24 hours with McCormick Foods Australia

Daniel Moorfield, managing director of McCormick Foods Australia takes Food Mag's Q&A and sheds some light on the joys and challenges of the world of flavour.

Name:
Daniel Moorfield

Company name:
McCormick Foods Australia

Title:
Managing director, McCormick Foods Australia/NZ

What are your primary roles and responsibilities in your job? Give us a day in your working life.

My responsibilities include:

  • The safety and wellbeing of all McCormick staff
  • Making sure best practise approaches are used within all areas of the company, from manufacturing to packaging to HR
  • Maintaining the integrity and values of the McCormick brand
  • Ensuring we are a profitable, healthy company delivering innovative products the consumers need

In regards to a day in the life, the great thing about my role is that you are never quite sure what the day will bring. Within one day, I can be discussing new product innovations with our Test Kitchen, speaking with the production staff about the latest production run, meeting with the Asia Pacific president, visiting retail stores, discussing new innovations and reviewing our latest marketing campaign.

What training/education did you need for your job?
While my background in Finance has been important for my current role, it is just as important to have an array of generalist skills ranging from good communication to leadership to problem solving. And of course knowing the FMCG industry and understanding the consumer is vital to success.

How did you get to where you are today? Give us a bullet point career path.

  • Auditor with Ernst & Young
  • Various finance role within Mars Confectionery which was the beginning of 15 plus years in the FMCG space
  • Finance director at McCormick Foods Australia
  • Finance director for McCormick Foods China
  • Chief financial officer at SPC Ardmona
  • Managing director at McCormick Foods Australia

What tools and/or software do you use on a daily basis?
While financial literacy is certainly essential to my daily work life, the tools I value the most are communication tools.

Many companies have great strategies but they are not executed correctly. Part of my role is to ensure all employees know our company strategy and understand our vision. The only way to do this effectively is to communicate, communicate and, if in doubt, communicate some more.

The tools I use include regular face to face meetings with all areas of the company, the intranet and newsletters.

Listening is also an essential tool. I love seeing people develop and shine in their roles, so I try to spend as much time as I can listening and encouraging people, and helping them achieve their goals. It is also vital for us to understand the customer so we can deliver innovative products the consumer need and want.

Research is a great tool for supporting many decisions we make as a team.

What is the one thing that you are most proud of in your professional life?
I believe I am working toward that right now. Having the opportunity to take all of my learnings to date to lead my colleagues at McCormick Foods Australia to the next level is exciting.

As an innovative flavour company, we are well positioned to help our customers grow and that, in turn, will lead to growth for McCormick Foods Australia.

This is especially exciting as I was able to return to McCormick where I worked before in Finance in both Australia and in China.

Biggest daily challenge?
Consumer preferences continue to evolve and change daily. We need to stay on top of these changes in order to bring new products to the market successfully.

Biggest career challenge?
Moving from a professional speciality such as Finance to a managing director role has been my most enjoyable challenge to date. Honouring the responsibility I now have to McCormick Foods Australia staff, suppliers and customers is a career challenge I welcome.

What is your biggest frustration in your job?
My role is pretty simple – work out what the business frustrations are and then come up with solutions. So I tend not to get too frustrated about many things, instead I prefer to spend my time working out how to lessen others frustrations.

What is the biggest challenge facing your business?
There are two major challenges, which are both related. Firstly, the growth in the private label and secondly, the Australian dollar. I believe that in the long term, it will be in the interest of consumers, retailers, suppliers and the government to have a healthy food manufacturing base in Australia.

I think collaboration – among suppliers as well as between suppliers and retailers – will continue to increase as companies realise the need to share in sustainable profits. Given the concentration of retailers, I anticipate the same will occur among the supplier base, whether it is through mergers and acquisitions, joint-ventures or mutually beneficial alignments.

I also expect, and have started to see, retailers looking to work closer with suppliers. The ability to share information and better understand consumers has great potential and opportunity. This is especially important with the continued growth in private label.

Based on overseas experience, I also expect there will be continued growth in more mid-range/convenience stores, internet shopping, and continued growth in Aldi and Costco. All of these will make the grocery industry a very challenging, interesting and exciting place to be over the coming years.

Is there anything else about your job you want Australia to know about?
McCormick Foods is an Australian-based food manufacturer (a subsidiary of US-based McCormick & Company, Inc.).

As the global leader in flavour, McCormick Foods has an extensive range of convenient and innovative flavour products and solutions, including herbs and spices, recipe mix meal bases, marinades, sauces and gravies.

Customers include retail, foodservice and industrial customers.

In addition to McCormick, our family of brands includes the iconic Aeroplane Jelly and Keen’s Mustard and Curry, both of which are produced in Australia.

We are passionate about bringing together the art and science of flavour to help create memorable food experiences for Australians. This is also demonstrated through our annual Flavour Forecast report, which predicts future flavour trends and pairings.

Based in Melbourne, McCormick Foods Australia employs more than 200 people.

 

If you would like to take part in Food mag's Industry Map, click here.

To read another Industry Map Q&A, click here.

 

Superfoods: not so super after all?

Superfoods is a buzzword now part of mainstream food and health language, often touted as miracle foods that cure all ills, stave off ageing and disease, or aid weight loss.

In practice, superfoods are more readily evoked when it comes to exotic and ancient fruits. Goji berry and acai berry, for example, or pomegranate and mangosteen are all famously regarded as being super. Liver is actually more dense in nutrients than any of these foods, but have you ever heard it called a superfood?

As you may have guessed by now, superfood is not a scientifically or technically defined term. It’s not a word that medical professionals or researchers really use. Indeed, it has little meaning in the medical research community.

Nonetheless, enter superfood in any internet search engine and it will return millions of hits – mostly from news, magazines, blogs and sales sites. Repeat the search in the US National Library of Medicines online database of biomedical research publications, PubMed, and you get a grand total of three hits along with the helpful suggestion that you may have, in fact, intended to search for “superfund”.

But that doesn’t mean there’s no scientific research into superfoods. Researchers just don’t call them “super”. And there’s a good reason for this: the giant leap from testing foods in the lab to their amazing marketed powers is simply too far to be scientifically or ethically sound.

Just because a component of a superfood may kill cancer cells in a dish in the lab doesn’t mean that eating lots of a food containing this component will prevent you from getting cancer.

What’s more, the assumptions behind superfood science can be problematic. Much of the available evidence comes from cell culture or animal models. While these models are good tools for scientists, they don’t automatically apply to humans.

Humans have considerable environmental and genetic variances that make us much more complicated.

Even when these studies are done in humans, they’re often tested in very high concentrations over short durations that are not reflective of regular balanced diets. There simply aren’t enough long-term, realistic studies to support the claim that superfoods can stave off illness or old age.

It’s easy to see why the concept is popular …  But the idea may be doing more harm than good. At best, it’s a misleading marketing tool, at worst, it may encourage bad habits.

Superfoods can give people a false sense of security, letting them believe that they can somehow balance out other unhealthy habits.

The prohibitive cost of superfoods is also an issue. The average price of “super” berries such as goji and acai is tens of times higher than humble raspberries, blackberries or apples. But they certainly don’t have ten times the nutritional value.

A common feature of superfoods is that they contain large amounts of antioxidants.

Antioxidants protect cells in the body from free radicals, which are reactive molecules originating from sources such as cigarette smoke, processed foods and normal metabolism. Too many free radicals damage cells, leading to age-related diseases, such as cancers.

Most of the research on the health benefits of dietary antioxidants comes from cell and animal models. This research is, again, not necessarily transferable into the regular dietary context.

The studies that have been done in humans generally show short-term elevations of antioxidants after consuming particular foods in very high concentrations, as you would expect. Avoiding sources of free radicals to start with is probably more beneficial than trying to balance them out with antioxidants.

Nutrients are clearly important for good health but seeking out large doses from any one source is not likely to be beneficial. Simply having more of a particular vitamin or mineral is not necessarily better.

Indeed, too much can sometimes be just as harmful as not enough. Also, the body cannot store certain nutrients so there’s no benefit in consuming large amounts of them; they will only be expelled as waste.

A fixation on superfoods can distract people from the benefits of healthy everyday foods. What most western diets are lacking is not any one super source of nutrients, but variety. Everyday fruits, vegetables and whole foods each have their own unique nutrient profile and contain individual factors that can be said to promote health and wellbeing.

No single food item, or even the top ten superfoods combined, have enough superpowers to replace a balanced, varied and healthy diet. Couple this with avoiding excessive consumption of processed and refined foods and alcohol, and you will have done everything you can, nutritionally speaking, to help you stay healthy and well into old age.

Emma Beckett receives funding from CSIRO (CSIRO OCE PhD Scholar)

Zoe Yates 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.

 

Seeing stars: ministers poised to approve new food rating system

 

State and federal health ministers will meet today to approve a new star rating system for food packaging. Easy-to-interpret front-of-pack labels are expected to help consumers quickly assess the nutritive value of food and help fight the epidemic of obesity and related chronic diseases.

Much like the energy star rating system on electrical appliances, the proposed system for food labels would see healthier choices carry more stars.

The scheme is the outcome of a 15-month government-led process that aimed to develop an easy-to-understand front-of-pack food labelling system that could be applied countrywide. A project committee, including public health experts, consumer groups, representatives from the food and retail industries, and state and territory governments, developed detailed recommendations for the system. All aspects of it were agreed on by participating parties.

But despite having agreed to the recommendations as part of the project committee, the food industry is now calling for a delay in implementing the scheme, and is seeking to water down the proposal.

How we got here

The introduction of an easy-to-understand food labelling system was a key recommendation of the 2011 Blewett review of food labelling commissioned by the federal government. But reaching consensus on the best system to implement has been difficult.

Food manufacturers have voluntarily adopted their industry’s own percentage daily intake (%DI) labelling scheme since 2006. But the scheme doesn’t meet the Blewett review’s requirement for an “interpretive” system.

The daily intake system only presents information about the contribution that a single serve of food makes to the “average” person’s daily dietary requirement. It has been criticised as being confusing for consumers, and potentially misleading.

The Blewett review specifically recommended traffic-light labelling, which uses green, amber and red to show, at a glance, the relative healthiness of products, as the preferred scheme. The recommendation was strongly supported by public health groups.

But traffic-light labels are vociferously opposed by industry, primarily because food manufacturers don’t want to put red (negative) labels on their products.

By the end of 2011, the federal government had rejected the call to implement traffic-light labelling. This was widely seen as government caving in to lobbying pressure from the food industry, which has been extremely active in its campaign against traffic-light labelling, both in Australia and internationally.

In an effort to develop a labelling system that could be supported by all parties, the federal government established a multi-sectoral committee to work on a proposal for a new scheme in 2012. In May 2013, this committee finalised their recommendations for the health star system.

The health star system

The scheme is based on a system proposed by the US Institute of Medicine. Under the proposed system, processed foods will be labelled using a scale ranging from half a star (least healthy) to five stars (healthiest).

