John West lands top sustainability award

Solidifying its position as Australia’s most sustainable tuna brand, Simplot Australia owned John West, was awarded the highest accolade at the 2016 Banksia Sustainability Awards, in Sydney recently.

John West Australia, the only national supermarket brand to be recognised in the awards this year, won the Communication for Change Award, followed by the prestigious 2016 Banksia Gold Award, which reflects the ‘Best of the Best’ across the categories.

Earlier this year, alongside the WWF-Australia (WWF) and the Marine Stewardship Council (MSC), a world leading brand commitment was made, to help end unsustainable fishing methods within the canned tuna industry in Australia, thanks to Pacifical, supplied by the world’s largest sustainable tuna purse seine fishery, controlled by the PNA (Parties to the Nauru Agreement).

The alliance with WWF, MSC and Pacifical and Simplot’s supplier network, is the result of years of the entities working together to find a way to overhaul John West’s supply standards within Australia, moving towards a more sustainable future for the world’s oceans.

Simplot Australia Managing Director, Terry O’Brien, said, “We feel privileged to have been awarded such an accolade in Australian sustainability. The category shift has been years of work alongside our partners, to truly lead the industry, consumers and the environment, towards a more positive future. We look forward to continuing the work, as we move into the next phase of ensuring a positive future for our oceans.”

The Banksia Awards is the longest running and most prestigious acknowledgement of commitment to sustainability in Australia. They recognise Australian individuals, communities, businesses and government for their innovation, achievement and commitment to sustainability.

ELIX Polymers launches new food grade contact material

ELIX Polymers has launched a new ABS grade for use in products that come into contact with food and which also require extra toughness and resistance to high temperatures.

Target applications include kitchenware, products for preparation and storage of food, and also toys.

The new M545TF grade will enhance the company’s Healthcare portfolio, which already includes grades for medical devices, cosmetics, food contact applications and toys.

The latest grade has been migration tested with different food simulants.

This enables ELIX Polymers to advise its customers about migration issues and regulatory compliance during the product design phase, helping to prevent problems before they occur and shortening time to market.

M545TF can be supplied precolored, with ELIX taking the responsibility for compliance of the pigments with food contact regulations.

ELIX Polymers’ current portfolio of FDA-approved colors already includes more than 120 active recipes; new colors are under continual development.

“ELIX Polymers offers a high level of service to our customers, especially for the healthcare portfolio,” says Aurelie Mannella, Industry Manager Healthcare at ELIX Polymers.

“We are pleased to have gained a reputation among our customers as a company that consistently offers excellence in service, along with high-quality products and constant innovation. We have implemented a rigorous selection of our pigments and suppliers in order to be able to guarantee consistent and zero-risk solutions.”


Coca-Cola launches Aussie summer ‘sweat smasher’ with sports stars

Coca-Cola  has announced details of Powerade’s new Australian Summer campaign ‘Smash the Sweat’.

The campaign is designed to encourage consumers to smash the sticky, humid conditions associated with the season through the launch of limited edition Powerade sport-themed ‘shrink packs’ aimed at generating cut-through during the key summer period.

The strategy, said the company, revolves around tapping into the Aussie’s love of sports through collectable summer sports-themed packaging, featuring imagery from a range of sports including rugby, cricket, basketball, tennis, soccer and athletics.

The signature packs are signed by sporting legends and Powerade Ambassadors Greg Inglis, Mitchell Johnson and Andrew Bogut.

Appearing from early November, the limited edition packs will be promoted in-store at point-of-sale and supported on social media channels in the build up to summer.

As the summer sport season kicks off, the campaign will be boosted through outdoor media calling on consumers to ‘Smash the Sweat’.

Sarah Illy, Brand Activation Manager, Powerade, said: “We all love an Aussie summer, but with the hot, sticky conditions it becomes even more important to stay hydrated. So this summer we are challenging people to ‘Smash the Sweat’. Being a sports-obsessed nation, we decided to tap into that trend through our collectable sport-themed packs to encourage people to be active and stay hydrated.”

“The limited edition bottles have been inspired by Australian sporting legends with the objective of keeping Powerade ION4 top of mind for rehydration needs. Powerade ION4… is scientifically formulated to help replace four of the electrolytes lost in sweat and is an ideal way to ‘Smash the Sweat’ this summer,” said Illy.


Asian milk demand growing but competition strong for exporters

Asian demand for Australian milk is continuing to grow but export margins have been squeezed and could potentially tighten further, according to new research.

The report, Liquid milk exports to Asia – avoiding the crush, by agribusiness banking specialist Rabobank, says competition in Asian markets will remain fiercely competitive as both international and local brands fight for market share and consumer spend.

Report author, Rabobank senior dairy analyst Michael Harvey (pictured below) says the automatic premium that international brands had historically received was unlikely to be repeated.

“It wasn’t long ago that being an imported brand automatically provided a retail price premium but that is no longer the case,” Harvey said.

“This has particular consequences for Australia and New Zealand given the previously alluring retail price premiums, combined with trade opportunities and relatively low capital outlays, which fuelled a period of significant investment in liquid milk processing capacity across Oceania.

“This increased capacity has been specifically geared towards Asia’s liquid milk markets, the short-term consequence of which has been a contribution to diminishing export margins.”


The flood of investment in the regions has resulted in capacity almost doubling across Australia and New Zealand, with additional investment potentially in the pipeline.

This region’s dairy exporters are also competing with their European counterparts, many of which have large-scale and highly efficient processing plants complemented by a growing milk supply.

And while competition from Europe is continuing to squeeze the market, local Asian brands are providing additional competition.

