Make the National Packaging Covenant work for you

Greenstreets Environmental Resources specialises in assisting companies compile statistics and prepare detailed action plans and annual reports in relation to their obligations under the National Packaging Covenant (NPC).

Over the past seven years the organisation has assisted a wide range of European and Australian companies, allowing them to concentrate on their core activities.

Its current client base includes companies such as Cadbury, Compass, GlaxoSmithKline, Sony and many other international firms.

Greenstreets has recently opened a dedicated Australian office to offer consultancy services, and a software product to assist signatories swiftly and accurately meet their key performance indicators (KPIs) while providing a transparent and auditable data trail.

The software also facilitates the input of the required data into the annual Industry Data Aggregation System (IDAS) online KPI Survey.

The organisation aims to empower its clients to prepare annual reports and statistics going forward with minimal cost and disruption to their core activities, while making them aware of cost savings related to packaging waste management.

Greenstreets can provide the following services to assist manufacturers, brand owners and members of the packaging supply chain:

  • Carry out packaging audits to ensure accuracy and completeness in line with the NPC’s requirements.
  • Review current systems and reporting tools.
  • Extract all available data within the company as required to prepare KPIs and apply this as a baseline for the statistics submitted for the period under review.
  • Prepare an internal report showing a full audit trail from the source data to the conclusions highlighted in the KPIs.
  • Prepare an action plan.
  • Provide one on one and online training for staff with responsibilities in relation to the NPC.
  • Present KPI analysis to senior management when required.
  • Provide ongoing support in performance improvement and preparation of action plan reports.

For further information contact Robin Tuckerman.

Quick serve restaurants: reducing fat

A roundtable of Australian Quick Serve Restaurant Industry representatives met on September 26th in Sydney to report on their progress in removing artificial trans fatty acids from their products.

Chaired by the Parliamentary Secretary to the Minister for Health and Ageing, Senator Brett Mason, the roundtable which included representatives from the Baking Industry Association, The Coffee Club, Domino’s Pizza, Hungry Jacks, KFC, Jesters Pies, McDonalds and Pizza Hut, was established to seek a further voluntary reduction in trans fatty acids, while maintaining food quality and taste and without increasing the amount of saturated fats in the Australian diet.

A survey of roundtable participants showed that a majority had active plans and strategies in place to manage trans fatty acids in their products.

According to Senator Mason, the roundtable has agreed to further reduce the levels of trans fatty acids in their products and also, over the next three years, to replace saturated fats with healthier oils and fats.

Senator Mason is pleased with the progress made by the Quick Serve Restaurants since March 2007, when the Australian Government called this roundtable.

Troubles with trans fats

There is a scientific link between the consumption of trans fatty acids and the risk factors for heart disease.

Food Standards Australia New Zealand (FSANZ) conducted a formal scientific review of trans fatty acids in the food supply and reported back to the Australia and New Zealand Food Regulation Ministerial Council in May 2007.

The report found that the contributions of trans fatty acids to energy intakes of Australians was 0.6%, and 0.7% for New Zealanders, which was well below the goal of 1% proposed by the World Health Organisation, and the same as, or lower than, most overseas countries.

Heart Foundation assists industry

The Australian National Heart Foundation provided a useful ‘3 Step Guide’ to members of the roundtable.

This guide aims to assist the Australian Food Service Industry reduce both trans and saturated fats.

It lists where trans and saturated fats can be found on the menu and practical ways on how to reduce them, including menu planning, healthier alternatives and healthier types of oils to use.

Review: 2009

A review in early 2009 will assess the progress made in reducing artificial trans fatty acids in the food supply.

If sufficient progress is not made, regulatory intervention will be the next step.

With progress firmly under way in reducing artificial transfats, Senator Mason raised the issue of tackling saturated fats with the roundtable.

According to Senator Mason, Australians are still consuming well in excess of the amount of saturated fats recommended by the WHO.

The roundtable agreed to meet in six months to report on progress made in reducing the levels of saturated fats in their products through the use of best-practice oils.

Quality time for Australian barley

Improving the quality reputation of Australian barley and malt is increasingly important in the competitive global grain marketing environment.

Barley Australia (BA) is close to releasing a supply chain quality trademark that will enhance Australia’s malting barley and malt market international competitiveness.

Although Australia’s barley production is forecast to increase by 10% to around nine million tonnes this 2007/08 harvest, increasing international competitive marketing pressures has led to a national focus on barley quality.

BA executive manager, Linda Price, investigated the supply chain for malting barley in the UK and France in the context of branding and supply chain trade marking and applying and integrating quality assurance (QA) schemes.

Supported by a Grains Research and Development Corporation travel award, Price established how Australia could implement a similar system.

Barley Australia Assured Quality trademark

This led to the development of the Barley Australia Assured Quality trademark, providing customers with assurance that the product they receive conforms to internationally congruent standards.

