F&D March 2011 issue

March 2011

Arla Foods plays to its strengths

Food & Drink Business Website:

www.foodanddrinkbusiness.com

C o n t e n t s

- 27 P ET F OOD

- 3 N EWS B RIEF

£2 billion UK pet food market still growing.

Business news from the UK and international markets.

- 4 B REWING & D ISTILLING Developments in the global alcoholic drinks sector.

- 29 H EALTH F OODS PAGE 3

Paul Bulcke, ce, Nestle.

NBTY Europe invests £20 million in infrastructure.

P AGE 9

Peder Tuborgh, ce, Arla Foods.

- 30 S EAFOOD Young’s Seafood Limited is launched.

- 5 M ERGERS & A CQUISITIONS

PAGE 9

R EGULARS

Coverage of British and international deals.

PAGE 3

Franck Riboud, ce, Danone.

Processing & Manufacturing . . . . . . . 16 & 20 Energy & Environment . . . . . . . . . . . . . 17

- 7 M ANAGING C URRENCY M ARKETS

Bottling & Packaging . . . . 17, 21, 24 & 25

Unpredictable currency markets taking a large bite out of profits.

Materials & Ingredients . . . . . . . . . . . . . 18 Information Technology. . . . . . . . . . . . . 22

- 9 C OVER S TORY Growth strategy paying dividents for Arla Foods.

PAGE 4

Indra Nooyi, ce, PepsiCo.

Ove Moberg, chairman, Arla Foods.

PAGE 13

John Moloney, md, Glanbia.

Managing Director: Colin Murphy Editor: Mike Rohan Sales Director: Ronan McGlade Advertising: Susan Doyle, Stuart Atkinson. Senior Sales Executive: Paul Lees Production Manager: Susan Doyle

Food & Drink Business Europe is published by Premier Publishing Limited, 51 Parkwest Enterprise Centre, Nangor Road, Dublin 12.

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- 13 D AIRY

Premier Publishing Limited can accept no responsibility for the accuracy of contributors’ articles or statements appearing in this magazine. Any views or opinions expressed are not necessarily those of Premier Publishing and its Directors. No responsibility for loss or distress occasioned to any person acting or refraining from acting as a result of the material in this publication can be accepted by the authors, contributors, editor and publisher. A reader should access separate advice when acting on specific editorial in this publication!

Return to profitability in Ireland underpins strong Glanbia performance.

- 19 B REWING British craft brewing remains buoyant.

PAGE 5

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FOOD & DRINK BUSINESS EUROPE, MARCH 2011

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N N E E W W S S Solid Sales Growth and Bumper Profit at Nestle Reporting growth across all regions and categories, Nestle achieved a 6.2% organic growth in 2010 group sales to SFr109.7b (Eur84.9b) with real internal growth of 4.6% and tripled net profits to SFr34.2b, reflecting the disposal of its Alcon shareholding. However, excluding the exceptional net profit of SFr24.5b from the Alcon disposal, 2010 group net profit was actually down 6.7% to SFr9.7b from SFr10.4b in 2009.

The continuing operations achieved organic sales growth of 6.0% and real internal growth of 4.4%. Food and Beverages achieved good growth with market share gains in all categories and regions. Organic growth in emerging markets stood at 11.5%, underlining the increasingly important role they will play in Nestle’s future development. Organic growth for Food and Beverages was 5.7% in the Americas, 3.7% in Europe and 10.2% in Asia, Oceania and Africa.

Paul Bulcke, chief executive of Nestle.

Strong 2010 Performance

by Danone Gives Confidence for 2011 With all of its divisions and regions posting gains, global food and beverages group Danone achieved a 14.2% rise in underlying net income to Eur1.67b on sales ahead by 13.5% to Eur17.01b for 2010. Excluding the impact of changes in exchange rates (+6.0%) and acquisitions, total sales were up 6.9%. This organic growth reflects a 7.6% rise in sales volume and a 0.7% decrease due to

price mix.

Fresh dairy sales were up 6.5% to Eur9.73b with volume growth of 7.5%. The water business increased volume by 7.8% and sales by 5.3% to Eur2.87b. Baby nutrition sales rose 8.9% to

Franck Riboud, chairman and chief executive of Danone.

Eur3.36b and volume growth was 7.6%. Danone’s medical nutrition division was the fastest growing with sales up 9.0% to 1.06b and volume growth was 8.7%.

Danone’s trading operating income rose 7.1% to Eur2.58b and the trading operating margin (EBIT) improved by 3 bps to 15.2% in 2010, despite the steep rise in raw material prices, particularly milk. The increase in raw materials was primarily offset by various cost-cutting measures that generated record savings of over Eur500m during the year.

Danone completed a number of major transactions in 2010. In October, Danone sold its 18.4% stake in Wimm Bill Dann Foods, Russia’s leading food and beverage company, for $470m. In November, Danone agreed to acquire YoCream, the leading producer of frozen yogurt in the US, for around $103m.

Also in November, Danone and Unimilk finalised the merger of their fresh dairy product businesses in Russia and other CIS countries, creating the region’s market leader in fresh dairy products. Indeed, Russia is now Danone’s largest single national market, with France.

“The strength of our group, businesses, brands and teams, and our exposure to regions with robust growth prospects mean that we can look to 2011 with

B B R R II E E F F confidence,” says Franck Riboud, chairman and chief executive of Danone.

Premier Foods in the Red But Debt Level Reduced Premier Foods, the UK’s largest food producer, has reported a pre-tax operating loss of £98m, against a profit of £42m in 2009, on a continuing basis for 2010 after a £125m goodwill impairment at its Brookes Avana own label bakery and prepared food business. Group turnover dipped by 3.5% to £ 2.57b due to lower non branded sales. Although volume was up 3.1%, the value of branded sales was relatively flat at £1.67b, down 0.3% on 2009.

Group trading profit edged up 0.6% to £311m, as both the grocery division and the Hovis business recorded improved trading profit. However, trading profit fell by £15m at Brookes Avana.

Premier is currently talking constructively with UK retailer Marks & Spencer to agree new product ranges and revised pricing and supply arrangements which will be able to return the business to profitability in 2011.

The debt mountain was reduced by £103m to £1.26b during the year but the proceeds from the recently agreed disposals of Premier’s canning and meat-free businesses will further cut pro forma net debt below £900m.

sumer foods manufacturer, increased revenue by 9.7% to Eur5.0b in 2010 and trading profit by 11.3% to Eur470m, resulting in an improvement of 20 basis points in group trading profit margin to 9.5%. On a like-for-like basis, revenue rose by 4.6%. Adjusted profit before tax increased by 16.2% in the year to Eur410m.

Kerry’s ingredients & flavours businesses performed strongly across all technology platforms, end-use markets and geographies during 2010 and achieved a 12.7% increase in sales to Eur3.68b, up 6.6% on a like-forlike basis relative to the prior year. Trading profit grew by 12.8% on a like-for-like basis to Eur401m, reflecting a 50 bps improvement in trading margin to 10.9%.

Kerry’s consumer foods business was affected by economic conditions in the UK and Ireland. The consumer foods divisional performance improved in the second half of 2010 despite the impact of rising raw material costs. Sales revenue in 2010 increased by 3.2% to Eur1.77b, reflecting like-for-like growth of 1.3%. Divisional trading profit grew by 5.3% like-forlike to Eur132m, reflecting a 40 basis points improvement in trading profit margin to 7.5%.

2 Sisters to Invest £30 Million in New Factory As part of its strategy for growth, UK chicken processor 2 Sisters Food Group is spending £30 million on a state-of-the-art food factory in Thetford. The site will act as the platform for growth for the company’s prepared foods

Robert Schofield, chief executive of Premier Foods.

Strong Showing by Kerry Group Kerry Group, the international ingredients, flavours and con-

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

Eddie Power, UK managing director of 2 Sisters.

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N N E E W W S S division over the next decade and will open in spring 2011.

“We believe we are the first food business to open a new coated protein factory of this scale in the UK for almost ten years. Our aim is to deliver significant environmental benefits as well as revolutionise the production of coated foods available in the UK,” says Eddie Power, UK managing director of 2 Sisters.

Group for Eur95.3m to gain a stronger branded foothold in the snacks and breakfast cereals markets in Great-Britain and Western Europe. The acquisition supports Raisio’s growth strategy to become the leading provider of healthy snacks in Europe

B B R R II E E F F During the year, the US-based soft drinks and snacks group acquired Wimm-Bill-Dann, Russia’s preeminent food and beverage company, to significantly strengthen its competitive position in Russia and Eastern Europe, while also providing a strong foothold in the attractive dairy category

Agrana to Invest €27.6m to Expand Russian Fruit Preparation Plant Austrian group Agrana is to invest Eur27.6m to expand its Russian fruit preparation plant at Serpuchov over the next five years. Agrana is one of the leading producers of fruit juice concentrates in Europe, and the top global manufacturer of fruit preparations for the dairy industry. The expansion programme will boost the factory’s production capacity by 63% from around 38,000 tonnes to 62,000 tonnes per year when the project has been completed, allowing Agrana to capitalise on the potential of the growing market for fruit preparations in Russia and the CIS states.

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due to positive revenue growth and continued tight management of operating expenses.

Muhtar Kent, chairman and chief executive of Coca-Cola.

Solid Performance by CocaCola Hellenic Matti Rihko, chief executive of Raisio.

Valio Lifts Milk Price as Profits Rise Finnish dairy co-operative Valio increased profit after tax from Eur17m to around Eur37m in 2010 as it benefited from increased sales of branded products abroad and rising ingredients prices globally. Turnover rose from Eur1.79b in 2009 to Eur1.82b last year as international operations grew by 18% to offset a 5% drop in domestic sales.

SOFT DRINKS

Raisio in Middle of Growth Phase

Surge in Sales at PepsiCo

Raisio, the Finnish food and functional food ingredients group, increased net sales by 17.9% to Eur443.0m in 2010.

EBIDTA fell from Eur37.5m (excluding one off items) in 2009 to Eur35.3m last year. EBIT was Eur19.4m (Eur20.5m excluding one-off items), which accounts for 4.4% (5.5%) of net sales, which is in accordance with Raisio’s all-year guidance.