The front of food packages will also have an icon showing the number of kilojoules in the product, and nutrient information on saturated fat, sodium and sugars. Only the kilojoules in the product will be expressed in terms of recommended daily intake.

Foods that are considered healthy (using government-defined criteria) will also be able to list a single “positive” nutrient (such as calcium) icon on the front of the package. And the standard nutrition information panel that is currently displayed on the back of the pack would remain in place.

The 2011 Blewett review specifically recommended traffic-light labelling, which uses green, amber and red to show the relative healthiness of products. Ian Clark

The system will initially be voluntary, and implementation is expected to be accompanied by a government-sponsored marketing campaign to explain and promote it.

Consumers and industry

If widely implemented in the form currently proposed, the health star system would be a significant win for consumers. With already high and rising levels of diet-related chronic disease in the community, we urgently need relevant nutrition information in a format that’s easy to understand and interpret.

While it may not be as easy to understand as traffic-light labels, the health star system would be a substantial improvement on current %DI labelling. It’s likely to assist shoppers to make healthier choices.

Despite having agreed to the details of the health star system as part of a government-led development process, the Australian Food and Grocery Council (AFGC) is now seeking to make changes to the proposed system.

Specifically, the AFGC is pushing for %DI information to be retained for a broad range of nutrients. But public health experts have noted that %DI labelling is potentially misleading for consumers if used for risk-increasing nutrients, such as sodium. This is because it implies that consumers should aim for a daily consumption target for these nutrients. In fact, the %DI figures are based on upper limits for consumption, and health experts recommend that people consume considerably less than these limits.

The food industry is also expected to lobby for technical changes to the way the star ratings are calculated in order to present their less healthy products more favourably.

The current proposal is for star ratings to be calculated per 100g of the product. This standardisation makes it easy for consumers to make comparisons between products, and is considered by public health experts to be an essential part of the system.

But there’s a risk that the food industry will seek to change the calculations to be based on “serving size”. This would open the system up to manipulation as serving sizes are not standard.

Concerns have also been raised about the cost of implementing the scheme. But food manufacturers regularly redesign their product packages anyway, for promotional events such as competitions. And the long lead time (at least 12 months) as well as the voluntary nature of the scheme will mean that additional costs to industry are likely to be minimal.

Undoubtedly, the AFGC is hoping that a delay in government approval of the scheme beyond the upcoming federal election (September 2013) will result in more extensive delays or a scrapping of the system altogether.

Public health vs corporate interests

The goal of an improved labelling scheme is to assist consumers to make informed dietary choices and, in so doing, help improve the health of the population.

From a public health viewpoint, corporate efforts to undermine the government policy-making process are a serious concern. There’s a clear conflict of interest between big food companies seeking to profit from sales of their products (many of which are unhealthy) and public-interest efforts to reduce obesity and diet-related chronic disease.

The health star rating system has been successfully negotiated by a range of stakeholders, including both public health and industry groups. State and federal ministers have an opportunity today to approve the system, which, while not perfect, is nevertheless likely to result in substantial public health benefits and long-term savings to the health budget.

Gary Sacks 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.

 

Coles are the piggy in the middle of animal welfare confrontation

Last week, Coles supermarkets began selling shopping bags on behalf of animal rights campaigners Animal Australia. Following a backlash from farmers, Animals Australia withdrew the bags. But the stoush raised some important questions about the growing power of ethical consumption, and about who gets to decide how much animal welfare is enough.

The animal rights group produced 15,000 bags displaying a little winged pig who encourages consumers to “believe in a world without factory farming”. They were to be sold in 500 metropolitan Coles Supermarkets. The National Farmers’ Federation (NFF) urged producers to boycott Coles, saying Animals Australia were “anti-farmer”.

Since ending the campaign, Animals Australia has raised enough in donations from sympathetic Australians to secure valuable air time for their television ad. According to the Canberra Times, Coles also received huge support in favour of the bags – leading many to ask why farm lobby groups are so strongly opposed the campaign.

Why don’t farmers like animal welfare campaigns?

The supermarket giant is trying to cater for the growing demand for high-welfare meat and eggs while remaining supportive of producers. But several farming lobbies called for immediate action against Coles in response to the bag sales.

Farmers groups didn’t object to a campaign to end factory farming. They objected to Animals Australia and its platforms. A representative of the pork lobby expressed his outrage that Coles would partner with an “anti-meat” organisation, and described Animals Australia as campaigning for a “meat-free world”.

 

At the core of any animal rights ideology is the objective to reduce suffering, as animal activists explain. Getting sows out of stalls and chickens out of cages is the first step in this process. Farmers say they also care about welfare. But farming lobby groups such as the NFF feel vulnerable to the effects of marketing campaigns by animal rights groups.

While animal welfare is important to farmers, there is immense pressure to supply chicken, pork and eggs to consumers at a low cost. This is why the factory farms that Animals Australia are protesting against exist. The Farmers Federation says it works with respected animal welfare groups and the government to make improvements in the industry. But they seem to think there is no place in the debate for a group that campaigns for animal rights; a group they describe as “extremist animal activist[s]”.

Farmers label the group as extremists because they campaign for an end to rodeos, no more kangaroo culling and no more culling of introduced animals. But these are different matters: if farmers are opposed to Animals Australia’s anti-factory farming campaign because it is based on false claims, they should tell the public what they are doing to improve farm animal welfare.

Can high-welfare foods work for supermarkets and producers?

Rather than trying to turn Australia vegan, Animals Australia told the Age they want Australians to “eat less and pay more [for meat and eggs] – ensuring that the bottom line for producers can remain positive”. To achieve this requires a dramatic shift in thinking by consumers and support for supermarkets and farmers to supply high-welfare foods to the public.

An open conversation between producers, supermarkets, and consumers on the realities of farming, include the unpleasant truths, may help Australia move forward and implement more animal-friendly farming practices.

Both meat farmers and Animals Australia agree that consumers need to know more about farming in Australia. The Farmers Federation say on their website they are dedicated to increasing awareness of farming’s role in society.

When transparency and labelling standards are improved, it will be the consumer who determines the importance of animal welfare – and rights – in the scheme of things.

The Business Benchmark on Farm Animal Welfare has found welfare is not keeping up with consumer demands. Consumers' concern makes them sensitive to campaigns such as “Make It Possible” and open to alternative products and lifestyles.

On the surface, the farming organisations who were calling for an immediate boycott of Coles have won the debate. But they have done little to convince consumers they needn’t worry about farm animal welfare.

Australian consumers, and subsequently legislators, will determine the direction for farm animal welfare in the future. It is in the best interests of the meat and egg industries to reassure consumers that animal welfare is a priority. Otherwise Animals Australia will have gained much more from the proposed boycott than anticipated.

Sally Healy was the 2011 recipient for the RSPCA Australia Scholarship for Humane Animal Production Research.

Georgette Burns 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.

 

Small brands, big impact: why craft beer is top of the hops

The brewing industries in many countries are undergoing dramatic changes, with increasing numbers of craft breweries challenging the traditional volume-based business model of major corporations.

In the US for example, more than 400 breweries opened in 2012, an increase of 17% from the year before. Craft beer continues to grow even when beer consumption overall is declining in many markets around the world. This certainly seems to be the trend in countries like the US, Canada, New Zealand and indeed Australia.

In 1990, the centralisation of the Australian beer industry seemed complete; three companies controlled the market and the whole country had just 11 breweries. Yet this seems to have been the turning point rather than the end state: 20 years later the craft beer sector had well and truly made its entrance so that by 2013, Australia’s beer industry consists of over 130 breweries.

The trend suggests craft breweries have found a niche market where the large breweries find it hard to compete. Craft beer is often differentiated by taste, as a food companion and by the raw material used to produce it. Enthusiasts sometimes refer to the common beers in derogatory terms as “fizzy yellow lagers”. Some may reject mainstream beer products based on a perceived lack of flavour; others reject it based on ownership of the label.

Some pub mangers around Melbourne refuse to serve beers that are not produced by small independent companies due to negative attitudes towards large multinational businesses, and a belief that craft beer can only be produced by small and independent businesses. Independent craft breweries have been able to make something positive out of their small size by framing themselves as unique and it is resonating with drinkers and pub owners alike.

While beer consumption in Australia has decreased steadily every year since 1979, consumers increasingly demand quality beers and the consumption of craft beers is increasing. ABC news reported that the consumption of craft beer in Australia is increasing by 6% every year. Nevertheless, the beer industry in Australia is still largely centralised, with multinationals SAB Miller (UK) and Kirin Holding (Japan) controlling about 90% of the market.

Yet it is this very high centralisation of the industry, where the large players can be regarded as “generalists”, that provides the opening for small players to enter the market as “specialists”. For craft breweries, such concentration of power in the industry is actually good news because these breweries serve a different market.

The specialists are often focused on selling more than just beer. They are selling an experience, quite often centred on educating consumers about beer styles and how to match it with food. As such, the craft beer industry is tapping into the monopoly of the wine industry as being the natural beverage to accompany a meal.

Beer appreciation, tasting and food matching is growing in popularity in Australia; it is also becoming an important part of tourist activities. For example, the festival Good Beer Week ran in Melbourne in May for the third year with rapidly growing popularity. The festival attracts beer tourists to Melbourne from around the country and overseas.

Large corporations are not ignoring craft beer, even if they generally serve a different segment of the market. The industry recognise that Australians are drinking different beer for different occasions, and craft breweries are leading the way by developing more styles and products to cater for this growing trend. In response, the large breweries are launching their own “craft” labels and buying out existing craft breweries.

For example, Fosters Group (owned by the world’s second largest brewing company SAB-Miller) has acquired one of Australia’s first craft labels, Matilda Bay. Similarly, Lion Nathan (owned by the Japanese giant Kirin Holding) acquired Little World Beverages, which operates two craft breweries, Little Creatures and White Rabbit.

Meanwhile, Australia’s leading retailers, Woolworths and Coles, have launched their own craft-looking beer ranges, Gage Roads Brewing Company and Steamrail Brewing Company. Time will tell whether these large companies can obtain a specialist position through telling genuine stories consumers will buy into. And yes, when it comes to beer, stories are important.

For specialist craft breweries, one of the assets of “smallness” is that they can afford to be more personal and local in how they brand their products. This personal and local touch adds a new dimension to conventional brand building theory in forming relationships with consumers.

An analysis of over 1,000 craft brewery labels from around the world revealed that the local and personal were key elements in the branding strategy of craft breweries. In particular, local and personal myths, including heroes and folklore, were key components of many craft beer brands.

For example, Bridge Road Brewers in Beechworth, Victoria, use local bushranger Ned Kelly as an integrate part of their brand and local storytelling. The attractiveness of mythology and the stories connected to place are also part of the romance that is the craft beer story. As such, an important brand element for craft beer is related to a sense of place.