The UK has been developing Assured UK Malt for around 10 years and the past four years have seen a significant roll-out and positive reception from maltsters and brewers.

Ms Price said the UK malting barley supply chain was set up so that during each stage, the owner or manager of the product parcel passed on a quality assured product that the next ‘link’ company could rely on for quality and integrity.

Significant food scares in Europe in the past decade led to a very high level of QA adoption in the grain supply chain in the UK, driven by both government and consumer pressures.

Keeping up with competition

Australia has had a more tolerant and less regulated environment for agricultural production and a by-product of this has been significantly less incentive for individual grain growers to adopt on-farm QA on a national scale.

However Barley Australia say it is vital that the Australian industry heeds international signals, watches what competitors are doing and responds accordingly as Australia competes with countries in a tough environment.

As key Asian malt markets continue to increase demand for beer and become more sophisticated in quality preferences and requirements, it will become essential for Australian growers to meet higher quality assurance and traceability standards.

The Barley Australia Assured Quality trademark is one that incorporates a series of HACCP compliant QA systems that will satisfy emerging market needs in terms of food safety and traceability.

While the ability to show Australia has a quality assured barley supply chain, with traceability back to the farm, does not mean increased barley prices, it will give Australian growers an opportunity to participate competitively in the market.

Dairy authority cautions consumers

Dairy Food Safety Victoria (DFSV), the independent authority to regulate dairy food safety, has issued advice that dairy products labelled and sold for “cosmetic” purposes should be used for these purposes only and that the consumption of these products may be unsafe.

According to DFSV, there are a number of dairy products labelled as “cosmetic” which are being sold and promoted by some retailers and food markets as product which could be used for human consumption.

This is clearly a concern from a food safety perspective.

The sale of these types of unpasteurised dairy products for human consumption is prohibited under Australian food laws.

Recently, DFSV has undertaken microbiological analyses of some of these products and the results have indicated that they may have the potential to cause illness with high levels of Coliforms, Staphylococci and, in one product, the presence of Listeria — pathogens which are killed by the process of pasteurisation.

It is important that the public are made aware that consuming these types of unpasteurised dairy products may cause illness particularly in pregnant women, young children, the elderly and people that have weakened immune systems.

Furthermore, the quality control systems and hygienic practices employed in these products’ manufacture is unclear.

DFSV will continue to monitor these types of products being sold on the market so that the reputation of the Victorian dairy industry and consumer safety is assured.

Industry update: beer grows locally while wine goes abroad

Government regulations, health concerns, competition from wine and ready-to-drink spirits, and a rise in imported beer relative to export growth have been responsible for the beer market remaining stagnant during 2006-07.

During this period, a growing trend in consumption of higher-priced premium beer was evident, with sales of premium brands growing 15-20% from the previous year.

In fact, in 2006-07 beer industry revenue grew by 2.4% to $4129 million as a result of pricing gains from greater consumption of higher priced premium beers as opposed to standard beer.

Demand for premium and boutique beers also led to an increase in imports from Europe and the US, growing by an average annual rate of 9.4% over the last five years.

However, growth has slowed due to Lion Nathan locally brewing Heineken.

The establishment of Pacific Beverages, a joint venture between Coca-Cola Amatil and SABMiller that will distribute a range of SABMiller’s premium beers including Italian beer Peroni Nastro Azzurro and US beer Miller Genuine Draft, will also increase competition from imports.

Government regulations and health concerns have led to a decrease in beer consumption, making packaging, brand values, advertising campaigns and the introduction of new product segments such as low-calorie beers increasingly important in securing market growth.

The decline in consumption of standard beer has also resulted in major beer producers looking to the export market for growth.

As a result of Asia’s growing beer brewing industry, Australian beer and malt exports have increased over the last five years by 6.9% per annum, amounting to $348 million in 2006-07.

In the future, IBISWorld has predicted that price increases and growth in premium beer sales will continue to drive revenue growth, anticipated to be worth $4.74 billion in 2011-12.

Wine manufacture

Wine exports continue to be the largest market for Australian wine manufacturers, rising from 42.1% to 54.3% of total revenue over the past five years.

However, global over supply of wine since 2003 has led to heavy discounting and a rise in the number of low margin clean-skin wines on the market.

Consolidation in downstream liquor retailing has also led to market-wide discounting.

The wine manufacturing industry has grown at an average annual rate of 1.4% since 2001-02, amounting to $5212 million in 2006-07.

IBISWorld has predicted that in 2011-12, wine manufacturing industry revenue will increase by an average annual rate of 2.6% as a result of export growth.

However, the domestic market is expected to remain stagnant.

