More Aussie takeovers expected as global demand for food rises

With a proposed acquisition of GrainCorp firmly in the pipeline, industry speculation is pointing towards further Australian agribusiness takeovers.

As Archer Daniels Midland (ADM) seeks to close the takeover of GrainCrop, industry experts are contemplating which Aussie business will be next. Many have suggested that animal feed provider, Ridley Corporation, could be a likely candidate.

According to the Financial Review, agribusiness stocks are in demand after GrainCrop gave its backing to ADM’s $2.8 billion offer.

The purchase of GrainCrop follows foreign acquisitions of other key players including AWB and ABB grain.

According to Commonwealth bank analyst, Jordon Rogers, Ridley is in the spotlight due to the recent sale of its Cheetham Salt business to Hong Kong-based CK Life Sciences.

Dairy producer, Bega Cheese, is also said to be targeted due to its attractive assets in Victoria and Southern NSW, and Asia’s growing appetite for dairy products.

“What China is very low on consumption per capita is dairy, and (that’s) growing rapidly. Australia and New Zealand are the two lowest-cost producers of dairy,” one analyst said.

“Bega Cheese is majority-owned by dairy farmers so we don’t think they are a takeover target in the short-term. But in the longer-term, there are assets that would be desirable for an Asian food company, or an international dairy company,” the analyst said.

The United Nations’ Food and Agriculture Organisation has estimated that food production must increase by 70 percent by 2050 in order to meet global demands, a claim which is continuing to fuel the increased value of agricultural businesses worldwide.

Another industry analyst has said that securing supplies is a major issue as populations are growing rapidly and resources are fixed.

Other Aussie businesses said to be on the hit list include Goodman Fielder and Warrnambool Cheese and Butter. BBY analyst Dennis Hume believes that rising Asian demand could add between a 0.5 and one percent increase in agribusinesses’ profits based on long term forecasts. 

 

Calls to strengthen standards for NZ baby milk exports to China

 

New Zealand is being urged to strengthen the standards for infant formula manufacture and to thereby realise the full potential of its exports to the Chinese baby milk market.

As stuff.co.nz reports, infant formula exports to China are estimated to be worth NZ$8.2 billion to the economy.

In an effort to highlight New Zealand’s anti-counterfeiting efforts, the New Zealand Infant Formula Exporters Association will make a presentation to the Chinese media at this month's Mother and Baby Expo in Beijing. The presentation will outline its work accrediting suppliers and approving brands.

And Chief Executive of Westland Milk Products Rod Quin, who recently visited China as part of a trade and political mission led by Prime Minister John Key, has also called for an extra focus on infant formula standards.

Historically, the counterfeiting of infant formula has been a problem in China and the nation understandably takes a strong stand on the issue.

For example, in 2008 the nation experienced a melamine baby milk powder doctoring scandal which resulted in the deaths of babies and long term kidney problems.

The New Zealand Ministry for Primary Industries (MPI) is understood to be working on the issue of standards alignment.

The importance and sensitivity of the issue were highlighted earlier this year when a chemical residue was found in Fonterra milk powder.

The MPI’s handling of the situation came in for much local criticism at the time.

Struggling yoghurt firm wins support from creditors

 

Tamar Valley Dairy has been backed by creditors to continue production, in spite of its short-term liquidity problems.

According to the Mercury, Tamar Valley Dairy director Guaraci Matteo explained that the company called creditors in to explain the liquidity problems. Following a discussion and a vote, the creditors offered their support for the yoghurt producer.

Matteo confirmed that there was no sunset clause on the support and none of the company’s 100-plus employees would lose their jobs.

Tamar Valley Dairy was not in administration or receivership and had simply called the meeting to keep creditors informed.

"We will review the situation from time to time and keep working closely with them but they have been working with Tamar Valley Dairy for 15 years so there was no need for drastic action," he said.

The problems stem from a planned $20 million investment which has been delayed. The investment involves a new factory and is intended to allow the company to supply Coles, Woolworths and Fonterra with 360 tonnes of yoghurt a week.

Despite reported offers from interstate firms to take between $5 million and $8 million in equity, Matteo said there would be no changes in ownership or shareholding of the company.