Understanding craft beer branding does help to explain the attractiveness of a craft beer you have seen, but not yet tasted. Unless offered a taste by the bar staff, we have to buy a beer before we actually taste it. As such, we often buy the story before we buy the beer. A connection to a particular place helps humanising the brand and brings it closer to us.

To create closeness with consumers around local products through local history, heroes, stories and folklore enrich the ‘invisible landscape’: that perception of place and connection inside our mind what we envision when we think about a particular place, sparked by a particular brand. For example, the Trappist breweries in Belgium tell the story of beer produced in old monasteries by the trappist monks for hundreds of years.

A mystical “sense of place” blended with culture, tradition, religion and beer fills our minds. A sense of place brings to life emotions of identity, attachment and even dependence on place, and focuses on people’s own experiences and how they feel about it. Craft beer marketers, I would argue, are experts in emotive storytelling.

Another example of folklore comes from the regional brewery Holgate Brewhouse in Woodend, Victoria. The brewery is named after the owners, Paul and Natasha Holgate. Paul Holgate’s parents migrated to Australia from England in 1965, and the Holgate Brewery has created its sense of place and humanised the brand using the Holgate’s family folklore. Taken from the family coat of arms, a bull’s head and horns form part of the Holgate Brewhouse logo and label design.

Folklore suggests that a bull’s head on a coat of arms represents bravery, valour and generosity, while its horns represent strength and fortitude. These attributes personify the brand through the connection with the brewer. At the same time, however, the bull resonates with the farming area surrounding the brewery, thus communicating the story about the physical place where the brewery is located, as well as the owner’s family traditions.

The brand relies on the historical folktale about the Holgate family and a real place, both of which humanise the brand. Some consumers may connect with the story around the brewer’s British background and the many British style ales he brews, others simply to the brewery location. Either way, it allows the consumers to ‘pick and choose’ the elements that have a meaning for them, hence allowing co-creation – or buy in ­– of the brand narrative.

Why we drink the beer we drink is a fascinating question and one that may have several answers. But one thing that is clear from the way craft breweries market their beer is that it’s not only about taste: we are also buying the story before we actually consume the products, consciously or subconsciously.

Torgeir Watne 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.

 

Quit your whinging, it’s our fault! AUSBUY’s take on Simplot and McCains cutbacks

In light of recent announcements from Simplot and McCains regarding cutbacks to their produce supply, AUSBUY have come out to say that when it comes down to it, the only ones to blame are ourselves.

McCains Foods and Simplot have blamed the ever powerful Aussie dollar and the threat of cheap imports for their drop in profits leading to a reduction in renewed supplier contracts and the possible closure of two processing plants respectively.

But is the problem really the fact that we have sold the majority of our major food companies to the foreign entities who make production decisions in boardrooms around the globe?

AUSBUY poses a good argument… Below is a statement they released this morning: 

Stop whinging – we have done this to ourselves!!! Simplot (USA) has been a relatively benign foreign investor since it bought many of the brands and factories formerly owned by the Australia Public Company in the mid 1990s (Edgells). 

Likewise we thought McCains (Canada) was here to stay. Will they follow the Heinz example to set up in New Zealand and sell back to us? Decisions are now made overseas about the closure of factories.

We have been complicit in the decline of our food manufacturing in Australia. Over the past three decades we have allowed majority control beyond the farm gate of every major food commodity except rice.

The Australian Consumer and Competition Commission has overseen the loss of control to overseas interests and retailers in the name of competitiveness, while our farmers and our local manufacturers are expected to play to a different set of rules to their competitors. 

While we claim food manufacturing is the largest manufacturing sector we have remaining, Australia has no major food companies. Decisions about our manufacturing are made in overseas board rooms, not here.

Other countries look after their own. New Zealand has the largest dairy company in the world, Fonterra. New Zealand obtained an amendment under the WTO rules to stop imports which impact their strategic industries. New Zealand stopped the sale of eight dairy farms to the Chinese last year because it did not meet the national interest test.

Its government cannot divest assets which are their for the long term interest of its citizens. Australians have no rights. Countries such as the USA strictly control manufactured goods through labelling law compliance. They decide what products will be sold in the USA.

Despite the warning signs, Australian decision makers turned a blind eye. Foreign investment at any cost has been the call cry! And our people are bearing the consequences! In recent years we have condoned the importation of packaged foods and fresh produce which does not meet our standards.

Dumping is rife! Our labelling laws are inadequate. We have under resourced our gate keepers AQIS, Bio Security Australia and Australian Standards. In recent years, aided by our high A$, our open door policy to imports, and our largess and benevolence to help developing countries, we have imported foods in direct competition with own farmers and their skills. Our borders are not secure. Imports are coming from countries with labels which do not meet our standards, are replacing local producers on the shelf.

The growth of private label among the retailers has also put addition burden on our manufacturers to compete on price with overseas manufacturers if they want to keep their factories operational.

In addition, in recent years we have been net importers of food. While retailers might espouse their support for fresh produce on the shelves, imported foods are being substituted for local produce in many manufactured goods. Made in Australia does not mean it is owned here or sourced here with the current rules of 51% substantial transformation.

The problem in Australia is further exacerbated by the closures in our regional areas where produce is “value added”, creating skilled manufacturing jobs while our farming skills are retained.

 The Australian owned businesses who are competing in this environment deserve our support. AUSBUY was prescient in warning of the consequences of loss of control of our wealth creating assets when it formed during the recession we had to have in 1991. 

Australia’s challenge in the coming years is to rebuild our nation, get our people working productively for Australia again, and reinvesting in our future. If we cannot find answers to the questions we are asking then ask other questions. The seeds of the future are in those Australian owned companies and our farmers, many of whom have the answers. Are we listening?

 

The rise of Australia as a wine nation

Think of alcohol in Australian life and you probably think of beer: a “hard-earned thirst” and all that.

Yet our national drinking taste is undergoing a dramatic change. Not only are we drinking less overall, but beer no longer dominates the contents of the national glass. Consumption trends now show that wine may soon be our drink of choice in terms of the type of alcohol consumed.

Whereas 50 years ago Australians drank 20 times more beer than wine, the comparison has narrowed to only three times more beer by volume. Beer is lower in alcohol than wine so if we look at pure alcohol rather than total fluid consumed: very little separates the two.

As shown in the graph below, from 1961 to 2011, alcohol consumption overall is lower than thirty years ago. Beer as pure alcohol dropped from 76% to 42% while wine consumption rose from 12% to 37%. Spirits increased from 12% to 20%.

Overall alcohol consumption in Australia. ABS

While the OECD says that: “wine consumption [is] increasing in many traditional beer-drinking countries and vice versa”, the closing of the gap between wine and beer in Australia says something especially intriguing about expressions of national identity.

Changing national tastes and global wine trade

This change in national taste over the past 50 years has been attributed to post-war migration from European wine countries, rising national prosperity, the increased power of women as consumers, and a more technologically sophisticated wine industry that matches its products with customer preference.

The influence of the wine industry is worth noting as Australia has taken more readily to wine-making than wine drinking. It is the world’s fourth largest) wine exporter, but only 12th in per capita consumption.

Unlike the recent preference for wine drinking, the desire to create a successful wine export product – particularly to the UK – can be traced to the early colonisation of Australia. The achievement of this historical ambition has been emphasised with Australia’s status confirmed as the UK’s number one source of wine, ahead of Italy, France and the US. The consequence of this is deeper than it might at first seem.

In global trade, wine commerce has long been a signifier of national economic maturity. UK marketer Hazel Murphy, who first facilitated the flood of Australian wine onto British supermarket shelves, described this from an Old World European perspective: wine export dominance signals a coming of age.

While alcohol is central to Australian culture, drinking beer, wine or spirits is not just an individual activity of daily life, but is also an inherently social one. Sociological research shows a strong link between identity and consumption choices. The consumption of alcohol is not just a matter of individual choice, but also a matter of cultural taste.

While concerns over risky drinking behaviours have focused on how much people drink, what they’re drinking says something significant too about how individuals self-identify with particular social groups, lifestyles, and cultural values. This has implications for the complexity and diversity of national identity.

Wine denotes a cultured, not just cultural, identity. Research shows that the alcohol least likely to be chosen by Australian binge drinkers is light beer, followed by bottled or fortified wine. This has echoes of European folklore about national lifestyles which linked wine with responsible drinking.

Beer was increasingly the drink of the working classes from the 1860s Cambridge Brewing Co.

In the 1800s, residents of European wine countries – regardless of social class – were thought to be better behaved (more civilised even) than those who took their alcohol brewed or distilled. This association between wine and civilised behaviour held surprising influence among the ruling class in colonial Australia who looked to Europe as well as Britain to fashion their cultural environment.

A ‘civilising drink’?

Wine was often promoted as a “civilising drink”, and in the context of temperance movements, its consumption was imbued with notions of self-restraint in contrast to consumption of spirits and beer. A rise in binge drinking during the 1850s gold rushes led to attempts to legislate for greater production of cheap wine to encourage sobriety among working men.

Unsurprisingly, in the decades after this, the socially prevalent British-derived labourers of colonial Australia refused to be transformed into wine bibbers. Their drink was beer, ale, and to a lesser extent, rum.

By 1901, ten times more beer than wine or spirits was consumed in NSW alone. By the 1950s beer had become deeply entrenched in popular notions of “Australianness”. This was emphasised in the 1962 “Scale of Australianism”, a bizarre “psychological test” devised to gauge the understanding of “New Australians” as to how to assimilate into contemporary Australian culture.

The test expected respondents to agree with the statement that “a good way for a man to spend his spare time is with a group of friends round a keg of beer” and disagree that “wine is a good drink to offer to a friend who just drops in for a visit”.

This resistance to wine drinking reflected white Australian fears that a changing way of life would weaken the nation: fears that have proven to be unfounded. It is in an environment of broader social acceptance of diversity in gender, class and cultural identities that Australians have turned to wine.

There is no longer a single national alcohol of choice. Cultural tastes have broadened. Let’s drink to that.

John Germov receives funding from the Australian Research Council (ARC) on alcohol and harm minimisation. He also collaborates with wine companies on historical sociological research while also publishing critical wine studies scholarship independent of industry. John is the current Vice-President of the Australasian Council of Deans of Arts, Social Sciences and Humanities (DASSH).

Julie McIntyre’s book First Vintage: Wine in Colonial New South Wales (Sydney: UNSW Press, 2012) was published with support from the wine industry. She collaborates with wine companies on historical sociological research while also publishing critical wine studies scholarship independent of industry.

The Conversation

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

 

Australia has lost control of its agribusiness to foreigners: Truss

Nationals leader Warren Truss has warned Australia has lost control of its agribusinesses and declared a new takeover bid poses a critical test for the Foreign Investment Review Board.

Mr Truss told his party’s federal council in Canberra today it was a great shame that foreign interests valued Australia’s land, its food producing capacity and the businesses associated with driving growth in agriculture far more than Australians did.