Industry at a glance: beer and malt manufacturing

Industry revenue: $4129 million (2.4% growth)

Export revenue: $348 million (6.9% growth)*

Import revenue: $111 million (9.4% growth)*

Major players: Foster’s Group, Lion Nathan, Coopers Brewery, ABB Grain, J Boag & Son

* Estimated figures Source: IBISWorld

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NZ lifts lid on great pavlova debate

Who invented the pavlova, Australia or New Zealand? According to a recent opinion poll of 1100 Australians, it appears the jury is still out.

In a survey conducted by Galaxy Research on behalf of New Zealand Trade and Enterprise (NZTE), over half of those polled (56%) believed the pavlova was invented in Australia, with the remainder choosing New Zealand (29%) or unsure (14%).

Interestingly, younger Australians aged 16 to 24 years are more likely to believe the pavlova was invented in New Zealand (39%) than senior Australians aged 50 years and over (23%).

Australia is officially credited with inventing the pavlova in 1935 in Perth when Bert Sachse named his meringue cake dish, ‘pavlova’.

However, New Zealand published a recipe for ‘meringue cake’ before anything like it was known in Australia.

History of the great pavlova debate

The pavlova debate started following the tour of the famous Russian ballerina, Anna Pavlova to Australia and New Zealand in 1926.

That same year, according to the book ‘Anna Pavlova: Her Life and Art’ by Keith Money, a chef at a Wellington hotel created a dish inspired by Pavlova’s tutu, draped in green silk roses.

The dish consisted of a meringue case in the shape of the tutu, whipped cream for the froth of the skirt and kiwifruit slices for the green roses.

The first published reference to the pavlova was in 1927 in ‘Davis Dainty Dishes’ by Davis Gelatine New Zealand. This recipe for pavlova included gelatin.

However, it was a recipe published in 1929 that lead New Zealand to lay claim to pavlova.

A New Zealand cookbook by E. Futter titled ‘Home Cookery for New Zealand’ featured the recipe ‘Meringue with Fruit Filling’, the original pavlova recipe.

Bert Sachse later admitted he found the meringue recipe submitted by a New Zealand resident in a 1935 ‘Women’s Mirror’ magazine and used it to create what he named, ‘pavlova’.

New Zealand innovation

In addition to the pavlova, New Zealand lays claim to the creation of avocado oil, the world’s first spreadable butter, gold kiwifruit and carbon-neutral wine (Grove Hill).

According to New Zealand Consul-General and Trade Commissioner Shona Bleakley, demands for the freshness, taste and quality of New Zealand’s food and beverage have surged in recent years, with exports doubling to $NZ15 billion since 1990.

Fonterra lead the pack

Fonterra Australia and New Zealand was ranked as the number one food processor by IBISWorld in 2006-07.

Fonterra’s general manager operations and supply chain, Bruce Donnison, talks about the innovation and development that has lead to Fonterra’s success within the dairy sector, and the industry at large.

Q. What do you think has contributed most to Fonterra’s success this year?

A. On June 1st, 2007, Fonterra formed the ANZ business unit which, bringing together a number of Australian and New Zealand food companies, aims to leverage Fonterra’s global capacity to make certain its customers are delivered safe products that taste great, are convenient and highlight the nutritional benefits of milk.

I believe innovation has been the key to Fonterra’s success.

Having a presence in 140 countries around the world enables us to leverage our experience to ensure we provide customers in Australasia with the right products at the right time.

Fonterra will continue to invest in developing innovative products that allow consumers to have healthier snacking options over the next 24 months.

As part of its $44 million investment in national dairy food production, Fonterra is upgrading the Darnum Park site to extend its production capabilities beyond whole milk powders to nutritional infant milk powders for the South East Asian market in particular.

Q. What products have driven growth at Fonterra and across the dairy sector?

A. Dairy manufacturers have encouraged greater consumption [of milk] by tailoring products to consumer needs, such as value-added products that have strong shelf presence.

Fonterra has introduced many innovative products in the last year that have capitalised on consumers’ increased awareness of, and demand for, healthy and nutritious dairy products.

The launch of Mainland Munchable Milk Protein Bars in April enabled Fonterra to promote the health benefits of milk in schools through the school canteen.

CalciYum, a range of nutritious flavoured milks, was also launched in school canteens in 2007.

The product leverages…attractive packaging, great taste and nutritional benefits that appeal to both children and adults.

A specially formulated milk product, Anlene, is another example of how innovation in functional dairy products is driving growth in the sector.

Industry update: dairy exports set to soar

Largely reliant on production levels and price, Australia’s milk and cream pro­cessing industry is estimated to have grown by an average rate of 1.3% per annum in the five years ending June 2007.

As the second largest segment in the milk industry, yoghurt has increased by approximately 8% per annum over the past two years with sales growth being attributed to product innovation in the areas of packaging, flavour, probiotic cul­tures, low-fat varieties, drinking yogurts and snack yoghurts.

