From administration to innovation: how the Byron Bay Cookie Company got back to business

2013 didn’t start off too well for popular cookie manufacturer, the Byron Bay Cookie Company. In March, the company announced it had entered voluntary administration, much to the surprise of consumers and fellow manufacturers. It didn’t take long, however, for it to be snapped up, with Rinoldi acquiring the Byron Bay Cookie Company in July, and getting the brand back on its feet in no time.

Emilie Emond, marketing manager for the Byron Bay Cookie Company, said the acquisition has completely transformed the company.

“At first people were asking why a pasta company would purchase a cookie company, but to me it didn’t sound odd at all, it just made sense because Rinoldi is a manufacturer with a lot of experience. They’re one of Australia’s oldest manufacturers, having been around since 1878 and they have the expertise that we obviously needed. And then for them, they acquired a very strong brand, so it did make sense.

“The mood at Byron Bay Cookie Company has completed lifted,” Emond told Food magazine. “And from a cultural point of view, Rinoldi is a family-owned business. They’ve got a very strong, positive, friendly culture and that’s transferred over into the Byron side as well. So you can see that people are happy to go to work every day. It’s made a tremendous difference.”

While there were staff casualties when the company first entered voluntary administration, 15 new employees have been hired since Rinoldi stepped in, and the new owners are now investing in making Byron Bay Cookie Company a leading manufacturer in Australia’s baked goods industry.

“From a practical point of view, the bakehouse in Byron Bay has seen a lot of improvements, because from the get-go Rinoldi has been investing in the site. For example, it’s introduced new processing equipment, and a new ERP [enterprise resource planning] system which we desperately needed … So now we’re in a better position to supply our customers in full and on time,” Emond said.

The Byron Bay Cookie Company credits the loyalty of its customers, including David Jones and Qantas, for its ability to get back to satisfying orders so quickly.

“We were very fortunate because all of our customers stuck by us. The best example is Qantas. We’ve been onboard Qantas for 10 years now and as soon as we were in trouble they reassured us that they were going to continue ordering from us, and that’s something that meant a lot to us, and obviously we’re still supplying to them – both domestically and internationally.

“And that’s such a core part of our brand. A lot of people know about us because of Qantas,” Emond said.

In other good news for the brand, Jetstar has recently announced its agreement to stock Byron Bay’s gluten-free Dotty cookie on its flights, both domestically and into Asia as well.

“That’s another big win for us,” said Emond, who believes the company’s customers were so loyal during Byron Bay’s troubles because they know how hard manufacturing is in Australia at the moment and were keen to stand by a local brand doing it tough.

Instead of making a song and dance out of its acquisition and resilience through tough times, Emond said Byron Bay Cookie Company’s strategy throughout the year was simply to put its head down, work hard and keep its customers happy.

“Our first focus was [to ensure we were able] to fulfill our orders … Because we’ve got such a strong presence in the café world, it was important for us to be able to supply our cafes, because at the end of the day when people grab a cup of coffee and they see the jars on the counter, that’s the biggest brand exposure you can get. So it was important that we could continue supplying, and keep those jars full.”

Once that was guaranteed, the marketing team was able to work on a very subtle marketing campaign, including attending industry events, conducting product sampling and promoting the brand through social media.

At the end of the day, however, it all comes down to the product. 2014 will be a year of innovation and product development for the Byron Bay Cookie Company brand, because there’s no better indication that a company is thriving than if it continues to release products that are in demand and sell well, said Emond.

“Product development has always been a strong area for us, but I guess in the last 12 months we had to kind of put it on hold. I know we released an Anzac biscuit last year, which worked really well for us, but we want to kind of push the boundaries when it comes to new flavours.

“We’re investing a lot in new product development. There are other new flavours in the pipeline as well for 2014; it’s important for us to stay fresh and relevant. We know that our customers love our classic flavours, but there’s always a need to keep innovating and keep the offering current,” she said.

“To be honest I’m quite impressed with how the company’s been turned around in such a short period of time. Yes, for the first couple of months there was a bit of damage control, but we’ve already managed to get back to where we were. And getting Jetstar onboard was a big win for us. It was like ‘OK we’re back. We’re strong.’”

 

Climate change through the grapevine – how will a warmer climate affect our wine industry?

During a whirlwind agribusiness tour of South Australia, Food magazine was lucky enough to be able to meet some of Australia’s leading scientists in crop science and viticulture, whose research focuses on how the South Australian and Australian agricultural sectors can best prepare for a changing climate.

Food manufacturers and producers around the world are already seeing the effects of extreme weather events on their productivity and livelihood and some are arguing that climate change is threatening the global food supply.

To minimise the impacts of climate change, the South Australian Research and Development Institute (SARDI), is currently undertaking a number of climate change application projects aimed at reducing and managing risks within the viticulture sector, including:

  • “Decompressing harvest and preserving wine identity”: a project led by Professor Victor Sadras which focuses on the effects of elevated temperature in grapevine physiology, berry traits, wine attributes, and viticultural practices to minimise the undesirable effects and maximise on the beneficial warming effects expected in the future.
  • The Grape and Wine Research and Development Corporation (GWRDC) project series which includes the GWRDC Managing the impacts of climate change rainfall decline on vine balance and root activity, led by SARDI’s Principal Scientist Dr Michael McCarthy.

Nicknamed the ‘winter drought project’, McCarthy’s GWRDC project is located in South Australia’s famed winemaking region, the Barossa, and is designed to simulate climatic conditions that the Barossa is projected to experience in 2030-50. The vines are positioned under rainout shelters, preventing them from receiving natural rainfall in winter and spring, and are instead exposed to artificially replaced rainfall or drip irrigation at different levels based on the climate projections for rainfall.

“There are some people saying that the wine industry is the canary in the coalmine in terms of sensitivity,” says McCarthy. “The approach we are taking is that the climate has always been variable. There is nothing new about a variable climate. But, if we can get growers to understand how to better manage existing climate variability, then they will be in a better position to manage any future climate change.”

Should the projected changes in climate occur, McCarthy says that wine varieties which are currently well adapted to the present climatic conditions in particular regions, may not be as well adapted in years to come.

“What is beginning to happen in Australia and elsewhere is that certain varieties are now being identified in certain regions: the Clare Valley/Eden Valley for Rieslings, the Barossa Valley for Shiraz and so on. Those varieties are well adapted to those environments under current conditions.

"Now if we go forward 50 years, and accept that we are going to be warmer and drier, are those varieties still going to be as well adapted to those regions as they might be at the moment? Do we continue to grow those varieties in those regions, and accept that there will be a change in wine style, or do we start to look at wine varieties that might be more suitable for those regions under a warmer environment? That is the challenge.”

So how exactly will a change in climate affect grapes?

In their research, Professor Victor Sadras’ team has found that to get the same colour in red grapes under warmer conditions, the fruit must be left on the vine for longer. The problem this presents is that while the fruit matures to an acceptable colour, the sugar content – what becomes alcohol in the wine – also increases.

“To achieve the same colour level – the trade off might be a higher alcohol content,” says McCarthy. “The wine industry is trying to be responsible in terms of alcohol use, and we don’t really want to be promoting higher alcohol wines… So again that is management and varietal choice that we will have to explore into the future.

“What the consumer may need to accept is that, in 50 years time, Shiraz out of an individual region, anywhere in the world may taste different to how it does now.”

Another issue for industry relates to ‘compressed vintages.’ With increasing temperature, a greater proportion of fruit is ripening in a shorter time window, resulting in a compressed harvest period. This results in a significant strain on harvesting resources and logistics as the time available to transport and process the fruit is compressed.

“The problem with this is that there are more grapes ready to harvest on any one day than there has been before, so that has all of these downstream effects, such as the ability to harvest the fruit, the ability to transport the fruit and the ability to process the fruit in the winery in terms of crushing capacity, fermentation space and all those sorts of things,” explains McCarthy.

Sadras’ project is testing the feasibility of using delayed pruning as a means to “decompress” harvest, and also to preserve the local identity of iconic Australian wines.  “The alternative of expanding the capacity to deal with more fruit in a shorter time is not feasible, as wineries already lock significant capital in equipment which is used for a short part of the year,” Sadras said.

In addition to the potential need for more capital investment, McCarthy says that a warmer climate may necessitate different management approaches, winemaking techniques and potentially new wine varieties as the sugar content continues to rise in the grapes.

“Will it be different management in the vineyard, new winemaking techniques that the winemakers will use? Or will it be that we actually have to start to look at other varieties within a region to stretch out that harvest?” says McCarthy.  

He says that the overall goal of the project is to provide the necessary tools that wine growers need in order to manage existing climate variability, and this will in turn put them in a better position moving forward.

“We have always had drought, we have always had wet years, we have always had hot years, but because the value of the crop is now so high, growers cannot afford to lose a crop. The question is now about the management and what we need to do to manage these wet years, dry years and extreme heat events.”

The Decompressing harvest and preserving wine identity project is funded by the Grape and Wine Research and Development Corporation (GWRDC) and the Australian Government through the Department of Agriculture. It involves close partnership with industry (Dr Paul Petrie, Treasury Wine Estates) and colleagues at the University of Adelaide.

 

Q&A with a Sail & Anchor brewer

We chat with Sail & Anchor brewer, Bill Hoedemaker, about Australia's craft beer craze and the challenges of competing in a crowded market.

Tell me a little about Sail & Anchor’s approach to craft beer
We like to keep things relatively simple by letting the recipe, our technique and the quality of our ingredients speak for themselves. Craft breweries are now producing beers with new techniques and flavour combinations, which is interesting and great for the craft beer scene. Sail & Anchor produces high-quality beer that can be enjoyed anytime, anywhere, by anyone.

What types of beer/beverages does Sail & Anchor offer?
Our main range consists of four beers: Monkey’s Fist Pale Ale, Lark’s Foot Golden Ale, Boa’s Bind Amber Ale and Cat’s Shank Kolsch.

Monkey’s Fist packs an unexpected fruity punch- a knock-out blend of American hops and a tingling bitter after-taste that is certainly refreshing.

Boa’s Bind Amber Ale is strong, hearty and full of body. Created with the use of Chinook and Cascade Hops along with 6 different types of malts, this Amber grips you from the start with its seductive warm colouring, thirst-quenching taste and deliciously bitter bite.

