containing cereals, and lupin,” Fleming said.

“These are required to be labelled when present in a food under the Australia New Zealand Food Standards Code. And just to add to the confusion, both for those on the ground in Australia and those wanting to import food products, allergens required to be labelled in one country might not always be required to be labelled in another.”

For example, in Europe, mustard and celery are allergens that must be labelled, whereas in Australia they are not on the list of food allergens required to be labelled.

“Any ingredient that is in a food product has to be labelled, and it is up to the importer to ensure that foods they bring into Australia and New Zealand have the correct allergen declarations to comply with ANZ requirements,” Fleming said.

“Australian and NZ manufacturers have gone further with labelling following best practice guidance developed by the food industry. For example, allergen names are highlighted in bold text in the ingredient list which helps consumers when purchasing products.”

Food allergens are not the only important piece of information that needs to be put on food labels.

For imported foods, all of this information is required to be provided in English, meaning labels must be translated accurately and completely. Failure to include all of the information can potentially result in a costly product recall and injury to consumers.

Importers of foods into Australia have to be responsible and realise that ignorance of local labelling laws is no excuse if the correct information is not available to the buying public. There is an over-riding premise in law that ignorance of law is no defence.

“All food companies have an obligation to know the regulations under which they must operate, and they have an overriding obligation to provide food that is safe and suitable,” Fleming said.

“Accurate food labelling is important for ensuring food safety, and ignorance of the labelling requirements is no defence.”

First and foremost, manufacturers tend to initially concentrate on the product itself. Is it tasty? How much will it cost to produce? Where can we source the ingredients? Can we outsource the manufacturing of our product, or can we set up or own manufacturing facility?

Once a manufacturer gets their head around what is involved in crossing the t’s and dotting the i’s, correct labelling can sometimes be intimidating and time consuming. But there is help available.

Fleming is the first to acknowledge that there no easy route to labelling food and beverage products.

“Food labelling is quite complex,” said Fleming. “I do recognise that it is very hard to start up a food manufacturing enterprise because sometimes companies don’t know where to go to find the information they need.

“There are certainly organisations that provide training in food labelling. If you are in NSW, for example, you can go to the NSW Food Authority’s website where there is a lot of good information for starting a business, and they have some basic information around requirements for food labelling.”

The final piece of advice Fleming would give is with regard to preservatives and additives in food products. They, too, have to be approved for use, and labelled as part of the ingredient listing on products.

“Australia is a small country, population wise, and we import a lot of our products,” Fleming said.

“It is important to remember that just because something is approved to be used in a food product overseas, it doesn’t mean it’s been approved to be used here.

It can be challenging negotiating the regulations, but it is very important for companies to be aware of the requirements and put steps and processes in place to ensure they have the information and knowledge they need to ensure their products are fully compliant.

“I know that sometimes information is not easy to find, but there are also food consultants out there who can assist. The AIFST website has a page that lists members who are consultants and provide this sort of assistance to food companies.”

There are also tools available to food manufacturers developed by the food industry to assist with collection of information and labelling. For example, the Product Information Form, or PIF, is an industry-agreed questionnaire developed by the food industry, for the food industry, in Australia and New Zealand.

The PIF allows companies to include a variety of information about food products and ingredients in a single document that meets information needs for legal and regulatory compliance in Australia and New Zealand, in a standardised manner.

The PIF is an industry tool that can improve company efficiency and reliability in managing product specification and other related data when applied across the sector.

With respect to allergen management and labelling, the Allergen Bureau has a comprehensive website and tools available to assist with allergen risk assessment and labelling (https://allergenbureau.net).

“At the end of the day, as a food manufacturer, whether big or small, Australian or not, you have an important role in ensuring that consumers continue to enjoy a variety of safe and nutritious food that will contribute to their wellbeing,” Fleming said.

Mandatory requirements for labelling – the Big 11

1. Name of food
2. Name and address
3. Lot identification
4. Allergen declaration
5. Ingredient list
6. Date marking
7. Storage and usage instructions
8. Nutrition information
9. Characterising ingredients
10. Country of origin
11. Quantity marking

Why the food packaging industry needs to sell itself better

Keith Chessell is a packaging evangelist. Being in the industry for the best part of 50 years, he was there at the beginning when consumers and manufacturers alike knew that packaging sustainability was going to be an issue going forward for many industries, including food and beverage. He was there when the Keep Australia Beautiful campaign was launched and knows that the image of the packaging industry isn’t what it could be.

As well as being a consultant at Sustainable Packaging Design, Chessell is also heavily involved with the Australian Institute of Packaging (AIP) and the Australian Packaging Covenant Organisation (APCO) – you could say that packaging and all its issues are in his blood.

Generically, packaging doesn’t have the greatest of reputations among consumers these days. At best, it’s seen as a necessity to transport products from the factory to the retail outlet, while others at the other end of the spectrum see it as an unnecessary pollutant that chokes our waterways, oceans, parks and other recreation areas.

Being in an industry for five decades gives Chessell a unique insight into the issues, not just on what they are now, but how far the industry has come. And while he’s not about to sell packaging as a brilliant accessory to human endeavours, he said that the industry itself needs to do a better job of informing the public of its true role in the wider scheme of things.

At a recent SAI Global Food Safety conference held in Sydney, Chessell outlined some of the issues facing the packaging industry. One of the key discussions at the moment is in the area of reducing packaging. For example, Chessell compares opening up some toys to that of unpacking a piece of IKEA kit. While some may nod in agreement, a large number of companies have spent years reducing the amount of packaging in a product – not that the public would know.

“The focus from many in industry over the past 20 years has been on removing and reducing packaging where possible,” said Chessell.

“ Some companies are now at the stage where they have reduced everything they can. I can remember eight years ago saying, ‘I can’t take any more out of my packaging with my products’. If the boss wants me to save another $2 million, I’ll start having other issues, such as maintaining the integrity of the packaging.”

Chessell also pointed out that most companies now do not want to overpack a product because it is becoming economically unviable to do so. This is where it is necessary to start educating people on the why. He cites the examples of cucumbers and bananas that have plastic packaging.

“Why are some cucumber wrapped in plastic? I know the answer, but most people don’t. Why not put a sign above that cucumber saying, ‘We’re doing this because it extends the shelf life of this cucumber’. It’s the same with wrapped small bananas. People ask ‘why?’ Well, it protects the fruit, stops it from bruising and is designed to reduce food wastage and spoilage.”

However, lauding the innovations that packaging can sometimes have unintended, negative consequences. He talks about a recent entrant into the AIP’s Packaging Innovation and Design (PIDA) awards.

“One of the companies that entered this year’s awards was a fish company with a fabulous innovative pack that extended the shelf life by 15 days,” he said. “But the company chose to not communicate this significant benefit to the consumers on-pack as they did not want a perception that their fish wasn’t fresh. For this company by promoting the extension of shelf life to the customer potentially offered a negative connotation.”

And it’s when Chessell starts throwing out stats on food waste that you begin to appreciate his frustration at how packaging is undersold. Globally, 1.3 billion tonnes of food is wasted at an estimated cost of $1.3 trillion.

According to the National Food Waste Baseline Executive Summary, Australia generates about 7.3 million tonnes of food waste annually. Of that, 1.2 million tonnes is recycled, 2.9 million tonnes is recovered, while the remaining 3.2 million tonnes is disposed of at landfills. Households contribution is 34.3 per cent and primary production 31.3 per cent, while manufacturing comes in at third with 24 per cent. With figures like that, it is no wonder Chessell is passionate about reducing food waste.

“Unfortunately, many consumers see all packaging as a negative. They don’t see any useful purpose for it and don’t understand the true role of packaging. I believe we can change that if we start to communicate better to customers about why we use certain types of packaging. They might then understand there are other benefits of packaging if we start to put more information on our packaging.”

Are there other answers? How can food and beverage companies sell the role of packaging in the food chain to the public? How do we better communicate that packaging plays a huge role long before the pack needs throwing away once the food has been extracted? There are several things, according to Chessell, and it’s all about education, education and education.

Packaging’s main role is to contain and protect goods and keep them in perfect condition until they are consumed. It also carries important information on the label that gives insights into the ingredients. Adding the Australasian Recycling Label on-pack to communicate the true recyclability of the pack is also important.

The final part of the jigsaw is the on-pack communication, that allows the manufacturer to expound the virtues and benefits their food or beverage encompasses. These criteria need to be explained loudly and often, said Chessell. Getting the public educated is one way of reducing stigmas surrounding packaging, and Chessell points out the AIP itself is taking the initiative by developing a set of Save Food packaging design criteria for reducing food waste for the industry. This criteria includes improved barrier packaging and processing; retaining nutrition; active and intelligent packaging; utilising skin (vacuum), MAP and EMAP packaging formats; portion control packaging; easy opening/resealable packaging; and controlled dispensing, which will mean all the product will be consumed as opposed to leftover product being thrown out (i.e. sauce bottles etc).

Chessell believes that the AIP has started the conversation and he wants it to continue.
“Packaging is a difficult topic these days and the important question we need to ask is, ‘What is the consumer’s view on packaging and how can we help change the perception so that they start to understand that intuitive packaging can actually help minimise and prevent food waste?”

This is something the AIP and Chessell are well on the way to doing.

Why St.George funds food and beverage enterprises

With interest rates at an all-time low – and some industry pundits stating they might go lower – the opportunities for growth, especially for an industry like food and beverage, are enormous.

Mark Burgess is the experienced and affable relationship director – consumer goods leader at St.George Bank. His portfolio of customers are in the food and beverage arena and he sees solid opportunities within the industry over the next 12-18 months. It is one of the bank’s growth sectors, mainly propelled by the domestic and global demand for quality Australian produce. He’s also a good gauge of what other factors are propelling the market at the moment, and Burgess cites new technologies and food trends as being market drivers.

At a recent St.George Signature Food Event, Burgess talked of not only how the food and beverage sectors are looking healthy, but how the role of banks has changed over the past decade.

“I think within the last few years – the banks have shifted away from being what I would call ‘order takers’ – like at McDonald’s – to that of being more trusted business advisors. That is one of the reasons St.George moved to an industry model four years ago because we wanted to have industry experts to not just be there to take orders from customers, but also have insightful discussions with them about their industry as well as their growth plans and where they see themselves going. Then talking to them about how we can support them to grow and prosper. It’s really about that. It is one of the reasons I joined the bank.”

READ MORE: How a 1960s cartoon predicted the future of food

Having been a director at Ernst and Young and a senior corporate advisor, Burgess likes helping businesses grow. It’s another reason he likes the food and beverage industry.
“While we are seeing growth with our customers who are the larger players in the market, as a bank we also focus on family businesses and the middle marketplace, too,” he said.

Why? Burgess sees them as lean, hungry and leading the charge when it comes to some of the newer market sectors within food and beverage.

“Those companies are really nimble, and quite dynamic and they are looking at new areas that they can diversity in,” he said. “For example, a lot of my customers look to supply Coles and Woolworths, and it is those customers who are leading the charge in the healthy alternatives market. Then there is a push for the vegan movement, as well as alternative substitutes for meats and other core products.

“Some of those businesses are ahead of the curve and have a huge focus on innovation within their organisations. I’ve got one customer who is a traditional meat supplier and they are now getting into non-meat products.”

Although Burgess is excited about the market and where it is headed, this doesn’t mean the bank has a laissez-faire attitude towards doing business. There are still systems that have to be followed. A large portion of food and beverage businesses involve the manufacture of perishable items, not exactly great assets to put in the ledger when talking to your bank.

So what does a company have to do with regard to getting a loan if they need to recapitalise, or more often than not, expand their business?

“If we’re doing cash flow lending as opposed to bricks and mortar property lending in the food space, we look at your working capital cycle. We are relying on your debtor book to fund your business,” he said. “We look at the strength of your relationships and what your terms are like with those debtors. We then look at how efficient your supply chain is. It’s also about the experience of the management of the company, too.”

