AFGC releases report focusing on new Asian export opportunities

The Australian Food and Grocery Council (AFGC) has partnered up with Austrade to publish a series of reports that deepen the Australian food and beverage manufacturing industry’s understanding of opportunities that exist in a number of Asian markets.

The reports, which were released last week, examine opportunities for specific manufactured food products including snacks, beverages, baked goods and condiments in Malaysia, Thailand and China.

The AFGC’s CEO, Gary Dawson said that the reports provide valuable information on export opportunities in Asia which have previously not been explored in depth.

“Australian and international research has focussed on export opportunities for products such as dairy, meat and wine across Asian markets but there has been little focus on the opportunities for manufactured food products such as snacks, non-alcoholic beverages, and confectionery,” said Dawson.

“AFGC Market Insights focus on three key markets: Thailand and Malaysia because of improved access under the respective trade agreements; and China due to the long term food consumption forecasts.”

Dawson says that exporting to Asia can be highly challenging for Australian manufacturers, particularly SME’s with limited resources, and that the government needs to work with industry to help facilitate trade.

“It’s critical for government agencies and industry to work together to facilitate trade and innovation,” he said.

 

Goodman Fielder accepts $1.3b takeover offer

One of Australasia’s largest listed food companies, Goodman Fielder has accepted a $1.34 billion takeover bid which will see the business fall into foreign hands.

First Pacific, a Hong Kong-based investment firm together with Singapore-based Wilmar International will pay 67.5c per Goodman Fielder share under the agreed Scheme Implementation Deed. Current shareholders will also receive a one cent dividend as part of the agreement.

Business Spectator reports that the agreed bid has fallen short of the company’s most recent offer by 2.5c per share, representing a 3.6 percent discount on the previous offer of 70c.

The board of Goodman Fielder has unanimously recommended that shareholders vote in favour of the scheme, and will appoint an independent expert to determine whether the Scheme is fair, reasonable and in the best interests of Goodman Fielder shareholders.

“In reaching our conclusion to unanimously recommend that shareholders vote in favour of the Scheme, the Board concluded that the proposal represented an attractive value outcome for shareholders,” Chairman of Goodman Fielder, Steve Gregg said.

Gregg said that the move represents a positive outcome for the company’s employees, customer and consumers, and additionally provides an opportunity for the business to further leverage its brands across Australia, New Zealand and grow facilitate growth across the Asian region.

“In the absence of a superior proposal and subject to the independent expert concluding that the Scheme is fair and reasonable and accordingly in the best interests of Goodman Fielder shareholders, the Board will unanimously recommend that shareholders vote in favour of the Scheme,” said Gregg.

Subject to the conditions of the scheme being satisfied, the Scheme is expected to be implemented by the end of the year.

In additional to the Scheme, Goodman Fielder also announced that it expects to record a non-cash impairment charge in the range of A$300-400 million in its groups accounts for the year ended 30 June 2014.

The business expects the charge to be predominantly against the Australian/New Zealand Baking business and the final impairment charge will be determined once the financial statements for FY14 are completed.

 

PURA develops test to confirm A2 content of milk

One of Australia’s largest milk brands, PURA has developed a test to verify the A2 protein content of its milk.

From 1 July, all of PURA’s milk in Victoria will have been tested to confirm that it naturally contains both A2 protein, as well as A1.

PURA says that the move was motivated by a study conducted by the company that revealed that more than three quarters of Australians surveyed wanted to know more about the nutrients in their food, and more than half wanted to know if the milk they’re buying contains A2 protein.

“There’s been a lot of noise about milk lately and consumers are telling us they want more information about what’s in it,” said Jeff Swan, category marketing director, Milk at PURA.

“We’ve responded to our consumers and spent 12 months developing a new and specialised test that verifies the A1 and A2 protein composition of our milk. Of those proteins, our tests to date confirm that PURA milk naturally contains 50-70 percent A2 protein.

“PURA is the first everyday milk brand to introduce testing like this, and as with the introduction of our permeate-free milk, we expect Australian consumers will welcome the initiative.”

PURA’s research also found that 75 percent of consumers surveyed are actively looking at labels to check what ingredients are in the food that there are consuming.

“Clear information that’s based on a robust testing method and provides more transparency gives Australians another reason to drink dairy every day,” says Accredited Practicing Dietitian, Geraldine Georgeou.

“Cow’s milk is a great source of calcium and protein that helps to build muscle, lower blood pressure and protect teeth from decay. A1 and A2 protein are both high quality milk proteins that are found naturally in milk,” she added.

Initially launched in South Australia as test market in May, today will see the launch of the milk in Victoria with the rest of Australia to follow in July.

 

Spring Gully Foods announces rebrand

Exactly 12 months after creditors voted to return the company to family control, Spring Gully Foods has announced it’s undertaking a rebrand and will release a new range of products in time for summer.

The South Australian based food manufacturer entered voluntary administration in April 2013 with more than $3 million in debts, but just a couple of months later in July, the company's 300 creditors voted to accept a Deed of Company Arrangements to return 100 cents in the dollar on outstanding debts. The company was then returned to its directors.

