Issue 58 | Water Innovation by FoodBev Media Ltd

WATER innovation

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Unicer united Why water and beer are a winning combination for the Portuguese firm

Launching the 2010 water innovation awards Special report

FOCUS

water innovation awards

2010

INSIGHT

Ingredients for good health Logistics on the move What consumers want 漏 water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

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Issue 58 - January 路 February 2010

Make a bigger splash in 2010 WATER innovation

announces 17 exciting categories

For more information and to download entry forms, visit www.waterinnovationawards.com from 8 February

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www.waterinnovationawards.com

Splash ÂŠ Okea | Dreamstime.com

Presentation to finalists and winners at the 7th Global Bottled Water Congress, Gleneagles, Scotland, in November

Inside this issue 4

6 8 9 12 15-17

38 40 41

Editor Medina Bailey on how you could win a prestigious industry award.

COVER STORY

Uniquely Unicer

Bubbles

André Jacques from drinks firm Unicer gives an insight into its brands, market positioning and the packaged water industry in Portugal.

Perrier clubs the night away, SoBe hand-paints an actress and Deeside immerses celebrities underwater.

Product innovations The latest market launches.

Ingredients innovations What’s new in packaged water ingredients.

SPECIAL

25 REPORT

Technical innovations

Drink to your health

Recent technical developments.

Newsreel News summary. For regular industry news updates, visit www.foodbev.com/water

Leading ingredients companies discuss their latest health giving solutions.

Asia roundup

Insight

Mintel’s Jonny Forsyth takes a look at UK consumer spending habits.

FOCUS

Fast forward

Trading places

How the logistics industry is keeping water companies moving.

Events and latest appointments.

Marketplace water innovation products and services guide. Advertiser index.

One to watch The 2010 water innovation awards start here. © Aravind Teki | Dreamstime.com

Springboard

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REGIONAL REVIEW

Middle East Everything you need to know about the bottled water market in the Middle East.

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Images: screen © Irochka, bottle © Filipe Varela, tomato © Mailthepic, carton © Photoeuphoria, cheese © Edyta Pawlowska, glass © Konstantin Tavrov, orange © Les Cunliffe, bean © Monika3stepsahead, biscuit © Picsfive, strawberry © Braendan Yong | Dreamstime.com

www.foodbev.com/water Issue 58 - January · February 2010

CONTENTS 3

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Reap the rewards

ophisticated, attractive, hard working, multi-tasking, efficient, engaging, philanthropic. I could go on, but that’s quite enough about you! Actually these words could also be used to describe the products and initiatives that your companies have launched over the past couple of years. Now your latest concepts, whether they be packaged waters, enhanced or flavoured water products, functional ingredients, packaging, machinery, marketing campaigns or charitable initiatives, could be given the recognition they deserve at our 2010 water innovation awards. We’re kicking off the awards programme in this issue - just turn to page 42 for full details - and we’d like as many of you to get involved as possible. It hasn’t been an easy climate for any industry of late, but packaged water businesses have responded and adapted by coming up with appealing, valueadded concepts for consumers, as well as cost saving measures and technologies, which have often benefitted the

environment, too. Then there’s the luxurious packaging designs that have lifted consumers’ spirits, the iconic marketing campaigns that have taken YouTube by storm and the humanitarian projects that have gone beyond the bottom line and truly made a difference. The industry has offered up a plethora of original and exciting innovations, and it’s about time we paid tribute to them. And pay tribute we will, as the awards will culminate in a Gala Dinner in Gleneagles, Scotland, in November, when the finalists and winners will be announced. But before we can celebrate your successes, we need you to send us your entries and reveal why your firm is a worthy winner. The categories are on page 42, and you can also visit our new

dedicated awards website at www.waterinnovationawards.com from 8 February, which will make entering the awards even easier. Be sure to check out our three new categories, which will enable ingredients and technical companies to also take part - after all the packaged water market is reliant on their innovations, as well. All entries will receive pride of place in our awards Showcase magazine, ensuring that no one will miss out. We look forward to your entries winging their way to us soon and best of luck to everyone! Now back to this issue - the first WI of 2010. As seen on the cover, Portuguese drinks company Unicer shares its beer and water success story on page 18. You can read about the latest health ingredient solutions in the Special Report from page 25, find out which packaged water products will make consumers tick this year on page 36, and discover how the logistics industry can best serve water companies on page 33.

Medina Bailey

In the next issue Don’t miss our March/April issue, which will feature:

We’re also launching news from the Asia region in this issue on page 15, and page 37 reveals some essential facts and figures about the water market in the Middle East.

Special Report: The power of PET

See you next time when hopefully temperatures outside the WI office will have crept above freezing and spring will no longer be a far off fantasy here in the UK.

Insight: Luxury waters

Focus: Sustainability and the environment

Regional review: The Mediterranean Event review: Dubai’s Gulfood show

It could be you: winners and finalists from the 2008 WI awards

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WATER innovation

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4 EDITORIAL

www.foodbev.com/water Issue 58 - January · February 2010

Bubbles

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Lightening up the news

Join the club

Sipping celebs

Champagne is normally an essential ingredient at any upmarket nightclub, but Perrier has been giving young professionals the chance to experience a different kind of bubbly at a series of VIP branded events in Toronto, Canada, recently. The sparkling bottled mineral water brand from Nestlé Waters Canada hosted ten Perrier ‘soirées’ in top-end nightspots to appeal to 25-39 year olds. To gain entry to the events, attendees had to become

The latest water related news from planet celebrity

members of Société Perrier by filling in entry forms at SocietePerrier.ca. They were then sent PIN codes to present on the night. Clubbers were given access to an exclusive, branded VIP area and received a free Perrier cocktail, taxi voucher and complimentary Perrier all evening. Facebook, Twitter and emails were used to spread the word about the events.

Coca-Cola refreshes Olympics The London Organising Committee of the Olympic Games and Paralympic Games has announced that commercial partner Coca-Cola will be providing all mineral water and soft drinks at the 2012 Olympic Games. Still, sparkling, low and no sugar, 100% juice, water, sports and energy drinks will all be available at the event. Free drinking water will also be accessible at all UK Games venues.

Apparently nothing comes between Ashley Greene and no calorie water, SoBe. The Twilight Saga star helped launch the PepsiCo brand’s strawberry dragonfruit flavour by posing in a hand-painted SoBe skinsuit for an advert in Sports Illustrated.

Making up with Veen Veen Water was invited to help celebrate the 25th anniversary of beauty brand Make Up For Ever at a luxurious club in Paris. The event featured a showcase of make up art and was attended by other international brands including Moet & Chandon and Smirnoff.

Actors Jessica Biel and Emile Hirsch reached the top of Mount Kilimanjaro after a six day trek in aid of the global clean water crisis.

Deeside Mineral Water and worldwide water charity fresh2o teamed up to launch an exclusive range of bottled water fronted by celebrities. The limited edition 500ml bottles feature stars including Keira Knightley, Judge Jules and Kelly Brook, underwater.

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light news 5

Innovations

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The Editor’s pick of the latest new products

PepsiCo Canada introduces Aquafina with pure Stevia extract

epsiCo Canada has launched Aquafina Plus Vitamins 10 Cal - the country’s first low calorie vitaminenhanced water to contain all-natural, pure Stevia extract sweetener, PureVia.

Aquafina Plus Vitamins 10 Cal beverages are available in three new flavours - Black and Blue Berry, Açaí Fruit Punch, and Tropical Cherimoya.

“We are extremely proud to be the first and only nationally available beverage in the country to feature PureVia as a zero calorie, natural sweetener,” said PepsiCo Beverages Canada President Stacy Reichert. “Consumers have long anticipated a zero calorie natural sweetener and are seeking healthier beverage choices. Our hydration

The Stevia plant is native to Brazil and Paraguay and has been commercially used as a sweetener in other countries for more than 30 years. PureVia natural sweetener is a pure extract derived from the Stevia plant that is 200-300 times sweeter than sugar, and is currently available as an ingredient in Natural Health Products in Canada.

portfolio, including Aquafina Plus+ vitamin enhanced water, has seen explosive growth in Canada, and the Aquafina Plus Vitamins 10 Cal brand is going to further that leadership position. Being the first to offer a great tasting, low calorie option with a natural sweetener is a big deal, and we are excited about sharing it with health conscious Canadians.”

Nestlé Waters unveils one of lightest bottles in use in Canada

estlé Waters Canada has introduced its Eco-Shape 500ml bottle, which it claims is one of the lightest containers in the Canadian beverage industry. Weighing 9.16g on average, the bottle contains 27% less plastic than the previous Eco-Shape bottle, which was introduced in 2007, and 60% less plastic than the company’s original PET bottle from 2000. The latest version of the Eco-Shape is currently being used for Pure Life and Montclair brands. The PET beverage container can be fully recycled and used to make products such as clothing, toys, carpets and automotive parts. Working with its industry partners, the firm is currently participating in funding Canada’s municipal recycling infrastructure that also collects glass,

paper and aluminium. It also introduced Canada’s first public spaces recycling programme in Quebec in 2008, will introduce a similar initiative in Manitoba later this year, and recently completed a successful pilot programme in Ontario. About 60% of plastic beverage containers were diverted from landfill across Canada last year. The Quebec programme captured about 85% of recyclables, compared to 77% for the first phase of the Ontario pilot in Sarnia.

In 2008, PepsiCo developed a partnership with Whole Earth Sweetener Company to jointly develop PureVia for various uses, including as a sweetener in food and beverage products.

New bottle for bot

S boutique beverage company bot has unveiled its newly designed, natural enhanced waters range.

The revamped line, which includes grape, berry, orange and lemon variants, is primarily targeted at children and young people. The products are naturally sweetened with pure cane sugar, contain vitamins B3, B5, B6, B12, antioxidants and electrolytes, and provide only 25 calories per serving.

Before

After

“With about 60% of Canadians drinking bottled water, reducing the amount of plastic in our bottles is one of the best ways to reduce our carbon footprint,” said Gail Cosman, President, Nestlé Waters Canada. © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

6 PRODUCT NEWS

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Renew yourself says Evian

raditionally a time for healthy living and cutting back on the calories, the month of January has seen Evian running a detox campaign for the past nine years. 2010 is no exception as vibrant pink Evian Renew bottles have hit the shelves to help boost sales. The Danone brand’s campaign is being supported by a £3 million marketing push, which consists of medium weight TV advertising, point of sale, promotional packaging, targeted digital commuter activity and specific sales promotions. The TV advertising schedule saw the iconic roller skating babies taking to the small screen over the festive period, while the Renew message was broadcast well into January. In-store discount

promotions, such as multibuy and buy one get one free offers, coincided with the TV adverts. “Our annual Detox campaign has gone from a standing start in 2000 to strong sales in the first six weeks of the year,” explained Brand Manager, Adrien Varrod. “We’re constantly looking for ways to engage and interact our consumers; and our new messaging - ‘Renew yourself naturally’ - at the start of the year is the perfect way to do this.”

For more information about the functionaldrinks newsletter, visit www.functionaldrinksnews.com

Functional findings Editor of Zenith International’s functionaldrinks newsletter, Jenny Foulds, reports on the latest functional water launches.

NutrientWater enhances line-up Australian enhanced water company NutrientWater has added a new variant to its existing range of functional waters and launched a low calorie range. The new variant, D-Stress, which joins the existing six (Antioxidant, Energy, Immunity,

Multi Vitamin, Endurance and Rehab), is flavoured with blackberry and goji berries. Enhanced with vitamin D and L-tyrosine, D-Stress is said to help the brain produce more neurotransmitters, thereby regulating emotions and controlling stress levels. NutrientWaterX, a superlow calorie version of NutrientWater that is naturally sweetened with Stevia plant extract, has also been introduced. Each bottle of NutrientWaterX contains just 23 calories, equivalent to only one teaspoon of sugar, and is currently available in two different functional varieties: Refocus, with brahmi and ginkgo; and Agame with vitamins A-E. Both are naturally flavoured - Refocus with Fuji apple and lime, and A-Game with strawberry and guava.

