Oil & Food Journal Mar'13 by Advance Info Media & Events

Oil & Food Journal Vol. 08, Issue 05, March 2013

From the Desk of Editor Dear Readers country which has 65 per cent of its population involved directly with farming can expect much better what India is witnessing in food processing. Processing of agro commodities is the best solution for not only good margins of their produce but also can minimize post harvest loses. FDI in food processing is one of the major millstones India achieved long back and now its fruits have started coming in. Foreign investors have invested Rs 6,198 crore in India’s food processing industries (FPIs) in a little less than three years ending 2012, Parliament was informed recently. “Total foreign direct investment (FDI) in FPI sector during April, 2009 to December, 2012 is Rs 6,197.63 crore,” Minister of State for Food Processing Industries Charan Das Mahant said in a written reply to the Rajya Sabbha. India allows 100% FDI in food processing sector. Foreign firms do not require government’s approval to start business here. Moreover, they can take advantage of the development schemes offered by the government. During the 11th Plan Period, the government had launched a mega food parks scheme for the development of FPIs and has approved 30 such projects so far. Quoting figures from the Annual Survey of Industries and National Sample Survey, the Minister, in a separate reply, said 64.67 lakh people are currently engaged in the country’s FPI sector. Mahant, however, said that his Ministry has not conducted any country-wide survey of the backward and rural areas of the country for setting up FPIs. The Budget’s increased fund allocation for rural development, agriculture, food security, and skills upgradation is expected to drive rural consumption. The Budget is largely positive for consumer markets (fast-moving consumer goods or FMCG, retail, and agribusiness), given the challenges of reining in expenditure from a current account deficit perspective. The key sectors that will benefit are FMCG and agribusiness, including agri-inputs, agriimplements, and food processing. In addition, the textile and apparel sectors will benefit from lower custom duties, and technology-upgrade schemes. The revision in indirect taxes will have a minor impact on some sectors such as food services, cigarettes, auto, and mobile phones, while private consumption will largely be unaffected as there have not been any major changes in direct taxes. On the other hand the co-operative federation that sparked India’s milk revolution has warned the government that allowing imports of cheaper, subsidised dairy products from Europe could adversely impact the livelihoods of 3.2 million domestic dairy farmers and hurt consumers. Better known by its brand name Amul, the Gujarat Co-operative Milk Marketing Federation (GCMMF) has written to commerce and industry minister Anand Sharma that the proposed free trade agreement (FTA) between India and the European Union (EU) must ensure that the economic and commercial rights of farmers and consumers are not compromised. The EU wants to export dairy products to India, the world’s largest producer and consumer of milk, and has sought a concessional duty rate for cheese imports in the FTA, which is now in the final stage of negotiations. If incorporated into the pact, the EU demand would threaten cheese brands such as AmulGouda and Amul Emmental that were developed in partnership with the Swiss government. “The EU is actually anticipating a huge market opportunity once the comprehensive free trade agreement is ratified...We are afraid that by entering into FTA with EU, India’s export may increase slightly to EU, but imports will grow much more,” GCMMF managing director RS Sodhi wrote to the commerce minister, urging him to put up a counter case to protect the commercial and economic rights of farmers and consumers. India’s largest dairy co-operative has pointed out that EU has the highest number of geographical indicators (GIs) for which it is seeking ‘extra protection’ beyond the rules of the World Trade Organisation (WTO). But EU is neither willing for any GI protection to India’s Lassi or Paneer, nor is it refusing to stop the bio-piracy of India’s traditional knowledge like Ayurveda and resources like Neem, Amul has noted. The EU also doesn’t allow import of Indian dairy products, citing its strict sanitary and phytosanitary standards, which are nothing but a non-tariff barrier. “In entire EU, one can find Indian products like ‘paneer’ and ‘lassi’ being manufactured or marketed by local people. These are ethnic Indian products and India can actually claim similar GI protection,” GCMMF’s managing director RS Sodhi has told Sharma. “Essentially, EU is asking India to give more monopoly protection in areas where it has more intellectual property,” Sodhi’s letter stated, warning that this will cost Indian consumers as well as dairy producers who are in the nascent stage of agro-food processing industry. -Editor

Vol 8 Issue 5 March 2013

Oil & Food Journal Vol. 08, Issue 05, March 2013

Contents News Givaudan Expands Flavour Capabilites in India

Intensive Food Processing is need of the hour : Minister

Food Park Project to yield Rs 500Cr 12 ITC to Foray into Indian Dairy Sector

Odisha Cabinet Clears Food Processing Policy

Add Fiber To Whole Grains 18 Package Design Innovation Genius in a Bottle

Health and Wellness: A Mega Trend in the Natural Food Ingredients Market

Bosch Packaging Technology accelerates pace of growth

A BAKERY OF FORTUNE 20

Top 10 tips for global food safety by Alan D. Leib

FSSAI

Changing the global outlook of Indian food industry By Basma Husain

Global Scenario on Supply, Demand & Price

Oleic Escalation

56 36

Emphasis, rewards for farmers needs to be enhanced to improve quality & tonnage of fruits & vegetables By : Dick Jennings

Oil & Food Journal Vol. 08, Issue 05, March 2013

ew Mumbai Innovation Centre demonstrates continued commitment to developing markets. Givaudan, the world’s leading fragrance and flavour company, today formally opened its new Innovation Centre in Mumbai, expanding local capabilities and resources to bring innovative and creative flavour and taste solutions to its customers in India. For the first time Givaudan’s sensory science, flavour science and foodservice expertise will be available from within India. Food and beverage customers across the sub-continent will benefit from faster access to Givaudan’s world leading tools and technical services, including Indian consumer-preferred flavour profiles such as mango, dairy and Indian spices and cooking cues. Representing an investment of over CHF 3.7 million to meet rising customer demand for Givaudan’s industry leading technical services from across the Indian sub-continent; the new Mumbai Flavour Innovation Centre is also the latest

demonstration of Givaudan’s on going commitment to expanding its creative and technical capabilities in India. Givaudan just completed the expansion of its flavours powder blend capacity at its Daman production facility and is

planning a new flavours manufacturing site at Pune. At the official opening of the facility, Mauricio Graber, President Flavour Division, said: “Growth in developing markets is one of our strategic pillars and we aim to increase our total sales in these markets to 50% by 2015 across all

Doehler files patent for innovative carotenoid-based “Crystal Clear Colours”

tability, taste neutrality and bright colours – that’s what Doehler’s “Crystal Clear Colours” stand for. With its new range of brilliant, crystal clear “warm orange” and “shining yellow” hues, Doehler is opening up innovative potential for the beverage industry. For the first time, “Crystal Clear Colours” allow the use of colours with neutral taste profile in clear beverages, without adding any artificial colours. In addition “Crystal Clear Colours” are characterised by outstanding stability under the influence of light, heat and various pH values. With “Crystal Clear Colours” Doehler has achieved a breakthrough in the development of carotenoid-based colours for clear beverages. Their outstanding properties Oil & Food Journal Vol. 08, Issue 05, March 2013

make the “Crystal Clear Colours” ideal for a wide range of beverage applications. They offer an excellent opportunity to distinguish beverages from other products in the beverage aisle, especially in the still drink and water plus segment. “Crystal Clear Colours” allow clear beverages to shine with a colour spectrum ranging from strong, warm orange hues to bright, sunny yellows. As a globally active manufacturer of natural ingredients, ingredient systems and integrated solutions for the food and beverage industry, Doehler also offers colouring concentrates, natural colours and colouring emulsions for premium foods and beverages alongside its “Crystal Clear Colours”.

categories. We will achieve this growth by investing in high growth markets like India, through superior local talent, capabilities and consumer understanding, together with world class infrastructure. “The expansion of our Mumbai Flavour Innovation Centre enables us to offer sensory science, flavour science and foodservice expertise directly from India for the first time. Together with our in depth understanding of the local Indian market, we are able to offer closer collaboration with our customers, creating true consumer preferred taste experiences to differentiate their products in the marketplace.” India is one of over 40 countries in which Givaudan has a presence. In 2012 the company grew its business in developing markets by 13.2% in local currencies; it aims to increase its total sales in these markets to 50% by 2015 across all categories. In 2013, further investments will be completed in Asia Pacific with the expansion of new spray drying capabilities in Indonesia and the ground breaking of a new savoury facility in China.

NEWS

Givaudan Expands Flavour Capabilites In India

Fonterra and A-ware go Dutch

ew Zealand-based Fonterra and Dutch company A-ware Food Group have been given the green light to develop a new cheese and dairy ingredients plant in Heerenveen in the Netherlands. Construction of both plants is scheduled to be completed in late 2014. Under the companies’ agreement, a greenfield site will be developed where A-ware will operate a cheese plant and Fonterra will operate a dairy ingredients plant alongside it. Cheese will be produced for A-ware’s European customers and the whey and lactose will be processed into premium nutrition dairy ingredients for Fonterra’s global customer base. According to Fonterra CEO Theo Spierings, the investment fits well with the strategic priorities of both companies. “Fonterra has substantial intellectual property in the manufacture of functional whey protein ingredients and has been looking for some time for a source of highquality whey to enable it to commercialise these innovations for customers around the world.”

NEWS

Food park project to yield Rs 500cr

he ministry of agriculture and food processing industries has so far approved 30 mega food park projects out of which 14 projects have been accorded ‘final’ approval and the remaining 16 projects have been accorded ‘in-principle’ approval.

Out of the 14 projects which have been accorded ‘final approval’, two projects in Andhra Pradesh and Uttarakhand are partially operational while two others in Assam and West Bengal are nearing completion, according to information provided by the ministry. Five more projects, one each in Punjab, Jharkhand, Karnataka, Gujarat and Tripura are expected to be completed in 2013-14, while the remaining five projects in the states of Madhya Pradesh, Bihar, Odisha, Tamil Nadu and Maharashtra are likely to be completed in 2014-15. The ministry said on an average, each project is expected to have around 30-35 food processing units with a collective investment of Rs 250 crore that would eventually lead to an annual turnover of about Rs 450-500 crore and creation of

direct and indirect employment to the extent of about 30,000 persons. The new mega food park scheme provides for both forward and backward linkages. The minimum land requirement has been enhanced in the new scheme from 30 acres to 50 acres. The maximum grant admissible is Rs 50 crore in case of a mega food park. The mega food park projects are implemented by special purpose vehicle (SPV) which comprises at least three independent members including at least one food processor. The mega food park scheme, according to the ministry, operates on a hub and spoke model in which central processing centre is net worked with primary processing centres and collection centres.

Intensive food processing is need of the hour : Minister

o prevent fruits and vegetables from spoiling, there is a need to take up food processing on a priority basis, Tariq Anwar, Minister of State for Agriculture and Food Processing Industries, said. Speaking at the Diamond Jubilee celebrations of Lucknowbased Indian Institute of Sugarcane Research, Anwar said, “As much as 25-40 per cent of fruits and vegetables produced in India are spoiled due to lack of storage facilities, which directly affects the farmers.” “Our bottlenecks are not in production, but in storage,” added Uttar Pradesh Agriculture Minister Anand Singh on the occasion, which is also being celebrated as National Sugar Fest 2013 and AgroTech 2013. “One way of cutting down losses is by giving priority to food processing,” Anwar said. Recalling a recent International Summit of Agriculture Ministers in Germany, Anwar said, “In the interactions with agriculture ministers...they said that food processing is given priority, hence, be it fruits, vegetables, or any type of grains, the quantity that spoils is low, almost negligible. In India, only nearly 7-8 per cent food is processed, while in European countries, somewhere it is 50 per cent, 60 per cent and even 70 per cent. Then, their product is also exported and brings in foreign exchange. All

this, either directly or indirectly, benefits the farmer,” he said. “If we promote this industry, a lot of our problems can be solved and the benefits an be transferred to the farmers,” he added. He also said that despite similar levels of area under agriculture - nearly 14 crore hectares, China’s foodgrain production in 2012 stood at 57 crore tonne while India’s total production for 2011-12 stood at just 25 crore tonne.

Oil & Food Journal Vol. 08, Issue 05, March 2013

TC is set to foray into dairy business with the launch of a range of dairy products over the next 14 months. The move is part of an integrated animal husbandry program, the firm’s corporate social responsibility initiative.ITC plans to launch shelf-stable dairy products such as

milk powder, long-life packaged milk and fortified milk. The FMCG major had already begun construction of a milk processing plant in Munger district of Bihar state in late December 2012 with an investment of INR1.5bn ($27.38m). It will have a capacity to process 200,000l per day and can produce up to 20 tons of milk powder, 20 tons of milk in pouches and 10 tons of ghee.ITC foods division divisional CEO Chitranjar Dar was quoted as saying that the company is also open to third party alternatives. “We realised it is just not good enough to only manufacture. We have to find a profitable outlet for it and that is how we planned to get into dairy,” Dar added. “So, from a strategic point of view, we will enter some parts of dairy in the next 14 months.” ITC also plans to set up cold chains and cool chains simultaneously to have a presence in the entire value chain.

Cadbury Dairy Milk Silk has got silkier

adbury India, a part of Mondelēz International, has launched a new TVC for the all-new softer, smoother and silkier Cadbury Dairy Milk Silk. Revolving around the theme of ‘indulgence’, the film effectively captures the immersive joy of consuming a bar of Cadbury Dairy Milk Silk. This is showcased through three young people who are shown taking hearty bites of the new silkier chocolate and also scooping it with their fingers, enjoying the softer, smoother and creamier sensation. The TVC has been conceptualised by Ogilvy India for the relaunch of the chocolate. Speaking about the campaign, Chandramouli Venkatesan Director, India Snacking and Asia Pacific and Developing Markets – Chocolate Lead, Cadbury India, said, “Silk has been a great success story for us ever since its launch. The renovation of Silk is in line with our efforts towards providing an even more superior Oil & Food Journal Vol. 08, Issue 05, March 2013

chocolate eating experience in India. The new Silk TVC showcases characters being completely immersed in the experience of consuming the new Cadbury Dairy Milk Silk. The product has been improved to deliver greater softness and creaminess, while retaining the signature Silk taste, to make it the best chocolate in India.” He further said, “This relaunch is supported with heavy marketing investments including outdoor, digital, on-ground engagement and differentiated POB execution.” Manoj Shetty, Creative Director, Ogilvy India, who developed the TVC, said, “The new Cadbury Dairy Milk Silk TVC is created to cater to the fast evolving consumer tastes and trends and their compulsive need to indulge and pamper themselves. The characters in the TVC aptly depict that the new Cadbury Silk is softer, silkier and smoother.”

ODISHA CABINET

NEWS

ITC to foray into Indian dairy sector

Clears food processing policy

he State Cabinet approved a dedicated policy for the food processing sector that promises 25 per cent subsidy excluding land cost for mega food park developers with a subsidy cap of Rs 15 crore. For small food park developers, the policy allows 25 per cent subsidy with a cap of Rs 2 crore. The policy also envisages up to 33 per cent subsidy for food parks proposed in the economically backward KBK (Kalahandi-Bolangir-Koraput) region and for projects with women and people from SC/ST categories as promoters. Units in the food processing sector will enjoy five per cent interest subsidy for a period of five years and VAT (valued added tax) waiver for 10 years, according to the policy provisions. Besides, the state government will offer financial assistance in the range of Rs 2-Rs 5 lakh. The state has received a string of investment proposals from biggies in the food processing sector like ITC, Parle Agro Indo Nissin, Future Foods and Nestle. The State Cabinet gave its nod to the establishment of Odisha Green Energy Development Corporation, a subsidiary of Odisha Hydro Power Corporation (OHPC). The chairman of OHPC will head the corporation. The green corporation is being set up keeping in view the enormous potential for the renewable energy sector in the state. The potential for green energy has been assessed at 16,230 MW with soar power having the lion’s share at 14,000 MW followed by wind power and bio-mass at 1,700 MW and 350 MW respectively. The proposed policy e-auction of liquor shops was also approved by the Cabinet. The auctioning system is expected to be put in place in two to three months. Presently, there are 1,500 liquor shops across the country with the state earning an annual revenue of Rs 1,700 crore.

BAKERY

A BAKERY OF FORTUNE Indian bakery market has been primarily dominated by big three - Britannia, Parle and ITC. New players have been recently added such as United Biscuit and Kraft. But few regional brands are giving tough competition to these entrenched brands .In north Indian market all these named brands have successfully build inroads to the bakery products market and are available at all major retail chains and bakery retail chains INTRODUCTION akery industry in India today has an important place in the industrial map of the country. Bakery products are an item of mass consumption in view of its low price and high nutrient value. With rapid growth and changing eating habits of people, bakery products have gained popularity among masses. The sector, typically, constitutes cakes, breads and biscuits.

B 14

The bakery industry has achieved third position in generating revenue among the processed food sector. The market size for the industry is pegged at US$ 4.7 billion in 2010 and is expected reach US $ 7.6 billion by 2015.The shining star of the sector remains the biscuits industry, which is expected to outperform the growth of the sector overall. The per capita consumption of bakery products in India, as it stands today,

is one to two kg per annum, which is comparatively lower than the advanced countries where consumption is between 10 to 50 kg per annum. The growth rate of bakery products has been tremendous in the both urban and rural areas. The sector has indicated promising growth prospects and has been making rapid progress. REVIEW The Indian bakery industry is dominated by the small-scale sector with an estimated 50,000 small and mediumsize producers, along with 15 units in the organized sector. Apart from the nature of the industry, which gravitates to the markets and caters to the local tastes, the industry is widely dispersed also due to the reservation policies (relating to the small scale industries) of the government. Biscuits and bread which are considered to be the major bakery product and they account for 82 per cent of all bakery production. The unorganized sector accounts for about half of the total biscuit production estimated at 1.5 million tonnes. It also accounts for 85 per cent of the total bread production and around 90 per cent of the other bakery products estimated at 0.6 million tonnes. The last includes pastries, cakes, buns, rusks and others. Oil & Food Journal Vol. 08, Issue 05, March 2013

Tata Strategic Management Group reports that, “The Indian bakery sector consists of some of the large food categories like breads, biscuits, cakes etc. The branded packaged segment in this sector had a size of Rs 17,000 crore in FY2012 and is expected to grow at 13-15 per cent in the next 3-4 years. Within biscuits, 3-4 large-sized players viz. Britannia, Parle, ITC, Cadburys comprise three-fourths of the market. The breads and cakes market is much more fragmented with multiple regional and local players. Britannia is the only national player straddling across the bakery segment. International players like United Biscuits, Unibic have gained prominence in the last few years in their specific product segments. Going ahead, the sector is expected to see some more

Oil & Food Journal Vol. 08, Issue 05, March 2013

of the international brands entering the Indian market. Broader food trends are also playing out here which includes unbranded to branded, rural adoption, Premiumisation, health & wellness and convenience. These trends have manifested themselves in the various new launches/introductions that we have seen in the past few years by leading players be it Britannia’s Nutrichoice range, smaller packs of Good Day, ITC dark fantasy, Parle’s Happy Happy and Parle-G Gold. Indians have always had a sweet tooth. With more travel and exposure to the worldwide market, people have now started appreciating good quality products, good quality ingredients, exquisite finishing and are willing to pay the extra buck. Growth rate of cake shops is directly related to the spending power. People are less hesitant on spending money, leading to the possibility of higher prices, leading to the possibility of better products. Convenience food is the need of the hour, as there is increase in number of middle class people and husband and wife both are working, so they opt for ready to eat food available in the market.