Strong community support boosted orders and sales throughout the administration process, and has continued to secure the future of the manufacturer, with Spring Gully today announcing repayments to unsecured creditors are on schedule and sales are running more than 20 percent above historic levels.

The company also announced that a new advisory board will be in place by the end of this month to guide the company’s growth; new machinery is being installed at the Dry Creek factory and arrangements are being made to export to China.

Spring Gully’s managing director, Kevin Webb, said new Spring Gully labels are currently being printed and will start to appear on supermarket shelves by the end of July.

“The new labels are eye-catching and modern, but retain enough characteristics of the old label to ensure they are readily identified on supermarket shelves,” he said.

“The new labels will be used on all Spring Gully branded products and will also be used on exports.”

Webb said community support has been instrumental in keeping Spring Gully afloat.

“We were initially worried about pantry fill and whether sales would fall once people had made their initial purchases, but this did not take place and people have kept on buying,” he said.

“We have now paid down 36 cents in every dollar owed to unsecured creditors and are on track to repay 100 cents in the dollar in line with the schedule agreed to at the second creditors meeting last year.”

He added that the company has also experienced a honey shortage due to dry conditions around the country, but volumes are expected to recover later this year and Spring Gully will introduce a new honey range later in 2014, with the Leabrook Farms label being retained as an export brand.

 

Robots: boosting efficiency and safety for small manufacturers

Next generation automated technology is providing an innovative solution to critical issues facing many small food manufacturers, while also streamlining the production cycle to boost safety and efficiency.

A new generation of lightweight robots means small food manufacturers in Australia can now enjoy the benefits of automation, previously only available to larger organisations. Many small businesses are turning to robotic technology to transform the entire lifecycle of the food manufacturing process. In fact, the recent interest by small food manufacturers has pushed Australian robotic purchases to record highs.

Through the implementation of new lightweight and compact robots, food manufacturers are now able to build a modern manufacturing workplace – automating industrial processes and upgrading the labour force to operate machines instead of having staff perform monotonous and repetitive manual tasks.

Man or machine
Industrial robots have long excelled at the kind of manually repetitive tasks that employees can find undesirable. Indeed, large food manufacturers in Australia have long used robotics in food processing throughout the production process.

More recently, small manufacturers have turned to more affordable robots to help free-up staff from unstimulating or labour-intensive roles. In small manufacturing facilities, even skilled workers can spend more than 32 hours per week on repetitive activities such as picking or packaging.

Lightweight industrial robots can take over these activities, while also significantly slashing the time taken to complete each action. For example, in a small bottling plant a single robot is able to complete the packaging process more than 35 percent faster than manual handling. The robot is used to pick-up two or three bottles simultaneously from the production line every 2.5 seconds, orienting them, and placing them in the packing machine.

Such a set-up can enable organisations to utilise staff more effectively – freeing them up to perform more skilled activities, such as operating machinery. 

A move to modularity
Today’s emerging manufacturing technologies are extremely adaptable – both in terms of function and the way they integrate into the overall production process. The highly configurable new technologies can significantly improve throughput time – particularly in the areas of preparation and set-up, as well as reducing inspection and put-away time.

For industrial robots, the push for lightweight machines means they can be mounted on the wall or shifted from one location to another, adding flexibility to the manufacturing process, thereby saving money on valuable real estate costs. This is a significant advantage for manufacturers when they choose to expand, move or grow their production line.

Also, small batch and seasonal productions are no longer stumbling blocks for businesses as the robots can be relocated with ease without the need to overhaul the floor layout and can be assigned to carry out different tasks in accordance with demand.

One of the most appealing aspects of the new generation of industrial robotics to small businesses is that they no longer require specialist knowledge to operate. Modern machines can now be completely reconfigured and deployed for any number of tasks in a matter of hours by almost any employee, instead of relying on engineers, therefore avoiding high fees. Lightweight robots now use a drag and drop interface more commonly found on consumer devices. Programming can be done via a teach pendant whereby the user-friendly interface allows the programmer to drag and drop the routines to do their programming. This functionality is very similar to an iPad, allowing manufacturers to take full advantage of all the production benefits of a dedicated production line.

Safety and cost
Of course there are many other considerations when investing in new technology – including the wellbeing of employees and ROI.

Manufacturing roles often consist of labour-intensive manual tasks. These are potentially highly dangerous activities, yet the reality is that for many employees this will constitute a large part of their working week.

Injuries related to both repetitive manual handling and workplace accidents cost the Australian economy millions of dollars every year. Packing and production lines in small operations are particularly risky. However, in contrast to traditional industrial robots in the market, small and lightweight robots can work collaboratively with staff.

Collaborative robots, or “co-bots” (in the majority of cases) don’t require safety shielding, enabling staff to work side-by-side with the robots.

Of course, the business benefit of industrial robotics goes well beyond just safety, with affordability also being one of the main business considerations. During the past few years industrial robots have become increasingly cost-effective. In most instances the investment in a lightweight industrial robot can be recouped in just over a year, and the total initial ownership cost is very low compared to many traditional robots. 

The ease of programming, integration and after sales maintenance means manufacturers save about 30 to 40 percent in integration costs compared to other traditional industrial robots in the market. 