And how does the bank find the attitude of the big players like Woolworths and Coles when it comes to helping out not just those who are regular brands on their shelves, but those new to the market? Burgess works closely with them and said they are very supportive of entrepreneurs because they want to see new products on their shelves.

“They want to get onboard because an entrepreneur could produce a new product that might fly off the shelves, and that product might also be a reason why consumers go to a Woolworths store instead of Coles or vice versa,” he said.

New technologies are also a driver for the industry, and Burgess and his team are seeing those innovations first-hand from their customers.

“I was talking with a customer today who specialises in ready-made meals, and he has
been flat out,” said Burgess. “His product had a shelf life of three to four days, but because a packaging specialist brought out a new technology, his product now has a shelf life of 7-10 days. Something as simple as that has made a huge impact on his business in terms of wastage and time savings from deliveries.”

Burgess loves the industry, not just because he’s a foodie, but because it is dynamic, ever changing. He is very excited about the future of banking in the sector, and the industry itself.

“The thing I love about this role is that it is all about seeing the customers grow and prosper and supporting them in their growth plans,” he said. “Given my corporate advisory background, I can provide meaningful insights around business strategy and direction. The food and beverage space is a rapidly changing environment and it’s exciting.”

How a 1960s cartoon predicted the future of food

Sharon Natoli loves food. Which is just as well when she makes her living as an author and speaker specialising in the food and beverage industry.

At a recent event held by St.George Bank at urban farm, Cultivate, which is based in the Sydney CBD, Natoli spoke about the future of food and some of the challenges processors, retailers and manufacturers face.

Her first point was that the future – in general – is coming faster and faster. The Human Knowledge Curve has shown that in 1900 humanity’s knowledge was doubling every 100 years. In 1945, the rate was doubling every 25 years. By 1982 it was down to approximately one year. Today, it is estimated that what humans know is doubling every day, while deep learning platform IBM Watson predicts that our knowledge will double every 12 hours by 2020. What is driving this alarming rate of change?

“It is around data collection,” said Natoli. “The fact is that every day that we use our laptop, our phone, we buy things, and we click purchase things online. We use our credit cards, that’s data that is being collected all the time. Wearables, sensors – so much technology around us, and so much data to collect. The key is keeping up with the rate of knowledge that is happening in terms at which it is doubling.”

READ MORE: Federal funding announced for aquaculture development in Northern Australia

And with all these changes starting to occur, it is important that food and beverage businesses don’t get caught ‘sheep walking’ – a term that Natoli said is similar to sleep walking, except people are wandering around with their eyes open.

“We have our eyes open and we are conscious, but it is hard to see the future coming at us because we are surrounded by the status quo,” she said. “If we get caught sheep walking, then it is harder for us to innovate and keep up.”

She gives the example of French yoghurt manufacturer Yoplait, who up until 2015 was the number one brand in the United States. Over a few years it lost 33 per cent of its market share, with 23 per cent of that coming within one year. The equated to about $500 million in revenue. What happened? A rival read the future.

“Chobani came along with a better tasting yoghurt, a lower sugar yoghurt – the kind of things consumers were looking for at that time, and so they took a large chunk of that market share away.”

However, one topic that Natoli covered could have consequences for food processors – 3D printing. Back in the 1960s the cartoon television series The Jetsons had the Foodarackacycle, a device that, with the press of a button, would produce food for the family. Fifty years later, similar technology is coming to fruition with the Foodini.

“Foodini is a 3D printer that enables us to serve food, freshly printed,” said Natoli. “It is a smart kitchen appliance using 3D printing technology that enables us to personalise our food. Not only the amount, but a personalised nutritional profile of the food, and we can personalise the way that it looks.

“It is also attractive to health-conscious people because it puts food production in the hands of the consumer. You can print things like crackers, wraps and pizza bases – some of the things you would usually buy prepared from the supermarket.”

With the future fast approaching, it would be easy to put your head in the sand and say “it’s all too much”, especially as Natoli has already stated, our knowledge is almost doubling every day. However, she also said there are three “plates that need spinning” if the food and beverage manufacturers are going to keep ahead of the knowledge curve. They are: what do you need to keep? What are things that these companies need to keep up with? What do they want to create?

When she talks about what companies need to keep, it is more about their legacy, their history – it is about a company’s culture, both past, present and looking to the future.
Probably the most important of the three “spinning plates”, is keeping up with trends, something that could be argued Yoplait failed to do when it lost its market share in the US. There are lots of trends and different businesses need to keep up with them, said Natoli. She said there are three areas of macro trends that will be relevant to the food and beverage industry.

“The first is this rising rebellion,” she said. “What we are finding is that we have the means and the motivation more than ever to stand up for the things we believe in. We are seeing a power shift from organisations and institutions through to individuals. And this is being shown a Colmar Brunton’s Millennium Monitor. What they monitor is Australia’s changing social sentiment. What they have found, is we are moving from an era of conformity where we had trust in institutions and organisations, through to this rebellious era. What we are valuing is empowerment and individual responsibility and taking on change ourselves.”
This is leading some food and beverage brands to adopt a rebellious approach, such as the likes of Soul Fresh, which owns the brand The Milk Thief.

“They’re saying, ‘we’re a movement, not a corporation’. They are saying they are a disruptor of the status quo versus doing what we’ve always done,” said Natoli. “They’re focussed on creating healthier and better foods for consumers instead of focussing on delivering foods and beverages at the lowest cost possible.”

The second macro trend is the idea of getting more from less. This is around the intersection between disquiet about the state of the environment, combined with consumers concern about their personal health. It’s about growing things with less impact on the environment but also being healthy. She cites the example of Mike Lee from US-based Alpha Food Labs, who is looking at the biodiversity of the supermarket shelf. Natoli said he has flipped things on its head. Usually, when it comes to new product ideas, it is marketing or product development people who come up with new concepts and go out and tell the farmers, or the suppliers, to grow this or produce that.

“What Alpha Labs is doing is turning that around and going out to the farmers and saying, ‘what are you growing? What is good for the soil? What is in season?’ and then the company takes that and makes a product from it. It is the opposite of what we would usually do from a food production perspective,” she said. “They want people to see that these products are not just made from wheat, rice and oats, but they are made from things like lentils, fava beans and moringa powder, millet – all kinds of different grains and that is a way to introduce biodiversity into the food chain.”

The final part in the macro trend equation is the expectations that people have when it comes to what they are consuming. Natoli said they have high expectations of food producers as well as high expectations from their food.

“This is where transparency and knowing where your food comes from – who made it, what’s in it – comes in,” she said. “Also the use of technology in terms of things like augmented reality, where you can scan a barcode of a product and find out the story behind it. Also around health and wellbeing and how we can really improve it through what we eat.

“Companies like Habitoir, which is a US company that takes some of the insights around genetic testing, and develops personalised nutrition plans that meet peoples’ expectations around how food can deliver better health to them.”

Natoli also believes that even though there is a lot of automation, robotics, artificial intelligence and augmented reality creeping into the food processing and manufacturing space, there is still room for human interaction. Some companies even make it part of their marketing plan.

“Harris Farm, they often put themselves forward – like one of the brothers Tristan Harris – as commentators,” she said. “They put a face to the brand. It gives it that human element.”
And getting back to her point about the rebellious disruption going on, The Havas Media Group recently completed a survey that involved 300,000 consumer and 1,500 brands across 33 countries. What it found was that brands that are more meaningful outperform the stock market by double over a 10-year period. Being meaningful meant contributing to the collective well-being of society.

“Overall the future is coming at us quite rapidly and we don’t want to get caught sheep walking. We have to be really future ready. If we can spin those three plates together at the same time, then that is going to help us navigate in this decade of disruption. Many a false move was made by standing still, so whatever you do, just don’t stand still.

“It is really great for food businesses to have the opportunity to come together, to network, and connect, particularly over a meal. To create those social connections over food and to share their ideas and learnings.

“I think the way of the future is really about collaboration and so an event like this that St.George has put on is really beneficial for helping to do that.”

Unleashed a game changer for award-winning bakery

Located an hour’s drive south of Perth, Pinjarra is a little town with a huge drawcard – its renowned bakery run by the Pantaleo family.

Founded just over 22 years ago by patriarch and former panel beater Larry, the bakery has not only put the town on the map, but has won a bookshelf-full of national awards for its pies. Its award-winning ways were capped off this year by taking out the Best Meat Pie award in the Great Aussie Meat Pie Competition at the Fine Food Australia Exhibition held in Sydney.

Like any company, growth is key, and since starting the business in 1997, Larry and the rest of his family, has grown the business to include stores in Maddington and Waroona, also in Western Australia.

However, while expansion is exciting, it does come with a set of challenges, one being more paperwork. When in its infancy, dealing with spreadsheets wasn’t a problem for the Pantaleo family. However, as the business expanded, so did the bureaucracy of keeping it running. The bakery’s general manager, Larry’s son Daniel, knew something had to be done to streamline processes with paperwork. Enter Unleashed Software’s solution.

READ MORE: Integration and easy of use key to cloud solution

“The old system that we had of dealing with the paperwork and spreadsheets was no longer going to work,” said Daniel Pantaleo. “It was very inefficient and time-consuming for us. It all came to a head when we opened our Maddington store.”

Unleashed’s inventory management software was a perfect solution for the family, and Pantaleo noticed the impact straight away.

“What we like about Unleashed is that it is a hosted solution, which means I can jump on it from anywhere in the world and I can check what is going on,” he said. “I can update my prices. I can contact my customers through the CRM. So it allows me – as someone who is here, there and everywhere at any given time of the day – to jump on any time anywhere and see what is going on. This is very important for me, because the last thing I want was a dedicated software solution on one computer at one location. A key to me was having that flexibility.”

According to Pantaleo, the system also streamlined a lot of processes that the bakery had, which were old and clunky. Many mistakes were getting made and Unleashed allowed Pantaleo to enter all the parameters he needed to cover in one place. From there, he could control the ordering of stock, see what stock he had, as well as the taking feedback from the other two stores.

“Everything became a lot clearer as to how we were operating that business,” said Pantaleo. “You need to keep control of your numbers otherwise it is pretty daunting feeling when you think you are losing control of the stock, the numbers and what is going on with that side of the business.

“Unleashed is quite precise in what it does. It is flexible, too. Not only in terms that we can operate it from anywhere, but also how you can tweak it to your style of business. It tells you everything you need to know. If you manage your stock and distribution correctly, Unleashed will do all the hard work for you. It allows you to customise and design your own purchase orders, invoices and stuff like that, which is very handy.”

Pantaleo is confident that Unleashed is capable of being used in many other industries. He said that it takes a while to set everything up, but once it is up and running it is a powerful tool.

“The biggest issue we worried about was that we had all these items that we needed to enter into it, which we thought was going to take forever,” he said. “But we were pretty much given a template of a spreadsheet and then told how we needed to enter the data. And from there, once we had the 1,000 plus items in there – the product, the supplier, the prices, the sell price tiers etc – we uploaded it to Unleashed and then we were ready to use it.”

With more than 70 staff onboard, Pantaleo knows that he is not the only one who needs to know how to use the software, which means he has had to teach others how implement it, too. He said that he has found teaching others how to use it easy for a couple of reasons.

“Unleashed is really easy to teach, because they have a lot of online training tools,” he said. “They have what they call a university that shows people how to use the software. If I do need to onboard somebody to use it, I usually send them to do that training first. From there, I manage them for a couple of days to give them pointers of the little intricacies of how we operate our business. It’s fairly straight forward.”

There are several highlights that Pantaleo points out. This includes being able to run a reorder report, which reads all the stock levels the bakery has at any given time.

“From that report you can generate a purchase order to all of your suppliers with the levels you require,” said Pantaleo. “That saves us a lot of time and this is why it is one of the main highlights of the product.”

The other feature that Pantaleo loves is its business-to-business portal that was released a year ago, which is an online ordering platform. It was a real game changer for Pinjarra Bakery.