NZ dairy partnership milking demand for a2

Two New Zealand dairy companies have formed a partnership to take advantage of the growing global demand for a2 milk products.

Synlait Milk and A2 Corporation have teamed up and will next month despatch the first consignment of a2 Platinum infant formula to China – the culmination of an 18 month process which saw the production of the infant formula and other a2 ingredients.

A2 milk products contain only the A2 version of the beta casein protein which is more comparable to protein that mothers naturally produce than other versions of the protein found in standard milk. 

The a2 Platinum infant formula will be available in Australia and New Zealand later this year.

Synlait Milk general manager Nutritionals, Tony McKenna, said that on current projections, a2 milk from certified herds will grow to be eight percent of the Company’s supply.

"Synlait is unique in the way our supply base is structured to deliver the right type of milk to meet specialised demand. Our plant is also unique in that we can keep specialised milks separate and process each run to meet the exacting specifications for high value end products.

"Integrity is in the makeup of every Synlait Milk product. It’s a core value we share with A2 Corporation whose business is founded on delivering the healthiest and best tasting milk and dairy products particularly for those consumers who have digestive discomfort issues with ordinary milk," he said.

Synlait Milk will be processing a2 milk from 10 suppliers from August this year, and McKenna expects many of them to achieve the internationally-accredited ISO 65 certification through Synlait's Lead with Pride program, which hallmarks excellence and sustainability throughout all aspects of operations.

This will make the suppliers the first in Australasia to gain ISO 65 accreditation.

Earlier this year, Australia experienced a shortage of baby formula after health scares in China caused shelves here to be stripped.
 

Coles’ milk deal gives supermarket suppliers a reason to be sour

 

Earlier this month, Coles and Murray Goulburn announced a ten-year deal that is likely to have significant consequences for the dairy industry, as well as Australia’s grocery sector more broadly.

Starting next year, Murray Goulburn will supply Coles’ private label milk. At the same time, its Devondale brand will be reinvigorated, with its cheeses returning to Coles’ shelves and – at least initially – Coles becoming the exclusive supplier of Devondale fresh milk.

A deal of this length carries with it considerable risk for both parties. Should market dynamics develop unexpectedly over the next decade, Murray Goulburn or Coles may well suffer. Coles might be locked into buying at prices which are no longer competitive, leaving it exposed on an extremely important product; conversely, Murray Goulburn might have committed itself to cost structures that it can’t sustain long-term.

Of course, the contract is likely to include mechanisms for price adjustments to account for such uncertainties. But as many lawyers will tell you, such clauses can often have unexpected shortcomings when reviewed years later. Try to imagine the world in specific commercial detail from now until July 2024 – that’s what the parties and their respective advisors have had to do.

At least Coles and Murray Goulburn have accepted these risks with their eyes wide open. By far, the parties most exposed by this deal are the other major dairy producers, such as Lion and Parmalat. Close behind them is the already over-worked supermarkets team at the Australian Competition and Consumer Commission.

On April 19, the ACCC granted approval to New South Wales farmers to collectively negotiate with Woolworths. This again makes life hard for the likes of Lion which, until Murray Goulburn came along, was Coles’ supplier.

From the ACCC’s perspective, that might just be competition at work. Indeed, superficially, there’s nothing to suggest the Coles-Murray Goulburn deal would raise competition concerns. Right now, Murray Goulburn doesn’t supply fresh milk at all, so how could it?

But the deal’s duration means that potential competitors are locked out of a significant portion of the grocery market. Depending on what else they can do with their milk (obviously Murray Goulburn has managed just fine not supplying fresh milk), this may reduce competition in the dairy sector.

The co-operative structure of Murray Goulburn also provides an interesting twist. Arguably, it’s the absence of a profit-making middleman that provides the foundation for this win-win arrangement. It also means that more dairy farmers will inevitably join the Victorian-based co-operative, particularly given its announced foray into New South Wales.

But the move of dairy farmers to Murray Goulburn will also affect the other major producers. Not only is their access to customers restricted, but they may also have to pay more for their inputs as their supplier base decreases. Over time this may reduce their economies of scale, making them less effective competitors.