Each 575ml bottle of NutrientWater and NutrientWaterX has a recommended retail price of AU$3.80. NutrientWater is available in Australia and New Zealand.

Rhönsprudel offers iron boost Rhönsprudel Life has been launched by German mineral water company, Rhönsprudel. The enhanced offering delivers all the benefits of locally sourced Rhön mineral water, in addition to its refreshing apple and grapefruit juice and extra source of iron, the latter to aid the development of red blood cells and ensure the body’s organs receive sufficient oxygen to function. With this additional mineral content, a 200ml glass of Rhönsprudel’s hybrid nectar/ water apparently delivers 30% of the recommended daily allowance (RDA)

of iron, as well as 30% of the RDA of antioxidant-rich vitamin C thanks to its fruit juice inclusion. It is packaged in a 750ml PET format and priced at €1.29.

Emotion expands Coca-Cola Hellenic Austria has introduced an appleredcurrant variant of its Römerquelle Emotion near water range. The product is available in 500ml and 1 litre PET bottles, priced at approximately €0.85 and €1.19 respectively.

A first from Frucor Frucor Beverages has launched New Zealand’s first low calorie, vitamin enriched water, Revive Supplement Water to contain Stevia. Stevia producer PureCircle supplied the sweetener.

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Danisco reveals phage-resistant bacteria research

he latest findings from Danisco and a growing number of research groups investigating bacteria with natural immunity to viruses (bacteriophage) have been published by international magazine, Science. The review summarises research into CRISPR Clustered Regularly Interspaced Short Palindromic Repeats - an immune system which provides bacterial cells with acquired resistance to specific phages and foreign genetic elements. Danisco has made its CRISPR model freely available to international researchers to assist them in their investigations: “Our model remains the most well established and documented for seeing the immune system work in bacteria,” said Senior

Scientist Rodolphe Barrangou, Danisco. “We hope the paper will help research groups in their work and encourage others not currently involved in the field to look into CRISPR.” In July 2009, Danisco coorganised and sponsored the second CRISPR conference at University of California, Berkeley, in the US. The CRISPR review in Science includes some of the findings disclosed at the conference, including the recent discovery that RNA, not only DNA, can be a target of some CRISPR/Cas systems.

Tate & Lyle research highlights importance of fibre

esearch released by Tate & Lyle emphasises the growing awareness by European consumers of the value of fibre.

The research reveals that people across Europe continue to struggle to meet their daily fibre intake, with a third of the survey’s 1,565 respondents admitting they do not consume enough fibre. Young people were most concerned.

The findings are part of Tate & Lyle’s ongoing research into European consumers’ attitudes towards labelling, ingredients and shopping habits. They found that the presence of fibre is now seen by European consumers as almost as valuable as more established claims such as ‘low in fat’. 40% of respondents rated fibre as an important benefit when purchasing products, while 72% said they would be willing to pay extra for products enriched with fibre (up from 50% in 2008 when the question was last asked in a survey on European consumers’ dietary preferences). 26% of the respondents suggested they would be willing to spend 20% or more for products which include a ‘high in fibre’ claim; again, up from 16% in 2008.

As plans get underway to hold a third conference at Berkeley in 2010, Danisco is involved in co-organising another event in Europe, in co-operation with an independent Dutch team working on CRISPR. The European conference will be held in Wageningen, the Netherlands on 21-22 October 2010. “This is a hot topic in Microbiology at this time,” said Senior Scientist Philippe Horvath, Danisco, as many groups throughout the world investigate various aspects of the CRISPR/Cas system, both in terms of mechanism of action and potential applications such as genetic typing, studying the interaction between viruses and their hosts, and building

immunity against undesirable foreign genetic elements. The article by Philippe Horvath and Rodolphe Barrangou is entitled ‘CRISPR/Cas, the immune system of Bacteria and Archaea’, and is the most up to date review of CRISPR knowledge so far superseding a previous Danisco paper on the subject published in Science in 2007.

Amino acid initiative from Ajinomoto

jinomoto is developing a new initiative to develop propriety fermentation technology for producing cystine and cysteine amino acids which are important in a wide array of applications, including flavourings. Ajinomoto’s expansion in this marketplace should offer additional sourcing options for manufacturers, as it will make cystine and cysteine that are produced by microbial fermentation of starches and/or sugars available. The largest portion of the cystine and cysteine demand is met by producers who currently extract these amino acids from raw materials of animal origin. “Our customers around the world are more and more sensitive to the nature and quality of raw materials used in food, pharma and cosmetic production,” said Director of Sales and Marketing at Ajinomoto, Mike Lish. “As the global leader in amino acid fermentation production, adding

this capability is a natural extension for Ajinomoto.” After the expansion, Ajinomoto will continue to manufacture some cystine and cysteine using its current chemical synthesis process, carried out by Nippon Protein Company, a wholly owned affiliate of the company. Ajinomoto does not use sources of animal origin in its cystine and cysteine production. The new fermentation initiative will be carried out in one of Ajinomoto’s existing facilities. Product rollout is expected in late 2011.

8 INGREDIENTS

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It’s not glass. No, really

ooking at PET Engineering‘s latest creations, it is hard to believe that some of the striking, shapely bottles destined for the horeca market are not glass. The new AXI Italian-made water bottles are actually constructed from PET, yet feature enhanced transparency and brilliance.

all feature the same base, are sealed in two different ways, with a crown cap or BVS closure in aluminium.

Special resin - Glasstar by Novapet - has been used for the range, with each bottle weighing in at 54g. The containers, which

According to PET Engineering, PET allows for more flexible, personalised designs due to its malleability.

Sacmi highlights compression technology

acmi is aiming to take continuous compression molding (CCM) to unprecedented levels with a machine that could produce 2,000 pieces per minute with a cycle time of 2.4 seconds. The CCM 80 machine joins the CCM 48 and 64 models, which are already on the market.

Previewed at Chinaplas, the machine was purchased by Tin Hsin, a Chinese bottle and preform producer. It was then displayed at Drinktec, where it attracted the attention of Hana Water, one of Saudi Arabia’s largest bottling firms, who also opted for the new equipment.

The new equipment offers the usual advantages of CCM, which include guaranteed homogenous cap output as the punches work independently of each other.

Further benefits include installation on existing lines without the need to replace or adapt other parts, and energy resource optimisation.

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TECH NEWS 9

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Türk Tuborg cuts down costs and improves efficiency

inancial savings combined with consistent and accurate labelling were the key drivers for Türk Tuborg’s can and bottle drying systems at its filling operation in Izmir, Turkey. The new drying systems were installed as retrofit units to replace compressed air jets and heated tunnels, and are reported to be achieving significant savings, while also helping to avoid the problem of label slippage resulting from inefficiently dried bottles. The can and bottle drying machines are from Air Control Industries (ACI) and were supplied by the company’s

Turkish distributor, Yük. Müh. Nihat Kagnici, Sanayi Müsavirligi ve Mümessilligi. The principal reason for the substantial cost savings is that the ACI units are all blower powered, which can provide a more cost effective and cleaner way of delivering air for drying bottles and cans. Prior to opting for the ACI systems, Türk Tuborg’s Packaging Engineers, Arda Sengöz and

Glass recycling on the increase in Europe

ollections of glass for recycling have steadily risen across Europe according to figures from Feve, the EU association for container glass. In 2008, an estimated 25.5 billion glass bottles and jars were dropped into bottle banks ready to be recycled, which corresponds to an average collection recycling rate of 65% for the EU’s 27 member states. “This data confirms the positive trend over the last year when, thanks to the collaboration of citizens, a number of EU countries have reached the ambitious 60% collection target fixed by the EU Packaging and Packaging Waste Directive,” said Feve President, Dominique Tombeur. In Belgium and Sweden, nearly all glass bottles and jars put on the market were collected, making the vision of a zero waste packaging material an ambitious objective which, to be realised, has to rely on strong co-operation from all stakeholders, beginning with citizens, policy makers and industry.

Mehmet Kaynak, investigated a series of different suppliers. A combination of good references from existing customers, competitive pricing and the easy self-installation/ running maintenance persuaded them that ACI offered the best solution for the company’s needs. Also, as they had a local distributor, they were confident that professional back-up would be on hand, if required. Five ACI drying systems have been installed, three of which are fully enclosed. Two of the fully enclosed units are installed on canning lines and incorporate ACI’s purpose-engineered ‘CanTunnels’ with Airknives, while the third is employed for bottle drying and is equipped with ACI’s ‘JetPlate’ system, with a pair of Airknives. The open units are EL (blower at Eye Level) packages and CanTunnel systems. The bottle drying line has a capacity of 60,000 bottles per hour and the ACI dryer can handle up to 14 different shapes

At EU level, taking the EU15 countries as a reference, national consumption increased by 8% over the last decade, while glass packaging waste destined for other uses and to landfill decreased by 26%, implying that there isn’t a direct correlation between consumption and waste generation. “The results reached in glass collection for recycling prove that glass packaging is a fully sustainable resource,” said Tombeur. “Unlike other materials, a very high rate of collected glass is actually recycled in a new production cycle with an extremely positive impact on depletion of raw material savings, energy savings and emissions saving.”

or sizes of bottle, drying neck and cap in one pass. “The ACI drying systems are working very well and the support has been excellent, both from ACI and Nihat Kagnici,” said Sengöz. “What’s more, we are saving money. The compressed air systems and heating tunnel were much more expensive to run and maintain so we expect a rapid payback on our investment.”

ULA chooses One Source for water bottling contract

nited Liquor Alliance’s (ULA) subsidiary, United Beverage Alliance has contracted One Source for the bottling of its artesian water. ULA’s main aim is to provide customers with quality water at competitive prices, and believes that One Source will ensure a solid profit margin for its product. “The bottle market is highly fragmented and our price can’t compete with lowend purified waters,” said ULA President, Shane Cooper. “However, the quality of our product highly surpasses these

purified waters, and the price for our artesian water will surpass the pricing of waters with similar quality. We will be able to afford lower pricing thanks to our proximity to the market and the ability to minimise transportation costs.” The US firm has recently submitted the label for its premium bottled water product to Gray Robinson for legal approval. It plans to market a litre bottle at a retail price of $1.75 in the Tampa Bay area of Florida.

10 TECH NEWS

www.foodbev.com/water Issue 58 - January · February 2010

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Tata Tea raises stake in Mount Everest Mineral Water

ata Group firm Tata Tea has increased its stake in Mount Everest Mineral Water to 50.24%, assuming management control of the company. Tata Tea had gradually increased its stake in Mount Everest Mineral Water over the past ten months in a bid to consolidate similar businesses under a single roof, and may merge the mineral water firm with itself. Reports further indicate that, under its consolidation drive, Tata Tea aims to create one holding company with various divisions such as

tea, coffee, water, juices and energy drinks. Tata Tea had acquired a 26% stake in Mount Everest in 2007 for Rs115 cr, which was followed by an open offer for acquiring a further 20% stake at Rs140 a share. Mount Everest Mineral Water reported a net loss of Rs2.36 cr in Q2 September 2009, as compared with a net loss of

Rs9.47 cr in Q2 September 2009. Net sales dipped 14.7% to Rs4.53 cr in Q2 September 2009 over Q2 September 2008. The firm sells natural mineral water under the brand name Himalayan. Its clientele includes luxury hospitality chains, premium airliners, cinema multiplexes and restaurants.