The dairy segment is becoming increas­ingly focussed on health conscious con­sumers with concerns over the high fat content of dairy-based foods having an adverse effect on demand for products like cream.

Technological advances in ultra-filtra­tion techniques combined with increased consumer demands for healthy, low-fat products have seen a growth in reduced-fat or low-fat milk products as opposed to traditional fresh full-cream milk products.

A number of companies now produce a full range of milk products, offering vary­ing levels of fat content, enhanced calci­um content, extra vitamins and mineral fortifications.

This trend has also been fuelled by the rise in popularity of milk substitutes such as soy milk, which poses an increasing threat to the industry.

Innovation and growth areas

Product innovation has been a major focus and area of growth for the dairy sector in recent years.

Dairy Australia invests approximately $10 million a year on research and devel­opment in manufacturing, including cur­rent research projects looking at UHT and shelf life, cheese and starter cultures, milk components and their interactions, and bioactivity.

In recent years there has been growth in flavoured milk and yoghurt varieties, pack­aging formats, and products that meet specific consumer demands such as extra-frothing milk for cappuccinos.

Innovation is expected to increase to maintain the dairy industry’s profit margins.

Although the perishable nature of fresh dairy products like milk, cream and yoghurt makes export difficult, techno­logical innovations including refrigerat­ed transport and the increased longevity of milk are expected to increase exports to emerging markets such as Asia and the Middle East.

While the industry currently exports over half of the cheese produced annual­ly, this is expected to increase as both Asia and the Middle East are consuming greater amounts of cheese.

Despite health concerns contributing to downstream consumer demand for cheese, there has been an increase in demand for cheese from fast food outlets as more meals are being consumed away from home.

Industry at a glance: cheese manufacturing

Industry revenue: $1314.5 million (1.7% growth)

Export revenue: $823.7 million (7.2% decline)*

Import revenue: $111.8 million (3.3% growth)*

Major players: Murray Goulburn Co-operative, Australian Co-operative Foods, Fonterra Co-operative Group

*Estimated figures source: IBISWorld

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Industry update: energy and sports drinks in high demand

The soft drink manufacturing industry is dominated by carbonated beverages such as colas, but energy and sports drinks are the fastest growing segments, fuelled by consumers’ increasingly active lifestyles and effective marketing campaigns.

Energy and sports drinks

Growth in the energy and sports drink sectors, as well as new product developments such as non-sugar soft drinks, have led to a revenue increase of approximately 7.2% from last year, amounting to $3187 million in 2006-07.

In a market where sales of traditional soft drinks remain stable, product innovation in new segments is vital for market growth.

Both energy and sports drinks have achieved a growth of approximately 20% per year as a result of packaging redesign, flavour innovation and marketing campaigns which have created new sub-segments within the category.

The market for sports drinks has broadened as they are increasingly promoted as a rehydration beverage for anyone feeling run down, not just sportsmen and sportswomen.

Competition from new categories such as sports water has also lead to sports drinks being reformulated to be low in sugar, appealing to health-conscious consumers.

IBISWorld has predicted that in the next five years industry sales revenue will increase at an average annual rate of 3.5%, amounting to $3.93 billion in 2012-13.

While increased consumption of bottled water and fruit juice will impact negatively on the soft drinks sector, a rise in consumers’ disposable income and growth in take-away and restaurant dining will see consumption patterns include more carbonated beverages, energy drinks and sports drinks.

Fruit juice and Fruit-flavoured drinks

Fruit-flavoured drinks and flavoured ice teas are also expected to rise as consumers opt for healthier beverages.

Fruit juice drinks containing less than 50% fruit juice have been losing market share to pure juice over the last few years due to consumers’ increasing health awareness.

This has also lead to an increase in the premium juice category within the chilled juice segment, as these juices are preservative and additive free.

However, during 2006-07 an increase in the price of fruit as a result of crop damage by Cyclone Larry in Queensland and frost in the Victorian Goulburn Valley led to a rise in chilled juice prices and, subsequently, growth in ambient juice sales despite their higher sugar and preservative content.

Single-serve premium fresh juices are expected to continue to represent a growing niche market in the future.

Supermarket house brands have become increasingly common and in demand across the beverage sector, making price an important basis of competition.

In the juice sector particularly, house brands have gained market share over the last year due to lower pricing, despite perceived lower quality.

In 2006-07, IBISWorld has estimated that fruit juice manufacturing industry revenue increased by 3%, to $955 million.

Growth within the juice sector is expected to continue at an average annual rate of 3.2%, amounting to $984 million in 2007-08.

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NSW food under the world’s spotlight

Austrade, the Australian Government’s export development agency, has brought over 250 buyers from around the world to Fine Food Australia in Sydney, in an effort to boost export sales for over 300 Sydney and NSW businesses participating in the event.