“Raisio is in the middle of the growth phase which we expect to last two years. During the growth phase, we aim to increase net sales and our international activities,” points out Matti Rihko, chief executive of Raisio.”

In the first half of 2010, Raisio acquired Glisten to enter the snacks and confectionery market in Great Britain. Since its year end, Raisio has acquired Big Bear

Driven by gains across its worldwide snacks and beverage businesses, and from the acquisitions of its anchor bottlers earlier in the year, PepsiCo has reported a 34% surge in net revenue to $57.84b for 2010 with net income up 6% to $6.34b and ahead by 15% on a constant currency basis.

The successful integration of its two anchor bottlers to create more-efficient and effective beverage businesses in its key North American market and in Europe, allowed PepsiCo to deliver more than $150m in synergies from the acquisitions in 2010, above target for the year. The strong pace of synergy realisation and the identification of additional synergies have led PepsiCo to increase expectations for total synergies through 2012 to more than $550m.

Indra Nooyi, chairman and chief executive of PepsiCo.

Coca-Cola Achieves Solid Global Growth Having achieved solid worldwide volume growth of 5%, Coca-Cola has reported a 3% increase in operating income to $8.4b for 2010 on net revenue ahead by 13% to $35.1b. Comparable currency neutral net revenue was ahead by 14% to $34.5b, reflecting 5% growth in concentrate sales, 1% positive price/mix and an 8% benefit from structural changes, arising from the acquisition of Coca-Cola Enterprises’ North American bottling business. On a currency neutral basis, operating income was up by 11%.

The CCE acquisition is expected to yield 2011 cost synergies of $140-150m. This is in addition to the $150m in annual synergies previously identified in North America. Productivity initiatives are well on track and on plan to achieve the group’s target of $500m in annualised savings by year-end 2011.

In Europe reported net revenue for the full year increased 1%, with 1% positive price/mix and the impact of structural changes partially offset by a 2% currency impact. Full-year concentrate sales were even. Full-year reported operating income increased 1% and comparable currency neutral operating income increased 3%

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

Greece-based soft drinks group Coca-Cola Hellenic increased volume sales by 1% in 2010 to 2.1b cases and net revenue by 4% to Eur6.79b. On a comparable basis (excluding restructuring costs), operating profit (EBIT) rose 5% to Eur682m and net profit advanced 8% to Eur450m. Free cash flow of Eur549m was stable compared to 2009.

During 2010, Coca-Cola Hellenic continued to focus on implementing cost reduction and productivity improvement initiatives as part of an ongoing effort to increase competitiveness and efficiency. The group incurred pre-tax restructuring costs of Eur37m which are expected to yield annualised benefits of Eur35-40m from 2011 onwards.

Coca-Cola Hellenic is one of the world’s largest bottlers of CocaCola products. It has a broad geographic reach with operations in 28 countries serving a population of approximately 560 million people.

Doros Constantinou, chief executive of Coca-Cola Hellenic.

BREWING & DISTILLING

Challenging Year For Carlsberg Reflecting a highly challenging

N N E E W W S S year in Russia, its largest market, Carlsberg increased net revenue by 1% to DKr60.05b (Eur8.0b) and operating profit by 9% to DKr10.25b in 2010. However, revenue fell 3% organically during the year with volume down 2% and a 1% decline in price/mix.

Favourable currency factors were responsible for 8% of the rise in operating profit and organic growth was 1%.

Net profit grew by 49% to DKr5.35b but included special items of DKr598m related to step acquisitions. The group’s beer volumes were down by 1% to 114m hectolitres and the organic volume decline was 2% Carlsberg is focusing intensively on driving profitable market share growth, while simultaneously improving efficiencies across the group. This is a continuous process and an integrated part of the Carlsberg strategy and business model. During 2010, Carlsberg significantly intensified investments behind its key brands, including innovations, new products, media, digital, consumer and customer activities. The Danish brewer also invested in innovations to be launched in 2011 and beyond.

For 2011, Carlsberg expects market share growth in markets representing two-thirds of its business, high single-digit percentage growth in operating profit and adjusted net profit growth of more than 20%.

Pierre Pringuet, chief executive of Pernod Ricard.

strong sales and profit growth in the first half ended December 31st last. Net sales increased by 13% to Eur4.28b – up 7% organically and group share of net profit from recurring operations rose by12% to Eur726m.

Pernod Ricard increased advertising and promotion spend by 11% organically to Eur765m; raising it from 17% to 17.9% of sales.

The French and international drinks giant improved its operating margin (profit from recurring operations/sales) by 30bps to 28.3% and also significantly reduced debt by Eur864m during the period.

The group’s 14 strategic spirits and champagne brands grew 8% in volume and 13% organically in value, reflecting a very favourable price/mix effect. These 14 strategic brands represented 59% of group sales in the first half of 2010/11, compared to 55% in the first half of the previous year: According to Pierre Pringuet, chief executive of Pernod Ricard: “This strong performance enables us to revise upwards our guidance for organic growth in profit from recurring operations to a level close to 7% over the full 2010/11 financial year. We will pursue our policy of sustained investments in our strategic brands and markets.”

Robust 2010 Performance

by Heineken Jorgen Buhl Rasmussen, chief executive of Carlsberg.

Continued Recovery at Pernod Ricard Benefiting from an improvement in the global economic environment and favourable currency factors, Pernod Ricard has achieved

Helped by the integration of its FEMSA acquisition in Latin America and continued growth of its flagship Heineken brand, Heineken increased net profit by 41% to Eur1.44b for 2010 on revenue up 9.7% to Eur16.13b.

On an organic basis, net profit (beia) rose by 19.7%, driven by

B B R R II E E F F solid EBIT (beia) growth and lower interest costs, but consolidated beer volume and revenue were down by 3.1% and 2.2% respectively.

During the year, Heineken successfully completed the integration of the beer operations of FEMSA. On a pro forma basis, EBIT (beia) of these operations increased 44% to Eur397m and pre-tax cost synergies of Eur42m have already been realised.

Heineken’s Total Cost Management (TCM) programme delivered Eur280m pre-tax savings in 2010.

“Heineken delivered a robust performance, generating doubledigit organic net profit growth for the fifth consecutive year. We achieved this against a backdrop of an improving yet still challenging economic environment in a number of our key markets. At the same time, we have made significant investments in our platform for future growth,” comments Jean Francois van Boxmeer, chairman and chief executive.

The relentless focus on cost reduction, global synergies and cash flow generation, which was a feature of 2010, will continue in 2011 and beyond.

expected to complete in the second half of calendar 2011, subject to regulatory clearances.

“This investment represents the continuation of our strategy to increase Diageo’s presence in those emerging markets, such as China and Vietnam, which have a rapidly growing middle class,” says Paul Walsh, chief executive of Diageo.

Paul Walsh, chief executive of Diageo.

Orkla Brands Merges Russian Confectionery Companies Norway-based Orkla Brands has decided to merge its Russian chocolate and confectionery companies - Krupskaya and SladCo into one entity named Orkla Brands Russia. The integration process has already started.

Headquartered in St Petersburg, Orkla Brands Russia will have about 3,350 employees and a turnover of approx. RUB6.8b (Eur170m).

Agrial Strengthens Milk Business

Jean Francois van Boxmeer, chairman and chief executive of Heineken.

MERGERS & ACQUISITIONS

Diageo to Acquire Turkey’s Leading Spirits Company For £1.3 Billion Diageo has reached agreement to acquire Mey Icki, the leading spirits company in Turkey, for an enterprise value of £1.3b from investment firm TPG Capital and Actera. The transaction is

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

French co-operative Agrial has strengthened its milk business by acquiring a minority stake in Delicelait, a producer of dairy ingredients, for an undisclosed sum. As part of the deal, Agrial will supply 70m litres of milk annually to Delicelait with a view to increasing this to 120m litres.

The move is in line with Agrial’s strategy of expanding its milk business, which currently accounts for about 10% of group turnover of Eur2.2b. Agrial is planning to merge its milk operations with those of Elle & Vire, the Normandy-based co-operative, in June. The combined business will have annual production of 900m litres of milk.

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I MANAGING CURRENCY MARKETS

Unpredictable Currency Markets Taking a Large Bite Out of Profits The currency markets are subject to fluctuations on a daily basis and rates can move by as much as 10% in the space of just a few days. or anyone who is involved in moving money internationally this kind of movement can have serious implications for their business. This is one of the key reasons why more and more food industry leaders are looking to manage their risk with the help of currency experts.

“Difficulties in the global economy have caused significant variations in the value of international currencies,” explains Jeremy Cook, chief economist at currency specialists World First. “For example, the Euro has moved by over 13% against the pound throughout the last 12 months, and these troubles look set to continue into 2011.”

He continues: “Meanwhile, across the

F

Atlantic, the US Dollar is also faced with an uncertain 12 months as the Fed continues to spend its second round of quantitative easing. I could go on, but clearly anyone involved in moving money between countries, generally via importing and/or exporting goods internationally, will need to keep their eye closely peeled on the exchange rates in the months ahead.”

Staying up to date with the latest information about where the rates are going is a must. Furthermore, companies stand to benefit by looking up one of the few companies that are well positioned to help control their levels of risk.

Most people use brokers and banks to secure a good spot rate (the rate to move money on the day). But by using FSA registered and regulated companies like World First you can guarantee that you will benefit from any movements in the market which work out in your favour by using ‘currency options’.

“By planning ahead with the right kind of currency hedging strategy it is possible to save huge amounts of money,” adds Jeremy

Jeremy Cook, chief economist at currency specialists World First.

Cook. “With the exchange rates continuing to prove very difficult to predict, some careful forward thinking might be the difference between making a profit or not.”

To find out more about how using Currency Options with World First can save your business money, call 0800 030 5025 or visit www.worldfirst.com To sign up for Jeremy Cook’s free daily webcasts and other exclusive currency analysis go to www.worldfirst.com/jeremycook. J

I EXPORTS

First Milk Signs Export Deal With Eilers and Wheeler irst Milk, the largest dairy farmerF owned business in the UK, has set up a strategic alliance with Eilers and Wheeler, one of Europe’s most established suppliers of dairy products.