The deal may also have broader ramifications. A logical consequence of a duopoly is a reduction in competition in all “upstream” markets. That is, over time, we would expect to see fewer suppliers to the supermarkets. This can create a vicious circle: the more that related markets become concentrated, the harder it is for effective competition to emerge in supermarkets. Smaller players can’t access the large-scale efficient producers, who are locked up by the major chains, and there are fewer “left-over” suppliers to deal with.

The parties haven’t sought authorisation from the ACCC for the deal. As such, they are confident that it doesn’t give rise to a substantial lessening of competition. If it did, the ACCC could bring court action, seeking an end to the arrangement as well as substantial penalties.

If the ACCC is concerned, at least it has time to make its assessment. Technically, it’s got another 17 years or so. But the market will adjust to this deal and, as they say, it’s hard to unscramble an egg. If the ACCC is worried, it needs to act sooner rather than later.

Regardless of ACCC action, it’s hard to see the milk wars continuing. In announcing the deal, Murray Goulburn said that the shelf price of milk will not affect returns to its farmers. This suggests prices are locked in — if so, Coles is hardly likely to take a hit on milk for the next decade. While consumers loved the savings (estimated to be $70 million a day), $1 a litre was widely considered to be unsustainable. At least dairy farmers can breathe more easily now.

A couple of years ago, milk was at the vanguard of the relaunch of private labels by the major supermarket chains. Now, it might be surfing the wave of the next big change. First, we had fewer supermarkets; next, will we have fewer suppliers?

Alexandra Merrett was previously a senior enforcement lawyer at the ACCC.

The Conversation

 

 

 

 

 

 

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

NZ to build new milk soda factory

After spending nine years developing a carbonated milk drink, founder of MO2 drinks, Richard Revell, is looking to build a factory in New Zealand to expand production capabilities.

According to stuff.co.nz Revell is hoping to build a plant in Waikato that would produce 9,500 250ml bottles an hour. He's also looking for outlets outside the town to sell the six carbonated milk drink flavours (iced coffee, lime, mango, pina-colada, vanilla-bean and wildberry).

Revell is currently using a machine which fills 1,600 bottles a day at The Food Bowl in Auckland.

As part of the research and development process, Revell distributed the MO2 drinks through 20 Hamilton retailers and was told by consumers that they wanted something different from carbonated milk-based cola and lemonade.

"They loved the concept, but they didn't want a cola and lemonade," Revell told stuff.co.nz.

"They wanted a milk-flavoured carbonated milk."

 

NZ ministry apologises to China for residue in milk powder

The New Zealand Ministry for Primary Industries (MPI) has apologised to the Chinese government for the way it announced that a chemical residue had been found in Fonterra milk powder.

Stuff.co.nz reports that documents released under the Official Information Act show that the MPI made a great effort to make sure that the Chinese had not been insulted by the issue.

The documents show that MPI deputy director-general Carol Barnao wrote to food authorities and regulators in Hong Kong, the Philippines, Malaysia, Macao, Singapore, Taiwan and China in late January and early February.

In her letters Barnao explained why DCD, which had been used as an environmental aid in New Zealand, had been taken off the shelves. It explained how many samples had been tested as positive in, or exported to, each of those countries and the maximum detected level of contamination.

Barnao had also written to the General Administration of Quality Supervision, Inspection and Quarantine in Beijing a few days earlier.

Noting that the Chinese regulator "might appreciate hearing direct" from the ministry, she said, "You might also be interested to know why we considered it necessary to go public with this release, when there is no food safety issue in the products derived from animals that might have grazed in pasture where DCD had been applied last spring.

"You will know that New Zealand takes the stance that we like to make known any findings we have that suggest there are new or unexpected results connected with agricultural practices . . . On this occasion, because there were no food safety implications from the DCD findings, we did not go proactively to counterpart regulators with advance warning of the press release.

"With hindsight we recognise that you would have been better equipped to deal with questions if you had known beforehand. I apologise if our omission inconvenienced you."

Low levels of DCD were found in Fonterra milk powder samples last September. The levels of residue were so low that they didn’t represent a threat to public health.

However, controversy has surrounded the way the issue was handled and the way interested parties were informed of the problem.