Harvey says while the companies behind local brands have also been pressured by increased import competition, they are by no means looking to surrender.

However, despite some of these home advantages, the report says, longer-term a major hurdle for local brands will still be accessing enough locally produced milk in a cost- effective manner.

Strategies to ease the squeeze

While the Rabobank report is forecasting growing export volumes of liquid milk into Asia, margin growth is likely to be the bigger challenge.

“The key areas of focus that dairy export businesses will be looking at to increase their margins will include ensuring processing efficiency, improving their distribution chains and building a premium platform,” Harvey said.

While economies of scale will be important to remain competitive in the Asian liquid milk export market Mr Harvey says developing a premium platform will be essential for those companies wanting to increase their margins.

“For dairy exporters this is not just about product and packaging innovation, but also category expansion, R&D and behind-the-border support to better cater to changing consumer demands,” he said.


WA agriculture to reap benefits from rising food demand in Asia

Western Australia’s beef export industry into Asia could grow to $1 billion by 2030 and beyond, according a new report by the Bankwest Curtin Economics Centre (BCEC).

From Paddock to Plate: WA’s potential in agriculture and agribusiness is the first report in the Bankwest Curtin Economic Centre’s new Focus on Industry series and asks if WA is positioned to take advantage of the unique opportunity presented by the increasing global demand for high quality, secure food produce.

Using the latest data available, the report analyses the contribution of agriculture to the WA economy, and assesses the State’s natural endowments, competitive advantages, and innovative and productivity capabilities to meet increased global demand.

BCEC Director, Professor Alan Duncan, said the importance of Asia to the State’s agricultural exports will grow in the future as Asian economies develop and as global demand for food changes.

“We can expect a greater demand for meat, seafood, fruits and vegetables, sugar products and baked or processed goods as economic development continues in many countries throughout Asia,” Professor Duncan said.

New estimates in this report project Australian beef exports to China alone could potentially increase from $1bn to $4.5bn by 2030, driven by a combination of increased demand for meat by the growing Asian middle class, and an expansion in efficient beef production and export volumes.

WA’s proximity to Asia creates the potential for the State’s beef producers to secure a $1bn share of exports to Asia.

Yet the positive narrative around growth in the economic value of agriculture to WA is not matched by a similar optimism for employment growth within the sector.

Jobs in agriculture, forestry and fishing accounted for around 5 per cent of WA total employment in May 2005. This share has dropped to only 2.3 per cent in May 2016.

“There is work to do to reverse the fall in jobs in the State’s agriculture sector,” Professor Duncan said.

“WA held a 14.8 per cent share of national employment in agriculture, forestry and fishing in May 2005. Latest data shows this share has fallen to 9.4 per cent.

“Innovation in agricultural production, increased capital intensity and efficient use of resources all point to agriculture as one of the State’s growth sectors, but questions remain about whether this will lead to an expansion in jobs.”

However, there have been bright spots in job creation throughout the State, with the share of employees in the South-West who work in agriculture rising from 2.9 per cent in 2012 to 11.5 per cent by May 2016.

“Around 10,700 people are now employed in agriculture in Bunbury and surrounding areas of the South-West – up from 2,800 at the end of 2012,” Professor Duncan said.

“The South-West has natural endowments that lend themselves to diversified agricultural production, a commitment to high-quality, high-value produce and a strong regional brand.

“The revival of agriculture in the South-West region, not just in the value of production but in jobs, is a success story for other regions in WA to follow,” Professor Duncan said.

The economic stimulus from investment in pastoral farming in northern Australia offers a significant potential for new employment opportunities in the Kimberley and Pilbara.




Food for thought: feeding our growing population with flies

Scientists have predicted that by 2050 there will be 9.6 billion humans living on Earth. With the rise of the middle class, we are expected to increase our consumption of animal products by up to 70% using the same limited resources that we have today.

The cost of producing agricultural crops such as corn and soy to feed these animals is also expected to increase and become more challenging with the onset of drought and rising temperatures.

While science is racing to develop more drought tolerant crop strains through genetic engineering, there may be a simpler alternative: flies.

Although people in some parts of the world have been eating insects for generations, the general population is opposed to introducing the crunchy morsels into their diet.

Since we might not be ready to eat insects ourselves, could we instead feed insects to our farmed animals to feed to growing population?

Introducing the nutritious black soldier fly

The black soldier fly, Hermetia illucens, is a cosmopolitan species found on every continent in the world (excluding Antarctica).

You may have seen this species powering the compost bin in your backyard, as they are efficient decomposers of organic matter. The black soldier fly was first described in 1758 and we are only now discovering its true potential: scientists in Australia, Canada, India, South Africa and the United States have begun transforming black soldier fly larvae into a nutritious and sustainable agricultural feed product.

‘Hermetia illucens’ was first described in 1758 but we are only discovery its true potential now.
CSIRO: Dr Bryan Lessard

This species was specifically chosen because of its voracious appetite, with one larvae able to quickly process half a gram of organic matter per day.

In fact, the larvae can eat a wide variety of household waste, including rotting fruit, vegetables, meats and, if desperately in need, manure, and quickly convert it to a rich source of fats, oils, amino acids, calcium and protein.

Black soldier fly larvae are 45% crude protein, which in addition to its high nutrition profile, has gained the attention of the agriculture community.

Researchers have demonstrated that black soldier fly feed could partially or completely replace conventional agricultural feed. Moreover, studies have shown that this feed is suitable for the diet of chickens, pigs, alligators and farmed seafood such as blue tilapia, Atlantic salmon and prawns.