Under the new arrangement, Eilers and Wheeler will be First Milk’s preferred partner for export sales of cheese and packet butter.

“Currently world markets are providing strong margins for UK dairy products and with most commentators predicting that global demand

will continue, we recognised that we needed an experienced partner to drive our export sales,” explains Kate Allum, chief executive of First Milk.

“Eilers and Wheeler has been particularly interested in the export potential of our products and brands, including the Lake District cheese company. We have agreed to move a growing percentage of our cheese make through this route and will evaluate progress on an ongoing basis.” J FOOD & DRINK BUSINESS EUROPE, MARCH 2011

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COVER STORY

Growth Strategy Paying Dividends For Arla Foods 2010 was a year of expansion for Arla Foods following a period of restructuring and cost reduction in 2009.

A

rla Foods substantially increased its investment budget for 2010 to DKr1.84 billion (Eur250 million), earmarking almost DKr920 million – double the 2009 figure – for significantly expanding capacity and ongoing efficiency improvements. Reflecting this growth strategy, the Scandinavian dairy co-operative increased turnover by 6% to DKr49.03 billion (Eur6.6 billion) in 2010 and annual profit by 30.6% to DKr1.27 billion. Operating profit rose from DKr1.41 billion to DKr1.68 billion. At the start of 2010, Arla Foods’ board of directors decided that the company would aim for annual profit of 2.5% of turnover, which was achieved.

Formed in 2000 through the merger of two dairy cooperatives – Arla of Sweden and MD Foods of Denmark – Arla Foods has production facilities in 12 countries and its products are sold globally in more than 100 countries.

However, Arla Foods has selected six core markets where it is building strong positions within liquid milk as well as a full range of dairy products for the Ove Moberg, chairman of Arla Foods. retail sector. The six markets are Sweden, UK, Denmark, Finland, Netherlands and Germany.

The increase in turnover in 2010 was primarily due to rising prices for industrial products, retail price increases in all markets and beneficial developments in exchange rates. Indeed, Arla saw positive development in most markets.

Growth Strategy The Arla Foods growth strategy was introduced in 2008 and includes achieving a revenue target of DKr75 billion by 2015.

Strategy 2015 is built on three cornerstones – innovation, growth and rationalisation.

Part of the strategy entails focusing resources on three global brands - Arla, Lurpak and Castello - along with developing the ‘Closer to Nature’ concept, as the dairy giant continues to concentrate on shifting processing from industrial to value added products, so reducing its reliance on commodity markets.

Arla Foods is also accelerating product innovation through doubling the development budget. Another objective is to double sales of whey protein and to become the world’s leading producer in this field.

In tandem with its growth strategy, Arla Foods is intent on minimising its carbon footprint and by 2020 plans to have reduced its emissions of greenhouse gases from transportation, production and packaging by 25%.

During the past year, Arla Foods managed to exceed its 2010 target to reduce energy and water consumption by 5% compared to the 2005 level.

Foods.

Market Priorities Arla Foods has been prioritising its global activities to achieve the best return from resources. In addition to its six core markets, the US, Russia, Poland, Middle East/North Africa and China have been identified as special growth markets, and have been assigned a larger share of the group investment budget. “In the long-term, a greater share of our earnings will come from these markets, where there is huge potential for growth,” points out Peder Tuborgh, chief executive of Arla Foods. Other markets have been defined as ‘tactical’ and business activity will be maintained at current levels.

During 2010, Arla Foods’ stepped up its marketing efforts and focused on its three global brands. “This is a milestone for Arla.

Previously we distributed our resources across more brands, and the effects of the new brand strategy have been immediate. The development of Castello and Lurpak has been especially positive. We have continued to work with the Closer to Nature message in all our markets. During the past year, the first commercial communicating the Closer to Nature message was screened in a total of 12 markets,” Peder Tuborgh explains. “In the coming years we must invest more in marketing and developing new products. Our Closer to Nature message will be communicated even more clearly to the outside world and it will be incorporated into everything we do within the company.”

Arla Foods has production facilities in 12 countries.

Peder Tuborgh, chief executive of Arla

Cost Reduction and Rationalisation During the past year, Arla Foods maintained its focus on cost reduction and streamlining the business, which had been a feature of 2009. For example, production and packaging of retail own label butter in Britain is being consolidated at Westbury Dairies, in which Arla became a co-owner in 2010. The rationalisation measures will impact production in Denmark, Sweden and the UK. Another ratio-

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

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Investment For the Long-term ”Over the past year, Arla has shaken off the effects of the recession without letting go of its tight cost controls. We’ve committed to a number of investments that demonstrate the company’s focus in the long-term and our readiness to exploit the opportunities offered by the markets in which we operate. One example is the decision to build the world’s largest fresh milk dairy in the UK,” comImproved Earnings For Owners ments Peder Tuborgh. “The UK is our Arla Foods delivered significantly largest market and, having increased our improved earnings in 2010 to its owners, market share, we are now the country’s secDanish and Swedish milk producers. For During 2010, Arla Foods’ stepped up its marketing ond largest dairy company. Our investment each kg of milk supplied by its co-opera- efforts and focused on its three global brands. in the new dairy will run to DKr1.4 billion.” tive members, Arla delivered 38 Danish Scheduled for completion in 2012, the new ore more in 2010 than in 2009. In total, Arla’s earnings for its own- dairy will have the capacity to process one billion litres of milk a ers (the Arla performance price) amounted to 252 ore per kg of year and will create 700 jobs. milk against 214 ore/kg in 2009.

Arla Foods’ owners are already starting to reap the rewards for Outlook their decision to substantially increase the investment budget and to Since the year end, Arla Foods has agreed to merge with German focus on future expansion. “Possibly the most important event for dairy co-operative Hansa-Milch (see Panel). The two businesses Arla in 2010 was the co-operative members’ strong backing for are highly complementary and the merger will underpin Arla Arla’s group strategy,” remarks Ove Foods’ ambition to become one of the Moberg, chairman of Arla Foods. three leading dairy companies in “Members gave their support to retaining Germany. the co-operative ownership structure and “There is a new and exciting year ahead. increasing consolidation in order to partly And there’s one thing we can be sure of finance the Arla growth strategy, which that we must continue to be ready to adapt includes plans for major investments. quickly to changing market conditions.

Under the new capital structure 4.5% of With the strong support of our co-operathe dairy group’s earnings will be invested tive members, we will be working hard to in developing Arla Foods. This is about realise Strategy 2015, with focus on organdouble the previous amount. Consolidation ic growth, acquisitions and new partnerships.” Peder Tuborgh concludes: “The will increase Arla Foods’ equity by approxioverall aim is to continually optimise the mately DKr4-4.5 billion over a six-year company in order to create the best possiperiod. The additional capital will be inible conditions for achieving our vision – to tially used to fund investments for contingive our members the highest possible milk ued growth but will also make it easier for Castello is one of Arla Foods’ three global brands. price.” J the group to raise capital for acquisitions. nalisation initiative is the amalgamation of sliced cheese production into three facilities in Denmark, Sweden and Poland.

“Using Lean principles, we have also increased efficiencies by 10-30% at several dairies - without increasing investment.

On the basis of these impressive results, we will accelerate the Lean roll-out to remaining dairies,” he says.

Hansa-Milch and Arla Foods to Merge Dairy co-operatives Arla Foods of expanding the Hansa-Milch plant in Upahl.

Scandinavia and Hansa-Milch Hansa-Milch will now be known as Hansa Mecklenburg-Holstein of Germany are set Arla Milch. It remains a co-operative entity to merge. A merger plan put forward by with its own members, and joins Arla Foods in the boards of the two companies has now that capacity. This means that the democratic been approved by the members of the two structures are still preserved under the new co-operatives. The decision is being entity of Hansa Arla Milch. In addition, the implemented with retrospective effect for northern German dairy co-operative will have the full 2011 financial year, and is enactits own representatives on the boards and ed for January 1st 2011. The merger is The Hansa-Milch dairy in Upahl, Germany. committees at Arla Foods. not unexpected as both companies have Under the merger of the two co-operatives, already been co-operating successfully for many years. the Hansa Arla Milch farmers are being given a milk purchase guarantee from Owned by 7,200 farmers in Denmark and Sweden, Arla Foods is the world’s Arla Foods with no time restriction. In addition, Arla Foods is assuring fourth largest dairy group and operates successfully in both domestic and Hansa-Milch of a milk payment price calculated on the same basis as is used international markets. It is well known for its speciality cheeses such as for its Danish and Swedish members.

BUKO, Castello and Hohlenkase, and for Lurpak butter. Owned by 1,200 dairy “In previous years, the price we paid for milk was generally higher than farmers, Hansa-Milch has enjoyed sustained success in northern Germany, that given by Hansa-Milch. This means that Hansa Arla Milch members can and with its Hansano brand is one of the main providers of regionally-proexpect a higher price in future,” points out Peder Tuborgh, chief executive of duced fresh dairy products such as milk, cream and quark.

Arla Foods.

The dairy business of Hansa-Milch, until now owned by the Hansa-Milch The Arla Foods strategy includes paying members the highest possible milk co-operative, will transfer to the ownership of Arla Foods under the merger price. “To achieve this objective, we need to continue to grow in Europe, arrangements. Manfred Remus, chairman of Hansa-Milch, who developed the and particularly in the important German market,” explains Peder Tuborgh. merger plans together with the executive boards at Hansa-Milch and Arla “Together with Hansa Arla Milch, our aim is to be one of the top three Foods, will continue to head up the company with his team. In addition, German dairy companies.” The merger still has to be approved by the compeconsideration will be given in the coming months to the possibilities of tition authorities.

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FOOD & DRINK BUSINESS EUROPE, MARCH 2011

I DAIRY

Return to Profitability in Ireland Underpins Strong Glanbia Performance Buoyed by improved global dairy markets and good demand in key nutritionals sectors, Glanbia, the international nutritional ingredients and cheese group, increased total revenue by 21.4% to Eur2.6 billion and EBITA, before exceptionals, by 21.6% to Eur173.2 million for the year ended January 1st 2011. roup EBITA margin pre exceptional grew 20 basis points to 7.0%. The improvement in performance was driven by the return to profit of Glanbia’s Dairy Ingredients Ireland business, after a first time loss in 2009.

