Food Business Africa May/June 2021 by FW Africa

FOOD BUSINESS A F R I C A ’ S

N O . 1

F O O D ,

B E V E R A G E

M I L L I N G

I N D U S T R Y

M A G A Z I N E

MY COMPANY PROFILE

FOOD STARTUPS AFRICA:

MZUZU DAIRY 254 BREWING COMPANY

TWO SIX ZERO BRANDS Ram Ray Vijayvargiya

COMPANY FOCUS:

UNILEVER: Boosting Sustainability Leadeship AFRICA’S TOP 100 FOOD COMPANIES

MARS WRIGLEY KENYA

EXECUTIVE INTERVIEW

MARTIN SCHLAURI Bühler Group WWW.FOODBUSINESSAFRICA.COM

YEAR 9 | ISSUE NO. 46 MAY/JUNE 2021

Afmass FOODEXPO

The Future of Food in Africa

DATE: December 2-4, 2021 | VENUE: SARIT EXPO CENTRE NAIROBI, KENYA

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AFRICA Inc. WWW.AFRICAINCMAG.COM

The Art of European Meat

Hindquarter Carcass with jowl

Mastered by the Belgian meat suppliers What makes the Art of European Meat? It’s that exceptional combination of Craftsmanship, Food Safety and Tailor-Made Service. And that’s what the Belgian meat suppliers truly master. As one of Europe’s leading meat producers and exporters, they turn their expertise into an art form. Up to you to savor it.

Find your Belgian meat master at artofmeat.eu

THE CONTENT OF THIS PROMOTION CAMPAIGN REPRESENTS THE VIEWS OF THE AUTHOR ONLY AND IS HIS/HER SOLE RESPONSIBILITY. THE EUROPEAN COMMISSION DOES NOT ACCEPT ANY RESPONSIBILITY FOR ANY USE THAT MAY BE MADE OF THE INFORMATION IT CONTAINS.

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JULY /14-16 / 2021 3D VIRTUAL SUMMIT THEME: INNOVATIVE SOLUTIONS & IDEAS ON FOOD SAFETY IN AFRICA, POST- COVID Regulatory & policy Environment

Quality & lab Management

Compliance & systems Management

Appropriate Technologies

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SPEAKERS FROM PRIVATE, PUBLIC, ACADEMIC & NON-PROFIT SECTORS

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CONFIRMED SPEAKERS

DAVID MULWA Regional Sales Manager, Ishida

MATLOU SETATI

Executive: Food Safety – Consumer Goods Council of South Africa

RUSHABH SHAH BDD, F&S Scientific

DOREEN LUGALIA

CHRIS WAINAINA

Commercial Director, Bruker

OKISEGERE OJEPAT

CEO, Kenya Fresh Produce Consortium

Food Safety Consultant, Nigeria

THOMAS OCHIENG’

Group QAM, Orbit Products

MOLLY ABENDE

DR. EDITH E. ALAGBE

Researcher/Lecturer, Covenant University, Nigeria

GEORGE AKIDA Exports Manager, Africado Tanzania

CAROL KEROR Country SHEQ Manager, CCBA Kenya

FOODBUSINESSAFRICA.COM

Food Lawyer, Foodlawlatest.com

Technical Director, Land O’Lakes International Dev, Egypt

Consultant Armlead Private, Zim

VICTOR YAMO

PAUL CHALE

ANDREW WANGA

MATTHEW NCUBE

COLLINS KAMOL

DR. PETER KAHENYA

Lecturer, JKUAT

JOACHIM WESTERVELD Executive Chairman, Bio Foods ltd

FRANK OBURE GM, Packhouses, AAA Growers

CESARE VARALLO

WALTER BRUCE OPIYO

Senior Technical Farming Campaigns Advisor, Technoserve, Manager, World Zambia Animal Protection

Production Managing Consultant, Manager, Burton & Mantra Quality Bamber Co. Consulting

JEMI BOYE-OKIT

Supplier Quality PM Barry Callebaut

MERCY CHATYOKA

KHALED SHEDEED

VERONICA IDOWU ALABA

PEER HANSEN

Biochemist, University of Copenhagen

Director, Nhlupo Business Solutions, SA

ISAAC MUGENYA

Manager, Testing Services, KEBS

URS DUBENDOFER Senior Advisor, Grain Milling, Buhler

Quality Control Manager, Golden Africa

Quality & Food Safety Manager, Africa, Wrigley

CEO, Bureau Veritas EA

KEMA BENEDICTA ASHIBUOGWU

Sales Manager, AIB EMEA

LAWRENCE ALOO

Chief Biochemist, National Public Health Laboratory, Kenya

WALTER RONO

Agri, Food & Trade Manager, Bureau Veritas

EHS Manager – Quickmart Supermarkets

CYPRIAN KABBIS

ROB BUCKLEY

ALIYU ANGARA

CEO, Institute of Public Analysts of Nigeria (IPAN)

(PMJF, NLCF) – Head, QMS – Food Safety and Applied Nutrition Directorate, NAFDAC

DR. GEORGE ABONG’ Senior

Lecturer, University of Nairobi

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

CHAIRMAN OF TWO SIX ZERO BRANDS VJ WITH HIS SON AND COMPANY CEO MR. GAURAV VIJAYVARGIYA

CONTENTS

Company Focus: Unilever: Taking Sustainability to the next level

YEAR 9 | ISSUE NO. 46 MAY/JUNE 2021

Company Profile: Two Six 28 My Zero Brands Two Six Zero Brands is a leading grains and snacks processor based in Zambia. The award winning enterprise has invested recently to meet rising demand for affordable, nutritious food and beverage products for local, regional and international markets. Food Business Africa had a discussion with Gaurav Vijayvargiya on the company’s plans and ambitions

Focus: Mars 45 Company Wrigley Confectionery Kenya: Unilever: Beating all odds to become a world leader in sustainable manufacturing

Sustainably growing into the future

37 Food Startups Africa: 254 41 Brewing Co

Food Startups Africa: Mzuzu Dairy

ON THE COVER Ram Ray Vijayvargiya Chairman of Two Six Zero Brands

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FOODBUSINESSAFRICA.COM

CONTENTS

YEAR 9 | ISSUE NO. 46 | MAY/JUNE 2021 REGULARS 8 Editorial 10 Events Calendar

News Updates: • Kenya’s premium tea brand gets backing from European financiers Si, IFU, Proparco • Afreximbank boosts capacity of food safety compliance in Africa, establishes first quality assurance centre in Nigeria • Kenya Breweries Limited to cash in on rising spirit demand, invests US$9.2m in new processing line • South African retailers invest in new distribution centres enhancing service delivery • Beverage manufacturers in West Africa solarise processing facilities, cut on carbon emissions • AB InBev’s Southern African subsidiaries in SA and Zambia turn investment taps back on • Huhtamaki to boost fibre packaging capacity with new facility in South Africa, eyes EAC market • Arla to invest in new modern dairy farm in Nigeria to boost milk production • Tanzania eyes increased sugar production as local players boost investments • Coca-Cola, PepsiCo, Harris International heighten competition in Uganda’s beverage market • Ethiopia beefs up edible oil production with launch of new US$114m processing plant

Supplier News & Innovations: Kerry sells meats and meals business to Pilgrim's Pride, acquires perseveration technology company Niacet | IFF launches new solutions for clean label baking and ambient yogurt production | CP Kelco, Symrise and Kerry launch innovation centers to enhance customer support capabilities | DSM launches new yogurt culture to help manufacturers meet clean label requirements

Executive Interview: MARTIN SCHLAURI - Senior Milling Expert - Bühler Group

DAIRY BUSINESS AFRICA 51 Fortification of milk products in India gathers pace BEVERAGE TECH AFRICA 55 Trends in Beverage Flavours and Colours post Covid-19 MILLING & BAKING AFRICA 59 Africa’s milling sector continues to take shape, registering rise in number of players FOOD NUTRITION & HEALTH 65 A circular food system can withstand crises like COVID-19 — and provide delicious meals

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EDITORIAL

FOODBUSINESSAFRICA.COM

Year 9 | Issue 3 | No.46 • ISSN2307-3535

FOUNDER & PUBLISHER Francis Juma EDITORIAL Catherine Wanjiku | Paul Ongeto ADVERTISING & SUBSCRIPTION Jonah Sambai | Hellen Mucheru DESIGN & LAYOUT Clare Ngode PUBLISHED BY: FW Africa P.O. Box 1874-00621, Nairobi Kenya Tel: +254 20 8155022, +254725 343932 Email: info@fwafrica.net Company Website: www.fwafrica.net

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INFORMING AFRICA’S BUSINESS GROWTH

Food Business Africa (ISSN 2307-3535) is published 6 times a year by FW Africa. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited. All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published.

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Join us as we debut Food Safety Africa magazine The new publication supports Africa Food Safety & Quality Summit - our annual African-focused international conference and expo

he subject of food safety – or lack thereof – is a major blot on Africa’s quest to feed its growing and fast urbanising population. A report from the Global Food Safety Partnership in 2019 highlighted the need for targeted investments to promote food safety at a domestic level across Africa, where foodborne illnesses claim an estimated 137,000 lives a year, according to figures from the WHO, thereby levying a public health burden similar to malaria, HIV/ AIDS and tuberculosis, combined. The report also revealed that unsafe food consumed cause human capital losses of an estimated U$16.7 billion a year in Africa, and yet an analysis of more than 500 projects and activities in sub-Saharan Africa since 2010 found that most of them focused on food safety for export markets, leaving out specific health risks, such as bacterial contamination that local consumers face when purchasing from local, informal food markets. “The future of the food system is critical to the long-term well-being of Africa and its people, and for the global food system to be a successful provider, food must be safe for everyone … With growing populations and changing diets, now is the time to take stock of the current food safety landscape in Africa and for new efforts to address old challenges”, said Juergen Voegele, Senior Director for Food and Agriculture Global Practice at the World Bank. WHY FOOD SAFETY AFRICA MAGAZINE? Food Safety Africa magazine is the first publication that is solely focused on the subject of food safety, quality management and compliance in

Africa’s food and agriculture sector. The magazine, set to be launched in July 2021, is focused on boosting the capacity of the food and agriculture value chain stakeholders in Africa to procure, store, transport, process, package and sell wholesome, nutritious, and safe food products The magazine will cover the most critical aspects of the industry, including latest regulatory and policy updates from various regulatory agencies in Africa and beyond; latest investments in infrastructure and facilities such as laboratories etc. in Africa; new technologies by suppliers of equipment, chemicals and diagnostic solutions; technical articles on food safety, quality management and compliance; interviews and high quality features and profiles of leading companies in the food and agriculture value chain in Africa; and the latest market trends and ideas that are shaping the future of food safety in Africa and the World. Set to be published every quarter originally, before moving to a bimonthly schedule, the magazine will support the growth of our premium industry event, Africa Food Safety & Quality Summit, which is slated for mid-July 2021 – and is planned to be a yearly conference and expo. As publishers of Food Business Africa magazine, the new Food Safety Africa magazine expands our scope and provides the platform to highlight food safety, quality and compliance better than we have managed to do with Food Business Africa. Please visit the website www.foodsafetyafrica.net to discover more. We wish you a good read Francis Juma CEO & Founder FOODBUSINESSAFRICA.COM

FOOD BUSINESS AFRICA

CONNECT JOIN THE DOTS - DISCOVER THE PEOPLE & TRENDS IN AFRICA'S FOOD INDUSTRY AT OUR NEW SHOWS The food industry in general, is undergoing a tremendous transformation - as new investments in the sector facilitate business growth, innovation in new products and new markets are opened The Food Business Africa CONNECT is the bi-monthly online magazine show, where you will meet the movers and shakers from the private, public, academia and non-profit sectors of the food industry, as they engage with editors from Food Business Africa magazine, to help unravel the opportunities and trends in the Continent. Part of our Food Business Africa TV platform, Food Business Africa CONNECT is for you, your teams and everyone in between. SIgn up today to attend the next edition of the Show!

JULY EDITION SPEAKERS

Larry Moore

Public-Private Partnership Manager, West Africa Trade & Investment Hub, USAID

Maureen Mutheka Founder, Tule Vyema

Afmass FOODEXPO

The Future of Food in Africa

Michael Ojo

Country Director, Global Alliance for Nutritious Foods (GAIN), Nigeria

Andrew Chintala

President, Millers Association of Zambia

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EVENTS CALENDAR

July 5-7, 2021 Foodex Birmingham, UK Focus: Processing & Packaging www.foodex.co.uk

September 9-12, 2021 WorldFood Istanbul Istanbul, Turkey Focus: Food & Beverage https://worldfood-istanbul.com/Home

July 14-16, 2021 Africa Food Safety & Quality Summit Virtual, Kenya Focus: Food Safety https://www.foodsafetyafrica.net/ summit/

September 14 – 16, 2021 Halal Expo Nigeria Abuja, Nigeria Focus: Food & Beverages www.accinigeria.com/event/halalexpo-nigeria-2020

August 5-7, 2021 DairyTech Bengaluru, India Fous: Dairy http://dairytechindia.in/

September 17-19, 2021 Grains Africa - International Trade Show on Grains & Technology Kampala, Uganda Focus: Grains & Milling www.mxmexhibitions.com/ grainsafrica_uganda

August 17-19, 2021 International Artisan Bakery Expo Las Vegas, USA Focus: Baking & Baked goods https://artisanbakeryexpo.com/ August 25 – 27, 2021 The Alternative Protein & Food Tech Show Singapore Focus: Alternative proteins https://www.kindearth.tech/ singapore-2021

September 21-23, 2021 Foodagro Tanzania Dar es Salaam, Tanzania Focus: Food & Agriculture www.expogr.com/tanzania/foodexpo September 22-24, 2021 Petfood Forum CONNECT Virtual Missouri, USA Focus: Animals & Pets www.petfoodforumevents.com

October 20 – 22, 2021 Drink Technology India Mumbai, India Focus: Beverage https://www.drinktechnology-india. com/en/ October 28-30,2021 African Livestock Exhibition and Congress Addis Ababa, Ethiopia Focus: Livestock https://africanlivestock.net/ October 29 - 31, 2021 The Vegan & Plant Powered Show Hybrid, Cape Town, South Africa Focus: Plant-based foods www.veganandplantpoweredshow.com November 07-09, 2021 Gulfood Manufacturing Dubai, United Arab Emirates Focus: Food & Beverage www.gulfoodmanufacturing.com December 2-4, 2021 AFMASS Food Expo Nairobi, Kenya Focus: Food, Beverage & Milling www.afmass.com December 3, 2021 Africa Food Industry Excellence Awards Nairobi, Kenya Focus: Food, Beverage & Milling www.awards.foodbusinessafrica.com

September 1-3, 2021 Food & Beverage West Africa Lagos, Nigeria Focus: Food & Beverages https://fab-westafrica.com/

October 09-13, 2021 Anuga Food & Beverage Fair Cologne, Germany Focus: Food & Beverage www.anuga.com

September 8-9, 2021 Dutch Poultry Expo Hardenberg, Netherlands Focus: Poultry https://www.dutchpoultryexpo.nl/en/

October 20-22,2021 Graintech Africa Nairobi, Kenya Focus: Grain & Milling https://www.graintechafrica.com/

December 7-9, 2021 The Africa Sugar Conference Kampala, Uganda Focus: Sugar https://informaconnect.com/africasugar/

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NEW FOOD PRODUCT INNOVATIONS

Premier Foods Peanut Butter and Sauces Premier Foods Industries has launched a new line of peanut butters comprised of Healthy Creamy, Healthy Crunchy, and Healthy No Added sugar variants. The peanuts are made from roasted Peanuts, Fully Hydrogenated Soya beans oil,sugar,Salt & Emulsifiers and are available in 250g, 400g, and 800g bottles. In addition to the peanut butter line, Premier Foods has also expanded its sauces line with launch of a new Kachumbari sauce comprised of tomato and onion, a real accompaniment for many Kenyan meals.

www.peptang.com

CHI Limited Mixed Fruit Drink

CHI Limited, Nigeria’s leading fruit juice maker, has expanded its Chivita Active brand with launch of Chivita Active Zest. The new product is made from a mix of 5 citrus fruits and fortified with Vitamin C for immunity boosting, Vitamin B1 and D3 for faster body metabolism and calcium for optimum bone health. The product which is made from all-natural ingredients comes in a premium 330ml Can.

www.chilimited.com

Fan Milk Ghana Fortified Yogurt Fan Milk Ghana has launched NutriDay, a new yoghurt brand fortified with zinc. The drinkable yoghurt is aimed to meet the growing demand for healthy nutrition that boost the immune system as it also contains vitamin B2, vitamin A and calcium. It comes in plain, sweetened, strawberry and vanilla flavours.

www.fanmilk.com

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

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Onja Foods Gluten-free Flours Onja Foods, a fast-rising food startup in Kenya, has released to market a number of gluten-free flours including sweet potato flour, sorghum flour, and the delectable Uji power mix flour. The uji power mix flour is a blend of Cassava, sweet potato, peanuts, arrow roots, and simsim. All the flours are available in 750g packets.

www.onjafoods.business.site

Sunveat Foods Limited Biscuits Sunveat’s new Somo biscuits are taking the market by storm. The tiny biscuits consist are available in milk, chocolate, and vanilla flavors. The biscuits are wrapped in attractive packaging that offers learners an opportunity to make snacking time a learning experience. Apart from the biscuit themselves being made in shapes of letters and numbers, the packaging contains names of baby animals, days of the week, and numbers to jog the memory of the young minds.

www.sunveat.co.ke

Diageo SA Marula Spirit Diageo South Africa has launched a new Gin variant made with real African fruits dubbed Orijin Marula. Orijin Marula is a modern and vibrant expression of South Africa’s famous Marula fruit with botanical spirit. Coming in a green glass bottle with details of gold, Orijin Marula can be served as a mix with tonic, lemonade or sparkling water. It has an alcohol by volume of 35%.

www.diageo.com

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MAY/JUNE 2021 | FOOD BUSINESS AFRICA

NEWS UPDATES

NEWS UPDATES by www.FoodBusinessAfrica.com FUNDING

Kenya’s premium tea brand gets backing from European financiers Si, IFU, Proparco

KENYA – Global Tea & Commodities, one of the fastest growing and fully integrated tea, coffee and macadamia producing companies with operations in Kenya and Malawi, is set to receive growth capital from three European financiers.

The three firms – French development finance institution Proparco, Danish sustainable investment fund IFU and London based investment and advisory firm Si Advisers LLP - have inked a financing agreement with the packer of premier tea brands, Kericho Gold and Baraka Chai. The proposed investment will assist Global Tea in building a new tea packaging facility in Mombasa, Kenya and support the group’s expansion plans in Africa. The closing of the transaction is subject to regulatory approvals and other customary conditions.

FOOD SAFETY

Afreximbank boosts capacity of food safety compliance in Africa, establishes first quality assurance centre in Nigeria NIGERIA – The African Export-Import Bank (Afreximbank),

a pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade, has commenced the construction of the Africa Quality Assurance Centre (AQAC) in Ogun State, Nigeria. Construction of the state-of-the-art facility commenced on 25th February 2021 and is expected to kick-start operations by the second quarter of 2022. The Ogun State AQAC is the first in a series of Quality Assurance Centres that the bank intends to establish across Africa to support industrialization across the continent by ensuring that African products are manufactured to international standards and enabling them to participate in intra-African and global trade. The first-class quality infrastructure will have the capacity to offer testing, certification, inspection, and training services covering agricultural products.

Bureau Veritas, a world leader in testing, inspection, and certification, is Afreximbank’s technical partner on the project and will manage and operate the facility. The partnership will ensure that AQAC meets the ISO 17025 standard for testing and calibration laboratories, to ensure the credibility and reliability of the range of services provided.

NEW SPIRITS LINE

Kenya Breweries Limited to cash in on rising spirit demand, invests US$9.2m in new processing line

KENYA – Kenya Breweries Limited (KBL), a subsidiary of Diageo through the East African Breweries Limited, is set to inject Ksh1 billion (US$9.2m) in the establishment of a new spirits processing line, in a bid to meet the high 14

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

demand witnessed in the segment. The investment will be used to acquire new line machinery and expand storage capacity at its sister company, UDV Kenya. It will enable KBL to begin local production of new international spirit brands, while ramping up volumes of those already being produced in the country such as Gilbey’s and Smirnoff Red Vodka. The firm says that demand for spirits has been growing faster than that of beer and the trend has been reinforced since the onset of Covid-19, justifying the need for an additional line.