Preliminary trials have also indicated that there are no adverse effects on the health of these animals. Black soldier flies can also reduce the amount of E. coli in dairy manure.

A swarm of environmental benefits

There are myriad environmental benefits to adopting black soldier fly feed. For example, Costa Rica has been successful in reducing household waste by up to 75% by feeding it to black soldier fly larvae.

This has significant potential to be adopted in Australia and could divert thousands of tonnes of household and commercial food waste from entering landfill.

One female black soldier fly can have up to 600 larvae, with each of these quickly consuming half a gram of organic matter per day. This small family of 600 individuals can eat an entire household green waste bin each year.

Entire farms of black soldier flies could significantly reduce landfill, while converting the organic matter into a feasible commercial product.

Black soldier fly farms require a substantially smaller footprint than conventional agricultural crops grown to feed farm animals because they can be grown in warehouses or small farms.

We currently use more than half the world’s usable surface to grow crops to feed farm animals. If more fly farms were established in the future, less land would be required to feed farm animals, which in turn could be used to grow more food for humans, or rehabilitate it and return it to nature.

Another emerging economic venture in black soldier flies is the production of biodiesel as a by-product of the harvesting stage. The larvae are a natural source of oil, which scientists have feasibly extracted during the processing stage and converted into biodiesel.

With future research and development, this oil could be commercially developed to alleviate the pressure off limited fossil fuels and could become a reliable source of revenue for countries adopting black soldier fly farming.

Would you buy black soldier fly feed?

The limiting factor of the emerging black soldier fly farming practice is ultimately the consumer. Would shoppers be tempted to buy animal products fed on black soldier flies at the grocery store, or purchase larvae to feed their pets or farm animals?

Promising trials have shown that customers could not detect a difference in the taste or smell of animal products fed on black soldier flies.

One of the greatest challenges we will face in our lifetime is the need to feed a growing population. If we want to continue our customs of farming and eating animal products on our limited resources, we may have to look to novel alternatives like black soldier fly farming.

With the benefits of reducing household waste and sustainably feeding farm animals a nutritious meal, perhaps the future of eating insects is closer than we thought.

The Conversation

Bryan Lessard, Postdoctoral Research Fellow, CSIRO

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

Fishing, not oil, is at the heart of the South China Sea dispute

Contrary to the view that the South China Sea disputes are driven by a regional hunger for seabed energy resources, the real and immediate prizes at stake are the region’s fisheries and marine environments that support them.

It is also through the fisheries dimensions to the conflict that the repercussions of the recent ruling of the arbitration tribunal in the Philippines-China case are likely to be most acutely felt.

It seems that oil is sexier than fish, or at least the lure of seabed energy resources has a more powerful motivating effect on policymakers, commentators and the media alike. However, the resources really at stake are the fisheries of the South China Sea and the marine environment that sustains them.

The real resource at stake

For a relatively small (around 3 million square kilometres) patch of the oceans, the South China Sea delivers an astonishing abundance of fish. The area is home to at least 3,365 known species of marine fishes, and in 2012, an estimated 12% of the world’s total fishing catch, worth US$21.8 billion, came from this region.

These living resources are worth more than money; they are fundamental to the food security of coastal populations numbering in the hundreds of millions.

Indeed, a recent study showed that the countries fringing the South China Sea are among the most reliant in the world on fish as source of nutrients. This makes their populations especially susceptible to malnutrition as fish catches decline.

These fisheries also employ at least 3.7 million people (almost certainly an underestimate given the level of unreported and illegal fishing in the region).

This is arguably one of the most important services the South China Sea fisheries provide to the global community – keeping nearly 4 million young global citizens busy, who would otherwise have few employment options.

But these vital resources are under enormous pressure.

A disaster in the making

The South China Sea’s fisheries are seriously over-exploited.

Last year, two of us contributed to a report finding that 55% of global marine fishing vessels operate in the South China Sea. We also found that fish stocks have declined 70% to 95% since the 1950s.

Over the past 30 years, the number of fish caught each hour has declined by a third, meaning fishers are putting in more effort for less fish.

This has been accelerated by destructive fishing practices such as the use of dynamite and cyanide on reefs, coupled with artificial island-building. The coral reefs of the South China Sea have been declining at a rate of 16% per decade.

Even so, the total amount of fish caught has increased. But the proportion of large species has declined while the proportion of smaller species and juvenile fish has increased. This has disastrous implications for the future of fishing in the South China Sea.

We found that, by 2045, under business as usual, each of the species groups studied would suffer stock decreases of a further 9% to 59%.

The ‘maritime militia’

Access to these fisheries is an enduring concern for nations surrounding the South China Sea, and fishing incidents play an enduring role in the dispute.

Chinese/Taiwanese fishing fleets dominate the South China Sea by numbers. This is due to the insatiable domestic demand for fish coupled with heavy state subsidies to enable Chinese fishers build larger vessels with longer range.

Competition between rival fishing fleets for a dwindling resource in a region of overlapping maritime claims inevitably leads to fisheries conflicts. Fishing boats have been apprehended for alleged illegal fishing leading to incidents between rival patrol boats on the water, such as the one in March 2016 between Chinese and Indonesian vessels.

Fishing boats are not just used to catch fish. Fishing vessels have long been used as proxies to assert maritime claims.

China’s fishing fleets have been characterised as a “maritime militia” in this context. Numerous incidents have involved Chinese fishing vessels operating (just) within China’s so-called nine-dashed line claim but in close proximity to other coastal states in areas they consider to be part of their exclusive economic zones (EEZs).