Cat’s Shank is a Kolsch that slips down easily. Using quality pilsner and Vienna style malts, the Cologne- inspired ale tastes light and refreshing like a lager. Perfect for a summer’s day.

In addition to our main range, we release a range of seasonal beers. So far, we’ve released Jack Tar Imperial Stout, Devil Dodger India Pale Ale and Changing Tides Barleywine Ale. Our seasonal releases are an opportunity to offer our consumers beers that are significantly more bespoke compared to our primary range.

Have you noticed any new trends emerge in the craft beer scene of late? If yes, what are they?
There’s been a trend towards extreme styles over the last few years, especially in the States and Scandinavia, that have extreme bitterness, ABV and flavour profiles. We’re also seeing lots of additions to beers that we wouldn’t have even thought about 10 years ago, such as green tea IPAs, wine, citrus fruits- all sorts really. Barrel-aging has gained some momentum lately too.

Craft beer is incredibly popular at the moment and a number of breweries specialise in the beverage – how does Sail & Anchor differentiate itself from its competitors?
Craft beer drinkers tend to prefer variety over loyalty to a brand or brewery. Exploring craft beer is very much about trying as many different things as possible. In that sense, there’s a great spirit of co-operation between craft beer producers. While a consumer may choose a four-pack of Monkey’s Fist one night, the next they might go for something different. It’s all about getting people drinking more craft beer, and in the long run that benefits us all.

As for how we differentiate ourselves, a lot of that comes back to our approach to craft beer-simplicity and quality. Our seasonal releases also give us a chance to stand out from the pack, and I believe we’ve developed a unique and engaging brand. All of these factors combine to help us stand out in the market.

What challenges do you face in your line of work?
A lot of people think of brewing as a really idyllic job, but in fact it can be incredibly difficult. For example, we’re sourcing multiple ingredients from multiple suppliers to make beer. If there’s a poor growing season for hops (as there was a few years ago), then we have to redesign our recipes and processes to suit. You have to be pretty easy going person to stay in the industry. It’s not for the easily-stressed!

How did you get to where you are today?
I started brewing with an old kit in my dad’s shed when I was about 16. My parents are Dutch, so they didn’t have a problem with me making beer – something my friends and I really appreciated!

I got my start as a professional by taking a leap of faith. I was working in far north Western Australia on mining sites when I decided to pack in the big money gig and take a job brewing at the Sail & Anchor pub in downtown Fremantle. We did pretty well at the Sail, and after a few years my brewing partner and I collaborated with my brother to start our own brewery just outside of Fremantle. 

What does Sail & Anchor have planned for the future?
We are about to launch our latest limited edition release, Changing Tides Barleywine Ale- just in time for the festive season. Changing Tides is an American-style barleywine, named for those hardy sailors who for months braved trying seas, and whose mood was always brightened by the sharing of an ale with shipmates.

Despite the name, barleywine is a style of beer, simply brewed to the strength of wine. Changing Tides pours a deep, murky amber with a fluffy white head. Pungent and sweet, the intense malt flavour and aroma is perfectly balanced by a load of citrusy American hops. At 11% ABV, the result is a rich, complex barleywine that will match with Christmas lunch perfectly. 
 

The real cost of pesticides in Australia’s food boom

More than A$17 billion worth of crops grown in Australia annually is attributed to agricultural pesticides. That’s a staggering 68% of the A$26 billion industry, according to a recent Deloitte report commissioned by CropLife Australia. So should we all pat ourselves on the back and eat up?

Most of us want cheap, perfect-looking produce and farmers want to make a decent living. Agricultural pesticides have undoubtedly reduced food loss and helped farmers provide the unblemished produce we have grown so used to.

But pesticides also represent a significant source of risk for human and wildlife health, and pollution into our waterways. Should we be concerned about these “costs”, and how do we account for them?

What are the costs of pesticides?

Pesticides (insecticides, herbicides, and fungicides) are applied over large areas in agriculture and urban settings. Their use represents an important source of diffuse chemical pollution that is difficult to monitor and difficult to control.

The overuse and reliance on pesticides has resulted in weeds and insects developing resistance to insecticides and herbicides. This results in excessive, ever-increasing pesticide use in an attempt to get on top of the problem.

For example, in the early 90s the overuse of insecticides resulted in resistant cotton bollworm (a serious moth pest of cotton), which nearly brought the cotton industry to its knees. New technology — genetically modified cotton expressing a bacterial toxin that kills only moths including the bollworm — has been a saviour to the industry and insecticide use has reduced by 87%.

Australia also has the worst weed resistance problem in the world, and many herbicides are no longer an option for control. Producing crops at a profit may be at risk, and the only way to get on top of the problem is likely to be by non-chemical means.

Pests developing resistance to pesticides isn’t the only problem. The use of “broad-spectrum” insecticides also wipes out all the good insects — the ones that eat the pests munching away at crops. Consequently, other pest insects that escaped the initial spray are able to grow large populations unchecked.

Unfortunately broad-spectrum pesticides are some of the cheapest chemicals in Australia costing only A$1.50 per hectare to apply in grain crops, making them an obvious choice for many farmers. These issues in themselves are challenging to manage not to mention the cost to human health and wildlife.

Insects are animals with neurological systems, and many insecticides, particularly organophosphates — a widely used class of insecticides — are neurotoxins to insects and to humans. Organophosphates are still widely used in agriculture in Australia even though many have been banned in the EU, and banned or restricted in the USA. Rarely do we ever measure these costs.

What are the alternatives?

The challenge is to reduce the risk from excessive pesticide exposure while maintaining and increasing the level of crop productivity. What are our alternatives?

There is an extensive range of policy instruments used by many countries to address human and ecosystem health concerns and pesticide pollution of water and air. These include regulation; payments to encourage lower use and more accurate application; pesticide taxes to encourage greater use efficiency by farmers; and advice and information for farmers on “best practice”.

For example, in 2008 the French government launched “EcoPhyto Plan” with a goal to reduce the use of pesticides and plant protection products by 50% by 2018, with an annual budget of €41 million (A$61 million).

In 2009 the EU adopted “Integrated Pest Management”: legislation to achieve sustainable use of pesticides, and prioritise non-chemical methods. The legislation takes effect in 2014.

This strategy will include a range of alternative management strategies to pesticides that can help control pests.

For pest insects, we can grow new crop varieties more tolerant to pest damage. We can manage weeds in fields and around field edges. We can conserve insect predators such as spiders and ladybirds. And we can selectively use insecticides that leave predators unharmed.

Research has also shown that native vegetation on farms can support these insect predators and native fauna. Managing vegetation to promote beneficial insects is known as “pest suppressive landscapes”, which could be a part of integrated pest management.

Another method may be crop rotation that produces “biofumigation” activity, such as mustards which produce a compound that inhibits fungal growth. These strategies can reduce soil-borne pathogens and break the disease cycle.

Where next for Australia?

If we compare pesticide sales and crop production in Australia we find that both increased from the early 1990s to early 2000s.

But for many OECD countries we now find that crop production has been decoupled from growth in pesticides. Instead, crop production has been boosted by other factors including education and training, payments for beneficial pest management, pesticide taxes, new pesticide products that can be used in smaller doses, and the expansion of organic farming.

In Australia there is actually very little data on pesticide use and environmental impact. This makes it difficult to judge how Australia is tracking against other countries, and how our flora and fauna are responding with continued exposure to these toxins.

Many groups and public lead alliances have expressed serious concerns about the way pesticides are regulated in Australia and about the implications for human health and the environment; several dozen pesticides banned in Europe are currently registered and used commonly in Australia.

Protecting crops against damage from weeds, insect pests and disease is an ongoing challenge. Integrated approaches, where chemical control is but one option — not the only option, and support for innovation from science, industry and farmers — will see us tackle these challenges.

Greater support for the development and registration of “softer chemicals” that are less toxic to the farm workers, and the environment, is needed. Australian farming is one of our most trusted industries precisely because we take steps to protect our people and our environment. We can’t get complacent if we’re to maintain that trust.

Nancy Schellhorn receives funding from the Grains Research and Development Corporation and the Cotton Research and Development Corporation. She has received funding from Horticulture Australia Ltd. From 2000-2010 she was a member of Gene Technology: Technical Advisory Committee for the Federal Government.

Sarina Macfadyen receives funding from the Grains Research and Development Corporation.

Anna Renwick does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

This article was originally published at The Conversation. Read the original article.

 

Coffee greenwashing works: study

Coffee labelled as “eco-friendly” can attract a premium, with consumers led to believe it tastes better, according to new research from Sweden.

The researchers, from the University of Gavle and the University of Chicago, asked study participants to taste and rate two types of coffee, after telling them that one was “eco-friendly”. In reality, both coffees were the same.

The study, published today in PLOS One, found participants preferred the taste of, and were willing to pay more for the “eco-friendly” coffee.

In a second experiment, participants were asked to taste coffee from two different cups, but this time they were not told which of the two cups contained eco-friendly coffee until after they made the preference decision.

Those consumers who identified as “high sustainability” felt the strongest about the label, even when they were told, after their decision, that they preferred the non-labeled alternative.

Low sustainability consumers appeared to be willing to pay more for the eco-friendly alternative as long as they preferred the taste of the product.

The study highlights the importance of perceptions on consumer behaviour, said Joanna Henryks, assistant professor of advertising and marketing communication at University of Canberra.

“Labels and honest labelling are critical because consumers use it to guide them in their purchase behaviour.”

Dr Henryks said consumers looking for eco-friendly or organic products would more than likely trust the label, and unless they were extremely motivated would be unable to check the claims of all of the labels on offer.

“Unfortunately within Australia and worldwide there are literally hundreds of labels claiming various issues,” she said.

The study authors argue further research could look at how to use the study findings to promote sustainable consumer behaviour.

But Robin Canniford, researcher in Melbourne University’s department of marketing, said these types of experiments don’t tell us enough about consumers' eco-friendly intentions because people perform differently in lab settings to how they do in their daily lives.

“When you figure in patterns of consumption outside the coffee arena the findings of these sorts of studies just can’t be generalised, because in daily life there are competing demands and people often don’t do what they say they’re going to do.”

Dr Canniford is currently trying to map the various, sometimes contradictory reasons that motivate eco-friendly consumption.

He said in some cases, ethical or eco-friendly intentions were a drop in a more problematic ocean of household consumption.