Greencore sells water business to Highland Spring

reencore Group has announced that it has agreed to sell its bottled water business - Greencore Mineral Water - to Highland Spring. Established in 1987, Greencore Mineral Water is the UK’s largest provider of customer brand mineral water, supplying over 200 million litres to top UK supermarket retailers as well as to wholesalers and foodservice customers throughout the country. It operates from two facilities located at Campsie Springs in West Scotland and Blaen Twyni near Swansea in Wales. In the year ended 25 September 2008, Greencore Water generated a loss before taxation of £3.8 million. As at 28 September 2008, its net assets were £15.9 million and gross assets amounted to £21.2 million. Under the terms of the agreement, Greencore will receive up to £17.5 million in consideration, £10 million of which is payable upon completion, £3 million deferred until the second anniversary of completion and up to £4.5 million contingent upon the future performance of the business. Completion of the disposal, which will be effected by means of an asset sale and the sale of

shares in a subsidiary company, is expected to occur on or before 30 April 2010. The proceeds

from the disposal will be used to reduce Group borrowings. Through this deal, Highland Spring will become the leading supplier of bottled water in the UK.

YouTube highlights bottled water recycling The International Bottled Water Association’s (IBWA) consumer website, www. bottledwatermatters.com, has released two short YouTube videos which emphasise the importance of consumers placing their empty containers in recycling bins. “Too often activists talk about empty water bottles piling up in our landfills, and this confuses consumers by making them think bottled water is not recyclable,” said Tom Lauria, IBWA’s Vice President of Communications. “But in fact, all PET plastic containers are 100% recyclable and PET is in very high demand by the recycling industry. In fact, last year, US PET reclaimers had to import post-consumer PET from other countries to meet demand in this country.” In the ‘Recycle This Bottled Water’ video, a teenager encourages viewers to get involved in recycling, by using curbside services and pressing local officials to expand recycling programmes in their areas. ’How to Recycle Bottled Water’ takes an amusing look at the different ways to recycle empty bottled water containers. The video ends with a conclusion: “No matter who you are, or what you do, ALWAYS recycle.”

12 NEWS

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FoodBev.com Images: screen © Irochka, bottle © Filipe Varela, tomato © Mailthepic, carton © Photoeuphoria, cheese © Edyta Pawlowska, glass © Konstantin Tavrov, orange © Les Cunliffe, bean © Monika3stepsahead, biscuit © Picsfive, strawberry © Braendan Yong | Dreamstime.com

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Advent International buys stake in Bulgaria’s Devin

lobal private equity fund Advent International has acquired a 79% stake in Bulgaria’s leading water bottling company Devin. Advent’s purchase values the company at a total enterprise value of €40 million. The top management team of Devin will retain their stake of 6.7% as part of the deal. Advent will launch a takeover bid for the remaining shares of Devin traded on the Bulgarian Stock Exchange. Advent has been active across Central Europe for 15 years and has already made several investments in the food and drink sector - Brewery

Holdings in Romania, Star Foods in Poland, Uno in Turkey and Graffigna in Argentina. It is banking on further growth for Devin. “The company has built a strong position on the local market and

established a presence in Romania. We believe that the company and its management team provide an excellent platform for further growth, and are delighted to be able to support this,” said Chris Mruck, Advent Managing Partner, who will join

the Devin Board as a non-executive Director. Founded in 1992, Devin has grown into the country’s number one bottled water company with its self-branded product, according to Advent. The drinks company has also established distribution agreements in Bulgaria for Red Bull and the juice brand Granini in the past two years.

Water firms offer much needed aid to Haiti

ater companies have been donating funds and supplies to Haiti after the devastating earthquake that hit the country on 13 January. Icelandic Water Holdings donated three tonnes of Icelandic Glacial bottled water, which were delivered by Iceland’s Search and Rescue Team (ICE-SAR) and among the first cases of water to arrive. “A tragedy of this magnitude affects everyone, everywhere,” said Icelandic Glacial Chairman and co-founder, Jon Olafsson. “We are doing our best to help search and rescue teams like ICE-SAR with their efforts on the ground in Haiti, and we pledge to ship thousands

more cases of bottled water in the coming days.” Nestlé Waters North America pledged $1 million in bottled water products to support disaster relief efforts, while the Coca-Cola Foundation gave $1 million to the American Red Cross to assist with emergency relief efforts, and its bottling partner in the Dominican Republic provided help on the ground. Fiji Water sent more than 136,000 litres of water to Haiti, and along with its parent

company, Roll International, donated funds to non-profit organisations that were working in Haiti before the disaster. PepsiCo Foundation donated $1 million, along with bottled water and Gatorade. Out of the $1 million, $500,000 was allocated to three of its strategic partners, including the American Red Cross, Save the Children and Friends of the World Food Program. The remainder has gone towards supporting longer term rebuilding efforts to strengthen Haiti’s infrastructure and limit damage in the future. Many other beverage companies also donated products and contributed to the ongoing relief effort fund.

Nestlé Waters North America calls for transparency

For estlé Waters North America has urged the bottled water industry Nindustry to test and report on the quality of its products. news and daily updates, visit The company publicly lended its support to Senator Frank Lautenberg’s recent call for federal standards to require disclosure by all bottled water manufacturers of water sources and test results concerning water quality.

FoodBev.com

“If people want to know where the water comes from or what

is in it, they should be able to find that out,” said Kim Jeffery, President and CEO of Nestlé Waters North America. “Information about drinking water quality should be easily available.” The firm has also highlighted the ways in which it claims to practice what it preaches:

• Water sources are identified on bottle labels and/or online • Since 2005, quality reports based on independent testing results from certified laboratories have been publicly available for all brands • Consumers can access information about water sources and quality reports via a phone number or website, both of which are listed on product labels.

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Asia news

Asia helping to drive bottled water sales

ccording to final year figures for 2009 from Canadean’s recently published Global Bottled Water Report, the worldwide market for bottled water may increase by around 2%. Although this represents a slowdown, it is encouraging for the industry that the category can maintain growth in even the most testing of trading environments.

category jumped by 18% in quarter three last year and is set for another large increase in volumes. The market has been aided by hot weather in certain parts of China and intense price competition which has kept prices low.

Asia will once again be the main global driver in 2009, with China boosting the regional and global performance. Canadean’s Quarterly Beverage Tracker suggests that the Chinese water

An improving economy is very significant and it is perhaps no surprise that the Chinese quarterly GDP growth rate was 8.9% year on year, which was 1% higher than Q2-09.

With the help of Asia, the bottled water category seems to have ridden out the worst of the global recession, but Canadean doesn’t anticipate that the pre-recession growth rates will return. It expects the water market to settle back down to a growth rate of 5% after 2009, a marked slowdown on the 7% seen in 2007 or the 9.5% jump in 2006. What is encouraging is that every region in the world is expected to register water growth in 2010.

The biggest market for waters, West Europe, which accounts for nearly 30% of world volumes,

is also set for negative 2009 results. Spain and France, two of the heavyweight markets, are responsible for much of these losses. In Spain, it is the slump in on-premise sales which is affecting the market as the recession keeps consumers at home. In France, three factors have been impacting on still water consumption: environmental (packaging and transport), tap water campaigns and of course economic issues relating to the price of mineral water.

Source: Canadean

The market would have fared significantly better if North America had been discounted, as in 2008 it dropped from double digit growth the year before into decline. Canadean attributes this downturn in sales to a combination of US consumers switching to more economical filtered tap water and concerns over the environmental impact of bottled water. North America accounts for 18% of global sales and the performance here is harming the overall global picture; in 2009, without North America the global water market was forecast to increase by a healthier 4%.

Share of the Global Packaged Water Market

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NEWS 15

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Asia news

Krones lines putting Tibetan glacial water on track

ibet Glacier Mineral Water is the first company to successfully bottle mineral water from a Tibetan spring, situated 16,800ft up in the mountains, and launch it on the Chinese market. Krones has installed three bottling lines on the site at 14,300ft, near the Tibetan capital of Lhasa, since 2006. Although lots of companies had toyed with the idea of bottling and marketing water from Tibetan mountain glaciers, known as ‘the Roof of the World’, the plans never actually came to fruition. Hong Kong based Mineral Water Resources, the parent company of Tibet Zhongji Jiahua and Tibet Glacier, has been planning the venture for around a decade, exploring a series of productive springs in the vicinity of Lhasa. The breakthrough finally came when the Qinghai-Tibet Railway was inaugurated on 1 July 2006, as this provided Tibet Glacier with a financially viable, relatively fast option for accessing the Chinese market. The railway cuts transport times from Lhasa to Beijing to two or three days, whereas delivery by truck via the Friendship Highway, the main road between Nepal and Lhasa, takes eight times longer.

one day’s drive away from the Himalayas, is without a doubt among the best in the world.” The Nianqing Tanggula range, with its snow covered peaks and glaciers, offers a vast supply of water. The region is also home to one of Buddhism’s three sacred lakes, the Heavenly Lake of Namtso. The Qinghai-Tibet plateau is renowned as one of mankind’s few remaining totally unpolluted regions. The spring used here is very productive, capable of yielding up to 3,000 cubic metres of water a day, and is rich in valuable minerals and micro-elements. As a result of its upmarket product positioning, an elegant bottle design was essential: “We got some invaluable support

from Krones’ PET design experts, who provided the finishing technical touches”, said Yu. Tibet Glacier opted for a classical square shape in 330ml, 500ml, 1 litre and 1.5 litre sizes. The lightweighting issue has been of relatively minor importance for Tibet Glacier: “The stronger the bottles, the safer they are in transit, and the more comfortable they feel in your hands.” The preforms, produced inhouse, weigh 18g (330ml), 23.5g (500ml), 36.8g (1 litre) and 47.6g (1.5 litres). Tibet Glacier took delivery of its first blow-molder/filler BLOC from Krones in 2006, rated at 24,000 containers an hour, plus a Contiroll labeller, enabling the firm to test the market. In 2007, 5100 was launched on the Chinese market, while 2008 saw the acquisition of a second filler BLOC with the same rating, and an Autocol for applying pressure sensitive labels. By the end of 2008, output had already reached 50,000 tonnes. Early in

2009, the third stage materialised - this time a complete PET line from Krones, rated at 36,000 containers an hour. Right from the start, the bottling plant’s elevation demanded a series of special measures in order to ensure reliable bottle production, filling and labelling. “When we first started talking to Krones we didn’t know whether the machines were really going to work at this elevation. At the end we were very satisfied with this admirable performance under what were extremely difficult conditions.” The company’s goal over the next five years is to get listed on the stock exchange and upsize its production capacity to 400,000 tonnes a year. “We intend to achieve this on the Chinese market first of all, build up a high profile image here, and then start thinking about exports,” concluded Yu. “Krones fits in perfectly with this strategy.”