The disputed South China Sea area.
Author/American Journal of International Law

The Chinese Coast Guard has increasingly played an important role in providing logistical support such as refueling as well as intervening to protect Chinese vessels from arrest by the maritime enforcement efforts of other South China Sea coastal states.

Fisheries as flashpoint

The July 2016 ruling in the dispute between the Philippines and China demolishes any legal basis to China’s claim to extended maritime zones in the southern South China Sea and any right to resources.

The consequence of this is that the Philippines and, by extension, Malaysia, Brunei and Indonesia are free to claim rights over the sea to 200 nautical miles from their coasts as part of their EEZs.

This also creates a pocket of high seas outside any national claim in the central part of the South China Sea.

There are signs that this has emboldened coastal states to take a stronger stance against what they will undoubtedly regard as illegal fishing on China’s part in “their” waters.

Indonesia already has a strong track record of doing so, blowing up and sinking 23 apprehended illegal fishing vessels in April and live-streaming the explosions to maximise publicity. It appears that Malaysia is following suit, threatening to sink illegal fishing vessels and turn them into artificial reefs.

The snag is that China has vociferously rejected the ruling. There is every indication that the Chinese will continue to operate within the nine-dashed line and Chinese maritime forces will seek to protect China’s claims there.

This gloomy view is underscored by the fact that China has recently opened a fishing port on the island of Hainan with space for 800 fishing vessels, a figure projected to rise to 2,000. The new port is predicted to play an important role in “safeguarding China’s fishing rights in the South China Sea”, according to a local official.

On August 2, the Chinese Supreme People’s Court signalled that China had the right to prosecute foreigners “illegally entering Chinese waters” – including areas claimed by China but which, in line with the tribunal’s ruling, are part of the surrounding states’ EEZs – and jail them for up to a year.

Ominously, the following day Chinese Defence Minister Chang Wanquan warned that China should prepare for a “people’s war at sea” in order to “safeguard sovereignty”. This sets the scene for increased fisheries conflicts.

Ways forward

The South China Sea is crying out for the creation of a multilateral management, such as through a marine protected area or the revival of a decades-old idea of turning parts of the South China Sea, perhaps the central high seas pocket, into an international marine peace park.

Such options would serve to protect the vulnerable coral reef ecosystems of the region and help to conserve its valuable marine living resources.

A co-operative solution that bypasses the current disputes over the South China Sea may seem far-fetched. Without such action, however, its fisheries face collapse, with dire consequences for the region. Ultimately, the fishers and fishes are going to be the losers if the dispute continues.

The Conversation

Clive Schofield, Professor and Challenge Lead, Sustaining Coastal and Marine Zones, University of Wollongong; Rashid Sumaila, Director & Professor, Fisheries Economics Research Unit, University of British Columbia, and William Cheung, Associate Professor, Institute for the Oceans and Fisheries, University of British Columbia

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

Top Image: Asia Times

Myanmar’s expanding food palate creates opportunities for Australia

Increasing demand for premium food, an influx of western restaurants and the rapid expansion of the tourism industry are creating growing opportunities for Australia’s food and beverage exporters.

Ross Bray, Austrade’s Senior Trade Commissioner for Myanmar, said since the country’s political and economic transformation, dining options have diversified for locals, expatriates and tourists.

‘This has seen local consumers’ eating habits and food preferences change, forcing producers and retailers to upgrade their products. They are also importing higher quality raw materials to remain competitive,’ said Bray.

Yangon, the commercial capital, is attracting regional and global food chains such as Tony Roma’s, Gloria Jeans, Pizza Hut, Manhattan Fish Market, KFC, Astons Steakhouse, Harry’s Bar and Ya Kun Coffee & Toast.

International hotel groups with fine dining establishments such as Kempinski Hotels, Pan Pacific, Sheraton and The Peninsula are all set to open hotels in the coming year, helping to meet the growth in tourism which is expected to top three million by 2020.

‘The local food service sector is also responding to the growing demand and challenges by seeking out new suppliers of premium food from across the world,’ said Bray.

‘Australia’s strong reputation for exporting clean, green and safe foods is a major attraction.

‘This is why Australian produce ranging from meat, fruit and vegetables, dairy products, to condiments and wines are in demand and are supplied to the food sector and upmarket retail outlets,’ added Bray.

Throughout June, the ‘Australia on the Menu’ promotion showcased Australian produce by encouraging diners to experience Australian beef and lamb menus prepared by Myanmar chefs across 17 participating hotels, restaurants and bars throughout Yangon.

The initiative also built relationships between local retail chain operators and Australian suppliers to the food service and hotel sectors, with participating suppliers including Mulwarra Exports, Argyle Premium Meats and Jack’s Creek all experiencing an increase in sales.

‘While Myanmar’s modern retail sector is still small in regional terms, it is growing strongly. With the increasing number of new hotels and restaurants, opportunities across the food sector will continue to emerge for Australian exporters over the next 18 months due to the change in consumer demographics, a growing expatriate community and increasing tourism,’ said Bray.

According to ABS statistics, beef and sheep meat exports from Australia to Myanmar have grown from a tiny A$303,000 in 2014 to A$1.33 million in 2015 with further growth expected for 2016.

Myanmar is also a member of the ASEAN Australia New Zealand Free Trade Area (AANZFTA), with tariffs falling on many food items progressively from 2015 through to 2022.

Asian food security a ‘threat to Australian industry’ says former minister

Industry experts warn the Australian food industry is missing out on potential commercial gains by failing to tap into our world-leading research facilities.

Not protecting our food and agribusiness sector from significant weather events could also place Australia’s export market into Asia in jeopardy.