Glanbia’s business comprises two main divisions - Dairy Ireland (incorporating the dairy ingredients and consumer foods businesses based in Ireland) and US Cheese & Global Nutritionals. In 2010, revenue in Dairy Ireland rose 10.7% to Eur1.1 billion while revenue from US Cheese & Global Nutritionals was up 29.0% to Eur1.0 billion.

G

Dairy Ingredients Ireland Dairy Ireland improved EBITA pre exceptional by 74.2% to Eur47.9 million.

Despite higher milk costs during the year, Glanbia’s Dairy Ingredients Ireland operations benefited from the improved market conditions across all product categories within the global dairy market. Although this business recovered from being lossmaking in 2009, margins were at the lower end of the historical range. There was a strong focus on cost management during the year and targeted saving initiatives both at gross margin and overhead level were

achieved.

Dairy Ingredients Ireland was recognised as 'Innovation Exporter of the Year' by The Irish Exporters Association for the successful commercialisation of the specialist milk protein product called Solmiko. Dairy markets have continued to rise in 2011 and are likely to remain firm throughout the year.

Glanbia consequently expects its Dairy Ingredients Ireland business to perform well in 2011.

Consumer Products The trading environment for the Consumer Products business is dictated by a conditions in the Irish retail market and the indirect impact of global dairy markets on input costs. Irish market conditions remained very challenging in 2010 and overall revenue, operating profit and margins from Consumer Products were lower than 2009.

Indeed, Irish consumer confidence declined as the year progressed and value remains the key focus in all food categories.

Consumer Products had a mixed year across its portfolio. The highlights included market share gains for Avonmore milk and a good performance in particular by the value added branded milk products. The trading environment for fresh dairy products was difficult in 2010, affected by intensive price promotion activity. For the food business overall it was a tough year with margin pressure both on pricing and input costs.

Glanbia achieved significant cost reductions in the operational cost base driven primarily by headcount reductions and process re-engineering. While underlying volume trends have stabilised for Consumer Products, the market remains fragile and the trading environment for 2011 is expected to continue to be challenging.

Consumer Products plans to continue to drive cost reductions to offset input and promotional cost pressures during 2011.

Overall performance for the current financial year is expected to be broadly in line with 2010. Consumer Products is in the FOOD & DRINK BUSINESS EUROPE, MARCH 2011

John Moloney, group managing director of Glanbia.

process of expanding its successful liquid milk business after agreeing to acquire the Limerick-based dairy business of Kerry Group. The deal is subject to regulatory approval.

US Cheese & Global Nutritionals Glanbia’s US Cheese & Global Nutritionals division delivered reasonable year-on-year EBITA pre exceptional growth, underpinned in particular by a good performance by Global Nutritionals, while the US Cheese business was impacted by volatile market conditions. US Cheese & Global Nutritionals EBITA pre exceptional grew 4.2% to Eur104.5 million in 2010.

The Global Nutritionals business benefited from the strong global demand for whey during 2010. This growth was underpinned by structural market changes such as an increased consumer focus on health and wellness; a growing understanding of the link between diet and exercise to weight management and active ageing; a greater emphasis on healthier and more nutritious food options in convenience formats; and strong demand from Asia and developing economies. Demand was strong across all key nutritional sectors including performance/sports nutrition, protein fortification and new products for mainstream bars and beverages. Good demand and tight supply drove whey prices up in 2010 and Glanbia expects the market to continue to be firm throughout 2011.

Since the year end, Glanbia acquired USbased Bio-Engineered Supplements and Nutrition (BSN) for $144 million (Eur108 13

million) to strengthen its portfolio in the fast growing, higher margin, sports nutrition sector. Headquartered in Florida and employing 140 people, BSN is a leading developer, provider and distributor of nutritional products designed for health, training, physique development and performance. BSN was founded in 2001 and has since become a leading US performance nutrition business. Its products are shipped to over 40,000 retail outlets in the US and distributed in over 90 countries worldwide.

Glanbia’s US Cheese business was impacted in 2010 by tight supply conditions and competition from other dairy products classes which increased milk prices for cheese manufacturing. As the year progressed, US cheese prices became volatile with prices trading higher than expected in the third quarter but declining steadily in the fourth quarter. A significant cheese price rally began in early 2011 and has continued in the year to date.

There are a number of variables that could impact the sustainability of this rally but US domestic demand is solid and export demand is strong. Milk supply continues to be tight and milk price competition is expected to be a feature of 2011, as butter and skimmed milk powder prices continue to outpace cheese prices.

operating profits and operating margins in 2010.

Joint Ventures Glanbia is involved in a number of joint ventures and associate businesses and revenue from this division increased by 40.0% to Eur416.6 million in 2010. Glanbia expanded its US cheese position during the year to become one of the largest US manufacturers of American-style cheddar cheese, following the 40% expansion of output of Southwest Cheese in New Mexico which was completed on time and on budget in April 2010.

Glanbia Cheese in the UK, the group’s European mozzarella cheese joint venture, benefited from good pizza demand across Europe, particularly in the home delivery segment where strong customer relationships and unique technologies underpinned growth. This business increased revenue,

Excellent Year “Glanbia had an excellent year with results ahead of expectations,” says John Moloney, group managing director of Glanbia. “The group benefited from strong organic revenue growth in our three nutritionals businesses, a return to profitability in Dairy Ingredients Ireland and the delivery of our strategic cost reduction programmes in Ireland. We delivered strong revenue and earnings growth and our 2010 performance reflects the strength and diversity of our businesses.”

He continues: “The group is well positioned for 2011. Our current expectation is that the trading environment for 2011 will be broadly positive. Global dairy markets are expected to remain firm, underpinned by robust demand, particularly from Asia, and demand-led growth in key nutritionals sectors. In January we acquired BSN, a leading US sports nutrition business which is an excellent strategic fit with our Performance Nutrition business. For 2011, given our strong market positions and growing portfolio, we are forecasting 11% to 13% growth in adjusted earnings per share, on a constant currency basis.” J

Enhanced Solu!ons to meet your Energy Needs Dalkia Alterna!ve Energy (DAE) will assist you in: Reducing total energy bills Replacing obsolete thermal installa!ons Responding to new thermal requirements Exploi!ng electricity produced with maximum e"ciency

The bene"ts of CHP are: Reduc!on of CO2 emissions per kWh produced Obtaining best value from electricity produced Improved overall energy e"ciency Modernised installa!ons Reduced energy bill Secure heat supplies Increased produc!on capacity DAE currently operates and maintains 54.4MW of electrical genera!on through combined heat and power (CHP) units within Ireland alone.

We provide a complete turnkey CHP installa!on service which bene#ts from years of project management experience in Ireland.

Contacts:

In addi!on, the know-how gained by opera!ng and maintaining over 810 CHP units (4,025MW of electrical genera!on) worldwide, which ensures the long-term e"ciency and availability of the CHP unit.

Jim Costello Opera!ons Director Tel: 087 225 3824 Colm Flanagan Commercial Director Tel: 086 231 2450 FOOD & DRINK BUSINESS EUROPE, MARCH 2011

Alternative Energy 15

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FOOD & DRINK BUSINESS EUROPE, MARCH 2011

Energy Efficiency Solutions From Dalkia Alternative Energy difficult economic times, managIandningthese your energy requirements efficiently economically can be a challenge.

Dalkia Alternative Energy will assist you in: • Reducing total energy bills • Replacing obsolete thermal installations • Responding to new thermal requirements • Exploiting electricity produced with maximum efficiency.

Dalkia Alternative Energy (DAE) is a joint venture between Dalkia and Fingleton White & Co. The business provides energy services and energy management to large sites requiring the services of CHPs of more than 1MW. DAE experts have years of experience in the Energy Management sector and combine a vast array of skills and expertise. DAE designs, finances, builds, operates and maintains CHP units and ensures a sustainable and effective energy supply to its customers. This results in significant and increasing savings and preservation of the environment.

duced Improved overall energy efficiency Modernised installations Reduced energy bill Secure heat supplies Increased production capacity.

DAE currently operates and maintains 54.4MW of electrical generation through combined heat and power (CHP) units within Ireland alone. It provides a complete turnkey CHP installation service which benefits from years of project management experience in Ireland. In addition, the know-how gained by operating and maintaining over 810 CHP units (4,025MW of electrical generation) worldwide, ensures the long-term efficiency and availability of the CHP unit.

To see if your site can benefit from the use of Combined Heat and Power, contact Colm Flanagan, Commercial Director, at 01 870 1200 or email colm.flanagan @dae.ie. J • • • • •

Combined Heat & Power (CHP) is the simultaneous production of electricity and recovery of heat, a by-product of electricity generation. CHPs guarantee 75-90% energy efficiency, whereas best-in-class traditional electricity generation guarantees 5560% efficiency. It is ideal for industrial or commercial applications where there is a balanced local demand for heat and electricity. Installing the appropriate CHP on your site will bring you the following benefits: • Reduction of CO2 emissions per kWh produced • Obtaining best value from electricity pro-

Kliklok Announces Interpack Showcase liklok International has announced K their packaging machinery showcase for Interpack 2011 in Hall 17 Stand No. A44. The company will be demonstrating an end load line, a top load line, as well as their best selling Certiwrap sleever.

Kliklok’s innovative Cascade Loader System (CLS120) is a compact, standalone product handling unit, designed to complement Kliklok’s wide range of end load and top load cartoning equipment. The CLS uses fully adjustable 3stage vertical rotor timing to provide collation, stacking and transfer of bags, flow-wraps, vacuum packs and sachets.

The CLS120 offers stainless steel construction, compact design and colour screen for ease of operation.

Integrated with the CLS will be Kliklok’s latest addition to their end load range - the SFR150 cartoner. The SFR150 was designed with a robust, fully welded stainless steel frame, easy size change facility, colour touch screen, and Kliklok’s patented rotary carton feeder,

offering speeds up to 150 cartons per minute.