FACTORS FOR GROWTH Recently, a lot of bakers have gotten into three dimensional cakes and theme cakes. Cutting off from the regularity, bakers are now looking at experimenting with many more ingredients like rice treats, and inculcating them into cake designs. Some bakers even make use of wooden planks for support. There is also something as sugar crystal sculptures, where they try and use them as per the theme of the cake.

BAKERY

Biscuits are estimated to enjoy around 37 per cent share by volume and 75 per cent by share by value of the bakery industry. The organized sector caters to the medium and premium segments, which are relatively less price-sensitive. The organized sector is unable to compete at the lower price range due to the excise advantage enjoyed by the informal sector. The organized segment in biscuits has witnessed a steady growth of about 7.5 per cent, conforming broadly to the growth rate of GDP.

The biscuit category is expected to continue its growth trajectory of 15 per cent going ahead. Growth in bread would be relatively slower. But numbers of bakeries have opened up in neighbourhood where one can buy his daily quantum of bread. India has few major national bread manufacturers namely Britannia and Modern; number is very low as compared to other countries such as USA or UK. Bread Manufacturing is volume driven and low margin industry with a disadvantage of very low shelf life of products which then requires very robust supply chain management to deliver fresh bread to consumer daily. The bread market has a business volume of 1.5 million tonnes. The bread industry has a production of approximately 27 lakh tonnes. The major factors for growth in

BAKERY this segment are: Brand loyalty,Volumes and Strong distribution networks. The major challenge faced by the organized bread sector at present is low margins of profit. Hike in the prices of major raw materials like sugar, vegetable oil, milk, and wheat flour has been accounted for the industry’s low margins of profit. The per capita consumption of bread in India is only around 1.5 kg to 1.75 kg in various zones. The consumption pattern in four zones is Northern States: 27 per cent Southern States: 32 per cent Western States: 23 per cent Eastern States: 18 per cent. In north India the bread that have a strong hold in the market are Harvest Gold, Bonn, Perfect, National andKitty POWER PLAY The business has so far been dominated by three players - Parle Products, Britannia and ITC. But battle lines could be redrawn as a raft of multinationals led by Kraft and PepsiCo make a beeline for India. In the past year alone, Britain’s United Biscuits and GlaxoSmithKline Consumer

Healthcare, or GSKCH, have had several launches, while the go-national plans of some regional players have taken off. French foods giant Danone, too, is waiting in the wings. And, the range is expanding: if United Biscuits has come up with an assortment of products under its McVitie’s brand, GSKCH has introduced Horlicks biscuits for toddlers in animal shapes, and extended the Horlicks range to new options like crunchy cornflakes and bubble gum flavour. Britannia has expanded its NutriChoice range from plain vanilla digestive biscuits to spiceflavoured and diabetic options. ITC too has come up with new variants like Marie Light and Marie Light Orange. Market share estimates vary depending on which company you ask, but according to market research firm Nielsen, Parle Products, for the first time, snatched the top spot by volume sales from Britannia in the last quarter of 2010. Parle, with a dominant share in the glucose biscuits category, has been ahead in terms of revenue share for some time now (see

Tasty Bites). Glucose biscuits refer to plain biscuits made of wheat, sugar, vegetable oils and skimmed milk powder. Parle has been ruling the market for many years in multiple categories and doing well in glucose, cookies, salty and cream segments. Britannia denies it has lost share and claims it remains India’s No. 1 biscuits brand. The share of glucose biscuits in the overall market is down from 31 per cent to 27 per cent.Though demand for glucose biscuits remains strong, “the segment has seen few product launches in the past two to three years. Still, what Parle has going for it is volume. Parle G, its glucose biscuit, is the top-selling biscuit brand by volume sales in the world, according to a Nielsen report. And with such scale comes pricing power: most Parle products are priced in the range of Rs 4 to 6 for 100-gram packs, opening up new consumer segments. Small packets brought in new buyers, who would have considered other foods earlier.

Oil & Food Journal Vol. 08, Issue 05, March 2013

Parle seems to have played its other cards well too. It has built an excellent marketing and distribution network. Of the total 6.5 million retailers across the country who stock biscuits, Parle Products has a direct presence in 4.7 million. Even the rest are mapped through wholesalers. Others who do not enjoy that advantage are pushing into the more lucrative categories. The cookies segment accounting for 10 per cent of the total biscuit revenues in India and dominated by Good Day and Parle Hide & Seek - has seen a flurry of activity. Besides McVitie’s and Oreo, other launches include the Voortman, Waitrose, Murray and Pepperidge Farm Inc varieties. The local offerings include Choco-Nut from ITC, Tiger Crunch from Britannia and Hide & Seek Milano from Parle, apart from goodies from smaller players like Saj Foods and Spencer’s Smart Choice. The domestic players’ portfolios tend to mirror one another. While Britannia’s Pure Magic is being targeted by ITC’s Dark Fantasy, its popular Bourbon faces competition from Parle too. KrackJack, the oldest in the salt-and-sweet category, was revamped by Parle to stop Britannia’s 50-50 onslaught. This results in eating into one another’s market share, says Natasha D’Costa, Senior Research Analyst at Frost & Sullivan, a research firm. Health biscuits, like digestive or sugarfree ranges, are also gaining ground. Bali believes this will be the next battleground - as consumers not only buy more biscuits but also become more health conscious. Britannia has fortified its offerings with additional proteins and fibre to lure this new buyer. Thought for food Oil & Food Journal Vol. 08, Issue 05, March 2013

Britannia is aware the biscuit is up for grabs and it needs a quick strategic shift to retain its market. The Indian market will get more competitive and new entrants, especially MNCs, will bring in innovation. Britannia has launched at least 40 new products or variants in the past year, compared with around 20 launches in 2008 and 2009. Despite its global heft, Chicago headquartered Kraft has been flying below the radar in India. Oreo is one of their leading brands with global revenues in excess of $1 billion. Kraft is in talks with at least three local players as it finalises its India plans, say insiders. GSKCH, which launched its biscuits business in India in 1992, decided to take on Britannia in the milk biscuits sub-category- biscuits that have milk as an ingredient in addition to all that goes into a regular glucose biscuit - with its Horlicks biscuits priced a notch higher. they are the second biggest players with a 20 per cent share in this sub-segment and have already overtaken ITC’s Sunfeast Dream Cream in the Rs 220-crore fruit cream segment, with the launch of bubble gum and orange cream range. GSKCH is eyeing small but profitable areas to dominate and be a health motivator United Biscuits is available in 125 cities, and as a matter of fact they are not testing the waters ratherthey are very much in them… they have captured almost 25 per cent of the digestive segment with McVitie’s.Australia’s Unibic has tied up with Food Bazaar to launch a private label called Tasty Treat for the retail chain. There have been media reports that domestic consumer goods firm Marico could acquire the business to make its entry into the biscuits market. PepsiCo India has taken the spicy route. Aliva - a cross between Indian savouries bhujia/matthi and biscuits - was launched in June 2009. The “protein-rich” offering combines wheat and lentils. PepsiCo plans to go further by extending the Quaker brand to oats cookies. They have the motive to see that their play in biscuits will be led by innovations rather than any category definition.

END Notwithstanding the fast-growing numbers, per capita biscuit consumption in India is only 2 kg a year, compared to 2.5 kg in the Philippines and Malaysia, and as much as 10 kg in the US and UK. The competition will soon get fiercer. The Kraft-Britannia case is just the beginning, say industry observers. Britannia’s earlier spat with ex-partner Danone over the Tiger brand was just the trailer. Biscuit manufacturers have other headaches too. The compounded annual inflation for flour, sugar, dairy products and fats has risen to around 9 per cent from 3 to 3.5 per cent. Milk prices are up 25 per cent over the past year while sugar has almost doubled in two years. Parle, Britannia and ITC have experimented with price rises and weight reduction in the glucose segment.

BAKERY

Helping Parle is also its ride into the premium segment of creams, cookies and crackers. Parle’s 20-20 has built an 18 per cent share of the cookie market over three years, eating into Britannia’s Good Day, whose share is down to 28 per cent from 33 per cent. In the past four years, Parle Kreams has captured one-third of the cream biscuit market, where Britannia Treat is down to one-fifth.

The biscuits category has seen rapid growth in the last few years. Implementation of packaging standardisation norms appears to be the big challenge. Volatility in input costs is expected to remain and this would add to the woes. In bread, profitability has remained the focal point for some time. Players have been looking to increase share of value-added products while focussing on operational efficiencies linked to daily distribution. The challenge for cakes would be to expand the consumption of packaged cakes. In fact, this challenge is also a significant opportunity for this particular segment. With the right enablers from product and supply chain, this is a category waiting to explode. The cake business is not a very high revenue-generating business. With commercial property rates so high, it is very difficult to sustain and have profitable retail outlets. It is also very expensive in cities like Delhi or Chandigarh to expand the production unit due to the same reason. The quality of flour and supply chain is the key challenges for the bakery industry. Bakery manufacturers have to deal with quality of flour and other ingredients. Whereas opportunities are immense in this industry as disposable income has increased among the people.

INGREDIENTS NEWS

Add Fiber to whole grains by Donna Berry

esearch shows many Americans believe that when they consume a product containing whole grains they also are getting a generous dose of fiber, which more often than not, is not the case, according to a group of nutrition experts who met in Chicago this past October. As a result, the group recommended whole grain products are an ideal food to be supplemented with fiber food ingredients in order for them to qualify as “good” or “excellent” sources of fiber. The public health implications of inadequate fiber intake prompted the formation of October’s roundtable meeting of nutrition researchers, educators and communicators entitled “Filling America’s fiber gap: Probing realistic solutions.” The meeting was sponsored by the Kellogg Co., Battle Creek, Mich., and a synopsis of the meeting was first published on-line on May 30, 2012. It will appear in print in the July 2012 issue of The Journal of Nutrition. The group, which included Roger Clemens, Ph.D., current president of the Institute of Food Technologists, and adjunct professor of pharmacology and pharmaceutical sciences at the University of Southern California School of Pharmacy in Los Angeles, met with the shared interest of identifying challenges and realistic solu-tions for translating current fiber guidance into practical advice for obtaining fiber from a variety of sources, both whole and enriched, in order to help Americans better meet their daily fiber recommendation. The meeting included presentations by the participants, with a focus on their areas of expertise related to the public health concern about low-fiber intakes, followed by discussions of the challenges of adhering to current dietary guidance, and opportunities for filling the fiber intake gap. Consideration of the effects on energy intake was also a focus because of the emphasis on energy balance in the Dietary Guidelines for Americans, 2010. “All of us agreed that all fiber-containing foods should play a role in helping Americans meet their daily fiber needs,” Dr. Clemens said. “With evidence that fiber intake is closely linked to energy

intake, there was recognition of the challenges of increasing fiber while attempting to reduce energy intake, as is the goal for many who are overweight. “This prompted the need to focus solutions on immediate and realistic small-step changes that could be implemented within current eating patterns. Considering that nearly all Americans fall short of meeting their fiber needs, yet meet or exceed their daily recommendations for grainbased foods, our discussions centered on opportunities to improve the fiber content of and choice of foods within this group as a strategy with an immediate potential for increasing fiber intakes without exceeding energy goals.” Dr. Clemens said the round-table experts agreed there is a great deal of confusion among consumers and even many nu-trition authorities regarding the relationship between whole grains and fiber. To help differ-entiate and reduce confusion, there is a need in future research and education to clearly delineate between the two terms to avoid the interchange of the food (whole grains) with the nutrient (fiber) and to provide clearer direction for choosing grain foods that provide at least a “good” source of fiber. He cited the example of the updated nutrition standards in the National School Lunch and School Breakfast Programs that include new directives that all grains must be “whole-grain rich,” yet do not address a fiber requirement for defining a food that is “whole-grain rich.” “By not using fiber as a marker of whole grain quality, this could be a missed opportunity for clarifying the role of fiber in providing key health benefits in whole grains,” he said. The amounts of fiber in grains, fruits and vegetables recommended by the Dietary Guidelines for Americans 2010, to close the fiber intake gap vary considerably, and many choices within these food groups are not considered “good” or “excellent” sources of fiber, and therefore won’t help close the gap, explained Dr. Clemens. This is why modifying grain-based foods makes sense. “Americans are already meeting, or for

that matter, exceeding, daily total grain recommendations; thus, a shift from lowfiber to higher-fiber grain-based foods may be an achievable public health goal,” Dr. Clemens said. Further supporting the idea of boosting the fiber content of grain-based foods are results from a modeling exercise using data from the National Health and Nutrition Examination Survey (NHANES) 20032006 that measured the effect on calorie intake when fiber-containing foods Americans are currently eating were increased to meet fiber recommendations (maximum increase of five times current intake). Although fiber intake increased in all adults to 28.5 grams per day, the calorie intake increased by more than 1,000 calories per day. Alternatively, by adding fiber food ingredients to grain foods that are naturally low in fiber to make the foods have 2.5 grams or 5 grams of fiber per serving, men and women increased daily fiber intakes to 25 and 39 grams, respectively, without increasing calories. Adding fiber to grain products is not a new concept, as many bread and cereal manufacturers have included oat fiber, beta-glucan and psyllium in their product formulations. What is a 21st century phenomena is the inclusion of novel fiber food ingredients such as inulin, soluble corn fiber and resistant maltodextrin. The roundtable experts agreed more emphasis needs to be placed on consuming adequate fiber, regardless of whether fiber occurs naturally in food or is added. Both forms become part of the total fiber content of the food and both can have a positive effect on human health, said Dr. Clemens. It’s no wonder that the second edition of “Fiber food ingredients in the U.S.,” published by Packaged Facts, a division of Marketresearch.com, Rockville, Md., said the market for all types of fiber food ingredients will increase indefinitely, as the market for fiber-enhanced foods is still in its infancy. The report said the addition of fiber to grain-based foods is driving the growth and will continue to do so. Further, there is a great deal of room for growth across almost all food categories, which presents an opportunity for the many — more than 50 — different fiber food ingredients currently available to formulators. Oil & Food Journal Vol. 08, Issue 05, March 2013

Oil & Food Journal Vol. 08, Issue 05, March 2013

OUTLOOK

Global Scenario on Supply, Demand & Price O

utlook for Vegetable Oils - 2013 I read a strange headline a few days ago. It said Swimming against the Bearish Tide. I believe this one sentence sums up the current situation in the grains and oilseeds market. It is a reiteration of the fundamental law of economics which says High Prices bring a Big Supply Response. I shall quickly re-cap my recent forecasts, made at the Price Outlook Conference of Bursa Malaysia in Kuala Lumpur on 6 March 2013. I said CPO futures on the 3rd position would trade between 2300 and 2500 Ringgits for the next 2 months until the end of April Between April and the end of June prices would come under pressure and go below 2200 Ringgits From JulyAugust onwards prices would break down and could possibly even go to 1800 Ringgits. If Brent crude oil declines to USD 80 per barrel, prices could even break 1800.

Oil & Food Journal Vol. 08, Issue 05, March 2013

I estimated that Malaysian CPO production in 2013 would be 19.5 to 19.7 million tonnes and Indonesian production would be about 30.5 million tonnes. I also estimated that large tracts of palm plantations in Thailand, Central America, Colombia and Africa would come into maturity during 2013. As a result total palm oil production in 2013 would grow by about 3.9 million tonnes. The latest information coming from friends in the plantations suggests that the new Low Cycle for palm trees has set in with vigour. CPO yields have begun to decline sharply on a year-toyear, like for like basis. This means the Low Cycle is projected to be somewhat more severe than anticipated in my KL paper. I do not believe this warrants as yet any change in my production estimates for 2013. The Oil Palm has wonderful and fast powers of recovery and these are conditioned by prevalent rainfall and climate. However, this does mean production in the first half of 2013 will be lower than expected and Malaysian stocks will be drawn down significantly. I am projecting today that Malaysian stocks dip below 2 million tonnes in June 2013. Indonesian stocks will also be drawn down below 4 million tonnes. The month of Ramzan commences this year in the second week of July which means peak Ramzan shipments will take place in the second half of June and first half of July. This could make the market for RBD Olein very interesting for June shipment.

sunflower oil production in other parts of the world. I continue to believe palm oil prices will come under pressure after June and definitely under strong pressure once the Low Cycle terminates in AugustSeptember. I continue to believe energy prices will continue to decline and the US Dollar will continue to remain strong. In such an environment, BMD futures on the 3rd position in the period post August 2013 can decline to 2000 Ringgits and even lower. I do not expect them to break 1800 Ringgits unless Brent crude oil trades below US$ 80 per barrel. I have a few more comments on the palm sector. Feedback to my POC paper in KL suggested I may have under-estimated demand growth for bio-diesel and bioenergy. You will recall I estimated such demand growth at just 1 million tonnes. People have suggested such demand

growth could be as much as 2 million tonnes. My answer is that Bio-Diesel and Bio-energy demand is very dynamic and depends on price. Government policies also change from time to time, given the fact that such demand relies on Governmental policies and subsidies. At this early stage I see no need to revise my estimates. I also believe the investment community is moving out of commodities and underlining what I have been saying for many months â&#x20AC;&#x201C; that the cyclical bull market in commodities is now over. I also remain confident that inflation in India will keep declining and will enable the Indian government to raise import duties on refined and unrefined vegetable oil as outlined by me in my POC paper. I expect the first moves in this direction to be delayed until the Malaysian elections are completed.