Former Federal Minister for Industry and Science, The Hon. Ian Macfarlane, who officially opened the 49th Annual Australian Institute of Food Science and Technology Convention, reinforced the importance of innovation in agribusiness and highlights Australia’s poor record of converting research and development (R&D) investment into commercial outcomes.

“The Australian food and agribusiness industry spends $541 million a year on R&D and, while ranked the 17th most innovative nation in the world, is listed very poorly at 116 out of 142 countries when it comes to converting those research dollars into innovation and commercial success,” said Mr Macfarlane.

According to Mr Macfarlane, the industry has a responsibility to commercialise innovation, grow the economy and provide long-term, well-paid jobs in Australia. Australian agribusiness currently includes 27,400 businesses and accounts for more than $55 billion of Australia’s international trade, making it the fastest growing sector in Australia. Our farmers export two-thirds of their produce and farm exports have grown by approximately 40 per cent in the last five years.

Convention keynote speaker Phil Ruthven, futurist and founder of market research company IBISWorld, noted that long-term exports are in danger and may require a major rethink of how and where we produce food.

“Supplying food to 1.5 billion people in China and 1.3 billion people in India is a real challenge for Australia and one of the macro challenges we face over the next several decades,” said Mr Ruthven.

“It also brings a great challenge as to how we can have more reliable food supplies generated in Australia. Our country is infamous for its droughts, floods and lack of water. Rethinking agriculture and the way we value-add to our manufacturing – even relocating agriculture and manufacturing areas further north where there is more water – is something to be considered,” he says.

Experts at the AIFST Convention will also consider challenges such as catering for Australia’s increasing ageing and allergy-affected population by improving the allergenic profile and microstructure of foods, and the wide spectrum of industry-leading innovations that are contributing to Australia’s ‘ideas boom’.

Hosted at the Brisbane Convention and Exhibition Centre, the 49th AIFST Convention is co-located with the FoodTech QLD Exhibition – the major trade event for Queensland food manufacturers.

As Australia’s largest food industry gathering for 2016, the overarching theme of the 49th AIFST Convention is ‘The Pulse of the Industry’, which demonstrates the current innovation and advanced technology employed by the industry.

Australian Pavilion set for ProPak Asia packaging event

The Australian Packaging and Processing Machinery Association (APPMA) will launch the first Australian Pavilion at ProPak Asia 2016.

The event takes place in Bangkok from 15-18th June. There will be two pavilions and companies already confirmed as exhibitors include HMPS, Adaptapack, Rhima, Confoil, Accupack, the APPMA and the AIP. Outside of the pavilion other APPMA Member companies such as TNA, Heat & Control and Fibre King will also be exhibiting at the show.

The APPMA identified a need to help Australian packaging and processing manufacturers and distributors by creating an Australian Pavilion at ProPak Asia each year. The pavilion will enable Australian manufacturers and distributors to showcase their products and companies to the Asian market in an affordable way.

ProPak Asia is Asia’s No.1 international processing & packaging trade event for Asia’s expanding food, drink & pharmaceutical industries. With a proven track record over 24 successful editions ProPak Asia consistently delivers results as well as quality trade visitors from across Asia. Visitors come to ProPak Asia to see and buy the latest technologies, machines, products and services.

ProPak Asia 2016 has a focused approach for the industry with six dedicated zones, including DrinkTechAsia, FoodTechAsia, Lab&TestAsia, PackagingMaterialsAsia, PharmaTechAsia and PrintTechAsia to highlight growing demand from these sectors.

Research hub to transform food industry’s relationship with Asia

The University of Melbourne and Mondelēz International Asia Pacific have launched “Unlocking the Food Value Chain: Australian Food Industry Transformation for ASEAN Markets.”

The ARC-funded research hub will aim to gain insights to unlock Asian consumer behaviour and market levers, and inform innovation in ingredient use, consumer experience and product design and packaging.

This will advance the positioning of Australia as a premium brand and lead to a sustained competitive advantage and will assist the creation of more productive supply chains across the food industry.

The $10 million collaborative research hub includes $2 million funding from the Australian Research Council (ARC) under the Industrial Transformation Research Programme (ITRP).

Research collaboration opportunities

The research hub is able to assist businesses by conducting research in priority areas.

Mondelēz International and the University of Melbourne have committed to share research outcomes with small and medium-sized enterprises (SMEs) and the wider sector through an open innovation model in a transformational project with national benefits.

It comprises six research streams, namely Consumer Insights, Market Analytics, Sensory Analysis, Supply Chain Management, Packaging Innovation, and Encapsulation and Emulsion.

The Unlocking the Food Value Chain hub draws on research expertise from five University of Melbourne faculties and schools: Veterinary and Agricultural Sciences; Medicine, Dentistry and Health Sciences; Science; Business and Economics; the School of Engineering as well as Swinburne University of Technology. Mondelēz International contributes extensive research and marketing experience in the Southeast Asian region to each of the streams.

Industry services

The research hub is also able to assist businesses by providing market intelligence services. For example, the Market Analytics team has developed a novel intellectual property searching technique which analyses consumer-identified attributes of premium food products to allow businesses to understand food innovation trends and opportunities in China, Malaysia, Indonesia, the Philippines, Korea, Japan and India.

The hub has also refined Qualitative Multivariate Analysis (QMA), a method of comparing the marketability of new and existing products ASEAN markets.

Professor Frank Dunshea, hub Director and University of Melbourne Chair of Agriculture, said the development of the Unlocking the Food Value Chain hub had been guided by the needs of industry.

“The Australian food industry is driven by innovation – in how we target consumers, in the products we create, in how we market and deliver them,” he said.