He said the FIRB – of which the Nationals have been very critical – had never said “no” to a foreign takeover of Australian land or agribusiness, he said.

“It now faces another critical test. The government must deal with the proposed takeover of Australia’s largest listed agribusiness, GrainCorp, by Archer Daniels Midland (ADM) – a US giant that is the second largest grain business in the world.

“This bid would mean that every grain export facility in Queensland, NSW, SA and all but half of one in Victoria, would be foreign owned.”

The takeover would hand ADM 280 storage sites in the eastern states, 19 grain trains, three container loading facilities and vital stocks information.

“The owners of these vital assets have the ability to decide whether eastern Australia has a grain industry or not.

“ADM is not offering new investment or any new commitments to Australia – just new owners at above market value. What is in this deal for Australia?”

Grain storage and handling charges would rise for farmers to pay for the purchase and the profits would be transferred to the new American owners, Mr Truss said.

“This purchase, along with the dominant buyouts of Australia’s sugar industry, meat works, dairy industry, grain marketing, oilseed crushers, food processing, wine industry – mostly over the past four years – raises serious questions about the future decision-making in our agricultural industries”, he said.

“We dream of becoming the food bowl of Asia but whether that can happen will increasingly be decided in boardrooms in the US, Europe, Asia and even New Zealand.

“Over the last four years or so, we have lost control of our nation’s agribusineses.”

The issue of foreign investment has previously produced tensions within the Coalition with the Nationals in particular concerned about investment in land.

This led to the Coalition producing new guidelines that it would introduce in government, including requiring FIRB to review any proposed foreign acquisition of an agribusiness where the investment represents 15% or more in an agribusiness valued at $244 million, or exceeds $53 million, whichever is smaller.

Dries within the Liberal party are concerned about checks that would discourage foreign investment.

Mr Truss said: “We support genuine forein investment that strengthens out economy, which promotes growth and fosters confidence, but investment must not be contrary to our national interest”.

Michelle Grattan 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.

 

Wins & woes in food manufacturing: Part three

There are obvious pros and cons to manufacturing wine on a small island off the coast of SA, but Yale Norris, general manager of Islander Estate Vineyards, says he wouldn't change a thing if he had his time again.

Islander Estate's founder and French winemaker, Jacques Lurton, planted the vineyard on Kangaroo Island in 2000, knowing that the island's cool climate, pristine environment and long ripening season, combined with his vast experience in winemaking, would produce some top notch wines. And he wasn't wrong.

"I think the biggest accomplishment that we've achieved as a company is that we're highly rated by Australian wine critics, and we have a five star rating from (James) Halliday, which puts us in around the top four percent of wineries in Australia," Norris told Food magazine.

Despite the brand's loyal following on the island, on the mainland and overseas, in countries including China, Hong Kong, Sweden, Finland, Canada and also in the UK, producing wine on the island, which sits 13km from the coast of Australia, presents a number of challenges.

"Part of the downside of making beautiful wine on Kangaroo Island is that you have to struggle with getting things to and from the island, and that increases our production costs significantly. Everything we have from a parts' perspective for the winery and the vineyard has to come across by ferry and from an export perspective and a bottling perspective everything has to go back off the island by ferry. So our transport costs are exponentially greater than our counterparts on the mainland," said Norris.

The next biggest challenge Islander Estate, and no doubt other manufacturers on the island face is labour.

"That's because a lot of folks come to Kangaroo Island wanting to live here for a very relaxed lifestyle, and vineyard work isn't necessarily relaxing, it's pretty hard yakka. So we certainly have challenges with getting labour, and in getting people who are willing to stay."

Not only is it difficult for the winery to find and then retain good workers, but paying them also presents a problem. And it affects manufacturers across Australia, not just on KI, says Norris.

"The cost of labour is extremely high compared to other places in the world. That certainly makes it less competitive. I don't know the answer to it but it certainly is a challenge we face. A lot of unskilled jobs have very high rates and it makes manufacturing difficult.

"It's not really sensible to pay an unskilled person 200 percent to work on a Sunday," he said.

But unlike other Australian food and beverage manufacturers, Islander Estate isn't threatened by imported products competing for shelf space.

"Imports aren't a problem because of the high tariffs they pay to bring wine into the country. One of the benefits, as a consumer, of the high dollar is the fact that imported wine became more affordable. But the quality of an imported wine compared to what you find domestically in a similar price point is not there."

The bigger concern is one of oversupply, insists Norris. Wineries with more product than they know what to do with are selling in bulk to "the Coles and Woolies of the world", who are then selling it extremely cheaply.

"That's a difficult thing because you have some guys out there making nice wine that they're unable to sell and have excess capacity which is then sold as a clean skin. That's certainly a challenge because people have the perception that wine should cost $3 a bottle."

Norris' concerns were echoed in IBISWorld's recent Wine Manufacturing in Australia 2012-13 report which referenced a 2009 study in stating that 20 percent of bearing vines in Australia are surplus to requirements and at least 17 percent of vineyard capacity is uneconomic. The study also found that Australia is producing 20 million to 40 million cases a year more than it is selling.

"So the challenge for us isn't necessarily the high dollar, it's the amount of Australian wine that's looking for a home somewhere else in the world. The competition we face with domestic competitors looking for new markets outside Australia is certainly a challenge," said Norris.

Despite these challenges, Islander Estate, which produces between 5,000 and 6,000 cases of wine per year, sees great growth opportunities both here and abroad, with the brand's very romantic story proving to be a great selling point.

"The story is the driver of a lot of sales, no matter where you are – even domestically. People want to hear a story, they want to understand the history of the brand, why we're here, why they should like the wine, rather than just buying something off the shelf which has no meaning whatsoever," said Norris.

"The Asian market is certainly big on that and I think that's a huge driver of why we're there, because Jacques has both an extended family history and a personal history of making wine in different parts of the world andhe's got a very romantic story about coming to this small island and having a vision to create beautiful, world-class wine from this little place in the middle of nowhere. I think that adds a lot to the mystique of the brand."

So despite oversupply issues and unreasonable labour expenses, Norris insists Australia is one of the best places in the world to make wine, or more importantly, to make the sort of wine that they want to make.

"We have a lot of government support," he said. "I think the industry as a whole is allowed to have the freedom to make the wines that they want to make. That's one of the main reasons why Jacques [pictured] came here. In different parts of the world you have a lot of restrictions on what you can grow, where you can grow it, how you can blend.

"Like all things Australian, you have this amazing freedom here to go out and plant this here or have a punt, have a go and if it works that's great. If it doesn't, then bad luck. But I think it's really exciting that in Australia you can go out and cut your own path."

Check out part one and part two of this story and hear some other persepctives on today's manufacturing industry from those living and breathing it!

 

Are we allowing our fruit industry to wither?

The sight of Victorian citrus farmers bulldozing surplus trees due to the loss of supply contracts is a dramatic way to illustrate the quandary facing both Australian industry and growers.

In April Victorian fruit processor SPC Ardmona, owned by Coca-Cola Amatil, announced it was dramatically cutting its requirements for locally-grown fruit.

More than half of the 150 current peach and pear suppliers were told none of their crop will be required in 2014. Growers are now looking for Federal Government assistance to bulldoze 750,000 surplus trees, while SPC Ardmona has called on the government to impose emergency tariffs on imports to protect the local industry.

SPC Ardmona partially blames a high Australian dollar which has hit rural markets hard.

But also says it cannot compete against the supermarkets' overseas-sourced “private label” products. “We are competing against products from countries that have considerably lower labour and production costs and arguably lower quality standards than we have in Australia,“ Managing Director Peter Kelly said.

There has been increasing recognition that supermarkets have become the most powerful actors in the global food trade.

Jane Dixon and Bronwyn Isaac’s research explores in detail the problematic and paradoxical role of supermarkets in the Goulburn Valley’s food economy.

While the use of imported produce in supermarkets' home brand products benefits consumers through lower prices, they destabilise the regional agricultural economy and undermine a sense of community by displacing locally owned grocers and butchers.

Part of the issue facing Goulburn Valley growers is historical. Simply, an industry that formerly blossomed under protectionist and interventionist agricultural policies is now facing the realities of global free trade and competition.

The first fruit growers association was formed in the Goulburn Valley in 1891, with the Shepparton Fruit Preserving Company (SPC) established in 1917. In 2002 it merged with the Ardmona Fruit Products Co-Op Ltd to become SPC Ardmona and was acquired by Coca-Cola Amatil in 2005.

Up until the 1980s, the industry was cushioned by protectionist policies; but slowly, Goulburn Valley growers have been put under increasing pressure by international markets.

But the market forces argument ignores several factors.

There is the problem of what happens to the families and communities whose livelihoods have been underpinned by this industry for a century or so.

Johanna’s current PhD research with Victorian orchardists identifies a widespread sense of pessimism and frustration in a system that is dominated by supermarkets and in which growers are constantly under pressure to adhere to stringent quality assurance guidelines over which they have little control.

City of Greater Shepparton Mayor Jenny Houlihan said at a recent community rally “SPC Ardmona is vitally important to our local economy, and it is also part of our identity”.

In our view the growers are there as a result of previous public policy decisions, and so the public, via the apparatus of Government, is to some extent accountable for what happens to them.

Also, we are regularly told we are moving into an era of global food scarcity, with Australia well-placed to benefit by supplying high-quality food to our neighbours. Perhaps the Goulburn Valley situation lends weight to the argument that we are actually poorly prepared to become Asia’s food bowl.

It seems curious that we would allow this industry to wither. The existing complex system of skills, knowledge, infrastructure and supply chain relationships will be much harder to recreate in the future if they are permitted to unravel now.

The challenge is to navigate a path forward whereby the assets of the Goulburn Valley orchard industry are protected, and deployed into an economically viable future. So who should be doing what, if this is to be achieved?

Johanna’s current research indicates growers fare better when they produce multiple products, including a range of both different crops and different varieties, and when they supply multiple buyers and markets, including beyond the dominant retail supply chain. That is a strategy that warrants further investigation from growers and their industry bodies.

SPCA has been vigorously pursuing an innovation and diversification strategy to try to find profitable products and markets, as documented by Libby Hattersley and colleagues, and this needs to continue. This has included developing world-first new packaging technology such as single-serve plastic cups, and resealable plastic jars, as innovations on traditional canning technology. They have also established partnership agreements with overseas companies in order to gain access to new sources of supply and new markets.

There is a good case for Victorian Government involvement given its aim to double Victoria’s agricultural production, and the priority strategies identified in the Goulburn Valley Subregional Plan, part of Regional Development Victoria’s Hume Strategy for Sustainable Communities.

There is also a case for Federal Government involvement, in particular on moderating the power of the supermarkets. We watch keenly the current negotiations between the supermarkets and the Australian Food and Grocery Council.

Growers, communities, industry and government all have a role to play in charting a way forward for this industry. Let’s get on with it.