OUTLOOK

New factors in the PALM market

Palm Price Outlook

The Ringgit has also shown a tendency towards weakness as the Malaysian elections approach. The Equity market in Kuala Lumpur has shown signs of â&#x20AC;&#x153;election strainâ&#x20AC;?. If the Ringgit weakens as the election campaign gets underway, BMD prices denominated in Ringgits have greater scope to rise and therefore today I am revising my short term forecast up to the end of May to a range between 2400 and 2700 Ringgits. I am expecting a strong recovery in CPO production in both countries in the second half of 2013 and particularly in the last quarter. This will coincide with strong recovery in soya oil, rape oil and Oil & Food Journal Vol. 08, Issue 05, March 2013

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Oil & Food Journal Vol. 08, Issue 05, March 2013

OUTLOOK

SOYA

Brazilian logistics are causing many problems as expected. However what is surprising is the erosion of the inverse in soybean futures and the narrowing of the spread between July and November soybeans. I believe this narrowing may either be a temporary aberration or it may simply mean the US soya crop of 2012 was under-estimated. There are many confirmed switches by crushers in China to US beans in recent days. If the US soya crop was as small as estimated by the USDA and Chinese crushers have indeed been switching out of Brazilian beans into US beans, then the July – November spread must expand and do so quickly. The USDA Planting Intentions Report on 28 March will be eagerly awaited. Logic suggests to me that soybean plantings will gain on corn simply due to the Rotation Factor. Planting corn-oncorn is far too risky for farmers this year. We must also observe that soya oil needs to revive some of its edible demand. Soya oil conceded markets to sun oil and to palm in major regions like India, Egypt and other parts of the Middle East. Now soya oil is at a USD 100 discount to sun oil and its premium over palm has eroded. At the time of writing, the spread of soya oil over CPO on FOB basis has narrowed to US$ 200 from its high of almost US$ 320. I expect soya oil exporters to become more aggressive in the coming weeks. Their window of opportunity is fairly narrow between now and September. After that sun oil will once again compete vigorously with soya oil. Finally, in Argentina we have a dingdong tussle between farmers and the

government. The matter at issue is the Devaluation or rather over-valuation of the Peso and Argentina’s heavy export taxes on grains and soya. The election of a Polish Pope had repercussions on the fate of Poland. Will the election of an Argentinian Pope have similar repercussions? Will that prospect make the Argentinian government more amenable to discussion and alleviation of farmers’ problems? Politics and the desire to say in office can make stubborn politicians very reasonable! An adjustment in the value of the Peso is a bearish factor for the soya complex. By September I expect soya oil prices to decline to US$ 900 FOB Argentina. I expect new crop Soybean futures on the CME to go to US$ 10 per bushel and I expect corn futures to go down to US$ 4.50 if good weather prevails.

RAPESEED

I have nothing further to add for the Rapeseed complex. It remains to be seen if demand for rape oil for bio diesel in the EU remains at a high level, given the competition from palm and soya bio diesel.

SUNSEED

There are prospects of big plantings of Sunflower seed in Ukraine and Russia this year. Also having had dry weather last year, we should expect better weather and bigger crops this year. Sunflower oil will be required to fill in the gap left by lower production of Olive oil this year. However, from September onwards Sun oil will exert pressure on all oils and particularly on soya oil for market share.

COCONUT OIL & PALM KERNEL OIL

The supply of Coconut oil appears to be still on an upward curve whilst its demand remains soft. Palm kernel oil production will follow the trend in palm oil. Overall the outlook for Lauric oils remains Bleak. Incremental Demand I am maintaining my earlier projection of an increase in world food demand by 3.5 million tonnes and an increase in world bio-diesel demand by 1 million tonnes.

CHINA

At this stage I wish to say a few words about China. I congratulate the State Reserve on its astute handling of the tight situation for soybeans this year. It can be said that Chinese crushers successfully check-mated the super-bulls in Chicago. The recent dithering on the release price for old rapeseed oil gives cause for concern. These oil stocks must be rotated and holding too much stock in reserve may not be best use of resources. It may be better to hold stocks of rapeseed rather than of rape oil. I hope the Reserve will find a way of lowering the Release Price to a level that is workable and attractive for refiners. The beneficial impact of this move, in terms of lower world prices of the entire vegetable oil complex must be taken into account. From statistics of vegetable oil production, imports and stocks, it appears to me that in 2012 China’s per capita consumption of oils and fats did not expand by any significant measure. High prices could have been a factor. I also believe the growth in Chinese consumption of vegetable oils is slowing down as China makes the transition from

We can now summarise the Global Incremental S&Ds as follows

Oil & Food Journal Vol. 08, Issue 05, March 2013

GLOBAL INCREMENTAL SUPPLY & DEMAND

As I have said in earlier papers, the most striking feature of 2011-12 was the SHRINKAGE in world bio-diesel demand by almost 2 million tonnes. This was due to the effect of Double â&#x20AC;&#x201C; Counting of Used Cooking Oils, Animal Greases and Tallow and other Waste Matters. Some of the same reasons will prevail this year also. However, the re-instatement of the Blenders Credit of US1 per Gallon in USA and higher mandates in countries such as Indonesia and the cheap price of Palm bio diesel will lead to growth in bio diesel demand this year.

First Half and Second Half of year 2013

Most of the increase in Supply will come during the Second Half of the year 2013. This Big Supply Push will come from soft oils such as soya oil and sun oil. Palm Oil & Food Journal Vol. 08, Issue 05, March 2013

OUTLOOK

a middle income country to a high income country. Such a transition is not easy and takes time. China has also introduced tough new specifications for import of RBD Palm Olein. It is quite conceivable that in the long run, China will turn into an importer of CPO and will prefer to refine and fractionate palm oil within China. I look forward with interest to hear what other China-based analysts think on this subject. It would be right to say that Chinese imports and Chinese demand are the major price-making factor for the world oilseed, oil and meal sector. Therefore the worldwide impact of local policy must always be taken into account. China needs to make its agriculture profitable for its farmers. There are 2 ways of ensuring that â&#x20AC;&#x201C; by guaranteeing high prices to farmers or by a system of direct payments to farmers. In the West there has been a move away from Guaranteeing High prices and towards providing Direct Payments to farmers. China may also have to consider such a move. It would lead to lower food prices in China and in many parts of the world. The lowering of food price inflation will also give other benefits like facilitating the lowering of domestic interest rates with its beneficial impact on overall economic activity.

oil will also add to that Supply Push in the last quarter of 2013. The main point to note is that the above S&Ds are based on a presumption of normal weather. Any weather problem will reduce supply. It must also be pointed out that over the course of the full year supply and demand are in balance. However, in the first half of the year, until June 2012, the supply side is weak whilst demand will be strong. The Muslim religious month of Ramzan will be early this year and all Ramzan related shipments will have to go out in June.

PRICE OUTLOOK- Assumptions

I have assumed that the world economy will grow by about 2 % this year. I expect Brent crude oil to trade in a range between 90 and 110 per barrel. I expect India to raise its import duties on vegetable oils.

What are the threats to this forecast?

The biggest threat on the bullish side is a weather problem such as a revival of an El Nino or a second successive drought in North America. There is also a possibility of a collapse in the US Dollar or a rise in energy prices due to geo-political tensions. On the bearish side, there is a threat of a super strong Dollar prompted by problems in the Euro Zone. Finally, if the US Federal Reserve decides to end its QE policy, stock markets and

commodities could fall dramatically.

Some comments on the macro economy

The USA still has major problems around its budget and the gridlock on Capitol Hill. So far markets have been remarkably sanguine and are trading close to all- time highs on the S&P 500. In the Euro Zone the actions of the European Central Bank have had a stabilising effect on Ireland, Spain, Portugal and Italy. Profits of major companies are still expanding as they cut costs and become more efficient. On the other hand growth in terms of national economies continues to be feeble in most of the developed world. Demand for commodities remains flat and prices have fallen. This development favours major commodity importers. Finally, we must be prepared for shocks like the recent crisis in Cyprus.

Conclusion

China will continue to be the critical factor in 2013. For me it is a matter of great joy to be here in Beijing thanks to Kingrain High Technology Company and I wish them well for the future. I wish my friends in the China crushing and refining industry and my friends in the Dalian Commodity Exchange another prosperous year.

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PACKAGING

Package Design Innovation Genius in a Bottle By Kate Bertrand Connolly,

reative package design is keeping things interesting for processors, particularly those with bottled products. The recent crop of breakout package designs emphasizes the personality of each product, with aesthetics ranging from minimalist to Oil & Food Journal Vol. 08, Issue 05, March 2013

fashionista-fabulous and brands scaling from artisanal to multinational. A bottle in the shape of a liquor flask and a bold typographic label are the key components of the striking package for Tavern Vinegar, a line of gourmet wine- and beerbased vinegars created by Jonathon Sawyer. He’s chef/owner of The Greenhouse Tavern and Noodlecat restaurants and founder of Tavern Vinegar Co., all in Cleveland. The inspiration for Tavern Vinegar’s package design came from the look and feel of The Greenhouse Tavern, whose construction and décor incorporate many reclaimed elements. “We wanted something that felt like part of the restaurant,” explains Cleveland-based freelance designer Christine Wisnieski, who created the package design. She adds that the package design is not a continuation of the Tavern’s brand identity, per se, but it does fit with the ambiance of the restaurant. “We wanted [the package] to feel crafty and reclaimed but … modern at the same time,” Wisnieski explains. The package consists of a stock 200ml glass flask with an off-center label printed with a pattern created by repeating the brand name, end to end, over and over. The palette is monochromatic, with the

exception of a pop of color in the vinegar flavor. Each bottle carries a neck tag, printed: “Housemade by Chef Jonathon Sawyer.” The tag, attached to the bottle with twine, also provides ingredient information and the batch number. The tags and pressuresensitive labels are digitally printed. “The solution [is] simple and typographic,” with a homemade sensibility that also feels professional, Wisnieski says. Tavern Vinegar’s products include vinegars made from red, white and rosé wines and one made from craft beer. In addition, the company recently introduced Garlic & Beer Garum Vinegar, Japanese Sake Vinegar and Japanese Plum Wine Vinegar. The products are sold through Sawyer’s restaurants and websites and at select locations in Chicago, Houston and Boston. For now, the bottles are labeled and tagged manually, but that is destined to change as Tavern Vinegar scales up production. “The batches were small and are getting bigger,” Sawyer says, noting that his early homemade batches were as small as 25 gallons. But starting this spring, Tavern Vinegar products will be crafted at the distillery of Middle West Spirits, Columbus, Ohio. “We’ll start with about 40,000 bottles per year,” Sawyer estimates. The package design is likely to change only minimally in the transition to larger batches and with the switch to automatic filling and labeling. For example, the neck tag may no longer be used. But the bottle will remain, as will the typographic label design.

Stings like a B

In the spirits aisle, where packaging is a key element of brand differentiation, innovative designs continue to emerge.

PACKAGING

In some instances, that means less fussy graphics than consumers are used to. The package design for a new Brazilian liquor, B Honey-Cachaça Sting Shots, Rio de Janeiro, illustrates the power of minimalism. The primary package is a stock bottle typically used for wine; the sole decorations on the bottle are the stylized-bee logo and a black-andgold striped plastic capsule covering the bottle’s neck and cork. The product formulation blends handmade cachaça, a traditional Brazilian liquor, with honey and lime. The brand’s bee theme is, of course, a nod to the honey. B Honey-Cachaça launched in Brazil in 2012, and the brand owner plans to introduce it in the U.S. this year. B Honey-Cachaça name and logo are screen-printed on the bottle in a single color. Product information such as alcohol content is printed on the back of the bottle, but this text is invisible when the bottles are on-shelf, thanks to the visual distortion created by the product inside the glass bottle. Pereira & O’Dell, San Francisco, designed the package. The design uses a “kind of Japanese minimalism,” says P.J. Pereira, chief creative officer and co-founder of Pereira & O’Dell. And because it’s so restrained, it’s a very cost-effective design. With the money saved via single-color printing and streamlined graphics, “The little things that we did, we could do very well. We could spend money on a great bottle and great printing, which is very simple but very well done.” The product itself -- specifically its color

-- plays a pivotal role in the B HoneyCachaça package. If the bottle were opaque or covered with a large label, some color variability between batches wouldn’t matter. But the B Honey-Cachaça bottle puts the product on display, making it part of the package design. So “the liquid has to have that [same] color every time,” Pereira says. If the colors of the product and the printing don’t match, “everything looks bad.”

right kind of honey in the right levels, you can … dial up or down the color” of the product. The quality and taste of the liquor ultimately determined how far the formulation could be adjusted. “At the end of the day, the taste of the product is the most important thing. If we were interfering with that, then the most beautiful packaging in the world wouldn’t make any difference at all,” Pereira says. In contrast to other cachaças on the market, the B Honey-Cachaça brand targets women -- thus the sleek graphics on the bottle and an equally sophisticated secondary package. The latter is a discreet black box; the sole decoration on the box is the brand’s logo, which is printed in gold. Pereira describes the box, which resembles a jewelry or perfume package, as “simple, stunning, minimal, precise, elegant.”

Fashion-forward Diet Coke

The designers worked closely with the brand owner to synchronize the color of the product and the ink on the bottle and capsule. “We did some tweaking on the color of the product to match the printing, and we did some tweaking on the color of the printing to match the product,” Pereira says. With “the right kind of cachaça and

The Coca-Cola Company, Atlanta, took a very different direction with its limited-edition Night and Day bottles for Diet Coke in Europe last year. The package graphics dress a contoured glass bottle in either a lacy corset or a Breton-striped shirt. The stripes are the signature style of the packages’ creator, fashion designer and Diet Coke creative director Jean Paul Gaultier, who designed Madonna’s iconic conebra costume in the early 1990s. For those who prefer to drink from a can, Coca-Cola introduced Night and Day Diet Coke cans emblazoned with Gaultier’s name over a pattern of either black lace or Breton stripes. Augmenting his Night and Day designs, Gaultier created the Diet Coke Tattoo bottle. Like the other packages, Tattoo uses the pink contoured bottle as a stand-in for the human body. But instead of clothing, this bottle depicts a fully tattooed torso. Though edgy, the design steers clear of putting the “graphic” in “package graphics” by using plenty of ink to cover the pink. Courtesy: Food Processing Oil & Food Journal Vol. 08, Issue 05, March 2013

BAKERY

Enzymes help bakers bake faster and better Uses for enzymes in baked foods continue to grow because they simplify the baker’s job. by Donna Berry

aster and better — we seem to strive for these qualities in all walks of life. Enzymes work behind the scenes to do this for bakers. These natural proteins, in the form of a complex, precise arrangement of amino acids, promote highly specific biochemical actions. “As catalysts, enzymes facilitate chemical reactions that would normally require much more time or energy to achieve,” said Nicole Rees, R&D manager, AB Mauri, Wilsonville, OR. By helping bakers advance production through enhanced dough handling and tighter process control, enzymes address costeffective flour correction, replace emulsifiers and optimize egg usage. They aid finished product quality through increased baked volume, finer crumb structure, extended shelf life and acrylamide reduction. Simply put, enzymes help bakers get the best from their raw materials. This translates to improved economics and a more satisfied customer.

Oil & Food Journal Vol. 08, Issue 05, March 2013

BAKERY

“Enzymes are naturally occurring components of many bakery ingredients,” said Jan van Eijk, research director, baking ingredients, Lallemand, Montreal. “Oftentimes, it is beneficial to add more enzymes to a batter or dough to maximize functionality in a specific application.” Initially applied to bread and other yeastraised items, enzymes now find use across the board, said Troy Boutte, group manager-bakery/fats and oils, DuPont Nutrition & Health, New Century, KS. “Virtually every baked food can benefit in multiple ways from enzymes, which is one of the reasons their use continues to grow,” he said. Not many natural ingredients are so multifunctional or function-specific and economical to use. “Enzymes are extremely effective at what they do at a fraction of the dosage of other ingredients,” Ms. Rees said, “and this keeps ingredient shipping costs down and inventory space at a minimum.”

More and more applications

The past two decades experienced an increase in enzyme use in all baked foods. “There are two reasons we believe this is happening,” said Trey MullerThym, vice-president, Thymly Products Inc., Colora, MD. “The first is due to the increasing and fluctuating cost of functional ingredients such as vital wheat gluten and ascorbic acid. Enzymes tend to have a stable, lower price point, and bakers appreciate this. “The second reason is because of consumers’ increased scrutiny of product labels. It is our belief that the end customer is looking for easy-to-read labels void of ingredients that sound like a chemistry lab,” he said. “And then, when bakers replace these other ingredients with enzymes, they discover the many extra perks that enzymes bring to the formulation.” A great deal of this change is driven by the increasingly competitive bakery market, according to Joseph Herzog, technical sales director, Enzyme Development Corp., New York. “Standards of product quality and cleaner labeling are rising,” he said, adding, “The growth of whole grain varieties has also resulted in escalating use of enzymes to counter the technical challenges of those ingredients.” Different enzymes — even those in the

same class — do different things for bakery formulations. Ms. Rees explained, “Enzymes can have different side activities. We’ve catalogued the behavior of hundreds of enzymes in each class.” Here’s an example of how enzymes addressed specific issues, with bakers reaping extra benefits along the way. “We created a blend of enzymes for a large national hamburger franchise,” Mr. Muller-Thym related. “We initially set out to help replace vital wheat gluten and sodium stearoyl lactylate due to cost and labeling; however, after the bake testing trials, the customer discovered that this blend of ¬enzymes actually gave a more resilient bun and added volume, which helped during distribution and shipping across the country.” Additional R&D work proved that the enzyme system could replace other commonly used texturizing agents such as calcium stearoly lactylate and diacetyl tartaric acid esters of mono- and diglycerides (DATEM). “Our customers are very happy about this because the word enzyme is much more labelfriendly,” Mr. Muller-Thyme explained. “So, the consumers get a label they can understand, while the bakery saves at the bowl and reduces waste that was caused by damage during transportation.”