“Businesses exporting to Southeast Asia need to understand their market and how they can deliver the best possible product at competitive prices. This hub provides services which will enable Australian businesses to do so.

“The Unlocking the Food Value Chain hub is working to help Australian businesses create products which have instant appeal for local consumers in South East Asian nations with technologically advanced processing and packaging.”

Nestlé Vietnam to invest USD 70 million in new factory

Nestlé Vietnam has begun construction of a new USD 70 million factory at Thang Long II Industrial Park located in Hung Yen province, North of Vietnam. The factory will be built on an area of 10 hectares to facilitate the company’s product innovations for the local consumption.

The ground-breaking ceremony was attended by Senior Vice President – Zone Asia Oceania Africa (AOA) Technical Management – Alfredo Fenollosa , the Chairman of Hung Yen People’s Committee, local authorities and the Ambassador of Switzerland in Vietnam.

This investment confirms Nestlé’s confidence in and long-term commitment to Vietnam. The factory is part of Nestlé Vietnam’s strategy to further reinforce its leading position as a nutrition, health and wellness company.

The new factory will help bring Nestlé products closer to the North consumers and will enable the company to further strengthen its supply chain to ensure freshness of its products to local consumers. The factory is expected to create 300 new job opportunities for the local people by May 2017.

Over the last 20 years, Nestlé Vietnam’s investment in Vietnam has been increased significantly – from USD 24 million in 1995 to USD 520 million in 2016.

Fonterra drops farmgate price again as global milk glut worsens

Fonterra Co-operative Group has once again reduced its forecast Farmgate Milk Price for the 2015/16 season from $NZD4.60 per kgMS down to $NZD4.15 per kgMS.

When combined with the earnings per share range of 45-55 cents, this means a total available for payout of $NZD4.60-$NZD4.70 per kgMS and would currently equate to a forecast Cash Payout of $NZD4.50-$NZD4.55 per kgMS to New Zealand dairy farmers after retentions.

CEO Theo Spierings said that although global demand remained sluggish, Fonterra supported the general view that dairy prices will improve later this calendar year. 

“The time frame for supply and demand rebalancing has moved further out and largely depends on a downward correction in EU supply in response to the lower global prices. These prices are clearly unsustainably low for farmers globally and cannot continue in the longer term.”

And despite the perceived increased demand from regions such as Asia, according to Kelvin Wickham, Fonterra’s Managing Director of Global Ingredients, the reality is somewhat more complex with the global demand for dairy continuing to lag. 

“The main factors affecting demand are declining international oil prices, economic uncertainty in a number of emerging economies and a slow recovery of dairy imports into China.”

“On the supply side, in Europe, milk volumes have continued to increase significantly and these surplus volumes are being exported. In addition, the Russian ban on European Union dairy imports has pushed more product onto the world market,” said Wickham.

“Declining international oil prices have weakened the spending power of countries reliant on oil revenues, many which are major dairy importers, contributing to the weaker demand for dairy being seen globally.”

“It is an imbalance between supply and demand that continues to put pressure on global milk prices,” added Wickham,

“Fonterra supports the general view that dairy prices will improve later this calendar year – but this largely depends on a downward correction in EU supply in response to lower global prices,” he said.

Asked about the pain that low farmgate prices give to the farmers, Wickham noted that there was no question this reduction will be tough on New Zealand’s farmers. 

“Fonterra will look at options to assist farmers with on-farm cash flows, underpinned by the expected improvement in dividend returns and the financial strength of the Co-operative.”

However, for the medium to long term outlooks, the global dairy giant remains optimistic, at least publically, with CEO Spierings pointing out, “while a unique series of global issues are impacting the forecast Milk Price, the business is performing well, as outlined in our business update in November, and is on track to generate improved dividend returns.”

“Fonterra has remained focused on reducing costs, increasing efficiencies and shifting more milk into higher value products,” 

“It is important to state that despite the current challenges, we have confidence long term international dairy demand will continue its expansion due to a growing world population, increasing middle classes in Asia, urbanisation and favourable demographics,” concluded Spierings.

Food Park set to open doors to Asia

A major food producing state in Australia is on the hunt for large-scale tenants to anchor a premium food hub and take its products to the world.

The South Australian Government will spend $7 million to attract anchor tenants to the Northern Adelaide Food Park, and to promote the use of renewable energy and energy storage solutions at the hub.

The 40ha food park will be built in the Parafield Airport precinct and will provide food manufacturers, food packaging specialists, cold-chain suppliers and transport companies with the opportunity to co-locate on the one site, with access to common infrastructure and services.

South Australia is renowned for world-class wine, seafood, fresh fruit and vegetables, meat products and grains. Its food and wine industries generated a record $18.2 billion in revenue in 2014-2015. Finished food and wine exports increased by 17 per cent in the past financial year.

The food hub site is located next to an airport and major road and rail freight routes.

Professor John Spoehr is director of Flinders University’s Australian Industrial Transformation Institute in Adelaide. He said there was exponential growth in demand for clean, green food, particularly in China.

“We’re wanting as much as possible to export not just the raw produce but also food that has a significant value-add associated with it, that’s where we can build a sustainable food industry and a manufacturing industry around a horticulture industry,” Prof Spoehr said.

“South Australia is respected as a place that is producing clean green food but the challenge is to scale up and improve quality and readiness for export in a way that also transforms the clean green food into manufactured food goods.”

Prof Spoehr said the government would be looking to secure an anchor company with “deep market connections into Asia and one that is also capable of working to the international food standards that are necessary to do that successfully”.