“Initially we got Unleashed because it was reducing the paperwork, but as we increased our stores that paperwork was starting to increase again, just through the volume of the stores we had,” said Pantaleo. “Having that online portal allowed us to place our orders online and that would then pull the orders straight in as a sale order, which saves us possibly two or three hours a day of not having to enter stock manually. The orders that come in are now a lot more accurate and saved us a tonne of time and allowed our distribution manager to focus on more things to improve the distribution as opposed to being stuck behind a computer all day.”

Preparing for the future: sustainability, digitisation, and an aging workforce

Supply chain, factories of the future, Industry 4.0, and an aging manufacturing workforce – all subjects that recently have started to have an impact on the food and beverage industry. It’s no longer enough to go after market share; processors and manufacturers in this space have to play the long game and ask themselves some questions about where they are heading, such as: What does the future hold in the supply chain space? Do we need to adopt an Industry 4.0/Internet of Things (IoT) strategy? Does it even affect my business? What is a factory of the future?

Pollen Consulting Group is a company that specialises in value chain transformations in the fast moving consumer goods (FMCG) sector. It recently hosted a networking event where a panel consisting of some of the brightest minds in the digitisation area came together to discuss some the issues that both multinationals and SMEs are facing within the sector.

Facilitated by Pollen’s managing director, Paul Eastwood, the event showcased insights into the aforementioned issues.

Linda Crowe, head of supply chain at wines and spirits producer Diageo, knows that the company has to get onboard with sustainability initiatives –but at what cost?

READ MORE: Branding and supply chain: Why they matter

“We had our global supply and procurement director out recently and we talked about sustainability,” she said. “And the biggest message he landed was that we don’t have a choice anymore, but we need to find a way to be sustainable without impacting costs. Or, if it’s going to be more costly, then we have to pull it out of the profit and loss (P&L) somewhere else. We definitely need to start looking within to get ahead of the trends and do it in an intelligent way.”

And while some talk the talk, as James Magee, CEO of Operations Feedback Systems (OFS), explained, when it comes to walking the walk, some baulk.

“From my time working in Visy’s recycling department, there were many brand owners and organisations that came in and said they wanted to go down the path of sustainability,” he said. “They wanted to promote it, but of course it came at a higher cost. When that resolve was tested, in many cases, neither the brand or consumers, despite outwardly promoting it and testing at shelf, decided they would go for the cheaper option. It’s interesting to hear Diageo’s approach. That is a breath of fresh air because a lot of companies will chase profits over sustainability.”

And while it is easy to be cynical about costs over profit, at least one person on the panel was not willing to compromise when it came to making sure her company was minimising its impact on the environment, even if it affects the bottom line. Diem Fuggersberger is the CEO of Berger Ingredients and food company Coco & Lucas, and her values in her home life cross over into her professional life.

“I have certain values in my personal life, so I have to make sure those things are the same in my business,” she said. “When I started Coco & Lucas I wanted sustainability, but it has hurt my profitability by at least $250,000 a year. All the packaging used in Coco & Lucas is biodegradable. Instead of paying $0.12 for a plastic food tray, I’m paying $0.28 for a biodegradable one. Initially my family wondered why I was paying all this extra money but I was determined to be the first national brand that doesn’t have plastic going into the earth. I felt it was my responsibility for me to have a biodegradable tray.”

The executive general manager at CHEP Australia, Lis Mannes, brought up the issue of waste in the food and beverage industry. Mannes was involved in companies that have had a large sustainability arm, yet the infrastructure within some of them has not been mature enough to handle the amounts of waste being created.

“We are in a lag position where we do not have, as a country, the infrastructure to handle the amount of waste we create,” she said.

To take it one step further, not only do companies have to think about what side effects waste will have on the environment, but there is a generation of younger workers coming through that are interested in their employer’s stance on the environment.

“I did an induction recently for some new employees, and one of my slides goes, ‘Why CHEP?’” said Mannes. “As I went around the room I asked people why they joined us. I would say over half of the room actually cited [the company’s attitude towards] sustainability as one of the core reasons that they joined the company. I don’t think I would have had that answer 10 years ago.”

Another point up for discussion was the role of technology in the supply chain, something that manufacturers and distributors in the food and beverage space need to take into consideration as digitisation starts to take hold. There were duelling trains of thought with this aspect of business in general – digitise completely now, or do it gradually.

Pollen Technology director, Oliver North believed that because technology is ever changing, there is a conundrum, which is that nobody knows what these changes will entail when it comes to supply chain.

“Nobody can predict what is going to happen,” said North. “The only thing we know is that it is going to change. The question being asked was, ‘How do we as a business adopt these changes?’ And when it comes to technology the first thing you should be looking at is where the pain points are in your supply chain.

“You need to look internally at a business and understand the areas where we have a problem, and where we can use technology to solve it. Then you look at the market and understand what technologies can help us there, and what technologies will fix that need.”
Mannes also delved into a few issues that need addressing within the Australian food and beverage industry – distance that products need to travel; legacy plant and machinery that needs upgrading; the need to diversify outputs during production; and an aging manufacturing workforce.

“When I look around the infrastructure in the food and beverage industry in Australia, there is a lot of legacy assets that exist, and one of the challenges of our economy is the distances versus the population that we are trying to service,” she said.

Mannes also touched on Australia being in a unique situation whereby the nature of the country – its size and the supply chain distances travelled – creates natural constraints that have to be considered. According to Mannes, some start-ups are often scared off by the scale of economies that exist in the country and the possibility of making a business work where they are servicing so many locations.

“To establish a fresh sandwich factory in Sydney, and to service the country, you just can’t do it, because you can’t get it with a three-day shelf-life to Perth,” she said.

Then there is the issue of the condition of the some of the plant and machinery in some factories, as well as the aging population of workers in the food and beverage processing and manufacturing industries.

“We have factories in many of our food industries that have these legacy assets that are looking tired,” she said. “Then, you have the generation of workers coming through who don’t want to work in them. I’m sure I’m not the only one who has been in endless discussions about aging employment and aging workforces and what that is going to do the economy, because we have a generation of people coming through who don’t want to work with our aged assets. But we have an economy that makes it really hard to have a business case to keep industry here. I don’t know what the solution for that is.

Generationally, as we start to adopt Industry 4.0 in the appropriate places, we will gradually get a younger segment coming though that do want to work in those kinds of environments.”

Eastwood then touched on workforce issues and how automation would affect factories of the future. In 2018, a Swiss think tank, The World Economic Forum, released a statement that stipulated that half the work force could be replaced by robots by 2025. However, it also said that robots could create twice as many jobs as currently exist now.

“I think the main problem is going to be a race between technology and education and which one is going to win,” said Eastwood. “I think if technology is going to win, you are going to have people without skills; if education wins then we might be okay. At the moment, technology is winning.”

This was backed up by productivity expert Ishan Galapathy who said we should be working smarter, not harder. “If we can build the capability of our frontlines leaders to problem solve, they will be using the skills that won’t go away – like empathy and courage,” he said.

The next topic on the agenda was about working in a factory of the future from an employee’s point of view. They would be ripe for the gig economy, said Magee, with gig referring to independent workers who contract their services out for short-term jobs.
“I would say that in the future an opportunity exists for manufacturing employees to share in the gig economy,” he said. “Why couldn’t there be a star rating where I’m an employee, or a hired gun, who can work in any factory. If you only need me for five hours, you don’t have to pay me to sweep the floor to fill out the contract if I finish early. I’ll walk across the road and go and work at another place for few more hours.”

A similar scenario could be played out for excess factory floor space. Diageo already thought ahead before it built its new distribution centre, according to Crowe. It intentionally built the factory bigger than it needed because it was taking into account the growth of the company. For about four months of the year it runs at full capacity, while in the other months it runs at about 50 to 60 per cent. It can rent out the extra space to, as Crowe puts it, “sweat the asset to make it profitable”.

The final point of the discussion, made by Eastwood, was about food and beverage processors and manufacturers taking on digitisation – don’t rush into it, he said.

“I don’t think you have to worry too much about being left behind because it takes time,” he said. “You won’t change the world tomorrow, but you do need to start thinking about it, because some companies are clearly starting to nudge ahead. There is no one that is miles ahead at the moment. Think about it. Take your time. And get it right. It doesn’t cost millions.”

A2 disruption to milk market not a bad thing

A2 milk had a rocky start when New Zealand businessman Howard Paterson and research scientist Dr Corran McLachlan founded the A2 Corporation in 2000. The milk, which claims to help reduce the risks of digestive problems, diabetes and heart disease because it is said to contain only A2 beta-casein, seemed to hit a nerve with people who were sceptical of its health benefits. Three years after the founding of the company, both men died, which left the company in a state of flux. It went through several highs and lows – including going into administration in late 2003 – before becoming The a2 Milk Company, which now is based in Australia. It is run by Jayne Hrdlicka, who started at the company just over 12 months ago.

Hrdlicka was the CEO of Qantas subsidiary Jetstar before joining the milk company, and has held positions at Ernst and Young, Bain & Co, and was a director of Woolworths between 2010-2016. At the Global Food Forum held in Sydney, Hrdlicka spoke about where A2 milk is headed, why it is seen as a premium brand in China, and the science behind the milk’s claims.

It’s a risky strategy to base your whole business model on one product – more so when some are a little uncertain of what makes it different from similar products. It’s share price has fluctuated over the past 12 months, but it does help when news gets out that discerning Chinese consumers think the milk is a premium brand. It has entered two of the most lucrative markets in the world – the US being the other – and Hrdlicka sees nothing but growth in the company’s near future.

READ MORE: A2 Milk expands range to make milk powder with Mānuka honey

“We’re not talking specific numbers, but we’re playing in the two biggest consumer markets in the world,” she said. “We’re building a deep franchise with those consumers and we’re really excited about what the possibilities bring to the brand and shareholders.”

When it comes to the science behind A2 milk, Hrdlicka makes no apologies about its brand strategy and indicates that it is the disruption that A2 milk is bringing to the marketplace that is causing the issue. Most of the noise about the benefits, or lack thereof, of the milk, is coming from those who have a vested interest in the milk not being commercially successful. The irony being that this is also keeping the brand in the spotlight, which is not a bad thing if you are Hrdlicka.

“We are quite comfortable with the company getting beaten up by big legacy players who feel uncomfortable because we are doing something different,” she said. “It happened in Australia, it happened in New Zealand. We expect it to happen everywhere we go and that is what happens when a disruptive approach to a category that has been around for a long time unfolds.

“It happened in aviation, and it is happening across all consumer products, not just milk. We expect that it is part of the process. The crazy part of it is that it draws consumer attention to the choices, including ours. It causes consumers to do their research and we’re the beneficiary. It is part of the process of evolving the category.”

Hrdlicka said the company worked hard in the early stages to ensure there was enough science for consumers to educate themselves. She said there are a number of studies that have been completed by independent research markets that came to similar conclusions that the founders of the company did.

“What is fantastic for us at the end of the day, is the impact it has on the consumers,” she said. “And consumers are telling us they are enjoying a functional benefit and they can enjoy fresh white milk again where they weren’t able to in the past. Or, they were fearful of the impacts of dairy products, and this has given them new confidence to re-enter the new category.”

What is helping the brand, and something not lost on investors, is its foray into the Chinese market. With milk powder a hot commodity, it seems the affluent middle class in the Middle Kingdom can’t get enough. Hrdlicka knows how important the market is, so much so that she spent her first week working for the a2 Milk Company in Sydney, then the second week in China. She goes up there every six weeks or so, not just to be seen, but also to meet with their partners, listening and learning on the ground and making sure the company’s strategy in the area is sound.

“We are doing some really exciting things in China,” she said. “We spent the first half of the financial year really understanding consumers, talking to mothers, talking to parents, talking to grandparents – really trying to understand the decisions they are making and how they we making them – where they like to shop. That gave us a lot of clarity on how to constructively build the brand and how to leverage our multi-channel strategy.”

And what about the US? Retail giant Costco started selling the milk in parts of the US at the end of the 2018, but Hrdlicka isn’t getting carried away just yet.