“An attitude towards one kind of product such as coffee might lead consumers to say it tastes better but when it comes down to it that doesn’t make them an eco-friendly consumer,” he said.

“For example, some people are consuming eco-friendly products to almost greenwash their household or themselves, but the amount of carbon emissions or sweat shop labour they save by consuming say, eco-friendly coffee, is smashed by the mobile phones they continue to update every year, or the clothes they buy and wear out in a few months.

“So whilst this study is interesting, we have a very long way to go to understand these problems.”

The Conversation

This article was originally published at The Conversation. Read the original article.

 

Reminiscing with Rutherglen

The history is palpable at Morris Wines, the Rutherglen winery where fifth-generation winemaker David Morris has just celebrated 20 years at the helm.

The cobwebs have been allowed to gather on the old pot still that was last used about 30 years ago.

But two basket presses that were installed soon after World War II are still in use. David says their gentle handling of the fruit is a key to softening the tannins that Rutherglen grapes have in abundance.

They also use an old Whitehill crusher: “It’s slow compared with a more modern crusher but … the beauty about it is there’s a little bit of stalk inclusion which is now becoming a bit more trendy.”

Time-honoured techniques continue to hold this 154 year old company in good stead. It also uses open fermenters, the submerged cap holding the skins down in the juice, producing what David describes as “layers of flavor.”

After vintage is over for Morris’s rich, full-bodied reds, the open fermenters are used for Port, Muscat and Tokay, wines that are among some of Australia’s, if not the world’s, finest fortifieds.

There’s history in the barrels as well, all 300 or so of them, in various sizes, some with a capacity of up to 550 litres. David’s father, Mick, who relinquished the role of chief winemaker to David after spending 40 years in the job, points out an old barrel made from Baltic oak and says, “You wouldn’t get that thickness of oak these days.”

Mick knows the barrel is well over a century old because the local cooper who made it went out of business in 1900 when phylloxera hit the region.

David is grateful for the legacy he has been left. “The old barrels have a tight grain to them and now they’re a fantastic vessel for maturing fortifieds because you don’t want the oak (to flavour the wine).”

Although he had made table wines with his father before taking over in 1993, David never realised how much work was involved in making fortifieds. “There’s always so much unfinished business. It’s all a work in progress.”

His efforts have clearly paid off, as during his time at the helm, Morris wines have amassed more than 4,250 awards, including 337 trophies and 1,399 gold medals.

David’s great great grandfather, George Francis Morris, established a vineyard and winery near Rutherglen in 1859 and by 1884 it was the largest wine producer in the district. Today, it is still a key player, producing
more than 50 percent of Australia’s Topaque (formerly known as Tokay) and being Rutherglen’s biggest producer of Muscat.

David’s father, Mick, was the first in the family to be university educated, gaining a Bachelor of Science at Roseworthy before returning to Rutherglen for his first official vintage in 1953.

In 1969, Mick sold the company, which ended up in the hands of the global Pernod Ricard group. Remarkably, Mick and subsequently David have continued to be hands-on in the business, preserving its family feel and great sense of history.

Mick still does some tasting and blending with David. “We’ve got very similar philosophies,” says Mick. “It’s always very considered; there’s no heat of the moment,” adds David.

In 1954, Mick made his first Durif, then labelled Claret, and this rich, full-bodied wine has since developed a cult following. But it is the fortifieds that Morris is planning to take to the world.

“We’re putting more spotlight on them to elevate them to the level they should be,” says David. “We’re looking at more international distribution in the UK, Belgium and Scandinavia. We don’t believe anyone does what Rutherglen can do in terms of Muscat and Topaque.”

Morris plans to introduce some regional wines as part of its Five Generation series, including a wild ferment Chardonnay from the King Valley and a Heathcote Shiraz. But don’t expect huge changes. “We’ve never really chased trends,” says David. “If it’s not broken, you don’t fix it.”
 

Getting a breakfast brand off the ground: Q&A with Yousli founder

Paul Findlay, founder of muesli brand Yousli, talks to Food mag about the struggles of launching a food brand today and what makes Yousli unique.

TELL US ABOUT YOUSLI. WHAT WAS THE THOUGHT BEHIND IT AND WHEN WAS IT LAUNCHED?
I was tired of spending so much time in the supermarket aisle, looking for muesli that was right with me. Most of the mixes had too much sugar, salt or saturated fats…or they were just plain boring in taste and texture. So I started buying whole foods and pulling together my own mixes using seeds, grains, fruit and nuts, and felt much better for it. But it got tricky trying to keep ingredient supplies up; it got quite expensive and I found there was a lot of wastage. There had to be a better way, I thought, and so the Yousli concept was born.

I created Yousli to get people excited about brekky again – it’s feel-good, simple and easy, putting the ‘You’ back into your muesli. You can order your muesli online in no time, creating your own custom mix just the way you like it. It’s then delivered to your door in two to five days, or in some parts of Melbourne the same day. 

To make life even easier, we have a delicious range of Pre-Mades – five in total – including our first Favourite Foodie blend, Shane Delia's Shameless Delight. We only use delicious whole foods – so our mueslis are delicious as well as nutritious.

WHAT IS YOUR UNIQUE SELLING POINT? WHAT DO YOU THINK MAKES THE BRAND SPECIAL?
What makes Yousli so special is that as a brand, it’s not about us, it’s about the consumer. We mix muesli your way using delicious, healthy whole foods.

Another unique selling point is that when ordering your Yousli you can be guided by the Yousli Online Nutritional Calculator. Developed by author and nutritionist Arabella Forge, the calculator updates your mix’s nutritional content with every scoop, so you can be sure that your mix is not just yummy but good for you too.

WHAT WAS THE HARDEST THING ABOUT LAUNCHING YOUR OWN FOOD MANUFACTURING BRAND? HOW DID YOU OVERCOME IT?
The hardest thing I would say would be getting our food suppliers and distribution partners on board, keeping in mind we deliver throughout Australia. We spent a lot of time up front (just over four months) meeting with suppliers and distribution companies. There was a lot of sampling and testing of products and services until finally will found the right partners for our business. It was hard work at first, but well worth it in the long run.

WHAT ARE THE BIGGEST CHALLENGES FACING THE INDUSTRY AT THE MOMENT?
For us it's distribution. It's a challenge to get our product out to anywhere in Australia at a reasonable rate. We only charge $3.95 delivery to anywhere in Australia, and it's free delivery for orders over $25. So that means we pay for the additional delivery fees over $3.95, but we feel this is worthwhile to make the product more accessible to our customers.

WHAT DO YOU FIND MOST REWARDING ABOUT YOUR JOB?
Getting those feel-good vibes out there, educating people about the benefits of eating wholefoods and hearing that we’re getting people excited about brekky again. And we have had amazing feedback on the taste and quality of Yousli.

WHAT’S NEXT FOR THE BRAND?
We have lots of exciting plans for Yousli, including an Activated Almond Bircher (launching at the start of December for Summer) and we'll be releasing healthy and delicious Yousli bars for next year. We also have a few exciting new Favourite Foodies launching their own Yousli blends.

TELL US ABOUT THE PACKAGING/LOGO/DESIGN. WHAT WAS THE THOUGHT BEHIND THEM?
The packaging itself is a heavy-duty cylindrical tube, great for posting and easy to pour out of. It has a special foil lining inside so that our product stays fresh. The branding is very simple – a mono black print on brown paper. We have a little smiley face at the top of our tubes, to embrace the feel-good factor and also to make sure a little somebody smiles at you each morning.

 

Food production in a warmer climate – what can Australia expect?

Climate change is an issue that will, and arguably is already starting to affect global food supply.

Scientists say that extreme weather events including the early start to the bushfire season in NSW and the recent Typhoon Haiyan in the Philippines are likely to occur more frequently as the earth continues to heat up.

A leaked document from the UN appointed group, the Intergovermental Panel on Climate Change, echoed this sentiment by stating that the greatest threat to the world’s food supply is climate change, and that the effects of climate change are likely to intensify as greenhouse gas emission continue to rise.

In order to minimise the impact of climate change on the food supply, researchers from around the globe are conducting various studies into how the industry can minimise the effects of a change in climate, and how best to manage the occurrence of extreme heat events.

Food magazine recently spoke to Dr Peter Hayman who has held the position of leader of Climate Applications within the South Australian Research and Development Institute (SARDI) since 2004.

As part of his research, Hayman assesses climate risk management and adaptation knowledge in South Australia, and has developed a new research capability for the state focused on understanding and managing climate variability and the impact of climate change on primary industries.

Hayman says that although the planet is predicted to experience a rise in temperature, a warmer climate may present some opportunities and well as challenges for Australia’s agricultural and food production industries.

“What we have a lot of confidence in is the rise of average or mean temperature, so warmer winters and summers and that has the general effect of plants growing quicker, which isn’t always a problem. But what you can find is that the development of plants is at a stage where faster growth can put things out of sync at bit. For example, with wine grapes, warming brings the ripening process from Autumn into late summer, that can be a problem.

“Of course we should acknowledge that there are also crops that open up new opportunities [in a warmer climate], and that is even within viticulture – there are some areas that are too cool for winegrowing. There are opportunities as well as risk with that sort of warming.”

Although there are a number of identified opportunities, Hayman explains that one of the greatest concerns that food producers face in terms of a changing climate is that of extreme weather events.

Spring heat events on wheat, and summer heat events on viticulture and fruit crops can have a damaging effect on production. As much of Australia is very water limited, Hayman explains that there is a real concern in terms of rainfall and long term drying of the land.

“There is a lot more confidence in the climate change surrounding temperature changes than there is surrounding rainfall, but certainly for South Australia, there is a growing trend – a worrying sense of projection of drying in the Southern part which impacts on both dry land farming, and on irrigation,” says Hayman.

“Linked to that is also a concern about the chance that even in a drier world, we may get more highly intense rainfall. If that highly intense rainfall occurs around harvest time, it can be a real problem, especially for a lot of horticultural products where quality is a premium – there is the potential for a lot of loss within that.”

Hayman explains that other pressing consequences of a warmer climate on food production is that of pests and diseases.

“There will be some pests that it won’t suit as well, but part of that is a changing spectrum. It might be that as the climate changes, there will be new insects, but it’s also possible that insects that are now at fairly low levels, may be able to increase up to pest levels.