“The food industry is one of the brightest spots we’ve got for growth over the next two decades so we just have to get better organised and cluster together some of the companies that can really do it well to international standards,” he said.

Food SA Chief Executive Officer Catherine Sayer said the hub would encourage world’s best practice, collaboration and the opportunity to reduce manufacturing costs through new, efficient facilities and shared services.

“The South Australian food industry is very well networked and a hub, such as the Food Park, will continue to bring the industry together and will benefit those inside the precinct and other industry players who will want to use the facilities,” she said.

The $7 million government funding is part of a broader $24 million investment in new initiatives for northern Adelaide to drive economic and social transformation in the region ahead of the closure of General Motors Holden’s car manufacturing plant in 2017.

Other initiatives in the Northern Economic Plan include:

$10 million for a Small Business Development Fund for northern Adelaide, to help small businesses to grow and create sustainable jobs;

$4 million for a new Disability Employment Hub to train former automotive workers, upskill existing workers, and encourage university students to work in the disability sector; and,

$2 million to support an alliance of northern businesses to trial electric/diesel bus prototypes, manufactured in northern Adelaide.

South Australian Premier Jay Weatherill said Adelaide’s northern suburbs were dynamic and diverse and the investment would generate opportunities for the people who lived, worked, studied, and invested in the region.

“The plan identifies key industry sectors that could help to deliver a viable future for northern Adelaide and new careers for auto workers – agriculture, food and beverages; health, ageing and disability; construction and urban renewal; defence; tourism, recreation and culture; and mining equipment and technology services,” Weatherill said.

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Fonterra finds novel way to drive cream sales in China

Fonterra China Foodservices has partnered with the country’s biggest restaurant rating website, – a site with more than 180 million active users – to find the best cakes in China using Anchor Cream.

 Esther Chu, Vice President of Fonterra China Foodservices, said the campaign has made an immediate splash among Fonterra’s bakery customers and consumers in China.
“More than 5,200 outlets from 158 bakery customers in 241 cities across China have jumped on board and, in just three weeks, more than seven million votes have been cast by Chinese cake lovers,” she says.
“Before the campaign started, only 54% of the 405 participating recipes were topped with Anchor cream so to qualify all of them have converted, which will have a direct impact on our sales.”
With Christmas, New Year and Chinese New Year, along with a number of major festivals, all falling within the space of a few short months, winter is the peak season for cake consumption in China.
“The competition is perfectly timed to maximise brand and product exposure and drive cake sales, and the response from our customers and their consumers is testament to that,” says Chu.
Every drop of Anchor Cream used in the competition is sourced from the Co-operative’s new state-of-the-art UHT facility at Waitoa, in the Waikato, meaning it is the freshest whipping cream in the market, says Operations Manager Russell Muir.
“China is a real growth market for UHT cream, so we’re pulling out all the stops to ensure when our customers order Anchor they’re getting the freshest cream. We’ve put a programme in place to get our cream to market faster and have managed to cut that lead time down to around 33 days from Waitoa to China.”
Fonterra’s premium Anchor brand is already a leading player in China’s dairy cream segment. But the business has an ambitious goal to increase Anchor cream sales at a 42 per cent compound annual growth rate from F15 to F18. To achieve that, it will continue to work hard on converting bakery customers from using non-dairy to Anchor dairy ingredients.
“The market share of dairy cream in China’s booming bakery sector is still small compared to more matured markets. But with bakeries gaining popularity and Chinese consumers’ increasing awareness towards health, there has been steadily increasing demand for dairy nutrition here in China. This creates huge opportunities for our Anchor professional dairy ingredients business here,” Chu noted.
The campaign winner will be announced in January 2016.

Australians being urged to buy local ham this Xmas

Australia’s most awarded butcher, Adam Stratton, is urging people to “buy local” this Christmas when it comes to selecting their festive hams.

Adam Stratton is a master butcher and runs the successful Tender Gourmet Butchery chain in Sydney. 

“Around 22 million kilograms of ham is sold in Australia at Christmas, but unfortunately, not all of that is sourced locally,” said Stratton.

“I think customers should know if the ham they serve for Christmas lunch might have spent three months on a boat being shipped in from overseas. Who knows what refrigeration has been used to get the produce here.”

“Pork products are flooding the local market from places such as Scandinavia, Asia and North America. When it comes to Christmas hams, there is no substitute for local produce. Australian produce is a clear winner for appearance, taste and value.”

“Customers need to look for the hot pink Australian PorkMark logo – this is a guarantee that the ham is made with 100 per cent Australian home-grown pork.

“In fact, research shows that around 90 per cent of Australians prefer to buy Australian produce because they believe Australian pork is fresher, of a higher quality and tastes better,” he said.

Latest figures show that nearly $10 million worth ($9.4m) of imported pork arrives in Australia every week destined to be made into ham and bacon.

Dodgy prawn packaging costs Kailis almost $11,000

According to the West Australian newspaper, seafood company Kailis Bros has been hit with a $10,800 fine after the Australian Competition and Consumer (ACCC) found shoppers could be mislead by the labeling on its “Just Caught Prawn Meat” product.

The ACCC said the packaging showed a prominent image of the Australian flag on its front and back.

A map in the bottom right hand corner included the words “Australian caught raw prawns” printed in a circle around the map, and the packaging also contained the words “Australian Caught-Raw-Deveined-Tail Off-Prawn Meat” noted the West Australian story.

ACCC chairman Rod Sims said the company had been issued an infringement notice because the ACCC had “reasonable grounds” to believe the company had engaged in conduct likely to mislead the public.

“The ACCC believed that the images and statements on this product gave the misleading impression that it was packed and processed in Australia,” he said.