Jane Dixon's research was funded by the ARC.

Johanna Christensen and Michael Santhanam-Martin do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.

The Conversation

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

 

Boys prefer foods spruiked by sports celebs: study

Boys are more likely to choose unhealthy foods with on-pack endorsements by sports stars than those without, a new study of primary school-aged children has found.

The Cancer Council Victoria’s Centre for Behavioural Research in Cancer surveyed 1302 Victorian children in grades five and six and concluded that sports stars should be prevented from promoting energy-dense, low-nutrient foods.

The researchers also found that children of both sexes were more likely to want foods with packaging that displayed claims about the food’s nutritional content, such as “reduced fat” or “source of calcium.”

The children were asked to look at mocked-up food packets for products in five categories: sweetened breakfast cereal, cheese dip snacks, ice cream bars, frozen chicken nuggets and flavoured milk drinks.

“For each food product category, a comparison pack was prepared, matched on packaging style to control for visual appeal of factors other than the promotion condition, but with a healthier nutritional profile,” the study said.

“Overall, results show that on-pack nutrient content claims made pre-adolescents more likely to choose energy-dense, nutrient-poor products and increased perceptions of their nutrient content. Sports celebrity endorsements made boys more likely to choose energy-dense, nutrient poor products.”

The study was published in the journal Pediatric Obesity.

Dr Helen Dixon, lead author of the study and senior research fellow at the Centre for Behavioural Research in Cancer, said the researchers only used images of male sports stars in their study because images of male sports stars are more common than female sports stars in food packaging.

Policy change
Dr Dixon said, “Stricter measures need to be introduced to limit food manufacturers’ use of nutrient content claims and sports celebrity endorsements to promote unhealthy foods, to ensure consumers aren’t confused about the healthiness such products.”

“We already have rules about the sorts of products that can carry health claims. You could make a rule that certain foods are ineligible to carry a nutrient content claim or a sports person’s image,” she said, adding that sports celebrities should think more carefully about the foods they promote.

“A lot of sports people who personally have an interest in health and fitness need to think about the effect they are having on children’s diets when they endorse food products. We have one in four kids overweight or obese in Australia, and when unhealthy food products are marketed heavily toward kids it can influence their food choices.”

Role model responsibility
Sandra Jones, Director of the Centre for Health Initiatives at University of Wollongong, said she was not surprised by the study’s findings.

“The boys really identify with sport players, and they really internalise it. And there’s a sense that that food actually contributed to those outcomes,” she said.

“There’s also the perception that if they consume it, it must be good for you. It’s about needing more of it in order to keep playing, or celebrating their success.”

Professor Jones also called on high profile role-models to take more responsibility for the products with which they are associated.

“What we should be saying is: you’re a role model for kids and you know you are. Is it really wise for you to promote this? Is it really a good idea to stick your name and your face on this product?”

Timothy Gill, Principal Research Fellow at University of Sydney, said the study clearly shows that children are easy to influence in terms of their product choices.

“Naivety around the market is something that, despite the fact that there are codes in place, is still widely utilised by the industry to encourage consumption of high profit margin products,” he said.

The Conversation

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

 

The five bottlenecks in Australia’s wine industry

IBISWorld has released its Wine Manufacturing in Australia 2012-13 report, and lists five key inhibitors to growth and success in the industry.

The report provides a snapshot of the industry, revealing that annual growth from 2008-13 has dropped by 3.2 percent, which annual growth from 2013-18 is due to rise by 1.1 percent. Revenue for 2012-13 sits at $5.3b, with a profit of $273.9m.

It also list the five major bottlenecks in the industry, preventing winemakers both large and boutique, from experiencing significant growth here and abroad. There are:

  1. Volatile economies in key export markets
  2. The high Australian dollar
  3. Rising competition from new low-cost wine producers
  4. Increasing dominance of the supermarket giants
  5. Oversupply of wine and wine grapes

Oversupply
The most challenging issue faced by the industry in recent years is oversupply.

In November 2009, the Winemakers’ Federation of Australia, Wine Grape Growers’ Australia, the Australian Wine and Brandy Corporation and the Grape and Wine Research and Development Corporation released a joint statement highlighting the structural surplus of wine and wine grapes in Australia, calling on producers to take steps to reduce production.

According to the research, at least 20 percent of bearing vines in Australia are surplus to requirements and at least 17 percent of vineyard capacity is uneconomic. The study found that Australia is producing 20 million to 40 million cases a year more than it is selling.

Major wine producers have responded to this oversupply by writing billions of dollars off their wine assets and selling vineyards. “During 2009-10, Treasury Wine Estates axed 37 wine brands and sold 31 vineyards, while Constellation Wines sold 10 wineries and 23 vineyards. Although this has had a disastrous effect on profitability, it should improve profit in the longer term as production capacity matches demand,” IBISWorld reports.

Exports
Export sales have declined by an annualised 9.7 percent over the five years through 2012-13, the report reads.

“During the past five years, wine exports have declined sharply as key export UK and US markets have suffered recession and the rising Australian dollar has eroded export competitiveness,” it states. Exports opportunities in Australia have also had to contend with growing competition from other low-cost wine producers.

The report says that cheap Australian wines dominated the UK market 10 years ago. But over the past decade several new producers have entered the market from countries including New Zealand, Argentina, Chile and South Africa.

Competition has also increased from producers in France, Italy and Spain, which the report states are “regaining their iconic status as winemakers.”

In order to combat this, Australian producers are responding by trying to improve Australia’s reputation as a wine-producing country and increase sales of higher value wines. Producers are also targeting Asian markets, particularly China, with Australia being the second-largest importer of wine to China, following France.

Supermarkets
“A major concern for wine producers is the increasing dominance of Coles and Woolworths in liquor retailing. Woolworths and Wesfarmers (Coles) have aggressively increased their presence in the liquor retailing market in recent years, expanding the number of Dan Murphy’s, Woolworths Liquor, BWS, Liquorland and First Choice outlets in Australia,” Wine Manufacturing in Australia 2012-13 reads.

The supermarkets’ hold on alcohol retailing in Australia represents more than 60 percent, and this is expected to increase with Coles and Woolworths having plans to open another 270 stores between them over the next two years.

Woolworths and Wesfarmers therefore have significantly more bargaining power over wine producers and their marketwide discounting has contributed to limited wholesale price growth over the past five years.

IBISWorld’s report also states that “The supermarket chains have also exploited their market power to reduce shelf space for branded products and push their own private-label and control-label wines.”

Looking forward
Wine Manufacturing in Australia 2012-13 states that leading up to 2017-18, winemakers are expected to move towards producing premium wines with Asian export markets playing an increasingly important role in the industry’s longevity and profitability.

“Growth will remain moderate in the immediate future, as the strong dollar and sluggish global economy take a toll on exports. Weak price growth will constrain domestic revenue growth and profitability,” it reads.

It’s also expected that winemakers will work on producing single vineyard wines, while also focusing more on cellar door sales and sales opportunities online.

Here’s cheers to hoping IBISWorld’s next analysis of our wine industry will paint a rosier picture for producers.

 

Wins & woes in food manufacturing: Part two

It took the collapse of a fellow South Australian brand for Phil Sims, CEO of confectioner Robern Menz to realise just how supportive Australian consumers are of homegrown brands.

In April this year, 65 year old pickles and sauce company, Spring Gully, went into voluntary administration after crumbling with debts of more than $3m.

Completely unaware of the effect it would have, Sims turned to social media, trying to rally support for the iconic South Australian brand.

"We've got 35,000 fans on our Facebook page, and they're predominantly all South Australians because our Fruitchocs brand is iconic here. So we sent out a simple message which said 'Spring Gully is in a spot of bother at the moment. It would be great if you could all go out and buy some of their products this weekend,'" explained Sims.

What followed was a tremendous expression of commentary and sharing on social media, and more importantly, three weeks worth of sales took place over a three day period with Foodland, IGA and Coles placing extra orders to make up for the increase in sales.

Bolstered by South Australians' efforts to help the struggling brand, Sims, who also sits on the board of Food SA, helped launch a new campaign – Shop and Swap.

"We're asking shoppers, when they go to the supermarket, to just consider swapping one product to a locally-made, South Australian product," Sims told Food magazine.

"It's about the South Australian food industry. We say it's unrealistic for people to swap everything to South Australian – one, because we don't make everything in South Australia, and two, people have their favourite brands and we understand that – but if your basket of goods has 30 items, if you consider swapping one of those items for a South Australian alternative then, overall, that would make a huge difference to our local industry," he said.

Sims says the South Australian food industry is lucky that consumers are so patriotic, adding that most South Australians have a vested interest in its survival.

"The food industry is the biggest single employer, as far as an industry sector goes, in the state. One in five people in South Australia is connected with the food industry in one form or another. By supporting the local industry it has a major effect on the South Australian    economy," said Sims.

But more often than not, homegrown brands need more than just domestic support.

"Most of our businesses need more than the local market to grow these days. The local scene is great but most of us need to be doing significant business across state boundaries and in overseas markets."

Despite this need to send products offshore, manufacturers like Robern Menz face an uphill battle when it comes to exporting goods.

"When you're bringing in some ingredients because you don't have any other option, like with cocoa, it [the high Australian dollar] helps because you're importing. But if you're exporting it's particularly challenging. Your product is costing 20 to 30 percent more to the end buyer than what it did a couple of years ago.

"Our background traditionally has been export. We've exported a lot of things but it has been less of a focus these days and the Australian dollar is one factor. It's not the sole reason but it's one of the major reasons. You're suddenly 20 to 30 percent less competitive and a lot of suppliers, to keep their markets open, are being asked to subsidise that, so to drop their cost base by 20 to 30 percent because they [retailers] don't want to pay anything more. And if you get into some of these big retailers overseas and you're desperate for their business, that's what companies have been doing," said Sims.

With a 105-year history and four generations of successive family ownership, Sims says he's most proud of the company's ability to evolve and stay relevant in what is a very difficult time for many food manufacturers.

"We've had to embrace change to remain relevant," he said. "We've evolved from a retailer into a fruit processor to more of a confectioner and we're dabbling back in retail again now. We've recently opened a new shop in the tourist town of Harndorf … And when you're in a tourist town, the bulk of the business os on weekends and public holidays, so you have to be mindful of the labour costs. You've got to make sure that your model is sustainable to carry those sorts of costs. We understand they're there and that it's a cost of doing business."

Fellow South Australian businessman, Peter Davis, is the owner of Kangaroo Island's Island Beehive, producing some of the state's – and perhaps the country's – best organic honey.

Davis spoke to Food mag recently about the successes and struggles his brand is experiencing at the moment. To read his comments, click here.


 

Concentrated facts on juice and health

Obesity is a growing concern for food manufacturers. As the size of the average Australian waistline continues to expand, everything from salt intake, fat content and sugar have been under scrutiny, forcing businesses to develop healthier alternatives. 