 

Ammonia leak at Oak factory

Workers at the former Oak factory in Hexham had to be evacuated over the weekend after an ammonia leak at the site.

According to The Herald, the minor leak came from a valve in the old section of the factory, which is now owned by the National Foods plant.

Fire brigade crews arrived at 6.30am on 21 April and hazmat crews identified the leak and repaired the pipe.

While workers were evacuated, no one was harmed as a result of the leak.

 

New MD at Fonterra

Fonterra Co-operative Limited has announced the appointment of its new Australian managing director, Judith Swales.

Swales was previously MD at Heinz Food Australia and also has experience at Goodyear Dunlop, Angus and Robertson as well as WH Smith and the food division of Marks and Spencer in the UK.

Fonterra chief executive officer, Theo Spierings, said "I am confident Judith can provide the leadership to accelerate the turnaround and growth of our Australian business.

"Judith has been credited with leading successful turnarounds and generating extremely strong business results. She has extensive experience across retail, sales, marketing and manufacturing operations, together with a strong track record in developing talent and building leadership within businesses."

Swales said she sees huge opportunity in Fonterra's business and plans to establish closer relationships with customers and end-users.

"It’s no secret that the Australian food manufacturing sector is facing some tough challenges. Fonterra has invested in a complete farm-to-consumer supply chain in Australia, has good relationships with farmer suppliers and customers, and the best dairy know how in the world. As I see it the challenge is to get even closer with our customers and consumers and really understand how we can deliver to them the next big thing in dairy," she said.

 

Australia and Japan close to free trade deal

Australia is close to securing a free trade deal with its second largest trading partner, Japan.

As The Australian Financial Review (AFR) reports, progress on access to Japan’s tightly protected agricultural sector has meant that a deal is now close to completion.

Originally, Australia had pushed to abolish all tariffs but a compromise has meant that Japan will be able to retain tariffs on rice but reduce tariffs on other agricultural goods such as beef and dairy products.

On the other side, Australia is aiming to retain its five percent tariff on Japanese cars which currently raises $940 million a year.

The Department of Foreign Affairs and Trade said on Wednesday that the text of the FTA is close to completion. However, some issues around final market access and investment have yet to be resolved.

“The government is working hard to conclude an FTA . . . as soon as possible and negotiations are at an advanced stage,’’ a spokesperson told the AFR.

Australia's two-way trade with Japan is worth up to $71 billion a year. A feasibility study which was completed before negotiations between the two countries estimated a deal would add $39 billion to Australia’s gross domestic product over 20 years.

Australia has been aiming to complete the deal before Japan formally joins the US-led Trans-Pacific Partnership. This trade bloc includes 11 countries and more than 700 million people. It would be worth $US20 trillion.

Dairy industry angry over DCD secrecy

Fonterra and the New Zealand government will be under industry scrutiny this month after failing to inform other dairy exporters of dicyandiamide (DCD) residue discovery.

Members of the Dairy Companies Association of New Zealand (DCANZ), whose chairman is Fonterra director Malcolm Bailey, will meet Ministry for Primary Industries (MPI) bosses on April 26.

Independent processors and the public were kept in the dark about the chemical residue discovery in Fonterra testing some of its dairy products until four months later, when MPI announced it in late January, stuff.co.nz reported.

Laurie Margrain, chairman of Open Country Dairy, the country’s number two dairy exporter, said the company would be looking for protocols and answers to avoid this debacle.

The Waikato Times attained MPI documents under the Official Information Act, which said MPI decided in November not to disclose Fonterra’s September finding with anybody else.

DCD residue was also discovered at very low levels in dairy products other than milk powder, as first thought. More testing found it in milk protein concentrate, colostrum, nutritional powders and UHT milk.

DCD, which is chemically related to malmine, is used distinctly in New Zealand agriculture, especially dairying, on pasture as a nitrogen inhibitor.

MPI said there was no food safety risks associated with it.

Fertiliser companies like Ballance and Ravensdown no longer sells it.

MPI’s shock announcement in late January triggered alarm in overseas dairy markets, especially China, which had a fatal melamine infant formula poisoning scandal in 2008.