Lightweight robot technology is helping small food manufacturers transform their production lines, while retaining skilled workers and creating a safe workplace environment where employees can work side-by-side with a robotic counterpart.

Shermine Gotfredsen is business development manager at Universal Robots Asia Pacific.

Sanitarium signs up to Health Star Rating system

Sanitarium Health & Wellbeing has made a commitment to adopt the new Health Star Rating system across its entire product range.

Todd Saunders, general manager of Sanitarium Australia said that the company welcomed the State and Federal Government’s introduction of the voluntary system.

“This is a major preventative health initiative which offers an opportunity for the food and beverage industry to significantly contribute to improving the health of our nation,” said Saunders.

“We know Australians trust Sanitarium products and by providing transparent and easy to understand information through the Health Star Rating system, we are continuing to deliver on the trust consumers place in us and our brands.”

Saunders said that in contrast to current labelling, the Health Star Rating system provides nutritional information in a clear and easily understood format.

“Currently, comparing nutrition values between products takes time and can be confusing. The Health Star Rating system is a practical way consumers can be equipped with the relevant information they need when making healthy choices for themselves and their family,” he said.

Greg Gambrill, food environment and science manager of Sanitarium Australia said that the consumers will benefit from the introduction of the system.

“It’s been great to see Governments recognising the need for improved health information when making purchasing decisions, and the leadership role taken by the Department of Health in developing this standardised rating system,” he said.

“With the front-of-pack labelling system guidelines nearing completion, it’s now up to us as manufacturers to put these Health Star Ratings into action on our packaging – and it will be the consumers who benefit.”  

Health Star Ratings will be rolled out across Sanitarium’s portfolio within the coming months.

 

Raw food manufacturer earns three major business awards

Laila Gampfer, founder of raw food manufacturer Rawsome has earned three major business awards in the past month including; Best Start-Up at the Telstra WA Australian Business Awards, the Outstanding New Business award and Excellence in Enterprise & Innovation award at the Fremantle Business Awards, as well as a commendation in the start-up category at the 2014 Business News Rising Star Awards.

In addition, Rawsome’s Carawmel Slice has been named a finalist in the Snack Food category for the 2014 Food Magazine Awards which will take place in Sydney this August.

Commenting on her recent achievements, Gampfer says that her success stems from the dedication of her team.

“My team at Rawsome is full of passionate, hard-working people and these awards are wonderful recognition of the effort that has helped drive the business since it started,” Gampfer said.

“Our stockists, customers and the community have supported us along the way, believing in our vision and positively reinforcing our business journey.”

After being diagnosed with coeliac disease in 2010 and looking for gluten-free alternatives to fit with her nutritional plan, Gampfer established Rawsome to create raw food versions of sweet conventional products.

Created in a commercial kitchen in North Fremantle, Rawsome’s products can now be found in over 100 independent cafes and retail outlets across Perth as well as several IGA stores, and more recently has expanded its reach to independent cafes in Melbourne.

“​Setting up a small business can be personally and professionally rewarding but a great deal of motivation and drive are required,” Gampfer said.

“It takes leadership, time, courage and grit to establish a business and it can be relentless with many sacrifices along the way. But with external support, both emotional and professional, and a clear focus and direction for the business, the rewards do come.”

Food Magazine recently featured Rawsome in an article about raw foods trends. To read our interview with Gampfer, click here.

 

BOC commences work on $40m New Zealand CO2 plant

BOC has announced that it will today commence work on a new CO2 plant at Refining NZ’s Marsden Point refinery located near Whangarei.

The plant is designed to purify CO2 which is produced as a byproduct of Refining NZ’s oil refining operations, which supplies to customers in the food and beverage, dairy, wine and meat industries.

BOC South Pacific Managing Director, Colin Isaac, said the plant will further enhance BOC’s delivery of industrial gas to its growing New Zealand customer base.

“BOC has been proudly doing business in New Zealand for over 100 years and today’s announcement of our new CO2 plant at Refining NZ is yet another strong signal of our confidence in our New Zealand business well into the future,’’ said Isaac.

“We are very pleased to be continuing our long standing relationship with Refining NZ which shares our passion for innovation, safety and success.’’

According to Isaac, both companies had agreed to a long term contract in excess of 15 years for the production of purified CO2 from the refinery which will purify more than 50,000 tonnes of CO2 per year.

 

Naturex introduces cherry-based curing enhances for meat products

Plant based ingredient manufacturer, Naturex has introduced a range of cherry-based antioxidants and curing enhancers for meat & poultry products.

The Acerola Cherry 17 offers natural oxygen-scavenging properties that protect meat pigments from oxidation, improving the color stability of raw and cooked meat products.

Naturex has also developed XtraBlend RA, an antioxidant that combines acerola with rosemary extract to create a powerful synergistic blend that protects both color and flavor in meat products and also demonstrates remarkable efficacy when used in raw meat due to the addition of standardized active compounds.

The third ingredient in the new range is Acerola Cherry 36, which contains more naturally occurring vitamin C – 36-38% – than any other acerola powder available on the market. It is also free from carrier compounds.