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DISTRIBUTION CENTRES

South African retailers invest in new distribution centres enhancing service delivery

South African retailer Massmart has built a new state-of-the-art Distribution Centre in Brackenfell, Cape Town, featuring an eye-catching curved and seamless roof, measuring over 60,000 m2. Under the roof, the centre is customized to suit Massmart’s needs with innovative modular mezzanine racking, allowing for easy expansion of picking areas to accommodate varying stock demand. With a capacity of 53,000 m2, this is the second largest Centre in the Massmart group, and a significant upgrade from the previous Airport DC that had a capacity of 19,500 m2. “This new facility is a key milestone

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in the journey we are on, to build a truly end-to-end supply chain that serves our stores and customers in the best possible way,” said Martin Halle, Massmart’s Group Supply Chain Vice-President. Sustainability is a core priority in any Massmart facility and the Brackengate campus makes maximum use of natural light and energy saving LED lights with motion sensors. It also has a built-in retention pond for rainwater harvesting. The pond will also generate water from air, daily, using atmospheric water generators. In addition to this, water-wise plants have been selected for the facility to further reduce water consumption. The Brackengate DC is the first of Massmart’s product-based distribution centres, which will see facilities distributing specific products

DECEMBER 2-4, 2021

SARIT EXPO CENTRE, NAIROBI, KENYA

be undertaken at Fortress’s flagship premium-grade Eastport Logistics Park, close to ORT Airport in Gauteng, to cover 36 hectares of state-of-the art infrastructure. The investment in the new inland distribution centre is aimed to give the company a competitive advantage.

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ATT AFRI D M RL FRO E WO H T &

THIS WILL BE AN ADDITION TO ITS CURRENT MARKET BASE OF SUPPLYING MAJOR RETAILERS. CAVALIER IS ONE OF ONLY TWO WOOLWORTHS-APPROVED RED MEATPACKERS

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to all Massmart trading banners from a single point. Meanwhile, Pick n Pay, has entered into an agreement with real estate investment company, Fortress, to establish one of the massive logistics centres in the country. The project will

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WWW.AFMASS.COM The Food Ingredients Show showcases the latest products for the food and animal feed processing industry from local, regional and international companies, including: Flavours & Colours • Sweeteners - natural, artificial • Thickeners • Improvers • Enzymes; Fat, Salt & Sugar Replacers; Emulsifiers• Preservatives • Humectants • Stabilisers • Flavour Enhancers • Foaming & Gelling Agents • Anticaking Agents • Sequestrants • Acidity regulators etc.

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BRIEFS Huhtamaki to boost fibre packaging capacity with new facility in South Africa, eyes EAC market

SOLAR ENERGY

Beverage manufacturers in West Africa solarise processing facilities, cut on carbon emissions

SOUTH AFRICA – Huhtamaki, a global food packaging specialist, has announced that it is establishing a new manufacturing facility in KwaZulu-Natal, South Africa, in a bid to boost its capacity. Due to begin operations in the fourth quarter of 2021, the facility will serve its existing and new egg packaging customers in the province, with a broad range of locally produced packaging solutions. WEST AFRICA – The Big Bottling

Employing around 30 people when fully operational, the facility will be located close to one of South Africa’s main export ports, enabling competitive exports of egg packaging for customers across East Africa. The new investment, of an undisclosed value, underlines Huhtamaki´s strong commitment to the growing customer base in South Africa and East Africa, as the addition of several new lines will allow a significant increase in capacity.

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

Company, the producer of Big Cola, Big Orange, and other popular soft beverages in Nigeria, has put up a 950kW solar power plant at its factory in Ogun State. The power plant, set up on the company’s factory rooftop, is fully integrated into the plant’s existing natural gas power infrastructure, offsetting the customer’s gas consumption during peak solar production, thereby enabling the plant to reduce its gas usage. It will help BBC offset 11,743 tons of CO2 over the project’s ten-year lifetime. These savings will help the company keep its commitment to protecting the environment. Meanwhile, Nigerian Breweries Plc has officially commissioned its 663.6 KWP solar plant worth over N300 million (US$732,000) at its Ibadan brewery. The solar plant will supply approximately 1,000 megawatts per hour (MWh) to the brewery annually, at a significant discount to their current cost of power. The landmark project, which can approximately brew 13.3 million bottles of its Star Lager beer, will

reduce the site’s carbon dioxide (CO2) emissions by over 10,000 tonnes over the lifespan of the plant. Under the agreement, Nigerian Breweries will only pay for solar power produced, receiving a single monthly bill that incorporates all maintenance, NIGERIA BREWERIES' SOLAR POWER PLANT TO PRODUCE 1000MWH ANNUALLY AND REDUCE SITE'S CARBON DIOXIDE EMISSION BY OVER 10,000 TONNES monitoring, insurance, and financing costs. In neighbouring Ghana, Guinness Ghana Breweries has also launched a solar photovoltaic system on the roof of its brewery in Accra, shifting to the use of clean energy in its operations. The 1,095 kWp solar power plant will be managed under the same terms as that of the Nigerian Breweries. It will provide up to 19% of the electricity consumed by the subsidiary of the British Diageo Group and supply 1,500 MWh per year, while avoiding 10,000 tonnes of CO2 emissions.

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NEW PLANTS

AB InBev’s Southern African subsidiaries in SA and Zambia turn investment taps back on

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SOUTHERN AFRICA - South African Breweries (SAB) and Zambian Breweries, part of the Anheuser-Busch InBev family, have re-embarked on shelved investment plans in a bid to grow their respective home markets. SAB, the maker of Castle Lager, has reinstated its investment programme that was cancelled last year due to the harsh lockdown measures in South Africa, allocating 2 billion rand (US$148.12 million) towards several projects to be completed in the 2022 financial year. At the height of the COVID-19 pandemic in August 2020, the brewer withdrew R2.5bn (US$164m) capital and infrastructure upgrade expenditure for the year, and later in January 2021, cancelled investments amounting also to R2.5bn (US$164m) for 2021. The leading alcohol manufacturer highlighted that the decision to cancel the investments was prompted by the challenging operating environment, regulatory uncertainty and surprise bans on alcohol sales in the country. The funding allocated will be used for several upgrades to operating facilities, installation of new equipment at selected plants, product innovations and other necessary operating systems. Meanwhile, Zambian Breweries has launched a US$18 million expansion project to address growing demand and improve quality, further stamping its dominance in the local alcohol industry. The company has commenced the upgrade its Lusaka and Ndola plants with cutting-edge technology, to increase its annual brewing capacity by a third and address beer shortages across the country. The investment includes six new fermentation vessels with the capacity of 240,000 litres of beer each, and modern brewing equipment to increase efficiency and quality. The expansion project has been in the making for over a year but disruptions in imports and working conditions caused by the COVID-19 outbreak forced the project’s postponement to 2021.

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EXPO

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The Food, Logistics, Cold Chain & E-Commerce Expo showcases the latest technologies in the supply chain, logistics, storage and e-commerce for food and agriculture sector in Eastern Africa, including: Cold Chain Solutions • Warehousing Solutions • Mobility Solutions • Fintech & New Technologies • Last Mile Connectivity Solutions • Mobile Technology & Apps • Food Delivery Services & Solutions • Clearing & Forwarding Services • Freighting and Transport Services

DECEMBER 2-4, 2021

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NEWS UPDATES

DAIRY FARM

Arla to invest in new modern dairy farm in Nigeria to boost milk production Arla Foods, one of the largest dairy cooperatives in Europe, is seeking to build a new commercial dairy farm in Northern Nigeria, to support local milk production in the country. Located in Kaduna State, the 200-hectare farm will house 400 dairy cows, modern milking parlours and technology, grassland, as well as living facilities for 25 employees. The dairy will also train and support up to 1,000 local dairy farmers to improve milk yields and quality, animal welfare and farm profitability. The investment forms part of Arla’s long-term commitment to increase local food production in Nigeria. The dairy giant did not disclose the value of its investment in the farm. According to the Danish dairy company, Nigeria’s dairy sector is currently only able to supply less than 10% of its demand – a gap that is expected to grow in line with the growth of its population. The farm – scheduled to open in 2022 – is eventually expected to produce over 10,000 litres of milk per day, which will then be processed by Arla’s dairy plant in Kaduna State to supply locally produced dairy products to Nigerian consumers. Arla Foods chairman, Jan Toft Nørgaard, said, “To collaborate with farmers in many parts of world, sharing knowledge and supporting local dairy industries is a key part of our cooperative mindset and our farm in Nigeria is the next important step.” The farm will be led by Arla’s farm management expert Snorri Sigurdsson, who will also head up the training agenda. NIGERIA –

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

SUGAR INDUSTRY

Tanzania eyes increased sugar production as local players boost investments Illovo Sugar Africa, a pan-African consumer centric agribusiness with roots in growing and making sugar and related products, has announced the commencement of its TSH. 571.6 billion (US$238.5 million) expansion project in Tanzania. The planned investment at its Tanzanian unit, Kilombero Sugar Company, co-owned alongside the Government of the United Republic of Tanzania having 25% stake, has been in the pipeline for several years. The new development will increase Kilombero’s sugar production by 144,000 tons from current levels of around 127,000 tons of sugar per annum, to 271,000 tons. The new plant will also capabilities for cogeneration of electricity for the Kilombero manufacturing complex and for export to the national Tanzanian grid. Further, a 4 million litre increase in the production of ethanol at the adjacent ethanol distillery will be realised, bringing total annual production up to 16 million litres in order to meet growing local and East African export demand for potable alcohol. The project construction phase is expected to take 25 months and completion is expected in July 2023. In related news, Said Salim Bakhresa Ltd, an affiliate company of the Bakhresa Group, has announced that the first phase of its US$300 million Bagamoyo Sugar Limited is nearing completion and will officially start production by June 2022. The company has already pumped in about US$100 million in constructing the first phase of the project. The project, which has three phases, is expected to commence with an installed processing capacity of between 30,000 tonnes and 35,000 tonnes, with the annual expanded to 100,000 tonnes in later phases.

TANZANIA –

BRIEFS Ethiopia beefs up edible oil production with launch of new US$114m processing plant

ETHIOPIA – WA Group, the Ethiopian

multi-sectoral company has set the turbines rolling at its newly built Birr 5 billion (US$114m) edible oil processing plant. The investment is a move by the company from importation of edible oil into the country, to refining of crude palm oil imported from abroad, and crushing of locally sourced oil seeds such as Niger seed, sesame seed, peanut, soya bean, and haricot beans. WA Oil Factory, located in Amhara Regional State, has a target of creating a linkage with at least 2,500 farmers to source raw materials, the factory has already stocked inputs needed to fully start production. WA is the third edible oil factory to be inaugurated this year in the country, following Belayneh Kinde Group launching PhiBela Edible Oil Factory in February 2021, worth Birr 4.5 billion (US$113.7m), with a daily production capacity of 1.5 million litres of palm oil. Shemu Plc, located in Dire Dawa, also invested Birr 1.6 billion (US$39.75 million) in the expansion of its processing plant that will enable the company to refine 950 tonnes of oil a day.

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NEW PRODUCTS

Coca-Cola, PepsiCo, Harris International heighten competition in Uganda’s beverage market

Coca-Cola Beverages Africa in Uganda, has commenced production at its recently installed US$15 million production line, at the Century Bottling Company’s Namanve Plant. The beverage giant undertook the investment in a bid to boost its local production, supporting the Buy Uganda, Build Uganda agenda. The firm has also unveiled its new Minute Maid Fruity Boost Mango drink, the

UGANDA –

first product from the new facility. Meanwhile, the company’s competitor, Crown Beverages Limited (CBL) - subsidiary of PepsiCo, has established a new plant with two dedicated water processing lines in the country, that will grow the company’s production capacity and broaden its market share by unveiling the new 20-litre jumbo size bottle of its Nivana water brand. CBL’s move COCA-COLA'S NEW MINUTE MAID FRUITY BOOST MANGO DRINK TO BE PRODUCED AT THE US$15M PRODUCTION LINE AT THE CENTURY BOTTLING COMPANY IN UGANDA to join the jumbo size water segment is in line with the company’s efforts

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to cement its position as Uganda’s number one beverages company. Uganda’s leading indigenous beverages company Hariss International has also increased the tempo of competition in the sector by unveiling its the launch of its new premium water brand dubbed ‘Krystal Natural Mineral Water’ The launch has come in quick succession, following the company’s introduction of the new ‘Oner Apple No added Sugar’, a sugar free variant of its Oner Apple Juice that is aimed at meeting the changing and sophisticated consumers taste and preferences

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WWW.AFMASS.COM The Process & Pack Expo showcases the latest food and animal feed milling, processing, packaging and laboratory technologies, including: Milling Equipment • Processing Equipment • Packaging Equipment & Supplies • Automation Solutions • Laboratory & Food Safety Equipment • Solar Energy & Energy Storage Systems • Refrigeration & Cooling Solutions • Engineering Services & Supplies • Storage & Post-harvest Solutions

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BRIEFS German food ingredients solutions provider Mühlenchemie to open Technology Center in Kenya KENYA – Mühlenchemie, one of the

world’s leading companies in the field of flour treatment is seeking to set base in the East African region. The food ingredients solution provider has announced that it will open a new Technology Center in Kenya in 2020, to be closer and better serve its customers in the region by availing a wide range of services. “Being close to our customers is something we consider very important. It is extremely significant for us to understand how we can provide individual service and support for our customer’s specific requirements in the region,” stated the company. Mühlenchemie has been active in the African market for many decades with local technical experts in Nigeria, South Africa, Egypt and Cameroon, as well as a successful Technology THE NEW FACILITY'S CORE SERVICES WILL INCLUDE ASSESSMENTS AND EVALUATIONS FOR THE MILLING INDUSTRY AND WILL ALSO FEATURE A TRIAL FACILITY FOR BAKING Center in Nigeria and a joint baking lab in South Africa. The company’s second technology hub in the region, the new facility’s core services will include assessments and evaluations for the milling industry, while offering comprehensive realisation of innovative and cost-saving projects. The hub will also feature a trial bakery to enable customers understand the challenges, in order to create the best and most economical solutions.

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M&A

Heineken makes move on South Africa’s Distell Group SOUTH AFRICA – Heineken NV, the world’s second-largest brewer seeks to enter new alcohol market categories of wine and spirits, as it eyes ownership of Distell, South Africa’s leading producer and maker of wines, ciders, spirit and ready-todrink beverages. Distell, the owner of brands including Amarula, Savanna, Hunter’s Dry, Durbanville Hills and Nederburg, has revealed that it has received interest from Heineken regarding the potential acquisition of a majority stake in its business. “The parties have entered into discussions which, if successfully concluded, may have an effect on the price of the company’s securities. Bearing in mind that there can be no certainty that an agreement will be reached, shareholders are advised to exercise caution when dealing in

their Distell securities until a further announcement is made,” a statement released by Distell said. Heineken and Distell, the world’s largest and second-largest cider makers respectively, have gone headto-head for the cider market in South Africa since Heineken launched its Strongbow brand there in 2016. The acquisition would be Heineken’s most significant transaction since 2018, when it formed a partnership with China Resources Beer Holdings Co., maker of the country’s best-selling beer. It will also expand its exposure in Africa as Distell has operations not only in South Africa but in Botswana, Lesotho, Namibia, Eswatini, Kenya, Mozambique and Nigeria – thereby stepping into the toes of Africa’s No. 1 spirits seller, Diageo.

FUNDING

Uganda’s Yo Kuku chicken brand owner to bag US$7m from IFC to spearhead expansion plan

UGANDA – HMH Rainbow Ltd, the producer of fresh and frozen chicken in East Africa under the brand name Yo Kuku, is eyeing financial backing from the private-sector investment arm of the World Bank, International Finance Corporation (IFC) to support its expansion plan. HMH Rainbow, headquartered in Uganda is a joint venture between Ugandan businessman Alykhan Hudani (66.5% stake) and Rainbow Farms Investments Proprietary Ltd (33.5% shareholding). Rainbow Farms is a wholly owned subsidiary of RCL Foods Ltd, a publicly listed South African food manufacturer. The poultry company seeks to

undertake a US$12 million capacity expansion programme that seeks to construct temperature-controlled broiler houses, improve abattoir operations, and establish grain silos as well as bulk feed-dispatch systems in Kampala, Uganda. IFC is looking to invest as much as US$7 million in the project, comprising of a convertible loan of up to US$5 million and an additional debt of US$2 million. HMH has 12 broiler farms with a capacity of over 1 million birds a year and output of around half a million a month. The company, with operations in Uganda and Kenya, sells raw chicken as well as semi-processed items like burger patties via supermarket chains as well as exclusive Kuku shops. It also manufactures feeds, that are distributed to various customers in Uganda and some parts of East Africa.

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BIOMASS PROJECT

HOTELS RESTAURANTS & CATERING

Ivory Coast eyes biomass power generation from cocoa, oil palm waste

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IVORY COAST – Ivory Coast’s specialist in the biomass sector Société des Energies Nouvelles (SODEN) has partnered with the US Trade and Development Agency to establish a cocoa-powered renewable energy plant. The project, which will innovatively use the cocoa-waste is expected to cost about 131 billion West African CFA francs (US$244m). Ivory Coast is the world’s leading producer of cocoa beans contributing over 40% of the global supply. The cocoa beans which are exported to power the US$130 billion per annum cocoa and chocolate industry, make up a small portion of the cocoa fruit with the other parts namely pod husks, bean shells and the pulp end up as waste. Following successful pilot projects, the cocoa waste is now set to become a significant part of Ivory Coast’s transition to renewable energy. SODEN has begun work on the biomass plant, which is targeted to produce between 46 and 70MW of electricity per year, meeting the electricity needs of 1.7 million people. Meanwhile, Biovea Energie, an Ivorian incorporated firm owned by Électricité de France (EDF), Meridiam and Biokala, a joint venture created by Meridiam and a major agro-industrial player in West Africa, Sifca has closed a

THE PROJECT IS EXPECTED TO PRODUCE BETWEEN 46 AND 70MW OF ELECTRICITY AND WILL BE CONSTRUCTED AT A COST OF 131 BILLION WEST AFRICAN CFA FRANCS (US$244M) financing deal for its Biovea project, which seeks to convert oil palm waste into electricity. The project is set to receive a Euros 165m (US$200m) loan and Euros 13m (US$15.76m) grant from Proparco, the subsidiary of the French Development Agency (AFD) group responsible for financing the private sector, and Emerging Africa Infrastructure Fund (EAIF).

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The Hotels, Restaurants & Catering Expo showcases the latest solutions and technologies to the HORECA industry from Kenya, Africa and the World to a local, regional and international audience, including: Equipment • Ingredients • Cutlery • Cookery and cooking Solutions • Laundry Solutions • Security & Asset Tracking Solutions • Franchising & Distribution Services • Food & Beverage Products • Food & Beverage Serving Solutions • Safety & Quality Assurance Services • Storage and Warehousing Services and Solutions • Accounting Software & Services • Refrigeration & Cooling Services & Products • Bathroom Solutions • and many more

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PLANT-BASED FOODS

Alternative protein university course launched in Singapore to drive innovation

SINGAPORE – The Nanyang Technological University, Singapore (NTU) - one of the top universities in Asia - has approved a new undergraduate course titled “Future Foods – Introduction to Advanced Meat Alternatives,” to help drive innovation in plant-based foods. The course which will be launched in August this year was created in

collaboration with the Good Food Institute Asia Pacific (GFI APAC), a global nonprofit headquartered in Washington DC that works to accelerate alternative protein innovation. According to a statement from GFI APAC, the course aims to equip NTU students with expertise and knowledge of the food industry

focusing on alternative proteins and cultivated meat. It will be offered as an elective to third and fourth year students taking the Food Science & Technology degree program as a 2nd Major. Adapted to suit Singapore’s context and needs, the course will be delivered by several GFI’s scientific experts alongside NTU faculty. It will also feature seminars conducted by veterans from leading companies, providing students with industry insights and knowledge of the specific regulatory and business environment for this industry. As the instructors are based in different countries across the globe, the lectures will be delivered fully using e-learning tools via Microsoft Teams and Zoom. The team of educators aim to equip students with knowledge of the science, technology, advances and challenges facing the three alternative protein industry pillars of plant-based meat, eggs, and dairy, cultivated meat and fermentation.

TECHNOLOGY

Swiggy receives regulatory approval to start drone trials for food delivery in India

INDIA – Swiggy, India’s largest online food ordering and delivery platform, is set to start drone trials for food delivery in Mumbai, one of India’s largest cities. 22

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This comes after Swiggy’s drone delivery partner ANRA Technologies received clearance from government authorities to commence drone trials for Beyond Visual Line of Sight (BVLOS) operations in India. ANRA confirmed that over the next several weeks, its flight team will conduct BVLOS food and medical package deliveries in Uttar Pradesh’s Etah and Punjab’s Rupnagar districts. According to the company, the teams will be using ANRA’s SmartSkies technology to conduct the food and medicine delivery trials. ANRA’s flight team launched its first test flight on June 16, 2021, after months of planning, assessment and air traffic control integration.

In the first test flight, the team demonstrated how food packages can be easily delivered using medium drones. Food packages mostly tend FOOD PACKAGES MOSTLY TEND TO WEIGH LESS THAN 1 KG AND CAN BE EASILY PICKED UP BY MEDIUMSIZED DRONES WITH LOAD CAPACITIES OF 3-4KGS to weigh less than 1 KG and can be easily picked up by medium-sized drones that have a load capacity of 3 KG to 4 KG.