The name for the new mineral water was quickly decided upon as “5100” is the spring’s elevation in metres. Tibet Glacier has positioned 5100 in the ultra high price range: the target consumer can purchase a 500ml bottle from the supermarket for an average of eight RMB, the equivalent of €0.80. This is about eight times more expensive than normal mineral water, as Mineral Water Resources President, Wallace Yu, explained: “There are huge differences between individual waters. That’s something that more and more consumers are taking on board. There’s good water and there’s bad water. The water we get from the Nianqing Tanggula mountains, about © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

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Husky breaks ground for new facility in India

usky Injection Molding Systems has started groundbreaking for a new facility in Chennai, India. Once complete, the 3,300 square metre site will have sales, customer support, manufacturing and sourcing teams. The location will also support Husky’s growing hot runner business in the region by providing local hot runner and mold refurbishing to reduce lead times. “Husky is dedicated to helping our customers in India successfully grow their businesses. This region has great potential for future growth and investment here will allow us to provide an expanded offering to our customers,” said Husky President and CEO, John Galt. “Our goal is to be a leader in servicing this market. Opening a new facility in Chennai will allow us to better meet the local needs of current and future customers.” Husky has established strong relationships in India since entering the market in 1999. In 2001, an office was opened in Mumbai to serve local customers, which led to an expanded customer base and increased business in the region. The Chennai facility, which is

expected to be operational within one year, marks an important step in Husky’s ongoing investment in India. “Our customers in India and all around the world benefit from working with our strong global team,” said Hari Prakash, Husky’s General Manager, Sales, SAARC. “Investing in local infrastructure allows us to offer customised support combined with all of the advantages of working with an experienced, industryleading global supplier.” Husky has also recently opened a larger technical centre in Yokohama, Japan, expanded its technical centre in Shanghai, China, and established a new PET and hot runner refurbishing site in Moscow, Russia.

Japanese company licenses technology to Graham Packaging

okyo based Tahara Machinery has licensed Graham Packaging Company to manufacture its electrically driven blow molding machines and market them in Europe. Tahara President Katsutoshi Saeki said his company would collaborate with Graham to consolidate its position as a producer of electrically driven blow molding machines. Tahara introduced the first electrically driven blow molding machine back in 1994. Under the licensing agreement, Graham Packaging will manufacture the machines at its Graham Poland factory and

market them in Europe through a Warsaw based firm, Muehsam-Elektromech Jan K Muehsam i Wspolnicy Spolka Jawna. Graham Packaging, based in Pennsylvania, US, designs, manufactures and sells customised blow molded plastic containers for branded food and beverage, household, personal care/specialty, and automotive lubricants product categories.

Husky executives participate in ground breaking ceremony

Global Bottled Water Report 2009 The most comprehensive analysis of global bottled water trends, this Zenith report provides a global overview, country rankings, and full market segmentation.

Data 2003-08 Forecasts 2009-13 Still vs sparkling Small pack vs bulk Regional commentary Company activities Product launches Support your investment Identify decisions new growth Adapt quickly opportunities to change and allowing you remain aware to be early to of what your market competitors are doing

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NEWS 17

Uniquely Unicer

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‘September/October’ from Unicer’s Água das Pedras 2009 calendar

When Portuguese consumers order sparkling water, they often ask for an ‘Água das Pedras’. The Waters and Soft Drinks Marketing Manager for the firm behind the iconic bottled water brand, André Jacques, talks Editor Medina Bailey through Unicer’s ethos, how the beer-water dynamic has worked past and present, and why it’s optimistic about a sparkling future. Background When was the company established and how has it progressed to become what it is today? Unicer was initially formed in 1890 as União Fabril Portuense das Fábricas de Cerveja e Bebidas Refrigerantes - Sociedade Anónima de Responsabilidade Limitada. It was privatised in 1989-90,

acquired A Caféeira and VMPS in 2002, and underwent restructuring in 2006. Today, its main focuses are beer and water, consolidating its international performance and maintaining its results culture. How is the Portuguese bottled water market currently faring? The table below gives an idea of the Portuguese water market’s dynamics.

YTD ‘09 vs ‘08

Shares in YTD ‘09

Value

Volume

Value

Volume

Total waters

-0.16%

4.58%

100%

Regular stills

1.52%

5.57%

66%

93%

Special stills

-33.98%

-31.39%

Flavoured sparkling

-8.93%

-10.29%

Regular sparkling

3.69%

-0.23%

24%

Source: AC Nielsen

There are four very distinct segments in the Portuguese water market: Regular still waters (93% of the volume and 66% of the value); Special still waters (1% of the volume and 3% of the value); Regular sparkling waters (6% of the volume and 24% of the value); and Flavoured sparkling waters (1% of the volume and 7% of the value). The dynamics between them are very distinct. The former, despite pressures from tap water consumption, are growing by 5%, but losing value - ie growth occurs through own brands whose market share is 45%. Special still waters, launched in 2006, are losing more than 30% due to price and some credibility regarding their functional claims, as a result of some campaigns

that over promised. After several years of decline, Regular sparkling waters, have stagnated in volume and increased in value, due to the large investment in the modernisation of the market leader (Água das Pedras). Finally, Flavoured sparkling waters, a segment in existence since 2002, are now losing around 10% in volume, largely due to their high price and a decrease in marketing investment. Can you outline the range of water products that you offer? Yes, Unicer is a beverage company. Our core business is beer, which makes up 62% of our volume. Water accounts for 25% and soft drinks 7.5%. With a market share of about 50%, we are the market leader in beer. Our brands are Super

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Bock (with several varieties), Carlsberg, Cristal, Cheers (alcohol free), Grimbergen and Kronenbourg. Super Bock and Cristal are present in Angola and have a volume of over 100 million litres per year, around 25% of our total beer volume. One of our major projects in this market is the construction of a plant within the next few years. In terms of soft drinks, we are the fourth largest operator, with a market share of about 6%. In this business we have a wide range of value-formoney brands in the following segments: Carbonated fruit juices (Frisumo), Still fruit juices (Frutis), Nectars (Frutis Natura), Guaraná (Guaraná Brasil), Carbonated soft drinks (Snappy), Ice teas (FruTea) and Isotonic drinks (Soccerade, a Cristiano Ronaldo brand). Our main competency in this business is draft service. Our other smaller businesses are in wine and coffee. With regard to waters, Unicer is the main operator in the Portuguese water market, with a market share of around 31% in value. Despite not being the largest operator in volume, we have a range of core competencies that distinguish us from the competition, such as the fact that we own the main sparkling water brand: Água das Pedras. This is a 100%

collaboration with the reopening of a luxury hotel with a Six Senses spa and championship golf course in the north east of Portugal. Finally, we also have a regional naturally sparkling mineral water called Melgaço. Unicer is unique in terms of sparkling waters in that our portfolio has three natural carbonated mineral waters, a very rare type of water that accounts for less than 0.5% of the bottled water in the whole world. During the course of more than a decade, we have acquired control of the only three sources of this type in mainland Portugal. natural sparkling mineral water, a rare characteristic anywhere in the world. We also own Vitalis, the market leader in still waters in the on-trade channel. Both of these have significant range extensions. Água das Pedras has an effervescent, almost still, variant called Pedras Levíssima, as well as a range of flavours, which we call Pedras Sabores, based on natural ingredients (pasteurised products) with a low glycemic index. Vitalis has two extensions in the special waters segment: Vitalis Sabores (lemon and magnesium) and Vitalis Elegante

with L-Carnitine and fibre, whose functional promise is to ‘help reduce the waistline’. Vitalis also has a regular water version in a premium bottle, a recent trend that despite the residual volumes has added value for the brand as a whole. Other brands in our portfolio include Caramulo, a spring water with value for money positioning, and Vidago, a naturally sparkling mineral water. The latter will be relaunched this year with a premium positioning in

What kind of locations do you supply the waters to? Unicer bottles and distributes over 250 million litres of water annually, which are destined for more than 25 countries in all the world’s five continents. The main market is the domestic one, accounting for 85% of the volume. In terms of foreign markets, we have

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COVER STORY 19

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established a market-tomarket strategy mainly close to Portuguese communities in countries where the Portuguese language is spoken. So, over 20 million litres of Caramulo are exported to Angola, making it the water brand with the greatest export volume and the main and most trusted brand on the Angolan market. Água das Pedras, the most widely exported brand, is present in the Spanish market (through a distribution agreement with the Leche Pascual Group), in the centre of Europe, where there is a large Portuguese community, and in Canada for the same reason. Other recent developments worth noting are the start-up of sales to Japan in late 2009 and the agreement with the 7/11 chain for distribution in Hong Kong in 2010. During this year, we are also going to resume exports to the US and Brazil, the latter being the most strategic export market for the brand.

Boosting sales How are you strengthening sales despite the international economic downturn?

In the domestic market, we are sacrificing volumes to be more stringent on the management of prices and margins. In terms of still waters, it has been essential to constantly develop our productive and operational competencies in order to achieve greater cost optimisation. The most important project in this area is our January launch of lighter PET bottles for the Portuguese market - 27.5g for 1.5 litre, 13.5g

for 0.5 litre and 10.5g for 0.33cl. But we have also invested in the growth of the sparkling water business, the value of which is significantly higher and where we have unique differentiating characteristics. If we are able to partly change Portuguese water consumption habits by replacing still water with sparkling water, we will make very significant gains. It is fair to say that this is our main strategic move in the water business. Another important move has been our internationalisation, particularly of the Água das Pedras brand, which has been progressing relatively slowly but surely. As we have said, the main immediate target market is Brazil, where the brand will occupy a natural space due to its high awareness and positioning in the mind of the high-end consumer, not to mention the fact that Portugal and Brazil are brother countries. These are guarantees that it will be possible to enter this market more easily than others. Does the brewery side of the business help to boost water sales?

As beer is our core business, in principle the role should be in reverse - our waters and soft drinks should help sell more beer. In fact, this is not always the case as the exclusivity agreements we sign with important clients in on-trade are based on the beer business. Water, especially still water, does come into it as well, but as a basket filler with the aim of preventing the entry of other competitors. In other words, still water benefits from the beer sales. In the case of Água das Pedras, one of the stronger and more widely distributed brands in the Portuguese market, it is different. Beer benefits much more. But what is undeniable is that whenever we visit a point-ofsale, we take a portfolio of three brands that are essential for the client: Super Bock, Água das Pedras and Vitalis.

Ethos and marketing How would you sum up Unicer in three words? Unicer is a strong, reliable and sustainable Portuguese company.

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What is your main ethos? Unicer seeks long term partnerships, whether with customers, suppliers, employees or consumers. We work everyday with a strong sense of business ethics, with responsibility and with transparency. We believe that these values are essential to be leaders in Portugal and to increase our competitiveness. How would you define your marketing strategy? In the water business, Vitalis is a modern brand, full of vitality, whose activities have made it a differentiator in the national market. We sponsor various sporting federations and clubs, and we gave its name to the second professional football league, the ‘Liga Vitalis’. In doing so, we are trying to keep the brand uppermost in the mind of the consumer, with a view to maintaining our market position. At the same time, we try to do the best we can, as this business is subject to various threats (own brands, office or home drinking fountains and tap water), which are difficult to curtail. In the sparkling water business, our Água das Pedras and Vidago brands are undergoing a repositioning process. The former has been modernised so that we will be able to conquer new consumption occasions, such as meals (before and during, not after) and on-the-go occasions (we have recently launched a range of PET packaging). The latter will soon have a premium positioning

aligned with a luxury hotel to be reopened by the end of the year. How important is the packaging and labelling of the products when it comes to attracting consumers? For us, good packaging is essential. It is the first communication tool with consumers, so we always try to work with the best companies in the design area market. An example of this was the comprehensive renovation of the Água das Pedras brand, which has been ongoing since 2008 and has transformed a 140-year-old traditional, medicinal brand into a very young, trendy brand - but without losing the interest of our longstanding consumers. In the case of Vitalis, 2009 was also marked by a total renovation of the brand’s image, changing it from something that was simply water to something with much more soul, so that it is now more lively and uplifting.