“We were deeply appreciative of Costco’s support in the US,” she said. “The success story for a2 milk in the US is in its early stages, but the signs are impressive. A2 milk is sold in 12,400 outlets across the country today and Costco is part of that story. It is taking the product to consumers who are interested in different pack sizes and are value driven, but they are a big and important format in the eyes of consumers and play a meaningful role in the repertoire. They are important players in the natural channel and they have helped us build our brand.”

Finally, there is the online presence of A2 milk. Hrdlicka knows that part of the company’s future success lies in the less tangible online marketplace.

“Alibaba is a really important trading partner of ours as is Amazon via its Whole Foods portal,” she said. “I will say, as a matter of course, that we are multi-channel company – ecommerce is a really critical channel for us as a business today and will be going forward. And if you listen to your consumers, it plays a really powerful role for them in their day-to-day lives. You don’t quite have the same choices in leveraging direct deliveries in Australia that you do in China and the US, but it is a changing canvas and digital players are changing the world for consumers at a very fast pace.”

Does plastic get a bad rap?

Director of sustainability is an unusual title, one that is not common within a multi-national company. But not only is that Alan Adams’ role for plastic packaging specialist Sealed Air, he is also part of the leadership group for the company’s APAC region.

At a recent conference at FoodTech Queensland, the education director of the Australian Institute of Packaging (AIP), Pierre Pienaar, made the point that, “plastics are not going anywhere’. And he is right. The thin, mainly oil-based product has a multitude of uses in many industries including food.

“Plastic is, and will remain, in my view, really important within the industry,” said Adams. “In fact, it is probably more important than ever when it comes to reducing food waste, and enabling our lifestyle. What we have to do though, is drive it to a circular economy so we can utilise those resources.”

With China and other Southeast Asian countries declining to take Australia’s recyclables, sustainability is more important than ever. However, it is something that Sealed Air saw coming over six years ago. The then recently appointed (but now retired) CEO of Sealed Air, Jerome Peribere, knew sustainability was going to be an issue, and one that needed addressing sooner rather than later.

READ MORE: Plastic waste: why every gram counts

“Jerome came out with this idea that we should think about ourselves as a sustainability company,” said Adams. “That was controversial and confronting when you think we are predominantly a plastics manufacturer, so it didn’t necessarily resonate with the average person back then.

“However, his reasoning was sound because if you look holistically at our impact on the world, we have a positive impact on the environment. If you think what Jerome was thinking back then, it led to us redefining our vision and mission. Our vision became to create a better way of life and today this continues with our CEO Ted Doheny and our purpose statement that, ‘We are in business to solve critical packaging challenges and leave our world better than we found it’. And it is through enabling efficient supply chains for food and goods without damage, that we remove a lot of the wastage that can be created in many industries including food.”

These company ideas backed up the sustainability minded Adams’ thoughts on what the future would hold. Adams was already a member of the Bioplastics Association for Australasia and served as president for four years. The association introduced standards for compostable and home compostable packaging for Australia during that time. Adams not only talks the talk, he walks the walk.

“I have a personal zero food waste policy at home,” he said. “It makes for some interesting food, and it has gotten easier to make it zero since I started composting. But we had herb salads from time to time, and it’s questionable how nice they are. Plus we grow a lot more food of our own now.”

Adams believes that there is a disconnect between people’s perceptions of plastic and how it can also be a sustainable product. But that is because there are a couple of issues that need addressing. The main one being that the Australian recycling industry is still immature.

“The problem is we don’t have great infrastructure and sustainable recycling industry developed yet,” he said. “If you talk about what plastics are recovered and recycled in Australia – and turned into something useful, and not landfilled or shipped overseas – you are talking about 4.6 per cent of rigids and 1.2 per cent of flexibles. It is tiny.”

How can such a perception of plastics be changed? Adams believes it will take a change in mind-set. Too often, there is a myopic view, which is not telling the real story.

“Any supply chain, or any product has three big buckets,” he said. “First is inbound resources. What are the products made from? How are they made? How efficient is that? Then you have operational efficiency. Does it do the job? How well does it do the job? Does it deliver performance? Then you have end of life. What happens to it after it has been used? Equating sustainability just to the end of life is really missing most of the picture.”

This is why he thinks Australia needs a mature recycling/circular system in place. What has also changed is how much people now rely on plastics in everyday life, especially when it comes to the food industry. Adams grew up on a farm in the middle of the North Island of New Zealand. The lie of the land was a lot different back when it came to food waste. He remembers having a shepherd’s pie on most Monday nights because it was a left-over from the Sunday roast from the day before. People rarely eat like that these days, he said. It’s all about lifestyle, too.

“We had very low food waste back then,” he said. “Can we wind back the clock 30 or 40 years ago and live that way? No we can’t. People will not stand for it. We want to have the eating experience we want but also be able to recover those resources at end of life. Otherwise, you are asking us to unwind the lifestyle we really want, and that generally ends with quite a big consumer backlash.”

How does a company like Sealed Air develop sustainability around a product that is continually under the microscope? For a start, it develops packaging solutions that can help products last longer on the shelf, such as its Cryovac brand food packaging range. If product can last longer on the shelf, then there is less chance of it being thrown out before it is eaten. Adams also realises that the way people consume food is changing.

“We have to be creative in our solutions and the recovery of the materials we generate – and plastics is a big part of it – to enable us to efficiently have the food where we want it, when we want it and the size and quantity we want,” he said.

But do people want to eat food that is staying on the shelf longer. Hasn’t the public been told again and again, that fresh is best? Sure, said Adams, but not all foods. Back in the day, a butcher would cut the customer a piece of meat, wrap it in paper and it would be taken home to be eaten. However, new packaging technologies not only mean the aforementioned longer shelf life, but it can “fool” the meat into thinking it is still relatively fresh.

“The meat is dead when you have carved it and served it up and exposed it to the atmosphere,” said Adams. “It was as good as it was going to get at that moment. From then on, it is going to degrade. If, however, you vacuum pack it, the meat still thinks it is the bigger part of the piece of meat it used to be. Because oxygen is not getting to it, atmosphere is not getting to it so, it continues to age and continues enzymatic action.

“There are case studies that will show you that the eating experience of vacuum-packaged meat with a longer shelf life is better than MAP packaged meat. Certain cheeses like to be aged, too. In the past it has been wax coatings and wax papers and things that helped keep longer shelf life. So there are efficiencies in a lot of this as well as potentially eating experiences. It isn’t like that with all foods. I’m not sure vacuum-packing apples will make for a good experience a few weeks down the track.”

Adams knows that there is a long way to go, especially in the recycling stakes. Even though there are challenges, he knows Sealed Air is on the right track when it comes to sustainability – it is what drives him every day. “I think what is really important is that Sealed Air clearly understands – and many people don’t see this – that sustainability is everything. It’s an umbrella over everything we do,” he said. “If you look at our core values and drivers – which are about food safety and shelf-life along with operational efficiency, package optimisation and brand experience – all of those things are sustainability endeavours in their own right. But I am very aligned with it, which means I love my job and I’m very happy working towards those goals.”

CSIRO: four new technologies for food processing

The CSIRO’s Ciara McDonnell talks about new technologies that are having an impact on the food industry.

When people think of the Commonwealth Scientific and Industrial Research Organisation, or CSIRO as it is affectionately known, most have images of boffins in white coats working in laboratories with Petri dishes, beakers and Bunsen burners busily inventing new gizmos and gadgets for an array of industries. And while this is accurate to a degree, it also is a multi-faceted institution that has more than 5,000 dedicated staff spread around 57 sites throughout the continent.

It has more than 690 patents including the one that encapsulates its most famous invention, wifi, and covers many research spectrums including mining, manufacturing and food. Most recent figures state that it returns about $4.5 billion to the Australian economy annually, and partners with more than 1200 SMEs per year. It’s a very busy place, and one that attracted Irish research scientist Ciara McDonnell to Australia.

McDonnell works at one of the three food sites CSIRO has set up throughout Australia. They’re at Werribee in Melbourne, North Ryde Sydney and Coopers Plains, Queensland, where she is based.

McDonnell spoke at a seminar at the recent FoodTech Expo held in Queensland. She talked about four food technologies that could have a lasting impact on the food industry.

Various Business Units in CSIRO welcome collaboration, and the Agriculture and Food Unit is no different.

“Coopers Plains is home to one of our food pilot plants that we share with the Queensland Department of Agriculture and Fisheries,” she said. “At that pilot plant, CSIRO have an emphasis on meat processing, so we have a suite of conventional pilot scale meat processing equipment. This can enable food processors to conduct trials at reduced batch sizes until the process is ready for scale-up. Then we assist companies with that scale up to ensure the best route to commercialisation.

“When we do any kind of R&D, we do take a multidisciplinary approach. We have a lot of expertise in house and we understand the importance of each aspect – from safety, nutrition, processing, food chemistry and more.’

Future trends are very important in the institution’s work because CSIRO want to conduct research with impact for current and future markets. And what are some of the pressing issues in the food and beverage space at the moment?

“We can certainly say that environment, sustainability, health, clean label and minimal waste are some of the top food trends that we drive towards,” said McDonnell. “CSIRO sees itself as bridging the gap between academic research and commercialisation into industry. We have access to a large suite of innovative processing technologies ranging from pulse electric fields, advanced spray and convection drying, high pressure processing, – the list goes on. In addition, we look after pilot scale conventional processing technologies as well.”

One way of gauging where a technology is at in terms of its development towards commercialisation is the Technology Readiness Level (TRL). This can be 1 or 2, which means it is at the beginning of its research level up to 9 or 10 where it is being commercialised.

High-Pressure Processing
High-pressure processing (HPP), which it is now commercialised for many food applications, was on the CSIRO radar almost 20 years ago. What exactly is HPP?

“HPP can offer an alternative to heat pasteurisation by inactivating microorganisms. A pre-packaged product is placed into a liquid-filled chamber where it gets treated, but there’s no re-opening of the pack, so no recontamination,” said McDonnell. “Pressure is applied instantaneously and uniformly so it is evenly transmitted throughout the product, usually at about 600 megapascals (MPa), or 6,000 bar, for a few minutes. The effectiveness of the process is dependent on the product type and its different properties like pH and water activity.

What makes HPP so attractive is that the high pressure affects non-covalent bonds only. This means that small molecules that give consumers health benefits, micro-nutrients, colour to the product and the flavour molecules, are unaffected. HPP offers a means of maintaining the fresh-like characteristics of the product – better colour, extended shelf life – it fits with the clean label and fewer additives trend that is now part of the food and beverage landscape. Currently, it is estimated that there are more than 2 million tonnes of HPP products produced per year globally. It is estimated that the industry will be worth about $80 billion by 2025. It is broadening into new product sectors, with its main application being shelf-life extension of refrigerated products.

However, McDonnell points out there is a catch. The technology doesn’t inactivate bacterial spores, whereas thermal pasteurisation can.

“So for those foods – low acid food, mainly with a pH greater than 4.6 – it will not work at reducing spore-forming bacteria” said McDonnell. “Any manufacturer that is interested in making products where spore control is required would have to limit the shelf-life, add preservatives, or the alternative is to heat the product, which could result in reduced flavour and nutritional value.”

McDonnell’s colleagues then started to experiment with a combination of heat and pressure, or, high pressure thermal processing (HPTP). They simultaneously applied moderate heat and pressure, and reduced the spore load with less overall thermal load than would typically be required to pasteurise or sterilise a product. What they found was that if they applied HPTP at 550 MPa for one minute at 87.5°C, they could achieve the same inactivation of Clostridium botulinum spores as a thermal-only process of 10 minutes at 90°C. They refer to this phenomena as HPTP synergy.

“You have less thermal load, so you are maintaining the nutritional molecules value, while achieving a significant increase in Clostridium botulinum inactivation” said McDonnell.