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REGULATORY

5-year truce on aircraft dispute hands temporary relief to European dairy industry

EUROPE – European dairy players are breathing a sigh of relief after a five-year truce was struck in the longrunning trade dispute over subsidies for Boeing and Airbus, which saw them dragged into a conflict that seriously damaged the sector. Beginning in October 2019, many EU dairy lines have been subject to an additional tariff of 25 percent on arrival in the US. The additional tariffs imposed on EU dairy exports reached

MILLING

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hundreds ofmillions of dollars and severely impacted EU and US-based businesses a like. Dairy producers in the EU lost business with exports of cheese to the US dropping by 10 percent in 2020 and continued to decline faster in the first quarter of 2021. This situation is however expected to change soon as both sides have agreed to remove taxes onUS$11.5 billion worth of goods, including dairy and wine, for five years.

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beginning of a new chapter in the trade relations between the EU and the US.”

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WITH THE TRUCE, BOTH SIDES HAVE AGREED TO REMOVE TAXES ON US$11.5 BILLION WORTH OF GOODS, INCLUDING DAIRY AND WINE FOR 5 YEARS

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Notably, this is not total elimination of the punitive measures but rather a five-year detente, so technically, the issue is stillon the table. Eucolait, the European Association of Dairy Trade, and the European Dairy Association(EDA) have welcomed the decision, as temporary as it may be. Eucolait in a statement noted that thegesture is a promising sign of the willingness to engage in a constructive manner, “heralding the

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WWW.AFMASS.COM The Milling, Bakery & Snacks Expo enables consumers, traders, distributors and the general public to touch, feel and taste the latest packaged grains, milled products and baked goods, including: Infant Foods • Grains & Legumes • Bread • Cakes • Processed & Packaged Flours • Biscuits • Cookies • Confectionery & Sweets • Snacks • Chocolate • Animal feed • Aqua feed • Petfood • Fats & Oils • Nuts • Oilseeds • Plant Based Foods • Extruded Snacks and Fruit based snacks, Snack bars and more • Pastries, wafers, sponge cakes etc • Chocolate and chocolate products • Snacky seeds, nuts, grains and legumes • Baked snacks and sandwiches

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SUPPLIER NEWS & INNOVATIONS

M&A

IFF launches new solutions for clean label baking and ambient yogurt production IFF, the leading food ASIA ingredient supplier, has unveiled a new, innovative bakery solution aimed at helping South American bakers produce clean label bread and pastries. Known as GRINDSTED POWERBake Clean, the new solution is a blend of soy lecithin, enzymes, and natural soluble fiber and is an alternative to the dough strengtheners currently used in bread formulations. Its use makes it possible to avoid the use of oxidizing agents that are traditionally used in bakery, some of which have names that consumers are unfamiliar with, note the company. In addition to improving the clean label profile of baked products, IFF says that it has other cost and process benefits. For instance, it can replace 100% of the vital wheat gluten that is usually added to the formulas of industrialized bread, allowing bakers to have a better production plan with potential cost savings since vital gluten has a large price variation. It also delivers process benefits, such as increased dough strength, higher tolerance, greater volume and better shaped loaves. The company has also unveiled a new ingredient aimed at boosting Chinese ambient yogurt with extremely robust live cultures. The new ingredient, YO-MIX ViV, is a lactic acid bacteria culture from natural fermented plant-based food, sourced in China. The live culture allows producers to offer ambient yogurt and other fermented beverages that contain highly stable live cultures throughout the shelf life.

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

Kerry sells meats and meals business to Pilgrim's Pride, acquires perseveration technology company Niacet

NETHERLANDS - Kerry Group has

sold its Kerry Consumer Foods’ Meats and Meals business valued at US$952 million to American multi-national food company Pilgrim's Pride. Kerry Meats is a leading manufacturer of branded and private label meats, meat snacks and foodto-go products in the United Kingdom and Ireland. Its sister, Kerry Meals is a leader in the ethnic chilled and frozen ready meals business in the United Kingdom. The combined businesses produced over £725 million (US$864

million) in annual sales during the year ended December 31, 2020 and have more than 4,500 team members. Proceeds of the sale increased Kerry’s liquidity, allowing it to sign an agreement to acquire preservation technology company Niacet in a deal estimated to be worth US$1.014

billion (€853 million). Niacet specializes in food preservation and has exclusive drying PROCEEDS OF THE SALE ALLOWED KERRY TO SIGN AN AGREEMENT TO ACQUIRE PRESERVATION TECHNOLOGY COMPANY NIACET IN A US$1.014BN DEAL and granulation process technologies in its key market categories of Bakery, Meat and Pharma. It also has costeffective low-sodium preservation systems for both meat and plantbased food across conventional and clean label solutions. According to a statement from Kerry, the acquisition will bolster its efforts to strengthen its own technologies for food protection and preservation. The resulting revenue synergies are also expected to enable the Niacet business to significantly outperform the market and deliver at least midto-high single-digit volume growth. Kerry expects the deal to close by the end of the third quarter of 2021, subject to customary closing conditions and regulatory approvals.

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BEVERAGES

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INNOVATION CENTRES

CP Kelco, Symrise and Kerry launch innovation centers to enhance customer support capabilities

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WORLD – Three of the world’s leading food ingredient

suppliers CP Kelco, Symrise and Kerry have launched innovation centers to bolster their R&D capabilities and improve their customer service capabilities. CP Kelco’s starts the list with the launch of a new innovation center in Atlanta, USA which is designed as an open, collaborative space for scientists and customers to engage in ingredient research, problem-solving, development and pilot plant scale-up of food, beverage, home care, personal care and other consumer and industrial products. Symrise, on the other hand, chose Dubai as the home of its innovation center, which was set up to deliver better taste solutions customized for the Middle East region. The company is reported to have invested around €1 million (about US$1.2m) into the new facility that houses development, application and sensory laboratories. For the Irish-based taste and nutrition company Kerry, Australia was the ideal location for a new purpose-built food technology and innovation center. The facility located in Queensland will include pilot plants, laboratories and tasting facilities, bringing the end-to-end food innovation cycle under one roof. SYMRISE INVESTED US$1.2M IN A NEW INNOVATION CENTER IN DUBAI TO SERVE CUSTOMERS IN THE MIDDLE EAST Additionally, Kerry has opened a new taste facility in Irapuato, Mexico, as it looks to strengthen its position in the Latin American market. According to Kerry, the new facility is expected to significantly expand the company’s offerings across a range of food and beverage categories, including refreshing and alcoholic drinks, snacks, meat, dairy and bakery.

The Beverages, Coffee & Tea Expo showcases packaged and processed beverage, coffee, tea and other hot beverage products to a local, regional and international audience, including: Beer • Wines • Spirits • Alcohol Free Beverages • Ciders • Cocktails • Coffee • Tea • Chocolate Drinks • Fruit Juices • Packaged Water • Cordials • Blends Packaged coffee, tea, cocoa and other hot beverage products • Ready-to-drink coffee, tea, cocoa and other hot beverages • Wellness and other plant-based hot and cold drinks • Medicinal and functional drinks • Equipment and solutions for preparing, cooking and serving coffee, tea, cocoa and other hot beverages • Ingredients for preparing coffee,tea and other hot beverage products

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NEW PRODUCT

DSM launches new yogurt culture to help manufacturers meet clean label requirements streamlined yogurt production. The culture is also reported to have a stable pH during yogurt filling, providing manufacturers with a flexible production time and cost efficiencies. Additionally, DSM notes that it has a low post-acidification rate, thus creating a stable pH until the end of shelf life (30 days), even under challenging conditions, helping producers create a product NETHERLANDS – DSM has extended

its yogurt culture portfolio to include DelvoFresh YS-042 that helps manufacturers meet clean label requirements without compromising on quality. According to a statement from DSM, the new culture enables dairy processors to create stirred yogurt that stays “extra mild, creamy and thick throughout its shelf life,” without the need for extra texturizers.

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DSM says that DelvoFresh YS042 creates an indulgent yogurt experience that also aligns with the preferences of today’s label-conscious consumers. Yogurt manufacturers using the new ingredient also stand to benefit from improved efficiency and reduced production costs when they use the new product. DSM notes that due to its fast and consistent fermentation time, it facilitates a cost-effective and

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with a consistent taste and texture throughout its shelf-life.

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THE NEW CULTURE ENABLES DAIRY PROCESSORS TO CREATE STIRRED YOGURT THAT STAYS "EXTRA MILD, CREAMY AND THICK THROUGHOUT ITS SHELF LIFE."

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WWW.AFMASS.COM The Fresh Produce, Meat, Poultry & SeaFood Expo showcases the most innovative fresh produce, herbs and spices; savoury and condiments products to a local, regional and international audience, inluding: Fruits & Veg • Herbs & Spices • Savoury & Condiments • Meat • Poultry • Fish • Seafish • Meat Alternatives Fresh meat, poultry, fish and seafood • Processed and packaged meat, poultry, fish and seafood products – sausages, hams, Viennas, bacon etc •Frozen and chilled meat, poultry, fish and seafood • Processing, packaging and storage solutions for meat, poultry, fish and seafood industry • Equipment for cutting, slicing, weighing, blending, thawing, cooking meat, poultry, fish and seafood products • Ingredients, chemicals and other solutions for the meat, poultry, fish and seafood industry

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2021 AWARDS CATEGORIES A. NEW PLANTS OF THE YEAR

GALA DINNER DECEMBER 3, 2021 NAIROBI, KENYA SUBMISSION OF ENTRIES BEGINS AUGUST 1, 2021

SUBMIT YOUR LATEST NEW PRODUCTS, NEW PLANTS & SUSTAINABILITY INITIATIVES. STAND A CHANCE OF WINNING THE MOST PRESTIGIOUS FOOD INDUSTRY AWARDS IN AFRICA!

B. NEW PRODUCTS INNOVATIONS OF THE YEAR 1. Dairy Products 2. Milling, Bakery & Snack Products 3. Beverages, Tea, Coffee & Other Hot Beverage Products 4. Fresh Produce, Meat, Poultry & Fish Products 5. Sugar & Confectionery Products 6. Animal Feed & Pet Food Products 7. Culinary & Condiments Products 8. New Product – Packaging Innovation 9. New Product - Ingredients Innovation 10. New Product - Nutrition Innovation C. SUSTAINABLILITY INITIATIVES OF THE YEAR 1. 2. 3. 4.

Renewable Energy Initiative Sustainable Water & Waste Initiative Covid-19 Response Initiative Sustainable Local Raw Materials Sourcing Initiative

D. SUPPLY CHAIN, LOGISTICS & E-COMMERCE COMPANIES OF THE YEAR 1. Food Delivery & E-Commerce Innovation 2. Supply Chain & Logistics Innovation E. FOOD INDUSTRY INVESTMENTS & DEALS OF THE YEAR

Send Sponsorship, entry and attendance queries to: TEL: +254 725 343 932; INFO@FWAFRICA.NET CONFIRMED SPONSORS

NEW THIS YEAR:

The New Plants of the Year & Sustainability Initiatives of the Year to be divided into Large Companies and Small & Medium Companies.

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Two Six Zero Brands is a leading grains and snacks processor based in Zambia. The award winning enterprise has invested recently to meet rising demand for affordable, nutritious food and beverage products for local, regional and international markets. Food Business Africa had a discussion with Gaurav Vijayvargiya on the company’s plans and ambitions

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MY COMPANY PROFILE: TWO SIX ZERO BRANDS

TWO SIX ZERO BRANDS:

FOUNDED IN 1997, TWO SIX ZERO BRANDS PROCESSES OVER 25,000 METRIC TONNES OF VARIOUS CONSUMABLE PRODUCTS PER YEAR

Zambian grains and snacks processor invests to boost nutrition, grow markets in Africa and beyond

By Francis Juma

or Lusaka, Zambia based Two Six Zero Brands, the last five years or so have been critical to their future. A future that the company’s Chairman Ram Ray Vijayvargiya (or VJ as he is commonly known) has been working on for the last 24 years, as the company looks forward to celebrating its silver anniversary of 25 years. The companies, originally started with the names of Vijay Limited and its sister company Seba Foods, has been undergoing a transformation, as the Founder & Chairman takes a back seat, culminating in a new company name that will drive the future of the producer of nutritious food and beverage products in Zambia and beyond: Two Six Zero Brands. Spearheaded by Gaurav Vijayvargiya, a young and driven executive who was appointed Chief Executive Officer for the enterprise in

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

2019 to step up to support his father, Two Six Zero Brands is on a journey of growth and transformation, as Gaurav seeks new opportunities for the company within Zambia, regional markets and internationally. Gaurav says that he is thankful for the vision of the firm’s founders, the contribution and resilience of the team members (many, who have been with the company for over 20 years), support from business partners who have believed in them over the years, and the love for their brands from consumers across Zambia and beyond, as the producer of foods and snacks celebrated the 24-year milestone in early 2021. “In 2019, we rebranded the company with a new identity Two Six Zero Brands, consolidating all the products from sister companies with a mission for innovation to launch further quality consumer products. What many people don’t know is that the

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The firm’s production facility, which consists of storage, processing and packaging facilities plus offices by use by its staff is located within the Chinika Industrial Area in Lusaka, Zambia. The company processes over 25,000 metric tonnes of various consumable food products per year. Gaurav informs us that the firm has had a busy but impactful few years, as they have focused on restructuring the business by investing in new facilities and the team, to take advantage of new opportunities. “We have worked with over 6,500 small holder farmers in the last 5 years. We have also consolidated our companies and operations and moved into a new manufacturing site, which has enabled us to counter some challenges, especially that of storage since we now have larger storage capacity. We have also been able to optimize costs by integrated value addition in the backend of our supply chain, which has diversified our operations further by including a maize mill.” The company continues to fill critical roles in the quest to have a knowledgeable and agile team that will be key to their next growth phase.

Two Six Zero Brands is one of the key companies in the grains value chain in Zambia and is proud of its work with thousands of small holder farmers to procure soya beans and maize across the country.

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name 260 in Two Six Zero Brands comes from Zambia’s telephone domain which is +260,” Gaurav informs Food Business Africa. Gaurav reveals that the new name and logo celebrates Zambia, where they have made a mark and where they truly appreciate the hardwork and resilience of its people, which is portrayed in the phrase from the country’s national anthem: ‘Like our noble eagle in its flight, Zambia praise to thee.’ “The reason why this excerpt from our national anthem is crucial to Two Six Zero Brands is because our vision and mission are bigger than us. We are extremely grateful to have this opportunity to work in a country where people have the ability to rise above the nation’s problems. The eagle is a revered symbol in Zambia and is depicted on both the national flag and in our logo. The eagle represents our resourcefulness and forward thinking nature. We are ambitious, we have a vision and mission that is bigger than us, and we are doing the work to make it happen.”

HUMBLE BEGINNINGS, IMPACTING LOCAL FARMERS Founded in 1997,, Two Six Zero Brands employs a staff of over 500 people today, which includes both full time workers, parttimers and daily paid workers. The company started by processing corn snacks under the Emilios and Koornees brand names for the Zambian market, and has since expanded its product range to include north of 75 product SKUs and more. “Our flagship brand is Golden Goodness, which constitutes of textured soya protein (meat alternatives) that are rich in protein. They are affordable naturally because they are from soy beans that are grown in Zambia. There is also Seba’s Instant Thobwa, which is a traditional Zambian beverage - a convenient instant powdered beverage that provides strength, energy and efficiency for increased productivity to our consumers. It is basically instant powdered beverage, made from precooked corn and soy, which consumers simply add water or milk to, and shake before consuming. We also have Seba’s High Energy Protein Supplement (HEPS), which is a high energy protein supplement used to tackle malnutrition and is primarily sold to NGOs ,

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

MY COMPANY PROFILE: TWO SIX ZERO BRANDS

CHAIRMAN OF TWO SIX ZERO BRANDS VJ WITH HIS SON AND COMPANY CEO MR. GAURAV VIJAYVARGIYA

hospitals and clinics. The product formulation meets the requirements of the World Food Program,” Gaurav explains, as he narrates the range of maize-soya blend products produced by the company. “On the products that constitute of maize, our maize milling operation feeds into our maize based beverages (both powdered and ready to drink) and snacks. We produce grits for our own requirements to produce our Emilios brand of snacks, which is our original, 20 year-old brand. In 2020, we launched ready to drink beverages, Monkoyo and Chibwantu. These are traditional Zambian beverages sold in general trade and some supermarkets. We have also recently debuted a soya milk beverage in Zambia, the first of it’s kind in which milk is extracted from Zambian soybean, and sold in a fresh milk format Two Six Zero Brands is one of the key companies in the grains value chain in Zambia and is proud of its work with thousands of small holder farmers to procure soya beans and maize across the country. “For example, we have worked with over 1,000 small holder farmers in the last one year in the production of pro-vitamin A maize, which is bio-fortified and non-GMO. We support these farmers by providing them with training on good agricultural practices, and sign take

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

off agreements with them and also try to understand their challenges and see how we can help them improve their production and post-harvest practices to increase the yield of the crop. We aggregate the commodities by procuring them from farmers and get them delivered to our warehouses located across the main production areas in the country. We then transport the produce to our storage facility in Lusaka that can handle over 16,000 metric tonnes of commodities.” Agriculture employs the most people in Zambia. Gaurav believes that with evidence showing that broad-based poverty reduction occurs when there is productivity increase in the highest employer in the economy, Two Six Zero Brands has a major role to play in alleviating poverty and improving nutrition in the country, to support the government, which has also identified agriculture as the engine for economic diversification, transformation and accelerated poverty reduction. The company’s impact in the agriculture sector has been noted, receiving two awards from the The Indaba Agricultural Policy Research Institute (IAPRI) and Musika Development Initiatives Zambia Limited (Musika) in the 2019 Champions of Agriculture Awards, where it bagged the Highest Number of Rural Farmers Reached in Agricultural

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KEY NUMBERS

25,000

NUMBER OF PRODUCTS IN METRIC TONNES THAT 260 PRODUCES ANNUALY

Marketing and the Highest Investment in Rural Agricultural Marketing awards. The year 2020 was tough for Two Six Zero Brands. “the entire world has been affected and we were not spared either. With schools being closed, we had challenges for demand on our Emilios snacks line as well as the Instant Thobwa. We saw a huge reduction in sales, which was very tough. We decided that we won’t lay anybody off and so we had to tighten our belts. We used creative schemes in the market to ensure that we still stood to be counted in the middle of the pandemic. We backed up efficiencies by reducing certain direct overheads such as diesel generator costs and carried out a couple of Kaizen activities. The lesson we learnt in 2020 is that we need more Kaizen initiatives for the improvement of the company. It is a big drive to make sure that we can optimize internal efficiencies.” EXPORTS TO THE US BEGIN Gaurav is positive that the future will be brighter, even as the Covid-19 continues to impact Zambia and other countries around the world. He, however, is elated that despite the pandemic, the company managed to open a new growth opportunity: exporting the first container of its Golden Goodness Textured Vegetable Protein to the US market. “Extremely proud of our entire team to have worked throughout the pandemic to achieve our FDA certification, and through a disrupted global supply chain, ship our products from Zambia to the US,” says Gaurav. Already available to the US consumers through the world’s leading online retailer Amazon as we went to press, Gaurav says that nutritious, non-GMO textured vegetable proteins are availed in a resealable bag, and a premium pack. The huge milestone comes after Two Six Zero Brands were registered with the US FOODBUSINESSAFRICA.COM

Food and Drug Administration (FDA) to start exporting Zambian products to the country. “All products regulated by the FDA must meet the same requirements, whether imported from abroad or produced domestically, therefore demonstrating our commitment to adhering to the highest quality standards in the industry. The ability to export to the US has a direct positive impact on the economy of Zambia, by earning foreign exchange revenue, which is crucial during this pandemic period. The impact on the smallholder farmer supply chain is immeasurable, bringing overall pride of exporting proudly Zambian made textured vegetable protein products to the US,” Gaurav explains. Furthermore, Two Six Zero Brands recently bagged an award for the most collabortive exporter, by the USAID and Zambian Association of Manufacturers, in light of this achievement, and to leverage the African Growth and Opportunity Act, which now has Golden Goodness listed on Amazon. com! He added that the deal was made possible due to the linkages from the Southern African Trade and Investment Hub and the team within the company, who offered valuable advice and put in the effort to achieve the milestone, one year since it was floated. “Am hopeful for this to open up various opportunities in the future, because we need to take Two Six Zero Brands to the US. The products went straight to Amazon and we believe that with Covid-19, this is the way to start off entry into the US the e-commerce way!” RISING PROTEIN DEMAND Gaurav lends his voice to the lack of affordable protein in Africa, especially in Zambia and surrounding countries, where he sees the need for nutritious, safe and affordable food rising as more consumers move into urban areas. “We have expanded our capacity significantly to make sure that our products are of quality and affordable compared to meat, fish or beef. The demand is there, not just for protein, also for various micronutrients. We see a lot of stunting across children under the age of 5; in Zambia it’s between 30-40 percent, as per latest reports. We need to combat malnutrition across the continent. Our mission also includes work towards the United Nation’s Sustainable Development Goals especially SDG 2 Zero Hunger and

Extrely proud of our entire team to have worked through the pandemic to achieve our FDA certification, and through a disrupted global supply chain, ship our products from Zambia to the US