The Portuguese consumer Who drinks the waters? Can you describe Unicer’s typical consumer? Still water is the beverage most represented in all beverage segments, and Vitalis, being one of the main brands, is no exception. We can therefore say that everyone drinks it. As for special waters, Vitalis Elegante consumers are women aged from 18 to 35, with very busy academic or professional

lives, who wish to be slim and look good. The Vitalis Sabores consumer tends to be male, also aged between 18 and 35, and is above all a person who regularly practises sport and likes to keep hydrated with something more than water. The Água das Pedras consumer is more adult, with an average age of 42, divided half and half between men and women, from a variety of social classes, but who share a liking for

Go figure Unicer’s 2008 sales: €471 million beer and wine. When it comes to flavour variants, we are dealing with a different profile: students aged between 15 and 25, a slight predominance of females and an ABC1 demographic. On the Água das Pedras website, you suggest different waters as accompaniments to different restaurant dishes. Is there a demand for premium waters that complement food in this way in Portugal? Not yet, but we believe that it is a question of time. Nowadays people are not accustomed to asking for specific water in a restaurant. We know that a water like Água das Pedras, when well chosen, brings out the natural flavours and it is important

for the consumer to have this perception and knowledge. We believe that this education is the entire industry’s responsibility. How important is sustainability to the brands? Sustainability is a term inherent to the company. We were the first company in Portugal to issue a sustainability report. Unicer’s management policy and strategy are defined to ensure economic, social and environmental sustainability. We want to safeguard the needs of present generations, without limiting the future.

The future Are you looking to add any new products to the range? At the moment, the most important thing for us is to make the presence of our current portfolio of brands even stronger in the domestic market, as well as abroad. Nevertheless, there might be some new launches throughout this year, but it is too soon to talk about them. Can you pinpoint any emerging trends that are likely to affect the bottled water market in the future? I have no doubt that as the pressures on bottled water increase (and also on soft drinks in general, though in this case due to nutritional issues), the markets that will benefit the most will be sparkling water and special waters. In the case of the latter, the most successful ones could be those associated with beauty and wellbeing.

22 COVER STORY

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Insight - page 36 What consumers want

Click here to subscribe What does the future hold for Unicer? Unicer has a stable shareholder position, so once the restructuring we have carried out over the last three years has been consolidated, we will increasingly focus on foreign markets, as the size of our domestic market necessitates this.

Personally speaking What’s the best thing about your job? Every day is different and I am always with different people. There is no sense of routine. I am fascinated by a job that I adore, which is intellectually challenging and is recognised everyday by our consumers whenever they choose one of our products. What’s the best advice you’ve ever been given? I would love to be more original in this answer, but the best advice has always been that ‘we are always learning’. In my job this is the approach I adopt everyday and I always hope to continue to do so.

From top: ‘January/February 2009’, ‘March/April 2009’ and ‘January/February 2010’ from the Água das Pedras calendars © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

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COVER STORY 23

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Drink to your health

Leading ingredients companies talk to Editor Medina Bailey about their latest health giving solutions that are injecting functionality into the packaged water industry.

Page 26 Ask the experts

Page 30 Latest health ingredient solutions

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SPECIAL REPORT 25

Drink to your health

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Ask the experts

Panel Beneo-Group, Yves Servotte, Executive Board Member (YS) Frutarom, Jim Moore, Global Category Manager Beverages (JM) / Liesbeth Neven, Head of Marketing Business Unit Health (LN) Gadot Biochemical Industries, Ronny Hacham, VP Business Development & Marketing (RH) LycoRed, Udi Alroy, VP Global Marketing & Sales (UA) Solbar, David J Kraus, Global Applications Manager (DJK) Symrise, Bernhard Kott, Corporate Communications (BK) Wild, Jochen Kistner, Product Manager - Beverage (JK) How is the health ingredients market currently faring? YS: With 2009 putting many food producers under significant pressure, 2010 looks set to be a further mix of both challenges and opportunities. Back at the beginning of last year, I predicted that functional food ingredient manufacturers would need solid scientific facts to base their claims on and a clear understanding of what consumers wanted in their products. These will continue to be vital for success in 2010 and beyond. LN: Generally speaking, it is doing quite well, but the implementation of the EU Health Claims Regulation is bringing uncertainty. We are currently seeing an ongoing governmental leaning towards changing the regulations for physiologically active ingredients so that they have a more pharma-oriented approach. Frutarom is actively participating in national lobby organisations, trying to protect the food status of our ingredients. JM: Consumption of still water sales continues to rise, but added value sales through innovation, ie new flavour developments and the use of functional ingredients have been slower to reach the market. This has been due to the global credit crisis, legislation changes and soft claims versus hard claims issues. RH: The main factor affecting the health ingredients market is

the global economic slowdown which resulted in lower demand for health and functional food and ingredients. The number of new health and functional food products launched in 2009 was approximately 10% lower than 2008.

The general longterm trend is definitely towards health and functional food and beverages UA: The health ingredients market did remarkably well in 2009. We are facing continuous growth and interest in applying health ingredients to a variety of foodstuffs, as well as beverages. One of the key drivers is the demand for natural solutions, mainly in the beverage and natural colourants markets. DJK: There is a high level of interest in health promoting ingredients along the following themes: Lowering blood cholesterol; improving cognitive performance; bone health; gut/ digestive health; brain health; fibres; weight management; glycemic index.

market at the moment. Everyone is waiting for their ingredient based claims to be accepted or declined, thus accelerating or dampening potential market success. This hesitation is visible in the final products market as well: innovation activity in this field seems to be extraordinary low. JK: Health ingredients are closely linked to the functional beverages market and its development. It has recently risen to above average, and according to leading market researchers, even higher growth rates are expected for the future. What is more, retailers can expect to achieve higher sales prices and better margins with functional beverages. Is there much demand among consumers for health giving ingredients in final products, such as beverages? YS: With over 13% of global soft drinks launches in the first nine months of 2009 positioned on a ‘natural’ platform, the power of all things natural looks set to continue to sell products well into 2010. With a portfolio of ingredients derived from natural sources, we are well positioned to offer beverage manufacturers what they need in order to be in line with current trends. JM: The overall demand for health giving ingredients in the beverage arena is increasing and is set to continue to do so for the next three to five years. Consumers are becoming more inquisitive about the nature and

sourcing of health ingredients, and the association with nature is becoming more important to them. In the late 90s and early millennium years, ‘fitness and wellness’ was a key trend. Going forward, it is likely to be along the lines of ‘longevity of lifestyle’. RH: The general longterm trend is definitely towards health and functional food and beverages. It is our belief that last year’s falls in demand are temporary, and when the economy recovers, demand will return to its previous levels and growth will continue. Functional beverages attracted a lot of attention and were a booming sector in 2007 and 2008, with double digit growth all over the world. However, beverages are one of the most recession vulnerable sectors as people just switch back to tap water. UA: Yes, we are seeing additional 15-20% annual growth in this segment, mainly in smaller sizes. A minor change towards family size products has also been seen over the past year. DJK: Demand for healthy and nutritious beverages is on the rise. The trends are: fortified water, fruit beverages with soy proteins and drinks with calcium and vitamins. BK: Over the past few years, consumers have gained

BK: As the EU Health Claim Regulation has not been published in its entirety yet, there is much anxiety in the European health ingredients © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

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knowledge about the holistic picture that directly connects health and nutrition. While the overall idea of ‘one product fits all needs’ wellness used to work for years, modern health seeking behaviour is now much more specific. Becoming aware of many different ingredients, as well as their sources and potential benefits, has enabled consumers to actively manage their health via nutrition. Omega-3 for the heart, collagen for the joints, calcium for the bones - you name it consumers know and consume it, provided that the product is trustworthy and the connection between ingredient and benefit is known. The most convenient way to consume the desired ingredients is through ready-todrink beverages - or it would be if producers were more active in their promotion of health drinks. Demand is definitively there, but supply needs to catch up. JK: Demand for products with health benefits is growing, and accordingly, the number of new functional beverages being launched on the European market is growing. Therefore, two mega trends are coinciding. On the one hand, a health and wellness trend. The majority of consumers in Western Europe recognise a clear relationship between health and nutrition, making them so-called health active shoppers. They are specifically seeking healthy foods and prefer products enriched with functional, health giving ingredients. Functional beverages fulfil these requirements, providing consumers with a healthy serving of important active ingredients on-the-go. This leads to another mega trend: convenient products. Functional

beverages combine the trend of health giving ingredients with convenience. Which area of health do you think consumers are most concerned with at the moment? YS: Looking at our own consumer research, we can conclude that energy and digestive health are of high importance to the consumer. We believe that digestive health will remain a primary concern for consumers looking for health and wellbeing in their food and drink products. From small beginnings back in 2002 when only 15 dairy drinks contained this active food ingredient, 2008 saw 181 products brought to market globally that contained inulin and oligofructose. Out of the 181 dairy drinks launched in 2008 that contained inulin and oligofructose, the highest proportion of health claims were to do with gut health at 17%. It is no wonder that Health Focus International’s survey of 32 countries found that digestive health problems were one of the top three health concerns among consumers worldwide. Consumers also have a clear preference for natural ingredients and products free from artificial additives. Therefore, it is logical that Beneo saw a rise in the use of its next generation sugar Palatinose, in beverages and particularly in the sports and energy drinks sector, in 2009. This trend looks set to continue this year with market forecasts suggesting an overall global growth of the energy drinks market by 2010 of over £19 billion. JM: On a macro level, concerns about obesity are, and will continue to be, the talking point of many governments, food and beverage companies and university institutions as figures continue to rise,

particularly in more developed countries. Therefore, the search for new ingredients with calorie burning attributes, or natural sweeteners which may be used in part to reduce the calorific loading of beverages, but maintain an acceptable level of sweetness for the consumer, will be critical targets. For the food and beverage market, concerns about cardiovascular health, blood and circulation, strong bones and teeth and mental agility will be in strong focus. RH: Looking at the new products launched in 2009, we can see that demand is still for general health and immunity (vitamins and minerals, fish oil, antioxidants), weight management (low/no sugar, low/ no calorie etc) and bone health. Looking at how our ingredient sales behaved in 2009, we can see that there was a reduction in consumption (tonnage) of exotic ingredients which usually deal with focused and more lucrative health issues (eg anti-ageing, brain health, skin health, sex improvement etc). On the other hand, consumption of what are considered basic ingredients and usually deal with a broader

range of health issues (eg fish oil, vitamins etc) increased. UA: Health concerns affecting children, babies, pregnant women, sports people and the elderly. DJK: Vitamin D; bone health; LDL cholesterol; gut health; brain health; and weight management. BK: Due to a credibility problem that many active ingredients have among cynical consumers, most functional solutions touch upon less severe issues: bones and joints, detoxification, digestion and immune strength support. The high-gain or -loss areas, such as heart health or intelligence enhancement, have been less affected so far. The reason is clear - even though many consumers believe in the positive effect of a drink which can enhance their energy throughout the day, doing the same to reduce the risk of a heart attack is something only a few would consider. JK: Consumers are currently concerned with sources. Products based on natural ingredients are viewed favourably because consumers generally believe that natural products are healthier. Artificial colours have also increasingly come under fire in recent years. The 2007

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SPECIAL REPORT 27

Drink to your health

What kind of health-related ingredients do you offer the bottled water industry? YS: Beneo’s Orafti inulin and Orafti oligofructose are used in bottled water. By incorporating modest amounts of them into beverages, manufacturers can produce drinks which offer real digestive health benefits. Bottled water brands that are enriched with inulin and oligofructose are already established in European, African and Asian markets. However, products that combine these with a variety of other health benefits are proving increasingly popular.