According to Austrade, the popularity of the Australian brand internationally has enabled them to attract key buyers from Asia, the Middle East, North America and the Pacific Region to the event, including over 70 buyers from China, the most from any country.

International interest will give the 800 Australian food and beverage businesses attending the event an ideal platform to showcase Australia to the world.

To assist smaller new to export businesses, this year Austrade will manage a ‘What’s New from Australia’ stand on the show floor.

This will give the opportunity for new to export companies to display their product samples.

The virtual ‘What’s New From Australia’ stand provides an ideal way for company’s new to export to participate in an international trade show without having to travel overseas and commit huge funds.

Austrade will have experienced export advisers manage the stand and provide feedback from the international buyers to the Australian companies.

According to Austrade’s chief economist Tim Harcourt, the rise of ‘super’ emerging economies in the world such as China and Indonesia are providing a real boost for the exports of Australian fine food and wine.

Fine Food Australia will run from Monday 24th September until Thursday, 27th September at the Sydney Convention and Exhibition Centre.

Industry update: variety fuels ready meal growth

The ready meal segment in Australia experienced growth during 2006-07, having developed healthier, fresher products, a greater number of which were gourmet.

Over the last three years there has been a dramatic shift from frozen to chilled ready meals, which are stored in retailers’ chiller cabinets.

Frozen meals such as Nestlé’s Lean Cuisine range have been superseded by fresh chilled meals including lasagnes and soups, which are precooked and packed in modified atmosphere packaging (MAP).

Packaging

Indeed, technological advances in packaging formats, including MAP, vacuum shrink bags and flexible stand-up pouches have fuelled an increase in the ready meal segment, making it possible for manufacturers to extend shelf life without freezing and offer consumers a visually appealing product on the shelf.

Changes in packaging from a sachet-in-box format to a cup and tray have had many benefits for the ready meals sector including increased portability, portion control and cost reductions.

According to Woolworths, people are more comfortable consuming meat-based products in cup style packaging.

Factors fuelling growth

Ready meals have become more in demand as the quality of the products, in terms of taste, nutritional value and variety has increased, and the appearance of the packaging has improved.

As consumers lead ever-busier lives and become more time-poor, the demand for ready meals has increased.

However, the ready meal industry faces competition from other affordable convenience food sectors such as restaurants and take-away outlets.

Meal substitutes such as liquid breakfasts and snack bars are also competitors as people assume busier lifestyles and eat on the run.

Premium, restaurant-quality ready meals, including ready-to-eat salads, pastas and curries, have experienced growth in line with consumers’ willingness to spend more on higher quality healthier pre-prepared meals, and in line with competition from other convenience foods.

Euromonitor reported that 2005 and 2006 saw manufacturers launch healthy alternatives to existing product ranges, including reduced salt and reduced fat items, appealing to health conscious consumers.

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Industry update: future looks bright for bottled water

As one of the fastest growing sectors within Australia’s beverage industry, the bottled water segment experienced a 12% revenue growth during 2006-07 totalling $627 million, approximately 5% of Australia’s total beverage manufacturing revenue.

Natural spring water and purified water have been the fastest growing segments in Australia.

Among factors contributing to the rising demand for bottled water are: consumers’ greater disposable incomes; lifestyle changes and a shift towards convenience purchasing; health concerns and a move away from high-sugar drinks; concerns about the quality of tap water (particularly in New South Wales); and the rise of the hospitality and entertainment industries, with some venues providing only bottled water, not tap water.

Product innovation has also impacted positively on industry growth.

The rapid introduction of new products such as functional waters and new packaging formats, including the increased availability of multipacks, has driven up demand from convenience stores and supermarkets.

The development and marketing of sports water and flavoured water has allowed the bottled water segment to obtain market share from high-sugar soft drinks, energy drinks and sports drinks, by appealing to consumers’ health concerns.

Manufacturers are increasingly realising the importance of bottle design as a basis of competition, with bottle size, shape and functionality not only fostering product differentiation, but allowing different brands to target certain demographics.

Coca-Cola Amatil’s introduction of the sparkling Mount Franklin glass bottle is an example of innovative packaging tailored to style-conscious consumers and the increasing number of people dining at restaurants as opposed to eating at home.

Niche and premium

While dominated by three major industry players, the bottled water segment has sought, and will continue to seek, growth through niche markets, making way for smaller producers to supply relatively small segments with specialist and/or premium products.

In particular, increased concern about the use of artificial colourings, flavourings and preservatives is expected to broaden the range of premium, health-focussed waters entering the market from small-scale, specialist operators.

IBISWorld has predicted that more organically certified waters will enter the premium end of the market in the future, resulting from improved consumer awareness of water quality.

In fact, the bottled water manufacturing industry is expected to double its revenue over the next five years, increasing at an average annual rate of 11%, fuelled by continued industry innovation and promotional spending.