The harsh reaction drove Fonterra’s chief executive to declare the DCD issue a crisis. But according to the documents, Fonterra had been worried about international trade reactions for months.

MPI had a public relations strategy to control the DCD issue since last year. This consisted of having a ‘holding’ PR plan for over Christmas if the DCD issue became public.

However, the documents do not bring to light how involved DCANZ was before the public announcement in January.

MPI said DCANZ was ‘part of a working group’ on DCD. But non-Fonterra DCANZ members said they were unaware of the DCD issue much before the public.

Dairy producers unconvinced on Coles’ milk deal

Dairy producers remain cynical on Coles’ new milk deal with dairy co-operatives.

The supermarket giant signed long-term deals worth $2.6 billion with Devondale and Norco on Wednesday.

Nobby dairy farm owner John Saville said farmers will only gain from the deal if Coles replaces its $1 per litre milk with a higher-priced alternative.

“If Coles are going to pay a premium on the milk, and it’s not going to go a dollar a litre, as long as that nonsense stops, it’ll help the suppliers.

“If this private labelled milk goes in as cheap milk, it’ll have the same effect,” he told The Chronicle.

Coles and Woolworths have attracted extra shoppers by heavily discounting perishable items such as milk, as people need to shop for it frequently. This has taken shoppers away from convenience stores and brought them to supermarkets.

Saville said the Coles deal looks like a measure to boost public relations.

“Being cynical I’d say they’ve picked the cooperatives for the PR exercise.”

On an episode of ABC’s The Checkout, Chris Reucassel said the deal could mean the supermarket giants would reduce processors’ margins and distribute those gains with the farmers’ collective, making lower milk prices more sustainable.

This is different from the Woolworths model, which only provides a premium farmer-made brand.

Lion and Parmalat control 90 per cent of the market for processing fresh milk. While Lion processes Pura and Dairy Farmers, and Parmalat processes Paul’s milk, they also process private label milk for Coles and Woolworths.

Reucassel also said processors pay farmers the same price for milk, regardless of the label. While it might be too early to know the long term consequences of the Coles milk deal will be for farmers or consumers, they concluded that this will negatively affect processors.

Coles locks in milk deal with MG

In a landmark deal, Australia’s largest dairy processor, Murray Goulburn Cooperative, will supply Coles with house-brand milk for 10 years.

The deal, to be announced today, is understood to be worth $2 billion over the 10 years for the farmer-owned cooperative, which has 2480 suppliers.

Murray Goulburn has also hinted it will enlist new suppliers throughout Victoria and into new supply regions to deliver the 200 million litres required per year.

The deal includes the NSW-based cooperative Norco. The two cooperatives will replace house brand-suppliers Parmalat and Lion in these states.

This is MG’s first venture into fresh milk and comes after the cooperative restructured its flagship Devondale brand last year.

Two new purpose-built processing plants are also in the offing for the company at a cost of $120 million, one in Melbourne and another in Sydney.

The house brand milk will fill the private-label bottles from the middle of next year throughout Victoria, NSW and Southern Queensland.

The deal includes:

  • The national relaunch of Devondale fresh milk
  • Stocking of Devondale cheese at Coles
  • A price premium to suppliers protected by a rise-and-fall contract provisions
  • A five year supply deal for Norco
  • Expansion of processing capacity by Norco

The milk price Coles pays under the agreement locks in a premium that will deliver further profits to Devondale dairy farmers over the life of the contract, an MG statement said.

Price fluctuations in the international dairy markets or movements in the Australian currency will not affect the premiums.

Devondale managing director Gary Helou said the entry of Australia’s farmer owned cooperative into this market eliminates the middle man and hands over profits directly to farmers.

“The daily pasteurised milk segment is currently mainly supplied by foreign owned companies that repatriate their profits to overseas shareholders,” he said in a statement.

“This is a logical growth opportunity that extends Devondale’s domestic presence in consumer markets and is expected to lock in returns that will be paid to farmers through higher farm-gate prices. These higher prices will benefit all dairy farmers.”

Coles merchandise director John Durkan told Weekly Times Now the supermarket had been negotiating with MG and Norco for up to 18 months and the deal offered supply-chain transparency with sustainability and security for dairy farmers.