JM: Frutarom offers a wide and extensive range of health related ingredients for the bottled water industry, including: Ginseng and Guarana, which are thought to boost energy and stimulation levels; a variety of tea extracts, including white, green and Rooibos, which are associated with the natural antioxidants necessary to maintain the body’s immunity; camomile; red vine leaf; echinacea; lemon balm; hops; and ginkgo. RH: Soluble minerals, crystalline fructose, isomaltulose, vitamin and mineral premixes. UA: LycoRed has two lines of products dedicated to the beverage industry, namely natural colourants and vitamin blends.

There is going to be a continued drive to make foods and drinks as ‘natural’ as possible DJK: Soy isoflavones which are dispersible in water. BK: Vitamins, minerals, antioxidants and fibres. Symrise is known for its strength in beverage application solutions. While we do sell some active ingredients, the main added value is our core expertise of taste. Many active ingredients bring about off flavours in beverages, which need to be masked with flavour solutions. Another area of expertise is the stabilisation and application of these ingredients in beverage compounds which are easy to use by the drinks industry.

Neviot+ waters in apple and peach, with ingredients supplied by LycoRed

JK: Wild offers the industry not only single ingredients,

Southampton Study, which looked at six artificial colours in connection with hyperactivity in children, is the reason for the current discussion. The EU has already reacted: a new regulation that takes effect on 20 July requires that products containing the disputed ‘Southampton colours’ carry a warning label. Another example is flavours. Again, consumers prefer flavours from natural sources to artificial variants. This trend and health concerns are leading to clean labelling.

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but concepts for beverages with certain functionalities, each of them fulfilling different consumers’ desires. Activating water is a near water concept which provides consumers with energy in two phases.

Wild combines them with fruity flavours and also adds juice to them, if required by the customer. What health ingredient trends can you pinpoint for 2010?

It delivers a quick energy kick from natural caffeine, green coffee beans and dextrose, with the combination of fructose and fibre maintaining energy over the long haul. The water is enriched with six vitamins, contains only natural flavours and comes in a variety of innovative taste solutions.

YS: There is going to be a continued drive to make foods and drinks as ‘natural’ as possible and I think that health and wellbeing will still be very important for consumers for years to come. Now, more than ever before, consumers are also looking for foods and beverages that provide them with felt benefits.

Our range also includes enhanced near waters, which are products with benefits, enriched with tea extracts, such as Rooibos, green, white or black tea, vitamins, minerals or other functional ingredients.

Another key trend seems to be ‘energy’ in the functional foods arena. Traditionally only found in energy and sports drinks, new applications are beginning to prove popular in food concepts and this looks set to grow.

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JM: This is a very complicated question, but firstly the concept of energy, including natural energy and stimulating ingredients will continue to increase, but we believe the rate of increase will start to slow down. Ginseng and Guarana have been in the public domain for some time, so, in order to elevate this area, new ingredients will be necessary. However, this slowdown may create a ‘vortex’ in the functional beverage industry where the concept of ‘relaxation’ could play an important part. Consumers wishing to experience mild relaxation after a busy day at work may be drawn to products which could have calming properties, such as camomile, passion flower, and green tea, which has a high level of L-Theanine.

Other expected trends for 2010 and beyond include weight management and associated ingredients, such as Yerba Maté, tea extracts, and natural sweeteners which offer the sweetness effect without calorific content. Finally, the use of natural antioxidants, such as lemon balm (Frutarom’s Origanox), may reduce the need to declare other antioxidants on finished pack labels, allowing for a cleaner declaration. RH: They are very much dependent on the overall economic situation. If the situation continues, then the trends we saw in 2009 will continue in 2010, namely a penchant for opting for products and ingredients that address a broad range of health issues, such as fish oil and vitamins. Economy recovery would probably bring about growth in almost all directions. Bottled water will definitely play a significant role as an ingredient delivery vehicle. DJK: Vitamin D, brain stimulation ingredients, cholesterol lowering ranges, products for type 2 diabetes, and chocolate with added functional ingredients. BK: Nutritional claims based on widely known ingredients will dominate, accompanied by a few exclusive and IP protected ingredients which have undergone the necessary clinical studies to protect the exclusivity of claims. What does the future hold for the health-related ingredients industry? YS: According to the Euromonitor Global Soft Drinks report, flavoured and functional bottled water value is set to outpace value growth of the sector as a

whole over the 2007 to 2012 period. This looks positive for food ingredient manufacturers who have natural value added solutions that can cross over from the food to the drink sector. LN: Consumers and practitioners are realising that in addition to medicinal answers to people’s health concerns, there are good natural alternatives available. Health supporting ingredients offer the possibility to strengthen health and wellbeing in general. The industry for health supporting products has left the pioneering phase behind, and is in the process of becoming more regulated. Clearer norms are being applied for product quality, proof of safety, clinical evidence and product labelling. This will lead to a higher level of trust and eventually to increased acceptance among consumers. RH: We believe that the major trend in the food and beverage industry is offering health and functional products that address ‘sectorial’ issues. Social studies show differences in focus and requirements from groups such as the baby boom generation (believed to have an interest in heart and joint health), and Generations X and Y (thought to have an interest in wellness and appearance). There is also a growing sector of seniors with energetic lifestyles. This is a well educated generation with lots

of freetime and a need to keep in ‘shape’. UA: We can see growth in this area, in addition to the health beverages segment. DJK: An increase in demand for more active and proven benefit ingredients, such as: vitamin D, probiotics and Omega-3 DHA. Also, indulgent products, such as chocolate, with added health benefits are likely to prove popular. BK: 2010 could become another quiet year regarding health product launches. 2011 will bring the real breakthrough in launch activity, as soon as the EU legal environment is clear. JK: In the EU, the Health Claims Regulations will have a huge impact on the future of functional near water, its ingredients and the declaration lists. Wild will develop concepts that fulfil the legal requirements. We will therefore meet the demands for beverages with health benefits, which we expect will increase continuously. The natural, zero-calorie sweetener, Stevia, has not been approved in the EU yet. However, we are expecting its official approval to occur in 2011 and are therefore already developing recipes in order to be able to offer a broad palette of attractive product ideas immediately after EU approval.

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SPECIAL REPORT 29

Drink to your health

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Latest health ingredient solutions

Beneo-Group a) Orafti inulin and oligofructose - used in Balanceline and Radenska Plus waters b) Palatinose - used in Viva Vital and Gerolsteiner Linée waters

Properties and benefits a) • Regular intake (at levels of 5g each day) stimulates bifidobacteria and increases them in number by as much as five to ten times • Aim to reduce the level of harmful organisms in the digestive tract, such as clostridia • Proven to increase bone density and bone mineral content

b) • Derived from pure beet sugar • Slowly but fully digested, resulting in a full expenditure of energy in the form of glucose (4 kcal/g) in a balanced way • Carries Toothfriendly logo from Toothfriendly International, a non-profit organisation that promotes oral health • Over 100 products containing the ingredient have been brought to market since its launch

Ideal for: Food and drink producers looking to reach consumers who place a premium on their and their children’s health and wellbeing.

From left to right: Radenska Plus, Balanceline, Viva Vital and Gerolsteiner Linée

Solbar

Frutarom

Soy Isoflavones

a) EFLA NW line of botanical extracts

Properties and benefits

b) Finomate green mate extract

• Dispersible in water • Could help to prevent cardiovascular diseases and type 2 diabetes • Aim to relieve menopausal symptoms • Could improve cognitive performance

Ideal for: Health oriented women.

Properties and benefits a) • Designed specifically for the bottled water industry • Offer exceptional clarity • Manufactured in hi-tech facility in Switzerland using patented HyperPure process, a unique filtration technology that removes lipophilic components, which can lead to cloudiness and solubility issues • Infuse water with a gentle flavour and promote a healthy lifestyle image b) • Scientifically supported ingredient for weight management • Boasts triple-effect mechanism, which

suppresses appetite, increases fat burning and decreases fat absorption • Mate is a traditional drink consumed throughout South America, so the ingredient taps into the trend of authenticity

Ideal for: A large target audience, ranging from consumers concerned about their health and wellness, to consumers looking for an exotic and authentic product.

30 SPECIAL REPORT

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Wild a) Vitamin Waters b) Fresh Up

Properties and benefits a) • Build on the popularity of vitamin waters in the US and bring this trend to the European market • Customised formulations have been developed which give specific added value to the products • Lemon balm extracts and magnesium have a relaxing effect, while natural caffeine from green coffee beans and Guarana boost energy levels b) • Refreshes, leaving behind a cool, pleasant sensation, without conjuring up images of menthol or peppermint • Previously, mint or menthol had to be added to beverages to give them refreshing notes. Menthol flavours can have too strong a taste, so Fresh Up avoids this • Flavours are ideal for use in near water drinks and can be combined with various taste options, particularly fruity ones

Ideal for: Modern, health conscious men and women who are looking for refreshment, added value and great taste. The beverage industry has previously targeted young women with near waters for wellness, relaxation or beauty, but energising concepts are now being directed more and more towards young men.

LycoRed B complex (B3, 5, 6, 12) and Folic acid for mineral water

Properties and benefits • Essential for growth in babies, children and throughout pregnancy • Work by inverting food to energy using proteins, carbohydrates and fats for growth and functionality of the immune system, the central nervous system and brain

Ideal for: Parents to give to babies and children, and pregnant women. © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

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SPECIAL REPORT 31

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Fast forward

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Logistics How to get from A to B has always been a major concern for bottled water companies, with costs, environmental factors and time efficiencies all impacting on the decisions they make about their transport provider. water innovation journeys through the latest issues affecting the logistics industry and finds out how they are being tackled.

leading player in logistics and transport, Norbert Dentressangle’s cargo can be readily observed along the motorways and roads of Europe. With 27,000 employees operating on 355 sites in 16 countries, it offers a complete range of logistics services, including warehousing and transport to manufacturers and retailers, temperature controlled food logistics, environmental operations management and aviation logistics. In the UK, it counts Nestlé Waters, Ardagh Glass, Tesco and Marks & Spencer as just some of its customers. According to the firm, the past couple of years have proved a challenge - not just for third party logistics companies, but for all markets and businesses operating in one of the most severe recessions that the world has experienced in modern times. “The principal challenge has been, and remains, to reduce customers’ cost bases while continually improving service levels,” explained Solutions & Operations Director, Brian McDill (below) from the company’s UK base. “We’ve responded by ensuring that we genuinely understand every customer’s business and the unique set of challenges within their

individual supply chains, in order to develop and implement practical, industry leading, and cost effective solutions through innovation, agility and collaboration.” An example of this collaboration can be found in the shared user facility at Buxton, which serves Nestlé Waters UK (right). By sharing the facility overheads and infrastructure, Norbert Dentressangle is able to reduce the fixed costs allocated to its client, ensuring that the commercial relationship is transactional. “This reflects the volatility of demand for services at different times of the year,” said McDill. Swings in demand are a key characteristic of the bottled water industry, and an example of a specific issue that logistics companies must be capable of dealing with. But, what else does a bottled water firm look for in a logistics provider? “The bottled water sector operates through complex supply chains which support guaranteed delivery

of product to its customer base,” continued McDill. “A key criteria is a third party logistics partner who understands the complexities and specific challenges of the supply chain . . . and can provide visibility and traceability at unit level.” As with all logistics customers, bottled water companies would also seek out cost effective, environmentally friendly solutions and expect their partners to be proactive in

identifying and delivering continuous improvements. Environmental issues have crept to the forefront of the agendas of all industries in recent years, not least within logistics. Norbert Dentressangle claims to be one of the most environmentally aware third party logistics providers in the UK, particularly through its long standing, exclusive relationships with two of the country’s leading retailers.