But there was another catch. As mentioned, the CSIRO sees itself as bridging the gap between research and commercialisation. And it knows that companies that have invested in HPP, have units without heating ability, and this limits the scope of products it could potentially process; in fact, there are no HPP machines available at commercial scale that have heating capability.

“In order to commercialise the HPTP, we need some processing adaptation,” said McDonnell. “CSIRO developed an insulated HPP canister that, after a pre-heating step, can be inserted into a conventional (cold) HPP unit to deliver a HPTP process. This is something that is going to be licensed by CSIRO and it will allow HPP units to be adapted with a simple drop-in solution.”

Ultrasound
Another technology finding its feet within the food industry is ultrasound processing. It has commercial applications in several processes in the food sector including emulsion breaking and separation, mixing, , homogenising and degassing products.

How does it work? Ultrasound pressures can be created in gas or liquid media  at frequencies in the range of 20 to 100 kHz with traditional transducer devices. As the soundwave travels, it oscillates above and below atmospheric pressure. When this occurs in a liquid, any microscopic gas bubble, which can be dissolved gas as well as water vapour, present in that medium will go through the cycles where it expands and contracts until it reaches an unstable size. It then goes through a final cycle, this causes the bubble to implode on itself. This is known as cavitation. It is not visible to the eye, but it is a very destructive microscopic mechanism. There are other effects caused by ultrasound, such as microstreaming, caused by the sound waves as well as the cavitation, that can be used for a range of applications. During the last decade CSIRO has created applications with frequencies from 400 kHz to 2 MHz, where smaller and larger amount of bubbles are created. In such cases, very mild cavitation occurs, if any, as bubbles do not reach their unstable state and transition back into compression.

CSIRO has filed a patent application based on the innovative application of ultrasound to dry foods far more gently with less energy consumption for sustainable manufacture of premium food products & ingredients.

The ultrasound-assisted drying technology has been shown to be highly effective in intensifying low temperature drying (from 40°C to below freezing) of various food materials (e.g., fruits, coffee, and meat products) resulting in up to 57 per cent reduction in drying time (i.e., corresponds to 54 per cent reduction in energy consumption) with better product quality by minimising thermal degradation.

The technology can be applied to enhance the drying processes of other heat sensitive non-food materials (e.g., bio-pharmaceuticals, medicinal crop, petfoods, etc.), providing further commercialisation opportunities across a broader sector. The patent also covers a novel use of the system in pretreatment processes for improved drying efficiency.

CSIRO is currently partnering with equipment manufacturers to develop and build a pre-commercial pilot prototype of the system to help prove its scalability and commercial viability.

CSIRO has also patented a process that enables oil recovery during both aqueous based edible oil extraction processes and oil refining by application of high frequencies beyond 400 kHz, also known as megasonics. The megasonic equipment is now commercially used in the palm oil industry to recover 200,000 litres extra crude oil per annum in a traditional palm oil plant or an additional 1 per cent oil loss reduction (saving about USD 500,000 per annum). The process consists of passing pre-macerated oil palm fruit through the megasonic unit to enable oil removal from the vegetable biomass, thereby enhancing oil recovery after the centrifugation step. The technology has also been proven to aid the olive oil process. A megasonic treated olive paste can provide an additional 4 per cent oil recovery at 3 tonnes of olive paste per hour, with a payback time of 3 years in a middle sized olive oil plant. Another use of the technology is in avoiding oil losses during the refining process by treating the emulsified oil with megasonic waves before gum removal. The technology has enabled reducing up to half of the oil trapped in gums, obtained as a refining process by-product.

Pulsed Electric Fields
Another innovative processing application is pulsed electric fields (PEF) processing, which is based on placing the food between two oppositely charged electrodes.

“If you imagine a bacterial cell filled with charged ions – positive and negative – and we apply very short pulses of very high voltage so we don’t generate heat. Typically, we apply several thousands volts for a few microseconds – this results in the ions moving towards the oppositely charged electrode until they permeate the cell membrane of the bacterial cell,” said McDonnell. “Just like HPP, it is a way of targeting those micro-organisms without affecting any molecules that contribute to flavour, colour and nutritional value of a product.”

The technology is high on the TRL scale as it has already been commercialised for fruit juice use. It can extend shelf-life significantly for preservative-free juices, while preserving nutrients. In addition, it has helped companies achieve up to 6% increase in extraction yield.

‘’We’ve looked at other applications, like non-thermal milk pasteurisation and improving the texture and quality of meat.”

Shockwave
Shockwave technology is the most novel of all those discussed by McDonnell because it is at proof-of-concept stage. It is the CSIRO’s newest investment, with the government entity having acquired a second commercial prototype, the first outside of Europe.

The idea of shockwave technology first came for meat applications around 1997 when scientists decided to put pre-packaged meat under water and detonate explosives to see if they could  tenderise meat.

“When I spoke about HPP I was talking about static application of hundreds of megapascals,” said McDonnell. “With shockwave technology, high pressures are applied for a shorter time – micro seconds. In previous studies, 100gms of explosives, placed underwater, were used to tenderise meat. Scientists thought, ‘this is great, but how can we commercialise something with explosives?’ For that reason the speed at which the idea progressed has been slow because, as you imagine with explosives, there were a lot of safety concerns.”

In 2001, dielectric discharge came into being, which helped recreate the shockwave. The technology uses two electrodes to generate a similar effect to the explosives. The scientists put voltage through the electrodes and the resulting arc causes very high pressure under water.

“We have acquired a commercial prototype from Germany, which can allow for continuous processing by a conveyor system. We can place a product on it, allowing it to go into the water tank, exposing it to shockwaves and come out at the other side,” said McDonnell. “At the moment, we have a lot of concepts to prove with the technology.

“We think it might cause tissue disintegration so we could accelerate the tenderisation of meat. The first application we are studying it for is meat processing through an Australian Meat Processor Corporation-funded project.”

McDonnell said that when it came to modelling and pressure, the scientists aimed to understand shockwave distribution in the treatment chamber and to identify the area of maximum impact.

“We used the information from the modelling and conducted trials with meat. We had a tenderisation effect which was measured objectively using a Warner Bratzler shear test, where the peak force required to cut through treated meat samples is recorded,” she said. “And now we are working towards optimising this effect.”

McDonnell is hopeful that a lot of these technologies will come to fruition. Some will take longer than others to be realised, but that is the nature of science and discovery.

“There is a future for some of these novel technologies as they provide an opportunity for clean labelling, either by changing the food structure or inactivating microbes,” she said. “Certain applications have already been commercialised and there are good opportunities for all these technologies to be taken up by the food industry. Who knows what else is to come from TRL 1 when new ideas are generated at research? They all certainly fit with the trends we are aware of, and they could help with regard with things like having less waste. It could allow us to have more food for increased food demand. Also, with globalisation we need extended shelf life to reach new markets so it will really help us on the supply chain and yield, as well as having healthier products and more efficient and sustainable processes.”

 

 

Change of direction for Coles

As one of the three big players in the supermarket space, Coles is always under the microscope – usually via headline-grabbing mainstream news, such as the furore surrounding its and Woolworths getting rid of single-use plastic bags, or criticism over its Little Shop plastic toys not being environmentally friendly.

It is something that the company is aware of and knows it needs to improve on. James Whittaker’s role as the company’s head of responsible sourcing and quality has many facets – ones that are increasing, shifting and malleable at the same time. Over the past decade, Coles has put a lot of effort into not only being seen to be doing the right thing, but actually doing it. He cites the company’s policies on cage-free eggs and RSPCA-certified chickens. Then there is its decision to stop using the aforementioned single-use plastic bags, as well as its more recent foray into utilising solar panels on its buildings, and implementing the more environmentally friendly LED lighting in many of its stores.

Addressing a packed room at the Australian Food and Grocery Council’s Sustainability Seminar at the Novotel in Sydney’s Olympic Park quadrant, Whittaker laid bare what the company is planning to do over the next few years. Not only in terms of sustainability but how it can change the public’s perception of what its whole corporate philosophy entails.

He first asked a question of the audience. “What does sustainability actually mean?” There were no takers, so he gave his interpretation.

“Sustain means to keep doing something for a period of time,” he said. “For example, I could run for an hour, maybe two. But I couldn’t do it for 24 hours.”

He then put his definition in context when it came to Coles’ business and how it approaches sustainability.

“We could continue to put petrochemicals [in the form of single-use plastic bags] in landfill,” he said. “We can do that for a period of time, but eventually the raw material is going to dry up and the landfill is going to become full and we won’t be able to do it anymore.”

Whittaker and his team knows that the public is becoming more discerning about the environment – part of the umbrella that sustainability falls under. This is why the company needs to start spruiking its ideas on the environment and sustainability more fervently. Although he feels it has been transparent when it comes to corporate responsibility, getting the message out hasn’t worked as well as it could have, said Whittaker.

“Last year, we did a study and talked to about 30,000 customers every week,” he said. “We wanted to see how customers perceived Coles. We think we are doing a great job because we have all these great initiatives, yet when we talked to customers they came back with ‘You’re all about down-down (ad campaign). You’re about cheap prices. You’re a big corporate giant’.

“We thought, ‘We’re doing all this stuff, but we are getting very little recognition for it’. We realised we needed to do things differently. This resulted in Coles working to build a new strategy, which was launched recently at our investor session.”

Part of this strategy included concentrating on driving the health agenda, especially when it comes to Coles’ home brands.

Whittaker said that the company’s mission statement is, “to feed all Australians to help them lead healthier, happy lives”.

As far as sustainability goes, he admits that Coles has made the odd mistake in the past, even when it’s had the best intentions.

“I think back to when we launched our Kids with Bananas program,” he said. “When the team developed the product we looked at how we would send the bananas out, so we wrapped them in plastic. They arrived in big cardboard boxes and we were pleased because we said, ‘We can do away with all of that cardboard, and we can take the smaller bananas and we can put them in the kids’ lunch boxes. And if you look at the lifecycle, we are using less packaging’. Of course, all the consumer saw were bananas wrapped in plastic. You can imagine what they thought of that.

“Now, we have committed to all our Own Brand packaging to being fully recyclable by 2020. The Redcycle program has been a key enabler for us. On top of that, we’re committed to the Australian Packaging Recycling Scheme. I think consumer confusion over labelling and what to do with that packaging is an issue that needs addressing.”

Whittaker said the company is setting itself a goal of being Australia’s most sustainable supermarket – in every way possible. It’s an ambitious goal, and one that he knows is going to be hard but also achievable.

“We usually focus on price and other elements, so this is really a change of direction,” he said. “What this means for us is to focus on something that differentiates us from other retailers. It’s going to take a lot of work and there are lots of elements in delivering that.

“But we do have three main pillars in place that are going to help get us there. The first is working towards sustainable communities. The second is to make sure we are supporting Australian farmers – so we have an Australian-first policy. Finally, we need to be a key contributor to the communities in which we operate.”

Another aspect the company is keen to highlight is the safety of the products that are on its shelves. Whittaker said that both safety and sustainability go hand in hand.

“We decided that safety had to be part of the sustainability drive, too. Because at the end of the day, if products aren’t safe then the sustainability of the business is affected,” he said. “Then there are sustainable environmental practices. And this is far reaching. This goes right the way through our store network, our fuel business and working with our suppliers.”

And what about carbon emissions? This is something that the company has not taken for granted, and it has sought to identify where most of the emissions are coming from in its business. They have identified the main causes – now it’s a matter of putting in place policies that will address those issues.

“I was looking at some data early this week and found that 97 per cent of the carbon emissions that we produce are coming from our supply chain,” he said. “While we can do some of these changes ourselves, we also have to make sure we are working with the right partners and the right industries.”

And the transparency part of its new strategy?

“My team is committed to transparency. This is an important point. We are building our software solutions to be able to understand where all our products are coming from,” he said. “Take our Graze product, which is grass-fed beef – we have line-of-sight of all the livestock producers, and what that allows us to do is gather a lot of information about best farming practices. For example, our Graze beef producers have planted three million trees since the program began. That kind of information is very powerful.”