“There is big demand for natural ingredients in the meat & poultry industry that offer technical benefits, and Naturex’s R&D focus on acerola cherry has opened up a world of opportunities in food preservation,” said Baptiste Demur, Business Manager at Naturex.

“Our new cherry-based ingredients provide high levels of efficacy while allowing meat & poultry companies to achieve consumer-friendly labels. These optimized natural antioxidants and curing accelerators provide exciting and effective options that cover needs of the entire meat industry, in both the fresh and cured meat categories.”

 

Arla Food Ingredients claims top award at IFT Food Expo

Global whey manufacturer, Arla Food Ingredients has received a 2014 IFT Food Expo Innovation Award for its innovative process solution that enables Greek yoghurt producers to capitalise on their acid whey waste stream by converting it into added-value dairy products.

As the popularity of Greek Yoghurt continues to increase, Alra identified a need to create a process that reduced wastage associated with the production of the popular dairy product.

For every 100kg of milk used to make Greek yogurt, only 33kg ends up used in the final product. The remaining two-thirds comprises of acid whey – a by-product that often is disposed of.

Arla developed a unique and simple process using a Nutrilac protein derived from milk to turn acid whey into a range of dairy products that can be sold at a high margin on consumer markets.

The 2014 IFT Food Expo Innovation Award marks the second award that Arla has earned for its Ingredients’ Nutrilac acid whey process. In September 2013, it was named ‘Best Beverage Ingredient’ at the Beverage Innovation Awards.

“We’re immensely proud to win this prestigious award. Outstanding service and constant innovation are at the heart of everything we do,” said Torben Jensen, application manager at Arla Foods Ingredients. “We strive to create solutions that will keep our customers ahead of the market, and if a solution does not exist, then we work hard to create it. Our Nutrilac acid whey process is a great example of how we put this approach into practice.”

Arla Foods Ingredients was one of only three recipients of the award, which honors outstanding innovation in products, equipment and services. Ten jurors judged a total of 27 entries on criteria including degree of innovation, technical advancement, benefits to consumers and manufacturers, and scientific merit.

 

SPC’s anti-dumping case director consults for Italian importers

Fruit and vegetable processor, SPC Ardmona says that the future of the business could be at risk after discovering that a federal government case director that worked with the company during anti-dumping commission hearings has left to consult for rival Italian tomato importers.

SPC Ardmona lodged an application with the antidumping commission on 10 July 2013, alleging that Italian tomatoes were being exported to Australia from Italy at margins that constituted dumping, resulting in material injury to local producers and reduced profitability/ lower sales volume for the business.  

The processor said it was shocked to find out that its case director, John Bracic has now set up a consultancy business offering “rare and invaluable” services for Italian tomato importers in their appeal with the anti-dumping review, The Australian reports.

Managing Director of SPCA, Peter Kelly said that Bracic was privy to confidential information during throughout the hearings that have taken place.

“He was the one we gave our confidential information to,” Kelly said. “I hit the roof. He’s appealing a case where he was the case director.

“He’s criticising his own work, finding fault with his previous work for the Australian people. Now we’ve got to go back and compete against the guy who has inside knowledge. I find it very frustrating.

“…In my company it would be completely unethical to move like that to a competitor and take the information that is in my head,” Kelly told The Australian.

Despite a 100m investment plan from Coca Cola Amatil and the Victorian government, SPCA say that they are still struggling to compete with cheap imported product.

Bracic, who left the Anti-Dumping Comission after 14 years of service rejected Kelly’s claim that he was “criticising his own work”.

“These are not my views, they are the views of my clients. This is not me criticising my own work. Whether I agree or not is irrelevant. I don’t have to believe it, I write it up for them and give advice about their chances of success,” Bracic told The Australian.

A spokesman for the Department of Industry said that while there is “no general legal impediment” for former employees of the public service to work in fields related to their previous employment, the Crimes Act, the Criminal Code and the Customs Administration Act prevented disclosure of protected information.

 

Aging population requires functional dairy products, Canadean

A new report from Canadean has found that manufacturers need to develop functional dairy products in order to meet the needs of the aging population.

The report highlighted that as consumers aged over 55 make up around a fifth of dairy consumption in the US, (representing approximately $8.7 billion) manufacturers need to focus on developing products that not only address nutritional needs, but are also positioned in a “sensitive way” with easy-to-open packaging.

Catherine O’Connor, senior analyst at Canadean says that older consumers are looking for dairy products that contain calcium to help maximise healthy bone strength, as well as riboflavin to maintain good nerve function.

“Bone health is a fundamental need here,” says O’Connor.  “Products that are enriched with extra calcium to help with tooth-retention and prevent from osteoporosis will prove particularly popular. There will also be increasing demand for products containing omega 3 and DHA to maintain brain health.”

O’Connor says that marketers need to take a sensitive approach in regards to product positioning. She suggests that dairy food should carry both a preventative and therapeutic message to target healthy consumers and meet the needs of those already suffering from issues such as bone decay.

“Manufacturers should communicate the health benefits of products by centring campaigns around keeping active and health maintenance, rather than focusing on older consumers’ vulnerabilities” she says.