One for the road: RedPrairie technology The RedPrairie Warehouse Management System used by Norbert Dentressangle carries out the following ERP practices: • RF scanning, which not only allows for a reduction in resource through efficient communication throughout the inventory management process, but also gives partners complete visibility at unit level throughout the supply chain • RDT and Voice Picking systems, which allow enablers to reduce the resource level within an operation, while

ensuring the highest levels of accuracy and traceability within the client’s supply chain • Multiple management of stocking points, which gives partners full visibility of all inventory points within a supply chain, including RMs, WIP, production line end, and multiple finished goods inventory storage locations, even in geographically diverse locations, on one single picture. This functionality is vital in ensuring availability of product from within clients’ businesses, reducing levels of inventory throughout the supply

chain, and managing resource levels efficiently • Integration into HMRC Chief System, which enables efficient and highly accurate processing and management of duty suspended and duty paid consignments • Hot Docking Functionality which allows the warehouse team to combine products picked from the finished goods storage inventory with products freshly received from the production location, ensuring the highest product availability.

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FOCUS 33

Fast forward Its initiatives include recycling vast amounts of card and plastics that would otherwise go to landfill, and providing customers who have adopted its returns management processes and systems with cost recovery and confidential disposal for products that were previously regarded as waste. Every one of its sites is tasked with reducing its carbon footprint and working with customers to achieve this. Each site measures its entire footprint and reports the figures back to head office on a monthly basis. It is also working with retail clients to actively investigate the potential for adopting

environmentally aware practices, such as anaerobic digestion of food waste, ground heat pumps for hot water, combined heat and power plants (ideally using some form of ‘waste’ product as a fuel), and wastewater heat recovery at some of its tray washing locations.

We have not lost sight of our ability to act in the short term

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“Although some of these advances may be long term objectives, either due to current technical or financial constraints, we have not lost sight of our ability to act in the short term. We see collaboration of all of our company assets, and alliance with other logistics service providers, retailers and other customers, as a means of improving vehicle and infrastructure use and reducing both road congestion and building developments. Both of these elements can reduce cost and carbon emissions.” Another primary issue affecting businesses is cost cutting. The firm believes that taking technology on board could lower its own cost base and enable it

to pass on the benefits to its users and ultimately end consumers. It is one of the UK’s largest users of the RedPrairie Warehouse Management System. “The application of this functionality and its integration with the wider Norbert Dentressangle business allows us to develop both dedicated and shared user solutions, which can be scaled according to the level of client demand,” said McDill. It can also provide its partners with real time visibility of stock, order progression at unit level, and even re-prioritisation of orders in the event of an urgent sales order, using a standard web browser.

Test driving food and drink logistics solutions

Poland Spring slows carbon emissions

new event for the food and drink logistics industry has been launched in response to market demand. The Food & Drink Logistics Show will take place at the UK’s Birmingham NEC from 21-24 March. Organised by William Reed Business Media, the show will provide a platform for companies involved in warehousing, palletised transport, third party logistics and supply chain solutions to showcase their products to the food and drink sectors. The UK food and drink logistics market in the UK is worth around £12 billion a year and forms around 10% of food and drink companies’ total spend. In the current economic climate, firms are actively seeking new and innovative solutions and services to help them maximise the efficiency of their supply chain. According to the show’s organisers, a survey conducted

among visitors at its 2008 shows found that they are planning to spend some £248 million on logistics over a 12 month period. The event has gained support from the industry, including the Chartered Institute of Logistics & Transport (CILT). “The addition of a specialist logistics show within the established Food and Drink format is a welcome innovation which recognises the vital role that logistics plays in serving the needs of all suppliers and consumers,” said Steve Agg, CILT(UK) Chief Executive. “As the chartered body for all transport, logistics and supply chain professionals we give this event our whole hearted support.”

he Poland Spring Water Company has successfully managed to curb its carbon emissions by drastically reducing truck fleet idling time. The firm’s efforts have been highlighted by a case study released by the US Environmental Defense Fund (EDF). In 2007, the company switched its truck fleet to a non-food grade biodiesel blend fuel, which has reduced annual carbon emissions by an estimated 1.8 million pounds, the equivalent of taking approximately 193 cars off the road every year. It has also been trying to improve its fuel economy and decrease its fleet’s carbon dioxide emissions by reducing idling time and lowering top driving speeds. The EDF case study underscores the success of Poland Spring’s idling reduction initiative - curbing

carbon emissions by 77 tonnes of CO2 annually. According to Program Manager - Corporate Partnerships at the EDF, the reduction in idling time by the Poland Spring fleet in just two years was dramatic - dropping 70% from 1,400 hours in February 2007 to 380 hours in February 2009. “Poland Spring’s use of technology along with individual driver responsibility drove the decrease in emissions. EDF applauds Poland Spring’s efforts to reduce global warming emissions from its fleet,” said Jason Mathers. The full case study can be downloaded at: www.edf.org/greenfleet

34 FOCUS

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Top gear from Jungheinrich

ungheinrich has introduced a range of ultra-high performance counterbalance forklift trucks for use on warehouse sites. The new 3-Series is powered by a Volkswagen engine and features the same hydrostatic drive technology as the 4-Series counterbalanced truck collection. It aims to offer fuel efficiency, productivity, safety and reliability at a price that ensures that lifetime costs are remarkably low. In simple terms, hydrostatic drives are self contained hydraulic pump and motor systems providing smooth and controllable acceleration as well as braking. They simply consist of hydraulic motors

fed by a hydrostatic drive pump. Hydraulic oil flows through hoses connecting the hydrostatic components to produce a continuously smooth and wear free power transfer to the drive wheels. Unlike other forklift trucks with hydrostatic drive currently on the market, the 3-Series hydrostatic drive components have been specifically designed for forklift use, which means they should offer optimum performance over the life of the truck. The hydrostatic drive technology at the heart of the range should minimise fuel consumption throughout even the most demanding shift. Test cycles have shown that over the course of 2,000 hours of typical operation, a 3-Series truck will

save some £2,000 in fuel costs, in comparison with a similar capacity counterbalance truck that uses conventional ‘torque converter’ technology. For sites where a large fleet is in operation, the savings could be extremely significant. The range is ideal for applications where a lot

of ‘shuttling’ work is involved - such as lorry loading and unloading within and around a busy warehouse or factory environment. Trucks in the 3-Series are capable of lifting loads weighing up to 1,600-2,000kg and are available in both LPG (TFG) and diesel (DFG) versions.

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What consumers want

As we enter a brand new decade, Mintel’s Senior Drinks Analyst, Jonny Forsyth, takes a look at UK consumer spending habits and what will be in shoppers’ sights when it comes to water provision over the next few years.

ottled water sales are picking up just as consumer confidence starts to do the same. This is not surprising considering bottled water is the ultimate in discretionary purchases, and is easily sacrificed when consumers look to control their spending. Consumer confidence lags behind the economy and the decline began in the latter half of 2007, despite the economy not entering into recession until 2008. Bottled water consumption fell directly in line with lowering confidence and the market declined by 11% in volume sales between 2006 and 2008. However, Mintel expects this decline to slow to 1% year-on-year in 2009, with volume sales of 2.3 billion litres and market values of £1.9 billion. With economic conditions expected to improve, we forecast that volume sales will start growing steadily from 2011 onwards, and that by 2014 the British will be consuming 2.5 billion litres a

year, which will see a return to 2007 levels. Within the market, Mintel predicts that over the next five years, growth of plain bottled water (which currently makes up 87% of the market) will be greater in volume sales (6%) than value (3%), due to the commoditisation of the market following a period of consistent discounting in the take-home sector. In contrast, enhanced water (generally water which is flavoured but increasingly which is fortified with vitamins or supplements) will grow its value from £450 million in 2009 to £543 million in 2014, a rise of 21%. The wildcard factor for any forecast of bottled water remains the weather, which is responsible for sales spikes rather than driving consumption. However, the fact that the summer of 2009 was better than those of 2007 and 2008 has helped in shoring up the market at a difficult time, as has heavy discounting.

Overall, the market appears to be retaining its sales base. Indeed, Mintel finds that although 15% of consumers claim that they have drunk less bottled water than two years ago, a similar proportion (14%) claims to have drunk more. Today, over a third of consumers in Britain (35%) think that bottled water tastes better than tap water. However, our research shows that there is still a huge question mark over whether bottled water is good value, even among its drinkers. Only one in ten think of it as value for money, a third think it is ‘a bit of a con’ and four in ten think it is no healthier than tap water. However, when asked, consumers see a number of positives connected to bottled water. A fifth of consumers feel that drinking bottled water means they are taking care of themselves, 21% feel that without it they wouldn’t drink enough water and 18% feel that it provides a healthier

alternative to drinking sugary soft drinks or caffeine based beverages. While people like to think that they may be improving their health by drinking bottled water, they are particularly attracted by the absence of calories in plain water, which they see as a major selling point. Finally, Mintel finds little evidence of environmental concerns affecting purchasing. Only one in eight (12%) admit their purchase decision is influenced by whether a brand is locally sourced to reduce the carbon footprint, compared to 28% influenced by whether the bottle is easy to carry. Also, despite one in six (16%) of bottled water drinkers agreeing that buying the product is bad for the environment, only a third opt for environmentally friendly brands, compared to over a half who opt for the most affordable price point.

Mintel is a consumer, media and market research company.

36 INSIGHT

www.foodbev.com/water Issue 58 - January • February 2010

Regional review: Middle East Full of Eastern promise

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The Middle East represents around an 8% share of the 220 billion litres of global bottled water consumption (Figure 1). Over the past five years, the region has shown a compound annual growth rate (CAGR) of 9% (Figure 2). This makes the Middle East bottled water market the third fastest growing region in the world following Africa and Asia/Australia. The market volume increased by some 6% in 2008 to reach a total of just over 16 billion litres. In 2009, Zenith International estimates a further growth of around 7%. It believes that increasing incomes within a number of developing economies, as well as health awareness and a hot summer climate will lead to greater demand for bottled water in coming years.

The fastest growing country in 2008 was Lebanon, up 17% on 2007. The main reason for growth was the recovery after a period of political instability.

The largest bottled water market is Turkey, accounting for a market share of around half the current regional market. If Turkey were to gain EU membership in the near future, it could significantly influence bottled water consumption. According to the regulations of the EU Drinking Water Directive, drinking water within the European Union has to be to a required standard. If this leads to Turkey having to improve the quality of its tap water supplies, this could see a degree of competition with bottled water consumption in the HOD sector. Saudi Arabia takes second place with a market share of 22%, followed by the United Arab Emirates (UAE) with just over 8% (Figure 3).

The country has several high quality mineral water springs with a combined daily capacity reaching around 64 billion litres. Only a small proportion of this is currently being bottled annually. This significant resource has not gone unnoticed, however, as some firms have started planning investments in new bottling facilities and R&D activities. For example, Kizilay Mineral Water Company has commenced production at a new advanced bottling facility in Afyon in order to increase its production capacity to 1.5 million bottles per day.

With a higher standard of living and a large proportion of nonnational inhabitants and tourists who rely on bottled water, the UAE’s consumption rate per person was the highest, reaching over 300 litres in 2008. However, in 2009, the economic downturn impacted the UAE significantly and held back bottled water growth.

Turkey Turkey dominates the bottled water market with just over 50% volume market share in the Middle East, recording a volume growth of 1% on 2007.

Still or sparkling dominance? Still water is sold in a far higher volume compared with sparkling water. However, sparkling water

commands a premium positioning and accounts for a third of Turkey’s overall bottled water market value. Main manufacturers Top manufacturers are Nestlé Waters, Danone and Coca-Cola, jointly holding over 25% of the total market volume and 30% of the total market value.

Zenith International Market Analyst Marta Babits, puts the Middle East bottled water market under the spotlight.