Mainstream media has bombarded the public with new findings of what we should and shouldn’t eat, what new superfood will prevent cancer and why we need every type of fortified vitamin under the sun, just to function.

But has the public actually lost touch of what we should be eating? It wouldn’t be surprising, considering every other day a new study releases conflicting health messages on the value of a piece of bread.

So what about juice? Juice has received a huge amount of flak in recent years, but isn’t juice essentially a piece of whole fruit in liquid form? Can’t be that bad surely?

2013 Australian Dietary Guidelines

The 2013 Australian Dietary Guidelines, which were released in February, state that a small glass of 100 percent fruit juice can be a beneficial part of a healthy, balanced diet for all people, including children.

This is a welcome statement for peak industry body, Fruit Juice Australia (FJA) which has recently commissioned an online consumer survey as well as evidence-based research reviews on the validity of ‘scaremongering’ claims surrounding fruit juice.

The online consumer survey of 1,000 Australian parents aimed to shed light on the validity of negative health claims surrounding fruit juice, including portion sizes and sugar content.

Findings in the survey indicate that one in four parents feels guilty about feeding their children fruit juice, and that parents in general are conflicted about the issue.

FJA chief executive, Geoff Parker, says that certain facts are routinely omitted from the controversial debate, including that 100 percent fruit juice has no added sugar and contains many of the same nutritional qualities, apart from dietary fibre, as whole fruit.

“The pendulum has swung too far in terms of disapproval by some commentators for what is in reality a healthy, natural option for children. We’re simply asking people to consider the facts about juice,” he said.

Squeezing out the evidence

In order to re-establish a healthy profile for juice, FJA commissioned an evidence-based research review titled Fruit Juice and Diet Quality – Squeezing out the Evidence which aims to inform health care professionals and the public about the benefits of 100 percent juice products.

The review showed positive correlations between children who consumed fruit juice as part of their diet with significantly higher intakes of four essential nutrients: folate, vitamin C, magnesium and potassium.

 “What the research overwhelmingly found was that people who consume fruit juice have an overall better quality to their diet,” Parker told Food Magazine.

The negative press that fruit juice has received over the past few years relates largely to the concentrated sugar content and lost nutrients during processing. Once fruit has been juiced, it loses a significant amount of nutrients found in the skin – carotenoids and flavonoids – and the pulp, which contains dietary fibre.

The Dieticians Association of Australia (DAA) states that while fruit juice can provide valuable nutrients, many varieties naturally contain a comparable amount of sugar and kilojoules to soft drinks. The DAA also points out that juice contains a relatively low amount of fibre when compared to fresh whole fruit.

Furthermore, a study conducted by Melbourne’s Deakin University on the association of key foods and beverages with obesity in Australian school children, found that children who drank fruit juice were more likely to be overweight than those who didn’t drink it. The study stated that “children who ‘usually’ drank fruit juice twice or more per day were 1.7 times more likely to be overweight/ obese compared with those who drank these beverages once or less per week.”

FJA states that if an individual consumes 100 percent fruit juice as part of a balanced diet, then the sugar content shouldn’t be of concern.

“We think that part of the negative image is the result of the sugar content of juice, which again is quite perplexing because all of the sugar in juice is completely natural and comes directly from the originating fruit. Juice has sugar, like fruit has sugar, it should be no surprise to people,” said Parker.

“The FJA is not saying that everyone should drink a 600ml glass of juice everyday, because for most people that is going to be way too much in a normal diet.

“A small glass of juice sitting around the 125ml mark can contribute to meeting a fruit serve and unfortunately a lot of kids are not meeting their daily intake of fruit serves, and when you look at that small glass being equivalent to one serve of fruit, it contributes to that daily intake.

“Research shows, and the Australian dietary guidelines have come out recently to show, that a small glass of 100 percent fruit juice – we are talking about half a cup or just about 125ml – is perfectly fine everyday as part of an overall diet,” he said.

But what about serving sizes?

So should the debate then turn to the issue of serving sizes? It has been widely publicised that everything in moderation is a good thing, so should the beverage industry be looking towards individual serving sizes that reflect the recommended daily intake?

A typical beverage serving size is 200 – 250ml, which is reflected in the popular tetra packs sold in supermarkets and placed in children’s lunchboxes. The daily recommended intake of juice is 125ml, half the typical serving size, making it harder for parents to control servings and no doubt a serious concern as national obesity rates in both adults and children continue to rise.

“There does seem to be some technical manufacturing problems when you start to go down to smaller than 200ml,” said Parker. “But then again if children are consuming 200mls of juice, then parents need to give consideration to what else is making up their diet. Not to say that 200mls of juice is bad or too much.”

Parker believes that the issue boils down to individual lifestyles, kilojoules requirements and personal/parental responsibility.

 “All kilojoules matter, whether kids are consuming extra kilojoules from juice or from breakfast cereal, if kids are having two serves of breakfast cereal a day they are probably also going to show a correlation between that overconsumption and obesity. Consumption, particularly for kids, comes down to parental responsibility.”

Parker believes that a holistic approach is the most effective way to ensure that consumers get adequate nutrients, and the inclusion of a serve of juice will only help to contribute towards that daily nutritional goal.

In order for individuals and children to reach their nutrition goals, nothing compares to fresh whole fruit and vegetables. However today’s time poor society has a penchant for convenience, therefore access to fresh produce can be restricted. In which case, a tetra pack of 100 percent juice will no doubt serve as a welcome source of nutrients. 

 

New Food Magazine Awards judges announced

The Food Mag team is pleased to announce a refreshed new judging panel for this year's Food Magazine awards.

The fully-independent panel comprises 11 food and beverage manufacturing professionals, each with something valuable to bring to the table – whether it be knowledge of the latest packaging trends, food safety innovations, groundbreaking flavour combinations or developments in how manufacturers can work more sustainably.

With a total of 129 entries, we've spent the past few days deliberating over which products are most worthy of a finalist crown, and have only just sent the panel their judging kits. (We'll be announcing each category's finalists online in the coming weeks, and of course also in our June/July issue, due out around 17 June).

The 2013 Food Magazine Awards judging panel is as follows:

  1. Pierre Pienaar – education co-ordinator at the Australian Institute of Packaging and owner of packaging consulting business, PackTech Solutions Pty Ltd.
  2. Ralph Moyle – director, Packaging Solutions and national president at the Australian Institute of Packaging.
  3. Fritz Meyer – head of technical – Asia Pacific Zone, McCormick Foods
  4. John Kapos – owner Perfection Chocolates and Sweets
  5. Paul Squires – director, Sensory Solutions
  6. Ron Mines – director, Aussie Pack n Ship
  7. Craig Young – senior marketing manager, SunRice
  8. Andrew Penton – senior brand manager, Sanitarium
  9. Mitchell Taylor – managing director, Taylors Wines, chairman Australia's First Families of Wine
  10. Mike Weeks – process performance manager, Dairy Innovation Australia
  11. Peter Day – executive director – compliance, investigation and enforcement at the NSW Food Authority

The judges' decisions will be announced at the 9th annual Food Magazine Awards gala dinner, held at Luna Park’s Crystal Palace on Friday 26 July.

Our MCs for the night will once again be The Chaser boys, most recently of The Checkout fame, who will no doubt ensure the night is full of laughs and hilarious industry insights.

Categories for this year's awards include Packaging Design, Sustainable Manufacturing, Snack Foods, Confectionery, Dairy, Organics, Beverages and many more.

The 2013 Food Magazine Awards are proudly brought to you by Platinum sponsor Heat and Control. Other sponsors include Flavour Makers, Janbak, HACCP Australia, Kerry Ingredients, Newly Weds Foods, Tronics, APPMA, Earlee Products, Matthews and Kurz.

For more information on the evening, click here.

 

Business intelligence: code for success

Total cost of equipment ownership, preventative maintenance and quality systems on-line are global and domestic trends in coding, marking and labelling. Matt Nichol, laser product specialist at Matthews, looks at costs and efficiencies within manufacturing.

Cost and efficiency are two forces that affect every facet of manufacturing — not just in Australia, but globally.
It’s a simple fact that the more efficient a manufacturer is, the higher their potential for profit. In this highly competitive business climate, the challenge for Australian manufacturing companies is to find creative ways of lowering costs without compromising high-quality products going out the door. And, of course, this all has to happen while regulatory and compliance standards — such as coding and labelling — are maintained.

Investing in core business competencies and optimising management of non-core activities is a good way to achieve a sustainable competitive advantage.

Total cost of ownership
One non-core activity is the life-cycle management of the coding, marking and labelling equipment that support your business operations. This is done by optimising their total cost of ownership, or TCO.

While plant managers may look at the TCO of the business’s production capital assets — because these are what generates the income — giving the same attention to the coding and labelling equipment will also contribute to the business’s overall sustainable competitive advantage.

TCO is a concept used to represent all costs (both direct and indirect) of owning capital assets. It goes through the equipment’s whole life: starting with acquiring the asset, maximising its operation, maintaining its performance, and then determining when to properly upgrade it.

Direct costs are usually those you plan for in a budget and can see in invoices and receipts, so they’re easy to identify and track. As an example, here are some direct costs to consider with coding and labelling equipment:

  • Capital
  • Consumables over the period (such as ink, ribbon, and so on — although this is not a factor with laser coders)
  • Routine maintenance
  • Service contracts
  • Corrective maintenance
  • Spare parts
  • Installation costs

Typically, indirect costs are hidden and not included in a budget, so they’re instantly harder to measure and quantify. Often, indirect costs aren’t factored into the coding and labelling equipment’s TCO either. And even if they are factored in at the start of a project, very rarely are they monitored over the equipment’s life to ensure it meets original expectations. Here are some indirect costs with coding equipment:

  • Downtime if the equipment breaks down
  • Shipping if the servicing is return-to-base
  • Downtime due to routine maintenance tasks
  • Replacement parts at time of service
  • Operator training and training time
  • Financing costs if it is a lease/rental
  • Cost of disposal

Get proactive with TCO costs
You can save money, increase your coding equipment’s performance and improve your workforce’s productivity all by simply understanding the life-cycle costs associated with equipment ownership. Try implementing some proactive strategies to optimise costs over your equipment’s four-phase life cycle: acquisition, operation, maintenance and disposition.

Here are some strategies to minimise your TCO and maximise the ROI on your coding equipment:

  • Regularly inspect and maintain the coder or labeller, with fixed-price service contracts
  • Invest in proper operator training (training is part of our installation process, but as new staff come on board down the track, investigate training options)
  • Evaluate the mean time between failure, response times and same-day fix rates
  • Look at the coder’s capital cost versus its ongoing running cost (a low capital cost, but high running cost, is a hidden TCO)

Have a think about the questions below. If you answer “no” to some of them, then you have hidden costs. Eliminate those hidden costs by rationalising your coding and labelling asset base and reducing your number of suppliers. This will maximise your buying power, increase your operator performance and reduce some management and administrative burden.