In addition, O’Connor says that lightweight, easy-to-open packaging are key requirements for older consumers, particularly for those with declining wrist strength or a decreased ability to carry heavier items.

“Packaging manufacturers should innovate with seals that increase shelf life in order to require fewer shopping trips for those who find getting about difficult.”

The report titled ‘Understanding consumer trends and drivers of behaviour in the US dairy market”, was developed from consumption surveys and consumer group tracking, which quantifies the influence of 20 consumption motivations in consumer markets. 

 

Ageing population: a missed opportunity for manufacturers?

Manufacturers in Australia need to recognise the value of Australia’s ageing population and adjust their packaging accordingly, said Fergal Barry from Arthritis Australia.

Presenting at the Australian Institute of Packaging’s National Conference, Barry, the strategic partnerships manager at Arthritis Australia, said Australia’s ageing population is becoming increasingly frustrated with hard to open or inaccessible packaging.

Over the past 20 to 30 years, packaging has become increasingly difficult for consumers to negotiate thanks to the requirements to ensure products are child resistant, tamper resistant, theft resistant and/or portion controlled.

He said one in two Australians face difficulty opening or reading packaging, 89 percent have been frustrated or furious with packaging, and 53 percent have suffered an injury as a result of inaccessible packaging.

With Australia’s ageing population, manufacturers need to reconsider who they’re targeting with their packaging, Barry said, and realise that the elderly represent a huge opportunity.

“They are largest and fastest growing sector in developed and developing countries,” he said. “They are the biggest, they are the fastest growing and they have the [largest share of] wealth … When you identify that issue, your market actually increases.”

Relatively small changes to elements of packaging, such as increasing the font size or using colour to distinguish between different product ranges can make a big difference in winning disgruntled consumers back, and also in creating a point of difference for your brand, Barry said.

“With this global change in the market place, a smaller company can have an advantage over the bigger players because of their ability to adapt.

“Accessibility can be a competitive advantage … it’s a way to compete and a way for SMEs to take market share away from the major players,” he said.

Barry added that 6.5 million Australians have difficulty with vacuum-sealed plastic containers, for example, so if manufacturers adjust their packaging to improve accessibility, this improvement needs to be clearly conveyed to consumers.

“If a consumer has a negative experience … it’s not enough just to fix the packaging. When they see that pack, they have a negative association either with your brand or the pack format.”

Manufacturers need to communicate the ease of packaging or the change in packaging that now makes it easier to access, he insists.

Barry would like to see the roll-out of a national ‘ease of use’ certification scheme, where products are independently tested by consumers and their accessibility clearly conveyed on retailers’ shelves.

A step in the right direction has been the development of the Initial Scientific Review (ISR) – a result of collaboration between Nestle, Arthritis Australia, NSW Health and Georgia Tech. The ISR is being used by Arthritis Australia to evaluate and improve the packaging of hundreds of products from over 50 companies both in Australia and internationally. It has been adopted by NSW Health to evaluate the food packaging of its suppliers, ranking them from -8 to +8, to help make food packaging easier to open for elderly or frail hospital patients.

“The +8 to -8 rating gives a standard method to compare products’ ease of opening and legibility, so an organisation can compare two competing brands of a similar product, or a manufacturer can compare two design solutions for a product,” said Barry.

 

FSANZ to examine safety of food contact materials: AFGC

Geoffrey Annison, director health nutrition and scientific affairs at the Australian Food and Grocery Council, says that consumer concerns surrounding the migration of chemicals from packaging into food has highlighted a gap in the nation’s food safety regulation, and that food manufacturers need to be prepared for possible changes to legislation.

As a result of this gap, the government’s food safety body, Food Standards Australia and New Zealand (FSANZ) is on the path to potentially developing new regulation that addresses consumer concerns associated with food contact materials, both in terms of packaging and processes.

Annison told the 2014 Australian Institute of Packaging National Conference this week that FSANZ has taken inspiration from the European Food Safety Authority, which is increasingly focusing on the regulation of packaging, with particular attention to the migration of chemicals from packaging and food contact materials into food.

Annison brought up numerous examples of consumer concerns relating to packaging including BPA in plastics, mineral oil from recycled cardboard, discussions of phthalates in lids and more recently issues relating to the use of nanotechnology in food and food packaging.

“If there are any concerns about packaging, they don’t go away,” said Annison. “Even though we might deal with these issues when they come up, they never go away now with the internet. It is critically important that we understand when we are dealing with these issues not only how they are occurring, but also how we deal with them in the longer term.”

Consumer protection to be a point of focus

Annison said that FSANZ identified a gap in regulation relating to food contact material, and that consumer protection will be a specific point of focus during regulatory discussions.

“FSANZ have started some initial discussions with industry… and the AFGC was part of the initial advisory group that was pulled together to give advice… Last week they announced that they will be notifying the potential to raise proposal P1034… with a full release of the discussion paper later in the year.

“They are keen to avoid the re-runs of the issues such as BPA, and rather they want to develop a framework for the regulation of food contact materials.”