Saudi Arabia For bottled water volume, with its 22% share, Saudi Arabia is number two in the Middle East. Volume sales increased by 9% in 2008. Still or sparkling dominance? The sparkling water category represents only 1% of total volume, due to the Saudi Arabians’ penchant for still water and the majority of the population being local. Sparkling water is mostly available in the upper trade (supermarkets and hypermarkets) and in hotels and restaurants. Main manufacturers The biggest player is Makkah Water which is chasing one fifth of the total market value in Saudi Arabia. However, the volume leader is Nestlé Waters due to the very strong Al Manhal/Springs/Nestlé Pure Life brands presented in the PET and bulk segments. Number three is Al Qassim Health Water.

UAE UAE presents just over 8% of the regional volume market share and the country saw over 11% growth in volume in 2008. Still or sparkling dominance? The volume share of the sparkling water category is far behind that

of still water. The average price of sparkling water is approximately five times more expensive than still water formats as it commands a premium position in the market across all channels and is mainly available through the horeca sector and retail trade. Main manufacturers The number one small pack format manufacturer is Masafi, followed by Al Ain. Following the new 5 gallon format launched by Al Ain in 2008 and its acquisition of existing HOD player, Ice Crystal, the company will more than likely consolidate its market position, particularly in the HOD arena during 2010. It is also important to highlight that the main player in the HOD business is the UAE and the dominant player overall is Oasis Water Company. For further information on Zenith’s Middle East Beverages report, please contact Marta Babits at mi@zenithinternational.com, or Sam Shammas at ss@zenithinternational.com

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middle east 37

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Events in review and preview

Review: Secret life of water

ater is alive and can respond to emotions in a way that could greatly influence the health of human beings and the state of the planet. That was the overall message of Dr Masaru Emoto’s recent talk about the extraordinary power of water, with torchlit Roman baths and hot springs providing a suitably mesmerising backdrop. Taking to the lectern in the historic spa city of Bath, UK, the Japanese researcher, author and speaker talked about his research, which has led to the publication of a series of books and an ongoing world tour in which he shares his findings.

The shows Packtech This is the ideal show for packaging professionals seeking new solutions and ways to improve operational efficiencies, as well as end of line equipment and transit packaging. Exhibitors include: Adpak Machinery Systems; Aetna Group; Domino; Esko Artwork; Go Plastic Pallets; Martek Industries

Ecopack The event for environmentally friendly packaging, this show brings together manufacturers, suppliers and distributors of environmentally responsible packaging equipment, materials and services. Exhibitors include: Avery Dennison; Gepack; Greiner Packaging; Portola Packaging; Seaquist; Tetra Pak

Packaging Innovations This showcase of the latest packaging designs enables attendees to meet face to face with leading industry experts to provide inspiration and enhance their brand exposure. Exhibitors include: British Glass Manufacturers; CCL Label; Kornelis Caps & Closures; Rexam; RPC Bramlage-Wiko; Veriplast

Contract Pack Specifically dedicated to outsourcing solutions, Contract Pack only features companies who are accredited members of the British Contract Manufacturers and Packers Association (BCMPA).

As part of the ‘Messages from Water and the Universe’ seminar, the graduate of the Yokohama Municipal University’s Department of Humanities and Sciences,

and doctor of alternative medicine, showed magnified images he has taken of water at the point of freezing. He took the world’s first photograph of a water crystal in 1994 and believes that the formations are visual manifestations of vibrations, or energy. The water taken from mountain streams and springs shows almost perfect geometric designs and formations, while waters from industrial and

Preview: Packaging showcase

he UK’s Birmingham NEC will play host to a quartet of shows in February, all targeted at the packaging industry. Taking place on 24 and 25 February, easyFairs’ Packtech, Ecopack, Packaging Innovations and Contract Pack will aim to shed light on every facet of packaging, including design innovation, the latest technology and sustainability issues. Inline with visitor research collated at last year’s show, two specific areas have been set up for 2010 due to high demand. The Print for Packaging Zone will enable print machinery suppliers to present their latest products and services, while converters will show off their newest solutions at the Converting Zone. A 50 strong programme of learnShops will also be staged. The free-to-attend events will

feature names from the world of packaging including Tesco’s Packaging Technical Manager, Stephen Pizer, who has altered the supermarket chain’s approach to packaging and the environment. Labels expert Mike Fairly will also be providing an insight into the labelling industry, while the Research Director of Eyetracker, Iain Janes, will be explaining why some types of packaging are more eye catching than others.

Exhibitors include: Aimia Foods; Complete Core Business Solutions; Concept to Consumer; Glowcroft; Labelling & Packaging Services; Lemonpath © water innovation 2010. Reproduced with the kind permission of FoodBev Media - www.foodbev.com For details about syndication and licensing please contact the marketing team on 01225 327890.

38 EVENTs

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heavily populated areas - such as London, Paris and Berlin reveal distorted and randomly formed crystalline structures. As he delved deeper, Emoto found that after being shown different words and pictures or played music, the water crystals seemed to alter in

their appearance. For example, when a bottle of water was shown a heart symbol or the word ‘love’, the crystal seemed to form a heart shape at its centre, while a picture of the Izumo shrine in Japan resulted in the appearance of a roof outline. When Madame Butterfly was played, the water seemed to move and change shape, particularly when a crescendo was reached in the music. According to Emoto, positive and negative thoughts, words and music can affect the composition and appearance of the crystals because water responds to energy, has a memory and retains information. He believes that as our bodies are made up of 70% water, our thoughts and

The Emoto Peace Project visits schoolchildren in Hawaii, US

emotions could be impacting on our health and wellbeing. To demonstrate this, he took to the stage for an uplifting karaoke rendition of Edelweiss, which he says never fails to energise the water in his body! Since its release a decade ago, his Messages from Water book has sold over three

million copies in more than 75 countries, and been translated into 45 languages. Emoto has given over 1,000 seminars and now spends much of his time spreading his message that if water were to gain our love, thanks and respect, the world would be a more harmonious place, among children. The Emoto Peace Project was set up after he was inspired by the birth of his grandson, with the main aim of giving millions of picture books away to children all over the world: “I want to leave the future in children’s hands so that they can understand the power of water.”

Latest appointments

Voss appoints former Snapple CEO

oss Artesian Water of Norway has announced the appointment of Jack Belsito as Group CEO, succeeding Knut Brundtland. Belsito is the former CEO of the Snapple Beverage Group and long-time Senior Executive for Cadbury Schweppes’ North American beverage business. He will be located at Voss’ headquarters in New York City.

Voss Chairman Rune Flogstad said: “With Jack at the helm, I’m confident that Voss will continue to expand its global presence and further develop its already strong brand position. We’re very fortunate that Knut Brundtland so capably led our company and will stay on as a major stakeholder.” Brundtland added: “I’m very happy to hand over the responsibilities for Voss to a truly professional and experienced leader, Jack Belsito.”

New Sales Director for Highland Spring

ighland Spring has appointed Simon Oldham as UK Group Sales Director.

Oldham replaces Alan Simpson, who is retiring from this position after 18 years and who will now take up a new non executive role within the Highland Spring Group. Joining the bottled water supplier from his role as UK & Ireland Managing Director at Whyte & Mackay, Oldham will work closely with the national sales team to build the company’s domestic customer base. At Whyte & Mackay, he headed up a 70 strong team and before that spent nine years with Procter & Gamble. “Highland Spring is an iconic brand and a company with high ambitions, which punches

Simon Oldham well above its weight,” said Oldham. “I am looking forward to joining the team at this pivotal point in the company’s history and building on the great work done to date.”

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Machinery and equipment

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Seaquist Closures Ltd 5 Bruntcliffe Avenue Leeds 27 Industrial Estate Morley, Leeds, West Yorkshire LS27 0LL, United Kingdom Tel: +44 (0)113 220 3200 Fax: +44 (0)113 289 7323 E-mail: info@seaquistclosures.eu Website: www.seaquistclosures.eu Sports closures and dispensing systems for plastic packaging. Contacts: UK: Paul King +44 (0)7711 648 835 Germany: Gerhard Brandt +49 (0)151 1950 7325 France: Florent Gras +33 (0)6 78 86 35 91

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MARKETPLACE 41

Innovation celebration 2010 water innovation awards

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water innovation magazine is delighted to announce the launch of its prestigious 2010 awards programme. First held in 2002, the water innovation awards (formerly the bottledwaterworld awards) are designed to reward innovation, excellence and creativity in the packaged water industry at a global level. To find out more about this year’s contest, including how to enter your company’s latest products and initiatives, visit www.waterinnovationawards.com, and read our essential Q&A guide. Am I eligible to enter? The 2010 awards are open to products, models, campaigns and initiatives introduced or reintroduced to the market from 1 June 2009. Any businesses or brands can enter - whether small or large, local, national or international you have just as much chance of winning. Are there different categories? Yes, you have 17 categories to choose from, including three brand new ones, namely: Best new bottling, manufacturing or production technology innovation; Best new functional ingredient for packaged water; and Best new product enhancing ingredient: flavour, sweetener or colour. The full line-up is below. Just decide which categories are relevant for your entries, or ask us if you’re not sure.

How many categories am I allowed to enter? Feel free to enter your products and initiatives in as many relevant categories as you would like. How do I enter? You can visit waterinnovation awards.com now to download and complete the entry forms. You’ll also need to send us your products for judging (unless of course you’re entering a filling machine, forklift truck etc), so stock up on the bubble wrap. How long do I have to send my entries in? Entries close 10 September 2010. How much does it cost to enter? It is €195 per category (€195 + VAT for UK entrants). The Best ethical or humanitarian initiative

category can be entered free of charge.

during the Global Bottled Water Congress in Gleneagles, Scotland, on 2 November.

How will my entries be judged? An international panel of industry experts will gather to judge the entries in London on 3 and 4 October.

Sounds very glamorous. As it’s in Scotland, does that mean I have to wear a kilt? Kilt wearing is optional, but we’d appreciate it if you did.

What are the judges looking for?

Categories Brands and products • Best new still or sparkling water • Best new flavoured water • Best new functional water • Best new children’s concept • Best newcomer brand or business Packaging • Best new bottle in PET • Best new bottle in glass • Best new label or decorative finish • Best new closure • Best new bottling, manufacturing or production technology innovation Ingredients • Best new functional ingredient for packaged water • Best new product enhancing ingredient: flavour, sweetener or colour Sustainability • Best environmental sustainability initiative • Best ethical or humanitarian initiative Marketing • Best consumer print marketing campaign • Best consumer TV/cinema marketing campaign • Best activation, store promotion or point of sale campaign

The judges will be impressed with products and initiatives that display innovation, stand out in the marketplace, present a new concept, offer added value and have market impact. Your entries might also be problem solving, for example, offer consumers a healthy option due to their low calorific value, reduce carbon emissions and costs, increase efficiencies or help worthy causes. Just think what their unique selling points are and the benefits that they offer. The panel will also award Best overall concept to the product that has made the most difference to the packaged water marketplace. How will prizes be awarded? Finalists and winners will be presented with their trophies at a special awards Gala Dinner

What if I don’t win? There’s no need to drown your sorrows at the bar as all entries will feature in the 2010 water innovation awards Showcase magazine. Our programme sets out to celebrate everyone’s achievements over the past couple of years. But remember, to be part of it, you have to send us your entries. What if I have more questions? To make taking part in the awards even easier this time, we’ve set up a dedicated website where you can find out everything you need to know, such as how your firm could become an official awards sponsor; take an inspirational peek at how the last awards programme and Gala Dinner panned out; and, of course, enter. Just go to waterinnovationawards.com and get involved. Good luck!

42 ONE TO WATCH