  • Have my operators received proper training?
  • How many different suppliers am I managing?
  • Am I buying and standardising on the best equipment available?
  • Am I leveraging my purchasing power and volume?
  • Have I compared the ownership of equipment from one manufacturer to another to know if I’m getting the best value for money?
  • Are my operators trained on how to use all of the coding and labelling equipment?
  • Do I know if it’s going to cost more to service particular equipment than if I was to buy new equipment?

Each business decision you make in each one of the coding equipment life-cycle phases will impact the other factors. The companies looking at TCO holistically — across both production and coding equipment — are the ones who improve their profitability and sustain a competitive advantage over their competition.

Planned maintenance
Planned maintenance is also a very powerful weapon in having a sustainable competitive advantage. Probably one of the best-known examples is Japanese carmaker Toyota, showing that Total Productive Maintenance (TPM) maximises profits in manufacturing.

In other words: take care of your equipment so you eliminate all unplanned downtime. This goes equally for your coding and labelling equipment.

But at what point does the benefit of having preventative maintenance outweigh the expense of setting up TPM on line? To explain, I’ll look at two approaches to coding equipment management: the more traditional “reactive” (“it’s broken now!”) maintenance and preventative maintenance.

a) The traditional approach: reactive maintenance

Potential benefits – hopefully, your equipment won’t break down. If it does, an inexpensive solution may work. But you cross the bridge of downtime and idle labourers when you come to it.

The costs – reacting when something breaks is “flexible” to a degree — until you find yourself in a rut, unable to get parts or repair staff within a profitable timeframe.

The “putting out fires” approach usually occupies valuable resources, as key staff or technicians are forced to make crisis management time in their day.

If products aren’t going out merely because they don't have the right codes or labels on them, and you’re unable to meet your commitments, reactive maintenance to a breakdown on the line could cost you more than is necessary in money, sales and customer relationships.

b) The lean approach: predictive, preventative maintenance

Potential benefits – on a closely monitored line, you have more information about the condition of your coding equipment, so naturally you can discover what’s causing the breakdowns stoppages more quickly. You also eliminate the risk of unplanned downtime and increase plant utilisation.

There’s no “I wonder what it really is” assessment (and cost) because you have up-to-date, real-time information. When your product is coming off the line with first-pass quality assurance on it and its coding, you avoid the expense and hassle of rework.

Preventative maintenance is also a major factor in increasing your coding equipment’s life. (I can think of numerous manufacturers with in-line printers that are 15-plus years, despite the “expected life” being five to seven years.)

The costs – expect to pay a monthly fee, the costs of which are determined by your choice in company and plan.

Another way to sum up the differences and benefits of reactive versus preventative maintenance is this: the reactive approach seems a bit like letting the oil run out in your car. It’s far more expensive to blow a gasket than it is to get an oil change regularly. With so many variables, expenses pile up quickly, even for smaller Australian manufacturers who are looking to keep expenses low and grow relationships with retailers.

Online quality system
Another way to give your business a sustainable competitive advantage is by having a quality system — or vision technology — running on your production line.

Vision inspection systems, when combined with the right software, provide intelligent image recognition, giving a business the high level automated quality assurance it needs during production and packing. This continuously evolving technology cost-effectively ensures products are fit for purpose, and any potential for mistakes is eliminated.

Manufacturers can spend a great deal of time, energy and money checking products manually; but vision systems allow for appearance, character and defect inspections — and coding checks — to be done automatically, and it can also allow reduced overheads in terms of staffing.

You can implement vision systems in a range of different environments, to do a range of tasks, from quality control to quality assurance and even process control. Vision systems can inspect, identify, count and measure products across many different sectors — from food processing and pharmaceuticals to heavy industry. For instance, in food and grocery, systems can be programmed to check labels, barcodes, caps, bottle rims, product formation, use-by dates, tamper seal, lids, label match, product orientation. The system will let operators know of any issues when they happen, so they can be rectified, before the product is shipped.

Vision systems can now be incorporated into other production line technology, so your automated solutions work as one. Any faulty products can be redirected to be fixed or rejected if the error can’t be fixed. For any business owner, preventing costly recalls for products that aren’t shelf-ready yet are shipped anyway, is invaluable.

The systems can also be used for process control to sort products based on their specific markings, and inspect them, ensuring the packaging contains the content it should at the correct levels. Industrial applications can include checking parts or components or even details like the amount of glue on edges for sealing.

There are many ways manufacturers can give themselves a sustainable competitive edge. Understanding TCO on your coding and labelling equipment, using preventative maintenance and quality systems on-line, are three sure-fire ways.

Matt Nichol is a laser-marking expert with Matthews Australasia.

 

The great palm oil debate: how the consumer turned an industry on its head

Palm oil has received a great amount of attention in recent months. Heightened consumer awareness surrounding palm oil farming practices has resulted in protests and boycotts the world over, causing producers to re-think the ingredient composition of many of their processed offerings.

Social media outlets have been rampant in naming and shaming manufacturers who use palm oil in their products. Supermarket giant, Woolworths, suffered a massive belting for the inclusion of the controversial ingredient in its hot cross buns earlier this year and Arnott’s has also copped a lot of flack for including it their popular Shapes range.

But what exactly is palm oil? Where does it come from and why is it so controversial?

What’s with all the bad press?

According to Food Standards Australian and New Zealand (FSANZ), palm oil is vegetable fat which is obtained from the fruit of the African oil palm tree. Palm oil contains a significant amount of saturated fat, similar to coconut oil, and is a popular ingredient in many processed foods.

Current regulations state that palm oil doesn’t have to be labelled as palm oil, and may be used under the more generic guise of ‘vegetable oil.’

FSANZ previously rejected an application for the mandatory labelling of palm oil in July 2008. The application focused on environmental concerns rather than food and safety standards and as such, FSANZ had no legal capacity to hear the case.

Contrary to Australian regulations, The Food Information Regulation published by the EU will require all types of vegetable oil used in food, including palm oil to be stated by 2014. Canada and the US also require palm oil to be labelled.  

Approximately 87 percent of palm oil is produced in Malaysia and Indonesia, with Australia importing around 130,000 tonnes of palm oil each year, according to WWF.

Palm oil is the world’s most widely used edible oil with an estimated 50 percent of products on Australian supermarket shelves comprising the ingredient. The widespread popularity of palm oil is due to its attractive price tag and the fact that it promotes a longer shelf life when compared to butter and other oil alternatives.

The controversy surrounding palm oil relates to mass deforestation which is taking place in Malaysia and Indonesia to make way for palm oil plantations, with obvious implications for native species, especially the endangered orangutan.

WWF has estimated that around 300 football fields’ worth of forest native to the orangutan is cleared every hour.

Why would food manufacturers use palm oil?

According to the Roundtable of Sustainable Palm Oil, the oil palm plant is entirely GMO-free and yields up to 10 times more oil per unit than soybean, sunflower or rapeseed oil.

The rise in demand for palm oil has also been largely attributed to the move away from trans-fats in the early 2000s. Palm oil offers a low trans-fat content for a cheap price, which is a welcome alternative for many food manufacturers.

Palm oil is typically used to produce an extensive range of processed foods including margarine, ice cream, biscuits, chocolate, chips as well as baked and fried foods.

Palm oil kernels, a by-product of palm oil production, are used for stockfeed because of its high fibre content, energy and protein as well as favourable levels of residual oil.

According to CHOICE, the leading brands in the Australian grocery aisles including Coca Cola (SPC Ardmona), Goodman Fielder, Nestle and Arnott’s all use palm oil and label it as vegetable oil.

Is there a solution?

WWF-Australia and the Australian Food and Grocery Council (AFGC) recently developed a report providing an assessment of facts, myths, issues and challenges surrounding the palm oil debate. The report provides a springboard for action to increase the amount of palm oil derived from sustainable sources.

"It lays out a way forward, including the need for better understanding of supply chains, better alignment of supply-side and demand-side expectations, and work to overcome significant logistical challenges,” said Gary Dawson, CEO of AFGC.

WWF- Australia’s CEO, Dermot O’Gorman said that the switch to sustainable palm oil is critical to the preservation of the environment and many engendered species.

“Companies must ensure that unsustainable practices are phased out; governments must support corporate commitments with appropriate incentives and land use planning policies,” he said.

Many other vegetable oils including canola oil, have been adopted by fast food outlets as an alternative to palm oil, including KFC which recently announced the use of Australian-grown canola oil.

The report states that a major challenge lies in the move away from stearin, which is palm oil in its solid state. Stearin is a popular ingredient in baking applications due to its hard composition, low cost and lack of trans-fats. Traditional alternatives, butter and hydrogenated fats, are typically higher in cost and contain trans-fats.

Other, more cost effective alternatives include more stable versions of canola, soy and sunflower oils however these products still hold a heftier price tag when compared to stearin.

How would a change to sustainable practices affect producers?

The costs associated with switching to sustainable palm oil production are a major factor in determining buy-in from food manufacturers. Some of the big players in the Australian industry however, Woolies and Coles, have already committed to make the switch.

Woolworths has committed to only use Roundtable on Sustainable Palm Oil (RSPO) certified sustainable palm oil by 2015 in all private label products. The supermarket giant is now a member of the RSPO and has committed to using only certified sustainable palm in their hot cross buns for Easter 2014, following the consumer backlash earlier this year.

Coles, now also a member of RSPO, has made a similar move by committing to use only certified sustainable palm oil in all Coles-branded products by 2015. The retailer said that it has already removed palm oil from some of its bakery products.

The current global supply of certified palm oil is sitting at around 15 percent of the world’s total production, resulting in supplies of the sustainable alternative to be somewhat limited at this stage.

The reality of a sustainable switch

Palm oil production is vital to countries such as Malaysia where it accounts for approximately six to seven percent of GDP and employs a significant proportion of the country’s workforce.

The movement towards sustainable production needs to have buy-in from governments to ensure a smooth transition from current conventional practices, ensuring that farmers receive adequate income and incentives to make the switch. This will undoubtedly require a great deal of co-operation from parties on each side of the debate.

The push for sustainable palm oil is a true testament to the power of the consumer. Widespread campaigns reporting on the unfavourable production methods of palm oil has undeniably turned the industry on its head.

The consumer really does have more power than you think.

International insights from the World Packaging Organisation

The seven international speakers who formed part of the World Packaging Conference at the recent AUSPACK PLUS in Sydney, had some very valuable lessons to share with Australia's packaging community.

At AUSPACK PLUS 2013, the AIP conducted the National Technical Forum with the theme ‘Global Packaging Trends’. The seven international speakers were part of the World Packaging Conference organised by the AIP. These were leaders in their fields from USA, Austria, Indonesia, India, Brazil and South Africa.

The world cannot do without packaging was the core message from Tom Schneider (USA) – president of the World Packaging Organisation (WPO). The WPO does provide a global advantage under its motto of “Better quality of life through better packaging for more people” and Tom reminded the audience that we as packaging professionals are making a difference, but it starts with education.