The top load line will consist of Kliklok’s popular ECT 500 glue former and Vari-Right three flap carton closing machine. The ECT delivers exceptional efficiencies with an innovative indexing turret concept for remarkable carton control and some of the highest forming FOOD & DRINK BUSINESS EUROPE, MARCH 2011

speeds available. Kliklok’s Vari-Right carton closer offers a patented revolutionary variable pitch design. It incorporates the dual benefits of lugged carton control and random in-feed timing, as a result of ‘infinitely variable’ flight centres. Vari-Right’s unique design couples the carton control benefits of a lugged carton closer without sacrificing the advantages of a random style carton infeed.

Kliklok’s best selling Certiwrap C150 wraparound cartoner will also be on display. This versatile machine is built to handle a wide variety of items including ready-meal trays, tubs, pizzas and many other applications. The Certiwrap 150 comes with standard features of stainless steel frame, easy size change, patented twin arm rotary feeder, and servo driven infeed.

Kliklok International packaging machines are renowned for their flexibility, easy changeover and durability. Come to Interpack and visit stand 17-A44 and see the innovation. J 17

Ulrick & Short’s Ezi Alternative to Eggs-pensive Ingredients

Danisco Invests in Future of Litesse Polydextrose anisco has committed to a major investment to expand production of its funcD tional fibre, Litesse polydextrose, in

eading UK manufacturer and supplier L of clean label ingredients, Ulrick & Short has announced the re-launch of its additive and allergen free range of bakery glazes. Originally developed in conjunction with the micro biology faculty at Leeds Metropolitan University in response to market demands for more natural ingredient replacements, Eziglaze can be used on both sweet and savoury baked products.

Already a recognised brand within the bakery sector and a huge success within the frozen pies market, Eziglaze carries a simple cornflour declaration and has been relaunched with improved cost saving value due to the fluctuating price of eggs.

Enhanced cost savings are achieved as the glaze does not need to be chilled and has an impressive shelf life making it an excellent and practical alternative to egg and milk.

Available in powder format to be made up on site with cold water and as 'ready to use', Eziglaze is ambient stable and can be adjusted to match the viscosity of existing glazes, meaning manufacturers do not need to re-calibrate their equipment - helping to save both time and money. For further information contact Ulrick & Short on Tel +44 (0)1977 620011 or visit www.ulrickandshort.com. J

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FOOD & DRINK BUSINESS EUROPE, MARCH 2011

response to the strength of demand for polydextrose globally. The expansion will enable the company to maintain its leading position in the world polydextrose market well into the future.

With increasingly health conscious consumers seeking food and beverage products that meet their dietary fibre needs, many food industry analysts predict annual growth rates for functional fibres to exceed the food industry average, reaching up to 10% per annum over the next five years.

This investment therefore represents an opportunity for Danisco to increase its presence in the fast-growing functional fibre market, which is currently valued at in excess of $1 billion. J

I BREWING

British Craft Brewing Remains Buoyant The craft brewing industry in the Britain is continuing to expand and thrive in response to growing consumer demand for a greater diversity of traditional and innovative, locally produced beers he development of the craft brewing sector in Britain has reversed the decline in the number of local breweries, which were adversely impacted by beer industry consolidation and rationalisation, as a handful of large national and international brewers came to pre-eminence. By 1970 The new brewhouse at Meantime Brewing Company. the number of brewing companies in Britain had fallen to 200 and total value of relief is then capped but conthe industry was becoming production-led tinues to be allowed to all brewers producrather than market-led, with the larger ing up to 30,000hl per annum. After brewers concentrating on developing high 30,000hl the value of relief tapers and volume, longer shelf-life, pasteurised and then discontinues at 60,000hl per annum.

The duty relief savings have enabled kegged beer brands.

The Campaign for Real Ale (CAMRA), micro-brewers to re-invest in developing which started in 1971, was a consumer brewing infrastructure, marketing and backlash to the direction in which the employment. Employment in the local British beer industry was heading, and her- brewing industry has doubled since the alded a revival in craft brewing and the introduction of PBD. SIBA brewers’ total beer volumes have development of micro-breweries. The number of breweries in Britain has since risen more than doubled since the start of PBD, dramatically to over 750. reaching 1,721,291 hl in 2009, and membership has also doubled. SIBA brewers Formation of SIBA now offer a local beer portfolio of around Instrumental in this change has been SIBA 2,500 permanent cask brands, plus 3,500 (Small Independent Brewers Association), seasonal beers and occasional or one-off which was founded by twenty pioneer specials, plus 1,750 bottled brands plus microbrewers in 1980. Today SIBA is the craft keg lagers and ales.

Society of Independent Brewers and has an operating brewing membership in Continuing Rise excess of 460.

In 2010, local beer production volume A watershed in the development of the rose by 8.8%, in contrast to a total British craft brewing industry was the introduc- beer market that declined by 3.9%. The tion of Progressive Beer Duty, a system of British micro-brewery revolution has been excise duty relief for smaller brewers, in based on the production of cask condi2002, following twenty years of campaign- tioned ale and this accounts for about ing by SIBA. The idea behind PBD is to 82% of SIBA members’ output. reduce duty at lower production volumes, Cask ale, while still growing in popularto offset the higher proportional input ity with consumers, is aimed purely at the costs to small brewers of ingredients, on-trade, which is in decline with pubs labour, overheads and operational logistics. closing down every week. A growing Progressive Beer Duty sets duty to quali- number of craft brewers are now starting fying brewers at 50% of the full rate on to produce keg draught beer and bottled production up to 5,000 hectolitres per beer, to expand the number of outlets to annum (59 brewers' barrels per week).The which they can sell to.

T

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

Modern Technology and Traditional Values Established in 2000, London-based Meantime Brewing Company specialises is producing craft beers in keg draught and bottled format. The company has just opened a new brewery as part of an ambitious growth strategy. While embracing the philosophy of craft brewing by promoting diversity of choice, taste and flavour in beer, Meantime Brewing Company has invested about £3-4 million during the last two years in new brewery infrastructure including packaging lines, kegging, lagering and maturing facilities. The centre-piece of this investment programme is a new £1 million fully automated 100,000 hl brewhouse.

“We believe, like many other European brewers, that the best way to handle beer is to condition it in the brewery and to make sure the product is perfect before it goes out the door. So we stick to draught and to bottle conditioned beers,” explains Alastair Hook, brew master and founder of Meantime Brewing Company. “That enables us to export – we export to 15 different countries – and to sell beer in restaurants, bars, pubs, sports clubs – anywhere regardless of whether they have a cellar to be able to look after cask conditioned ale. Our focus is on creating taste and flavour in our beer.”

He continues: “In terms of achieving taste and flavour, quality and consistency, we believe the right strategy is to invest in modern technology. We have the most advanced brewhouse installation of any craft brewery.”

The new brewery has allowed Meantime to increase capacity from 15,000 hl to 100,000 hl. “We do not see a limit to the demand for craft brewed beer, certainly not in our geographical area,” Alastair Hook remarks. “We are aiming to reach our 100,000 hectolitres capability within five or six years.” J 19

I BREWING

German Craft Brewing Expertise From ROLEC OLEC is one of the leading German brewing equipment suppliers. The comR pany was founded in July 2003 by Wolfgang Roth and Karl Lechner, who have both worked in the brewing industry for many years and possess extensive experience and know-how in the design and fabrication of brewing and beverage equipment.

Prior to starting ROLEC they had been working as a team for beraplan, another German equipment fabricator - Wolfgang Roth as director of sales and marketing, and Karl Lechner as technical director.

ROLEC’s objective is to offer individual solutions based on actual customer requirements. The company’s philosophy is to be a partner, not just a seller, to customers.

This may be one of the main reasons for ROLEC’s success in dealing with some of the leading craft brewing companies around the globe.

Impressive Credentials

ROLEC’s reference list reads like a ‘who’s who’ of the world’s finest craft breweries.

The select list of clients includes some of the most renowned specialty breweries within the rapidly growing US craft brewing industry, such as Victory Brewing, Stone Brewing, Lagunitas, Magic Hat, North Coast Brewing, Firestone Walker Brewing and Brooklyn Brewing. Most of them are also distributing some of their products in Europe, mostly in the UK and Scandinavia.

London-based Meantime Brewery has also picked ROLEC as its partner, supplying the new brewing system for the site in

Sugar dissolving system.

20

ers have been using labour intensive ‘antique’ hop filters (hop back) to separate the wort from the flower hops, leading to massive oxidation and product losses. Since being developed in 2004, the HOPNIK system is now operating at the Meantime Brewery, Thornbridge Brewery in Bakewell, Victory Brewing and Odell Brewing (both US), Little Creatures (Australia) and soon at Robinsons Brewery in Stockport near Manchester.

Dry Hopping

The HOPNIK at Thornbridge Brewing.

Greenwich in 2010. According to Meantime founder Alastair Hook: “ROLEC are uniquely placed to combine traditional brewing engineering expertise, at which the Germans are unsurpassed, with an understanding of modern uninhibited brewing methods.”

The new Meantime Brewery is considered by many as one of the most technologically advanced in the UK and will allow capacity to be boosted to an eventual total of 100,000 hl.

Another new development by ROLEC is the DRY-HOPNIK, a system designed for breweries using dry hopping methods in the lager cellar. There hops are added to the lagering beer to add aroma and flowery notes to the clarifying beer. This procedure does involve, however, some risk in both oxidising as well as contaminating the beer.

The newly invented system allows a closed system, which can work as an oxygen free and sanitary environment, to add the hops to the beer in the tank. ROLEC has applied to patent the system.

ROLEC is also a supplier to the beverage industry. One of the components used commonly in beverage and juice production are sugar dissolving units. They can work as continuously working systems or as batch production systems. The continuously working systems can be delivered with capacities starting at 2500 l/h up to 20,000 l/h and various degrees of Brix, generally around 60 Brix to 65 Brix. J

Customised Equipment

Analysing the craft brewing industry closely and talking with the brewers about unique brewing procedures has made ROLEC a customised equipment ‘designer’. One of ROLEC’s unique developments for the specialty brewing industry is its famous HOPNIK. While most breweries nowadays use hops in the form of pressed hop pellets, some are returning to traditional production methods, using real flower hops again.

Since industrialised brewing methods have made flower hopping equipment expendable there has been a shortage of equipment available for brewers seeking to use traditional techniques.