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

MY COMPANY PROFILE: TWO SIX ZERO BRANDS

BATCHES OF PRODUCTS FROM TWO SIX ZERO BRANDS BEING LOADED FOR SHIPPING TO THE US

SDG 3 Good Health and Well-being. There are also other sorts of proteins like fish, and we are seeing that here in Zambia they are working aggressively towards building the aquaculture value chain to avail more fish to the population.” However, achieving the goal for more affordable protein in Zambia faces the challenge of a weakening and unstable currency. “The biggest challenge is the strength of our currency. The Kwacha depreciated by 10-42% every year between 2015 and 2020, only appreciating slightly in 2017. We are selling in a very price sensitive market in Zambian Kwacha, whereas our packaging materials and the price of soya are all dollar based; it creates a lot of pressure to avoid the foreign exchange loss. In this market, if our cost is inflated by a certain percentage, we cannot pass this to the consumer, so we take the hits and absorb a lot of the costs.” He adds that power instability and availability is another problem they have to contend with, with the use of the generator becoming the new normal. Gaurav reveals that the company constantly seeks to identify new consumer needs in a market that is sensitive to pricing. “We make sure we have products that are in single

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serve packs, which have the fastest sort of movement because of the purchasing power element which many Zambians face. We also ensure that we focus more on Zambia’s agricultural produce and that is basically the route going forward.” GROWING REGIONAL MARKETS With Zambia’s location, which is in the middle of key regional markets in the SADC region, the company is looking at establishing and growing sales for its products in the region. “We recently started exporting to Congo and have been exporting to Namibia. However, we do have plans of expanding in this region, but now with travel restrictions it becomes a little harder. Initially the challenge was that we did not have enough capacity to cater for the region; now that we have expanded the capacity, the only challenge left is Covid-19.” He contends that the other challenge to their plans to expand into other countries in the region is the cost of logistics. “Our infrastructure is not developed well enough to enable us to tap into other markets. Also diversity would be another problem; I mean, we have 54 countries and that means different cultures, economies, languages and currencies. The

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cost of trading thus becomes high mostly due to the lack of a common currency. If negotiations aimed at breaking some of these barriers in this region are successful, like with the East African Community, then trading will be much easier.” SUSTAINABLE FUTURE As the company strives to boost access to nutritious, affordable food to its consumers across Zambia and the region, Gaurav notes that the company is pleased that Zambia has managed to produce adequate quantities of maize and soya beans for local consumption and utilisation, while largely becoming self reliant over the last decade. He reveals that as a firm focused on sustainable practices, Two Six Zero Brands was able to reduce its diesel consumption by about 15% in 2020 by optimizing the boiler requirements and steam generation for its plant. They have also explored solar aggressively, looking as 1 MW solar plant but now its biggest problem has been storage, due to the high cost of putting up a power storage facility, and the current grid system which doesn’t allow for buyback. On the water side, they have taken measures to re-circulate the steam from the boilers, saving on water on their quest to become environmentally friendly. “The future of our business is to strengthen Two Six Zero Brands by manufacturing high quality products. We are looking into being the leading manufacturers of high quality, affordable products that enhance for a good life in Africa. We are looking into plant-based protein in the form of food and beverage, as

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they are gaining momentum in Africa. There are a few products we are planning on investing in to allow us increase our processing capacity from the existing over 25,000 metric tonnes to 35,000 metric tonnes in the next 24-36 months.” He further informs Food Business Africa that the company is in the process of a capital raise to fund its new projects. “While it is a family owned business, we operate in a very professional manner and have a great senior leadership team, with professionals in their respective fields. My father has definitely laid a very good foundation for us to build upon. We are open to the idea of funding and partnerships, but look for strategic partnerships to support our growth strategyWith the vision that we have for the business, and the space we currently operate in, I believe good opportunity exists for growth. Gaurav adds that many food manufacturers in Zambia lack the appropriate information, knowhow and ability to prove that a business

KEY NUMBERS

COMPANY PROFILE

Sector: Grains & Milling Country: Zambia Main Contact: Gaurav Vijayvargiya Website: www. 260brands.com Email Address: sales@260brands. com Telephone: +260 955 901111

6,500

Address: Lusaka, Zambia

NUMBER OF SMALL HOLDER FARMERS THAT 260 BRANDS HAS WORKED WITH IN THE LAST 5 YEARS

has strong governance, so that they can receive external funding. “Most Zambian businesses do not come out with confidence of having strong systems, policies and governance in place. Am happy to see that there are initiatives taking place to help take Zambian SMEs into the capital raising rounds, with initiatives driven from Prospero Zambia.” He closes by saying that the success of Two Six Zero Brands over the last 24 years has been having the right people and teamwork. We can have the right processes but without a good team we will go nowhere. The strategy we are taking to grow in the next 5 years is building a good team, processes and partners We look forward to celebrating our 25th anniversary in 2022 and to many more investments in the food industry in Zambia.” FBA

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

TheNest AFRICA

AT THE NEST AFRICA OUR AIM IS TO CONNECT START-UPS WITH BIG CORPORATES & FUNDERS

Start-ups and young businesses in sub-Saharan Africa face a myriad of challenges, including lack of access to technology, expertise and networks to grow. At The Nest Africa, we are creating a collaborative facility with new product development labs, production and packaging kitchens and office space for use by start-ups and young companies to facilitate their innovations and growth towards becoming the next big thing. AND WE BELIEVE THAT CONNECTING THEM TO BIG CORPORATES AND FUNDERS IS KEY TO THEIR SUCCESS Visit the website and sign up to partner with us today

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SPONSORED BY THE NEST AFRICA

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MZUZU DAIRY DAVID CHITOWE - FOUNDER & CEO FOODBUSINESSAFRICA.COM

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FOOD STARTUPS AFRICA: MZUZU DAIRY

Malawian milk processing start-up soars high despite the pandemic At a time when many businesses are facing major financial struggles – with large numbers having to borrow working capital, revise production capacities or lay off staff – you might think that starting a business during the coronavirus pandemic would stand very little chance of success. The Food Business Africa team had a seat down with Denis Chitowe, the Founder and Managing Director of Mzuzu Dairy, a dairy processing start-up in Malawi that commenced operations just at the onset of the pandemic in November 2019. By Catherine Wanjiku

espite taking a one-year stint, from November 2018, to establish the business, David Chitowe, the Founder & MD of Malawian dairy start-up Mzuzu Dairy had not anticipated that the launch of the venture will be shadowed by the pandemic. Tough times built though people! The dairy processing start-up dauntlessly commenced operations, availing innovative products in the market, after obtaining approval from the Malawi Bureau of standards in

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

February 2020, providing a stable market for the small-holder dairy farmers in a region that has struggled over the decades to establish a viable dairy industry. “We started when COVID-19 was just coming in, it was tough because the economy was majorly affected. This meant that our growth projections and plans were impacted. However, over time, we managed to pick up with the business,” Chitowe informs Food Business Africa. Mzuzu Dairy, majority owned by Denis Chitowe, alongside Accesserator BV, a Dutch impact investor owning 30% stake

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in the business, is based at Mzuzu town in the Northern region of Malawi, an area with the potential of having a thriving dairy sector. However, due to lack of a structured market for the small holder farmers’ raw milk for over 10 years, following the closure of Northern Dairy in 2010, production had dwindled, taking away a vital source of income to residents of the town, which numbers slightly more than 200,000 and its surrounding areas, where tea, coffee and rubber are the main cash crops. “Because of the presence of few players in the industry, there was low uptake of raw milk by the off takers, which meant that farmers had little motivation to venture into dairy farming. The other problem was lack of technical expertise on best production practices and proper management of the livestock, coupled with lack of a proper breeding system. With this, a farmer who had the capacity of producing 30 litres per day was getting only 10 litres,” he explains of the dire situation of a destitute dairy sector. This was the scenario that Mzuzu Dairy was getting into, with a focus on streamlining the value chain by providing a farm-to-market pipeline for the smallholder farmers in the region, and availing locally produced dairy products into the market, competing side by side with the imported goods, which are currently dominating the dairy aisles of Malawi. SUPPORTING SMALL-HOLDER FARMERS To this end, the company has built a robust route-to-market system for the small-holder farmers, currently boasting of a network of 5,000 farmers. Mzuzu Dairy monitors their progress to ensure they maximize productivity and produce high quality milk, by deploying extension workers in the field, complementing the government’s support systems. The company guides farmers on the best agricultural practices pertaining to animal health, nutrition, welfare and milking hygiene, among others, to ensure a sustainable and thriving dairy sector can be established in the region, which pales in comparison with the central and southern parts of the country where dairy farming is more established. Addressing the issue of low-quality of livestock, the MD revealed that the company is currently working on establishing a farm that would provide the right breeding stocks to the farmers, to boost their productivity. The buck does not stop with Mzuzu Dairy enlightening the farmers on proper agricultural practises only, as the processing company has built the capacity of the milk producers, by encouraging them to form and join cooperatives. The cooperatives enable the farmers to aggregate their milk together, boosting their purchasing power. Chitowe reiterates that by being part of the structured organization groups, the farmers have better link to finances, agricultural inputs and information. Currently, Mzuzu Dairy is guiding and supporting the dairy cooperatives in securing grants from a World Bank run initiative in Malawi, dubbed Agricultural Commercialization project (AGCOM). The financial assistance is aimed for procurement of more livestock and increasing milk yield in the region. FOODBUSINESSAFRICA.COM

KEY NUMBERS

US$50,000

THE AMOUNT IN CASH THAT THE DAIRY RECEIVED FROM NATIONAL BANK OF MALAWI

EXPANSION DRIVE All these strategies are aimed to ensure that the supply chain responds to the rise in demand of raw milk requirements by the processing company, as they are currently embarking on an expansion drive. The dairy has recently obtained a long-term loan facility worth US$50,000 from the National Bank of Malawi, a development financial institution in the country. “The funding has been channelled towards procurement of additional machinery, which will see us increase our daily processing capacity by 20,000 litres per day,” stated Chitowe. Other than boosting the company’s processing capacity, the investment will enable Mzuzu Dairy to expand its range of products to ice-creams, ghee and fresh cream, an addition to its current

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FOOD STARTUPS AFRICA: MZUZU DAIRY

COMPANY PROFILE

Sector: Dairy Country: Malawi Main Contact: David Chitowe Website: www. mzuzudairy.com Email Address: info@mzuzudairy. com Telephone: +254 757 427 227 Address: PO Box 1027, Nkhalaphya St, Plot 4, Mzuzu

offerings, which include fresh milk, bottled yoghurts and Chambiko – a traditional Malawian drink. The company is also seeking to install a new yoghurt cup filler to enable them avail its nutritious and tasty yoghurts in smaller tubs of 150ml, targeting children under the age of 5 years. The machineries are expected to arrive in the country by the end of June 2021. LAUNCHING INNOVATIVE PRODUCTS During the sit down with the Mzuzu Dairy MD, it was clear that the start-up leverages on innovation to set itself apart from its peers. He apprised about the new kid in the block dubbed Fresh-Yo. The drink is a nutrient-dense yoghurt made up of milk and orange flesh sweet potato. Excitingly talking about the product, he stated, “This is a product that has high nutritional value that is aimed to address the malnutrition challenge among children under the age of 5 years and is also beneficial to the elderly, expectant and lactating mothers.” The product has not yet fully launched in the market, as the company is currently working on obtaining the relevant certifications from the Malawi Bureau of standards. Once the dairy processor gets the go ahead from the regulatory body, the company will avail Fresh-Yo across all retail outlets in the country, including in the country’s largest retailer, Shoprite. The new product has come at an opportune time, as the World Food Program estimates that four out of every 10 children in Malawi, are affected by chronic malnutrition. The condition is a serious challenge with 37% of the children affected by stunting, while only 8% aged 6-23 months having the minimum acceptable dietary requirements. Further meeting the consumer’s needs and as a response to the company’s recently conducted market research and assessment, Mzuzu Dairy is working on a new yoghurt brand that will incorporate sorghum. He notes that this will be a perfect alternative to energy drinks and supplement products in the market and can be enjoyed by all consumers across the board. MITIGATING COVID-19 CHALLENGES Having operated for barely two years, Mzuzu dairy has encountered its fair share of challenges, but the management has been upbeat in finding solutions. Denis notes that one of the outstanding challenges they encountered while trying to break

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

WE ENVISION BUILDING OUR NETWORK OF FARMERS TO 15,000 AND GETTING A MINIMUM PF 30,000 LITRES OF MILK PER DAY TO PROCESS INTO VARIOUS PRODUCTS

the ice during the pandemic period was the disrupted market access of raw materials such as packaging that they were sourcing from South Africa, a region that was experiencing lockdowns, boarder closures and movement restrictions. “The market was also slowing down as retailers were weary of stocking large volumes of dairy products given the perishable nature and uncertainties of lock-downs. This also highly affected the farmers’ earnings,” he notes. The company innovatively mitigated the challenges by clinching a COVID response grant from UNDP through an accelerator program – Growth Africa. The resource provided them with working capital that has kept its operations afloat. Further to that, the business had enrolled into several online courses that equipped the management with the necessary skills and knowledge pertaining to managing a young business such as Mzuzu Dairy during the pandemic period. Denis signed up for courses at the African Management Institute and got the opportunity of becoming a Mandela Washington finalist in 2020. EYES ON THE FUTURE Despite of the rough start, the future is bright for the dairy start-up. “We plan to expand and become a leading dairy processing company in Malawi. We will expand our market and export to the SADC region and beyond. We are looking forward to going into long shelf-life products like UHT milk and yoghurts, and high value dairy products, like butter. Further to that we envision building our network of farmers to 15,000 and getting a minimum of 30,000 litres of milk per day to process into various products. Our target is to have as many innovative products on the shelf as possible.” With a focus on undertaking its operations sustainably, Mzuzu Dairy is planning on introducing reusable milk packaging, reducing its use of plastic packaging that are attributed to environmental pollution. This will also reduce the price of the product, making it affordable to most consumers. The company is working towards building a strong team of professionals who will spearhead its growth. FBA FOODBUSINESSAFRICA.COM

COMPANY PROFILE

254 BREWING EOIN FLINN - FOUNDER & CEO FOODBUSINESSAFRICA.COM

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FOOD STARTUPS AFRICA: 254 BREWING CO

254 Brewing Co: Bold enough to launch a beer business at the height of a pandemic

By Paul Ongeto

he covid-19 period was not a good time to be in the beer business in Africa, much less start one. Governments across the continent shut down bars, restaurants and virtually any entertainment joint to help keep check the spread of the pandemic. These measures were good for public health but spelt doom for the alcoholic beverage industry. Beer took the worst hit as over 70% of its sales came from on-premises trading. As big beer manufacturers were announcing that they were putting on hold any investments across many parts of Africa and the World, somewhere in a small town in Kenya, a new craft brewing company was being set up by two expatriates who had seen potential in Kenya’s nascent craft beer market. How do you thrive amid a pandemic? That was the question we had in the mind when we had the opportunity to interview Eoin Flinn, the bold entrepreneur behind 254 Brewing Company, Kenya’s newest craft beer company. A PASSION FOR MANUFACTURING Eoin Flinn, an Irish national who fell in love with Kenya, has always had a passion for manufacturing. Before settling in Kenya, Eoin had a stint in China where he saw firsthand, the impact of manufacturing on the country’s middle class. Coming to Africa, he noticed a problem: unlike China where manufacturing was thriving, in many African economies, we shipped out raw materials and then brought back finished products, often at an expensive price. He wanted to be part of the solution, and after a stint in manufacturing of cooking stoves (Jikokoa), Eoin’s love for beer got the better of him and he decided to venture into craft brewing. When the idea struck on his mind, he thought that craft brewing was a good business to venture in. Very few craft beer existed, and the market seemed like it was ripe for something different from the mass-produced beer that was similar in taste, lacking in character, and rich in marketing and branding. On paper, it seemed like good business, a few craft beers such as Sierra, Sirville and Brew Bistro had already set up and

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

seemed to be thriving. What could possibly stop him from conquering this largely untapped market? His experience on the ground, however, proved so daunting that he admitted that he may never have bothered venturing into Kenya’s alcoholic beverage industry if he had known the challenges ahead of him. THE CHALLENGES OF SETTING UP “It's difficult to make good beer,” admits Flinn. One would need to procure state-of-the-art equipment, have employees with the right skill set, and procure high quality ingredients – often from overseas, he reveals. He informs us that the team at the brewery noted that if 254 Brewing was going to make a name for itself in the budding craft beer industry, then it had to get everything right from the start. To guarantee high quality beers, the company

KEY NUMBERS

40,000

NUMBER OF LITRES THAT 254 BREWING HAS CAPACITY TO PRODUCE IN A MONTH

managed to recruit a world-class master brewer from the US with over 20 years’ experience in making craft beer. It also got to bring in premium malt from Germany and high-quality hops from the United States, Germany, and Canada. A KSH. 100 million (about US$ 1 million) brewery was also set up in the beautiful slopes of Kikuyu town, which is about 20 kilometers Northwest of Kenya’s capital, Nairobi. With FOODBUSINESSAFRICA.COM

all the ingredients of making good brew already figured out, Flinn set out to get regulatory approval for his new company and this is where the rubber really got to meet the road. He quickly found out that in Kenya, for one to make commercial beer, you need an excise sticker. An excise sticker is a sticker by Kenya’s tax authority, Kenya Revenue Authority (KRA), that is put on bottles of every beer that is produced and bottled, regardless of whether it’s sold or not. It shows you are licensed to sell alcohol and have paid the necessary taxes. Flinn admits that he had projected that the entire compliance process would take at most six months, but it ended up taking much longer. The first step to become compliant was to get his sample product approved by the Kenya Bureau of Standards (KEBS). Once KEBS gave the okay, the next step was to get a manufacturing license from the Kiambu County Government, which he did. With the manufacturing license at hand, 254 Brewing could finally be allowed to apply for an exercise duty license from KRA. He discloses that it took 254 Brewing 2 years to finally get all the approvals in place. After a long, tedious, and probably stressful journey, 254 (which was conceived in 2018) finally opened its doors in 2020, right in the middle of the pandemic. Amid a dark cloud punctuated by a raging pandemic, Flinn and his team set out to create some of Kenya’s most refined craft beers. MAKING UNIQUE PREMIUM CRAFT BEERS Every beer in the world is comprised of barley, water, and hops. How then do you create a premium craft beer that is unique from every other offering that is available in the market? Flinn reveals that the secret to unique beers lies in the use of diverse types of these same ingredients and combining them in different strengths. For instance, 254 Brewing has been able to produce over 100 different beers from base ingredients comprised of 20 different malts and 30 different types FOODBUSINESSAFRICA.COM

of hops. Out of the 100 beers that 254 Brewing has created, seven have become especially popular among drinkers; the company has therefore adopted them as its flagship beers. Of these, two lager beer brands Karibrew and Ni How make it to the list of the brewer’s most loved brands. The lagers are joined on the list by two India Pale Ales (IPAs): Golden Rump (the lighter version) and Sand Trap (the heavier and most popular version). Others on the list are Sambrubru - for those who are new to drinking beer - and Amboseli - an amber ale with balanced character. Cliffhanger, meant for stout lovers completes 254 Brewing’s top 7 list. In addition to the seven standard beers that you are likely to get at the brewery, 254 Brewing also spices up its portfolio every now and then with seasonal beer offerings. Flinn says that every month, two new seasonal beers are put on the shelves, making sure there is always something new for the adventurous drinker. Flinn is proud that all the company’s beer brands are unpasteurized and un-

filtered, and they therefore must be kept cold during the entire value chain – which is a challenge for the company as it seeks to grow its footprint. SURVIVING THE PANDEMIC 254 Brewing entered the business market amid a pandemic, so how did it manage to stay afloat. Flinn explains that in a normal business environment, craft beer companies only set up front bars or tap rooms at the front of their breweries and serve consumers directly from the source. These requires no investment in bottling lines or brand labeling. He, however, realized early on into the business that this model was not going to work with Covid-19 restrictions discouraging people from visiting bars. To stay afloat, 254 embraced a hybrid approach to craft beer production: serving from the tap room while at the same time bottling for take away. The company aggressively pursued an out-ofbar drinking experience leveraging both e-commerce and partnership with other retailers such as Carrefour and Naivas and other e-commerce sites to bring its MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FOOD STARTUPS AFRICA: 254 BREWING CO

COMPANY PROFILE

Sector: 254 Brewing Co. Country: Kenya Main Contact: Eoin Flinn Website: www.254brewing. com Email Address: cheers@254brewing. com Telephone: +254 748 523522 Address: Kikuyu Nderi Road, Nairobi

beers to the consumer’s doorstep. Customers could even order its beer through Instagram! These measures ensured that even when the tap room was inaccessible, production would still go on and 254 Brewing beer lovers could still enjoy their favorite beer. Flinn believes that the highly unpredictable business that we are in today requires entrepreneurs to build a resilient business, one that survive different scenarios that could be coming our way in future. It may not be a pandemic, or locust invasion, but it is going to be something that has capacity to cripple businesses that have not put resiliency into their operations.

believes that there is a lot of botanicals in Kenya, which they could experiment with in the long run. “As a craft beer company starting off with IPAs

PRIORITIES FOR THE FUTURE Having been in the market for a little more than a year now, he believes that 254 Brewing is well on course to revolutionize the craft beer experience in Kenya. As the beer maker looks into the future, Flinn reveals that the team’s major priority will be to utilize the brewer’s installed capacity, which is 40,000 liters per month, from the current 10,000 liters. The next priority is to develop a sustainable and resilient supply chain for key raw materials. As earlier noted, 254 brewing currently imports its malt and hops from United States, Germany and Canada. Relying on international markets still exposes the company to a lot of supply chain risks and the company wants in the next 2 years to be able to source its materials locally. By bringing the raw materials supply chain into Kenya, the firm also hopes to improve its cost structure and probably lower the cost of its beer. In the future, Flinn also hopes that the craft beer maker will get better at experimenting with locally sourced traditional yeasts instead of just using Belgium or American yeast. Flinn also

and lagers, we believe as time goes on, we can actually make products here in Kenya that blows people’s minds away in America and Europe.” Flinn confesses that he likes making delicious beer and says he would like to have more of the 254 Brewing tap rooms in other similar towns in Kenya. He is certainly confident that he does not look forward to making pasteurized beer. Entering Kenya’s mass beer market is therefore out of question, at least for as long as he is at the helm of the brewery. The idea is to bring people fresh beer right from the tap and that is what he plans to continue doing. He adds that he is excited that there is an abundance of new and potential entrants into the craft alcohol industry in Kenya, including gin, rum and other spirits brands. “There is no limitation to the growth and potential of the craft industry in Kenya. There will be good craft spirits in Kenya in the near term: the biggest hindrance at the moment is that it takes a long time to get licenced, with some potential entrants giving up along the way before they get to the end of the process.” FBA

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

FLINN BELIEVES THAT THE HIGHLY UNPREDICTABLE BUSINESS THAT WE ARE IN TODAY REQUIRES ENTREPRENEURS TO BUILD A RESILIENT BUSINESS, ONE THAT SURVIVE DIFFERENT SCENARIOS THAT COULD BE COMING OUR WAY IN FUTURE.