Diverse but specific uses

What makes enzymes interesting is how their use varies by application and desired function, with each enzyme type functioning best at its own pH and temperature range. “Faster and better” aspects rely on these conditions along with time and enzyme concentration. Mother Nature designed them this way. “Plants, animals and microorganisms all produce en-¬ zymes,” Mr. van Eijk said. “They are responsible for various life processes, yet enzymes are not living organisms themselves.” Enzymes catalyze biochemical reactions by bringing reactants together, rather than relying on the natural pace of a chance meeting of molecules. Once the desired reaction takes place, the altered complex releases the enzyme unchanged, and it moves along to the next set of reactants to do its magic. The enzyme continues to function in this ¬manner until it is deactivated, or denatured. Typically,

enzymes shut down after exposure to heat, as in baking, or when a forced chemical alteration such as a change in pH occurs. Today, the primary reason bakers use enzymes is to foster longer shelf life. “The most successful and almost indispensable use of enzymes in baked foods is for maintaining softness and freshness,” Mr. Boutte said. “This is accomplished mainly by using specific amylases that alter the starch, resulting in a form that resists staling. “However, we also use phospholipases to achieve some anti-staling effects,” he added. Phospholipase acts on naturally occurring wheat lipids to generate an emulsifier that interacts with starch to slow the staling process. Bacterial xylanases give some antistaling effects, too. “They convert waterinsoluble wheat fiber into soluble fiber to give a hydrocolloid-like effect in the baked food,” Mr. Boutte explained. “This keeps the product moister, which helps soften the crumb as well. All of these mechanisms work in a wide variety of baked foods.”

How they work

Enzymes can increase the volume of baked foods, according to Mr. Boutte. “Volume is an indicator of how light or dense a baked product is, and this can be an indicator of value to the consumer. There are many ways to increase volume in baked foods including chemical oxidants, hydrocolloids, vital wheat gluten and, of course, enzymes.” Many mechanisms that impact staling also tend to increase volume. “So, partial digestion of starch by amylases during baking decreases viscosity and allows the product to expand more easily, resulting in higher volume as well as an anti-staling effect,” Mr. Boutte said. “Production of emulsifiers by phospholipases results in starch complexing,” he continued. “This delays starch gelatinization, allowing greater expansion during baking. And bacterial xylanases can increase dough viscosity during the proofing stage, which prevents ¬coalescence of air bubbles and, in turn, produces more volume.” Other enzymes such as hexose oxidase and glucose oxidase produce volume in a different way. “These enzymes actually mimic chemical oxidants by producing Oil & Food Journal Vol. 08, Issue 05, March 2013

New and emerging needs

Many other enzymes, some commercially available and others under development, address the varying current issues and emerging concerns encountered by bakers. These include clean-label

Oil & Food Journal Vol. 08, Issue 05, March 2013

products, preservation of taste and flavor of baked foods, improved mold-free shelf life of baked foods and reduced product quality variation due to flour variability, according to Mr. van Eijk. For example, demand for guar gum currently exceeds supply, thus raising its price, and several ingredient suppliers have developed multi-ingredient systems that replace guar. Some employ a combination of enzymes and other components to replicate the gum’s functions of thickening, binding and improving texture in select baked products. It’s not just guar that presents price challenges that can be ¬addressed by enzyme applications. DSM Food Specialties USA, South Bend, IN, offers a number of such enzyme ingredients to optimize the functionality of commodity ingredients that often experience fluctuating and, at times, significant rising costs. For example, one such ingredient improves the emulsifying properties of egg lecithin by up to 20%. “It does this by transforming egg lecithin into lyso-lecithin, a much more effective emulsifier,” said Brian Fatula, DSM’s vice-president, Americas, baking enzymes. “The enzyme optimizes egg usage because the baker uses less egg but still gets the same functionality.”

This DSM enzyme system is one of a number designed for cakes. It helps bakers cut costs and boost quality by enhancing aeration during mixing, which, in turn, increases batter viscosity and cake volume, according to Mr. Fatula. Another enzyme ingredient has optimal functionality in denser cakes and is also effective in muffins. “It synergistically combines lipase and amylase technology to ¬produce cakes that maintain ovenfresh qualities over an extended shelf life,” Mr. Fatula said. “The specialty lipase releases natural emulsifiers from fats and lipids in cake recipes. These emulsifiers prevent starch from firming during storage, ensuring cakes stale less rapidly.” Cakes represent a relatively new area of application for enzymes. Results are seen in finer crumb structure and shelf life extension. “Their specific enzymatic action enables manufacturers to double cakes’ shelf life while maintaining premium quality,” Mr. Fatula said. “In tests, extended-shelf-life cakes baked with one of the enzyme ¬ingredients displayed crumb quality equivalent to freshly baked cakes. This extended softness helps manufacturers simplify warehousing and logistics while also increasing consumer satisfaction and ¬reducing waste.” Suggested applications include sponge

BAKERY

very tiny amounts of hydrogen peroxide in the dough,” Mr. Boutte said. The peroxide helps cross-link protein directly but can also convert ascorbic acid added to the dough to dehydroascorbic acid, a strong ¬oxidizing agent. “The crosslinked protein forms a much stronger gluten network that is much better at holding in air and, therefore, produces more volume,” he explained. On the production side, enzymes can be used to improve the ¬machineability of doughs. “Cracker doughs, for instance, are very dry and can be difficult to sheet out,” Mr. Boutte said. “Addition of pro¬teases can improve the sheeting of the dough to reduce snapback, resulting in a better-looking product. “In general, you want the dough to be as strong as possible but also as soft as possible without becoming sticky,” he continued. “This minimizes damage to the gluten structure as the dough is machined and results in the best volume, shape and overall appearance of the finished product.”

BAKERY cakes, pound cakes, muffins and highratio cakes. Even longer shelf lives may be in the works, too, according to Mr. MullerThym. “We continue to see the evolution of the standard extended-shelf-life enzymes that have been around for years,” he said. “By combining some of the more traditional enzymes, it is possible to get a synergistic effect that offers even more shelf life.” Plenty of territory remains to be explored. Mr. Herzog summarized the state of the art involving enzymes and said, “In the short term, there will be continued refinement of existing technologies such as reduced side activities and finding new synergies. Long term, there are likely to be enzymes that target other components in flour not yet utilized.” He put his finger on an intriguing possibility: in situ saccharification. Using enzymes to do this would, he noted, keep sugar off the label and not increase total calories.

Problem solvers

Biotechnology advances allow identification and production of enzymes that address specific issues. For example, when concerns surfaced about the formation of acrylamide in baked foods,

enzyme ¬scientists got busy. A potential carcinogen, acrylamide forms at high temperatures when the amino acid asparagine reacts with a reducing sugar such as glucose. The enzyme asparaginase retards acrylamide formation in baked foods by converting asparagine to aspartic acid, which does not take part in the formation of acrylamide. Asparaginase has been shown to reduce acrylamide levels in biscuit, cookie and cracker applications up to 90% without changing the dough or finished product characteristics. Another development involves synergistic enzyme systems that can be used individually or in combination to optimize specific characteristics of the dough or final baked food. “We have such ¬systems for soft breads and rolls,” said Richard Leboucher, R&D ¬director, West Coast, Puratos, Cherry Hill, NJ. “The systems enable bakers to differentiate the texture of products in terms of resilience, short bite, softness, moistness and melting properties. “The systems can be added on top of an existing recipe to intensify a specific functionality,” Mr. Leboucher explained. Thus the ¬baker can influence one specific characteristic without reformulating the

entire recipe. “For example, the ‘moist’ system improves freshness by increasing softness and moistness,” he continued. “The ¬‘resilient’ system enhances the resilience of soft bakery products, helping to regain original shape after compression. There’s even a system designed to improve texture after reheating or defrosting in the microwave.” It is also possible to combine systems to customize texture. Overall, suppliers report good opportunities for bakers to improve production and product through the use of enzymes. “Enzymes are one of the most economical, efficient, reliable and label-friendly category of performance ingredients available to today’s baker,” Mr. Muller-Thym said. A great deal of progress has been made in enzymes, but more remains to come. “Most commercial baked foods now contain at least one enzyme, but many manufacturers still rely on chemical oxidants or reductants and emulsifiers to develop dough,” Mr. Boutte said. “Enzyme companies still have some work to do in terms of either developing slightly better enzymes or combining existing enzymes in the right way to get the same results as more traditional ingredients.” Curtsey: Baking Business Oil & Food Journal Vol. 08, Issue 05, March 2013

PACKAGING

Oleic Escalation R.&D. leads to healthier, functional oils from sunflowers, canola and soybeans by Jeff Gelski

he levels keep rising, from 55% to now more than 75%. But over the past two decades, not only has the proportion of high-oleic acid oils jumped, but sources have expanded, too, thanks to research and development involving sunflower, canola and soybeans. Higher oleic acid levels mean more stability and functionality when the oils are used in grain-based foods applications. Meanwhile, R.&D. efforts have taken out trans fat and reduced saturated fat, which enhances the oils’ nutritional profiles. Oleic acid innovation picked up steam in 1995 when the National Sunflower Association sought to change the fatty acid structure of sunflowerseed to meet future needs of the food industry. The resulting NuSun oil has higher oleic levels (55% to 75%) than traditional sunflower oil. During the past decade, oleic acid levels rose in canola oil. Dow AgroSciences, L.L.C., Indianapolis, now offers omega-9 fatty acid oils from sunflower and canola. The primary omega-9 fatty acid is oleic acid. Cargill, Minneapolis, offers the Clear Valley brand of canola oil and sunflower oil with high oleic acid levels.

Oil & Food Journal Vol. 08, Issue 05, March 2013

Soybeans join in

This decade, soybean oil is joining the high-oleic acid movement. High-oleic soybean oil made from Plenish higholeic soybeans is entering the market. The oil has an oleic content of more than 75% along with 0 grams of trans fat and 20% less saturated fat than conventional soybean oil. Will these oils be used in commerical food applications? More than 100 testing agreements are in place with various food and beverage companies and industrial users, said Russ Sanders, director of the DuPont Plenish venture. “There is very, very high interest,” he said. DuPont Pioneer offers Plenish, which already has received regulatory approval in the United States and several international markets, including China, said Dave Tegeder, senior marketing manager for the DuPont Plenish venture. Pioneer has filed for approval from the European Union, but Plenish has yet to be approved there.

Interest in Plenish covers a gamut of the food industry, both from food service companies and food manufacturers for the retail market, Mr. Tegeder said. Plenish initially may see more use in food service. “Maybe the quicker ‘in’ is obviously with the frying applications,” he said. Stratas Foods, Memphis, Tenn., already offers Frymax Soy Supreme, a high-oleic oil, for use in the food service industry. The grain-based foods industry may find use for the high-oleic oils, too. “In high-oleic oils, the amount of linolenic and linoleic fatty acids are reduced, resulting in a more stable oil, while the amount of saturates remain comparatively the same,” said Jackie Steffey, product development scientist for AarhusKarlshamn (AAK), which has a U.S. office in Louisville, Ky. “The high-oleic oils can be blended with other oils and shortenings in order to maintain functionality in the finished product. The use of these will improve overall stability, while maintaining zero trans fat and a reduction in saturated fat of the oil or shortening blend.

PACKAGING

“These blends can be utilized in many grain-based foods, such as pizzas, muffins, pastas and tortillas. Higholeic oils also can be an alternative for partially hydrogenated products in frying applications due to the increased stability.” Mr. Sanders said this year Plenish soybeans are being grown in Indiana, Ohio and Maryland. The growing area should expand into Illinois and Iowa within the next two years. The potential future market for high-oleic soybeans is 15 million to 20 million acres (of 77 million acres planted in the United States), he said. Cargill in the 2013 growing season will contract with soybean farmers in the Sidney, Ohio, area, to grow Plenish soybeans that will be delivered to Cargill’s facility for processing. Crushing should take place in October, said Lorin Debonte, assistant vicepresident of research and development, specialty seeds and oils for Cargill. Testing with customers should begin in 2014, he said. Cargill will want to see what flavor profile the oil provides and how the oil blends with other oils. “The big thing is how can you combine (the oil) with other oils,” Mr. Debonte said. With a saturated fat level of 10% to 12%, the Plenish oil compares with commodity soybean oil at 14% to 15% and canola oil at 6.5% to 7%, he said. Plenish will add to Cargill’s oil portfolio. “Our goal is really to deliver the widest possible range of solutions economically to our customers,” said Kyle Marinkovich, director of marketing, specialty seeds and oils for Cargill. “It just gives us a lot of options.” Archer Daniels Midland Co., Decatur, Ill., in the 2013 growing season will contract with soybean growers in the Frankfort, Ind., area to grow Plenish high-oleic soybeans. “ADM is enthusiastic about the introduction of high-oleic soybean oil,” said Michelle Peitz, technical sales representative for ADM Oils, Decatur. “A growing program was started in 2012 and will continue in 2013 in east central Indiana for ADM. “This provides the food industry the

opportunity to evaluate this oil in a wide spectrum of food applications and start approval processes so everyone is ready to take advantage of high-oleic soybean oil attributes when production ramps up in upcoming years.” Tom Tiffany, senior technical manager for ADM Oils in Decatur, said different sectors of the food industry are evaluating high-oleic soybean oil. “It can be used as-is, in blends with other oils, and turned into a shortening by enzymatic interesterification or blending with various hard stocks,” he said. “Because of the various means to modify the functionality of high-oleic soybean oil, it can be used in frying, baking, spray oil, margarine, spreads and a host of other applications.” Bunge also is involved with Plenish. In October 2012, it was announced Pioneer will contract with soybean farmers in the Delphos, Ohio, area to grow Plenish high-oleic soybeans in the 2013 growing season that will be delivered to Bunge’s facility for processing or to a participating elevator. A similar contract was in place for the 2012 growing season. “Although our numerous customers are evaluating high-oleic soybean oil, we are still awaiting global approval,” said Dilip Nakhasi, director of innovation for Bunge. Small amounts of the soybeans are being crushed, and small amounts of the oil are being tested, Mr. Nakhasi said.

Gold, soon may be available from St. Louis-based Monsanto. The U.S. Department of Agriculture in December 2011 deregulated the biotech trait, MON 87705, in Vistive Gold soybeans, which have 0 grams of trans fat, 60% less saturated fat than conventional soybean oil and have a fatty-acid profile of at least 75% oleic acid. The Vistive Gold oil will have an advantage in its saturated fat content of only about 7%, Mr. Debonte of Cargill said. “It’s now in the range where canola has been working for the past 40 years,” he said.

Growth in canola

Cargill’s Clear Valley range includes canola oil with oleic acid levels of 65% and 80% as well as high-oleic sunflower oil and an omega-3 fatty acid oil that is a blend of canola and flax, a source of alpha-linolenic acid, an omega-3 fatty acid. Cargill announced two investments in canola in 2012. The company plans to construct a world scale canola refinery at its Clavet, Sask., canola processing facility that should be completed in time for the 2014-15 canola harvest. Construction of a canola processing facility near Camrose, Alta., also should be completed in time for the 2014-15 harvest. Mr. Marinkovich pointed out Cargill is a fully integrated canola oil supplier from seed to oil.

“We’ve done tests in house, and it’s working very well,” he said.

“We own it,” he said. “We grow it. We have a dedicated supply chain. That allows us to assure supply.”

Last year Bunge opened a culinary center in Bradley, Ill. The center includes an industrial kitchen, a corporate dining room and video capabilities. Bunge customers may take Bunge’s ingredients, including fats and oils, and test how the ingredients work with the customers’ existing products or how the ingredients may be used to develop new recipes. Perdue AgriBusiness also has joined the Plenish growing program this year. The company will contract with soybean farmers in the Shiloh and Sudlersville, Md., areas to grow Plenish soybeans.

Dow AgroSciences already has integrated its omega-9 fatty acid oils into the grainbased foods industry. Bakery shortenings may use omega-9 fatty acid oils in combination with the right functional fats, said Asim Syed, director, global R.&D. The possible levels of reduction in saturated fat through the use of omega-9 fatty acid oils depend on the application. In the next two years Dow AgroSciences plans to launch an omega-9 fatty acid sunflower oil that has 0 grams of saturated fat, Mr. Syed said. It may be used in shortening formulations.

Another high-oleic soybean, Vistive

“A select group of food manufacturers Oil & Food Journal Vol. 08, Issue 05, March 2013

Palm oil innovation

Palm oil already is a functional oil used in grain-based foods, and it’s also trans fat-free. Palm oil’s saturated fat content may be higher than liquid oils, but recent innovations have taken place with shortenings. SansTrans RS39 is a zero-trans fat, allpurpose shortening that has 30% less saturated fat than regular palm oil, said Gerald McNeill, Ph.D., vice-president of R.&D. for Loders Croklaan, Channahon, Ill. A line extension introduced last year offers firmer texture than SansTrans RS39. “Consisting of three products based on blends of palm oil with canola oil, SansTrans RS40, RS42 and RS45 provide successively firmer textures that better match the needs of a diverse range of baked goods that need an all-purpose shortening,” Dr. McNeill said. “All of the RS products contain less than 40% saturated fat, providing approximately

Oil & Food Journal Vol. 08, Issue 05, March 2013

35% lower saturated fat content compared to their regular palm oil counterparts.” He added saturated fat, according to recent studies, may be more neutral than harmful in relation to cholesterol and heart disease risk. For example, a study in the August 2012 issue of Diabetologia suggested the reported dietary saturated fatty acid intake was not significantly associated with cardiovascular disease and allcause mortality in type 1 diabetic patients. A prospective cohort analysis was performed in 2,108 European type 1 diabetic patients aged 15 to 60 years who were free of cardiovascular disease at baseline. “For decades scientists have warned that saturated fat raises risk of heart disease because it raises serum L.D.L., commonly called ‘bad cholesterol,’” Dr. McNeill said. “Nutritionists called for lower and lower intakes of saturated fat to reduce heart attack rates. But saturated fat also was found to raise H.D.L. cholesterol, also known as ‘good cholesterol,’ perhaps making saturated fat not as bad as once believed.”