“There has also been a lot of discussion about human health with the likes of malaria and dengue fever and those sorts of things. There is some work being done on weeds and pests in Australia, and how they may change, but one of the challenges is knowing exactly what the temperature range will be – there is confidence that things will be different, but exactly how the difference will manifest is always going to be hard to be specific about.”

Hayman states that the management of these extreme heat events is going to be an ongoing challenge for food producers, as they must be able to cope with  different weather conditions and events.

“If we focus too much on one, of course the other one can come and hit us,” he says. “And I guess that is to the point that there is ongoing variability even with a trend, so even if we were expecting a drying trend, there will still be wet years.”

Even with the current predictions being as they are, Hayman believes that the Australian food producing industries have the capacity to adapt well, both in terms of the varieties of crops that we have, and also with the farming techniques we use.

“I just think … thatit is important to recognise that there is a lot of ability to adapt, but there is also a level of change that will be very hard to adapt to. Australian agriculture is exposed and is very sensitive to changes. There is, however, a lot of ways that you can see where people have adapted to changes in the past, and I think that there is capacity to do that in the future.”

 

Foreign investment and the popularity test: does GrainCorp set a new precedent?

At any other time, Friday’s decision by treasurer Joe Hockey to reject Archer Daniels Midland’s (ADM) A$3.4 billion takeover bid for GrainCorp might have been just another controversial foreign investment decision.

Indeed, were it not for a widely reported split in the Coalition over the proposal, the decision may not have made it out of the business section of the national press.

However, inserted within the ADM-GrainCorp decision was a never-before-seen rationale for rejecting a foreign investment: the tenor of community attitudes and level of popular support. This seemingly minor caveat may radically change the way in which foreign investment reviews are conducted by the Coalition government in coming years.

Australia’s foreign investment framework

Debate about Australia’s foreign investment policy was catalysed in 2008, with the highly contentious “dawn raid” by Chinalco on Rio Tinto.

Since then, an ongoing series of high-profile foreign investment deals has attracted both intense public and regulatory scrutiny: these include the takeover of OzMinerals by China’s Minmetals; the acquisition of Felix Resources by Chinese state-owned Yanzhou Coal; the failed Singapore Stock Exchange bid for the Australian Stock Exchange, SAB Miller’s acquisition of Fosters, and the current takeover bid of Warrnambool Cheese & Butter by Canadian dairy group Saputo.

Australian foreign investment policy presumes in favour of foreign investment, and generally does not enforce local ownership requirements. However, investments in a small minority of cases are screened by the Treasurer to ensure they are consistent with the national interest.

This screening process is conducted by the Foreign Investment Review Board (FIRB), and must be undertaken if an investment: a) is from a foreign government investor; b) is a business investment over 15% of the targeted firm and valued at over $248 million; c) is in real estate; or d) is in a defined set of “sensitive” sectors (such as banking, airlines, airports, shipping, media and telecommunications). All other foreign investment applications receive automatic approval.

Reviewed applications are subject to a six-point “national interest test”, administered by the FIRB. This considers:

  • Impacts on national security
  • Impacts on competition
  • Impacts on Australian government policies
  • Impacts on the Australian economy and community
  • The character of the investor
  • [For state-owned enterprises] The commercial orientation of the investor

Following its enquiries, the FIRB makes a (confidential) report to the treasurer, who may either approve, reject or conditionally approve the investment.

The overwhelming number of screened foreign investments are approved. Over the five years to 2011-12, 38,590 applications were approved (valued at A$860 billion), while only 63 were rejected. The bulk of these were in the real estate sector, and prior to the GrainCorp decision only two major business proposals had been recently rejected: the 2001 Shell takeover over Woodside Petroleum, and the Singapore Stock Exchange’s 2011 bid for the ASX.

GrainCorp: a new populist precedent?

Friday’s decision is significant because it may set a new precedent for how foreign investment is screened. It would appear the ADM-Graincorp decision is implicitly adding a new, seventh criteria to the FIRB’s national interest test: community attitudes and popular support.

In explaining his decision, Treasurer Joe Hockey outlined two reasons for rejecting the proposal: that there is limited competition in the grains handling industry (presently dominated by GrainCorp), and that there was a “high level of concern from stakeholders and the broader community”. He also argued that “allowing it to proceed could risk undermining public support for the foreign investment regime and ongoing foreign investment more generally”.

Several analysts have argued the competition policy rationale is relatively weak. The Australian Competition and Consumer Commission (ACCC) had already approved the deal in June on the grounds it would be unlikely to substantially lessen competition, and ADM had made significant commitments to improve bottlenecks in the grain handling chain.

Thus, it would seem political concerns have loomed large. One consideration appears to be opposition from the Nationals, who had campaigned hard against the application being approved. But another was widespread community opposition to the deal, with Hockey instructing the FIRB to consider the “wider ramifications” of the deal – including public attitudes – mid-way through the assessment process.

Until now, community attitudes have not been part of the FIRB’s national interest test. While “community concerns” are considered, these are defined in economic terms – a fair return to the community, opportunities for Australian participation, the interests of employees.

The FIRB has not assessed whether an investment is considered “popular”, or how it will influence community attitudes to foreign investment more broadly. Moreover, no recent decision by the treasurer – whether approval, rejection, or conditional approval – has made reference to public sentiments. Until now.

The implications of community attitudes

The ADM-GrainCorp case is of course a single decision, and it is not clear whether this will be a one-off, or will be followed by the Coalition government in future cases. But it raises questions over how community attitudes should be assessed, and whether the FIRB even has the capability to assess them.

Community attitudes are a nebulous and difficult to measure concept. For example: if the majority of the country supports an agricultural investment, but a majority of rural residents oppose it, whose views should dominate? Moreover, the economic policy-focussed FIRB has no experience in assessing community mood, nor the resources or capabilities to do so at present.

Whether this would be a robust test, or simply a “get out of jail free” card that allows the Treasurer to reject controversial cases, remains to be seen.

Secondly, it would significantly reduce legal certainty for foreign investors in Australia. At present, there is a clear set of national interest guidelines, which have been applied in a transparent and consistent manner. A foreign investor will have a good idea as to whether their proposal ticks the boxes before committing, and can be confident the goalposts will not be moved part-way through the process.

Introducing volatile and contested community attitudes into the process may deter investors out of fear their proposals will be decided at the whim of populist politics.

Third, it will “politicise” the foreign investment assessment process. Rather than approving investments based on their economic merits, popular attitudes will also become a key criterion. A number of worrying outcomes may result.

Investment proposals could become an issue for party politics, determined more by the electoral fortunes of the government of the day rather than sound policy criteria. A business’s competitors may try and sabotage a deal by stirring up community opposition, transforming the FIRB process into a politically-contested commercial battleground. Vested interests with something to lose may also use popularity arguments to sink deals, even when they bring net national benefits.

If the example set in the ADM-GrainCorp decision becomes common practice, Australia’s supposedly “open for business” approach to foreign investment may change radically.

Jeffrey Wilson does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

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Toughen up: what Australia’s supermarket code could learn from the UK

The new draft voluntary code of conduct between supermarket giants Coles and Woolworths and their suppliers has so far elicited responses ranging from cynicism to cautious optimism.

Supporters point out the code will act as a useful adjunct to the existing statutory framework and provides transparency and certainty.

But critics describe it as intended to dilute political concerns around the misuse of market power and unconscionable conduct by supermarkets, heading off any attempt to introduce more draconian remedial measures such as market capping and divestiture – while not altering the underlying economics of lop-sided supermarket-supplier relations.

Other points out that the code fails to address concerns around major supermarkets’ leveraging their power into other sectors such as liquor, fuel and financial services. It is also unlikely to strengthen the bargaining position of primary producers, many of whom do not deal directly with the supermarkets.

And as a comparison with the UK experience shows, there are significant limitations on the Australian code’s likely effectiveness, not least of which is the absence of penalties for its breach.

The UK approach

Non-compliance with the Australian code could lead ultimately to declarations, injunctions, damages and a range of remedial orders requiring contractual terms to be changed and payments to be refunded. But a serious weakness of the statutory scheme underpinning the Australian code is its failure to provide financial sanctions for breaches.

The UK introduced a much tougher groceries supply code earlier this year, administered by independent Groceries Code Adjudicator, Christine Tacon, whose position is funded by a levy on the largest supermarkets.

Tacon, who participated in a major public symposium on supermarket power held by the University of Melbourne and Monash University in August, has wide-ranging investigatory and enforcement powers, backed by the threat of substantial sanctions.

Consequences for breach of the code include a maximum penalty of 1% of UK turnover from the retailer. This would equate to a maximum financial penalty ranging from £10 million to £500 million (based on 2012 annual accounts) depending on the UK turnover of the retailer concerned. What’s more, where the code is found to have been breached, the costs of investigation can be recovered from the retailer.

Tacon also has the power to “name and shame” by requiring a retailer publish information about an investigation. This tool alone may be sufficient to achieve suitable outcomes without having to impose financial penalties. Tacon has said she regards penalties as “the last resort”.

Importantly too, Tacon – well-known in the food production and retail sectors – aims to build trust between her office and the industry and amongst industry participants themselves. This will be critical in ultimately in changing unconscionable behaviour.

Early reports have been positive. Tacon says that there has already been a change in behaviour by the retailers with suppliers indicating that they are enjoying greater flexibility over where they source packaging, while reasons for delisting products are being set out more clearly, with reasonable notice being given.

Pale by comparison

All this makes Australia’s efforts seem rather pale. Australia’s proposed code has no dedicated independent agency tasked with educating the sector or providing guidance on the code’s interpretation (such as the meaning of dealing in “good faith”), monitoring and reporting on compliance and mediating or arbitrating disputes.

While some of these roles will be played by the ACCC, the code appears to envisage that educative and monitoring functions will be performed primarily by a committee of an industry roundtable.

All of the dispute resolution processes are to be conducted privately or with a mediator/arbitrator appointed by the parties. The ACCC becomes involved only where those processes are unsuccessful or there is a unilateral complaint to the Commission about breach of the code.

The voluntary code is not intended as a substitute for the laws dealing with anti-competitive acquisitions, misuse of substantial market power and unconscionable conduct, which will continue to be monitored by the Australian Competition and Consumer Commission (ACCC).