“One thing we realised out of our milk contracts (was) we weren’t getting the transparency that we needed and we weren’t close enough to our farmers to be able to do that,” he said.

“This deal clearly allows us, with both of these great co-ops, to get much more transparency, security and sustainability for the farmers.”

Durkan said this deal is in response two things.

“One, consumers, who say they want to make sure that we are responsible with the dairy farmers in Australia and this is a clear demonstration that we take that very seriously by giving transparent, open, long-term agreements.

“So it allows investment.”

He believes the price paid to dairy farmers would be visible as MG and Norco publish farmgate prices.

Coles will still source milk from existing eastern state suppliers Lion and Parmalat for its north Queensland, northern Territory, South Australian and Tasmanian supply.

United Dairy Farmers of Victoria president Kerry Clalow said the deal sets a premium for milk that dairy farmers need.

”It’s also great to hear Coles has agreed to res-stock its shelves with Devondale-branded fresh milk and cheese,” she said.

Mid–year end to global dairy price rush

The recent surge in global dairy commodity prices is only likely to last as long as mid-year.

Economists have suggested that the spike which will serve as a positive start to the new season for Fonterra will soon lose traction as a result of reduced pressure which had caused a decline in dairy production from both Australia and New Zealand according to stuff.co.nz

Fonterra had recently enjoyed a surge of 14.2 percent on the most recent auction which was the eighth straight gain in average price. Doug Steel, BNZ’s senior economist, believes that export demands, particularly from China are further fuelling the price hike.

Despite a long and slow recovery expected for New Zealand’s drought stricken North Island, Steel urges producers not to become too optimistic about the continuation of the current prices into the new season as the Northern Hemisphere’s dairy season gets underway.

Con Willians, ANZ’s rural economist, also believes that the strong prices will provide benefit into the new season. He noted a 28 percent rise per tonne to US $5142 in the average price of skim milk and a 7 percent rise in the price of wholemilk powder in last week’s auction.

However contract prices for Fonterra wholemilk powder to be supplied in August hit US $6100 making the price levels self-limiting and benefit from the price hike hard to measure.

The short term payout for now may lift, but with a strong rise in the New Zealand dollar, exports will be affected.

New Zealand is the world’s largest dairy exporter.

Cheese company recalls feta products

A South Australian cheese company recalled several feta products after failing an E. Coli bacterium test.

Alexandrina Cheese Company recalled four feta cheese products that were sold in stores across South Australia and Alice Springs from March 15, the ABC reported.

The cheeses were recalled from fruit and vegetable shops, Foodworks, IGA and other independent supermarkets.

The Food Standards Australia New Zealand (FSANZ) was informed of the recall on March 29.

The products recalled were Marinated Feta (Mustard Seed), Marinated Feta (Chilli), Fleurieu Feta Vacuum Pack and Fleurieu Feta in Brine.

The FSANZ said customers who bought the products should return it to the place of purchase for a full refund.

Diary farmers to skip middleman in Woolworths deal

A group of dairy farmers from the Manning Valley in NSW is looking to skip the middleman by launching a new brand of milk, dealing directly with Woolworths.

The AFR is reporting a deal is close to being sealed, with the Manning valley farmers already loged a collective bargaining notification with the ACCC.

The new milk brand, potentially named Farmers Own milk, may be in shops by the middle of the year, with the deal being revealed earlier this month.

Woolworths general manager Pat McEntee told the AFR that the direct sourcing model already works well for other fresh produce lines.

“For us to transition into our dairy business with the same model we have in other fresh sourcing makes sense for us” he said.

“This trial, although we believe it will deliver commercial benefits to the farmer, we also see it as a freat first step towards bringing the farmer closer to the consumer”

The deal could see farmers get an extra 10-14c per litre.

Chobani yoghurt not Greek says UK court

Up and coming yoghurt manufacturer Chobani has lost a court case in the UK over the branding of its US made yoghurt as Greek.

According to Just Food, the trial originated after rival Fage claimed that the labelling was confusing for UK consumers.