Time will be the measure of how successful Coles’ new strategy pans out, but in the meantime Whittaker knows what the endgame needs to be.

“We are hoping that it will change the way we think about business and about how our team members and our customers see us.”

Integration and ease of use key to cloud solution

Managing inventory in real-time is just one of the key features of Unleashed software, which is a cloud-based platform that is well suited to manufacturers within the food and beverage industry.

Marrying the costs of raw materials and the final products can be time-consuming. Unleashed has made it easier.

“Unleashed is an inventory management system that not only tracks products coming in from purchase orders for food manufacturers and for sales, but it also captures the average costs so we can give real-time margins and profits to customers,” said Unleashed’s New Zealand country manager, Danielle Dadello. “With the manufacturing piece sitting in the middle, we know the purchase price and the average landed price of the product and therefore, each of the components or ingredients going into the finished product.”

Unleashed can calculate how much a finished product is going to cost. It can also include things like labour costs and any additional costs in the manufacturing of products. If an item is manufactured externally by another company the software will add in the costs in real time.

Unleashed also has the ability to be integrated into the accounting software package Xero, which Dadello said is popular with its customer base. Any financial movements from purchase orders to sales orders, credits and other financial transactions can be passed from one platform to the other.

“Another highlight of Unleashed that is quite popular at the moment is B2B done in-house, where a customer can use the software to set up a B2B portal,” said Dadello. “It is possible to set up the portal to be invite-only, or it can have guest customers, so users don’t have to be logged in. But you do have to send the link of the website to the customer – it is not something you can just Google. The customer can go in and see a catalogue that is suited to them. It has a list of all the products they have purchased, with the purchase price, so they can set up pricing in the background.

“Wastage is a bugbear of many food and beverage processing factories. It is inevitable that with various batches, there will be waste of the raw ingredients or as a by-product of the final merchandise. Unleashed has a way of streamlining this process, and allows users to set up parameters such as expiry dates so the manufacturer can make sure a product is used before its use-by date arrives.

“For food and beverage manufacturing, it is really critical to have serial and batch tracking so you can see the batches coming in from the supplier and their expiry dates,” said Dadello.

“During the manufacturing process, users can track the sales orders going out the door. This means that at any given time, if there happens to be a product recall, you can manage that. You can also manage all of the stock you currently have on hand such as what is going to expire soon so you can quickly get it out the door, or use it, or manage it in a way that you’re not wasting it.”

It takes the guess work out of whether a raw material or batch is no longer fit to be put on a supermarket shelf. Unleashed will also give users prompts if a batch is about to expire.

“On the dashboard, by default, it says there is going to be a number of batches expiring in the next couple of weeks or days. It is on the dashboard, so it’s the first thing you see when you log in,” said Dadello. “They will turn red if it is going to be soon. Anything that has
already expired will also be in red.”

Unleashed also has a stock-taking feature, which is critical to keep up to date especially if a manufacturer is using multiple warehouses.

“I see a trend in food and beverage manufacturing whereby if you are not warehousing product yourself it is quite common to have a third party doing it,” said Dadello.

Users often don’t touch the stock, or maybe they only capture the finished product. Unleashed often sees businesses get into trouble when they purchase stock, which they send to a third party, but they have no idea what the stock levels actually are. They assume there is a certain amount and they get into trouble because when they find that amount is wrong it can often cause friction between the business and the third party. Unleashed fixes this by having real-time information on stock levels.

“You would still keep the manufacturing relationship you have with the third-party manufacturer. But just being able to track what you have given them, in terms of raw ingredients, and what they’ve said in terms of the sales side. If you’ve made 10 kegs of beer, being able to say, ‘I can sell 10 kegs of beer, because that is what my third party has just manufactured for me’, then you can make arrangements to sell it. However, if you only have five, then you have a problem. So, it is being able to have that traceability with that third party that can be a problem.”

Dadello said the payment model is subscription based, depending on individual needs. She said that back-up service is one of the main planks of the business and Unleashed has several different aspects to that part of its organisation.

The company has free email support for all users of Unleashed. People don’t have to be a user; they can be a prospect or a partner. The company is not going to turn anybody away. With every new medium subscription or above, it has a free four-hour onboarding resource.

It helps guide users through the tasks they need to do to help them get up and running. That is the nature of incorporating a new system – users need to know how their current business fits into the new system. And And it’s not something that can easily be documented. Every business is slightly different.

How Vega has led the way in radar level transmitters

The use of the radar level transmitter for the process industry started back in 1991. These were extremely large units and operated with a 6GHz frequency. The units were sold generally into liquid applications and were only ever considered when no other technology would work. They were a large unit weighing in at several kilograms and operated only from an AC supply.

In 1997 Vega released the world’s first true loop powered radar level transmitter, offering a more suitable transmitter for typical process applications. But once again they came with their limitations. 1999 saw the 26 GHz radar level transmitter being released, offering a smaller unit with a reduced antenna size and narrower beam angle (a downside to lower frequencies is the larger beam angle).

Vega continued to develop and improve radar level transmitter performances through the first decade of 2000. The main changes were in the software area where, thanks to customer feedback, the parameters for setup were improved and made much more descriptive and user friendly.

As with all developments you reach a point where the components and physics of the technology have been maximised. At this stage, Vega started research on the 80 GHz frequency range. This frequency was not new to the market as it was and still is quite common in the automotive industry with reversing sensors.

During the research and development of this frequency Vega carried out a number of real-life customer trials and the results of these opened up many more opportunities for the use of the radar that had never been practical before. It also allowed, for the first time, antenna sizing and adaption to many typical process fittings that exist in the industry. One of the things to note with regard to radar frequencies is that, as you increase the frequency, the antenna size and the beam angle reduce.

Radar level transmitters work on the reflection of the signal from the product being measured, and the strength of that returned signal is based in the Dielectric Constant (conductivity). So, in the past, they were not considered suitable for applications that have a relatively low DK value radar. 80 GHz now allowed these measurements to take place, but, of course, there are other considerations.

As well as the high frequency, you also need quality components that provie you very good sensitivity or dynamic range as it is commonly known as. Typically, up to this point, radar level transmitters had a dynamic range of around 90 db – that is, until the VEGAPULS 64 (liquids) and the VEGAPULS 69 (solids) were developed. Vega had manufactured a radar level transmitter with a dynamic range of 120 db. So what does this mean? Well, as with audio, for every increase of 3 db you get a doubling of the power. An increase of 30 db over the previous and existing radar frequencies achieve an increase of over 1000 times in the sensitivity of the Vega 80GHz radar level transmitters. For this increase Vega transmitters were now able to measure extremely low DK products such as plastics.

Radar level transmitters, like all instruments, do have their limitations, and many limitations are set by the physics of the technology. It is very important to take into account not just the frequency, but all the data, when evaluating whether a transmitter is suitable for the application. At Vega, 80 GHz has proven to be a large step forward in solving difficult applications, but the company has developed a model for liquid applications and a model for solids applications, as different algorithms for the types of process medium are needed.

Radar level transmitters are now a very accepted form of non-contact level measurement and the use of these units has increased by many times over the past decade. But as with all developments, this one has not yet finished, and Vega is continuing to improve the transmitters. The company said that, in the near future, it will again break through barriers and open up opportunities for radar to provide more solutions in industry applications.

Looks matter when it comes to taste

Driven by impulse, consumers often make decisions based on a product’s aesthetic appearance, making label design a key competitive advantage in food manufacturing. Find out more.

Your average Australian supermarket carries approximately 40,000 different products. When every product is vying for consumers attention, how do you ensure your product cuts though the noise and stands out from the rest?

Driven by impulse, research shows that consumers take only two and a half seconds to make a purchasing decision and read on average only seven words during an entire shopping trip. Instead, buying products instinctively based on brand recognition, colour and shape of packaging. Therefore, how a product is labelled is a key driver behind a consumer’s purchase decision.

Effective product labels should emphasize your brand’s DNA and evoke a memorable, emotional response…all within 2.5 seconds. Product labels that encapsulate these characteristics will have the most successful shelf impact.

Emphasise your Brand’s DNA
A brand’s DNA is made up of the core values and beliefs that captures who you are as a brand, what your product is, and what your brand stands for. Your label should be a cohesive part of this identity, and accurately represent your brand’s story. Bringing your brand’s DNA to life can be achieved through colour, label face stock (top layer of the label) and embellishments.

When selecting your label face stock and embellishments, reflect on your brand’s primary characteristics and personality. Does your product offer environmental awareness? This can be represented through a biodegradable face stock. Perhaps luxury is a key brand characteristic – this can be expressed through foiling embellishment, or simplicity can be achieved by using a clear face stock.

insignia offers a range of premium-labelling face stocks and embellishments from cold foiling (designed to deliver high quality and cost-effective metallic printing effects), two side printing, to UV Flexo and UV lamination. Labels that stand out on a crowded shelf by instantaneously communicating to consumers your brand’s DNA will have the most successful shelf presence.

Colours Evoke Emotions
Consumers subconsciously make judgement within 90 seconds of viewing a product. Further to that, research shows that 62-90% base that judgement solely on the product’s colour. As 85% of consumers attribute colour as the determining factor when purchasing a product, it is evident that colours used on your product label play a role in affecting consumer emotions. Consumers act when a brand makes them feel something. Therefore, the colours that you choose for your label should project a deliberate subconscious message to attract your target audience and prompt them to choose your product.

Impactful Differentiation
Ensuring consistency of tone, colours and graphics not just on your labels but across your branding is critical in building brand credibility among consumers. Consistently maintaining these elements of your brand’s identity can eventually be the iconic differentiation that set your brand apart from the rest. For example, you see a red and white swirl and instantly think Coca Cola, or automatically associate the colour purple with Cadbury.

At insignia, our team of experienced graphic designers work directly and collaboratively with you to assist with label colour and die recommendations, as well as label design and layout. Working closely with our certified printers throughout the label making process to ensure your labels create a lasting impression on the shelf and in the minds of your customer.

If you would like to find out more about how insignia’s team can help you with your labels contact us on 1300 467 446 or sales@insignia.com.au.

 

How vibratory compaction tables settle products

Companies in the bulk packaging industry experience a range of material challenges during the packaging and filling process. These challenges include material condensing, densifying, de-airing, material settling and material packing.

During the packaging and filling process, materials become aerated. Material that is transported in an aerated state will eventually settle and compact due to gravity or the vibration in transit.

Aerated material can compact up to 20 per cent and this results in dead space in the container. This dead space can cause product breakage and loss, and in some cases contamination. Further, when transporting materials on a cubic-metre basis, the opportunity to fully utilise the capacity of the entire container is lost. These issues are especially common in industries that process and package, such as nuts, spices, pet food, biomass pellets, livestock feed and grains. These issues also occur in fertiliser and cement-sand packaging and processing. The consequences of these challenges are reduced efficiency, increased operation, transport and storage costs.

VSS vibratory compaction tables are designed to compact, settle and consolidate product and dry bulk materials during the packaging and filling process. VSS vibratory compaction tables are available for light-, medium-, and heavy-duty, depending upon the specific material, application and processing facility.

VSS vibratory compaction tables are suitable for a range of applications in the bulk-packaging processing line. They flatten the cone or pile of material made from the filling station discharging into rigid structure packaging. This compacts and settles material, allowing for up to 20 per cent more material to be added to the container, utilising the full container’s capacity and protects the product from breakage, product loss and decreases the risk of contamination. This also allows for more product to be shipped in the same amount of space, saving money for the producer and customers.

The vibratory compaction tables compact and stabilise flexible intermediate bulk containers (FIBCs), including bulk bin bags or super sacks for easier stacking and handling prior to storage or shipment.

In addition, these tables remove air bubbles from moulds, cast products and liquids (like chocolate) to improve structural integrity, surface finish and quality control. They can also be custom designed to accurately weigh material and fill containers to the required mass. This is important when products are sold or shipped by weight.