Annison says that in addition to P1034, FSANZ are also developing proposal P1025 which is a complete plain English re-write of the food standards code which came about as the result of a court case six years ago, where FSANZ’s code was criticised for being too difficult to interpret. Annison also noted that P1025 had references to packaging material in the draft edition that he had viewed.

“Under current regulations, there is very general advice about ensuring foods are safe when using materials that are in contact with food. Elsewhere there are specific limits on migration packaging components and this is what they are now proposing in proposal P1025 – to give general advice on packaging.”

Annison says that under proposal P1034, FSANZ are proposing to develop another industry advisory group to look at potential hazards and industry practices. He says that the proposal will look at current risk and residual risk with a particular focus on virgin packaging and recycled packaging. Annison also noted that FSANZ will be focusing on smaller packaging companies.

“They are not particularly concerned about the larger packaging companies, but they are a little bit concerned about some of the smaller packaging companies – not because there is any evidence of health risks associated with them, but just because they are not so familiar with those companies. So this is an opportunity for those companies to step up and talk about the technologies that they are using and essentially demonstrate to FSANZ why they are safe.”

Annison says that FSANZ will be exploring a number of avenues to address the issue, ranging from the general provisions that are currently in place under the food standards code, to potential regulatory, co-regulatory and self-regulatory options.

“We at the AFGC think that there should be a best practice regulation which includes the opportunity for self-regulation and code… But we must not forget that it is about consumers, and they want to know everything there is to know about food products including packaging and the environment."

Consumers have trust issues with industry

Annsion admitted that some consumer groups are not overly keen on the idea of industry self-regulation as “they don’t trust the industry” to provide a comprehensive account of the information that they seek. Annison says that the industry has a wealth of opportunities to demonstrate to consumers that they can be trusted, and pointed to the use of smartphone apps are a powerful tool to provide additional information.

“This is the concept of extended labelling,” says Annison of the smartphone apps.
“They may focus on nutrition, allergens or indeed packaging… The apps mean that labels themselves no longer limit the amount of information that we can provide consumers, and the AFGC will be making this point when it comes to advising the government on potential packaging regulations and information about packaging.”

Annison says that consumer and public health advocacy groups will be looking for strong regulations, and that now is the time for industry to promote self-regulatory responses by adopting the use of smartphone technology.

“Food and grocery packaging is a policy and regulatory challenge. There is international precedent for greater regulation, and hopefully there will be evidence based regulatory measures used [in the development process], but regulators will have a precautionary approach – they will err on the side of consumer protection,” says Annison.

“The AFGC will be in contact with packaging companies and with their industry bodies representing them to perhaps work out the best way to manage this issue to make sure that the regulatory response that may come out of FSANZ is as benign as possible in terms potential impact on industry but still basically serves the fundamental role of regulatory arrangement which is to provide the consumer with protection.”

 

Acquisition opportunities ripe for the picking: report

According to a report released today from Grant Thornton Australia, mid-sized food and beverage businesses need to formulate growth plans or exit strategies in order to capitalise on the increasing number of acquisition and divestment opportunities available in the sector.

The report titled Bite Size, found that despite challenging market conditions globally, Australia has had more food and beverage acquisition targets than any other country in the Asia Pacific region.

According to the report, Australia is ranked as having the fifth highest level of food and beverage transactions globally during the January 2011 to March 2014 period.

Cameron Bacon, Food & Beverage Partner, Grant Thornton Australia said that now is the time for medium sized businesses in the industry to capitalise on either investment of divestment opportunities.

“Acquisition opportunities within the Australian food and beverage sector are receiving interest from local, international and private equity buyers. Fuelled by the sector’s prime position to service Asia’s growing demand for high quality food products, CEOs and owners within the sector need to ensure their businesses are well positioned to capitalise on current opportunities within the sector,” he said.

Bacon said that buyers are heavily focused on the food segment which makes up 75 percent of total transactions within the food and beverage manufacturing sector. In addition, Bacon noted that the report revealed higher valuation multiples were achieved by businesses with strong brands in premium segments.

“As the trading and transaction multiples of Australian food and beverage companies are often lower than equivalent companies in North America or Europe, we will continue to see strong interest from international buyers seeking the opportunity to purchase good quality companies for a reasonable price that are well positioned to benefit from growing Asian demand,” he said.

 

Mondelez prepares for opening of new Innovation Centre

Mondelez is three months off opening a Food Innovation Centre in Ringwood, Victoria, which will aim to facilitate training and collaboration between food manufacturing professionals in order to take advantage of growing export opportunities in Asia.

Representing the company’s largest ever investment in new technologies and innovations, the centre aims to connect small to medium sized enterprises, state and federal governments, industry and higher education institutions through collaborative programs, in order to develop and share insights and build a platform to deliver “world-class innovations.”

Mondelez International’s RD&Q director, premium chocolate and dairy, Asia Pacific, Nicholas Georges discussed the centre at the Australian Institute of Packaging’s national conference, claiming the centre will focus on identifying and nurturing talent in the industry, promoting the development of innovations by having SMEs, universities and research organisations working towards a common goal; using new technologies to fast track idea prototyping; and identifying best practices that unlock growth platforms into Asian markets.

Stage one of the centre, which opened in January 2013, has pilot manufacturing for new products, a design and packaging lab and sensory facilities to deliver quality testing.