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COMPANY HIGHLIGHT: MARS WRIGLEY CONFECTIONERY KENYA

Mars Wrigley Confectionery Kenya: Sustainably growing into the future

By Catherine Wanjiku

ne of the wealthiest men in the world, Steve Jobs, once said, “If you want to make everyone happy… sell ice cream.” Well, one Mr. William Wrigley Jr. seems to have long mastered the art, as in the spring of 1891 he landed in Chicago, USA with a great talent for sales and started out in the baking powder business. One day Mr. Wrigley got an idea to offer merchants free chewing gum with each can of baking powder. The rest is history, as this random but well-thought-out plan gave birth to the world’s leading manufacturer of chewing gum, now part of the Mars Incorporated family - Mars Wrigley, previously known as the Wrigley Company. For decades, the company has put smiles on people’s faces and created better moments for millions through their iconic products. Spreading its good cheer across the globe, Wrigley landed in Africa in 1972, opening its first factory in Kenya, which is the multinational’s only manufacturing plant in the region. The company’s first products to be manufactured at its facility in the Industrial Area, Nairobi, were the famously known and widely enjoyed Orbit with Sugar and

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Big G chewing gums. Adding a burst of flavours and the right balance of bubbliness, Wrigley commenced local manufacturing of PK and Juicy Fruit chewing gum pellets in Kenya in 2003 and 2005 respectively. Big news emerged in 2008 when Mars Incorporated, an American multinational manufacturer of confectionery, pet food, and other food products, founded in 1911, entered in one sweet deal with the Wrigley Company. The maker of the world’s best-selling chocolate candy brands: Snickers, Skittles and M&Ms, bought the chewing gum major for US$23 billion, creating a confectionery behemoth with centuries of experience. Following the acquisition, Mars Incorporated began integrating Wrigley’s business units worldwide into its operations, including Wrigley’s chewing gum businesses in Kenya. Initially Wrigley was functioning as a separate, standalone subsidiary of Mars, until 2016 when the familyowned privately held business, made a decision to combine its Mars Chocolate and Wrigley segments to create a new entity: Mars Wrigley Confectionery. The tie-up brought together the two companies with a wide global footprint, to currently boast of more than

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

COMPANY HIGHLIGHT: MARS WRIGLEY CONFECTIONERY KENYA

115,000 Associates in 80 countries around the world. Mars Wrigley sells its products in more than 180 countries, and has 21 production facilities in 14 countries including the United States, Mexico, Spain, the United Kingdom, France, the Czech Republic, Colombia, Poland, Russia, China, India, Japan, Kenya, Taiwan, Australia, and New Zealand. MARS WRIGLEY DOUBLES CAPACITY IN KENYA In Kenya, the newly formed entity continued expanding its business. In 2015, the Mars family invested in a new state-of-the-art chewing gum manufacturing plant in Athi River, near Nairobi, breaking ground in April the same year. Built at a cost of US$70 million, the new factory became operational in 2018 and subsequently led to the decommissioning of the Industrial Area factory. The Athi River manufacturing base was officially launched in 2019, aligning with the company’s 50th anniversary in the East African country. The new plant, having a production capacity of 7.8 billion pellets of chewing gum annually, produces leading chewing gum brands such as Big G, P.K., Doublemint and Juicy Fruit. It also acts as a base of operations for Mars Wrigley, enabling the company to coordinate the importation, distribution and marketing of the company’s other gum, confectionery and chocolate products such as Orbit, M&Ms, Galaxy, Bounty, Skittles, Twix and Snickers among others. Doubling its capacity in comparison to the former factory, the new investment is a clear indication of the ambitious targets the company has set for itself in terms of revenue growth, as it focuses on operating at optimal capacity. To generate the sales needed to utilize the capacity, the new factory does not only serve Kenya, BUILT AT A COST OF US$70M, THE NEW FACTORY BECAME OPERATIONAL IN 2018 AND SUBSEQUENTLY LED TO THE DECOMMISSIONING OF THE INDUSTRIAL AREA FACTORY but also Uganda, Tanzania, Rwanda, Nigeria, Burundi, Ethiopia, Djibouti, DRC and South Sudan. “As a result, the pace of economic integration in Africa is something that we are closely monitoring, as critical trade agreements such as the African Continental Free Trade Area (AfCFTA) will allow us to build strong and expansive supply chains across different geographies within the continent,” said Lennox Yieke, Mars Wrigley Confectionery Corporate Affairs Manager – East Africa. SUSTAINABLY RUNNING OPERATIONS A key feature about this new plant, besides the doubled capacity, is its environmental sustainability design credentials. The facility was built with the future in mind, in

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line with Mars’ Sustainable in Generation Plan (SiG), under which the company intends to cut all fossil fuel use and greenhouse gas emissions in its operations by 2040. SiG also has ambitious targets with regards to water efficiency and zero waste to landfill. To meet these bold sustainability commitments in the Athi River plant, the confectionery maker uses a biomass boiler which burns sugar cane bagasse to provide 100% of the steam used in the processing equipment. In addition, they use solar energy for water heating and have fully implemented the zero waste to landfill policy. Further to that, the company is in advanced stages of operationalizing its waste water treatment plant, which will significantly enhance water efficiency by recycling 100% of the water used in the cooling towers. All these contributed to the company being feted globally for setting the pace in sustainability, receiving the Leadership in Energy and Environmental Design (LEED) Gold Certification from the U.S. Green Building Council in 2018. Mars Wrigley is the first factory in the East and Central Africa region to receive the accolade, which is the most widely recognised green rating system across the globe. Also the Association of Energy Engineers (AEE), the premiere professional association for energy engineers globally, awarded the Mars Wrigley site in Kenya the ‘SubSaharan Africa Region Energy Project of the Year Award for 2020.’ The plant was also feted at the 2018 edition of the Africa Food Industry Excellence Awards as the most outstanding new investment in the Sugar & Confectionery sector in Africa.

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The manufacturing giant has also implemented the most robust food safety management system in its operations as it is FSSC 22000, ISO 9001 and ISO 22000 certified. This is guided by its five business principles: Quality, Responsibility, Mutuality, Efficiency and Freedom. “The certifications have ensured our quality, safety, environment and food safety management systems are implemented and maintained in a manner that delivers efficiency in operations and compliance to Mars and regulatory requirements. Over the years, our focus on compliance to the international standards has delivered continuous improvement to our current status of world class manufacturing,” highlights Yieke. IMPACT ON THE ECONOMY AND COMMUNITIES Wrigley Mars is not just committed to offering its consumers quality products and ensuring their operations are sustainably undertake, the company is also positively impacting the communities it serves. Mars has employed more than 300 people directly at its Athi River facility and provides indirect employment to thousands more through its extended value chain. Moreover, in 2013 the candy master rolled out an entrepreneurship programme called “Project Maua”. Through this programme, Wrigley Mars works with entrepreneurs in hard-to-reach areas such as informal urban settlements and rural areas, to access markets that can’t be reached through conventional channels. This model has created mutual benefits for the company and the entrepreneurs as it allows them to scale their distribution while giving the beneficiaries a stable livelihood. So far

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the program has reached more than 1000 entrepreneurs across the country, including in Kakuma refugee camp. Corporate citizenship at Mars is not the exclusive preserve of Corporate Affairs. All its associates are allowed and encouraged to take part in community initiatives through a global program, Mars Volunteer Program (MVP). Through this program, associates have rallied behind causes they are passionate about, including visiting children’s homes around Athi River and Nairobi, tree-planting, just to mention a few. In addition to MVP, the company has also made strategic investments in CSR initiatives around oral health. Through the Mars Wrigley Foundation, they have partnered with the Kenya Dental Association (KDA) and provided funding to the tune of Ksh13.7 million (US$127,000), to support free dental screening and treatment for primary school pupils. The program started in 2018 and ended in 2019, reaching 20,287 pupils. These pupils were drawn from six counties: Nairobi, Murang’a, Nakuru, Kajiado, Machakos and Meru. Its partnership with KDA builds on other strategic alliances they have forged in efforts to advocate for a national oral health policy. In this regard, they have worked with stakeholders in the health and education space to draw attention to the oral health gaps in Kenya. For example, the company commissioned the first ever Kenya National Oral Health Survey Report in 2015 in partnership with the Ministry of Health and the University of Nairobi’s School of Dental Sciences. They have also been a strong voice for the inclusion of oral health in the school curriculum and have worked closely with the Kenya Institute of Curriculum Development to pursue this agenda. Going forward, Mars Wrigley has set its eyes on the future by channelling all its energies towards boosting competitiveness and meeting consumers at their point of need. Its sustainability agenda is an example of how they are striving to remain competitive. Research shows that, businesses that take tangible steps to protect the planet and its people are more likely to succeed. These measures not only insulate businesses

from regulatory intervention, but also endear them to the modern consumer, who is more likely to buy from brands that care about the world. FBA

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

COMPANY REVIEW: UNILEVER

UNILEVER CEO, ALAN JOPE

Unilever: Beating all odds to become a world leader in sustainable manufacturing By Paul Ongeto

Unilever, a multinational consumer goods company, transforms itself into a global sustainability leader.

nilever prides itself to be a company that has championed sustainable living for the 120 years that it has been in existence. “Our purpose is to make sustainable living commonplace. It’s why we come to work. It’s why we’re in business. It’s how we inspire exceptional performance,” says the company. The company’s bold steps towards sustainability can however be correctly traced back to 2009, when Paul Polman was appointed CEO of Unilever. Polman inherited a company in long-term decline at the beginning of a major global financial crisis.

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When you take charge of a company grappling with stunted growth, sustainability is usually not an area you would want to focus on. Your main area of concern would be how to rejuvenate the business and steer it back to profitability. Polman, Unilever’s first ever outsider to be recruited to lead the company, was however not your everyday CEO. To the surprise of many he introduced the Unilever Sustainable Living Plan (USLP), a commitment that placed three “sustainability” goals at the core of the company’s strategy. Under his leadership, Unilever was to help 1 billion people improve their health, to halve the environmental

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THE UNILEVER COMPASS INITIATIVE WILL TACKLE THE KEY CHALLENGES OF OUR TIME, SUCH AS PACKAGING AND WASTE, GENDER EQUALITY, HUMAN RIGHTS AND FAIR VALUE footprint of making and using its products, and to enhance the livelihood of those in its value chain. For a company experiencing declining growth, this was a tough sell to both internal and external stakeholders. Many environmentalists were also skeptical that the company, which manufactures over 400 brands and serves 2.5 billion customers, would make a meaningful change. Fully aware of the challenges ahead of him, Colman got to work almost immediately to translate his radically different vision into strategies and priorities that could be implemented by a global company with 170,000 employees. THE PLAN DELIVERS UNPRECEDENTED SUCCESS Touted as a mere publicity stunt, Unilever’s SLP turned out to be a major win for sustainable manufacturing 10 years after its launch, in 2019. Through the USLP, Unilever managed to reduce total waste footprint per consumer by 32% and managed to achieve “zero waste” across all its factories. The company was also able to reduce greenhouse gas emissions from own manufacturing by 65%, while at the same time achieving 100% renewable grid electricity across its sites. One of the core pillars of USLP was to help 1 billion people improve their health. Unilever smashed this target by positively impacting the health of 1.3 billion people through its health and hygiene programs. The company also reduced sugar across all its sweetened tea-based beverages by 23% and now boats of a food portfolio where 56% of products meet recognized High Nutrition Standards. As part of efforts to improve livelihood of those in its value chain, the company enabled 2.34 million women to access initiatives aimed at developing their skills or expanding their opportunities. Sustainability programs not tied to any financial success are a tough sell. French Dairy giant Danone learnt this lesson the hard way after activist investors rejected the company’s impressive plan and used their influence to kick out President and CEO Emmanuel Faber in early 2021. Unilever, knowing fully well that the success of its sustainability plan relied on a strong business case, actively integrated its plan with commercial success, and the results have been impressive, to say the least. In terms of growth, Unilever’s purpose-led, Sustainable Living Brands which include popular food brands such as Knorr, Wall’s ice cream, Lipton, and Hellmann’s are now growing 69% faster than the rest of the business and delivering 75% of the company’s growth. The company also noted that through USLP, it was able to avoid over €1 billion (US$1.41

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billion) in costs, by improving water and energy efficiency in factories, and by using less materials and producing less waste. CHALLENGES REMAIN During the celebrations to mark the end of the 10year USLP, unilver leaders were refreshingly candid in admitting that the CPG giant had fallen short of its own environmental aspirations. The executives admitted that Unilever was unable to source 100% of its agricultural raw materials sustainably and had come to learn that measuring the actual impact of programs was extremely difficult. The Unilever executives further noted that when it came to reducing the greenhouse gas and water impacts of the company’s products, they underestimated how challenging it would be to help consumers to change their behaviors and misjudged how long it takes to do so. Perhaps the biggest failure was the company’s inability to reshape the use of plastics, which is a major cause of environmental pollution globally. Embracing the successes and failures, current CEO Alan Jope said, “The Unilever Sustainable Living Plan was a game-changer for our business. Some goals we have met, some we have missed, but we are a better business for trying.” MAKING SUSTAINABLE LIVING A COMMON PLACE The shortcomings of USLP did not dampen Unilever’s sustainability goals, if anything they have only fueled the ambitions of the company to even become better at its game. “As the Unilever Sustainable Living Plan journey concludes, we will take everything we’ve learned and build on it. We will do more of what has worked well, we will correct what hasn’t, and we will set ourselves new challenges,” Jope said. To up its game on sustainability, Unilever has launched a more ambitious successor to the USLP dubbed the

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

COMPANY REVIEW: UNILEVER

“Unilever Compass.” According to Unilever, the Compass will be “fifteen multi-year priorities that cover the full spectrum of our business and wider ecosystem.” It will be centered around three core beliefs: to drive purpose and encourage behavior change through more brands; to embed sustainability further into every part of the business; and to do more to actively bring others along. Jope says that the new initiative “will tackle the key challenges of our time, such as packaging and waste, gender equality, human rights and fair value – plus, of course, climate change and social inclusion.” Included in Unilever’s compass is a more ambitious goal to become net zero within its own operations and halve the greenhouse impact of its products across its supply chain by 2030. The company has also embarked on a journey to become a net-zero business by 2039, 11 years ahead of the Paris Agreement on Climate Change. To achieve these goals, Unilever plans to invest US$1.5 billion in a new climate fund that will focus heavily on making the activities that better the environment. Part of the funds will be used to protect and regenerate 1.5 million hectares of land, forests, and oceans by 2030. The company also hopes to implement water stewardship programs in 100 locations in water stressed areas by 2030 while at the same time achieving 100% sustainable sourcing of key agricultural crops. Still on making the environment better, Unilever has committed to achieving a deforestation-free supply chain in palm oil, paper and board, tea, soy, and cocoa by 2023. The company also plans to invest heavily in empowering farmers and smallholders to protect and regenerate farm environments. Unilever also wants to ensure that everyone

who directly provides goods and services to Unilever will earn at least a living wage or income by 2030. The world cannot be better if plastic packaging - some which bear names of brands belonging to Unilever - end up

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

KEY NUMBERS

US$1.5B

THE AMOUNT UNILEVER PLANS TO INVEST IN ITS NEW CLIMATE FUND

in landfills or in a worse scenario, the ocean. To prevent this from happening, the CPG major has committed to collect and process more plastic than it sells and achieve 100% reusable, recyclable, or compostable plastic packaging by 2025. It further plans to halve its virgin plastic use by half, including an absolute reduction of 100,000 tonnes in four years' time. To further the world-without waste agenda, Unilever plans to halve food waste in its operations by 2025 while still maintaining a zero waste to landfill record in its factories. The compass strategy goes beyond lofty commitments to reduce plastic waste and reforestation. It also touches on sustainable food production. In this area, the company mainly focuses on plantbased foods and plans to grow its plant-based meat and dairy alternatives to annual sales of €1 billion by 2027. To Unilever, sustainable food also means healthy food. This makes sense as unhealthy foods leads to a surge in lifestyle diseases, putting at risk the health of consumers globally. To better feed the world’s population, Unilever plans to double the number of products sold that deliver positive nutrition by 2025 while at the same time increasing the percentage of its portfolio that meet WHO-aligned nutritional standards to 70% by 2022. It goes further than that. The company is targeting sugar and salt in its products and plans to ensure 95% of packaged ice cream contain no more than 22g total sugar per serving by 2025. By 2022, 85% of Unilever products are also expected to help consumers reduce their salt intake to no more than 5g per day. A HEALTHY PLANET, A HEALTHY BUSINESS The Unilever Compass is certainly a more ambitious plan than the USLP. It broadens the company’s sustainability scope even further than many had anticipated. From a point of no knowledge, one could be forgiven for thinking the plan is unattainable. But Unilever has a solid 10-year experience in sustainable manufacturing. Their ability to achieve most of the goals in the USLP certainly gives us confidence that the Unilever Compass, ambitious as it may be, is certainly achievable. We shall be tracking Unilever’s activities and hoping for the best for the company, because what is good for the planet, is certainly good for us all. FBA

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Dairy

BUSINESS

TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF DAIRY PRODUCTS

Fortification of milk products in India gathers pace By Catherine Wanjiku

World’s largest producer strives to build a healthy nation by availing fortified milk products to its population - offers great example to African countries

lobally, more than 2 billion individuals, or one in three people, are afflicted by micronutrient malnutrition, according to statistics by the Food and Agriculture Organization of the United Nations, with the World Health Organization further highlighting that 45% of child deaths globally are attributed to under-nutrition. Dairy products, especially milk, have been identified as one of the most fortified food items globally, despite FOODBUSINESSAFRICA.COM

it being considered a super food as is rich in calcium, vitamins, potassium, zinc, phosphorous and magnesium. Milk fortification helps in recovering the micronutrients that are lost during processing and the fact that milk is consumed by all population groups, it makes it a suitable medium to address under-nutrition. Also, milk is a good carrier for fortificants, as most are water soluble and is a natural carrier of fat-soluble vitamins, like vitamins A and D. MAY/JUNE 2021 | FOOD BUSINESS AFRICA

DAIRY BUSINESS AFRICA: MILK FORTIFICATION INDIA

Global evidence, according to the Food Safety and Standards Authority of India (FSSAI), indicate that mandatory milk fortification legislation was first introduced in 1935. Currently, there are fourteen countries that have mandated milk fortification. Eleven of the fourteen countries fortify milk with both Vitamin A and D. Costa Rica is additionally fortifying with iron and folic acid. China and Canada are adding calcium, in addition to Vitamin A and D. India, the world’s largest milk producer, issued a draft of regulations for mandatory fortification of packaged milk through the FSSAI in January 2021. The apex food regulator has been considering making fortification of milk mandatory for some time, in a bid to address the pertinent issue of Vitamin A and D deficiency in the country, which causes night blindness and bone disorders such as rickets and osteoporosis, respectively. INDIA TACKLES VITAMIN A & D DEFICIENCY HEAD ON The Comprehensive National Nutrition Survey data 2019, suggested a high prevalence of lack of these two vitamins A and D in the population in India, thus becoming a growing public health concern. As per the survey, the prevalence of vitamin A deficiency stood at 18% for pre-school children, 22% school-age children and 16% adolescents. Vitamin D deficiency affected 14% of pre-school children, 18% of school-age children and 24% of adolescents in India. Recognizing the positive impact of food fortification in enhancing the well-being of its people, FSSAI recently issued provisions for licensing and registration of fortified food products in its Food Safety and Compliance System. The provisions cover processed food products categories, including milk alongside edible oil, juices, rice, wheat flour