Loders Croklaan invests in sustainable palm oil

In 2013 IOI Loders Croklaan Europe plans to increase its volume of certified sustainable palm oil to 30% of total sales. Parent company IOI Group in Malaysia primarily produces the oil. The IOI Group expects to have the last of its plantations certified by the Roundtable for Sustainable Palm Oil by the end of 2013. Sustainable palm oil will be available in the United States, too. “IOI Loders Croklaan Americas has fully implemented its plans to offer its customers a full range of certified sustainable finished palm and palm kernel oil products in mass balance form, using oils that are fully segregated up to the Channahon (Ill.) and Rexdale (Ont.) refineries,” said Gerald McNeill, Ph.D., vice-president of R.&D. for Loders Croklaan, Channahon, Ill. The R.S.P.O. was established in 2004 to promote the production and use of sustainable palm oil. It brings together more than 1,000 palm oil growers, oil processors, manufacturers, retailers, N.G.Os and palm oil investors.

PACKAGING

have received samples in small amounts,” he said. “They are doing their own internal testing.”

EXCLUSIVE INTERVIEW

Emphasis, rewards for farmers needs to be enhanced to improve quality & tonnage of fruits & vegetables

OODPRO International Inc., USA, is a Food Processing and Distribution specialist and a leader in area of “Design & Build” of all types of Food Processing facilities. Headquartered in San Jose, California, FOODPRO

INTERNATIONAL, INC. was founded during 1982. Today, the company executes projects all over the world, including India. Foodpro International, Inc. has successfully completed more than

450 food industry related projects in more than 43 countries. Some of the areas in which Foodpro has been very successful are in the post harvest handling, treatment and storage of fruits and vegetables, all types of processing (cooking, freezing and dehydration as well as extraction and concentration) and in maintaining the cold chain in the distribution of perishable products. The principals of Foodpro represent a solid food industry background; together they embody more than a century of dynamic experience within the food industry. Foodpro’s team of specialists is backed by associates in every field of engineering and food technology. As one of the leading advisors to the food industry worldwide, FOODPRO has helped many companies expand existing operations or develop new ones. Now Foodpro has partnered with the eminent globalcompany Bry Air AsiaAsia, head quartered in India to make its progressive venture here in India. They have big plans and thoughts to enhance the food industry in India. While chatting with Dick Jennings, Director of Food Pro International, Our Editor– Firoz H Naqvi came to know about their humungous plans for the food industry, their partnerships and future plans in India. Oil & Food Journal Vol. 08, Issue 05, March 2013

The long relationship we have had with BryAir coupled with the interest in the Indian food industry actually resulted in our deep attention in India. The main reason was that the emergence of Indian food industry as a potential market made us renew our long time relationship with BryAir. We have read and understood the decision making of the government of India, and not to mention that from the economic point of view India is a miraculous market for most international companies like us. Food Pro is a multifaceted company and has profound knowledge from farm to fork concept. Also we have the resources of experts from all over the world that can address every aspect of the food chain. With coincidental presence of our friends BryAir and the kindred food operation here was the turning point in our decision to enter the Indian food industry to explore its potentiality. We look forward to expanding with them together with providing each other with mutual needs and requirement. You have been traveling throughout India, so could you tell how do you view the business culture of India especially related the food processing industry? We feel that there is much be done, however the situation is perfect as you have good aggressive and hardworking population who senses values and senses what they are missing and many of them have responded to us in their own way in our supermarkets or machinery manufactures or food operation themselves . They welcome the attempt to put things together. Though I have not had a chance in this trip to look closely at the farming situations which are vital as we always stress that if farms are not producing what is needed then none of us can get anything done. Farms are the backbone of all food processing business so our basic work is to enhance the farming level here. Do you think there should be collective effort right from the farm to the fork for coordination and need for efficient leadership? Oil & Food Journal Vol. 08, Issue 05, March 2013

No doubt, but then the pleasant aspect of the situation here in India, is the fact that the government not to mention the private sector is right behind this with their several schemes and each one of which would result in some cohesive action among the different players. The farmer needs to be shown that they can get a good income each year which is also renewable. That is to say if we get a couple of dozen farmers with a given area and a given crop and we can develop and assure the farmer with the help of the government that this long term effort. We are looking forward to build that relationship. This thought process should be within the agriculture people the world over. Being one of the largest producers of vegetables and fruits in the world India is still lagging behind, what do you think is needed to be done to make our presence being felt in the international market? Emphasis and rewards for the farmers needs to be enhanced so that they can improve the quality as well the tonnage of the fruits and vegetables. We visited several supermarkets in India and emphasized on the produce section, although much of it is fine but still a great is disappointing. The appearance of the product and its physical properties were not up to the mark instead they seemed to have suffered the path from the cold storage to the market. This has many reasons, which needs to overcome as soon as possible. But the money produced by the farmers consistently needs to be increased thus making the farmer grow big and do a better job both in quality and quantity. India definitely needs both. Recently the Indian government has announced that they are going to accept 100 percent FDI in the retail sector and with the entry of giants like Metro Cash n Carrys and Wal-Marts of the world, do you think the produce will now be of higher and better quality? Certainly, let’s see the example in what we did in Moscow – we set up a produce centre, and for this supermarkets

from France and Germany came in with beautiful stores but did not have the produce section. This step was to enlighten the Russian buyer to the importance of clean farm produce, with which they were not aware of. This step was also the way to show that the industry that was dated thousand years ago could be defined in a whole way by presenting clean, hygienic and fresh farm fruits and vegetables. So ultimately with dedicated hard work we now have a lot of super market over there with beautiful farm produce section which not only excels in quantity but also in quality. The same thing can happen here in India, if we follow the same step and divert to consumption of clean fruits and vegetables, it will be inherently be very good for us as well as for the Indian economy and farms. Let’s say delivery loads of grapes or mangoes can go to fresh market, dehydrated, processed, frozen etc. all this engages so many people and involves year round operation for the food stuff and hence gives a happier economical future for the entire sector.

EXCLUSIVE INTERVIEW

Could you tell us about your company and are your ground interest in India?

Indian is going through high inflation rate in recent times especially in the food sector, do you thing that organized processing of fruits and vegetables will help to stabilize the food prices to some extent? Absolutely because if there is scarcity, prices goes-up. So what needs to be done is to level off the production on a year round basis as best possible for the main food stuffs here in India. Though you have a proper harvesting period of two to three months, building a proper infrastructure is important, because this will enhance the ability to handle the fruit and vegetables as they come in and then the capability to store them in cold storage awaiting production. This method can ultimately require fresh fruits and vegetable as well as finished produces, but also it can handle certain production like fresh grape jelly and peanut butter or fresh farm carrot, so that it is available all over the year for the consumer. In this way there won’t be wide swings in the price of these commodities. Also they can switch from one group to another which should be abundant and also be evenly priced- if things get short the price goes up the production stops,

NEWS

may be the farmers will learn from this. Eventually we all are in it together and things we have discussed today will naturally heighten the normal flow of product to the market which means normal pricing.

Remove Moisture

How do perceive your partnership with Bry Air, and what responsibilities are you going to divided and share?

and see the difference in

quality and productivity

Bry Air Asia will continue in their normal way. We operate and we consider ourselves to be lucky to be their partnership in many ways – like they know most of the people involved in the Indian industry which can be of great advantage to us. We in turn can divert their attention from their primary efforts to more into the food sector. Because we have staff of food experts in various roles such as farming or dehydration or quick freezing, we also have case history and also we can adapt the techniques and economic case studies that will benefit everyone. Our partnership with Bry Air Asia is nothing but a pleasure to work together. Their ease of working with several industries here puts forward a clear advantage for us including the governance. Bry Air Asia and Food Pro joint venture will go a long way benefiting each other mutually.

Goa: Govt initiatives fuelling dairy revolution

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revolution in dairy development is sweeping Goa-a tiny mini state of India. More and more farmers are taking to milk farming with gusto and as a result of it milk production is spiking. According to an estimate milk production will have touched the 68 thousand litres mark by the close of the fiscal year. Sources say the state intervention is mainly fueling growth in the dairy sector. The govt. has lately provided a raft of facilities and incentives to the farmers, claim the sources. Several schemes including Kamdhenu are aimed at investing dairy farming with profitability, official sources say. Goa earlier experienced a wide gap between demand and supply in milk production and this was blamed on the poor performance of the cooperatives. Goa remained dependent on sources outside of the state, noted analysts. The pace of the current transformation experts say is also being quickened by govt providing quality fodder and buying of additional livestock.

24 cm X 9 cm

Oil & Food Journal Vol. 08, Issue 05, March 2013

NEWS

Hi-tech milk dairy proposed for Mysore

ysore will soon have a hi-tech and massive dairy on the lines of Mega Dairy in Bangalore. With this, the proposed dairy will be able handle eight lakh litres of milk daily, which can be expanded up to 10 lakh litres. It is going to be a fully computerized plant with hi-tech features. Bangalore’s 10 lakh litre-capacity mega dairy was set up a decade ago. The officials of Mysore Milk Union Ltd have proposed the mega dairy project, predicting massive growth of the industry in the near future. According to them, milk production may increase by 2020, and that the new dairy would help them meet challenges. Preliminary discussion on the setting up of the dairy is over. Next week, there is will a presentation on the proposed project in Bangalore, which will be attended by

NABARD officials. Mysore and Chamarajanagar Milk Union MD Suresh Babu told that their recent procurement analysis has revealed that there was an increase milk production in November last, during which time the dairy handled about 6.25 lakh litres daily. On an average, the dairy receives nearly 4.7 lakh litres of milk every day, and sells 2.4 lakh litres in sachets and 40,000 litres of curds. As many as 1,309 milk co-operative societies in Mysore and Chamarajangar districts have been supplying milk to the dairy. Babu said milk procurement is expected to rise with many people are taking up dairy farming, “because this is the only business which is immune to drought or recession”. “Studying its growth in the near future, we have proposed to set up a mega dairy

First India-China JV in Australia sets up edible oil refinery

he project has created 80 direct jobs, 200 construction jobs and over 500 indirect jobs, besides contributing significantly to the local economy The first India-China joint venture in Australia, Riverina Oils and Bio Energy Pty Ltd (ROBE), has developed a 170,000-tonne oilseed crushing and edible oil refining plant with an investment of A$150 million (around Rs 830 crore) in Wagga Wagga, 470 km south-west of Sydney in New South Wales (NSW). The plant will also produce 105,000 tonnes a year of vegetable protein meal for use in the Australian poultry, dairy and animal feed industry. The project has created 80 direct jobs, 200 construction jobs, and over 500 indirect jobs, besides contributing significantly to the local economy. ROBE’s key partners and shareholders include SP Chemicals, China, Asiawide Holdings, Singapore, Lotus Ventures, New York and India’s leading transport and energy company, Bhoruka Industries. For technology, the company has partnered with Desmet Ballestra, a world

leader in the oils and fats technology and a supplier of key components of solvent extraction and refining plants across the world. ROBE’s Managing Director D D Saxena told: “Australia exports oilseed, but imports both edible oil and protein meal. The crush margins in Australia are the highest in the world. It has globally competitive pricing for oilseed exports, yet very high domestic prices for finished products. Value addition is central to the ROBE business proposition and critical to the future of the agri/food processing sector in Australia”. The ROBE agribusiness venture is described as the largest value-added greenfield investment on Australia’s eastern seaboard and it is the first greenfield project to be funded by State Bank of India and Axis Bank. “Indian banks understand project finance and SBI has supported us through this difficult journey of bringing this project to fruition,” Saxena said. The initial approval for the project was given in early 2007 and the groundbreaking took place in September 2009,

in Mysore. It would come up on a 34acre land in Alanahalli at an estimated cost of Rs 116 crore. We have sought assistance from NABARD (50%) and state government (40%), and the milk union will bear 10% of its cost,” he added. COMPETITION FROM PVT PLAYERS Of late, Mysore dairy has been facing competition from private players. Babu said that there is competition from private players who have adopted aggressive marketing strategies. “But we are educating consumers about the quality of our products, and health hazards of milk supplied by private players, who are paying high commission to sellers. As ours is a government set-up, we can’t pay more than 4% of MRP as commission,” he said. but bureaucratic and regulatory approval resulted in a three-year delay and a cost over-run of over A$20 million. The plant started producing crude oil in December 2012 and refined oil in the second week of February 2013. “In December, our first shipment of 500 tonnes of crude oil was sent to Gokul Refoils and Solvent Ltd in India. Over the next five years, we plan to export about 20,000 tonnes of refined oil a year to the US and Asia,” said Saxena, who had earlier run large food and agribusiness ventures for multinationals such as Unilever and Bakrie, and for India’s Thapar Group. ROBE will focus on canola for the next six to eight months and then move to safflower, cottonseed, soybean and sunflower. The food processing industry is the largest manufacturing employer in Australia with more than 312,000 jobs. Welcoming the Indo-Chinese joint venture, deputy premier of NSW, Andrew Stoner, said in a message: “We appreciate the jobs and flow-on economic benefits that the investment creates in regional NSW.” ROBE’s official launch in Sydney was hosted by the Australia India Business Council, which plays a vital role in building bilateral business ties.

Oil & Food Journal Vol. 08, Issue 05, March 2013

NEWS

Mother Dairy launches ice creams in Chennai

other Dairy Fruit and Vegetable Private Limited, a wholly owned subsidiary of the National Dairy Development Board (NDDB) having its headquarters in Gujarat’s Anand district

entered Chennai with the launch of its entire range of ice creams. One of country’s leading ice cream brands, Mother Dairy, will offer its entire portfolio of ice creams in ‘Impulse’ and

take-home range including the popular premium ‘Classics’ range at Chennai. “Having won the heart of millions of consumers across the country, Mother Dairy’s ice creams are all set to delight the taste buds of ice cream lovers of Chennai. We are sure that people of Chennai will enjoy the goodness of icecreams in its purest form as offered by us,” Subhashis Basu, business head, dairy products division of Mother Dairy said on venturing into Chennai in a press release. Mother Dairy ice cream is made out of milk fat as opposed to frozen desserts, the release said, adding that consumers in Chennai can now pamper themselves with the exotic and the most sought after range of premium tubs. Mother Dairy was commissioned under ‘Operation Flood’ project of NDDB on December 4, 1974. It claims to be market leader in the branded milk segment in Delhi with sales close to 30 lakh litres per day in the city. It has also entered categories such as probiotics with the launch of Mother Dairy ‘b-Activ’ probiotic curd and lassi, ‘b-Activ’ plus curd and ‘nutrifit’ probiotic

Anand Agricultural University develops India’s first indigenous probiotic culture

ountry’s first indigenous probiotic culture isolated by scientists of Anand Agricultural University (AAU) will be used by a Kerala-based food company to introduce probiotic dairy products. AAU has signed a MoU for commercialization of the probiotic lactobacillus helveticus (strain number MTCC 5463), with Thiruvananthpurambased Dr Baboo’s Food Science and Biotechnology Private Limited. It is the first of its kind MoU between a university and a food company wherein the food company will be utilizing the latest and need based research carried out by university at commercial level. Probiotics are bacteria that help maintain the natural balance of micro organisms in the intestines by inhibiting the growth of

harmful bacteria. They are also available as dietary supplements and are used by many to prevent diarrhoea, gas and cramping caused by antibiotics which kill beneficial bacteria along with the harmful types. Most probiotic range of dairy products available at present in the market like the probiotic lassi and curd sold by dairy giant Amul use imported probiotic cultures. “After getting it patented in 2010, we had deposited the culture at the Indian patent repository at the Institute of Microbial Technology (IMT) at Chandigarh while the DNA mapping was submitted to the gene bank at the National Centre for Biotechnology Information, United States. Now, we have given the exclusive right for its commercialization to the food company,” said professor J D Prajapati

of Department of Dairy Microbiology at AAU’s SMC College of Dairy Science. Interestingly, Dr Baboo Nair, who is the managing director of the Kerala firm, is also an alumnus of AAU. After graduating from the erstwhile Gujarat Agricultural University in 1961, Nair, as professor emeritus at Lund University, Sweden, has worked with AAU under an exchange programme. “Currently, probiotic cultures are largely imported from Denmark by the dairy and other food industry of the country to manufacture probiotic products. The indigenous culture developed by us can be used for manufacturing probiotic fermented milk products such as lassi, curd, buttermilk among others,” said Prajapati.

Oil & Food Journal Vol. 08, Issue 05, March 2013

pecialty biomedical company Pamlab has signed an agreement to sell its business to Nestlé Health Sciencefor an undisclosed amount. Nestlé Health Science aims to develop sciencebased nutritional solutions to deliver improved personalised healthcare for people with chronic medical conditions. Pamlab’s products, including Metanx,

CerefolinNAC and Deplin, have helped address the nutritional management of metabolic issues associated with diabetic peripheral neuropathy, mild cognitive impairment and clinical depression respectively, and other diseases and conditions. “The acquisition of the Pamlab business is aligned with our strategic ambition

NEWS

Nestlé Health Science Acquires Pamlab

to provide science-based nutritional solutions for people with chronic medical conditions,” said Luis Cantarell, Nestlé Health Science President and CEO. “Pamlab will particularly strengthen our brain health platform and provide us an additional foothold in metabolic health in the US. By leveraging our nutrition heritage and US operations with Pamlab’s proven expertise in medical foods and strong salesforce capabilities, together we can play a key role in helping to manage certain chronic diseases and improve the quality of patients’ lives.” Nestlé Health Science anticipates it will be able to leverage Pamlab’s strong sales-force capabilities and reach to promote sciencebased personalised nutritional solutions in the US.