The stage two developments will see the construction of a facility to house theatre-style seating for an expanded virtual store, collaboration spaces and planning rooms which will be used by Mondelēz International and the broader food industry.

Mondelez has also partnered with the University of Melbourne and the Victorian government to create a new Master of Food and Packaging Innovation, which aims to influence the development of the next generation of food innovators with, once again, a priority focus on Asian markets.

The Master of Food and Packaging Innovation is a two year full time (or part time equivalent) program with a combination of online, evening and intensive delivery. During the final year of the program, students will be given the opportunity to partake in a professional industry internship.

The first intake for the Master of Food and Packaging Innovation will be this July.

Mondelez has also announced it will be sponsoring 15 student per annum for the first three years of the program.

“We need to get the best talent we can in the industry. We need the best brains in the country to come into our industry,” Georges said. “We really think this is a critical step.”

 

Protein still trending but manufacturers must innovate, report

According to Innova Market Insights, the interest in protein content and high protein product lines across the food and drinks market is showing no signs of slowing down, but now is the time for food and beverage manufacturers to innovate.

Although Innova notes that consumers in the developed world generally get enough protein, the trend is being largely driven by concerns relating to weight management, as well as an increased interest in sport performance products which are now readily available in the mainstream market.

Another trend that Innova sights is the increased interest in the Paleo diet which focuses on lean protein and is designed to mimic the diet of our Palaeolithic ancestors.

With this in mind, Lu Ann Williams, director of innovation at Innova Market Insights, says that now is the time for food manufacturers to innovate in order to secure a piece of the protein pie.

Williams cites a number of drivers, including the need to feed a growing global population, an alarming rise in sarcopenia (declining muscle mass, particularly among an aging population), and the economic and environmental costs of existing protein sources.

“Proteins have diverse application potential, with opportunities for alternative vegetarian options, and new protein sources – such as microalgae – alongside existing and novel dairy-based and vegetable sources, such as soy, beans and grains,” she says.

The data indicates that close to three percent of global food and beverage launches over the past 12 months ending 31 March 2014, were marketed as “high protein” or “source of protein”.

The report also states that demand in Asian markets for whey protein has soared as a result of its rising popularity as a natural, healthy ingredient within the infant nutrition, mediacla nd sports markets.

Vegetables still top the list for the number of published protein patents in food and drinks over the period, and whey has risen from eighth position in 2012 to third position in 2013.

At the same time, the number of nut and seed protein patents has also risen sharply, from single figures in 2012 to more than 200 in 2013. Strong activity has also been observed in patent actions relating to algae-derived proteins.

 

Food manufacturers at the mercy of high costs and dominant retailers, says AFGC

Following the release of the Competitiveness and Sustainable Growth Report, The Australian Food and Grocery Council (AFCG) says that food manufacturers are “being squeezed” by increasingly high manufacturing costs and dominant retailers.

Conducted by KPMG on behalf of the AFGC, the Competitiveness and Sustainable Growth Report provides a detailed analysis of real financial data from food and grocery suppliers over the last four years (2010-13).

CEO of the AFGC, Gary Dawson said that the report’s findings indicate that Australia now has the highest manufacturing costs in the world and that the nation’s retailers are extracting greater payments from suppliers to fund promotions.

"This report demonstrates how tough the market conditions have become for food and grocery suppliers, squeezed between the unstoppable force of dominant retailers and the immovable object of high labour, utility and regulatory costs,” said Dawson.

"A key finding is that one dollar in every four earned by suppliers is being returned to retailers to fund discounts, rebates and promotions."

Dawson says that the rapid growth in payments extracted by retailers represents a direct profit shift from suppliers to retailers.

"The two major retailers extract an additional 5% more from suppliers than other retailers, reflecting their market power. This 'trade spend' has been growing at four percent per annum, while volume has been flat and profitability declining sharply,” he says.

"This level of funding flowing back to the major retailers is simply unsustainable, with a direct impact already on marketing, R&D and innovation spending.”

Other key findings in the report include:

  • Australia has the highest manufacturing costs in the world, with labour, utilities and regulatory costs all among the highest globally;
  • A strong focus on cost containment by suppliers has brought some reductions in supply chain costs through initiatives such as automation to boost efficiency and productivity;
  • Capital investment is growing, which is a positive sign for the future, although much of this investment has been focused on ‘staying in business’;
  • Profitability of Australian suppliers is now well below international peers, and falling further behind, raising questions about the willingness of major companies to make major investments to upgrade Australian facilities;
  • Despite growing demand for premium food in Australia's key export markets, we are losing market share in China, Indonesia, Thailand, Malaysia and Japan.

Dawson says that the key challenge for the Australian food and grocery industry is to improve competitiveness in order to secure growth opportunities both domestically, and in international markets – especially if the industry wants to become Asia’s ‘food bowl’.

Dawson also added that the report underlines the importance of levelling up the playing field between retailers and suppliers, stating that the sooner the draft Food and Grocery Industry Code of Conduct moves through the current regulatory review process, the better off manufacturers and suppliers will be.