This is despite rising PET resin costs and more intense price competition in the supermarket channel.

In response to a trend towards consuming bottled water based on functionality rather than brand loyalty, and as the market becomes more price competitive with a rise in supermarket house brands, manufacturers will need to increasingly focus on value-added products.

Industry at a glance

Industry revenue: $627 million (12% growth)

Export revenue: $35 million*

Import revenue: $40 million*

Major players: Coca-Cola Amatil, Cadbury Schweppes Australia, Frucor Beverages (Australia)

* Estimated figures source: IBISWorld

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Industry update: innovation and health drive snack sector

Convenience, a focus on health, and product innovation and differentiation are regarded as key factors driving forward the snack food sector, which is estimated to have grown by an average of 5.2% per annum in the five years to June 2007.

While potato chips dominated product sales, products containing less fat, such as Frito-Lay’s Red Rock Deli potato chips and nuts and pretzels, attracted increased sales, reflecting consumers’ growing health consciousness.

Indeed, the nutritious snacks segment, comprised of savoury snacks such as health food bars, experienced the most significant growth this year at 22%, making up 10.8% of the market.

New flavour development and successful advertising campaigns have also seen corn chip sales grow steadily over the past five years to 11.5% of total sales revenue.

Industry forecast

IBISWorld has forecast that the snack food manufacturing industry will experience a 5.2% decrease in revenue over the next year as the market matures.

However, industry revenue of $2290 million during 2007-08 is expected to rise to $2439 million in the period 2011-12.

Changes in supply chain conditions, such as the cost of cereal inputs that have been affected by recent drought, downstream demand from retailers and grocery stores as a result of changing consumer tastes and preferences, and market consolidation and competition are depicted as the main factors inhibiting growth.

Increased sugar prices will inflate production costs, unless these costs can be passed onto consumers.

However, given the competitive trading conditions in Australia and overseas this is unlikely.

As many snack food products are not regarded as essential by consumers, household consumption expenditure and disposable income have an impact on snack food purchase.

Therefore, marketing campaigns will need to continue to focus on increasing impulse purchases.

Growth in the snack food segment will also be fuelled by the continued development of innovative food products and production techniques, creating value-added foods in line with consumer health trends.

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Industry update: meating global needs

During 2006-07, the bacon, ham and smallgoods manufacturing industry achieved revenue of $2769.3 million, representing a growth of 4% per year over the past five years.

As domestic production recovers from drought and pork imports continue to grow, thus increasing competition on the domestic market and decreasing input prices, IBISWorld has projected that industry growth will continue at a rate of 2.7% per annum over the five years to June 2012.

A rise in health conscious consumers opting for low-fat, low-salt diets, as well as an increase in convenience food consumption, has impacted on the consumption of smallgoods and meats in recent years.

Food scares associated with smallgoods and meat products have significantly increased consumers’ awareness of food safety standards.

Over the next five years, bacon, ham and smallgoods manufacturers are likely to face greater regulatory restraints in relation to product labelling and food safety, due to lobbying from consumer groups.

As a result, smallgoods producers are likely to compete on the basis of whether or not they are accredited members of the Australian Pork Industry Quality Program.

Beef

With drought affecting the industry during 2002-03 and 2006-07, resulting in increased turn-off of production during these periods, and declining volumes in the year immediately after as farmers rebuilt their herds, meat production industries have become more reliant on imports during the past year.

However, the export market is the primary outlet for Australian processed meat including beef, lamb and pork, accounting for approximately 62% in 2006-07, down from 82.7% in 2000-01.

While drought resulted in volatile production volumes and subsequent fluctuating prices, the industry has benefited from outbreaks of disease in other meat producing countries such as the US, which have increased the demand for Australian beef exports.

Although Australia produces 3.6% of the global beef supply, it is the second largest beef exporter in the world.

The meat processing industry achieved revenue valued at $12.7 billion during 2006-07, an increase of 4.1% from the previous year.

Future outlook

IBISWorld has predicted that the meat processing industry will achieve moderate growth over the next five years.

Factors including reduced demand in international markets and increased competition, decline in local red meat consumption, supermarket buying power, increased import competition and recovery from drought will see industry production experience a decline of 3.5% over the next year.

Value-added products are expected to provide the largest opportunity for raising revenue in coming years, with Australian processors expected to raise quality standards and tailor more meat cuts to the needs of different market segments, for example the development of ready-to-cook seasoned roasts to meet increased demand for convenience.

Industry at a glance: bacon, ham and smallgoods

Industry revenue: $2769.3 million (4% growth)

Export revenue: $8.6 million (12.8% growth)*

Import revenue: $12.7 million (3% growth)*

Major players: Food Investments, KR Castlemaine Foods, Hans Continental Smallgoods, Primo Meats*

Estimated figures Source: IBISWorld

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Industry update: sweets sector looks to export for growth

With the confectionery market in Australia reaching saturation, growth is, and will continue to be, dependent on product innovation, differentiation and export.