ROLEC has discovered that those brewFOOD & DRINK BUSINESS EUROPE, MARCH 2011

The brew house at Meantime Brewing Company.

Coca-Cola and Heinz Form Landmark Packaging Partnership he Coca-Cola Company and HJ Heinz T have announced a strategic partnership that enables Heinz to produce its ketchup bottles using Coca-Cola’s breakthrough PlantBottle packaging. The PET plastic bottles are made partially from plants and have a lower reliance on non-renewable resources compared with traditional PET plastic bottles. The partnership is an industry-first, and one that both companies hope others will follow to transform how food is packaged around the world.

PlantBottle packaging looks, feels and functions just like traditional PET plastic, and remains fully recyclable. The only difference is that up to 30% of the material is

made from plants. The plant material is produced through an innovative process that turns natural sugars found in plants into a key component for PET plastic.

Currently, PlantBottle is made using sugarcane ethanol from Brazil, the only source widely recognised by thought leaders globally for its unique environmental and social performance.

“PlantBottle is revolutionising plastic, and our partnership with Heinz is paving the way for industry-wide collaboration,” says Muhtar Kent, chairman and chief executive of Coca-Cola. “This partnership is a great example of how businesses are working together to advance smart technologies that make a difference to our consumers and the planet we all share.”

Heinz’s adoption of the PlantBottle technology will be the biggest change to its iconic ketchup bottles since they first introduced plastic in 1983.

“The partnership of Coca-Cola and Heinz is a model of collaboration in the food and beverage industry that will make a sustainable difference for the planet,” adds William Johnson, chairman, president and chief executive of Heinz.

The launch of PlantBottle is another important step in Heinz’s global sustainability initiative to reduce greenhouse gas emissions, solid waste, water consumption and energy usage at least 20% by 2015.

Coca-Cola first launched PlantBottle in 2009 on brands that include Coke, Sprite,

Muhtar Kent (left), chairman and chief executive of Coca-Cola, with William Johnson, chairman, president and chief executive of Heinz.

Fresca, and Dasani water. By using PlantBottle packaging across multiple brands, the company is able to significantly reduce its dependence on non-renewable resources. An initial life-cycle analysis conducted by Imperial College London showed that the use of PlantBottle packaging provides a 12-19% reduction in carbon impact. J

New £3.2 Million Bottling Facility Opens in Northern Ireland ampak Plastics Europe has officially N opened its bottling facility in Ballymena, Northern Ireland, following investment of £3.2m investment. Plans for the bottle manufacturing plant located at the Dale Farm liquid milk factory in Pennybridge Industrial Estate, were announced last year. Invest NI has offered £254,000 with part funding from the European Regional Development Fund (ERDF).

The in-plant facility, which has already begun production, has the capacity to make more than 100 million bottles a year. As well as servicing Dale Farm’s current production requirements, Nampak will be targeting new customers in the Republic of Ireland. The project has created 20 jobs.

Northern Ireland Enterprise Minister Arlene Foster with Jamie Tinsley, sales director of Nampak Plastics, at the official opening of the new Nampak Plastics Europe facility in Ballymena.

Jamie Tinsley, Nampak's sales director, says: “This investment is in line with our FOOD & DRINK BUSINESS EUROPE, MARCH 2011

strategy of securing long-term contracts for large volumes of bottles. We are seeking to broaden our geographical base and recognise that Northern Ireland offers an excellent platform from which to target the Republic of Ireland market as well as servicing the local market. We are confident that this investment will yield a profitable return and will be looking for opportunities to grow our customer base across the island of Ireland.”

Nampak is one of Europe’s largest manufacturers of rigid plastic containers for the food and drink industry. The company currently operates from nine sites across the UK including six in-plant (‘through the wall’) operations which are situated on customer sites. J 21

I ENTERPRISE RESOURCE PLANNING

Drive Computing Offers ERP Solutions Specifically Developed For Food and Drink Companies ounded in 1983, British company Drive Computing specialises F in providing ERP systems and expertise for small and medium sized operations within the food and drink industry. Indeed, Drive Computing’s ERP products and services have been developed specifically for UK food and drink companies.

If you are new to food ERP it can be difficult to know where to start your search as there are so many ERP products available.

However, Drive Computing’s BLISS ERP system is the original enterprise resource planning solution, created for small and medium sized UK food and drink companies.

Food and drink companies face specific issues in implementing ERP due to the nature of their products and a relatively weak market position. Drive Computing believes these issues translate into a unique set of requirements.

No matter what kind of processing you do - whether its continuous processing, semi batch or batch processing Drive Computing can help.

Thriving companies manage every part of their supply chain: from forecasting and distribution to shelf life and minimising waste

to having 100% traceability.

Growing businesses often take on new levels of complexity. If you are striving to reduce reporting time, lower costs or increase turnover, you need an ‘edge’. Drive Computing’s promise is that if you implement BLISS food ERP UK, you will notice the benefits quickly where it matters – at.the bottom line.

Drive Computing’s food ERP UK solutions will allow you to manage your business in a way simply not possible with older systems such as MRPII. BLISS is widely used by companies in sectors such as: ready meals, soups and sauces, bakery, chilled and ambient foods, tinned produce, beverages, fish processing (see Panel), and health foods.

BLISS ERP software gives manufacturers greater end to end visibility of their business.

Drive Computing has been helping food and drink companies stay competitive for almost thirty years – offering quality software from a British company. J BLISS ERP at International Fish Canners International Fish Canners (Scotland) was established in 1979 and is the largest manufacturer of canned seafood in the UK. At their factory in Fraserburgh, on the North East coast of Scotland, the company employs around 150 personnel who process many millions of canned seafood products every year.

Over 60% of the company’s sales are exported to Europe, USA, Australia and South Africa. Whilst in the home market IFC supplies the leading distributor John West Foods, as well as the major retailers. IFC used Ernst & Young consultancy to review several solutions that best fitted the company’s needs and finally selected Drive Computing’s ERP application BLISS in 1992. The main reason for final selection being the package provided an integrated business solution that covered all areas of their business from manufacturing and stock control to sales, purchasing, production planning and finally through to accounts.

IFC’s Jim Strachan says: “The strength of module integration, combined with the system’s inherent flexibility enabled BLISS to be tailored to our exact requirements. We have seen tremendous growth and change in our market sector over the last few years and required a system to meet these and future legislative demands. The system continues to grow with us and to provide all the relevant information to control and run a business involved in ‘best practice’ within food manufacture.”

He continues: “The modernised, browser based product has since 2008 also been implemented in a sister company based on two sites, Nor-Sea Foods Ltd encompassing bespoke changes as well as full EDI integration to all their main customers.”

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I ENTERPRISE RESOURCE PLANNING

Solarsoft Becomes Commercial Partner of Food and Drink Federation olarsoft Business Systems, a leading S developer and provider of ERP and business software solutions for food and drink manufacturers, has become a commercial partner of the Food and Drink Federation, the voice of the UK food and drink industry.

“In the past year, FDF has formed com-

mercial partnerships with a range of leading professional services companies to provide added value services to our members,” explains Charlotte Lawson, director of member services at FDF. “Effective industry specific software is vital to the competitiveness of food manufacturing businesses and we are pleased that through this partnership our members can more easily benefit from Solarsoft’s extensive knowledge and experience in process IT manufacturing systems.”

Solarsoft has developed software for food and drink manufacturers since 1990, focusing on effective support of the manufacture and distribution of chilled, frozen and ambient food and drink products.

Traceability, quality, waste minimisation, regulatory compliance and rapid fulfilment are key features of Solarsoft’s Tropos ERP for the food and beverage industry.

From bulk foodstuffs to short-cycle fresh produce, Solarsoft solutions enable effective management of manufacturing processes and associated supply chains, whether they involve major retailers, the catering trade or direct sales customers.

Clive Thomas, EMEA sales director of Solarsoft Business Systems, comments: “We are looking forward to working closely with the FDF to help both new and existing members to address the industry's key challenges in sustainability, food safety and supply chain efficiency.”

“This announcement is positive news for our industry,” comments Darren Frost, IT director, of Uniq Prepared Foods, established users of the Solarsoft Tropos suite. “Solarsoft’s solutions help Uniq to manage the key challenges in food manufacturing such as effective traceability, control of yield, wastage and packaging, and managing the requirements of major retailers. I'm sure that FDF members will benefit from Solarsoft’s experience in these vital and topical areas, and that Solarsoft’s product development will benefit from FDF’s insight into the needs of our sector.” J

Flexibility Top Requirement For Improving ERP Systems ver one in three (35%) UK IT deciO sion-makers cite greater flexibility as the top improvement they would make to their existing ERP systems, according to an independent report launched by global enterprise applications company IFS. This is closely followed by higher standards of customer service, with 29% seeking improved relations.

Better training and usability top the respective wish lists of 18% and 9% of those surveyed. Notably, all of these desired

improvements come before clearer visibility of return on investment (4%), despite the current business focus on cost efficiency.

Additionally, 15% of IT decision-makers could not express confidence that their current ERP system is flexible enough to work efficiently alongside other tools and business systems. Tellingly, only 5% of those surveyed would not alter any element of their existing ERP suites.

Alastair Sorbie, chief executive of IFS, says: “It’s significant that most businesses FOOD & DRINK BUSINESS EUROPE, MARCH 2011

desire greater flexibility in their ERP systems and better customer service from providers above factors such as clearer measurement of ROI. It reveals that many CIOs and IT managers are fed up with enterprise applications and ERP providers that fail to deliver on the promise of meeting changing business needs and improving business agility. It also shows that they are waking up to the potential benefits of enterprise applications that have flexibility and agility built into their architecture.” J 23

Completion of Skanem Newcastle Retail Food Deal kanem UK has completed the sale of its S retail food labelling business at its Gateshead operation to Paragon Print & Packaging. “This is part of our strategic changes we are effecting in the UK. We have grown rapidly both in the multinational and the domestic market in recent years, but with such growth comes the necessity to focus on core markets and core activities,” explains Steve Dunne, managing director of Skanem UK: “The expectations from various markets are becoming more demanding. As a consequence, we will focus on serving the growing portfolio of ‘key strategic’ customers as we do not want to give our retailer customers reduced service expectations in the future. We want to continue our focus on

Pictured (from left to right): Karl Bostock, Paragon finance director; Steve Dunne, managing director of Skanem UK; Tony Lennon, chief executive of Paragon Group; and Dennis Patterson, Paragon operational director.

high quality customer relations.”