“The Code will provide greater contractual certainty and transparency.  In addition, the ‘root and branch’ review of Competition Policy provides a welcome opportunity to examine and address the current market imbalances,” says Dawson.

“Without a viable domestic food processing sector Australia will not fully capitalise on the opportunities of the Asian ‘dining boom’.”

 

A fresh approach to food processing

Dealing with and handling fresh produce presents a unique challenge to logistics and supply companies.

Understanding the issues of food safety, packaging and distribution for fresh supply chain requires a tailored approach for different customers.

With this in mind TOMRA Sorting has developed a unique sensor based sorting solution and multi-spectral technologies to create customised options to meet these specific customer requirements.

According to the company its new machine, the Halo, combines intelligence with advanced control, and is a robust and compact machine that provides high capacity, low maintenance, flexibility, and gentle handling.

“Additionally, Halo guarantees long-life accuracy and provides quality control and feedback through an intuitive touch screen,” TOMRA Sorting stated.

Featuring both VIS and NIR capabilities, the Halo “provides high performance sorting and grading based on a number of different factors that affect fresh produce.

TOMRA Sorting explained that these include defects, colour, subtle blemishes or marks on the produce, any foreign material (which is often a problem in the fresh produce supply chain), size, and finally shape.

“For cut fruit the Halo sorter can now separate apple wedges displaying bruise, core, steam, discolouration, and broken pieces,” the company said.

Its fresh pack applications include russet potato, sweet potato, varietal, and speciality potatoes in addition to the typical carrots, parsnips, cucumbers, onions, radishes, and tomatoes.

“Halo is also ideal for processed peeled and unpeeled fruits and vegetables, carrots, apricots and peaches, pear halves, and citrus fruits.”

It has also released a produce material handling machine that deals with unwanted foreign materials in the line.

TOMRA Sorting’s Genius is equipped with high resolution cameras and lasers.

The machine utilises a number of different inspection technologies in its various zones, with state-of-the-art air guns built to reject any pre-determined unwanted items within milliseconds, in two or three separate streams, and sound product proceeding in the processing line.

Karel Strubbe, TOMRA Sorting’s sales manager for Oceania, went on to say that “the Genius sorter is now available with a special designed infeed system, the handle high throughputs”.

“This designed infeed system consists of multiple steps creating a well spread single layer of product so that the Genius unit can inspect at very high levels of efficiency.

“This new unit has been a great success since its introduction, and also features a unique add-on, the Advanced Foreign Material Detector (AFMD).”

The AMFD identifies defects and objects previously difficult to distinguish because of their similar structure or colour characteristics.

“Now, with the Advanced Foreign Material Detector, sorting on product-specific features with an optical configuration not limited to a single application is possible,” Strubbe said.

One of the major areas where the Foreign Material Detector has been used is in lettuce sorting.

“Organisations can even introduce radicchio lettuce in to their mixes before they enter the sorting unit,” he said.

Prior to the introduction of the Advanced Foreign Material Detection unit, processors had to mix these elements in after sorting, running the risk they still contained defects.

TOMRA Sorting stated that the AFMD application is “revolutionising the way lettuce processors operate.

“They can now sort virtually every kind of baby mix, targeting defects perfectly,” Strubbe said.

“The AFMD capabilities significantly improve results, minimises false detections, enhances processing line flexibility, maximises efficiency, and elevates the quality and safety of the end produce to new levels for consumers, while maintaining the highest yield at unsurpassed throughputs.”

In addition to these two machines, TOMRA Sorting has unveiled the Primus Gemini for sorting multiple fruit applications with defects such as discolourations, over ripe, hail, and insect damage, plus foreign material.

“It delivers a high quality end product, meets modern consumer demands, and provides a very fast return investment,” Strubbe said.

The Primus Gemini sorter is now available with the Advanced Shrivelled Detector (ASD).

The ASD laser allows TOMRA’s sorters to remove shrivelled berries for fresh packing.

“Compared to other optical technologies, it can detect up to 9- per cent of shrivelled blueberries and will also improve the detection of rain split.”

It offers one sorting solution for detecting soft and discoloured berries and provides a three-way sort.

 

Nestle to ditch weak food brands in favour of scientific lines

Nestle, the world’s largest packaged food group has announced that it's looking to make further divestments in a number of underperforming food brands and instead invest in more scientific businesses in the medical nutrition and skin health arena.

Nestle’s chief executive, Paul Bulcke said that the new businesses would require greater investment and resources than food due to its complex nature, Reuters reports.

"If you really go into the dimension of science … the promise is big but the pre-investment is a little heavier than reformulating a bouillon cube," said Bulcke.

"We don't allow ourselves to have laggards because we don't have the luxury anymore because we are investing for the future," he said.

The new businesses are looking to include the likes of injectable wrinkle treatments as the company recently purchased the rights to several injectable wrinkle treatments for US$1.4bn.

Nestle recently sold its PowerBar business as well as the bulk of its Jenny Craig business, stating that further divestments of other underperforming brands could also take place.

"We are living in a riskier place and going riskier places strategically, like Nestle Health Sciences. That equals more margin," Bulcke said. "To get higher margins, you have to take out that which is dragging you down."