The ACCC continues to investigate potential market power misuse and unconscionable conduct by the supermarkets, with an outcome expected next year.

No doubt the verdict of the ACCC’s investigation will influence the government’s forthcoming review of competition law, which will examine the effectiveness of the existing legal prohibitions and remedies.

But whether or not the Australian code succeeds in repairing the broken trust between suppliers and the major supermarkets in this country remains very much to be seen. Failure to emulate some of the strengths of the UK system makes it hard to shrug off the scepticism that justifiably accompanies most attempts at self-regulation.

More teeth needed?

It may also explain in part why groups such as the National Farmers’ Federation withdrew from the code negotiating table and why their Victorian counterpart has dismissed the code as “pure spin”; whereas in the UK the new adjudicative scheme enjoys widespread support including from the National Farmers Union.

Applying penalties will require an amendment to the provisions of the Competition and Consumer Act 2010 that governs codes of conduct. Similarly, legislation would be required to establish an independent adjudicator, either as part of or separate from the ACCC.

Minister for Small Business Bruce Billson, who is overseeing the government’s competition law review, has said that if the current code proves ineffective then steps will be taken to give it more “teeth”. However, waiting for the (arguably) inevitable failure of the code before introducing more stringent measures does not seem sensible policy. Nor is it likely to engender confidence amongst suppliers who have been crying out for government to take robust action in relation to supermarket power and behaviour for years.

If anything, the “wait and see” strategy will only reinforce the perception that the supermarkets wield as much political power as they do market power.

Caron Beaton-Wells was the co-convenor of a major public symposium on supermarket power, held by the University of Melbourne and Monash University, in August 2013.

The Conversation

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Libs vs Nats: GrainCorp stoush shows cracks run deep in the Coalition

Socrates once observed that no-one could be a statesman if they were entirely ignorant of the problem of wheat. Once again wheat – or, more precisely, grain handling and the sale of GrainCorp – is drawing attention to the fact that the Liberal-National Party coalition is not a single entity united in its approach to policy.

Australia’s 44th parliament has only just convened and we are already being reminded that the Abbott government is not a majority government but a Liberal-led minority government. Tony Abbott is in power with the support of a party whose history, ideology and support base are different from that of the Liberal Party.

With 58 seats, the Liberal Party does not have the numbers to govern in its own right. It needs nearly all of the 22 votes that National Party leader Warren Truss can deliver to guarantee passage of its legislation.

Farmers vs graziers

The National Party is largely agrarian in orientation, with its origins in a belief that neither of the two city-based parties can truly understand or represent the interests of rural Australia. In 1920, the first leader of the party in the Commonwealth parliament, William McWilliams, pledged independence from both parties. But that commitment was short-lived.

The politics of rural Australia can be crudely divided between “farmers” and “graziers”, united to some extent by their dislike of the trade union movement. The terms don’t indicate their current agricultural pursuits but are indicative of the historical origins of their attitudes and values.

“Farmers” are the descendants of the smaller farmers who entered the industry following the land reforms of the mid-19th century which were initiated by city-based politicians with a romanticised view of the virtues of establishing a yeoman agriculture. Farmers are stereotyped as public school-educated and rugby league players who are more likely to vote for the National Party.

The Nationals tend to favour government intervention in areas of importance to their constituency. Image from shutterstock.com

“Graziers”, in contrast, are the ideological descendants of the squattocracy) and can be stereotyped as private-school educated, players of rugby union and (often) Liberal Party supporters.

Graziers have traditionally been free traders while farmers have been more inclined to welcome government intervention in the marketing of agricultural products.

During the 1950s, the policy aspirations of the then Country Party fitted comfortably with the more paternalistic policies of the Liberal Party which saw high levels of government intervention across the economy.

Over the past 90 years, the Nationals have been prepared to take a stand on issues of concern to their constituency, voting against their coalition partners on more than one occasion. Cracks in the Coalition have frequently reflected the division between the increasingly “dry” economic policies of the Liberals and the tendency of the Nationals to favour government intervention in areas of importance to their constituency.

Contemporary debates such as the sale of GrainCorp, the development of coal seam gas and foreign ownership of farm land all bump up against agrarian notions of the appropriate use of land.

GrainCorp

The Nationals have contributed their share of maverick politicians who have been popular and populist advocates of what is known in Australian as “country-mindedness” – a belief in the special nature of agricultural activity and the virtues of country life.

These mavericks have generally become subdued once in the Cabinet. But we have yet to see if Barnaby Joyce will follow this pattern.

As agriculture minister and deputy leader of the National Party, Joyce is already making his views very clear on the bid by American agri-business giant Archer Daniels Midland (ADM) to take over the grain handling company GrainCorp. He is staunchly and vocally opposed to the deal, putting him at odds with treasurer Joe Hockey.

 

Hockey will decide by December 17 whether the deal can proceed. AAP Image/Dan Peled

Grain marketing is a particularly sensitive area for the National Party, with an historical preference for collective marketing arrangements and a suspicion of “middle men”.

The export single desk, held for nearly six decades by the Australian Wheat Board and then its disgraced privatised successor AWB Limited, was something of an article of faith for the Nationals – but not so for their Coalition partners. When the Wheat Board was privatised in 1999, the two parties were clearly at odds.

ADM’s A$3 billion bid for GrainCorp is likely once again to highlight the difference between the Coalition partners around issues of the marketing of and trading in primary products. Treasurer Joe Hockey will decide by December 17 whether the deal can proceed on national interest grounds.

Bridging the gap

Foreign investment in agricultural land is another area in which Hockey is likely to encounter opposition from his National Party colleagues. Abbott’s election night pledge that “Australia is open for business” is potentially shaky if the Nationals get their way and agricultural land purchases are subject to much lower thresholds for Foreign Investment Review Board scrutiny.

Past Coalition governments have weathered these policy differences and much of the success of the alliance can be credited to leaders of the Nationals such as Tim Fischer and John Anderson who have not been ideologically too distant from their Liberal colleagues and have taken a pragmatic approach to policy.

Abbott’s natural conservatism and historic associations with Democratic Labor Party figures and thinking may assist in bridging the gap between the more economically liberal of his party colleagues and the position of the Nationals.

Life under a Liberal-led minority government may not be as chaotic as the 43rd parliament, but it may well be just as interesting.

Linda Botterill does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

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Manufacturing powerhouse China lagging on brand awareness

China manufactures an enormous amount of consumer goods. Its value to the global economy is estimated to be around US$7 trillion. But stigmatised as low cost, low quality products, Chinese brands have yet to make inroads into international markets.

And because they have not been very successful at developing reputable international consumer brands they are unable to reap the rewards – customer loyalty, premium pricing, inoculation from competition, preferential distribution – that come with branding.

Chinese firms have, for some time, preferred to leave branding – and thus “ownership” – of their products to others along the value chain, focusing instead on a business-to-business model.

But as the Chinese economy matures and integrates further into the global marketplace, it is inevitable that Chinese firms will spend more time, and money, working on this highly lucrative value-adding activity.

As Australia’s trading relationship within China grows, most likely with a free trade agreement in place, it’s likely more Chinese brands will come to Australia. There is already some movement, and evidence suggests Australian consumers have an appetite for some Chinese brands.

Great Wall Motors and Tsingtao – catering to two of our most favourite of pursuits, driving and drinking respectively – have gained a respectable foothold in the Australian market. Other notable brands include Haier (appliances), Geely (cars), Lenovo (laptops and tablets), Huawei (telecommunications) and Li Ning (sports equipment).

Successful branding requires resources and a devotion to brand building that is often regarded as too risky for many Chinese firms that originate from a conservative corporate culture that abhors grandstanding.

To a large extent branding requires such show-ponying so it is little surprise many Chinese firms have refrained from branding and have adopted a wait-and-see or “copycat” approach – a strategy that potentially stifles brand building.

If brand recognition is an indication of how successful Chinese firms have been performing, then they are not doing well. A recent US study found 94% of Americans are not even able to name at least one Chinese brand, but the battle isn’t lost.

Most valuable brands in China, 2013 BrandZ

It’s not so much that Chinese brands are disliked, but rather consumers are not aware of them and thus have little inclination to try them. Chinese firms are yet to be proactive in getting their brand to market. Awareness and attitude towards the brand can be mouldable through precisely targeted marketing tactics as evident by the many Korean and Japanese brands that were once shunned by Australian consumers.

Chinese brands being sold through Australian retailers require this kind of commitment because the adage of “build it and they will come” does not work particular well for unknown brands.

And whilst brand awareness is important it is only the starting point. Persistence is another key component. Many Japanese and Korean products were initially disliked by Australian consumers, but are now regularly on our shopping list.

There are no better examples at making poorly perceived brands successful than Toyota Corolla and LG (formerly Lucky GoldStar). Success of these brands stem directly from their firm’s devotion and persistence so there is no reason why Chinese brands cannot replicate this and become similarly successful.

There is some evidence of this occurring within Australia. Geely, for example, is heavily promoted through the reputable dealer John Hughes in Western Australia. On another front, Huawei’s sponsorship of the Canberra Raiders indicates Chinese companies are willing to take their brands to the grass roots.

Chinese firms are yet to become fully proactive in getting their brand to market but if these examples are any guide then Australia’s branding landscape is clearly changing.

Russel PJ Kingshott does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

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Informed consent: why some foods should carry a cancer risk warning

The evidence that smoking causes lung cancer is definitive. It took a few decades, but cigarette packs now carry prominent health warnings to alert us to this risk.

When it comes to dietary patterns, convincing evidence collated by the World Cancer Research Fund also shows that regular consumption of some foods and drinks increases the risk for specific cancers.

It’s time to begin making consumers aware of the cancer risk associated with regular consumption of particular foods and drinks, through front-of-pack warning labels.

Snapshot of cancer in Australia

It is true that the absolute risk of developing cancer is low. Last year around 120,000 new cases of cancer were diagnosed in Australia, from a population close to 23 million.

But put another way, before the age of 75 your lifetime risk of being diagnosed with cancer is one in three for males and one in four for females. Cancer is now the leading cause of disease and injury in Australia, accounting for the loss of over 550,000 years of life due to ill health, disability or early death.

The most commonly diagnosed cancers last year were prostate (18,560 cases), bowel (15,840 cases), breast (14,680 cases), melanoma (12,510 cases) and lung cancer (11,280 cases). Many of these have good treatments outcomes but approximately 117 people still die from cancer each day.