Steve Dunne continues: “Paragon Print and Packaging are highly respected in the food manufacturing and the food retail sector and our food business could not be placed in better hands.”

Tony Lennon, group chief executive of Paragon Print and Packaging, says: “This transfer of business makes good commercial sense to all parties as we continue to focus and expand our strategic commitment to the domestic food manufacturing and food retail sector. The transfer has been concluded in a very fair and open manner and both Skanem and Paragon will continue to work alongside each other to ensure that all existing customers’ requirements are satisfied.” J

A Fabulous Order for Kliklok n a joint project with Ulma Packaging, Kliklok is about to install IBakin’ its award winning Celox end load cartoner at The Fabulous Boys factory in Witney, Oxfordshire. As part of a turnkey line, the high performance Celox machine will be supplied with an extended infeed to accept product loading from 3 racetrack/Delta robot infeeds, to pack individually wrapped muffins and cup cakes in 4’s, 6’s and 8’s at speeds up to 160 cartons per minute. Two additional servo drives were added to the Celox, plus an uprated HMI screen, customised to include hard wire links to the robotic loading system, to enable matching speed variations. For further information contact Kliklok on Tel + 44 (0)1275 836131 or visit www.kliklok-int.com. J

Cases For Industry Customers to Enjoys Benefits of Export Packing and Freight Forwarding Alliance ases for Industry, a division of the leadC ing single-source packaging solutions specialist FDL Packaging Group, has entered into a new strategic partnership with PK Marine, one of the UK’s leading lights in freight forwarding services. The strategic alliance will enable customers to enjoy a completely seamless service in which case manufacturing, export packing and freight forwarding will go hand-in-hand to ensure a smooth and trouble-free service.

Through the new relationship, Cases For Industry customers will enjoy access to an 24

exemplary ISO 9001-accredited import and FOOD & DRINK BUSINESS EUROPE, MARCH 2011

export handling operation that has been serving British exporters, major multinationals, the MOD and other government departments for over 40 years.

Operating from an eight-acre site in Knowsley, Merseyside, the PK Marine operation will offer Cases for Industry customers a comprehensive handling service for all types and weights of cargo, unrivalled in quality and scope. For more information contact the Cases For Industry Customer Information Desk on Tel +44 (0)151 545 0092 or visit www.casesforindustry.co.uk. J

R-Flute® – Taking Out Costs and Carbon lthough times are changing rapidly in A the retail end of the corrugated packaging market, it is very rare to be able to talk about a major breakthrough, but DS Smith Packaging’s new R-Flute® deserves that description, and more. R-Flute® is a new type of corrugated fluting designed to help customers sell more, reduce supply chain costs and operate sustainably.

A meticulous development process has resulted in a profile in which the flutes are smaller and closer together than B-Flute, whilst optimising board strength. It is suited to many sectors and ideal for fast moving consumer goods. Compared with the widely used B-Flute, R-Flute® delivers better printing, better appearance, machine line efficiencies and dramatic savings in logistics, whilst continuing to offer the necessary protection.

R-Flute®’s calliper is 20% less than BFlute’s, so that 20% more corrugated can be loaded onto a pallet for delivery. This means up to 20% fewer deliveries to handle, up to 20% less storage space and correspondingly fewer pallet movements in the factory. All these percentage points add up to big savings for customers, in cash, space, operating time and carbon.

Compared with B-Flute, R-Flute® offers a flatter, better surface for printing and presentation, a crucial advantage for more and more customers as they seek brand appeal and sales success with shoppers in store.

In addition, the closeness of the flute tips helps perforated retail ready packaging to form squarely, open reliably and look good on shelf after opening, another big factor in competing for sales.

As if great print is not enough, the excellent crush resistance of the R-Flute® surface makes it exceptionally effective for shipments of products in bottles, cans or

R-Flute® has achieved some healthy savings in cost and carbon for Kellogg’s Nutri-Grain range.

R-Flute®’s better printing surface helped to create a new robust and colourful pack for Calypso Soft Drinks.

similar containers.

On automated packing lines, some customers who have moved from B-Flute report productivity increases of up to 15%.

This is achieved via crisp, problem free folding and less downtime to feed new pallets of corrugated into the line, since each pallet of R-Flute® holds many more empty packs.

single material retail ready format. The new perforated pack forms squarely and opens reliably whilst optimising board strength. It has enabled 10,200 more packs inbound to be stacked in each lorry. Rob Grundy, Production Manager of Lincolnshire Herbs, says: “Not only does the pack work well but it looks great too. Critically, it is helping our business reduce costs and drive out carbon.”

R-Flute®’s better printing surface helped to create a new robust and colourful pack for Calypso Soft Drinks. Needing to develop eye-catching packaging for a new range of soft drinks for Sainsbury’s, Calypso turned to DS Smith Packaging Featherstone who deployed the PackRight suite of tools. DesignRight ensured that the pack was engineered to meet the rigours of Calypso's automatic packing lines and extended supply chain. ImageRight, in combination with R-Flute® flat print surface, gave the finished pack an outstanding colourful and vibrant impact with precise matching of all the brand colours. Cathrine Matthews, Calypso’s Design Manager, comments: "We are delighted with the results of this project.”

Who is Benefiting From R-Flute®?

R-Flute® in Action Since R-Flute® was launched a few months R-Flute® has achieved some healthy sav- ago, there has been tremendous customer ings in cost and carbon for Kellogg’s Nutri- interest in the savings it can offer. Tony Grain range.

Foster, Director of DS Smith Packaging, R-Flute® provides a better, flatter print has been delighted by the level of customer surface than other more commonly used demand: “Our ability to use R-Flute®, flutes, which means the packaging has great together with our unique PackRight busicolour coverage with solid block colours. ness tools, means we can give our cusThe previous competitor pack, produced in tomers a step change in packaging efficienC-flute was reported to have looked cy, sustainability and effectiveness. Already "washed out". The new pack now stands R-Flute® has proved itself across a very out on the shelf far more, as well as being wide range of packaging and supply chains easy to find back of store, helping to drive and we’re confident that more and more on shelf availability. The change to R- customers will be able to make significant Flute®, which has a smaller calliper than savings in cost and carbon in the months the previous C-flute case, has reduced and years ahead.” J Kellogg's pallet movements by 911. This equates to a massive 24 full loads less every year. Overall that is a saving of 22 tonnes of C02 pa.

R-Flute® also stacks up for Lincolnshire Herbs. DS Smith Packaging Louth reviewed a previous supplier’s box, a standard B-flute case with an opening tape and recommended using R-Flute®. As a result, the R-Flute® stacks up for Lincolnshire Herbs. pack was converted into a FOOD & DRINK BUSINESS EUROPE, MARCH 2011

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I PET FOOD

£2 Billion UK Pet Food Market Still Growing Despite the recession, the UK pet food market remains in growth and has broken through the £2 billion sales barrier for the first time. arket growth is being fuelled by innovation by manufacturers to meet the increasing demand for convenience from pet owners in terms of product packaging and formulation. New product launches have resulted in greater market segmentation. Manufacturers are also encouraging pet owners to trade-up to premium products, especially those offering particular nutritional benefits for their pets.

The range of products has become increasingly diverse as manufacturers have tailored their cat and dog food products according to an animal’s age, gender, breed, health and lifestyle. Similar to the human food market, functionality and naturalness are important issues within pet food.

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More Discerning Pet owners have become more discerning in their purchasing of pet food and apply many of the same criteria as when shopping for themselves, regarding their pet as part of the family. Consequently, there has been a growing demand for pet food manufactured without artificial additives, preservatives and colourants, and a greater emphasis on providing pets with a healthier diet.

Manufacturers have also been able to capitalise on the tendency of many owners to humanise and pamper their pets by introducing premium meals based on gourmet recipes. As many pet owners have become increasingly concerned with value for money, manufacturers have responded by adding value to their mid-range brands by introducing new gourmet recipes and redesigning packaging.

Highly Sophisticated Over the past twenty years prepared pet foods have become increasingly sophisticated following scientific advances in pet nutrition.

Manufacturers are not only developing products to meet the nutritional needs of pets but are also considering how health and well being can be enhanced by using added beneficial ingredients. For example, there are now products with specific antioxidants to help support immune function and others with glucosamine to help maintain joint health.

UK pet owners feeding a commercially prepared pet food can have complete confidence they are addressing all their pet’s nutritional needs, .according to the Pet Food Manufacturers’ Association (PFMA).

With 60 members representing 95% of the UK pet food market, the PFMA promotes improvements in nutrition, processing, packaging, traceability and quality assurance across the industry.

Founded in 1970, with just four members, the PFMA has played a highly influential role in the development of the UK pet food market over the

past forty years. In 1970, the UK dog population was 5 million, the cat population was 4.25 million and the pet food market was worth £100 million.

Last year, there were 8.3 million dogs, 8.6 million cats and the market was worth in excess of £2 billion. In 1970, the majority of a pet’s diet was home prepared using scraps and fresh meat compared to on average only 15% today.

Major Industry The UK pet food manufacturing industry employs over 8,000 people and is making significant investment in new production and packaging facilities in both wet and dry pet food. Current capital investment in the pet food industry is estimated at over £100 million.

The industry is dominated by two players, Nestle Purina and Masterfoods, which between them control about two-thirds of the dog food market and close to 80% of the cat food market. Nestle Purina is one of the world’s largest producers of dry dog and moist cat foods. Its portfolio includes well known brands such as Winalot, Felix, Friskies and Go-Cat. Part of US-based Mars, Masterfoods is a major supplier of pet care products with brands such as Whiskas, Pedigree, Kitekat, Pal, Cesar, Katkins, Chappie and Sheba.

However, increasing segmentation and premiumisation of the market offer opportunities for smaller players to establish niche positions.

Bright Outlook The market fundamentals remain solid for UK pet food manufacturers. Approximately 13 million UK households (about 47%) own pets (excluding fish). The total number of pets in the UK is currently around 24 million (excluding fish) including 16.9 million dogs and cats, and 2.7 million small animals such as rabbits and guinea pigs.