KEY NUMBERS

2 BILLION

NUMBER OF PEOPLE GLOBALLY THAT ARE AFFLICTED WITH MICRONUTRIENT MALNUTRITION

and maida1 (refined flour), cereal products, baked goods and salt. As per FSSAI-issued standard operating procedures, food business operators (FBOs) are required to upload test reports showing levels of fortificants in the fortified food product. Results must be obtained from the FSSAI notified National Accreditation Board for Testing and Calibration Laboratories. With the proof, each product will be labelled with the +F endorsement mark, validating its claim for fortification. “The +F endorsement is essentially a logo and brand to help consumers recognize certified fortified foods, and hopefully choose to include these in their diets. We also support products under the +F endorsement by putting these on our website,” said FSSAI Director (Food Fortification Resource Centre/FFRC), Inoshi Sharma. The ‘+F’ logo was developed by FSSAI’s Food Fortification Resource Centre, which was established in 2016 to build capacity for food producers. The Centre also issued new mandates to use fortified staples in safety net programs and the Integrated Child Development Schemes (ICDS). According to the FSSAI, the new move of branding the food products with the +F endorsement mark, as the country waits for fortification of milk to be made law, will allow for higher levels of fortification to be achieved. Also it will permit the addition of nutrients to the recommended amounts that will translate to provide between 30%-50% of the Recommended Dietary Allowance (RDA). As per the FSSAI standards, milk needs to be fortified with Vitamin A and D at a level of 270 µg RE - 450 µg RE per litre and 5 µg -7.5 µg per litre, respectively. This moves further catapults efforts undertaken by the industry players in driving the milk fortification agenda. HUGE UNTAPPED POTENTIAL REMAINS India produces 438 million litres per day, in which 130 million litres is contributed by the organised sector, which comprises of cooperatives and private companies. FSSAI notes that the total fortifiable milk (liquid milk) produced by the organised sector is 41.6 million litres per day. Dr. G.S. Rajorhia, President, Indian Dairy Association (IDA), during the India milk fortification summit held by FFRC in collaboration with GAIN and TATA Trusts,

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

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DAIRY EXPO highlighted that the contribution of milk cooperatives to the fortifiable milk quantity is approximately 22 million litres per day, while the private sector contributes approximately 19.6 million litres per day. The total quantity can potentially benefit almost 275 million people. Out of the total 41.6 million litres per day of liquid milk produced, about 17.6 million litres gets fortified currently, reaching about 117 million people. Despite the market performance showcasing a huge percentage of untapped potential, the current status of milk fortification in the country is very impressive with 55 brands carrying the nutrition claim. With this, the Executive Director of the National Dairy Development Board (NDDB), Meenesh Shah, revealed that the milk cooperatives have made a significant progress to provide fortified milk across the country, covering more than 90% of the geographical areas in India. Around 30 cooperative milk brands in the market are fortified. He furthered shared that NDDB has developed standard operating procedures for fortification and testing of milk and that they have trained all NABL accredited laboratories on this and knowledge dissemination workshops have also been held. He highlighted that a lot of consumer awareness activities were done by the cooperatives to ensure that people are aware that the milk they consume is fortified. This was followed by the monitoring and evaluation of these activities. Delhi Milk Scheme (DMS), Mother Dairy Fruit & Vegetable Pvt. Ltd, Punjab State Cooperative Milk Producers Federation, Krishna Milk Union are some of the dairy cooperatives that avail fortified milk. THE +F ENDORSEMENT IS ESSENTIALLY A LOGO AND BRAND TO HELP CONSUMERS RECOGNIZE CERTIFIED FORTIFIED FOODS, AND HOPEFULLY CHOOSE TO INCLUDE THESE IN THEIR DIETS. Despite the NDDB receiving overwhelming support from the cooperatives in driving the fortification agenda, Gujarat Co-operative Milk Marketing Federation (GCMMF), maker of the popular Amul brand of milk and dairy products, opted to stay out of the board’s milk-fortification programme launched in 2019, in partnership with World Bank and Tata Trusts. The project, scheduled to run for 23 months aims to process about two million tonnes of fortified milk, reaching around 30 million consumers. It is financed by the South Asia Food and Nutrition Security Initiative (SAFANSI), administered by the World Bank, reports Business Line. Representing the private sector during the virtual seminar was Kailash Gahir, Chief Growth Enabler, Milk Mantra. He explained that the purpose of starting the company was to bridge the trust between the consumer

SPECIALTY & COUNTRY PAVILLIONS

0+ 500 S NDEE

ATTE A AFRIC FROM ORLD W & THE

1000+

PROD UCTS & SOLU TIONS FROM AFRIC A & BEY OND

The Dairy Expo enables consumers, traders, distributors and the general public to touch, feel and taste the latest processed and packaged dairy products, including: Packaged Milk • Yoghurt • Ice Cream • Cheese • Butter • Ghee • Milk Powder • Dairy Alternatives • Traditionally Fermented Milk

DECEMBER 2-4, 2021

SARIT EXPO CENTRE, NAIROBI, KENYA

Afmass FOOD EXPO

A SPECIAL PAVILLION AT:

The Future of Food in Africa

WWW.AFMASS.COM

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DAIRY BUSINESS AFRICA: MILK FORTIFICATION INDIA

and the producer. With this in mind, Milk Mantra became the first company to fortify milk and it started a different category of milk, which was named as Super Vitamin Milk, fortified with vitamin A and D. He further stated that “this category has become a very good capacity which contributes to 22% of market share of our entire category of products.” To further boost its production, Milk Mantra has recently received a grant of US$10 million to invest in the quality control infrastructure. Other than Milk Mantra, some of the private dairy

companies in the country currently fortifying their milk as per FSSAI standards include Britannia Industries Ltd, Nestle India, Creamline Dairy Products Ltd, Heritage Foods Ltd, Kwality Ltd, among many others. DEVELOPMENT ORGANIZATIONS PARTNER TO BRIDGE THE GAP Even though India is the world’s largest dairy producer and one of the largest consumers of milk, only 35 to 40 percent of the marketed milk passes through organized channels such as milk unions, dairy producer companies and the private sector. The challenge remains to convert more milk in the unorganized sector to processed and packaged milk and eventually to fortified milk. To bridge the gap, POSHTIK, a network of government and development partners working on food fortification in India under the guidance of GAIN, has launched the strategic roadmap for scaling up milk fortification in the country. The objective of the guideline is to engage in effective collaboration to fortify at least 70% of the fortifiable, processed and packaged milk by 2022. Further it seeks to work with other partners and all stakeholders and advocates for mandatory fortification of milk by 2023 and

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

REGULAR INTAKE OF FORTIFIED MILK RESULTED IN 18 PERCENT LOWER INCIDENCE OF DIARRHOEA, 26 PERCENT LOWER INCIDENCE OF PNEUMONIA, 7 PERCENT FEWER DAYS WITH HIGH FEVER AND 15 PERCENT FEWER DAYS SICK WITH SEVERE ILLNESS. finally, working towards capacitating the industry so that all the fortifiable milk available in India is adequately and appropriately fortified as per the national gazetted standards by 2025. In a bid to turn the targets into reality, POSHTIK will undertake a landscape analysis of what the progress has been in the market and identify areas which require attention. It will also focus on capacity building of dairies, food safety officers, premix suppliers and NABL accredited laboratories on all the aspects related to milk fortification. In addition, POSHTIK aims to work with the ministries at the national level and the state level and sensitize all stakeholders about the benefits of fortifying milk by using all available channels - media, civil society and open market channels - to generate demand among consumers. Currently, food distributed in government institutions such as schools or governmental food assistance programmes is fortified. While this has been the standard for governmentprovided food since 2018, the private sector has only begun to follow suit to provide fortification to certain products. All these efforts will ensure sustainability in fortification efforts by industry, governments, and development sector partners. A recent research studied the effects of fortified milk on morbidity in young children in North India. The results showed that regular intake of fortified milk resulted in 18 percent lower incidence of diarrhoea, 26 percent lower incidence of pneumonia, 7 percent fewer days with high

fever and 15 percent fewer days sick with severe illness. In India, a country in developmental transition, facing the dual burden of under-nutrition and infectious diseases as well as lifestyle-related degenerative conditions, the addition of milk to the list of mandatory fortified foods, is a step towards building a healthy population. FBA

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BeverageTECH TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF BEVERAGE PRODUCTS

Trends in Beverage Flavours and Colours post Covid-19 By Paul Ongeto

The pandemic has changed the way consumers eat food and critically, how flavour is perceived in beverages

ovid-19 has been with us for less than two years, but it has affected our lives in ways nobody living in the pre-covid period could have imagined. Consumer attitudes around food have fundamentally changed, with many of them suddenly wanting more from food. We want food to help improve our personal well-being, including mental, emotional and spiritual wellness. Additionally, we have developed a preference for food that gave us a sense of familiarity and comfort.

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With travel restrictions put in place, we have even resorted to food as a way of experiencing new cultures. Flavor being a key component of food and beverages was certainly impacted by these new demands. In this issue, we take a deep dive into the beverage sector to bring you the trends affecting how your favorite beverage will be flavored in 2021 and beyond. A SENSE OF NOSTALGIA With so much uncertainty going on during the pandemic, flavors that provide a feeling of security and stability

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BEVERAGE TECH AFRICA: TRENDS IN BEVERAGE FLAVOURS AND COLOURS

became popular. According to Brandy Rand, COO Americas, IWSR Drinks Market Analysis, flavors and smells like chocolate chip cookies, fresh-squeezed lemonade or peanut butter and jelly sandwich have become popular as they “bring back the nostalgia of childhood and are simple comforts”. For instance, in the US, peanut butter-flavored whiskey has been growing for some time and has continued at pace throughout the pandemic, albeit from a low base. Collectively, the leading five peanut butter whiskey brands in the US increased sales by more than 250% from 2019 to 2020, according to IWSR data. In RTDs, lemonade flavors have rose in popularity, satiating consumers’ desire for comfort, while also providing the simple and refreshing taste they crave. An interesting addition to the list of flavors that evoke nostalgia is cola. The desire for the flavor popular in soft drink beverages led to Kikkoman introducing a flavored soy milk that is made to taste just like cola. The drink evokes a sense of familiarity associated with the soda pop, which most consumers would have missed in their quest to lead healthy lives. HEALTH CONSCIOUSNESS DRIVES DEMAND The pandemic also brought forward the importance of food on health and wellness to the fore. Health experts have warned that unhealthy lifestyles leading to obesity and diabetes increase the chances of hospitalization and death if one catches the virus. To boost their immunity and general wellbeing, consumers have continued to demand for beverages with flavors that are associated with positive health attributes. Halo ingredients are therefore expected to trend as people increasingly take a proactive approach to their health and wellness, explains Coralie Garcia-Perrin, Global Senior NATURAL FLAVORS PROVIDING TASTE SOLUTIONS FOR SUGAR REDUCTION AND MASKING OFF-NOTES WILL BECOME A MAJOR PART OF BEVERAGE FORMULATIONS IN 2021. Strategic Marketing Manager of Sweet & Modulation Taste at Kerry Taste & Nutrition. “We will see several products targeting immunityboosting in a range of flavors – ginger, turmeric, elderflower and juniper – coming to the fore,” noted Coralie. Those that deliver stress relief, with notes such as chamomile, lavender, neroli and ginkgo, are also expected to grow in popularity, according to the Kerry taste expert. Taste varieties including citrus, lavender, hemp, and green tea that address emotional well-being, mindfulness and relaxation are also expected to trend in, notes Agneta Hoffmann, marketing manager for flavors at Bell Flavors

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and Fragrances. As clean label continues to gather momentum, Hoffmann projects that natural flavors providing taste solutions for sugar reduction and masking off-notes will become a major part of beverage formulations in 2021 and beyond. USING FLAVORS TO TRAVEL THE WORLD The pandemic greatly restricted the ability of people to travel. Hélène Moeller, director of global product management at ADM observes that with travel out of the table, consumers are now looking for exploration in their flavors. “We have seen F&B processors responding to this need in innovative ways. For example, taking a traditional margarita formulation and substituting calamansi or key lime for Mexican lime is one way that an established product can be reformulated to meet evolving flavor needs,” she details. The desire to experience the warmness of the tropics lead to tropical tonalities of watermelon and guanabana to be among interesting flavors trending in beverages this year. The popularity of foreign flavours, especially those associated with the tropics was so profound that PepsiCo decided to make watermelon flavor a permanent addition to its Mountain Dew soda brand. CLASSIC FLAVOURS TAKE CENTER STAGE As the world accustoms itself to the new normal, a new trend of embracing classic flavors such as vanilla and citrus is fast gathering momentum. Agneta Hoffmann, Manager Marketing Flavors at Bell Flavors & Fragrances, notes that she expects to see significant growth for classic flavor profiles. “Returning to a ‘new normality’ amid COVID-19 means reflecting positive associations and memories, while creating a sense of nostalgia,” she says. This is where classical flavors come

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in.

Vanilla is, for instance, known for both its own warm, comfortable flavor that often evokes feelings of nostalgia, as well as an enhancer that brings out the depth of other flavors. Sri Nagarajan, Global Marketing Manager at Givaudan expects the flavor to retain its marketability through its wide use in cocktails and ready-to-drink (RTD) beverages such as coffees, through syrups. Citrus as a classical flavor is continuing to establish its dominance in the flavor market as consumers seek to what is refreshing and yet so familiar. Leif Jago, junior marketer, global marketing, flavor and nutrition segment at Symrise notes that classic mood-boosting flavors like chocolate, vanilla, strawberry, dessert and bakery-inspired flavors are also in demand as consumers strive to accustom themselves to the new normal. Beverages, particularly spirits, RTDs, and Hard Seltzers are expected to continue incorporating these classical flavors to attract a consumer that is trying to move past the pandemic. UNUSUAL BLENDING TO CREATE NEW FLAVOR TWISTS Consumers are hungry for new flavors and combinations that will delight their taste buds. It’s the least you’d expect from people largely confined in their homes. Beverage companies particularly hard seltzer manufacturers have been quick to meet this demand, infusing botanical and fruit blends into their drinks to offer consumers a new and exciting experience. Botanicals have been particularly popular as they offer a fresh twist on flavor combinations. Their launch to the market has also been readily accepted as they are well known to consumers as herbs from the kitchen and combine especially well with several fruits. Some great combinations that have come up include elderflower and lime, citrus and mint, and grapefruit and juniper berry. Blood orange has also become a key flavor for many applications, particularly in hard seltzers. Three-Fold, White Claw, Smirnoff Seltzer, and Press Spiked are some of the leading hard seltzer brands that have the blood orange flavor on their product lines. COLORS GO NATURAL TO APPEASE CONSUMERS Colors provide evidence to a consumer that a certain flavor exits in a beverage. For instance, consumers associate strawberry, guava, and pomegranate flavors with color pink, citrus flavor with light green, orange flavor with orange, and cola flavor with black. It would be hard to convince consumers that a beverage is strawberry flavored if it were colored green or white. This unique association between colors and flavors makes it exceedingly difficult for a conversation about flavors to be considered complete with talking about colors. When it comes to colors, artificial dyes continue to lose market share as a shift to close-to-nature ingredients creates

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elevated demand for natural colors. Aside from this, there is a growing demand for nutritionally functional solutions, which provides significant opportunities in the world of clean label pigments. Nathalie Pauleau, global product manager for natural colors at Givaudan notes that interest in natural colors supporting healthy food concepts has grown, especially those relating to blue spirulina, yellow turmeric extract and red elderberry extracts. Apart from demand for natural colors, demand for bright and vibrant colors has also risen as they improve the overall indulgent sensory experiences of consuming beverages. Bold colors associated with botanicals and fruits such as cherry, pineapple, elderberry and tangerine have especially become popular with consumers seeking for brightness in a dull pandemic world. Emina Goodman, senior director for colors at ADM adds that out-of-the-box applications, such as color-changing beverages are “hitting the market left and right” to keep up with consumer demands for exciting experiences. Dr. Roland Beck, head of business unit colors at Döhler notes that growing rejection of synthetic colors is expected to further propel the growth of natural colors even in regions such as Middle East and Asia where interest for natural colors has just taken off. The classification of titanium oxide (E171) as not safe for use in foods and beverages by the European Food Safety Authority is also another development that is expected to

create new interest in development of natural alternatives. Food ingredients manufacturer Döhler has already developed a solution dubbed White Diamond which it says is “a truly natural alternative to titanium dioxide for food and beverages.” The company also has another one dubbed “Black Diamond” that is said to be an effective natural black that can perform well in different conditions. The trend towards healthier, natural, and functional colors and flavors highlights the evolving demands of consumers. Natural colors and flavors are expected to continue edging their synthetic counterparts while more interesting flavor mashups are expected to continue emerging as producers work tirelessly to capture the interest of an adventurous consumer. FBA

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AFRICA Inc. W W W. A F R I C A I N C M A G . C O M

INSPIRING AFRICA'S BUSINESS LEADERS & ENTREPRENEURS

Health Care & Personal Care

Agribusiness & Biotech

Aviation, Transport & Logistics

Manufacturing & Retail

Construction & Real Estate

Government/NGO Services

Energy, Oil & Gas

Telecom, ICT & Media

Finance & Insurance

Mining

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Hospitality & Tourism

Education & Training

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TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF MILLED & BAKED GOODS AND ANIMAL FEED

Africa’s milling sector continues to take shape, registering rise in number of players Investments in new grain milling plants surge as consumers demand higher quality flour

By Catherine Wanjiku

he milling sector in Africa plays a vital role in ensuring food security as its products are the primary ingredients of staple foods consumed in most countries in the region. In addition, the sector adds value to the commodities, bringing variety to the consumers’ food basket. The milling industry is a traditional sector that for generations has been content to create its products in time-honoured fashion. In Africa, the sector has gradually metamorphosed into a booming economic segment, leading to consolidation among the bigger players and the launch of new and independent outfits. This has been partially attributed to the natural endowment of raw

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materials in the region, as Africa boasts of having 60% of the world’s arable land and diverse agro-ecological zones. To this end, the region is said to be the centre of origin and a major producer of several grains and cereals like maize, wheat, barley and rice, among many others. According to FAO, the aggregate cereal production in Africa was forecast at an above-average level of 212.8 million tonnes in 2020, 7 million tonnes higher on a yearly basis. The rise in cereal production is also expected to be registered worldwide, as global out-put is projected to expand by 375 MT, to reach 3,054 Mt in 2029, mainly driven by higher yields, indicates OECD-FAO Agricultural outlook 2020-2029.