The good news is that between 1982 to 2010, the five-year relative survival after a cancer diagnosis increased for the three most commonly diagnosed cancers: from 58% to 92% for prostate cancer, 48% to 66% for bowel cancer and from 72% to 89% in women with breast cancer.

But more could be done to prevent the development of cancer in the first place, or to reduce the risk of it recurring.

So, what foods and drinks increase cancer risk?

There is convincing evidence that alcohol increases the risk of for pre- and post-menopausal breast cancer, and cancers of the mouth, throat and (in men) bowel. While the official recommendation is to limit alcoholic drinks to no more than two a day for men and one a day for women, when it comes to breast cancer risk there is no safe level of intake.

There is also convincing evidence that eating more than 500 grams of cooked meat per week is risky. For every 100 gram increase in red meat a day there is a 17% increase in bowel cancer risk.

For processed meat, there appears to be no completely safe level of intake, with a meta-analysis of 13 studies finding an 18% increase in bowel cancer risk for every 50-gram increase in daily intake.

Alcohol, processed meat and salt increase the risk of some cancers. Image from shutterstock.com

The evidence indicates that salty and salt-preserved foods are probable causes of stomach cancer. As a result, the World Cancer Research Fund recommends avoiding these foods, not using salt when preserving foods, limiting consumption of processed foods with added salt and aiming for a low salt intake (more than six grams of salt or 2.4g of sodium) a day.

On the flip side, there is probable evidence that you can reduce your risk of bowel cancer by regularly eating garlic and foods high in dietary fibre, such as wholegrains, legumes, pulses, high-fibre cereals, vegetables and fruit. In fact, for every ten grams of fibre you consume per day, your risk reduces by 10%.

Eating plenty of non-starchy vegetables and fruits is associated with lower risk of cancers of the mouth, throat, oesophagus and stomach; while foods high in folate, such as green leafy vegetables, legumes, seeds, citrus fruits and fortified breads and cereals, are associated with lower risk of pancreatic cancer and diets high in calcium with lower risk of bowel cancer.

How would a labelling system work?

The food labelling process could be managed by Food Standards Australia and New Zealand (FSANZ) in the same way it currently manages health claims, which are voluntary statements made by food companies that refer to a relationship between food and health.

In January, FSANZ introduced a new standard to regulate health claims made on food labels or in advertisements. Two types of claims are now permitted: general and high-level claims.

General level health claims refer to something “in” the food and its effect on a health function, such as “calcium is good for bones”. A high-level health claim refers to something “in” the food and its relationship to a serious medical condition or an intermediate factor or risk marker for that medical condition. For example:

There are 13 pre-approved high level health claim statements and 200 pre-approved general health claim statements related to foods, their health effects, and health conditions in the FSANZ code. But none of these raise the alarm for consumption patterns associated with increased disease risk.

What we need is a similar list of statements to alert consumers to potential adverse risk from consumption. These claims could be made by public health authorities relating food consumption patterns to cancer risk.

This process could be overseen by the National Health and Medical Research Council (NHMRC) which currently produces Australia’s official dietary guidelines. The NHMRC could draw on the World Cancer Research Fund’s data in areas where there is convincing evidence that foods or drinks raise the risk of specific cancers.

Government health departments and non-government agencies such as cancer councils could also be approved to submit high-level health claims for foods and beverages where there is strong evidence that consumption increases risk.

It’s time to raise awareness about what consumers can safely eat and drink, and which foods to increase or avoid to lower their cancer risk. FSANZ high-level health claims on food labels could be one such signpost.

Clare Collins receives funding from the National Health and Medical Research Council of Australia and has had funding from the Meat and Livestock Australia Human Nutrition Research Program.

Image 2: For every ten grams of fibre you consume per day, your bowel cancer risk reduces by 10%. Chiot's Run

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WCB battle and farmer ownership: dairy at a crossroads

The share price of Victorian dairy processor Warrnambool Cheese and Butter (WCB) has more than doubled over recent weeks in response to a takeover tussle between Australian publicly listed company Bega, Canada’s publicly listed Saputo and Australian cooperative Murray Goulburn (MG).

MG is Australia’s largest milk processor. Its 2,400 farmer-shareholders produce a third of Australia’s milk which is sold in domestic and export markets. Devondale is its main retail brand.

A vote of confidence in the Australian dairy industry

Saputo is one of the world’s ten largest dairy manufacturers. It trumped Bega’s initial offer for WCB, and then raised its bid to trump MG when it entered the fray. Saputo clearly thinks there is money to be made producing dairy products in Australia.

The key ingredients according to chief executive Lino Saputo Jnr are a cost-competitive and reliable supply base (that’s the dairy farmers), and proximity to growing and profitable Asian markets. Saputo’s interest can be taken as a vindication of Australian politicians' views that Australia is well placed to benefit from an impending “dining boom”.

But what about the farmers?

Up until the recent takeover activity the main news coming out of the south-west Victorian dairy industry was of crisis. A depressed milk price and challenging seasonal conditions pushed some farmers to the wall. Are these stories connected? Does corporate confidence signal better times ahead for farmers?

One dairy farmer with strong views on this is Roma Britnell, from Woolsthorpe, 25km north of Warrnambool. As well as being a director of a family-owned company that milks 1,000 cows across three farms, Roma is also involved in the wider industry through her roles as a United Dairy Farmers of Victoria regional policy councillor, and Australian Dairy Farmers national councillor. She is also a former Victorian Rural Woman of the Year.

Time for Australian farmers to understand the benefits of cooperation

Based on her 2010 world tour as a Nuffield Farm Scholar Roma is convinced there is an opportunity for Australian agriculture to benefit from rising global food demand. But the benefits won’t necessarily flow to farmers:

“Having ownership post farm gate is imperative to farmers' ability to influence the price they receive and therefore their future business sustainability. We don’t and can’t influence the international milk price. However, ownership of the product further along the supply chain by farmers does determine how much of the profit (and losses) stay with us.”

Roma is a Murray Goulburn supplier-shareholder, and a passionate believer in cooperative principles: “Without an efficient farmer-owned model to sell through we would be at a significant disadvantage. It seems in Australia we are not listening. Everywhere else I went this was considered a no brainer.”

Global competition more important than local competition

Murray Goulburn previously attempted a takeover of WCB in 2010, but withdrew after receiving advice from the Australian Competition and Consumer Commission (ACCC) that it was concerned about reducing competition in the milk processing industry. Roma argues this is the wrong focus: “It’s the ability of the Australian dairy industry to compete globally that is the main game for farmers, and to win that game we need a larger farmer-owned processor.”

This time around Murray Goulburn is attempting to bypass the ACCC by making an application to the Australian Competition Tribunal for authorisation of the merger on national interest grounds, and has suggested that the Foreign Investment Review Board shouldn’t make a ruling on Saputo’s offer until Murray Goulburn’s application has been considered.

Cooperate or perish?

Tim Mazzarol has argued that, facing global competition and a powerful retail sector, farmers have only three options to strengthen their position: “get larger, find niches or cooperate.”

For Roma Britnell a merger between WCB and Murray Goulburn is an opportunity that may never come again to strengthen farmer cooperation in the dairy industry: “There are lots of variations of the cooperative model around the world so, if the current one isn’t to the liking of our community of farmers, we can change that. But if we lose control it’s going to be very hard, if not impossible, to regain it.”

Not all dairy farmers support the cooperative model, and not all are fans of Murray Goulburn. But MG CEO Gary Helou is convinced the cooperative needs to grow for it, and the Australian dairy industry, to thrive. If he’s right then the WCB battle, which still has a long way to run, may indeed be a crossroads for the industry.

Michael Santhanam-Martin does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

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Sugary drinks tax could swell coffers, shrink waistlines

A study published in the journal of the British Medical Association, BMJ, today [1 November] says a tax on sugary drinks could cut the number of obese adults in the United Kingdom by 180,000. Similar Australian projections predict an even bigger impact.

The BMJ study shows people aged from 16 to 29 years would be most affected, and the tax would raise up to £276 million (AU$442 million) annually, which could be invested in the health sector.

Lennert Veerman, senior research fellow in population health at the University of Queensland, is in the process of doing a similar projection with Australian data.

He has found that if such a tax were implemented here, the number of Australians with obesity would drop by 110,000, a 2.6 percent drop in the nation’s obesity rate. This is twice the impact expected in the United Kingdom according to the BMJ study.

Veerman said that one reason for the difference is “unique consumption” of sugary drinks in the two countries; people in the United Kingdom consume less sugary drinks per person than Australia.

Another reason is that we are reliant on very old data; Australia’s last national nutrition survey was conducted in 1995. The survey collects data on what and how much people consume.

Veerman also noted that such studies tend to underestimate true effects because people under-report how much they indulge in unhealthy habits.

Nutritional clinical affiliate at the University of Sydney, Suzie Ferrie said a tax on sugary drinks would greatly benefit society.

Ferrie said “patterns of consumption” show young people under the age of 30 drink more soft drinks than older people, so the potential for change would be great because this age group is when habits really become entrenched.

“Changing youth drinking habits to healthier options could carry on to future generations,” she said.

But the chances of having such a tax implemented are low.

“Not many countries have managed to successfully implement these taxes,” said research fellow at Deakin population health, Gary Sacks.

The problem is that all governments have faced opposition from the private sector. In France, Sacks pointed out, “the food industry threatened to close down some of their factories”.

Despite full-page ads in Mexican papers opposing the measure, the government has just implemented a tax of one peso (A$0.08) per litre of soft drink and a five percent excise on high-calorie packaged food.

It is also too early to understand the full effect of the tax on the obesity rates in these countries because most laws have only been in effect for a couple of years. So, there is still only a limited amount of data to analyse.

However, when Denmark put a tax on fatty foods, consumption dropped by 15 percent, which was consistent with the modelling, Sacks said.

In an accompanying editorial in the BMJ, assistant professor of population medicine at Harvard Pilgrim Healthcare, Jason P Block suggests the only way we can truly find out what the impact of such a tax would be is by implementing it and reviewing the results.

But Ferrie suggested a pilot study would be adequate to collected data.

A new national nutrition survey to update from the one in 1995 may be a better way help calculate the results of such measures. It would be very expensive, but useful for many public health initiatives.