"Businesses cannot rely on fine print disclaimers to correct or qualify a prominent country of origin representation that is false or misleading,” Sims said.

Kailis chief executive Nicholas Kailis said the prawns were caught by Australian fishermen on Australian boats in Australian fishing zones and were sent to Thailand for peeling and processing for cost reasons.

There was no intent to deceive the public, noted Kailis.

Lower dollar sees “spectacular” food and beverage export increase

The food and beverage sector has benefited handsomely from the lower dollar, according to a new report on the sector, with exports up 28 per cent.

The ABC reports that the Australian Food and Grocery Council’s seventh annual State of The Industry report has found a “spectacular” surge in trade, with the trade surplus for food and beverages nearly doubled and total exports up from $20 billion to $26 billion. Beef exports recorded a strong increase among exports.

"So there is double digit growth across a whole range of categories including some you would not expect, like beverages, biscuits and confectionary, sauces and condiments and a whole range of processed foods," the ABC reports AFGC chief executive Gary Dawson as saying.

According to the report, the sector is worth $119 billion, and represents nearly a third of all manufacturing in the country. Over 40 per cent of its more than 322,000 employees live in regional areas. An additional 3,183 employees were hired during the year.

The drop in the Australian dollar relative to the US currency, from a $US 1.10 peak in 2011, has been a welcome relief for many.

Simplot, for example, had previously been in danger of closing its Devonport and Bathurst processing sites.

“…our estimation at the time was that the bad times were here to stay and it is now paying its way," said the company’s managing director, Terry O’Brien.

To read the State of The Industry 2015 report, click here.


Fonterra opens new manufacturing facility in Indonesia

Fonterra Co-operative Group has officially opened its new blending and packing plant in Indonesia – its first manufacturing facility in the country. 

 Chairman John Wilson said the plant is Fonterra’s largest investment in ASEAN in the last decade and will support the growth of Fonterra’s brands – Anmum, Anlene and Anchor Boneeto – in Indonesia. 
“Fonterra has been supplying high quality dairy nutrition to Indonesia for more than 30 years and today it is one of our most important global markets. The opening of our new plant is an exciting step forward in our relationship with the country and local dairy industry,” he said.
Fonterra Managing Director Asia, Middle-East, Africa (AsiaMEA) Johan Priem said the investment strategically positions Fonterra to help meet Indonesia’s continuous growing demand for dairy nutrition.
“The country’s large and increasingly affluent population is looking for highly nutritious foods for all ages. This is fuelling dairy demand growth, which is expected to increase by five per cent every year to 2020.
“Our new plant has the capacity to pack around 16,000 MT of dairy ingredients a year – that’s a pack of Anlene, Anmum and Anchor Boneeto every second, or 87,000 packs every day, which will go a long way in helping Fonterra meet this growing demand for dairy.” 
Mr Priem said the plant located in Cikarang, West Java is already having a positive impact on the local community. 
“We used local partners for the construction and, when running at full capacity, our new site will employ a team of 160 local employees meaning the investment will continue to flow through the local community.
“The site also utilises Cikarang’s dry port, allowing us to ensure all of our operations are located in one area. This will help us drive logistical efficiencies,” he said.
New Zealand Minister of Local Government, Social Housing and State Services Paula Bennett said this new facility reflects the strength of the relationship between New Zealand and Indonesia. 
“On behalf of the New Zealand government, I wish to congratulate Fonterra on today’s official opening – it reflects the increasingly interconnected nature of global value chains, and more closely links our economies together.
“Our governments have set a target to grow two-way trade to NZD4 billion by 2024 and dairy continues to be a critical part of this relationship,” Ms Bennett said. 
The plant received an A grade rating from regulators during its final stages of testing and commissioning, and has been in commercial operation since June 2015.

Asia leads iced coffee growth

The chilled ready-to-drink or iced coffee sector has experienced significant growth in recent years, with the majority of product launches taking place in Asia.

According to Innova Market Insights, in the 12 months to the end of July 2014 the iced coffee segment accounted for only 4.2 percent of global launches in the soft drink industry. However, this is up from less than three percent five years ago, and the actual number of launches  has nearly trebled over that time.

Asia accounted for 53 percent of RTD coffee introductions, ahead of Europe with 30 percent and North America with 11.5 percent.

Lu Ann Williams, director of innovation at Innova Market Insights, said “Although ambient canned and bottled coffee drinks continue to dominate globally … particularly in well-established markets such as those in parts of Asia and the USA, it is the chilled milk-based variants in lidded cups for on-the-go consumption that have been leading growth, particularly in the relatively undeveloped European market.”

The dairy industry has been driving activity, with launches including Emmi of Switzerland’s Caffe Latte range, Starbucks’ Discoveries range of RTD iced coffees from Arla, German company, J Bauer’s premium Mövenpick line as well as the Landliebe range from FrieslandCampina.

More recent activity has focused on the arrival of leading hot coffee brands into the chilled sector. A significant entrant to the German market in 2014 was Mondelez, which brought its market-leading Jacobs coffee brand to the chilled iced coffee market. During the summer of 2014, the world’s leading coffee brand Nescafe entered the European chilled dairy iced coffee market with the launch of Shakissimo, a range of three milk-rich coffees in lidded cups.

Earlier this year, Vitasoy launched its Soy Milky Iced Coffee product, in response to consumer demand for a non-dairy, lactose free iced coffee product.

Beth Roberts, senior brand manager, Vitasoy said “We asked our fans what flavour soy milk Vitasoy should develop next and iced coffee was a clear winner.”