Saham Global Supports Kenya Rural Agri Food Processing Project

e are of great pride and privilege to support Kenya Rural Agri Food Processing Project. Kenya Rural Agri Food Processing project aims to uplift the lives of less fortunate people in Kenya specially those who are in rural areas where food and safe drinking water scarce are being experienced. Mr. Jan Willem Van Es, Managing Director of Saham Star General Trading LLC, Dubai and Saham East Africa Ltd, Kenya stated that: “We are looking for Social Investors who are willing to participate in the rehabilitation of two villages in Kenya, one coffee/dairy farmers village in the South at the foot of Mount Kilimanjaro, the other in the west, close to Lake Victoria. We have identified waste-to-revenue opportunities for rural food processing, which are supplied on a lease-to-own base. For each 10 Euro we change the life of 1 person - we will start phase one once we have the accumulated funds to involve 50,000 villagers. Investors with contributions over 1,000 Euro are repaid in 60 monthly annuities, including reasonable interest. The higher the contribution the more interest we are Oil & Food Journal Vol. 08, Issue 05, March 2013

willing to allocate.” He continues: “We have already started the reforestation project in Seme, Nyanza, Western Kenya with the propagation of the first few Moringa trees, prior to turn corner of the shamba into a nursery. The seedlings will be used for the reforestation project along the 26km long river and many of its feeding sources, replacing useless bushes and wild vegetation, occupying good land without any value for the inhabitants.” He added: “The most priority project is the rehabilitation of Awach River. This river is running from Maseno Hills towards Lake Victoria over a 26km stretch. Despite the fact that there is virtually no industrial activity in this rural area of Western Kenya, the water is heavily polluted because of human and animal waste. For not more than Euro 2,50 per month per couple, we can process and supply every day 25 liter healthy drinking water, as per World Health Organization, European and USA Standards. The local population, represented by the Awach River Water Resources User Association, has committed themselves to pay for the water once the equipment

is installed. They will form a cooperative that will jointly operate the water processing plant and share responsibility for all operational expenses and monthly payment of the lease.” Mr. Jan Willem Van Es, Managing Director of Saham Global team ended the statement: “Saham would be donating 10% of its annual 2013 profit in support with this cause. We welcome anyone who are interested to donate, even how little or big amount. Your donations will also be used to mobilize the nursery and seedling propagation, a good source of work for the local people and a next step towards a future in prosperity.” Saham is a Dubai-based environmentally dedicated group, part of the Belselah Group of Companies, with branches in The Netherlands, Kenya and before year end in Saudi Arabia. Saham is dedicated to make a change the Green Way and educates various audiences whilst offering a variety of 40+ bio-active products combined with an unrivaled expertise on surface cleaning, sanitizing, waste treatment, leisure turf, public green, agriculture and horticulture.

NEWS

Birmingham manufacturing hub provides European base for tna

ackaging solutions specialist tna has announced the opening of a European manufacturing hub in Birmingham in the UK. The development at one of the company’s existing sites further expands tna’s global manufacturing facilities and provides a logistical base for its sales, technical service and project management capabilities in Europe. The new hub creates a strategic site closer to tna’s European customers, reducing lead times and further enhancing the company’s ability to provide quality

Recycling rate continues to rise

he Australian Packaging Covenant (APC) has announced that the overall recycling rate for postconsumer packaging in Australia is 63.8% for 2012. Collaborative product stewardship actions have led to this considerable improvement in the recycling rate from the 39% baseline established in 2003. The establishment of the Packaging Covenant itself is said to have had a direct contribution to the increased national recycling rate. APC-funded projects have accounted for up to 32.4% of the overall increase in recycling tonnes from 2005-2012. APC CEO Stan Moore said, “We are pleased to see the recycling rate continue to increase overall despite the difficult trading conditions. The Australian Packaging Covenant has a number of key projects in the pipeline and would expect these to start contributing to

service. The 4645 m2 facility represents a significant investment in the European market, and product output is expected to reach 30% of all tna’s capital equipment from around the world. Providing employment for about 65 people, the site will create new jobs in the area, both in the manufacturing facility and the offices. Annual cash injection in the region is set to reach £15 million per annum and is projected to double in the next three to five years. “We are delighted to be opening our

new European Manufacturing Hub in Birmingham,” said Tim Moulsdale, General Manager - Europe for tna. “Through our new production facility in Europe, we can now manufacture a large proportion of our revolutionary products in addition to offering enhanced technical support, sales and related services to our customers here and across the globe.” The opening of the European manufacturing hub represents just one of a number of office openings for the company in 2013

future increases.” There have been increases in recycling tonnes for all but one material type. The recycling rate for paperboard packaging has increased to a new record level of 76.8%, which is a 1.5% increase on last year and up by 5% since the stronger market prior to the global financial crisis. The plastic packaging recycling rate is now a world-leading figure at 41.5%. Consumption of plastic packaging has decreased by 2.3% over the previous year, reflecting factors such as the implementation of sustainable design considerations, eg, light-weighting. Plastic packaging recycling has increased by 7.8% over the same period, reflecting increased efforts to recover plastic packaging. Consumption of aluminium cans decreased by 7.5%, as did total recovery at 2.7%, resulting in an improved recovery rate of 67.3%. There has been a rise in the imports of beverage containers by 3.7% over 2011-12, though total imports remain a relatively small proportion compared to domestic production. Collected separately, recycling tonnages of aerosol cans have remained constant with a decrease in consumption, lifting the total aerosol recycling rate to 49.3%. As aerosols are not included within the recovery rate methodology, this has not been reflected in the overall 2012

recycling rate. A decline in consumption for steel cans and an increase in the total recycled increased the recovery rate by 4.7% to 38.9%. While the demand for steel packaging from the food sector has been relatively stable, it is believed that adverse weather conditions may have been a factor in decreased consumption as there has been less steel required for the packaging of local produce. There has been a decrease in the glass recycling rate by approximately 2% over the past 12 months. Behind these figures has been a significant structural change in recovery with one facility closure and a new facility commissioned in NSW, in addition to an increased consumption of imported beverage containers. The APC will continue to focus on the issues, barriers and opportunities of packaging recovery to continue to drive the recycling rate upward in the future. All parties in the packaging supply chain and all levels of government remain focused on the achievement of an overall recycling rate of 70% by 2015. The APC is an agreement between companies in the supply chain and all levels of government to reduce the environmental impacts of consumer packaging by encouraging improvements in packaging design, higher recycling rates and better stewardship of packaging. Oil & Food Journal Vol. 08, Issue 05, March 2013

HEALTH NEWS

Health and Wellness: A Mega Trend in the Natural Food Ingredients Market By Ashwin Raj Ravinder

atural, “clean label,” “green,” “eco-friendly” and “sustainability” are the new buzzwords in today’s food and beverage industry. Products and ingredients bearing these tags have created demand among consumers, and therefore have been significant purchase influencers. The markets for these natural and naturally derived products are growing at a fast rate, creating an immense profit potential for food and beverage manufacturers. The past two decades have witnessed consumers becoming more health conscious and resorting to preventive measures, rather than reactionary ones. Functional foods and beverages play a major role in this segment, promoting the concept of healthiness-on-the-go. These functional foods and beverages include health ingredients, which have proven to promote general health and well-being by preventing certain diseases. However, the industry also confronts certain challenges in coping with the demand of natural ingredients used in food and beverage applications, particularly in terms of sustainability. The “health and wellness” mega trend drives the overall natural ingredients market. Increasing incidence of lifestylebased disorders, such as cardiovascular Oil & Food Journal Vol. 08, Issue 05, March 2013

diseases (CVDs), obesity, osteoporosis and diabetes, has propelled consumers to resort to natural alternatives. Moreover, the number of articles and newsletters circulated in media describing the illeffects of consuming synthetic ingredients has further cautioned consumers. Consumers perceive natural ingredients as having a positive impact on general health, while synthetic ingredients have certain detrimental effects on health. As a result, food manufacturers have promptly responded to the situation by completely replacing or partially replacing synthetic ingredients with their natural counterparts. Many synthetic ingredients used in the food and beverage industry have a natural alternative. Some of the prominently used natural ingredients in the food matrices include natural antioxidants and natural antimicrobials that help preserve the shelf life of food or act as functional ingredients offering health benefits. Other natural ingredients include vitamins, phytochemicals, carotenoids, proteins and probiotics that are intended to provide functional benefits. These ingredients cater to a wide variety of health conditions that range from bone and joint health, cancer reduction, cognitive health, weight management, cardiovascular health, immune health to gut health, as well as

infant health. Another set of natural ingredients also exists that helps improve the sensory and textural properties of food and beverages. These natural food additives include natural colors and flavors that fall under sensory food additives and natural emulsifiers, starch and gelling agents/hydrocolloids that are used as textural additives to enhance the textural properties of food and beverages. Certain ingredients such as natural antioxidants perform dual roles—acting as a functional ingredient that helps curb cardiovascular, immunity, and skin disorders, and also as a shelf life extension food additive protecting products like oils, fats and meat against rancidity by arresting oxidation. The total natural food ingredients market, including sensory and textural food additives and functional ingredients, is worth approximately $4 billion having grown at an encouraging rate of 6 to 7 percent in 2012. The high growth rates are accompanied by an augmented demand from health-conscious consumers across the globe. The natural food ingredients market has managed to remain relatively stable, in spite of the economic downturn and is expected to increase in the future. North America and Europe continue to be the mainstay markets for natural

HEALTH NEWS

food ingredients. They represent approximately 60 percent of the global market. This situation has prevailed following sharp increases in obesity levels among in the populace of the United States and the United Kingdom. According to the Centers for Disease Control and Prevention (CDC), almost one-third of the U.S. population—about 35.9 percent—suffer from this condition. The costs involved in treating the disorder amounted to US$147 billion in 2008. Obesity, in turn, leads to an array of fatal diseases, such as diabetes, cardiovascular disorders, arthritis and high blood sugar levels. Increasing medical costs and the peril caused by these diseases have raised anxiety among consumers to reduce fat, sugar and salt levels. As such, they desire to consume functional food that helps keep a check on these factors. This serves as a huge driver and creates a potential market for natural ingredients to be used in these foods. Maturing western markets have paved the way for emerging economies, such as India, China, Brazil, Russia, Mexico, United Arab Emirates (UAE), South Africa and Latin America, to establish a concrete platform for international and multinational participants to consider these promising markets. Increasing disposable income, relatively stable governments and rise in health-conscious consumers are key factors that drive growth. Rapidly changing lifestyles have also changed the nature and type of food available to the public. The consumption of processed food and snacks has become inevitable among the working population. These markets have increased the usage of natural ingredients, such as flavors, colors, emulsifiers and hydrocolloids. The natural flavor industry, in particular, has performed exceedingly well among all the other categories and occupies a significant share of the natural ingredients

market. The addition of new natural colors in beverages has created new avenues for innovations in the market. Standard natural textural additives such as lecithin are gradually replacing synthetic variants. In addition, natural antioxidants and antimicrobials have also been a lucrative segment in the natural food ingredients markets and have multifaceted properties that enable them to perform as both shelf-life extension food additives and functional ingredients. Naturally derived vitamin E, rosemary extracts and green tea extracts are typical examples that have shown noticeable progress. Although these facts substantiate the potential behind the natural food ingredients market, ingredient manufacturers face certain intricate challenges throughout the supply chain. Natural ingredients are in limited supply. Raw material availability is down, and the surging demand for these ingredients is unable to meet the supply, thus creating a supply-demand imbalance. The dependence on allied industries has also caused an increase in demand, leading to an erratic increase in prices of these ingredients. A typical example would be the case of naturally derived vitamin E, which is used for multiple benefits, such as shelf-life extension and as a functional ingredient. Its supply is dependent on non-genetically modified (GM) soy, which is also an important source for the production of biofuels, which is in great demand. Additionally, the fact that there is a limited availability of this raw material has resulted in the prices of natural vitamin E to increase at a rate close to 25 percent during the past two years and is further expected to grow in the near future. Manufacturers have started to follow the trend of blending different natural antioxidants to cut down the total cost; this practice decreases the premium associated with the product and therefore

offers their customers an affordable price. Learn more about getting the GMOs out of the vitamin E market the INSIDER Vendor Brief, “Nutralliance Natural NonGMO Vitamin E.” Another challenge for end users is to match the taste and other organoleptic properties of these natural ingredients with that of synthetic ingredients, since consumers are not ready to compromise on the aspect of taste. It is imperative that manufacturers spend a significant part of their revenue in research and development (R&D) to sort out this issue. At times, regulatory challenges create havoc, as they differ according to regions and sometimes even countries. Its impact on the growth of natural ingredients, however, is minimal. Though natural ingredients are gradually replacing or substituting synthetic ingredients, natural ingredients still have a long way to go to compete with synthetics. Currently, natural ingredients constitute only about 25 percent of the total ingredients market, in terms of revenue. Increasing marketing efforts is essential to create awareness among consumers as well as convey the benefits of natural ingredients and how these impact their lives. Innovations are critical in this space to differentiate the products against conventional products. A wallet-friendly, clean labeled, natural product with good taste and organoleptic properties would be the best success formula for manufacturers and others in the supply chain to capitalize the potential in this market. Ashwin Raj Ravinder is a food and agricultural research analyst at Frost & Sullivan. For more information on Frost & Sullivan’s chemicals, materials and food practice and research, please contact Jeannette Garcia, corporate communications, Frost & Sullivan, at jeannette.garcia@frost.com or at 210477-8427.

Oil Oil && Foods Food Journal Vol. 08, Issue 05, March 2013

NEWS

‘Fresh and pure label used by Milk Unions across India’

he Kerala Co-operative Milk Marketing Federation Ltd (MILMA) submitted before the Kerala High Court that the ‘Fresh and Pure’ label, seen on Milma milk pouches, is a symbol registered in the name of the National Dairy Development Board of the federation. Milk unions all over India are using the symbol in their milk packets duly authorised by NDDB. The term ‘Fresh and Pure’ is not a creation of Milma and is not confined to the state. The High Court had warned Milma to stop using the label if it wished to continue converting skimmed milk powder into milk and selling the same as fresh milk. Unless skimmed milk powder is added, it is not possible to produce toned/ double toned milk, as per the norms prescribed in the Food Safety Standard, because the milk produced by the cross-bred cows in Kerala contains lower SolidNon-Fat content, Milma submitted. Milma further submitted that it is not importing skimmed milk powder directly, and that the task is being carried out by the NDDB. The packaging of milk without processing, and its distribution to a large number of households is not possible, Milma submitted.

Chu Minh Tofu Company loses food processing license, fined $17,800

he Washington State Department of Agriculture (WSDA) has revoked the food-processing license of Chu Minh Corp., which produces tofu and other soy products, after several inspections found on-going sanitation problems with the Seattle business. In addition to revoking the company’s license to process food, WSDA also assessed a civil penalty of $17,800 against the company and required all products at the facility to be destroyed. Notices about the license revocation are being sent to all retail outlets and restaurants that have purchased or carry Chu Minh products. As a result of these actions, the company cannot process any food at this location. Chu Minh has 10 days to appeal and request agency reconsideration of the order, but it cannot operate as a food processing operation during that appeal period. This enforcement action follows several visits to Chu Minh where WSDA inspecOil & Food Journal Vol. 08, Issue 05, March 2013

tors consistently found problems with unsanitary conditions, poor sanitation practices by employees, pest infestations and a general failure to protect food products from contamination. During the most recent inspection on March 6, inspectors noted many of the same problems observed during earlier inspections.

WSDA’s Food Safety and Consumer Services Division typically tries to work with businesses to correct problems when violations of the state food production and handling requirements are discovered. When these education efforts fail to improve conditions, WSDA has the authority to suspend licenses or assess civil penalties. In this case, WSDA had twice issued orders to suspend Chu Minh Corps.’ processing license. Both times, the company signed settlement agreements in which they promised to meet food-processing requirements. The most recent agreement was in October 2012. However, the continued violations of food processing standards and the failure to fully pay earlier fines associated with previous violations led to the decision to revoke Chu Minh’s food processing license.

NEWS

Frozen yoghurt a hot trend in Korea

f all the places you’d expect frozen yoghurt to be popular, South Korea would be unlikely to rate a mention. Yet the country is one of the biggest markets for frozen yoghurt, according to Frosty Boy CEO Dirk Pretorius. The trend is also taking off around the globe. In the United Kingdom alone, sales of frozen yoghurt have soared 50%, up from £4 million to £6 million. “The frozen yoghurt concept is currently spilling over from the USA into Europe and Asia Pacific,” Pretorius said. “The reason why it is so popular is because it is a healthy alternative to normal ice-

cream and usually the concept allows consumers to be creative and design their own product using the frozen yoghurt base. “We are seeing some really unique uses of frozen yoghurt in different stores across Australia and throughout the world. We have clients who use them in smoothies and even protein shakes. Others are setting up self-serve frozen yoghurt outlets where you pay by weight. “Fruit and vegetable stores are seeing frozen yoghurt as an add-on to their current operations providing them with an additional revenue-making opportunity. Customers are able to purchase readyto-eat fruit salads and then add frozen

yoghurt in-store for example. Cafes are changing their offering to reflect healthier breakfast options and many are introducing frozen yoghurt as part of their menu. “The opportunities are endless and innovation is the key driver here. In the last three years alone our range went from eight to over 25 frozen yoghurt blends distributed to both Australian and international markets,” Pretorius said. Frosty Boy has its origins in the soft serve ice-cream market, but started production of YoFrost frozen yoghurt in 1985. The product offering has changed substantially from the first product to Frosty Boy’s current product offering, mainly due to advancements in food technology. Prebiotics and probiotic fibres are now being added to some products in the Frosty Boy range. Frozen yoghurt stores are able to create their own flavours, allowing for signature ranges exclusive to each store.