“We’re really suffering now because we still use old data,” Ferrie said. “I think the investment is worth it.”

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How Australia’s craft beer industry compares to the US

The Australian Brewery's David Ward has just returned from The National Beer Wholesalers Association’s annual convention and trade show in Las Vegas and made some interesting observations about the craft beer market both here and abroad.

Last week I arrived back in the country from The National Beer Wholesalers Association’s annual convention and trade show in Las Vegas. It was great to take a look into the world of craft beer in America and whilst I was expecting the craft market to be striving ahead over there, I didn’t expect it to be so huge and advanced. It is almost frenzied and it’s really causing a stir with the mainstream brands.

The $12 billon dollar industry is booming and being propelled by Gen Y’s pouring into bars and bottle shops to get their favourite boutique drop. I would say that the main driver influencing buying behaviour for consumers is attributed to the interest in a brewery’s local story. I believe this is driving the uptake of craft beer over the mainstream brands both here and more so in the states.

The size of the industry in America absolutely dwarfs what we believe to be a ‘big craft brewery’. Take the Boston Beer Company for example, which produces America's most popular craft beer, Samuel Adams. They only represent one percent of the beer market, but their revenue is close to $1.5 billion per annum, producing 900 million litres of beer annually.

At the event, I noticed the major manufacturers were trying to reassure their distributors they are working to win back the business lost to craft beer. This is a good sign for us, as Australian Craft Brewers is looking to expand into these overseas markets. Some of us have already dabbled in America with companies such as Coopers, James Squires and a few others making the shift.

The psyche is starting to shift with Australian beer now being seen as a premium product by international beer drinkers. And distributors are interested in the Australian offering. Despite the steady decline in beer sales in Australia since the late 70s, the consumption of craft beer is increasing by six percent every year.

With so many craft operations springing up all over the country, it is nice to see these smaller operations gaining some recognition. While I still think Australia is about five to 10 years behind the United States when it comes to a developed craft beer category, we are certainly moving in the right direction. It will be interesting to see if an international audience will share our tastes in craft beer.

 

Food eco-labelling – green credentials or green-mail?

Australia has seen a boom in eco-labelling: more than 50 different organisations were eco-certifying products in 2010. Queensland National Senator Boswell calls it green-mail, forcing food producers to bear the cost of certification and shoppers to pay a premium, while certification organisations pocket the profit.

Should we consider standardisation of food eco-labelling for Australia? What are the implications for agricultural producers?

Aldi announced in 2010 it would team up with Planet Ark to become the first Australian supermarket to put Carbon Trust labels on their products.

Other Australian supermarkets are adopting a wait and see approach to carbon labelling especially after Tesco in the UK dropped its plan to label all 70,000 of its products with Carbon Trust labels claiming that the program is too expensive and time consuming.

Calculating a carbon footprint

In Europe and Australia, there is a popular movement towards buying food locally to support local farmers and to eat fresh, in-season food. Campaigns focus on consumers reducing their “food miles”.

Food miles refer to the distance food is transported from the farm gate to the consumer, and the energy and carbon dioxide emitted during transportation.

But food miles are only part of the picture. The carbon footprint during on-farm production can have a larger impact.

For example, even when shipping was taken into account, New Zealand dairy products imported into the UK used half the energy of their UK counterparts. In the case of lamb it was a quarter of the energy, due to grass-fed conditions in New Zealand compared with the energy-intensive system used in the UK.

In Australia, a 2010 study by Aldi and Planet Ark found that a brand of Italian olive oil had a carbon footprint about 14% smaller for every 100 mL than that of a local brand, even though it was shipped 16,000 km from Italy. This was mainly due to the oil’s traditional Mediterranean farm production system. Of course, the Australian olive oil is probably fresher and may taste better.

If it’s to realistically meet consumers' requirement to shop more sustainably, any carbon footprint labelling should be based on a full lifecycle assessment of carbon emissions from paddock to plate.

It needs to include production, procession and everything in between, not just the food miles incurred during transportation. In life cycle assessment, all major greenhouse gases – not just carbon dioxide – should be included.

Calculating a water footprint

Agriculture accounts for about 86% of global fresh water consumption. A product’s water footprint describes the total amount of “virtual” or “embedded” fresh water used in making a product such as food.

The water footprint includes three components: green, blue and grey water footprints. The green water footprint refers to rainwater transpired and the blue water footprint to surface and groundwater evaporated following their use in irrigation.

Grey water footprint refers to water that becomes polluted during crop production. It includes the amount of water necessary to reduce pollutants discharged so that water quality meets appropriate standards.

A global study of the water footprints of nations found Australian households held the world’s worst record for water consumption. We have a water footprint of 341,000 litres a person a year compared with the global average of 57,000 litres. The report equates eating a kilogram of steak to using up to 16,000 litres of water, a kilogram of lamb to 10,600 litres and a 200 ml glass of milk to 200 litres of water.

But there are so many different ways to calculate the water footprint of a product that there is no way to compare each methodology. Scientists at CSIRO, Swiss University, and ETH Zurich are developing a new water footprint standard based on lifecycle assessment and compatible with the International Organisation for Standardisation.

Their water footprint is expressed as a unit called water equivalent (H2Oe) similar to CO2e used in carbon footprinting.

Using this method, the water footprint of lamb cuts produced in south-west Victoria was 44 litres of H2Oe per kg and the average dairy milk water footprint in the Gippsland region was 1.9 litres H2Oe a litre of fresh milk at the farm gate. These are mainly rainfed farming systems in high rainfall zone with no irrigation, so the water footprints were relatively low.

Implications for food producers

Poor eco-labelling unjustly disadvantages farmers. For example, Australian cotton and rice farmers are the most water efficient in the world but they still get the negative publicity of being water guzzlers. A water footprint labelling system for rice would need to be very well refined.

If eco-labelling is to further expand in Australia, it should be done with proper scientific methods such as lifecycle assessment. Eco-labelling should educate consumers and give farmers an incentive to improve their practices. Eco-labelling should promote energy and water efficient food production practices and must not be green-mail.

Daniel Tan receives funding from the Cotton and Grains Research and Development Corporations. He is President of Ag Institute Australia (NSW Division).

The Conversation

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Talking trends and challenges with De Bortoli winemaker: Q&A

We sat down with Steve Webber from De Bortoli, Yarra Valley, to get some insight into a day in the life of a modern day winemaker.

Can you please give us the brief history of your career?

  • Cellarhand at Leo Buring in 1978-1989
  • Studied for Roseworthy B. Sc. Oenology 1980 to 1982
  • Winemaker at Lindemans in Mildura and Coonawarra from 1983 to 1989
  • Winemaker at De Bortoli Yarra Valley from May, 1989 –

What’s a typical day for you?
6.30 – 7.00 am start. Coffee in lunch room with staff. Mainly office work, blending, tasting and promoting these days. Glass of wine at 5pm. Crazy hours during the harvest, getting hands dirty and playing on the forklift.

What training/education did you undertake for your role?
A degree in Winemaking, as well as  tasting and enjoying piles of wine, lots of of wine travels and chatting with other vignerons.

What would you say is the biggest daily challenge you face in your job?
Making better wine for less cost so that we can meet the markets' price expectation.

What do you think is the biggest challenge facing the wine industry today?
Interesting and delicious wine with terroir at an affordable price.

What’s the piece of technology or equipment that you find indispensable in your work?
Destemmer – needs to be gentle and effective. Some berry sorting on the end of it wouldn't be bad but we don't have one so we rely on human bunch sorting at this stage.

What’s an exciting project you’re working on at the moment?
Making and getting consumers to drink lighter beautiful, aromatic and graceful red wine.

What do you think will be the next big trends in wine in Australia?
Probably more Sauvignon Blanc but hoping for Pinot Grigio, Sangiovese and of course fine Chardonnay.

What are some of the biggest opportunities for Australia’s winemakers at the moment?
Some markets are enjoying the fine subtle wine from Australia's cool regions so hopefully this phenomenon is an opportunity.

Where do you see the industry in 10 years time?
I am not holding my breath, but with some luck a vibrant, interesting, multi faceted retail market, and hopefully not dominated by too fewer players.

What advice would you give to a young winemaker just starting in the industry?
Drink broadly, take real interest in what you are drinking and work and travel overseas.
 

An advancing Australia is not so fair: why Aussie food manufacturers are doing it tough

You'd be hard pressed to come across a topic in the Australian food manufacturing sector that generates as much passionate discussion as how to best support Australian brands using Australian ingredients.

A high Australian dollar – despite easing recently – coupled with an influx of cheap imported products, a decline in export markets and ambiguous country of origin labelling legislation have all impacted on the profitability of local businesses.

2013 has been a particularly challenging year. Unable to compete with cheap imported products, SPC Ardmona was forced to cut 61 fruit growers’ contracts, and was then denied provisional safeguard tariffs against cheap imported tomato and fruit products as part of the Productivity Commission’s accelerated report.

Food processor Simplot announced that two of its plants were under threat of closure due to a highly competitive industry and unsustainably high costs, and Gourmet Food Holdings, which owned iconic brand Rosella, was placed into receivership.

South Australia’s Spring Gully also entered voluntary administration earlier this year with debt of more than $3 million, only to be saved – largely – by a wave of local consumer support.

So what needs to be done in order to save our local food processors and iconic brands? And what’s stopping them from sourcing Australian inputs?

Made in Australia? Or from local and imported ingredients?

In August this year, the Australian Made campaign‘s chief executive, Ian Harrison, called for a strategic partnership between the government and Australian Made to develop a plan to reduce consumer confusion surrounding country of origin labelling.

The ambiguous term ‘Made in Australia from local and imported ingredients’ does not distinguish between ingredients and packaging and has been a long-standing matter of contention within the industry and amongst consumers.

According to the Australian Competition and Consumer Commission (ACCC), the ‘Made in’ claim means that the product was made (not just packed) in the country stated, and that at least 50 percent of the cost to produce the product was incurred in that country. Products that use the ‘Made in’ claim may also contain ingredients from other countries – hence a product with a ‘Made in Australia’ label won’t necessarily contain Australian ingredients.

The ‘Made in Australia from local and imported ingredients’ claim can also be confusing as it doesn’t communicate to the consumer what proportion of the ingredients are local, and what’s imported.