With the correct application of vibration, the material should move up and down in the centre of the compaction table with little side to side movement. While all VSS vibratory compaction tables utilise vertical linear vibration to achieve this “up and down” movement, each compaction application design requires the consideration of each application’s unique variables.

When designing a vibratory compaction table, variables like weight, material characteristics and structural design must be taken into consideration as it affects table design, applicable accessories and the vibration frequency necessary for the specific application.

Depending on the application, tables may be designed with a flat deck, a grid deck or a belt table.

For areas that have limited space and where height requirements are at a minimum, the compaction tables are available in low profile. For applications that require accurate weighing and filling, VSS vibratory compaction tables can be equipped with digital scale instruments that use set points to control the start and stop of the fill device and the vibration sequence.

When choosing the correct pneumatic vibrator for the application, the required vibration frequency is largely dependent on the material density; high-frequency vibration with smaller resulting strokes is suitable for heavier material. While lower frequency vibration with its larger strokes is more suitable for lightweight materials.

These tables lower labour hours and costs for packaging and processing lines in the bulk packaging industry.

Enclosed DAF system still achieving excellent results

Adelaide-based Sunfresh Salads produces packaged food that can be found on leading supermarket shelves throughout Australia. The family-owned business takes respecting the environment seriously, especially when it comes to effluent discharge.

So when the company’s wastewater wasn’t up to council specifications some years ago, it called on wastewater specialists Aerofloat to find a solution.

Five years later, the Aerofloat wastewater treatment system continues to remove up to 97 per cent of fats, oils and grease and ensures a compliant effluent discharge.

Sunfresh specifically chose Aerofloat’s system over other products on the market, according to Sunfresh Salads’ HR and environmental service manager, Robert Mika.

“The AeroDAF 100 system was initially built as a prototype from Aerofloat’s new patented design, and we chose it for good reason,” he says. “Many other systems that we looked at were open top tanks exposed to the external environment. The Aerofloat system was completely enclosed, which meant there were no odours. Being enclosed also means we have no issues with rodents and there is no visual attraction for birds on site.”

Health and safety are integral to Sunfresh Salad’s food preparation principles, and a system that allowed it to meet council effluent regulations, and was also odourless was a win-win for the company.

Michael Anderson, general manager for engineering for Aerofloat, said it is not the first time a company has installed the system for this reason.

“We completed a similar project for 4 Pines Brewing Company where the treatment plant was located about five metres away from a restaurant sitting area and bar,” said Anderson. “In the brewery installation, we included a similar DAF to the Sunfresh Salads system and vented every pipeline above the building, so as to not affect those in the restaurant.”

The patented design of the AeroDAF 100 has stood the test of time, continuing to give great results.

Anderson advises companies that are thinking of investing in a new system to make sure they know what’s included and what they are getting for their money. “A recent client had been shopping around and finding highly variable pricing on the market,” he said. “I explained that a DAF is just one piece of the puzzle.

“A complete treatment system needs to address a number of factors. For example, water needs to be averaged out, pump flows selected, pH corrected and the correct chemicals applied.”

“A critical part of the process is having good screening equipment up front and appropriately sized tanks to accommodate flow. Remember that wastewater flow and consistency varies with production. The chemical dosing to the system is essentially set-and-forget after commissioning so it’s also important to have a decent balance tank to average out the wastewater.”

“Some companies will install basic equipment and then need to call in a number of third parties – this is where is Aerofloat is different. We have a large team that can deal with all the disciplines required to create a successful waste treatment plant that can accommodate production changes and growth.”

Mika commended the ease of use and simplicity of the installation at Sunfresh Salads and explained the wastewater treatment process in detail.

“All our waste was previously collected in grease traps which were no longer supporting our needs. Aerofloat converted the system to allow the waste to be pumped via a rotary screen.”

“The wastewater is then discharged into a blending tank to be mixed and corrected for pH. It then flows to a balancing tank and on to the AeroDAF 100 where it is treated with coagulant and polymer. The flocculated waste particles are floated to the top of the tank and then, automatically pushed into the waste tank.”

The AeroDAF 100 system is easy to use. As Anderson explains, it is also mechanically simple, with less working parts, which lessens the chances of a breakdown.

“With our system, you push the sludge out through a conical shape from the DAF. This means that you don’t have to maintain complex scraping chains. It also means we can manufacture the DAF more economically.”

“Depending on the project, we can offer our patented design or traditional scraper DAFs. We decide on the best fit for the client’s needs following a thorough assessment,” Anderson continued.

As food and beverage companies grow they tend to create more wastewater. So, how often does a company need to revise its wastewater plant?

“Higher wastewater flow means more pressure on existing systems and companies are therefore at increased risk of facing council water compliancy issues.”

“If the authority is happy with the wastewater amount and effluent quality being produced, then the company won’t have any issues. However, once the facility starts to grow, or the equipment they have installed isn’t working properly, then everything must be reviewed.”

“There are subtle signs that things might be going wrong. Often a system appears to be working but is at high risk at not being able to sustain the flow or discharge requirements.”

Aerofloat’s flexible designs allow companies to expand, change and grow and the company’s engineers can simply enhance or add technology to the existing system as required.

Custom designed solutions that apply patented technology in combination with other cutting-edge products, means Aerofloat is equipped to address a range of wastewater treatment needs in the industry. The long-term success of the innovative AeroDAF 100 design over time has been demonstrated repeatedly since its inception five years ago.
Sunfresh Salads look forward to ongoing growth in the future and are confident that its wastewater needs will be met with Aerofloat’s technology on hand.

Packaging designed to leave nothing behind

With the war on packaging waste, together with 2025 global packaging targets, it’s fair to say that the food packaging industry is busy finding new ways for smarter packaging. The strong media focus on “end of life” for packaging means consumer awareness and demand for green solutions is growing, along with the increasing concerns that packaging is ending up in our landfill and oceans.

While efforts to reduce end-of-life impact are certainly critical, the significance packaging plays in protecting food and reducing food waste is often underestimated. So, as we get busy finding new smarter ways for packaging, where exactly should we be focussing?

Designing food packaging for longer product shelf life and product protection is non-negotiable. Resources need to be optimised and end of life taken into account. Well-designed packaging takes the full life cycle of a product into account – end of life cannot be considered in isolation of the primary role of packaging.

Reducing, reusing and recycling are great ways to make a smart difference and certainly have their uses in the greater scheme of things. However, the best way is to embrace the opportunity to re-design, reinvent and change the status quo. For example, fresh proteins packed in a modified atmosphere tray lid configuration require absorbent pads to retain product purge. In fact, across ANZ’s fresh meat sector, more than 750 million soiled pads end up in landfill each year. That is a huge number. Rather than re-designing the pad to make it recyclable and therefore address ‘end of life’ concerns, a total rethink of the solution gave rise to a new sustainable way.

Sealed Air’s Cryovac HydroLoQ barrier tray is a new concept where product purge is retained by the purposefully designed cavities in the tray, thereby eliminating the need for a soaker pad. The recyclable tray offers extended product freshness and shelf life and with no soaker pad to dispose of, Cryovac HydroLoQ is designed to leave nothing behind.

Another example of re-design and reinventing is the gradual evolution from modified atmosphere packaging technology to vacuum skin technology, which offers a step change to Sealed Air’s food value chain. For example, Cryovac Darfresh is proven to at least double the shelf life of fresh red meat, enhance logistic and retail efficiencies and offer an enhanced consumer experience. Extended shelf life of this magnitude means less food waste, less packaging waste and it means better profits for our processors and this means better business sustainability. Not to mention, the best eating experience available.

Smart design means smart for everyone along the value chain, from processors to retailers and consumers. While down gauging (reducing) ticks one box, its benefits cannot be negated by poor operational throughput, down time and lost profits.

Cryovac OptiDure is an example where traditional barrier shrink bags have been re-engineered to use less material, drive improved abuse resistance, and improve operational efficiency and throughput. Its leading clarity and gloss characteristics drives stronger shelf aesthetics and that means greater consumer appeal. And once the product is opened, consumers can place the shrink bag into polyolefin recycling streams.

A holistic approach to packaging design will yield the best outcome, but a design around end of life only is a flawed approach. The noise around end of life alone should not dictate future packaging design and development.

Beyond saving food and delivering operational excellence, smart design must also take into account product and consumer safety. As we commit to including recycled content into “direct food contact” packaging, we cannot simply introduce a new recycled element into a re-design without proper validation. This is not an area of guesswork and must be validated from a regulatory perspective, ensuring it meets all necessary food law requirements.

While all of this logic may resonate across industry professionals, this is a story waiting to be told. In the minds of consumers, plastic waste is still perceived to be worse for the environment than food waste. According to a recent survey, ANZ consumers agree that re-sealable packaging is the best way to reduce household food waste. The findings also show that packaging has a reputational impact on the supermarket. More than 45 per cent of ANZ shoppers state they would react positively to a store promoting their food items as being packaged in a way that optimises food freshness.

Now is the time for education and B2C communication. Consumers need to understand how packaging contributes to a safer and less wasteful food supply chain. They need to know how it impacts food accessibility around the world and how it drives better business sustainability for local producers and processors. Brand owners have a role in telling this story. Without a story, consumers and non-industry stakeholders see packaging as unnecessary, simply adding to our waste piles.

To reduce is priority, but whether we design for reduce, reuse or recycle, the full product lifecycle must be at the front of mind when designing packaging. A smart design that yields a sustainable outcome for all of our value chain is a fail proof way of leaving our environment in a better place that which it was found. And, that’s a stronger story we should all own.

Part of the problem is that there are a few misconceptions out in the marketplace when it comes to the sustainability of food packaging.

Sustainable packaging is often met with the perception that it is green and environmentally friendly in that it is made from renewable materials and can be recycled or is compostable. Quite often, the focus on end of life and its disposal dominates. But, there’s a missing part of this story about packaging’s primary role in keeping food fresh and safe. If you consider the resource intensive nature of our food supply chain, packaging that can double shelf life offers immediate and substantial environmental benefits.

Longer shelf life and freshness allows us to consume products within a greater time period, enabling less waste. But, it also goes a step further. There are also peripheral benefits, such as not wasting the resources that surround the packaging of products, such as the water and energy required to produce an item.

Sometimes, damaged products, or spoiled foods, have a greater environmental impact than the products that protect them. For example, the carbon footprint of 1kg of beef is nearly 400 times that of the plastic packaging used to protect it during distribution and sales.

We need to remind stakeholders that sustainable packaging involves understanding the life cycle analysis of the whole package including the product, packaging and shipping. This is something some people do not consider when looking at the big picture. Cost sensitivity is a concern, but is often negated when processors and retailers realise the myriad of supply chain benefits. From reduced re-work and down time through to extended shelf life and product appeal, it’s easy to see how value sells itself. Again, while the initial outcome seems obvious, if you dig a little deeper, there are other considerations that need to be taken into account.

Sealed Air just doesn’t talk the talk, it is dedicated to the 2025 pledge and its packaging targets, and it does so by strongly supporting its research and development team. While efforts are deployed to meet targets, smart design underpins Cryovac innovation. It starts by efficient design and waste avoidance, ensuring packaging design provides efficiency and functionality.

One of the challenges is changing the mindset of the consumer. In the minds of many customers, plastic is still perceived to be worse than food waste for the environment. Let’s applaud the past three consecutive years where FMCG brands including Harvey Beef, The Bared Bird and Don KRC have been awarded gold for the Packaging that Save Food category at the Packaging Innovation and Design Awards (PIDA) using Cryovac solutions that extend shelf life and reduce waste across the supply chain. Brand owners have a great opportunity to leverage this and drive a sustainable brand story.

Sealed Air loves exciting the industry and we like to keep some things a secret. What we can say is that as we reinvent Sealed Air, we reinvent the way we make our products and solve our customers solutions. As an industry however, we know that education at store level and across consumer brands will drive better informed consumer buying decisions and thus we should start to see brands tell this story.