In the period 2007-08 the confectionery manufacturing industry is expected to grow 2.8%, equivalent to a total sales revenue of $2312 million.

In a segment where over 70% of sales are the result of impulse, an increase in low-fat chocolate varieties, sugarless sweets and functional confectionery in particular is fuelling this growth, while line extensions have proven to be a popular method of igniting new interest in existing products.

Packaging innovation has also contributed to industry growth, including the reconfiguration of packaging sizes and formats, for example the economical multipacks available in supermarkets.

Comprising 62% of total confectionery sales, chocolate continues to be the confectionery sector’s major product category, followed by sugar confectionery comprising 29% of total sales volume.

IbisWorld reveal that approximately 40% of total chocolate sold is chocolate bars, with the top three sellers being Mars Bar, Kit Kat and Cherry Ripe.

While gum is currently the smallest product segment, generating approximately 9% of total industry sales, consumers spend approximately $162 million each year on sugar-free gum, highlighting increasing health concerns tied to sugar intake.

Focus on health

Increased health concerns have been countered in recent years by evidence that antioxidant-rich chocolate, particularly dark chocolate, has some health benefits.

Manufacturers have also responded to consumers’ health concerns by extending product lines to include reduced-fat or sugar-free products.

Despite increased health awareness, and continued growth in the organic and sugar-free confectionery segments, an increasing number of consumers are turning to premium chocolate brands as the quality of the raw ingredients takes precedence and an increase in disposable income makes specialty, imported chocolates more attractive than mainstream products.

Impact of globalisation

Globalisation is of particular interest to the confectionery segment, with imports comprising approximately 20% of the domestic market and being valued at $548 million.

Retailers are also increasingly looking to foreign suppliers in an effort to obtain cheaper products, placing pressure on Australian manufacturers as they compete with cheaper imports from countries like China.

However, Australian manufacturers are also seeking growth through export opportunities in Asia, with close geographic proximity and Asians’ rising disposable incomes making them attractive export targets.

One of the biggest factors threatening the industry’s future growth is the current push by Australian supermarkets to expand their range of private-label products.

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Industry update: growth predicted for bread and biscuits

While the bread manufacturing industry is a consolidated and mature domestic market, which has experienced a revenue decrease of approximately 0.1% per annum over the past five years, future growth is expected as a result of increased export opportunities, innovations in ingredients and processing, and new product development.

In fact, IBISWorld predicts that growth in industry revenue is expected to average 3% between 2007-08 and 2011-12, bringing annual revenue to $2276.2 million by June 2012.

While bread manufacturers have historically focused on supplying the domestic market — the highly perishable nature of bread products and the low unit value of bread making export unattractive — exports in the past five years have risen by an average of 14.7% per annum and are expected to increase in the future.

Rising incomes in Africa and Asia will lead to diversity in their diet, resulting in greater consumption of products like bread.

Australian manufacturers will be able to take greater advantage of their reputation as safe food producers, with international health and safety standards becoming more stringent.

The supply of longer lasting bread products such as breadcrumbs to export markets will allow the industry to be competitive with foreign bakeries that provide bread daily.

Innovation and product development are also tipped as growth opportunities although there is insufficient funding of research and development for new functional bread products in Australia, making commercialisation of high-technology products difficult.

Manufacturers have benefited from responding to consumer demand for healthier bread products by offering greater variety, a trend that will continue.

According to IBISWorld, one of the greatest growth areas has been functional breads, particularly enriched or fortified breads, which are growing at a rate of 10% to 15% annually.

The production of organic bread using organically grown cereals and avoiding artificial additives is also gaining momentum.

While growth in the industry is also expected to lie in product development, particularly products in a premium price range as consumers show an increasing willingness to buy higher quality specialty products, demand for generic goods is also growing as consumers on low incomes become less brand conscious.

Mixed bag for biscuits

Dominated by foreign ownership, the profitability of Australia’s biscuit market is threatened by the ongoing consolidation of the retail food-client base.

The continuing reduction in the number of retail buyers and growth of the giant supermarket chains will pose a similar threat to all food manufacturing industries.

While the biscuit industry experienced a 0.5% decline in revenue in 2006-07 from the previous year, it is expected to grow at an average rate of 0.6% over the next five years.

Main factors contributing to growth include the development of low-fat product ranges, export opportunities in Asia and innovative packaging formats that increase shelf-life and reduce breakage during transit, making them ideal for export.

While the industry is dominated by two major companies, smaller firms are finding success in the market by appealing to niche groups of consumers with specialty gourmet biscuits, both savoury and sweet.

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Zipper sealed pouches

Zip-Pak has launched a range of innovative press-to-close zippers for commercial shred­ded cheese packs, allowing the packaging to be reused multiple times.