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MILLING & BAKING AFRICA: INVESTMENT IN GRAIN MILLING IN AFRICA

Maize for human consumption is projected to increase by 23 million MT, especially in Sub-Saharan Africa where white maize is an important food staple and population growth remains high. Global consumption of rice is projected to increase by 69 million MT by 2029, with Asia and Africa accounting for most of the projected increase and direct human consumption remaining the main enduse of this commodity. The use of other coarse grains is projected to increase by 30 million MT, with higher food use expected in Africa. With the rise in grains production in Africa, signifying availability of raw materials, alongside increase in consumption rate, the region has become an attractive frontier to both the international and local investors. This is evident by the number of investments in new milling plants and upgrade of existing projects that have been witnessed in the region in the last 3 years. FLOUR EASTERN AFRICA Agriculture-focused investor Unigrains estimates that flour milling capacity in sub-Saharan Africa grew by 12%, or 3.6m tonnes, between 2014 and 2017 to reach 34m tonnes. This number has substantially grown, as companies such as Unga Group, a Kenyan-based holding company with investments in flour milling and manufacturing of a human nutrition products and animal feeds, commissioned a new 300 tonnes-a-day wheat milling plant in Eldoret in 2018, more than doubling its processing capacity from the previous 250 tonnes-a-day mill. In the same year, Capwell Industries, invested US$10 MAIZE FOR HUMAN CONSUMPTION IS PROJECTED TO INCREASE BY 23 MILLION MT, MOST OF THE GROWTH WILL BE IN SUBSAHARAN AFRICA WHERE WHITE MAIZE IS AN IMPORTANT FOOD STAPLE million in a new plant, enabling it to expand its Soko brand. The new Alapala plant, equipped with pre-cleaning equipment and a storage silo with a capacity of 15,000 tonnes has a daily tonnage of 250 TPD. In 2019, GMach, a leader of milling technologies, delivered a steelconstructed high-capacity turnkey milling facility with 500 tons/day capacity in Kenya to Pembe Flour Mills. The launch of the milling facility, featuring advanced milling technologies, positioned GMach as a major solution partner to the country’s milling sector. Still, in East Africa’s largest economy, Grain Industries Limited (GIL) has invested in a state-of-the-art milling plant producing wheat flour products with a total milling capacity of 2,250 TPD, catapulting the Mombasa-based miller into the leading wheat miller in Kenya, in a few short years. The company’s products are sold under its flagship brand Ajab, which has taken the Kenyan market by storm,

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SECTIONS OF THE RECENTLY COMMISSIONED 300TPD FLOUR MILL AT NATIONAL FLOUR MILL CO., SOMALILAND

adding a maize meal plant with a 400 TPD in 2020. Meanwhile in neighbouring Tanzania, the Mohammed Enterprises Tanzania Limited (MeTL) Group, a diversified investment company, inaugurated a new wheat and maize processing facility after investing US$89.17million (TSH. 205bn) in 2019. The plant by its subsidiary 21st Century Food and Packaging Limited has the capacity to process 300 tonnes of local maize and 500 tonnes of imported wheat per day. The grain milling industry in Uganda is in its nascent stages, however the recent entry of Mandela Millers, with a new 300 tonnes per day wheat and a 48 tonnes per day maize milling plants, is an indication that the country’s milling sector has many untapped opportunities. Another recent investment in the sector was by Master Grain Millers based in the second city of Jinja, which was a 300 TPD plant. In the land of a thousand hills - Rwanda, Minimex Limited, the country’s leading maize milling firm, received US$3 million from UK based social impact investor, AgDevCo in 2019, to expand its production capacity from the then 40,000 tonnes per annum. Still in the Eastern Africa region, Ethiopia’s milling sector has registered several investments in the last three years, characterised with installation of new mills alongside baking facilities. The twin investment enables FOODBUSINESSAFRICA.COM

equipment in the world, completed the installation of a flour mill reference at the National Flour Mill Company in the country. Being the first flour mill in Somaliland, it was commissioned in April 2020 and has a processing capacity of 110,000 MT wheat annually. NORTH AFRICA The Turkey based premier milling equipment company, Alapala, also completed the installation of another flour mill reference at Flour Mills Company in Morocco in 2020. The new plant has a processing capacity of 300 tonnes per day. Still in the Northern part of Africa, Jordan based AlHazaa Investment Group added a second flour mill in Egypt, Al-Tajj mill 2, worth US$35m. The new wheat mill has a production capacity of 460 tonnes per day, and a grain storage capacity of 90,000 tonnes alongside flour storage capacity of 3,000 tonnes.

the investors to ensure the baked goods facilities have ample and readily available raw materials, as well as meet the high demand of wheat flour and baked goods in the country. In 2019, Dina Gezahegn Import & Export, invested US$7.1 million to set up a flour processing and biscuit manufacturing factory with the processing capacity of 820 tonnes of flour a day. This was followed with A.S.S.E.S. Industry Plc, an Ethiopian conglomerate, investing US$1.64 million in the establishment of a modern wheat flour plant with a processing capacity of producing 82 tonnes of wheat flour per day. On a similar track, Kiya, a local food processing company in Ethiopia, invested 350 million Br (USS$10.3m) in 2020, to expand its flour processing, pasta and biscuit manufacturing plants. Vita Hydro Agro-Processing Plc, sister company of Belayab Food Production Plc, franchise owner of Pizza Hut and Cold Stone Creamery brands in Ethiopia, constructed a flour and biscuit processing plant worth 210 million Br (US$6.3m). The factory has the capacity to process between 42-60 tonnes of flour a day. Also eyeing the expansive wheat flour and baked goods market in Ethiopia was Horizon Plantations Plc, kick starting operations at its 900 million Br (US$26m) state of the art Sheger Bread & Flour factory. An inaugural investment was undertaken in Somaliland when Alapala, one of the leading suppliers of flour milling FOODBUSINESSAFRICA.COM

SOUTHERN AFRICA Shifting gears to Southern Africa, African Milling Limited, one of Zambia’s largest integrated wheat and maize flour milling operations, commissioned its newly installed maize mill with a capacity of 336TPD and 50,000 MT storage in 2019. The official opening of the mill marked the culmination of a joint undertaking between the company and Swiss milling equipment supplier, Buhler, which installed the modern facility. Another eye-catching investment in the country was undertaken by National Milling Corporation, an affiliate of American agribusiness and transport conglomerate, Seaboard Corporation, commissioning a new US$37.5million milling plant in the same year. The plant was also installed by Buhler, having a milling capacity of 600 metric tonnes of wheat per day. In neighbouring Zimbabwe, the board of National Foods, has recently approved the purchase of a new state of the art flour mill, which will be installed as a replacement for the existing mill at the Bulawayo Basch Street site, at an estimated cost of US$5 million. This follows the company registering 56% growth in volume at its flour unit in the half year period ended December 2020. Prior to that, in 2019, the leading flour and food producer invested US$2.5 million into a plant to produce breakfast cereals in bid to diversify its product range with the launch of instant porridge in four flavours under the Pearlenta Nutri-Active brand. Within the same product category, Nestle Zimbabwe inaugurated a US$2.5m cereals manufacturing line in 2020, aimed to boost operations, meet local demand and exports. According to the food manufacturing giant, the investment will result in over 30% incremental volume throughput, targeting to triple its US$400,000 monthly exports in the medium term.

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MILLING & BAKING AFRICA: INVESTMENT IN GRAIN MILLING IN AFRICA

KEY NUMBERS

212 MILLION

AGGREGATE CEREAL PRODUCTION IN METRIC TONNES THAT AFRICA PRODUCED IN 2020

WEST AFRICA Elsewhere in West Africa, KEDAN Ltd, a Ghanaian agribusiness firm, commissioned a new 30 metric tonnes per day maize processing factory in Tumu in 2018. Also, the Ghanaian government through its One-District-OneFactory initiative, invested US$4 million in establishment of a new maize processing factory in Ashanti region. Through the same initiative, DUFIL Ghana, owner of the Indomie brand, received a major boost with the inauguration of a US$20 million noodles and spaghetti manufacturing plant. The factory, situated in the Tema West Municipality has a production capacity of 30,000 tonnes of noodles and 8,000 tonnes of spaghetti annually. In Nigeria, Kellogg Tolaram Nigeria Limited, a joint venture between the Kellogg’s group of the US and the Tolagram Group of Singapore, opened a N6 billion (US$14m) cereal factory in the Lekki Free Trade Zone with a production capacity of 10,000 metric tonnes of breakfast cereals annually in 2018. One of Africa’s leading food and manufacturing conglomerates, BUA Group, closed the year 2020 by signing of an agreement with Milleral, a Turkish manufacturer and installer of milling equipment, to build the company’s new flour milling plants with a total milling capacity of 2,400 TPD. The plants, expected to be completed in 2021, will bring BUA’s total installed flour milling capacity to 4,000 TPD. The manufacturing giant also entered into an agreement with Italian maker of pasta production equipment, FAVA spa to install a new pasta processing plant. The new plant will have a total processing capacity of 720 tonnes per day of pasta across 5 lines. It is scheduled to be completed in 2021, complementing the food processor’s already existing 720 tonnes/day pasta processing plant in Port Harcourt, Nigeria, bringing its total installed pasta processing capacity to 1,440 tonnes per day across 10 lines. Meanwhile, Crown Flour Mills, the Nigerian subsidiary of multinational food and agribusiness company Olam International, established a state-of-the-art vitamin premix facility in 2020, to steer its food fortification efforts. A first of its kind by any flour miller in the West African country, the complex was established with technical support from the international non-profit organization TechnoServe, under its Strengthening African Processors

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of Fortified Foods programme. RICE Other than flour milling, investors have also been pumping funds into the construction of rice mills, mostly in the West African region. Both Nigeria and Ghana are in the quest to attain rice self-sufficiency in a bid to reduce the import bills and meet the high demand of the commodity locally. According to USDA, Nigeria’s rice consumption in 2021/22 is projected to reach 6.6 million metric tonnes, against production of 5 million metric tonnes of milled rice. In Ghana, consumption has been set at 1.58 million metric tonnes during the period under-review, with production estimated to reach 600,000 metric tonnes. In a bid to bridge the supply gap, the public and private sector have been mulling investments to boost rice production and processing. In 2019, Stallion Group, a Dubai-based conglomerate through its Nigerian Subsidiary, Popular Farms and Mills Limited, inaugurated a new rice milling plant in Kano State. The firm invested about US$22.19m in the establishment of the processing plant with an installed milling capacity of 430,000 metric tons per annum. FBA

EVALUATION OF WORKS DURING CONSTRUCTION OF MANDELA MILLER'S NEW 300TP WHEAT MILLING PLANT IN UGANDA

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Afmass DIGITAL

S U M M I TS

INTRODUCING AFMASS DIGITAL SUMMITS! The AFMASS Digital Summits are a series of ONE DAY online events that provide the platform to discover the latest investment and innovation opportunities, unravel market trends and find the latest solutions to challenges standing in the way of Africa’s food industry becoming more efficient, sustainable and prosperous.

Visit the website for the specific dates for each of the upcoming Summits

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www.afmass.com/digital

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Meanwhile, Kogi State government established a rice milling factory worth N4 billion (about US$11.11m), with a processing capacity of 80 tonnes per day of paddy rice, giving out 50 tonnes of rice per day. In search for further growth, Lagos State Government, the commercial center of Nigeria with a population of about 22 million people, is setting up a 32 metric tonnes/ hour new rice processing mill in Imota. The mill will start operating around July 2021 and is set to be the largest mill in Nigeria. Crossing boarders into Ghana, where the government has set the target of locally produce 1.6 million metric tonnes of milled rice by 2023, the Western Deedew Group Company Limited, initiated plans of constructing a processing plant in Agona, Ashanti Region in 2019. The company secured Ghc2.5 million (US$0.46m) in funding from the GCB Bank Limited for setting up the processing plant. In 2020, the government of Ghana inaugurated a rice processing centre in the Adansi-South District of the Ashanti Region, constructed under the government’s One District, One Factory (1D1F) initiative. It has a processing capacity of 140 bags of rice per day and was constructed under the supervision of the Ministry of Food and Agriculture and B. Kaakyire Agro Chemicals Company Limited. BARLEY The beverage sector is also linked to the milling sector given that alcohol makers cannot miss one of the most important ingredients in brewing of beer: malt, milled from barley. In Africa, Ethiopia is one of the few countries that has welcomed investments in the sector recently. Beginning of the year, Boortmalt the World’s leading malting company, commenced operations at its new Birr 2.8 billion (US$71.6m) plant inside the Debre Birhan Industrial Park Zone. The factory, with a processing capacity of 60,000 tonnes of malt per annum, is seeking to quench the thirst of the 14 Ethiopian breweries whose demand stands at around 170,000 tonnes per year. Soufflet Group, a French family-owned business, also joined the game by kick starting production at its newly built malting plant near Addis Ababa. Located also at the Debre Birhan Industry Park in Amhara region, the new factory will initially produce 60,000 tonnes of malt and in the longer term it hopes to reach a production capacity of 110,000 tonnes per annum. MAJOR DEALS IN THE MILLING SECTOR Other than industry players raking in huge amounts of investments towards expansion of businesses, the sector has also been graced with notable deals undertaken by leading players. One of the stand-out deals undertaken in Nigeria in 2018, was Kellogg’s, the World’s leading breakfast cereal and convenience food maker, exercising an option to

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TO ENSURE PROCESSORS HAVE EFFICIENT AND ULTRA-MODERN FACILITIES, PREMIUM MILLING EQUIPMENT SUPPLIERS SUCH AS ALAPALA, ARE EXPANDING THEIR PRESENCE IN THE REGION. acquire a stake in packaged food manufacturer Tolaram Africa Foods (TAF) for US$420 million, to expand its presence in the African market. TAF is a subsidiary of Tolaram Group, which owns 49% of Dufil Prima Foods, the Nigerian consumer goods manufacturer of the popular Indomie noodles. The move was building on Kellogg’s formed joint venture agreement with Singapore-based Tolaram in 2015, which saw both companies take a 50% stake in Multipro, the largest distributor of foods products in Nigeria and Ghana. In the same year, Dufil Prima Foods acquired three noodles production lines of May&Baker Nigeria Plc, a maker, seller and distributor of consumer products for US$2.14 million, consolidating its market position in pasta and noodles segment. Meanwhile, Dufil’s unit in Ghana, opened its cheque book in 2020, and purchased Ghanaian manufacturer of Yum-mie Noodles brand, Blow Chem Industries. Nothing seemed to slow down in the deal rooms of Nigeria as Olam International Limited, the multinational food and agribusiness company, acquired Dangote Flour Mills (DFM) through its Nigerian subsidiary, Crown Flour Mills Limited for N120 billion (US$331m) in 2019. The move doubled Olam’s capacity as it added five more flour mills into the already existing 5 units. Another deal that came to the radar was Amethis Fund II in partnership with Proparco and Kibo Fund II, acquired a minority equity stake in Mozambique’s largest integrated wheat and maize miller, Merec Industries in 2020 for an undisclosed amount. In the current year, Amethis, made its first transaction in Senegal with the acquisition of a minority stake in one of the country’s leading producers and distributors of pasta, wheat flour and animal feed, Nouvelle Minoterie Africaine (NMA). The grain handling and storage segment was also not left behind as Holmarcom Group, a leading diversified industrial group in Morocco offloaded a 49% of its stake in its grain terminal operator, Mass Céréales al Maghreb (MCM) to Danish company A.P. Moller Capital (APMC), as part of its development ambitions in Africa. Africa’s milling industry is continuing to take shape as it feeds the masses. To ensure processors have efficient and ultra-modern facilities, premium milling equipment suppliers such as Alapala, are expanding their presence in the region. The company recently announced that it will be opening a new office in Kenya. With such kind of moves, it is evident that the sector is ripe for further growth. FBA

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A circular food system can withstand crises like COVID-19 — and provide delicious meals

Sarah Tranum is Associate Professor, Social Innovation Design, Faculty of Design, OCAD University here are many hard lessons learned from the pandemic. One is that our food system needs a serious reboot. Luckily, we need only look to nature’s cycles for clues on how to fix it. In a circular food economy, food waste becomes valuable, affordable healthy food becomes accessible to everyone and innovation uses a regenerative approach to how food is produced, distributed and consumed. A pilot initiative in the Ontario city of Guelph and surrounding Wellington County, called Our Food Future, is Canada’s first circular food economy. It is demonstrating

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what a regional circular food model can look and taste like. FALLING OUT OF SYNC WITH NATURE The pandemic has magnified deep inefficiencies and inequity in the food system. On one hand, we see tremendous food waste and on the other, worsening food insecurity. One estimate is that 40 per cent of food is wasted in our current system. Meanwhile, one in eight Canadians worry about their next meal, and one in six children who go hungry each day. In Toronto, Canada’s largest city, the situation is even worse, with one in five residents experiencing food

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FOOD NUTRITION & HEALTH: CIRCULAR FOOD ECONOMY

insecurity. The food system has evolved into a linear model of take-make-waste. We take from the ground the nutrients needed to grow food, make it into many products that line supermarket shelves, and then consume it, thinking little of the waste produced. This linear model is out of sync with the cycles seen in nature that were inherent in food production practices for thousands of years. FOOD, DESIGN AND SYSTEMS THINKING Wading through the complexities of the food system can be overwhelming, but there are many opportunities to design a better model. First, it’s important to see the connections between food and design. In fact, the food system is a design. Everything about how food is grown, distributed and marketed is design. Why is this significant? Because if food and the system that encompasses it is a design, then it can be redesigned — and that offers great hope for creating a better system. As a social innovation designer, my research, teaching and practice focus on systems thinking and designing socially innovative solutions that don’t simply address the

symptoms — they also get to the root of the challenge. How we view food is one of the core issues that must be tackled. REFOCUSING OUR FOOD VALUES Barbara Swartzentruber, executive director of Guelph’s Smart Cities Office that includes the Our Food Future initiative, says: “Not only do we not properly value food, we don’t value the people who are integral to getting the food to us — from the farmers who produce the food, to the truck drivers who deliver it, to the cashiers at the supermarkets.” Our Food Future is modelling a regional circular food economy that addresses food security, creates business and broader economic development opportunities and uses waste as a resource. It’s helping to re-establish the connections and value of food along the supply chain.

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ONE ESTIMATE IS THAT 40% OF FOOD IS WASTED IN THE CURRENT FOOD SYSTEM. MEANWHILE ONE IN EIGHT CANADIANS WORRY ABOUT THEIR NEXT MEAK, AND ONE IN SIX CHILDREN WHO GO HUNGRY EACH DAY. Our Food Future is a collaboration of a broad network of stakeholders – from agriculture, business, food sciences, government and academia. Our Food Future is also supporting projects working to eliminate food insecurity by connecting community to healthy, locally produced food. Through funding opportunities and research partnerships, it’s also championing farmers working to regenerate the land as well as food producers using data and other technologies to maximize efficiency and eliminate waste. CIRCULARITY ON THE PLATE The Our Food Future initiative also exemplifies systems design and circular practices. Collaborations, mentorship and funding is helping to spur innovation and the creation of business models that are regenerative, meaning that the elimination or reuse of waste is an integral part of an organization’s mission and operations. A great example is a project in collaboration with Provision Coalition, called Re(PURPOSE): A circular food experience. Last fall, seven stakeholders came together to show that a food waste byproduct could be kept in the human food system longer and ultimately help create a delicious meal. Spent grain from the Wellington Brewery was sent to Oreka Solutions as food for black soldier flies. These flies produce larva which became feed for fish at Izumi Aquaculture. The manure from the fish farm made great fertilizer for potatoes at Smoyd Potato Farm. Meanwhile, the spent grain, along with spent yeast from Escarpment Labs, became the ingredients for sourdough bread made by The Grain Revolution. Then, the fish, potatoes and bread headed to The Neighbourhood Group, where these circular ingredients were transformed into dishes on the menus at three restaurants: fish and chips, smoked trout sandwich and gravlax and crostini. WORKING TOGETHER The circular meal is a compelling example that demonstrates the power of circularity when food industry stakeholders work together to design solutions at the systems level. The result was creative, delicious food that would have otherwise gone to waste. The goal is that this successful pilot will become the basis of an ongoing collaboration and will inspire more circular practices in

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the food and other industries. Our Food Future is just one example of the circular economy applied to the food system. But the circular model and circular design can be applied to any industry. Imagine an economy built upon products and services designed for their outputs to become inputs, with little or no waste, and fed back into the loop instead of a linear take-make-waste model. A circular food system is aligned with how nature works when humans are not interfering. A transition from

a linear to a circular model can help fight climate change, produce more robust and truly innovative products and services, help businesses grow and allow us as individuals and communities to flourish. For this transition to take place, we must push for change in the food system, including changing how we value food. Demanding transparency requires us as consumers

FOODS OF THE

WORLD EXPO

SARIT EXPO CENTRE, NAIROBI, KENYA

to support producers who are taking the steps to care for people, animals and for the land. We must advocate for policies and leadership that fund farmers who embrace regenerative agriculture practices to create a better food model. Designing a circular economy that is locally rooted, one community at a time, can collectively become an interconnected global circular food system. It’s possible, and Our Food Future is showing us how it can be done. The important lessons being learned by this initiative can be shared with communities across Canada and beyond to design an equitable, regenerative food system. If you want to learn more, check out the podcast Designing a Humane Future which features an episode on the food system, circular design and the Our Food Future initiative. FBA

Afmass FOOD EXPO

A SPECIAL PAVILLION AT:

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ATT AFRI D M RL FRO E WO H &T

DECEMBER 2-4, 2021

NOT ONLY DO WE NOT PROPERLY VALUE FOOD, WE DON’T VALUE THE PEOPLE WHO ARE INTEGRAL TO GETTING THE FOOD TO US — FROM THE FARMERS WHO PRODUCE THE FOOD, TO THE TRUCK DRIVERS WHO DELIVER IT, TO THE CASHIERS AT THE SUPERMARKETS

The Future of Food in Africa

1000

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WWW.AFMASS.COM The Foods of the World Expo is the country and specialty pavilion with imported food, beverage & milled products from around the World The Food of the World Expo section will showcase a broad range of food products from out of Africa to a local, regional and international audience. These products include grains, flours; fruits and vegetables, nuts, and spices; milk products; meat, poultry and fish products; beverages, coffee and tea; chocolates, confectionery and snacks; bakery products etc.