“'Made from imported and local’, or ‘Made from local and imported’ – depending on the order in which the two words are placed, is supposed to infer  whether the majority of the product is imported, or whether the majority of the product is local,” Harrison told Food magazine. “But the public doesn’t understand that.”

Australian Made’s iconic green and gold kangaroo logo has been used by thousands of businesses for nearly three decades to identify genuine Australian products and produce in Australia and overseas. Harrison says that the logo serves as a powerful marketing tool for those companies that meet Australian Made’s strict ‘made in’ test.

“Being Australian is a decided advantage – you will get a premium for your product, particularly if it is dairy-related at the moment. And that premium is justified because Australia has a reputation for high product standards, high safety standards, and it reflects our clean green environment,” says Harrison.

"In an environment where increased costs and a high Australian dollar have seriously undermined the competitiveness of many Australian products, country of origin is an asset we should be driving much, much harder."

Cheap imported ingredients come at a cost to Aussie producers

Country of origin labelling is just one of the many factors that is affecting the livelihood of the Australian food manufacturing industry. Australia, even without the high Australian dollar, is still an expensive place to do business.

Australia’s wage structures are amongst the highest in the world, industrial arrangements are quite inflexible and government-related charges coupled with high power costs seem to be increasing year on year.

One manufacturer whose struggles have been highly publicised is SPC Ardmona.

The company, which makes a commitment to sourcing a significant percentage of its ingredients from Australia, was forced to cut 61 growers’ contracts from Victoria’s Goulburn Valley region – home to SPC Ardmona’s iconic Goulburn Valley Fruit brand – in April this year.

The company, which is the largest remaining fruit and vegetable processor in Australia, said that the decision was not made lightly, and was a direct result of a huge rise in the Australian dollar that fuelled imports to record levels. The low cost imports were favoured by major supermarket chains as it enabled them to take advantage of the exchange rate appreciation and import products at an extremely low cost.

In an attempt to tackle the issue, SPC Ardmona applied for temporary safeguard tariffs of at least 30 percent for retail canned tomatoes and 45 percent for multi-serve fruit products for 200 days, consistent with the World Trade Organisation (WTO) Safeguards Agreement.

However in late September, findings in the Productivity Commission’s Accelerated Report indicated that provisional safeguards were not warranted, and as such, the application was denied.

“This is extremely disappointing for SPCA, growers and the Goulburn Valley region. We disagree with the Commission’s conclusion in the reports. We have provided compelling evidence that in these circumstances the immediate provision of safeguards should be applied,” said managing director SPC Ardmona, Peter Kelly.

Although the Productivity Commission’s full report is not expected to be finalised until 20 December, Kelly said that the findings “further delay action at a critical stage in our business and seasonal cycle and perpetuates uncertainty in the region.”

Some positive news for the food processor was the recent announcement of a $7 million deal with retail giant Woolworths. Under the new deal, Woolworths will source 13 lines of canned fruit from Goulburn Valley growers for its private label ‘Select’ lines, which were previously imported from South Africa and Thailand.

The power of the consumer

Even if SPCA was to secure emergency safeguards, the reality is that wholly Australian-made products have a tendency to attract a higher price tag than their imported counterparts. So how do you communicate to consumers the importance of choosing a locally-made product over an imported one?

Peak industry body for the South Australian food industry, Food SA, has launched a number of successful campaigns including ‘Eat Local’ which saw a selection of restaurants and cafes showcase the state’s high quality produce by either including a dish that was made from local ingredients, or selling local produce in-store.

Another was the Shop & Swap initiative launched by Robern Menz – South Australia’s largest confectioner, and endorsed by Food SA.

The Shop & Swap campaign was launched on the back of unprecedented public support for South Australian pickle and sauce manufacturer, Spring Gully, which was on the verge of receivership until a sudden wave of both retail and consumer support saw sales soar.

Spring Gully experienced three weeks’ worth of sales within a three day period shortly after Shop & Swap was launched, resulting in Foodland, IGA and Coles supermarkets placing extra orders to keep up with demand. The Shop & Swap campaign encourages consumers to simply swap one item for a locally-made product every time they shop. The campaign is intended to help shoppers recognise locally-owned brands so that they can make informed purchasing decisions that support and strengthen local businesses.

Catherine Barnett, CEO of Food SA, said that the initiative serves as a powerful vehicle that has the capacity to influence the shopping habits of many South Australians.

“It is critical that people understand what they are buying. We would like consumers to think about buying and consuming South Australian-made and owned high quality products. There are many ways consumers can make this change,” she said.

Government support – food manufacturers need more of it

As we have seen with the revival of Spring Gully, consumer support can do a great deal to sustain local industry. But what the industry really needs to foster and secure a sustainable and profitable future is sufficient government support and investment, especially if the nation is to become Asia’s food bowl, as some reports have suggested.

A recent industry roundtable involving executives from NAB, Nestle and SMS Management reinforced this sentiment.

The executives were asked to identify sectors of the Australian economy with the best potential for future economic growth and the consensus was clear: the nation needs to capitalise on its reputation for clean and green food production, otherwise known as “Brand Australia.”

The executives contended that Australia needs to focus on producing and exporting high quality finished products to best capitalise on Asia’s growing middle class, rather than sending over raw materials such as wheat and milk.

"There's almost no new investment in food production, in food manufacture and, in fact, if you look at what's happening in the Goulburn Valley, fruit is rotting on the ground because of closures of factories,” Elizabeth Proust, chair of Nestle Australia, said at the roundtable.

"I'd be very cautious about seeing us as an exporter of raw materials, so to speak, rather than somebody who can be really smart and clever, and find ways of really making export dollars by exporting the final or the almost final product."

Proust’s view is echoed by many other key players in the industry. The notion of focusing on quality over quantity and then exporting that final product is exactly what a number of boutique food producers and winemakers are currently doing.

A prime example is the Barossa Valley Trustmark which was launched by SA Food Minister Gail Gago in September. The trust mark was created by Paul Henry of Winehero and is designed to encompass the region’s commitment to consistent, high quality products and provide a platform to firmly establish the Barossa brand on the world stage.

The reality is that Australia is blessed with a beautiful clean and green environment, and from that, we produce some of the best food and wine in the world. All we need to do, is invest in it.

 

After wine, Chinese consumers want a slice of cheese

When I heard that Asia, and particularly China, started to show interest in cheese, I automatically assumed that the French would be leading the race of cheese exports to the region. How wrong I was. Australian and New Zealand producers will have the most to gain from a booming Chinese demand for cheese.

The introduction of Western-style cheese to the Chinese urban middle class has been gradual. It may have started with large supermarket chains stocking cheese on their shelves to cater for expatriate communities. Even so, it was certainly the international fast food chains and their offerings of pizzas and cheese burgers that shaped the taste of cheese of China’s biggest cities.

The impact of fast food on urban communities was such that, by the late 1990s, Chinese consumers had accepted processed cheese or ‘nai lao’ (milk jelly) into their diet.

But the taste for cheese has come about mainly in large urban areas.

No Roquefort for me

Anecdotal evidence suggests a dislike of “Old World” cheese in China. Most people asked to sample a range of French, Italian and Spanish cheeses said they disliked the smell of the most potent cheeses.

The idea of ingesting old rotten milk is found off-putting in a country that traditionally had no dairy in its diet and where lactose intolerance is common.

Despite the fact that cheese is alien to traditional Chinese gastronomy, imports of processed cheese or “New World” cheese — as it is often called — have been growing at an impressive rate.

Overall, the yearly consumption of cheese per capita is still very low at 200 grams compared to the French consumption of 26kgs per person per year or the yearly Australian consumption of about 12kgs per person.

With an average annual growth rate of 20%, China imported some 30,000 tons of cheese in 2011. This is good news for the three major suppliers of processed cheese to the Chinese market. New Zealand supplies 40% of the import market. Australia and the US make up another 40%.

Unsurprisingly, the local Chinese cheese industry is still in its infancy with production levels of about 20,000 tons (2011) representing a drop in the bucket for the vast world of cheese making. In comparison, in 2011 Australia produced 340,000 tons of cheese of which some 215,000 tons were consumed domestically.

Chinese processed cheese manufacturers not only face aggressive competition from international players, but are still struggling to re-establish trust among their customers since the 2008 milk scandal.

Australian dairy manufacturers — who enjoy a reputation for quality, safety, and competitiveness — now have an opportunity for growth. This was confirmed with recent growth figures in dairy product exports released by the Bega Cheese Company.

Australia’s competitiveness and low-cost production are attractive features to international corporations that are seeking an entry point into the growing Asian markets. Already Canadian dairy processor Saputo is in the process of acquiring the Warrnambool Butter and Cheese Company.

And the signing of a free-trade agreement between Australia and China will only bode well for Australian cheese exports. Negotiations have been difficult and lengthy but it is hoped that tariffs will be reduced to allow Australian dairy companies to compete with New Zealand’s Fonterra on an equal footing.

Got milk?

But the story of cheese in China is part of much bigger initiative: the introduction of milk into the daily life of ordinary Chinese people.

In 2000, the State Council of China set up a national school milk program to address public health concerns, but also to kick start a national dairy industry. Despite the 2008 milk scandal, the program has been going from strength to strength, boosting the average national daily consumption of dairy products two-fold in the last decade.

The burgeoning middle class and its demand for exotic tastes and products prove to be significant trend setters in changing diet as well. The ‘Old World’ or European-style cheeses have started to capture the imagination of this middle class who are still showing strong interest for European wine. As wine merchants have had to do, cheese manufacturers will have to educate their customers about cheese and its meaning within European gastronomy.

Traditionally a diet lacking dairy, Chinese authorities have been trying to increase the amount of milk consumed on a daily basis. 

And no doubt European cheese makers are dreaming of achieving what wine makers have accomplished in China. Today, the affluent and urban Chinese youth is learning more about wine than ever and as a result, the consumption of wine has not stopped increasing.

One sign that traditional cheese is making in-roads into the life of middle class urban China is the opening of traditional cheese-making retail outlets in Shanghai and Beijing.

The Beijing Cheese Maker, or ‘Le Fromager de Pekin’ as it is called, believes that the Chinese won’t be put off by the tangy taste of traditional cheese for long.

So, either way, traditional or processed, things are looking good for cheese!

Brigit Busicchia does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

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