Danfoss Reiterates Importance of ‘Energy Efficiency and an Eco-Friendly Environment’

ollowing the theme ‘Dedicated to eco-friendly environment’ at ACREX India 2013, Danfoss Industries Private Limited – a global leader within energy-efficient solutions that help save energy and combat climate change, unveiled the curtain raiser event for the 14th edition of ACREX 2013 at The ITC Maratha, Mumbai. Danfoss India, in order to promote green growth is hosting ACREX’s first ever curtain raiser event. The ACREX 2013 Curtain Raiser event is a forum created by Danfoss in order to instil the importance of understanding and working towards energy efficiency. Danfoss is hopeful of making this forum an annual event. The theme for the evening was ‘towards sustainable development’ which is in keeping with the overall theme of ACREX this year. This curtain raiser event sponsored by Danfoss will be one among various forums to express Danfoss’ commitment to energy efficiency.

Danfoss continues to focus on highly efficient solutions for both refrigeration and air-conditioning segments. As a result, the company will highlight some of its new products for the airconditioning segment during ACREX 2013. The products include VZH- the 2nd generation of inverter scroll compressors for commercial applications, SH485 – Danfoss’ innovative 40 ton compressors for large chillers and rooftops and LLZ - the new scroll compressor for LBP (Low Back Pressure) refrigeration which broadens the existing range for MBP (Medium Back Pressure) applications. Sponsored by Danfoss, the special curtainraiser event encompassed an engaging panel discussion with keen participation from several eminent speakers from the industry. The curtain raiser received an overwhelming response, with the audience also being addressed by experts in HVAC & Refrigeration on the challenges faced by the industry and India’s increasing

participation in combating against global warming. “We are pleased with being associated with ACREX 2013. This is a unique platform to increase awareness and the importance of Energy efficiency thereby enabling & building a sustainable future for India. The Co 2 challenge is real and energy consumption will grow by 45% by the year 2030, therefore, the need for deploying Co2 abatement technologies is getting much stronger. We at Danfoss with our “Solution ready” platform can significantly contribute to India’s Energy efficiency agenda. I really look forward to engaging with Industry stalwarts on this exciting event.” said P. Ravichandran, President Danfoss India. ACREX 2013, which is to be held from 7th to 9th March 2013 at Mumbai organized by Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE).

Oil & Food Journal Vol. 08, Issue 05, March 2013

NEWS

Bosch Packaging Technology accelerates pace of growth Sales planned to reach 1.5 billion euros by 2015

aiblingen / Stuttgart – Bosch Packaging Technology posted stronger growth in fiscal 2012 than the packaging machine market as a whole. In the years ahead, the company intends to maintain its high growth rate and has set its sights on achieving 1.5 billion euros in sales by the end of 2015. Last year, this division of Bosch racked up sales of 914 million euros, up 123 million euros or 16 percent over 2011. In the same period, the number of associates rose to 5,000 or by six percent. In fiscal 2013, Bosch Packaging Technology is expecting to grow its sales by a high single-digit percentage figure. “We want to leverage our packaging solutions and related services to strengthen our leading position in the international market,” said Friedbert Klefenz, president of the Packaging Technology division, during the annual press conference at the company’s headquarters in Waiblingen near Stuttgart.

billion euros. Sales of machinery to the food industry account for 50 percent of Bosch’s packaging technology sales, and demand is on the rise here, too, as more and more countries begin to realize that suitable packaging can lengthen the shelflife of food. “Packaging is one way of securing the food supplies of millions of people worldwide,” said Klefenz.

Pharmaceuticals and food markets continue to gain impetus

The international market for packaging machinery in which the company operates grew by six percent last year. “This shows how much less dependent our business is on the general economic climate than other areas of the mechanical and industrial engineering sector,” explained Klefenz. Customers, he said, had longer planning horizons because the structure of the sales markets was generally more stable than, for example, in the automobile industry. This was why the pharmaceuticals market, in which Bosch Packaging Technology posts just under half of its sales, is set to continue growing strongly in the coming years, reaching a market volume of 1.1 trillion euros by 2015. Two years ago, the corresponding figure was just 850 Oil & Food Journal Vol. 08, Issue 05, March 2013

the pharmaceuticals and food industries worldwide.

An even stronger global player

In 2012, Bosch Packaging Technology continued to enhance its international presence. A global strategy is fundamental to the division because it generates more than 90 percent of its sales outside of Germany. Already, around half of the Bosch Packaging Technology associates are employed abroad. All in all, the company is represented at over 30 locations in more than 15 countries, with Asia occupying a prominent place in the network. Bosch Packaging Technology already earns one-quarter of its revenues in Asia, and expects to achieve doubledigit growth rates there over the next five years. A new factory at Verna, in the Indian state of Goa, came on stream in 2012 with a workforce of 130. Business in India is currently growing at an average annual rate of over 30 percent. “We expect this dynamic growth on the Indian subcontinent to continue in the coming years as well,” said Klefenz.

Pioneer in Africa

Bigger market shares

“Sales growth of 16 percent helped us to expand our market shares in 2012,” Klefenz went on to say. He said that Bosch Packaging Technology would be able to turn the consolidation process of recent years to its advantage. In the long term, only those companies would prosper that offered comprehensive solutions from a single source. One of the reasons for this was the ever more demanding expectations and requirements of consumers, legislators and international competitors vis-à-vis manufacturers in

Within the packaging industry, Bosch has assumed a pioneering role on the African continent. “Africa is becoming a market that merits a lot of attention. With our assembly site in Midrand, South Africa, we are already among the biggest packaging machinery manufacturers on the continent,” stresses Klefenz. Last year, the division generated six percent of its total sales in Africa, and the goal is to raise that to eight percent this year. That is one reason that Bosch established a further distribution and service center in Egypt, and the company plans to continue building up its African business in the coming years, especially south of the Sahara. Bosch Packaging Technology’s sales

NEWS

in North America grew moderately in 2012, while its performance in Europe and Latin America was satisfactory. “In Eastern Europe, and particularly in Russia, we discern substantial market potential, and are keen to make the most of it in the years ahead,” said Klefenz. He also stressed that expansion abroad would not come at the expense of the locations in Germany. A total of 13 million euros was invested in the Crailsheim location in Baden-Württemberg in 2012. After a new assembly hall covering 6,600 m² went on stream there, another new building with 2,200 m² of office space is due for completion in mid-2013. That will create a further 70 new jobs in the Schwäbisch Hall region, most of them in assembly and development. All in all, some 900 associates will then be working for the Bosch Packaging Technology division in Crailsheim.

Diverse acquisitions enhance portfolio mix

Last year, Bosch Packaging Technology extended its inspections expertise through the acquisition of Eisai Machinery, the machinery arm of the Eisai Co., Ltd.,

Japan, and its 120-strong workforce. “Our inspection solutions help make our customers’ filling and packaging processes safer. At the same time, we can enhance our own expertise for complete systems,” explains Dr. Stefan König, in charge of technology at the Packaging Technology division and a member of its executive management. In late 2012, the division completed its acquisition of Ampack GmbH in Königsbrunn, Germany, which has a workforce of 250. The company’s portfolio comprises cup and bottle filling machines as well as dosing systems and peripheral machinery, which are deployed to fill and package highly sensitive food such as milk products, cereals, and food for babies and hospital patients. It also comprises services such as the maintenance and general overhaul of used machinery, the supply of spare parts, the validation of filling lines, and training programs for machine operators.

Networked services enhance customer benefit

Bosch Packaging Technology does. Even in the development phase of new machinery, we place great emphasis on ensuring that later tool and product changes can be carried out quickly. The division offers its customers a one-stop approach to procurement: our components are matched in such a way that customers can get tailored solutions from Bosch in one easy step. Service, too, continues to gain in importance. If customers require replacement or spare parts, they can order them quickly online, helping keep production downtimes to a minimum. Another example of networked services is the mobile conferencing system Mavus. Mavus guarantees the greatest possible freedom of movement, and comprises a headset with a fully integrated camera, display, headphone and microphone. Thanks to Mavus, local technicians can make audiovisual contact with remote Bosch experts via the internet. That makes long journeys to the customer for machine maintenance and repairs a thing of the past.

The wishes and requirements of its customers are at the heart of everything

Application of High Pressure for Food Processing Training Day The Central Institute of Fisheries Technology (CIFT), Cochin is conducting a one day national training programme on ‘Application of High Pressure for Food Processing’, on 12 March 2013. High Pressure Processing (HPP) is an emerging food processing technique which has gained importance during the last decade. The process is non thermal and processing is done at low temperatures in order to retain the natural and fresh like appearance of food without bringing about changes in its natural constituents. High pressures ranging from 100 to 900 MPa in combination with or without heat can be applied for preservation of food substances. These processes help in destroying microorganisms, mainly pathogens, improve food quality and ultimately help in extending the keeping quality or shelf life of the products during storage. HPP is also used worldwide in shell fish

processing for 100 per cent removal of meat from the shells and for reducing the microbial risks during raw consumption. HPP can be used to develop new gel based products in muscle foods with desired sensory attributes and mouth feel, inactivate undesirable enzymes to avoid quality changes etc. Applications for marination and impregnation of desired flavors, additives or colors can be effectively undertaken. Pressure assisted thermal processing for development of shelf stable ready to eat products is another promising area of research. Pressure assisted freezing and pressure assisted thawing help in retaining the microstructure and reduce drip loss unlike conventional methods.

This training is organized to disseminate the knowledge and achievements gained under the NAIP- Sub-project “Studies on High Pressure Processing (HPP) of high value perishable commodities”. The training is intended to equip scientists, teachers, students, technologists and entrepreneurs involved in the food industry with the recent advancements in this novel processing technique so as to benefit the food processing sector. The morning session focuses on high pressure processing of marine products and the afternoon on meat, dairy, fruit and vegetables. To sign up for the course and read more information on the programme please click here. Oil & Food Journal Vol. 08, Issue 05, March 2013

NEWS NEWS

Whole Foods Promises to Label GMO Ingredients by 2018 The grocery chain is the first in the industry to require such transparency.

hen Whole Foods top brass announced this morning that they’d set a deadline requiring labeling of all products that contain genetically modified ingredients sold in their U.S. and Canadian stores, the room, filled with 400 suppliers, exploded with applause. The company’s president, A.C. Gallo, and co-CEO, Walter Robb, received a standing ovation. And this is indeed big news: Whole Foods is the first national grocery chain to establish a deadline for GMO transparency. “We’re responding to our customers, who have consistently asked us for GMO labeling and we are doing so by focusing on where we have control: in our own stores,” said Robb in a statement. Grassroots efforts to get genetically modified foods labeled has been in the works for years. But it was California’s high-profile, failed Proposition 37ballot initiative that’s given fuel to the GMO labeling momentum in states like Washington, Vermont and elsewhere. Food items can contain a number of ingredients that come from plants that have been genetically modified, including corn, soybean, canola and sugar beets. While some genetic modification is done to resist disease (as in the case of Hawaii’s papaya crop), commodity crops like corn and soybeans are primarily modified to withstand the herbicide Oil & Food Journal Vol. 08, Issue 05, March 2013

glyphosate or tweaked to resist pesticides. Products containing genetically modified ingredients are required to have labeling in 60 countries, but not in the U.S. Kate Lowery, spokesperson for Whole Foods, tells TakePart they established a five-year deadline to give suppliers time to source ingredients or change formulations, if necessary, but expect many to comply earlier. Since 2009, the chain has been working with the Non-GMO Project, a nonprofit, third-party verification and labeling organization. Whole Foods currently carries over 3,300 verified non-GMO items from 250 brands. The products are the store’s fastest-growing category of nonperishable items. While the move is seen positively by industry watchdog groups, including theEnvironmental Working Group and the Just Label It Coalition, many recall Whole Foods’ absence in the early days of the California labeling effort. “Had they supported Prop. 37 sooner, Americans may have labeling right now,” said Dave Murphy, founder and executive director of Food Democracy Now! and co-chair of the California Right to Know Yes on 37 campaign. It wasn’t until mid-September of last year that Whole Foods finally endorsed Proposition 37, mere weeks before it went before voters. According to theLos Angeles Times, that endorsement came

with the stipulation that the company felt that “a 0.5% threshold was too low for exempting a product containing a small amount of genetically engineered content from the labeling requirement. The company also objected to a provision that would allow private attorneys to sue on behalf of the state, alleging a violation of the labeling mandate, should it become law.” While Murphy says this is a step in the right direction, he thinks the five-year deadline is too generous. “Whole Foods’ customers shouldn’t have to wait another half decade to get common-sense labeling of genetically engineered ingredients in their products that they sell unlabeled every day,” he tells TakePart. It’s unclear exactly how the store’s new policy will impact the overall industry, but Lowery says they expect it will have a ripple effect. “If they’re already labeling for Whole Foods, it will probably appear in other stores because those companies aren’t just supplying product for us,” she says. “That, paired with the state labeling initiatives currently happening? I think it’s going to have a big effect. Suppliers are going to start asking those deeper questions because the consumer is demanding it, and you give the consumer what they want.”

NEWS NEWS

Yum! Brands, is Trying Hard to Fix It: McDonald’s Corporation, Burger King

always knew Yum! Brands, Inc. won’t give up on China so easily! The company suffered a 6% decline in its fourth-quarter same store sales in China due to the recent food safety issues. But the company had to do something to gain back its customers’ confidence in China, from where it got almost 44% of its revenue last year, and Yum! is surely on the right track.

What went wrong last quarter?

After the new regulation and supervision in China’s food manufacturing and processing industry started, media reports alleged that excess antibiotics and hormones were found in some chicken products sold at KFC outlets. Though Yum! Brands, Inc. (NYSE:YUM) was not fined by the Chinese food safety authorities, but due to this negative publicity, Chinese consumers completely stopped visiting the KFC stores as a result of which the company faced a sharp decline in its fourth-quarter sales. Though Yum! Brands, Inc. (NYSE:YUM)’s same store-sales increased 3% in the U.S., 24% in India, and 3% at other international stores, driven by their new advertising and pricing strategies to attract budget-conscious customers, the falling numbers in China washed away most of the shine from its throne. Yum! Brands, Inc. (NYSE:YUM), which operates with a total of 38,200 restaurants worldwide, could report 1% rise in their overall revenue. So obviously, Yum! Brands, Inc. (NYSE:YUM) had to take some measures to gain back customers confidence in China, as it has always been a very important market for the company. Steps taken for fixing it up: Yum! Brands, Inc. (NYSE:YUM) is fighting hard to re-establish its battered image in China. The company has announced that it would undertake steps to monitor its

poultry suppliers in China to ensure food safety in its KFC outlets. Soon after investigations conducted by a third-party agency from 2010 to 2011 found eight batches of chicken, supplied to Yum! by Liuhe Group, with antibiotics levels that didn’t meet prescribed standards, Yum! stopped buying from Liuhe. The company is keeping a close watch on its suppliers, and is conducting vigorous testing procedures to check their suppliers’ quality standards. The company is cutting ties with suppliers that source their chicken from small farms that are hard to regulate. Yum! has recently announced that it is eliminating 1,000 slaughterhouses from its network, from where 25 of their poultry suppliers source their chicken. The same strategy was applied by its competitor McDonald’s Corporation (NYSE:MCD) , which faced a similar situation few months ago. When the burger chain suffered from allegations of containing antibiotics in their meat, Oil & Food Journal Vol. 08, Issue 05, March 2013

initiatives to bring it to the notice of the government that the industry requires more investment and quality check. The company has invited representatives from industry groups, such as the China Chain Store & Franchise Association, the China Cuisine Association, and the China Animal Agriculture Association to speak at the company’s press emphasizing the fact that the meat sector requires more investment and better management, to ensure quality and consumer safety. Further expansion: Competition is constantly increasing in the lucrative Chinese market. On one hand, its biggest competitor McDonald’s, has plans to add almost 750 restaurants to their 1300 outlets in China, while on the other hand, Burger King Worldwide Inc (NYSE:BKW), which currently operates only 100 outlets in China has plans to open almost 1000 new outlets in the mainland within the next five to seven years. Yum! already operates more than 4,200 KFC restaurants and 800 Pizza Huts in China. When all of its competitors are expanding,

Yum! Brands, Inc. (NYSE:YUM) is not sitting idle. Though sales at its KFC stores open at least 12 months in China declined 41% in January, that won’t stop Yum from trying. The company plans to open at least 700 stores in China. Once the company manages to solve the quality issue problem, these large number of stores will surely help it to boost its topline. Foolish bottom line: Regaining the confidence of its consumers won’t be an easy task for Yum!, but the company has taken the first step to do so. The company is already showing decent performance in other parts of the world. Once the company becomes successful in regaining customer confidence in China, there will not be any looking back. I agree it will take time, may be not before the next two quarters, but I somehow have faith in this company. It will fight back. The article Yum! is Trying Hard to Fix It originally appeared on Fool.com and is written by Satarupa Bose.