As mentioned, research shows more than two in five Australian and New Zealand grocery shoppers stated they would react positively to a store promoting their food items as being packaged in a way that optimises food freshness. But what they also said was that they would react positively to a store promoting that its fresh food items are safer to eat. The reputation and image of food brands and retailers is likely to be positively enhanced by participation in educating the public about food packaging and helping them to make more environmentally friendly choices. A store or retail brand being proactive in communicating about how to reduce food waste is likely to drive favourably among consumers.

Alan Adams, Sustainability Director, Sealed Air, APAC

ifm helps build reputable businesses that connect with others

Reputation can lead to failure or success. And in a world where many speak about negative experiences more than positive ones, a company needs to hold a good name among industry. As a part of sustaining a reputable business, PwC stated in a survey – What drives a company’s success? – that companies were more likely to succeed if they had a clear understanding of their own business.

The survey shows that companies find it harder to understand their own strengths than to understand their customers. By knowing themselves well, and leveraging their distinctive strengths to build a clear identity, companies can outperform their peers. But many companies aren’t basing their strategies on this insight, the study found. In fact, companies have widely divergent views on how to develop strategy, despite evidence that a capabilities-driven approach delivers the best returns. Additionally, companies with a clear identity –standing for something unique and consistent over time – tend to perform better than others.

The survey, which included 720 participants, identified what people recognised as key strategies for success. The most important drivers of success for the world’s 105 largest companies include having a coherent business strategy where everything the company does points in the same direction. It is also important that of products and services perfectly fit together and support a company’s value proposition.

Successful companies are also deemed to be agile, fast-moving innovators that stay one step ahead of challenges. ifm’s clear business strategy, and its commitment to putting customers’ requirements first, are among the reasons engineering solutions provider, Agito, chooses to work with the company.

ifm sells sensors, safety systems, light curtains and other products to Agito so it can fulfil its projects, which include building conveyor systems, PLC control equipment and automation systems.

Agito managing director Michael Musca said he prefers to work with ifm because the ifm team is takes time to look at a company’s needs. “They care about us and they actually care about what they do. They answer the phone, they provide good services and they are invested in what we are doing.

“They need to understand what we are doing to be able to sell the right equipment to us. They make the right suggestions for new equipment they have because they know what we are about.

“That’s important because if you don’t know what’s available, you might just do what you’ve always done. Sometimes, for example, buying new products can be more cost effective,” said Musca.

He said ifm’s service and support differentiates them from companies that offer similar products.

“They’ve got a good system in place to get the phone answered every time and the people care and are interested.”

Agito uses ifm’s AS-Interface (ASI) system, which allows devices to communicate.
“It’s simple and the installation takes is a lot less time when compared with other systems. We have halved the installation time.

“ifm supplies the network of controls to allow us to drive things. You don’t have to wire a single wire through a device. You add to it as well. That’s what I like about ASI – it’s always able to grow.

“Other systems can be more expensive,” said Musca.

Agito has used the ASI system for many applications, including in food manufacturing facilities and in airport motor control systems. The ASI system includes inductive dual sensors for position detection on valve actuators, position feedback for single and double seat valves and for diaphragm valves, and inductive sensors for use in machine tools.

Agito builds specialty machines such as robotics or PLC control equipment. The company works predominantly in the food and beverage industry on projects such as conveyor systems for bakeries and soft drinks manufacturers.

“We build new equipment. We design it and decide which products to use. ifm’s products are easy to use, provided that people have a bit of training. Nothing is simple in electronics.”

While Agito trains its staff in-house, ifm is also able to provide training to customers. The company offers internal and external seminars and presentations about individual devices or whole product groups. All documents about system documentation are also available
as a download.

What’s next for barcode technology

Over the past few years, with the Internet of Things (IoT) and Industry 4.0, data has been at the forefront of a lot of thought processes when it comes to smart factories and new products. If there is one thing GS1 knows about, it’s data. That is the raison d’etre of the standards bearer. After all, it was at the forefront of the barcode revolution. So what of the future?

A keynote speaker at the company’s Nexus 2019 Conference, was the not-for-profit organisation’s global chief solutions and innovation officer, Robert Beideman, who spoke about the importance of new technologies and where the likes of barcodes and their future iterations stand.

GS1 standards are the link between technology and business. Beideman believes that at the core of every consumer interaction is data. He also believes that a lot of companies are struggling to know what to do with all this information. As the video shown before his speech stated – “anything that can be connected will be connected” and “the identification of everything, makes anything possible”. Unique identification – something becoming more critical when it comes to food and beverage traceability, especially in emerging lucrative markets – is at the forefront of the latest moves towards digitisation and how it affects the consumer experience.

Technology, disruption and the supply chain were the main themes Beideman wanted to talk about.

“This conference is about what we can do to solve the problems that we all have together. Whatever those problems might be,” he said.

“Part of what we do with GS1 globally is take a look and scan the horizon. We work with GS1 Australia, with 113 GS1 member organisations around the world. These are country organisations that represent industry all around the world.”

He said, that what GS1 was concentrating on at the moment was looking at the major business problems that were facing everyone and prioritising them. Only then, said Beideman, is it possible to look at the technologies that might come to the fore and help solve the most pressing issues. He said the first thing people have to look at is data security and privacy.

“It is a $200 billion industry already,” he said. “This means we have the opportunity to do better when it comes to the amount of data we consume, that we share across enterprise, or we share with our trading partners. It is a huge trend – data security and privacy. Who owns what data?”

He said a side-effect of this, especially in the food and beverage industry, is issues around traceability. Standards for traceability have been around for more than a decade. He said that every so often there was a push for supply chains to do better with traceability, but it has never really taken hold – it has never become true end-to-end traceability.

“Until now,” said Beideman. “Regulatory drivers. Consumer drivers. People want to know where the stuff they buy is coming from. Where it has been? What it is made of? These business drivers are on the rise. There are things we have to do as an industry to address them.”

Beideman sees this as a huge opportunity for businesses, especially if the visibility, history and movement of goods is improved.

He added that there are a couple more pieces to the supply chain puzzle. Sustainability and the two-worded latest buzzword phrase “circular economy” as it relates to recycling. It also includes, he said, fair trade initiatives.

“With all these business challenges and issues arising every day, how do you prioritise?” he said. “What do you spend money on? But there are massive opportunities to serve customers more efficiently. And the list goes on. What about on-demand logistics services? I recently saw a video of an airship where drones were flying out of it and dropping off packages to people.”

He reiterated that the work needed was both Business to Consumer (B2C) and Business to Business (B2B). Streamlining processes, reducing transit times and warehousing and carrying costs – these are all business challenges that companies are being faced with every day.

“Then, there is the trend of automation and everything getting smarter,” he said. “You have smart cities, smart factories, smart homes and you have smart health. I’m not sure everything is getting smarter, but there is absolutely more data being generated.” And the challenge, said Beideman, is; how do companies adapt to these changes?

“I mean, when refrigerators know how to place an order for food, how do we react?” he said. “It doesn’t matter if you are a retailer, a brand or a transport company, you need to consider how this future impacts on your business.”

He said that another trend that was starting to gain traction, was bespoke products and services – drugs, food, vitamins.

“How do we react as an industry?” said Biedeman. “This is up to individual companies to solve, but they are things that we need to talk about.” GS1 Australia can provide some insights into the technologies that are available. This is also true of the value chain that it considers as it builds up standards with industry to remove costs and create better experiences to help companies sell more products.

“The value chain goes further upstream these days, to include growers and farmers, and it goes further downstream past the point of sale to the use of products and to the end of their life,” he said. “The value chains of today are far more complex than the traditional supply chains of yesterday.”

After GS1 looked at business trends, it looked at how technology could help. Put simply, IoT-enabled products create data and that enables the development of applications across industry, according to Beideman.

“Whether it is machine optimisation, smart industrial applications, or warehousing or logistics applications, sensors are becoming cheaper and more abundant and the data they are generating has the opportunity to help users address the aforementioned business challenges,” said Beideman. “But harnessing that data and making it useful for you is the challenge. Most of it is unstructured and not defined, and most of it is not standard.”

He feels that the better the standards can be mashed together, the better everybody will be. He said that Artificial Intelligence (AI)and the IoT create sets of data and knowledge and allow people and companies to take information from it – useful insights into whatever a company has to do. However, he said for AI to be something that helps solve business challenges, massive sets of data are required.

“Data that you understand the meaning of,” he said, “is essential. There is a massive trend out there in every industry in the world for data to become more readily available and easier to comprehend by machines. Everybody’s websites can be better than they are by using standards. It is the simplest thing in the world, but not something we have properly thought about. Not even if you are the representative of the IT team in your organisation. The more data we can put out there for consumption by machines, the easier it will be to solve those big business issues.”

He also said to be careful using blockchain as a blockchain is only as good as the data and information that is contained within it.

“If the information you have in it isn’t accurate or of good quality, all you have in your blockchain ledger is the ability to share bad data really well,” he said. “That is not helpful. Get the foundation right, and layer the technology on top of it, and solve your business problems.”

What GS1 has ended up doing is taking all of these technology enablers, and mapped them against business trends.

“We have released a report that is unique, in that I have never seen this done before,” said Beideman. “Truly mapping technology enablers to business trends as it relates to supply chains. So anyone – whether you are in the logistics space, part of the supply chain, or a manufacturer, the contents of this report can be helpful for you prioritising the technology investigations that you choose to do, or how to map them into the business challenges you are faced with solving.”

He said that GS1 sees a future where every retailer can verify every product that every brand makes, automatically. Where every retailer can connect to brand-authorised data about every product automatically and globally. Where every consumer can engage with every product in a way that generates added value back to the trading partner’s supply chain. Or every product that is made, can be a source of data back into a manufacturer’s enterprise.

“You can learn about what happens as it leaves your production line,” said Beideman. “But every product can also be a source of data back into every retailer on which that product sits on shelf. And imagine all that can happen while lowering costs and removing friction across supply chains.”

Beideman said it sounds like an impossible task, but he said GS1 is trying to do four things to bring that future closer to life.

The first, he said, is that they are developing a registry platform – a global, thin, neutral registry – of all the things that have identification based on GS1 standards. This means that anything that has a GTIN (Global Trade Item Number) on it, anything that has a barcode on it, will have the opportunity to be registered in this global, neutral, not-for-profit platform with some basic, simple attribution that raise the visibility of the smallest of the small business products.

“Number two, is making things into sources of data,” said Beideman. “There’s a standard out there that now bridges the physical and digital world of commerce that allows you to put a single barcode on a package that works and goes beep at the checkout, but also works on two billion mobile phones. There is work going on in Australia called data-embedded barcodes where we are investigating what is the right way to take the next steps are in terms of volume-pack barcoding. But one thing is essential – if we want two billion consumers out there to scan and read the stuff we make or sell, you have to bridge the physical and digital worlds much more effectively than we have.” Then there are the web pages. Beideman believes companies are really good at making web pages that enable people to add items to carts and checkout and have things delivered. But he believes that companies are bad at making websites that are easily consumed by Google, Yahoo, Yandex and Bing – the largest search engines of the world.

“It turns out the keys to the castle when it comes to data on the web,” he said, “is to know there are standards for that. How to define and describe products online in a way that has no impact on how your consumer sees your web page, but have a massive positive impact on the visibility and availability of your products. It’s called the GS1 Web Vocabulary. It’s really a little-known secret. Being able to supply accurate, structured data about products on your web pages changes the game. And there are standards for it.”

The final point Beideman wanted to make, is only a suggestion, he said.

“Think about how devices that talk to you – like Alexa, Google Assistant or Siri – are changing the game when it comes to things like buying decisions,” he said. “It’s starting now with a conversation with an electronic device. How are you going to adapt to that in your business? How are you going to ensure that your company is going to have a voice? That’s something to think about. Because right now, there is a world filling up with companies that own the microphones in your home and in your pocket via your mobile phone. And if you are a retailer, a brand, a transport organisation – how do you connect into those ecosystems. Or better yet, how do we figure out a way to make it open and balanced and neutral?