Mr Justice Briggs granted a permanent injunction and said Fage had succeeded in its claim to "restrain Chobani from passing off its American-made yoghurt in England and Wales under the description Greek yoghurt"

The issue highlights some of the problems with EU intellectual property laws, with many generic  products with region based names, from Champagne to Danish feta, falling foul of regulations.

Chobani recently opened its $30 million factory in Dandenong, Victoria, creating over 200 food manufacturing jobs.

Almond breeze chocolate flavour

Product name: Almond Breeze Chocolate

Product manufacturer: Pactum/Freedom Foods

Ingredients: filtered water, raw sugar, almonds (2%), cocoa powder (0.6%), calcium carbonate (ground limestone), sea salt, stabilizer (carrageenan), emulsifier (sunflower lecithin), natural flavour.

Shelf life: Refrigerate for longer shelf life.

Packaging: Sold in 1L individual cartons. Sold to stores in packs of 12.

Product manager: Roger Ringwood

Brand website: www.almondbreeze.com.au

What the company says

Following the successful launch of Almond Breeze last year, the leading international brand of almond milk is expanding its range with a low fat and dairy free chocolate version.

Set to hit the shelves just in time for Easter, Chocolate Almond Breeze is a healthy non-dairy treat that is easy to digest and nutritious at the same time. The chocolate version has just 120 calories per 250ml serving making it a healthy alternative to chocolate skim milk and soy.

Roger Ringwood, Country Director for Almond Breeze said: “We are thrilled with the success of Almond Breeze and are excited with the opportunity that the new chocolate version brings to the brand. There has always been a demand for a healthy alternative to those products we love, such as chocolate milk. Chocolate Almond Breeze appeals to the whole family and is ideal for anyone looking for a guilt free treat and a healthier lifestyle.”

Say cheese: WCB and Kraft Foods announce partnership

Warrnambool Cheese and Butter Factory Company  (WCB) and Kraft Foods Australia have announced they've partnered up in a long-term supply agreement, which will see Kraft Foods produce specially formulated cream cheese under WCB’s Sungold brand.

The product will be exported to WCB customers in Japan, China, Singapore, Malaysia and the Middle East.

Effective from the second quarter of 2013 the agreement will provide a staged increase of up to 5,000 metric tonnes of product per annum for WCB exclusively.

The cream cheese agreement follows the recent announcement of a further collaboration with Kraft Foods, with WCB developing low fat cheese for Kraft Foods, marketed under the Livefree brand (pictured). The cheese contains 80 percent  less fat and half the energy of regular tasty cheese.

Kraft Foods’ managing director of Foods,Darren O’Brien, said that collaboration was proving to be a key ingredient for business success. “Together, Kraft Foods and WCB have combined their expertise and resources to deliver two new exciting innovations," he said.

“Australian food companies are strong in food innovation and our products are trusted around the world, so it’s great that we’re making the most of our local manufacturing capabilities, supporting our farmers by sourcing locally and capitalising on this brilliant export opportunity.”

WCB CEO and managing director, David Lord, said “It's an exciting time for WCB, with the cream cheese and low fat cheese agreements building on an already strong relationship with Kraft Foods.

"Both agreements are consistent with WCB’s strategy to build a portfolio of higher margin products and deliver more customer specific applications.”

 

Woolies tries to improve image with new milk plan

Woolworths is planning to bypass the middleman, buying milk directly from farmers rather than dealing with processors, in an attempt to prove it doesn't exploit producers.

According to AFR, farmers are unsure if dealing directly with the supermarket giant will be of benefit, with concerns that Woolworths might impose extra conditions and further dry up costs.

The National Farmers Federation is supporting the proposal, however, with president Jock Laurie arguing it could give farmers more bargaining power.

"When you're dealing directly with farmers and understanding the costs of production, you can take all that into consideration at the time of negotiation of the contract," he told AFR.

Woolworths plans to market the milk under a new brand, 'Farmer's Own' which it hopes will convince consumers that it supports primary producers.

In order for it to go ahead, however, farmers would need to get authorisation from the ACCC to bargain collectively with Woolworths rather than the processors.

News emerged earlier this week that WA dairy farmers are reluctant to sign long term contracts with milk processors, for fear that they won't see strong returns, despite the current milk shortage and a rise in demand.