Dairy sector in UP set to get a boost

the 14 milk-producing states and under this plan, the Central government will introduce scientific measures in all the states to increase cattle’s milk production. It is learnt that in the first phase, 49 proposals from the chosen eight states have been approved by the Project Steering Committee. The scheme includes activities such as progeny testing, pedigree selection, strengthening of semen stations, balanced ration programme and fodder development proposals. Milk cooperatives in these states will be provided support in providing rural milk producers with greater access to the organised milk processing sector. The steering committee has approved Rs 130 crores for this plan for the financial year 2012-13. In the later phase, Andhra Pradesh, Rajasthan, Bihar and West Bengal are also likely to be included in the plan. The livestock sector has been showing healthy growth of more than 4% per annum in recent years and has the potential to grow even faster with new initiatives being taken in the 12th plan. This sector is important not only as the producer of highly nutritious food

products, but also for sustainnance of poor farmers and overall prosperity of the farming community. Efforts are also under way for finalising the long-pending draft National Livestock Policy that will guide sustainable growth of the entire livestock sector in the country. The National Dairy Plan is a mega programme for fast growth of dairy sector. Its first phase is to be implemented over the next six years. Incidentally, the Gujarat Cooperative Milk Marketing Federation (GCMMF), producers of the famed Amul brand of milk and milk products, has also showed keen interest in the dairy sector of Uttar Pradesh and has already acquired land near Kanpur for setting up a milk processing plant of double capacity in Kanpur. It will be the largest milk processing plant in the state and will market products of Amul brand. The UP government-owned Pradeshik Cooperative Development Dairy Federation Limited (PCDDF), which processes milk and markets its products with the brand name Parag, is also plans to set up a dairy plant of 5 lakh litre daily capacity near Lucknow.

he dairy sector in Uttar Pradesh is set to get a boost following the inclusion of the state in the National Dairy Plan (NDP) of the National Dairy Development Board (NDDB). The NDP is a World Bank sponsored project that covers eight states in the first phase. The other states, besides Uttar Pradesh, are Punjab, Karnataka, Tamil Nadu, Gujarat, Madhya Pradesh, Odisha and Maharashtra. The NDP will eventually cover 13 of Oil & Food Journal Vol. 08, Issue 05, March 2013

NEWS

it suppressed the negative publicity by telling consumers that it is detaching ties with the supplier in question. Luckily, McDonald’s Corporation (NYSE:MCD) was not much impacted with the news like Yum!, and thus, their same-store sales in China dropped just 0.9% in the fourth quarter, and their total profit rose 1.4%. It’s good that Yum! Brands, Inc. (NYSE:YUM) has realized that the dominant reason behind their declining quality of chicken lies in China’s meat industry. The entire Chinese meat industry relies on small scale farms, and thus is vulnerable to risk as the small scale farms hardly meet the quality standards. Thus, Yum! is planning to tie up with international poultry suppliers. The company has announced that it’s working with international poultry suppliers, and is helping them enter the Chinese market, or to invest in the Chinese small scale suppliers to improve their quality. Not only Yum! Brands, Inc. (NYSE:YUM) has realized the weakness in the Chinese meat industry, but it has also taken

FOOD SAFETY

Top 10 tips for global food safety How new and existing baking and snack companies can avoid potential food safety problems. by Alan D. Leib

ntrepreneurs starting up any type of new business face a number of challenges, including financing the venture, finding quality employees, generating sales and a host of other operational and technological challenges. Starting and running a food manufacturing, packaging or distribution company is a particularly risky and challenging undertaking since delivering unsafe food can result in serious adverse health consequences to humans. Any entrepreneur contemplating starting a baking or snack company (or any food company for that matter) should carefully review and plan for the Top 10 food safety considerations. Laws and Regulations: Food companies are regulated businesses and are subject to myriad federal, state and local laws, regulations and codes. For example, most food manufacturers are required to register with the Food and Drug Administration (FDA) and are now subject to a new federal law, the Food Safety Modernization Act (FSMA), which contains the most sweeping changes in federal law since 1938. FSMA also gives FDA new enforcement authority to mandate food recalls, conduct more frequent plant inspections, inspect records, suspend FDA registration, regulate imports and require food safety plans. Food companies also are subject to state and local health and safety codes and inspections. Food companies must understand the regulatory landscape in

which they operate and take appropriate steps to verify legal compliance, or they will not be in business for long. Suppliers: Any company that is in the business of selling or distributing a food product is liable if that product is defective and the defect causes an injury. It is irrelevant whether the ingredients that caused the injury were defective when they came from a supplier. As a result, food companies must perform due diligence to get comfortable that they are dealing with a supplier with sound food safety practices. This due diligence can include plant inspections, third-party audits and independent testing. In addition, agreements with suppliers should cover issues relating to food safety such as requiring suppliers to have a food safety plan, setting forth procedures for recalls, authorizing access to supplier records, providing for audits, implementing contractual indemnity provisions in the event of a claim, and requiring that the supplier carry adequate liability insurance. Food Safety Plan: Regardless of whether your business is currently mandated by law or customer purchasing requirements to have a food safety plan, it would be reckless to conduct business without one. A food safety plan is plant-specific and includes development of a Hazard Analysis Critical Control Points (HACCP) plan A HACCP plan involves both hazard identification and development of critical control points. Hazard identification

is the process of identifying potential significant hazards based upon likelihood of occurrence, severity and plant history. The hazard identification process should look at environmental risks such as allergens and Listeria. Critical control points and critical limits are then developed for each significant hazard, leveraging on the fundamental prerequisite programs in place, including current Good Manufacturing Practices (GMPs) and standard operating procedures (SOPs) for sanitation, supplier control programs, personal hygiene and training. The HAACP plan must require that critical limits be monitored, required controls verified, corrective actions be implemented and provide for suitable documentation. Management commitment is essential for an effective food safety plan. Traceability: Traceability refers to the ability of a food manufacturer to have a documented record to track inputs and processes of food as it moves though a companyâ&#x20AC;&#x2122;s manufacturing processes, as well as up and down the supply chain. As you can imagine, food traceability is very complex, and companies are struggling to find systems that are comprehensive but also manageable and affordable. FDA recognizes that food tracing is imperative, but food companies are struggling to find realistic and cost-effective tracing systems. As a consequence, FSMA has required FDA to do pilot testing and has specified that there will be no mandate to use specific Oil & Food Journal Vol. 08, Issue 05, March 2013

Oil & Food Journal Vol. 08, Issue 05, March 2013

accompany documents to be released. Insurance Program: Food companies have special insurance needs. Bakeries and snack manufacturers should work with a quality insurance broker who understands the industry and, specifically, a company’s overall business and can recommend appropriate insurance coverage and liability limits. Not only must a company carry workers’ compensation and product liability insurance, but it should explore special insurance programs to cover food product recall expenses. Also, an experienced broker and legal counsel will be on the lookout for troubling exclusions for common claims against food companies that may be buried in esoteric policy exclusions. Customer Audits: Customer audits are the new normal in the food industry, especially when dealing with larger retail and food service customers. If a bakery or snack producer is not prepared to follow best practices in terms of food safety and quality, it will not be able to sell to sophisticated buyers. Companies must understand customer requirements early in the sales process to determine if getting the business is feasible and worth the costs to do so. Additionally, the audit checklist in all likelihood has been developed in close cooperation with the bakery’s or snack producer’s customer. It will not work to challenge auditors or try to have them focus on other items. And, just like with government inspections, the sooner the auditor leaves a facility, the better. Documentation: Food safety professionals say, “If it isn’t written down, it didn’t happen.” That’s why food safety plans

should be monitored, verified and documented on a consistent basis. In the event of a food safety issue, relevant records will be required to be provided to governmental authorities and other parties. Furthermore, FSMA grants FDA increased authority to inspect records and contemplates that additional recordkeeping will be required for “highrisk” foods. There will, however, be sensitivity to keeping certain records confidential, such as recipes and other trade secrets, as well as records related to unaffected products. Food companies must understand what records have to be produced and ways to protect trade secrets, including using protective provisions of FOIA. Experts: There are many critical activities a food company must undertake to comply with the complex web of regulations and requirements applicable to ensuring safe food. Don’t be afraid to get help. There are good, affordable food industry experts available to assist companies. For example, there are consultants who can assist with reviewing or developing food safety plans and plant layouts. In addition, insurance brokers, IT professionals, accountants and lawyers can augment an internal team. In the end, having good and open communication among the team can help the challenges of running a food company. Alan Leib is a partner at the Chicago law firm Horwood, Marcus & Berk Chartered and is chair of the firm’s food and beverage industry group. Mr. Leib is also a CPA and is certified by the International HACCP Alliance. Curtsey: Baking Business

FOOD SAFETY

technologies, or to fully trace food up or down the supply chain. With that said, traceability is critical to both sound manufacturing processes and the ability of a food company to respond quickly and appropriately in the event of a voluntary or mandatory recall situation. However, experts can assist with the design and implementation of traceability systems, taking into account a bakery’s or snack producer’s unique requirements and budget constraints. Recall Plan: The old adage, “He who fails to plan plans to fail,” applies when a company is confronted with a recall situation. The company should establish a recall team composed of senior executives, legal counsel and communications professionals. Each member of the team should understand his or her role. The company should maintain and update a formal recall plan that includes logging of communications, steps taken and relevant events, maintaining records of all injuries, documenting the internal investigation, and cooperating and communicating with government officials. A mock recall can test whether the plan actually works. Finally, the company should understand its obligations under the Reportable Food Registry (RFR) to report any situations involving a reasonably probability of serious adverse health consequences to humans or animals to FDA’s portal within 24 hours of their discovery. Company personnel should be trained on their obligations to report into the RFR as such reporting can obviously have a huge impact on the company going forward. Government Inspections: With any food company, inspections go with the territory. Inspectors can be from any number of local, state or federal governmental agencies. Generally speaking, the quicker the inspector leaves a plant, the better. Preparation and readily available documentation provide the keys to success. In all cases, the company should consider who should be the point person for government inspections. In the case of certain governmental inspections stemming from food safety issues, the company should consult with legal counsel in advance to review documents that may be subject to attorney-client privilege or where a Freedom of Information Act (FOIA) letter should

FSSAI

Changing the global outlook of Indian food industry By Basma Husain

REMINISCENCE

long with the exaltation of the growth of the food industry, India can now also flaunt of having an integrated law to regulate food products across the country with the focus on curbing the danger of food adulteration and ensuring that consumers have access to safe and quality food. India had a complicated system to regulate food products with eight different acts and orders administered by four different ministries until recently. There was clear lack an integrated approach to food safety management with a universal emphasis on risk mitigation, risk management and prosecution of wayward perpetrators.

So far, samples were collected at the point of occurrence and identification of contamination was generally carried out by inadequately trained staff, while subsequent testing of these samples was carried out in ill-equipped labs. These resulted in several legal disputes remaining unresolved on frivolous grounds of errors in sample collection and examination resulting in a lack of legally enforceable case against the offenders. The presence of multiple acts and orders led to multiple controls over various commodities with conflicting provisions. The Government of India comprehended the need for harmonising the food laws as a pre-requisite for fostering growth in the food processing industry and successfully

introduced the Integrated Food Safety Bill. In 2006, this Bill ultimately became the Food Safety and Standards Act (FSSA). Further, a statutory regulatory body, the Food Safety and Standards Authority of India (FSSAI), was constituted on September 5, 2008, under the ministry of health & family welfare. The FSSAIâ&#x20AC;&#x2122;s mandate is to lay down science-based standards for articles of food and to regulate their manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption.

SIGNIFICANT FEATURES OF THE ACT Oil & Food Journal Vol. 08, Issue 05, March 2013

1. To frame rules, regulations, standards and guidelines in relation to articles of food and provide guidelines for accreditation of certification bodies / laboratories 2. To offer scientific advice and technical support to the Central and state governments in matters of framing the policy and rules in areas related to food safety and nutrition 3. To collect and collate data on food consumption, incidence and prevalence of biological risk, contaminants or residues thereof in food, and the introduction of a rapid alert system 4. To establish an information dissemination network about food safety across the country 5. To contribute to the development of international technical standards for food safety and phyto-sanitary standards 6. To promote general awareness on food safety and food standards

STATUS OF IMPLEMENTATION OF ACT, RULES AND REGULATIONS

he Food Safety and Standards Act is further strengthened with a new set of detailed rules and regulations

Oil & Food Journal Vol. 08, Issue 05, March 2013

coming into force in the year 2011. Food Safety and Standards Rules which came into effect in Feb 2011, details the administrative and enforcement structure, processes and procedures for sampling, prosecution & appeal, and powers and duties of various functionaries under the Act. Further, the Authority notified Food Safety and Standards Regulations into 6 parts on August 5, 2011: 1. Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011 2. Food Safety and Standards (Packaging and Labelling) Regulations, 2011 3. Food Safety and Standards (Food Products Standards and Food Additive) Regulations, 2011 4. Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 5. Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011 6. Food Safety and Standards (Laboratory and Sample Analysis) Regulations, 2011

TO MEET SAFETY NORMS

ood retail outlets and restaurants are busy revisiting their working models with the Food Safety and Standards Authority of India (FSSAI) cracking the whip to ensure stricter food safety measures in the sector. While large chains claim to have ensured adherence to the new norms already, small-to-mid level restaurant chains are gearing up to avoid being penalized after the February 4 deadline this year. FSSAI has mandated hat all eateries in the country, which includes multinationals such as KFC, Pizza Hut, McDonalds and domestic restaurant chains, canteens and cafeterias will need a ‘food business operator’ license from the authority. The organization had also come up with a list of stringent hygiene measures to be practiced at these outlets. Failure to ensure compliance with these measures would subject companies to “heavy fine”. The norms, which were to be implemented from August 2012, were postponed by six months to allow more time to companies. FSSAI has a wide range of measures to ensure food safety at eateries. Food companies could voluntarily approach the authority in case of any safety related

issues. Under the new norms, FSSAI will randomly conduct checks at these outlets as well as increase the frequency of such inspections. The norms have been framed to ensure greater accountability. That is not happening today. FSSAI motive is not to implement a license raj but to align food safety practices in India with foreign practices. While most international chains said they follow standard food safety practices, domestic food chains such as Bikanervala said they are busy working on final formalities. Foreign players such as US-based Yum! Brands, which operate Pizza Hut, KFC, Taco Bell in India and TGIF, said the mandate is not new for them. “We are aware of the food business operator license mandated by FSSAI and have applied for the requisite licenses as per the timelines set,” a company spokesperson for Yum! Brands said. Devyani International, which has the franchise rights for brands such as Pizza Hut, KFC, Vaango and Swensen’s, said the new guidelines will largely affect smaller food retail companies, because bigger companies like them follow all of these norms even now. The rules of the game will change for smaller players as they will have to comply with stricter measures now. Under the new norms, companies will have to ensure that the authority always has up-to-date information on their food business. Companies will also have to employ at least one technical person possessing a degree in science with chemistry, biochemistry, microbiology or food and nutrition to supervise the production process. Specific hygiene guidelines in the kitchen, apart from ensuring optimum standards of raw materials and maintaining daily records of production will be compulsory too. National Restaurant Association of India (NRAI), which has been working with the authority on this issue, said this will help boost healthy growth in the organized restaurant space in India. According to estimates, the size of the eating out industry in India stood at Rs 43,000 crore in 2010 and has been growing at 20%25% annually. There is a need for every food vendor to be regulated by the authority. State governments need to come out in full support of the move to ensure food safety.

FSSAI

he Food Safety and Standards Act is a step in the right direction and seeks to modify the basic approach to food safety from farm to fork. Under the current Act, there is a clear shift from “checking adulteration and prosecution” to “self-compliance” enabling responsibility with the food business operator to comply with the law. The Act mandates , through a new set of regulations, untouched areas like proprietary foods, novel foods, GM foods, dietary supplements, nutraceuticals and more. The Act also stipulates bringing regulations / guidelines for food imports, food recall and an active surveillance system. The current Act also empowers consumers to draw samples and send these for analysis to recognised labs— an act of empowerment of consumer to prevent food contamination through a structured legal remedy. In case of minor offences, the Act stipulates faster disposal without going to courts. As per the new Act, the role of FSSAI will be

FSSAI

FSSAI’S RULES FOR NEW FOOD PRODUCTS ENTERING INDIA

ith continuous innovation and research happening in the area of foods, a lot of new products and new ingredients can be seen coming into the food segment especially under the nutraceutical and functional food category. A lot of foods imported into the country also may contain ingredients which are being introduced in India for the first time. Under the PFA (Prevention of Food Adulteration Act) regime, there was no provision to regulate such foods. The FSSAI (Food Safety and Standards Authority of India) under the new food law has introduced a regulation providing for requirement of new food product/ ingredient approval before obtaining a license for the manufacturing of such foods. The requirements : It has been provided under Schedule 1 of FSS (Licensing & Registration) Regulation, 2011 that food business operators manufacturing food containing ingredients or using technologies that do not have a history of safety or having ingredients which are introduced in the country for the first time need to obtain FSSA licence. According to the Food Authority, such FBOs must apply for product approval before applying for a central licence. Who all are covered: All the food business operators who are manufacturing or importing any article of food containing ingredients or substances or employing processes or technologies whose safety has not been established. It also includes any food article containing ingredients or employing technologies which do not have a history of safe use. The process: Applicant must apply for every product or ingredient approval separately in the format prescribed by the authority. Application must be made with a demand draft of Rs 25,000 in favour of senior accounts officer, FSSAI payable at Delhi. This payment shall be made towards initial screening of the application by the Approval Screening Committee.

The envelope must be superscribed with the heading “New Product/Ingredient Approval”. The committee will decide whether the product shall fall under either of the categories mentioned above. Category A shall include applications where the product safety can be established. Applications where further assessment is required are classified under category B. They will be sent to scientific committee. The applicant will have to furnish an additional payment of Rs 25,000. Furnishing information: The format provided for application describes extensively the information and data supporting to be provided by the applicant. Administrative information, technical details, information on efficacy and nutritional impact of the product are the aspects to be covered by the applicant. Technical information is the second section of the application. Name of the new ingredient or new product must be provided. In case of product application, the common name, product composition and the brand name if applicable must be provided. With respect to new ingredient application, the chemical or other name, name of the food in which it is proposed to be used along with the concentration, and the brand name must be provided.

more. The FSSAI envisages the necessity of upgrading existing labs and creating a large network of new labs in order to provide the requisite support to the new and vibrant food safety regime. The Authority has also taken steps to create a new enforcement structure and judicial dispensation system for fast track disposal of cases. The state level food safety commissioners will play a key role in surveillance and enforcement. Food safety commissioners in every state with the designated officers are now responsible for enforcing the act in every district. The Authority has constituted scientific panels and scientific committees to address all scientific matters relating to food safety so that matters of emerging science can be discussed and factored in during the development of new products by the industry. Sathguru Management Consultants played an important role in supporting the efforts of the Authority over the two years in the formation of the needed structures at the apex and grass root levels. Some pieces have been taken from ET, article by Prabodh Halde

FINISHING POINT

he Act put in together with these regulations, amalgamates all the previous laws and orders with duplications, conflicts, and redundancies removed, and covers in a more structured manner, the licensing of food businesses, standards for additives and food products, limits for contaminants, residues, labeling guidelines, prohibitory aspects of sale of food products, proprietary food and Oil & Food Journal Vol. 08, Issue 05, March 2013

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