Slider technology and the inclusion of an ergonomically designed clip ensures the cheese is kept fresh for longer while allowing the cheese to remain in its orig­inal package, keeping the brand name, logo and package information in front of the consumer throughout the product’s usage.

According to the company, pouches with double zippers are also available, creating a hermetic seal to enhance food safety and minimise spoilage.

Click here for more information.

Tailor-made fortified ingredients

SternVitamin, a designer of vitamin and mineral premixes, develops tailor-made ingredients for its customers that are ideal for fortified drinks, pasta, cereals, bakery products, dairy products and baby food.

Individual solutions, not standard products

As the requirements for fortifying food and beverages are highly specific, SternVitamin does not offer standard products.

Its research department develops each vitamin and mineral mixture individually, according to its customer’s requirements, and tests it thoroughly for use in the relevant foods.

When making up new premixes, attention is given to synergisms between nutrients and also to cost-effectiveness and the optimum processing characteristics of the products.

SternVitamin works closely with universities and research institutions and has strategic alliances with manufacturers of vitamins to ensure it delivers premium ingredients with optimum nutritional value.

Modern container blending plant

SternVitamin has one of the most modern premix plants for high-quality ingredients and food supplements in Germany.

The company’s new plant in Wittenburg has three fully automatic blending lines with the latest process control and visual display equipment, as well as several pilot blending lines, enabling handle throughputs from 100 to 6000kg/hour.

At the beginning of 2008 a modern pharmaceutical-type container blending plant is due to be commissioned in a new, independent extension of the factory.

The process will be accompanied from beginning to end by a sophisticated quality system ensuring that all batches can be traced.

There will be separate rooms for depalletising, weighing, feeding of starting materials, blending, sifting, filling and palletising.

Food Ingredients Europe

SternVitamin will be showcasing its portfolio of products and services at Food Ingredients Europe, from October 31st to November 1st.

Australian wine sells for more than $2000

A bottle of first vintage 1973 Moss Wood cabernet sauvignon achieved a record price of $2301 at the recent Langton’s on-line auction in Melbourne.

This is the highest price ever paid for a single 750ml bottle of Australian wine post 1970.

A bottle of 1974 Moss Wood cabernet sauvignon sold for $1726.

According to Moss Wood, the 1973 and 1974 vintage is extremely rare with only a few bottles in existence. The price illustrates an increasing awareness of Australian wine heritage and the reality of the secondary wine market.

Vintage sale

Langton’s will be holding its first 2007 vintage, Great Wine Estates of Western Australia en-primeur offer from November 9th to December 10th, 2007.

This novel on-line futures sale is the first of its kind in Australia and promises to attract significant interest from the cream of Australian and International wine collectors.

The sale will include spectacular 2007 en-primeur vintages of Cape Mentelle, Cullen, Devil’s Lair, Leeuwin Estate, Howard Park, Moss Wood, Pierro, Plantagenet, Vasse Felix, Voyager Estate and Xanadu.

On November 9th, Langton’s will offer a list of 2007 vintages from the Great Wine Estates of Western Australia and collectors will have an opportunity to purchase them at a fixed en-primeur “futures” price.

Success at home and overseas for NZ company

Four years ago, JMP recognised that if it was to con­tinue its growth in the palletising and packaging mar­ket it would have to change its business model and way of manufacturing.

New Zealand has been hit hard by the cheaper Chinese products being imported into Australia and New Zealand.

JMP did not want to give up manufacturing in New Zealand so took the decision to export, despite the dollar’s value not being favourable, and to increase the work load to streamline its manufacturing and processes.

This was made easier with the support of Kawasaki Robotics and by being able to sell Robotic systems designed and manufactured in New Zealand. To support the number of systems being installed, espe­cially in Australia, JMP Australia was formed under the man­agement of Cameron Traum.

This way JMP New Zealand could manufacture the sys­tems and Traum could sell, install and service the systems locally. JMP Australia is currently installing its largest Robotic Palletising system in Australia for Nestle, which consists of twelve lanes palletising at a rate of over 60 cartons per minute.

Systems have been sold in Australia to Fonterra, Dairy Farmers, Simplot, Nestle, and Goodman Fielder, to name a few, which have all been manufactured in New Zealand. JMP has also designed and developed robotic case packing, which uses Kawasaki robots to pick up the robotic palletising on the end of lines.

Both the up-stream and down-stream lines can be sourced from one supplier. JMP holds complete robots in stock, both in Australia and New Zealand, to guarantee 100% spares and parts are always in-house.

Because the systems are manufactured in New Zealand they are fully set up and run in front of the customer prior to installation. This makes on-site commissioning quick and easy, and gives the operators confidence that the system will work, allowing them to embrace the system quickly and easily.