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MAY/JUNE 2021 | FOOD BUSINESS AFRICA

ENTRY IS FREE

MARKET TRENDS: SOLAR ENERGY IN FOOD

African food and agriculture companies transition to solar to cut costs By Paul Ongeto

Food and agriculture enterprises in Africa join the race to install solar energy systems to reduce costs, improve reliability frica is home to one of the highest electricity rates in the World. According to the World Bank, industrial electricity tariffs can reach US$2050 cents/kWh, compared to a global average electricity tariff of $10 cents/kWh. When costs are high, industries tend to suffer. In a recent study by Energy Growth Hub, 41% of firms in Africa identified electricity as a major constraint to their business operations, the highest of any region in the World. In addition to being very costly, power supply in Africa is often characterized by unreliability and inefficiency, resulting in additional disruption costs for operating firms. African enterprises are reported to experience power interruptions averaging more than 50 hours/month, a loss of 25 days of economic activity per year. Costly and

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

unreliable electricity means bad business for enterprises. Food businesses in the continent are particularly disadvantaged as they cannot afford to transfer the high costs to a price sensitive customer. Staying without electricity is also out of question as most foods are perishable and need to be kept under refrigeration. To survive in a continent that is mostly dark, food businesses have opted to shift to solar, a more reliable and cost-effective source of energy. Unlike the developed world where solar is adopted for lofty environmental goals, in Africa we are doing it out of necessity. MULTINATIONALS LEAD THE WAY IN SOLAR ADOPTION Early adopters of solar energy in Africa are big multinational giants such as Nestlé, Unilever, Heineken, and Diageo. FOODBUSINESSAFRICA.COM

Unlike small food companies in the continent, these multinationals have the financial muscle to easily transition to solar energy. Apart from reliability and affordability, solar energy also fits well in their ambitious sustainability goals, making it an attractive venture. In February 2020, Nestlé, which has a goal of achieving net-zero emissions across its supply chain by 2050, inaugurated a private solar station in Morocco. According to the company, the station, adjacent to the company’s factory, will produce 1.7 gigawatts of electricity per year, eliminating more than one million kilograms of CO2. Guinness Ghana Breweries, a subsidiary of British brewing giant Diageo, has also embarked on a mission to decarbonize operations, commissioning its own solar photovoltaic system on the roof of its brewery in Accra. The plant will supply 1,500 MWh per year, enough to meet 19% of the electricity requirements of the facility, while avoiding 10,000 tonnes of CO2 emissions. Still in West Africa, Heineken-owned Nigeria Breweries officially commissioned its solar plant at its Ibadan brewery. Given Nigeria’s chronic power issues, the plant with an annual capacity of 1,000 megawatts per hour (MWh) will supply the plant with reliable and affordable power all year-round while helping Heineken reduce the site’s CO2 emissions by over 10,000 tonnes. Following the example of Heineken and Diageo, a leading beverage player in Nigeria, Big Bottling Company, also recently invested in a 950kW solar system at its plant, with the firm noting that the new investment will help it offset 11,743 tons of CO2 over the project’s ten-year lifetime. In East Africa, East Africa Breweries Limited, Diageo’s blue-chip company has also sought approval from the Energy and Petroleum Regulatory Authority (EPRA) to set up its own solar power stations. If given the go-ahead, EABL will put up three solar power stations with a combined capacity of 13.9MW. A 2.2MW station will be set up at its East African Malting Limited site in Nairobi, a 9.3MW station will be set up at its brewing facility in Ruaraka, and a 2.4-MW solar power plant will be established in Kisumu, in western Kenya. HOMEGROWN COMPANIES TAKE UP THE CHALLENGE Home grown companies from all corners of all corners of the continet have also shifted to solar en masse. Those who haven't are also seriously considering shifting to this green energy source as relying on the national grid is longer tenabe. In Kenya, companies in their droves have migrated from national grid electricity to solar partly due to the high costs and occasional power blackouts. In the last one year, several notable companies have initiated projects to migrate to solar, the most notable being the Kenya Tea Development Agency (KTDA). The Agency that manages over 67 factories on behalf of small holder farmers launched a tender in

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AFRICAN ENTERPRISES ARE REPORTED TO EXPERIENCE POWER INTERRUPTS AVERAGING MORE THAN 50HOURS A MONTH WHICH TRANSLATES TO A LOSS OF 25 DAYS OF ECONOMIC ACTIVITY PER YEAR March 2021 seeking independent power producers (IPPs) for the construction of a series of small-sized solar parks with capacity ranging from 300kW to 1MW. The plants will be used to power KTDA’s 29 factories, cutting the agency's power bill by 50%. KTDA joins a growing list of Kenyan food companies with commissioned solar power plants that include Williamson Tea, Krystalline Salt, London Distillers, Kenafric Bakeries, Kapa Oil Refineries, DPL Festive Bakeries, Menengai Oil Refineries, Bio Food Products, Mars Wrigley Confectionery and Bidco Africa. Recognizing the cost savings associated with solar, Rwanda made the decision to go green from the beginning, launching a Rwf270 million (US$17.5m) pineapple drying factory in Ngoma district. Upon completion the Rwandan facility will have a processing capacity of 90,000 tonnes of pineapple every month, dried and packaged for both the domestic and export market. South Africa’s acute power shortage due to load shedding has forced food enterprises to find an alternative source of energy. Many companies with ability have opted for solar to free themselves of reliance on the power utility Eskom and its associated inefficiencies. South African Breweries, part of AB-InBev started its migration in January 2020, with a project that will see over 23,000 solar panels installed across the brewer’s seven facilities. Once all arrays are switched on, they will generate close to 14 GWh of power per year, significantly reducing the companies over reliance on solar. Shoprite, a continental retail chain with its roots in South Africa made the switch by installing rooftop photovoltaic panels at 19 sites in South Africa and Namibia, generating 12,300 MWh of electricity a year. Its largest installation is at its Basson distribution center in Brackenfell, South Africa, covering the surface area of an entire soccer field with panels measuring 7,706 m2, generating capacity of 1MW. To reduce its impact on the planet, the retail chain also recently announced that it will add 39 solar-powered refrigerated rigid trucks to its existing solar-powered fleet of 749 trailers by the end of June 2021. In Zimbabwe, Tanganda Tea Company Limited has also shifted to solar to cut costs. The company has constructed a US$15m solar plant to power its production facilities. According to reports by Business Times, the plant will supply the country’s largest producer of tea and coffee with 7.55MW of clean, reliable, and affordable power on an annual basis.

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

MARKET TRENDS: SOLAR ENERGY IN FOOD

FUNDING TO SOLARIZE AFRICA’S AGRICULTURE The solar fever is also spreading to agriculture, capturing the imagination of small holder farmers. The arrival of big money from major financial institutions such as IFC, DFU, and Proparco is also making the transition to solar easier for farmers. The trend on the agriculture scene is big financial institutions providing tailored loans to established local banks who then provide it to farmers at competitive rates. In Egypt, the IFC has partnered with ALEXBANK, and Agricultural bank of Egypt (ABE) to help Egyptian farmers access financing for purchase of solar irrigation systems, reducing their reliance on diesel-powered generators. IFC estimates that using solar powered pumps could save farmers up to 14 billion Egyptian pounds (US$875 million) annually in diesel fuel costs, helping reduce greenhouse gas emissions. Provision of funds is, however, one part of the equation; solar solutions are the other. Several startups have thus grown in the region to complete the agricultural solar equation. Kenyan-based solar startup SunCulture is a good example of the startups that are helping farmers solarize. In May 2021, the startup partnered with Brookside Dairy Limited, a leading dairy in Kenya, to provide dairy farmers with solar powered irrigation systems. The farmers will use the systems to water their fodder crops and provide the livestock with reliable drinking water, improving dairy production in the long run. During the past one year, the startup has raised about US$25 million to help in expanding solar activities to 7 African nations including Ethiopia, Uganda, Zambia, Senegal, Togo, and Côte d’Ivoire. USING SOLAR TO PREVENT POST-HARVEST LOSSES In Africa, post-harvest losses are estimated to be between 30% and 50%. The Food and Agriculture Organization (FAO) estimates that these losses occur mainly downstream, between the production and retail stages of the supply chain. Without electricity, farmers could not install refrigeration systems to prevent fresh foods from going bad. In rare cases where electricity was available, the high cost makes refrigeration a prohibitive venture - until the arrival of solar. Funded mostly by foreign aid, food cooling systems are rapidly spreading in rural Africa, preventing monumental food losses, and contributing to food security. A solarpowered vegetable pack house in Trans Nzoia County, West of Kenya that was recently launched by Farm Africa., a UK-based charitable organization is a perfect example of solar investments aimed at combating post-harvest food losses. A similar project funded by the British government in Gambia’s Kafining municipality is helping farmers keep their vegetables fresh for longer. These are the notable ones but moving around the continent from Senegal in the West to Malawi in the south, hardly will you go more

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

than three villages without seeing a solar powered cooling facility for either dairy or fresh produce. THE FUTURE IS BRIGHT FOR SOLAR IN FOOD Solar has managed to stake its claim as the energy source of choice for many food businesses in Africa. Companies are shifting to solar for its reliability and cost effectiveness and are certainly not regretting it. Reports from multinationals have proven that there are huge cost-savings in migrating to solar. Moving forward, we expect more companies in Africa to continue ditching the national grid for solar. Faced with acute power shortages, African countries are also liberalizing their energy laws to allow companies produce their own electricity. South Africa has for instance announced that the Electricity Regulation Act would be amended to increase the threshold for exemption from applying for a license from national energy regulator NERSA to generate electricity from 1MW to 100MW. This provides a fantastic opportunity for food companies to invest more in solar. A new trend that is expected to further accelerate transition to solar is power purchase agreements (PPA) between food companies and solar power companies. In the PPA model, the solar power provider installs, maintains, and owns solar infrastructure while the food company only pays for electricity consumed at a fixed rate. With this model, food companies are spared the acquisition and installation costs which are usually prohibitive, enabling them to adopt the technology even faster than before. Increased funding from financial institutions such as the IFC, Standard Bank, and Proparco is also expected to further drive adoption of solar at the farm, processing, storage, retail and distribution levels. With the investments

that are going into solar and the massive potential that lies ahead, we are confident that the future of solar could not be any brighter! FBA

FOODBUSINESSAFRICA.COM

PACKAGING: SNACKS

Convenience, sustainability concern inform innovations in snack food packaging By Paul Ongeto

Snack packaging manufacturers are striving to develop new ways to keep snack products safe and fresh, while meeting evolving producer and consumer demands.

nack food packaging has evolved over the years to align with consumer demands for greater convenience, reliable containment and sustained freshness. Suppliers of snack food packages have also been forced to innovate in order to meet recyclability and sustainability goals of major snack manufacturers. Consumers are always on the move today, picking up snacks at a kiosk or in the supermarket and then consuming them in smaller portions on multiple occasions. According to Séan Cairns, Sonoco’s VP and general manager for

FOODBUSINESSAFRICA.COM

the European consumer products division, on-the-go consumption has incorporated new ideas like: “Will it fit into my pocket? Is the packaging sturdy and reclosable?” into consumer purchasing decisions. This has made the ideal on-the-go snack packaging to be the one that is easy to use, is reclosable, and fits the personality of the individual consumer. To align with the demands of consumers, snack packaging manufacturers have come with new packaging designs that are convenient and easy to use. For example, bag closures from Kwik Lok Corp., help keep food fresh

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

PACKAGING: SNACKS

and safe and offer the consumer the option of reclosing the package, so they can enjoy the rest of the product later. Presto Products Co. has taken the reclosure technology even further by introducing a Fresh-Loc Click ’N Lock sensory zipper that makes an audible noise when the package is opened and securely sealed, adding more assurance that the package is completely closed. Sealstrip Corp. has introduced SealAcross, an easy-open, tamperevident, resealable label applied across the packaging film, which opens along the package’s full width at the end seal. According to Jo Anne Forman, director of product development at Sealstrip, their product does not affect packaging machine settings or speeds as the pre- applied rolling stock is even, smooth and flat. Heather Chandler, president, Sealstrip Corp., however, cautions that resealable features do not restore the original package barrier conditions, but only prevent repackaging of product in the wrong type of film, bag or container, which can cause a faster degradation of taste and texture. AN ATMOSPHERE OF FRESHNESS The proliferation of clean label snack, which are produced without artificial preservative and additive food ingredients, has posed new challenges to snack food packaging. Removing preservatives from snack and bakery products can shorten their shelf life, resulting in high levels of food wastage. To offset this challenge, packaging manufacturers have developed new composite packaging with high barrier properties that keep oxygen out of the food packaging. Modified-atmosphere packaging, which replaces oxygen inside the food packaging with nitrogen and CO2, has also been embraced during snack food packaging to preserve food for longer. “Active barrier films combined with modified-atmosphere packaging (MAP) creates an CONSUMERS ARE ALWAYS ON THE MOVE TODAY, PICKING UP SNACKS AT A KIOSK OR IN THE SUPERMARKET AND THEN CONSUMING THEM IN SMALLER PORTIONS ON MULTIPLE OCCASIONS. atmosphere of freshness thar is able to extend shelf life and improve food quality,” says Scott Corey, director of marketing at Sealed Air. GOOD FOR THE PLANET The current focus on sustainability has led to the proliferation of snack packaging that boast of environmental credentials. Demand by brand owners for sustainable packages has reduced research in more complex polymers or encapsulated materials that generate more active properties in favour of compostable, biopolymers or mono

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

materials. Nestlé’s leading chocolate brand Kitkat has, for instance, pledged to be carbon neutral by 2025 and this has forced its packaging suppliers to look for a packaging that aligns with this goal. A breakthrough in the quest for sustainable packaging was announced by the chocolate brand in March 2021. Kitkat’s division in Australia said that it had managed to collaborate with other companies to create Australia’s first soft plastic food wrapper made with recycled content. Dow, a giant in plastic polymers, has responded to brand demand for sustainability with Recycle Ready structures that are approved for the How 2 Recycle label and enable flexible packaging to be recycled in store drop-off locations around the country. Sealed Air has also entered the sustainable packaging space by signing an agreement with Kuraray America Inc. to offer food packaging materials derived from Plant biobased resins. According to the company, the materials provide a highly effective oxygen barrier that is costcompetitive when compared with traditional rollstock barrier films. Tielman Group, Toronto, has on the other hand, developed a laminated greaseproof paper that allows consumers to replace aluminium foil and plasticcoated board materials in snack packaging with paper. The material withstands baking at high temperatures and deep freezing, and functions well in microwave ovens.

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properties. “Ensuring the product is intact during the final moment of truth—the period in which a consumer opens the package they’ve been waiting for and sees their ordered item—is as important as the quality of the product itself,” says Richard Custer, specialty commercial director, Presto Products. Chips won’t be the same if they’re broken, he adds. To protect snacks from breakage and damage, manufacturers have had innovate. Geometry in the package style such as the “quad-seal” package style, has been used to help avoid breakages. Manufacturers have also embraced rigid side seals and gussets to provide stability and to cut down on product crushing during distribution.

PACKAGING FOR E-COMMERCE The proliferation of the internet in many regions globally has fueled the expansion of e- commerce. The Covid-19 pandemic has particularly helped this channel to grow faster than earlier projected, as consumers shifted online to adhere to social distancing measures put in place by health authorities. Online grocery shopping which was previously a small segment of e-commerce has outpaced other categories and is expected to receive the largest share of growth. According to research conducted by Food Marketing Institute and Nielsen, 70 percent of consumers will be grocery shopping online by 2024. The growing use of online shopping has posed new supply chain challenges for snack brands. With shopping for multiple products being done online, items like a bag of chips and laundry detergents which normally don’t mix may end up together in the delivery package. Will the chips take on the taste or odor of the laundry detergent? These and many other concerns have led to brands to start working with suppliers to develop new packaging that are best suited for e-commerce handling. New snack packages have thus been developed that have added barrier properties to maintain product integrity for the consumer. This has been accomplished by using a mixture of materials to include films, foils, metalizations and polymers that deliver the right combination of barrier

IDEAS FOR THE NEXT GENERATION SNACKS Brands and snack packaging manufacturers are still working to develop even better packaging for the snacks of the future. AIMPLAS, a research center located in Valencia, Spain, is for instance working on a project to develop a printed sensor that can detect the presence of oxygen inside packaging. The goal is to make it possible to detect in-line defects in MAP during transportation and storage in a nondestructive and economical way. Researchers at England’s University of Oxford have also developed a new type of nanosheet coating for food packaging that could replace metalized films currently in use. The new film is made by using an inexpensive process that produces thin films made from water and amino acids. The film is transparent, and most importantly, does not allow gases or water vapor to pass through. The EU-funded NanoPack project, which came to a conclusion at the end of 2019, has shown some remarkable results in inhibiting microbial and fungal growth in bread and baked products. Players are waiting for the solution to be rolled out in future as it has already proven that it could be produced in commercial quantities. With sustainability becoming a key pillar for most snack brands, sustainably produced snack packages are also expected to proliferate the market in future. The Circular Economy for Flexible Packaging (CEFLEX) project is a key initiative that could improve sustainability in snack brands in Europe. According to CEFLEX, the project has the ultimate goal of developing a collection, sorting and reprocessing infrastructure for flexible packaging across Europe by 2025. In May this year, major snack companies including Mondelēz International, Nestlé, PepsiCo and Unilever came together to support flexible plastic recycling in the UK. Making flexible plastic recycling economically viable for recyclers and easier for consumers in the UK and other regions is the aim of these snack brands. Its success will significantly improve the sustainability profile of this material, making snack food packaging an eco-friendlier process than it is now. FBA

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

Martin Schlauri is well known around the World for his dedication to promoting the growth of knowledge in the milling industry. He was previously responsible for Bühler’s Grain Milling Training Centre and later the worldwide milling activities of the company. In Africa, he led the company in 2015 to build the African Milling School in Nairobi, Kenya – the region’s premier training institution that covers Africa and some parts of the Middle East. In this interview with Francis Juma, he shares the opportunities in Africa’s milling industry – and celebrates his recent induction into the Milling Hall of Fame in March 2021. Tell us about the award and its importance The Award from the Flour World Museum in Wittenburg, Germany is awarded to people to honor them for their contribution to the milling sector. It came as a surprise, but I am glad that I was inducted to the Milling Hall of Fame.

MARTIN SCHLAURI Senior Milling Expert - Bühler Group 74

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

The sculpture of the Award is a man balancing on top of the millstone. How does that remind you of the balance that millers have to make every day in their mill? The statue has two symbols that gives two messages. First there is the millstone, it is an old symbol that keeps the message of a solid craftsmanship. This means that even though millstones were replaced by new technologies, the art of milling still requires one to have the technical know-how. Then there is the man in motion; this represents the people behind the mills - the owners and the people constantly involved in milling. It is crucial to note that as much as the mills do the work, people are also constantly in the move to ensure that the process goes on smoothly. You received the Award on World Flour Day. What is the significance of this day? If we look at it from a broader perspective, the World Flour Day has two functions: one is to introduce the topic of flour to the people and two, FOODBUSINESSAFRICA.COM

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to bring the role of millers into the light, to have them recognized. If we dedicate a day to flour, people start thinking about flour and as we all know, flour is the base for many staple foods including pasta, pastries, bread and snacks too. It is a new initiative, but I believe that with media campaigns, this day will be made more known to the people and will become more relevant. On this day, we would also want people to perhaps start thinking of the people who make their flour products in the mills across the World. What are some of the key challenges facing the milling sector in Africa and how can they adopt new technologies and ideas? African millers have similar challenges as millers in other parts of the world, the biggest issue being inconsistency in the raw material, say, maize or wheat. It is sometimes a challenge to get the right grain for the specific applications all over the world. Another challenge when it comes to the grain sector in Africa is that of pest control post-harvest, which results to great losses. Furthermore, qualified staff is the base for keeping a milling plant at ultimate efficiency and operational excellence. It needs the commitment and foresight of the company’s management and owners to develop skills on all the levels in their operation. On the other side, the market growth and demand for new end-products are great opportunities for mills in the Middle East and Africa. Upgrading the milling operations with the latest technologies do not only give the milling companies the chance to participate as the market grows but enables them to benefit from the higher plant efficiencies and cost savings, such as through lower energy consumption. What is the opportunity around traditional grains in Africa? Traditional grains and foods are very important since people have gotten used to them over generations. Grains such as millet and sorghum should be part of the diet and nations should encourage their consumption and support their processing. The major issue around these grains is building up 76

MAY/JUNE 2021 | FOOD BUSINESS AFRICA

efficiencies in the processing of such and creating the whole value chain to grow and source such grains. What are the opportunities and challenges around the animal feed industry in Africa? Animal feed millers encounter two main challenges; one is access to abundant and quality raw materials. They obviously purchase huge volumes of raw materials - be it soya, maize, barley or whatever. The millers often need to make their composites from say, Brazil and other countries out of the continent, and thus the issue of carbon footprint becomes a big problem. Local production of these raw materials needs to be scaled up. Farmers and feed millers need to sit down and have these discussions and I am sure AFRICAN MILLERS HAVE SIMILAR CHALLENGES AS OTHER MILLERS IN OTHER PARTS OF THE WORLD, THE BIGGEST ISSUE BEING INCONSISTENCY IN THE RAW MATERIAL OF SAY, MAIZE OR WHEAT. this will generate new businesses and opportunities. The other issue is that of efficiency: for animal feeds, the mix must be accurate, and the ratios must be correct, otherwise there will be a lot of wastage of the raw materials. We need more insights on the nutrition of the animals here in Africa to get some of these things right. What is the parting shot you would like to share with our readers in Africa and beyond? I have two messages. First, millers around the world are doing an excellent job but sometimes this work is not recognized by the population. Consumers do not really get to know the industry behind the flour, and I think we as millers should better our communication and interactions with our consumers. We need to let them see what we are doing behind the four walls of our factories and assure them of the safety of our flour products. Secondly, skill development is very key for the growth of this sector; we, therefore, need to build up the technical know-how in Africa and all over the World. FOODBUSINESSAFRICA.COM

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Food Business Africa May/June 2021

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TWO SIX ZERO BRANDS:

Africa’s milling sector continues to take shape, registering rise in number of players

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