Having reached the £2 billion mark, the UK pet food market is expected to continue growing. “A key target for growth is likely to be the pets not currently being fed prepared pet food,” says Michael Bellingham, chief executive of PFMA. “In 1960 only one quarter of a pet’s diet was commercial food. By 1970 that proportion was still under half, whereas today we estimate 85% of a pet’s diet is prepared pet food.”

Despite the economic recession, pet owners seem willing to continue to buy premium pet food. A survey conducted by the PFMA revealed that 90% of pet owners believe the food they feed their pet greatly affects its health and 92% of pet owners make sure they give their pet the best quality food. J

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

27

Hilton Process Solutions Ltd. Our teams regularly provide engineering, design & manufacturing support to some of the UK’s largest food and pharmaceutical companies.

• Process Pipe work Systems • All Stainless Steel Design & Manufacture Fabrication • Service Pipe work Systems • Turnkey Project Design & Manufacture Management • Vessel Design & Manufacture • Product Recovery Systems • Conveyor Design & Manufacture • Sourcing & Refurbishment • Relocation & Installation of Process Equipment • Coded Welding • Fire Suppression

For more information on our products and services please contact:

Hilton Process Solutions Ltd Unit 11, Wellington Business Centre, Quebec St, Elland, West Yorkshire, HX5 9AS Tel: 01422 374454 Email: info@hiltonprosol.co.uk

Engineering, Design and Manufacturing Support From Hilton Process Solutions ilton Process Solutions specialises in process engineering and bespoke instalH lations within the food and pharmaceutical industries, which include: * System design and installation of process and services pipe work for the food industry and various other applications * Tank design, manufacture and installation * Control system design and installation * Full design layout drawings * Conveyor design, manufacture and installation * Machinery positioning and relocation * CDM Management of projects * Civil works * Fabrication and Engineering works * Fire suppression (water mist) systems for various applications including ovens, fat fryers, engineering plant rooms and computer server rooms * Product recovery systems (PIG), design, manufacture and installation.

The company’s teams regularly provide engineering, design & manufacturing support to some of the UK’s largest food and pharmaceutical companies.

Clients rely on Hilton Process Solutions because it understands the importance of urgency, value for money and superior workmanship in a hygiene conscious environment.

Hilton Process Solutions provides a comprehensive range of services from minor repairs to major projects such as new manufacturing facilities to factory relocations.

All team members are certified holders of IOSH Safety Passports and as Hilton Process Solutions is accredited to Safe Contractor, you can be totally confident that its Health & Safety procedures are second to none. J 28

I CONVEYORS

Cox and Plant Launches New Laning System idlands-based conveyor manufacturer Cox and Plant M Products has launched a new conveyor enabling separation of products for easier presentation and packaging.

Cox and Plant’s vibratory Laning system is designed to align products and is ideal for products such as plastic components, computer chips, bottle tops, cereal and chocolate bars, bread rolls, fish fingers and sliced vegetables.

“We have worked very closely with food manufacturers to develop the Laning system, in particular the UK’s largest processor of seafood. This has resulted in fifteen similar systems being installed across Europe,” says commercial director Andy Cox. “The conveyor was originally designed as a bespoke laning machine to align fish fingers so they could be directly fed and packed into boxes. We are now seeing an increase in the need for correct handling and effortless arrangement of products to ensure that ‘A’ grade products are produced.”

The Laning system is supplied with custom designed alignment sections to suit the product and application required and each system is manufactured from bespoke designs to meet customers’ exact requirements. Laning sections can also be supplied with varying designs for quick product changeover using Cox and Plant’s Quick Release Clamps.

The Laning system is a totally hygienic system manufactured from stainless steel and requiring minimum maintenance. It also surpasses health and safety noise levels operating at less than 58 dB(A). J

FOOD & DRINK BUSINESS EUROPE, MARCH 2011

I HEALTH FOODS

NBTY Europe Invests £20 Million in Infrastructure NBTY Europe, the home to health food brands including Holland & Barrett, Julian Graves, GNC, Nature’s Way and De Tuinen, has unveiled two new buildings in Nuneaton and Burton-on-Trent representing a combined corporate investment of more than £20 million in its English operations.

BTY Europe has invested more than £14 million in establishing ‘Burton 2’, a new 130,000 square foot processing and packing plant in Burton-on-Trent. It has been developed to complement an existing warehouse and distribution depot (Burton 1) on the same site. New equipment includes a bespoke ‘chocolate coating plant’, which will help fuel new product development, while new fruit and nut production lines will be capable of producing more than one million bagged products every week.

The new facility has been built to service the growing health foods market and also to lower costs, expand market share and further develop the company. The world class manufacturing plant has placed NBTY at the forefront of health foods manufacture within the EU. NBTY Europe has also spent £6 million on Samuel Ryder House, a new headquarters and store support centre in Nuneaton, which is home to more than 160 employees and the central operations for all NBTY Europe brands. It is named after the famous golfer and founder of Holland & Barrett who set up the company from a market garden in the 1920’s.

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NBTY is a leading global manufacturer of nutritional supplements.

Central Hub The new infrastructure forms part of a central hub, which supports more than 1,000 health food stores across Europe and has created more than 210 new jobs over both locations. These consist of 80 new employees in Burton 2, over 50 in Samuel Ryder House with the remainder being additional supply chain positions in Burton 1.

The investment reflects strong growth in the business. Roger Craddock, group legal director of NBTY Europe, comments: “During 2010, NBTY Europe posted sales in excess of £400 million and opened more than 80 new stores, strong growth we are pleased and proud of - especially given the current challenging economic climate. This new investment in buildings, equipment and infrastructure underpins our commitment to providing customers with the highest quality products at excellent value.”

Continued Growth He elaborates: “Over the next 12 months, we are well placed to continue growth across all our brands within the group, as well as growing core and emerging categories. Last year, Holland & Barrett grew its Natural Beauty category 16 per cent year on year, with the sports nutrition category reporting growth of 14 per cent.”

In 2010, Holland & Barrett reached the milestone of 600 stores, with new concept models proving a great success. Plans for 2011 include a roll out of concept store models through both the Julian Graves and GNC brands as well as expansion into new categories.

“As customers continue to be affected by spending cuts, we are confident that high quality personal health products at the best prices will remain of upmost importance,” says Roger Craddock.

Global Business Parent group NBTY is a leading global vertically integrated manufacturer, marketer and distributor of a broad line of FOOD & DRINK BUSINESS EUROPE, MARCH 2011

In 2010, Holland & Barrett reached the milestone of 600 stores.

high-quality, value-priced nutritional supplements in the United States and throughout the world. Under a number of NBTY and third party brands, the group offers over 22,000 products.

In addition to the Holland & Barrett, Julian Graves, GNC, Nature’s Way and De Tuinen brands, the portfolio also includes Nature’s Bounty, Vitamin World, Puritan's Pride, Rexall, Sundown, Worldwide Sport Nutrition, and LeNaturiste.

NBTY is now part of the Carlyle Group after being acquired for $4 billion last October. The Carlyle Group is a global alternative asset manager with $90.6 billion of assets under management. Carlyle invests across three asset classes - private equity, real estate and credit alternatives - in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media.

Carlyle portfolio companies generate more than $84 billion in revenue and employ more than 398,000 people around the world. I 29

I SEAFOOD

Young's Seafood Limited is Launched Young's Seafood, The Seafood Company and Findus UK are being brought together to create Young's Seafood Limited, the UK's largest supplier of fish and seafood. aving grown organically and by acquisition, Young’s is the leading branded producer and distributor of seafood in the UK, with a 200 year old heritage of selling a wide range of high quality seafood products - both chilled and frozen - in retail and food service channels. Its market-leading products include the Young’s Chip Shop range and Young’s Admiral’s Pie. The Seafood Company is the leading supplier of chilled fish and seafood to UK retailers.

By bringing these UK businesses together, Young's Seafood Limited will become the UK's leader in chilled and frozen, own-label and branded fish and seafood. Leveraging its market-leading expertise in sourcing, sustainability, quality, category and consumer insight, and new product development, Young's Seafood Limited will provide a fish and seafood Centre of Excellence.

With a turnover of around £600 million, Young's Seafood Limited’s meals will be enjoyed by millions of consumers every

H

day. Young's Seafood Limited is part of the European parent, Findus Group, which is led by chief executive Chris Britton.

Development Young’s Seafood and The Seafood Company were both part of FoodVest (now the Findus Group), which also incorporated Findus in continental Europe, and was created by CapVest, before it sold the business to Lion Capital, another private equity firm, in July 2008. CapVest acquired Young’s Seafood in 2002, Findus in 2006 and The Seafood Company in 2007 in line with its strategy of leading consolidation within the European seafood industry.

Young’s and Findus had previously been operated as separate sister companies, but in 2008 were combined under a new, unifying structure. With annual turnover of more than £1 billion, Findus Group is one of the largest frozen food and seafood companies in Europe. It holds leading market positions in:the frozen and chilled seafood market in the UK; as well as the frozen food sectors in France; Sweden, Norway and Finland.

Organisational Structure Young's Seafood Limited will employ 3,200 people across 13 UK sites. Grimsby - the traditional home of Young's - will continue to be Young's Seafood Limited's manufacturing and NPD Centre of Excellence, alongside its commercial leadership base in London. The business has invested over £1.5 million in operations in Grimsby in the past 18 months. Young's Seafood Limited will continue to have a strong base in Scotland, drawing on the invaluable fish expertise of The Seafood Company's manufacturing base.

Leendert den Hollander, managing director of the Findus Group UK & Ireland, is the new chief executive of Young's Seafood Limited. Pete Ward, managing director of The Seafood Company, becomes chief operating officer of Young's Seafood Limited.

Accelerating Growth “Fish is a fantastic source of protein and has an essential part to play in the healthy diet of the UK consumer. We love fish – that’s why fish is right at the heart of our business - and we will further accelerate growth by drawing on our scale, heritage and leadership in fish and seafood, in close partnership with our retailer customers,” says Leendert den Hollander. J

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FOOD & DRINK BUSINESS EUROPE, MARCH 2011