Jin Zhe (Jack) from the World Packaging Centre (China) spoke on the scale of the changes and future of the Chinese packaging industry. The value of the Chinese packaging industry was $248 billion in 2012 or 50 percent of the world’s output and growing.

Dr. Johannes Bergmair of the Austrian Packaging Institute presented Packaging and Food Safety on a Global Level. This presentation was full of alerts to packaging and food technologists about the risks to food safety with the core message being “the problem is already out there.” There is relevant legislation in many parts of the world but there is little cohesion between them and they are not complimentary.

Global Trends in Packaging in Indonesia and Within the Region was the presentation from Ariana Susanti of the Indonesian Packaging Federation. Our nearest neighbour has geographical challenges of 17,500 islands and 250 million people, which affect the required packaging formats to serve its culturally diverse people with the limited supply chain resources. The radically changing retail environment provides another dimension.

Professor Narayan C. Saha represented the Indian Institute of Packaging and spoke on Economical, Social and Ecological Aspect of Packaging and Indian Market Potential. With a population 55 times that of Australia, diverse food habits, economic growth rates of 6.9 percent, an emerging middle class and booming retail market, India has addressed its ecological aspects across the country. Government controls on certain packaging formats are being applied. Rural India, where 74 percent of the people reside, is the “challenge of distribution – the market for the future.”

Luciana Pellegrino represented the Brazilian Packaging Association on the topic of Packaging as a Marketing Tool – Global Approach. The marketing strategy of a brand has to be materialised to consumers through its packages, Luciana insisted. For consumers, packaging and product are one single element that cannot be disassociated. Luciana’s last and most telling comment was the impact that an online presence can have on influencing consumers’ buying decisions. Be online; be connected with the real world.

Keith Pearson provided the closing presentation on Discovering the Missing Link – Sustainable Advances in the Packaging Supply Chain, which was directed at all parties in the packaging industry, encouraging them to change the way they think and act. Food waste is becoming an increasing concern for consumers and industry members, with the former buying more than is needed and the latter often not packaging their products appropriately.

Keith shed light on the implications of our growing waste, especially in regards to sustainability, with one-third of global food production lost or wasted annually. His messages were simple: good packaging saves food; and recycling is not about removing waste but extending a material’s value and usability. A fine end to a global review of packaging.

Ralph Moyle MAIP
National President
Australian Institute of Packaging

 

24 hours with The Right Food Group

Name: Anni Brownjohn

Company name:The Right Food Group Pty Ltd

Title: founder and president

What are your primary roles and responsibilities in your job? Give us a day in your working life.
From the foundation year of 1999 right through until today my primary role is to drive the vision of developing and manufacturing wonderful, delicious organic foods while all of us also have some fun.

As the company has grown, some wonderful people have come on board as members of "Team Organic" at The Right Food Group.

My day can start out with looking at new product ideas, then onto a management meeting, chat with a client, review of new machinery, discussions with new private label customers, review of marketing – and this may all be before lunch!

I've always seemed to have a lot of new ideas for great products and like to spend some time each day on these.

What training/education did you need for your job? 
Interestingly – I had none. Just a good idea and dedication to clean, healthy, organic food.

If I had undertaken any formal business training, there would be a good chance that I would never had taken the risk to start such an innovative food company.

In 1999 when I founded The Right Food Group, organic food was considered "hippy food". I well remember turning up to sell my products to a grocery store and the buyer being very surprised I had on a good suit!

How did you get to where you are today? Give us a bullet point career path.
Hmm, career path?? Not something I have ever given any thought to. I have been self-employed since my early 20s – initially in natural health care.

When I work out what my career is, I'll let you know my career path. Not sure there is such a thing for an organic entrepreneur!

What tools and/or sofware do you use on a daily basis?
My MacBook Air, Blackberry, and various software programs. Oh, and the largest computer I own, my brain.

What is the one thing that you are most proud of in your professional life?

  • Still being in organic food manufacturing in Australia in 2013 and being profitable!
  • Surviving the GFC and creating full time jobs in a rural town.
  • Creating roles in my company where good people can grow their skills, improve their income and lift their level of professional training.
  • Giving those people the room to run with their own ideas.
  • Taking on the chair's role of the Tweed Business Advisory Board and using the position to push through some ideas to improve the regional economy.

Biggest daily challenge?
Keeping my many ideas for new products in some sort of order, then working out which ones are "real" and which ones go into the "later" file.

Plus – the internet. We are in a regional town and the net can be very slow. Roll on the NBN!

Biggest career challenge?
Attempting to keep my frustration with the organic certification industry in check. Some organic certification fees seem out of proportion with the service and add extra cost to the final product. Imported organic product do not pay these fees. The whole system disadvantages Australian organic food producers. I fail to understand why fees are not controlled by federal legislation.

What is your biggest frustration in your job?
There are a few items in my "biggest frustration" basket.
1. For a regional company, distribution can be a hassle. While we have product on shelf in every state in Australia, how it gets there is complicated and costly.
2. The "I am not interested" attitude to Australian food producers from the federal government! Honestly, why on earth is there no recognition of the following:

  • We need to eat as a nation (and I don't think locally made cars make a tasty meal no matter how much sauce you pour over them!)
  • The food industry is a massive employer! Many production plants are in regional towns which need the jobs to sustain the local economy.
  • We cannot compete with the dollar so high against imports – particularly those which are subsidised. Why is Australia the only sportsperson on the "level playing field?"

3. And of course I have a lot of new ideas for products and the development, certification, supply chain, manufacture, marketing and distribute process can be frustratingly long.

What is the biggest challenge facing your business?
High dollar, cheap imports, lack of federal government interest in sustaining a vibrant Australian food production industry.

Also, there's no domestic organic certification legislation which is enforceable under federal or state law. There are may products on Australian shelves claiming "organic". The only "organic" ingredient in some of these products is the name on the label. I have to compete with these cheats.

Is there anything else about your job you want Australia to know about?
I don't have a job – I have passion, drive and commitment. A passion for people, organic food, sustainable business and community.

My food which we create every day in our own factory is proof that the "career path" can be a journey. And all journeys start out with the desire to explore.

I continue to "explore" organic food (and have a heap of fun while doing it!)

 

If you would like to take part in Food mag's Industry Map, click here.

To read another Industry Map Q&A, click here.

 

Eating insects: good for you, good for the environment

 

The Food and Agriculture Organisation of the United Nations released a report on Monday called Edible Insects: Future prospects for food and feed security and since then news outlets have been looking for images of people eating bugs.

Even I was on our local TV news this week commenting on the issue. The reporter who rang to seek my input asked if I would be willing to eat a live bug for the camera. I politely declined, not just because I am a vegetarian, and not because I am squeamish. As I told the reporter and camera man, if I were to eat an animal, it would most certainly be a bug.

Indeed, I probably eat bugs all the time. As explained by an insect food producer to the ABC, most of us eat a quarter of a kilogram of insects by accident each year. Insects find their way into our foodstuffs no matter how hard we try to keep them out. Interestingly, if you eat organic, your rate of insect consumption is much higher.

So even though I have avoided eating animal flesh (including fish) for over 30 years, I nevertheless engage in entomophagy. And so do billions of people all over the world.

It is not true that the eating of insects is something that humans resort to only when they are starving. Many cultures cherish the flavours and texture of insects. Right here in Australia, indigenous people travelled to the alps each summer to feast on the bounty provided by the annual influx of bogong moths.

Which, you might say, is fine for them but not likely to convince me to fry up some moths (hint: remove the wings by scorching). So what are the arguments for entomophagy, and why on earth does the United Nations want us to do this apparently disgusting thing?

Eating insects is efficient, good for the environment, improves animal welfare and reduces the risk of diseases in humans. Let’s go through the arguments presented in the FAO report.

Efficient feed conversion. The amount of feed you need to provide to get animal based food varies greatly depending on the species. Predatory fish are expensive to raise in aquaculture because they need to be fed fish. Herbivores are more efficient, but it still takes 10 kilograms of food to produce 1 kilogram of cow, only half of which can actually be eaten. By contrast, 10 kilograms of feed will produce up to 9 kilograms of insects, of which over 95% can be eaten. If we want to find a way to produce more protein with less, insects are the way to go.

Food inputs from waste. Now let’s talk about what kind of food we give our livestock. If we have to catch fish to feed our aquaculture fish we are still dependent on wild caught protein. If we grow grain to feed our cattle, we still have to use land and fertiliser and water. But if we choose to raise insects we can feed them our waste products. Think about it, flies grow on manure. Other insects could grow on agricultural waste products high in cellulose. This transcends efficiency. Growing insects for food could actually clean up the mess made by growing other food.

Less greenhouse gases. Cattle produce so many greenhouse gases that a kilogram of beef has an impact similar to driving 250 kilometres in a car. The only insects that even produce methane as a waste product are cockroaches, termites and scarab beetles. Getting our protein from insects would significantly reduce greenhouse gas emissions.

Water savings. Agriculture consumes 70% of water worldwide, and the production of animal protein requires 100 times more water than protein from grain. This includes the water used to grow the grain to feed the animal, also known as “virtual water”. By this method of calculation, 1 kg of chicken requires 3500 litres of water and 1 kg of beef requires between 22,000 and 43,000 litres of water. Insects need far less, and can be grown throughout the drought.

Animal welfare. All of our concerns about live animal exports and battery farm hens are based on the need to reduce animal suffering. High density of livestock is necessary for commercial food production but is undesirable from an animal welfare point of view. Insects, on the other hand, are naturally gregarious. Many of them prefer to live in high densities and killing them humanely is possible and easy. No more nightmare film clips from abattoirs.

Reduced risk of disease. Think about the infections that move from animals to people and have frightened all of us: swine flu, bird flu, mad cow disease. These infections are called zoonotics, and they spread because we are similar enough to our livestock to be able to catch their diseases. Insects have a much lower risk of passing disease on to us.

In fact, it is difficult to find many disadvantages to eating insects. We don’t even have to get over our aversion to biting into a crunchy morsel with too many legs. Factories are already growing insects to produce protein powders which can be used to supplement foods we already enjoy.

The only downside I could find is that eating fresh insects collected in the wild puts you at risk of consuming pesticides. Which is one of the reasons I did not want to eat a bug for the camera – we did not have any insects from a trusted source.

The other reason is the backlash that could result from the disgust factor. Yes, it would make good TV viewing, because it is shocking and kind of gross. But if we really want people to eat more bugs (and we do!) then I don’t think we want to give the impression that we will have to start picking crickets up off the lawn and popping them in our mouths.

No, we are much more sophisticated than that. Insect protein will be produced by reputable growers who will care for their charges and ensure a high quality product. Make no mistake, this is a growth industry.

In future, entomophagy will be something we do by design, instead of by accident.

Susan Lawler 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.