F&db europe may 2015

May 2015

â‚Ź2.7 billion investment in EU dairy ingredients processing

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C o n t e n t s

- 2 M ERGERS & A CQUISITIONS

- 47-53 M EAT & P OULTRY

Coverage of British and international deals.

European meat processors facing leaner times.

Faccenda Foods is UK Processor of the Year.

P AGE 37 PAGE 5

Dr Josef Schwaiger, Executive, DMK Group.

- 5 C OVER S TORY

R EGULARS

Mike Benner, MD, SIBA.

Processing & Manufacturing . . . . 12-14 & 39

Quality & Safety . . . . . . . . . . . . . . . 15 & 54

€2.7 billion investment in EU dairy ingredients processing.

Control & Automation. . . . . . . . . . . . . . . . 20

Arla Foods and DMK Group open new joint venture production facility.

Materials & Ingredients . . . . . . . . . 22, 40-44 Cocoa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41-44

PAGE 47

Kjeld Johannesen, CEO, Danish Crown Group.

PAGE 5

Peder Tuborgh, CEO, Arla Foods.

Energy & Environment. . . . . . . . . . . . . 27-33 Waste Water Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . 27-29 Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-33

Storage & Logistics . . . . . . . . . . . . . . . . . 45 PAGE 53 Bottling & Packaging. . . . . . . . . . . . . . 55-56

- 17&23 D AIRY

Hannu Kottonen, CEO, HKScan.

Challenging times for Valio.

Strong financial performance as Dairygold prepared for post-quota era.

Managing Director: Colin Murphy Editor: Mike Rohan Group Operations Manager: Sylvia McCarthy

PAGE 9

Theo Spierings, CEO, Fonterra.

Advertising: John Bent, Ian Stewart & Rachel Howard Production Manager: Sylvia McCarthy

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M E E R R G G E E R R S S M Iglo Group Sold For €2.6 Billion Private equity group Permira is selling Iglo Foods Holdings, Europe’s largest frozen food business, to Nomad Holdings for Eur2.6 billion. Nomad is a publicly-listed acquisition company and upon closing of the Iglo deal will change its name to Nomad Foods. As part of the transaction, Permira will retain a 9% stake in Nomad Foods. The deal is subject to customary closing conditions and is expected to complete in the second quarter of 2015.

Under Permira ownership, Iglo Group has established itself as Europe’s largest frozen food business with iconic brands including Birds Eye in the UK and Ireland, Iglo in Germany and other continental European markets, and Findus in Italy. This was achieved by investing heavily in product innovation, improving its brand marketing and taking advantage of consolidation opportunities in the European frozen food market. In October 2010, Permira provided additional investment to enable the acquisition of Findus Italy adding significant scale to Iglo

Group. As a result, Iglo Group has achieved leadership in seven out of the 12 countries in which it operates, including the UK, Germany and Italy, which account for about 85% of sales.

The company is also in a strong financial position today having recently reported revenues of Eur1.5 billion and EBITDA of Eur306 million for the 2014 financial year.

Cheryl Potter, head of Permira’s global consumer team, says: “Iglo Group is a great example of how we partner with leading co-nsumer brands and support th-em, including during tougher economic times, to foster innova2

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tion and build a platform for sustainable growth. Iglo Group today is the most trusted brand in European frozen food and the fact that it will be the foundational investment in Nomad’s portfolio of marketleading, niche consumer foods companies speaks volumes to the strength of the company, its powerful brands and exciting growth prospects. We are pleased that the Permira funds will remain invested alongside Nomad as the company embarks on the next phase of its journey.”

Carlsberg Completes Greek Merger Carlsberg Group has completed the merger of its Greek subsidiary, Mythos, and Olympic Brewery, the third largest brew-

er in Greece, after gaining the necessary approvals from the Hellenic Competition Commission. The deal was first announced in November 2014.

The combined company will be a strong number two in the Greek beer market with a market share of around 29%. The combination of Olympic Brewery’s strong local brand, Fix, and the Carlsberg Group’s local power brand Mythos and its international premium portfolio will create a very strong product portfolio. In addition, the merger will generate synergies within areas such as procurement, production and distribution.

Carlsberg will own 51% of the combined company and the current shareholders of Olympic Brewery will own the remaining 49%.

Pork Farms/Kerry Foods Merger Provisionally Cleared The UK Competition and Markets Authority (CMA) has provisionally cleared the acquisition by Pork Farms Caspian of the chilled savoury pastry

Chinese consumers with plantbased protein drinks representing a growing beverage category in China.

Heineken to Take Majority Stake in Slovenian Brewer business of Kerry Foods. The acquisition, for an undisclosed price, incorporates Kerry Foods’ manufacturing assets at Poole, Dorset, and Spalding, Lin-colnshire.

Pork Farms Group, through the Pork Farms Caspian subsidiary, and Kerry Foods’s chilled savoury pastry (CSP) business both manufacture and supply branded and own-label CSP products to customers such as supermarkets, convenience stores and wholesalers.

CSP products include cold pies (such as pork pies), sausage rolls, pasties, slices, hot pies, quiches and scotch eggs, and are worth approximately £1 billion a year.

Coca-Cola Plans $400 Million Chinese Acquisition The Coca-Cola Company intends to make a cash offer to acquire 100% of Xiamen Culiangwang Beverage Technology Co, a producer of plantbased protein drinks sold in China. The company is owned

by Hong Kong-listed China Culiangwang Beverages Holdings. The deal is valued at approximately US$400 million.

Headquartered in Xiamen, Fujian Province, Xiamen Culiangwang’s top-selling products include green bean, red bean and walnut variants of plant-based protein drinks sold under the brand China Green Culiangwang. The proposed acquisition is in line with CocaCola China’s strategy to continue providing a diverse range of beverage products to

FOOD & DRINK BUSINESS EUROPE, MAY 2015

Heineken has agreed to acquire a 51.11% stake in Pivovarna Lasko, Slovenia’s leading brewer, for a total consideration of Eur114.3 million. Slovenia is centrally positioned between

other markets where Heineken has operations. Pivovarna Lasko operates two modern and well-invested breweries and owns and brews the renowned Lasko and Union beers.

Jean-François van Boxmeer, chairman and chief executive of Hein-eken, says: “This acquisition strengthens our position within the region and will bring two complementary strong local brands into our existing portfolio.”

Dusan Zorko, chief executive of Pivovarna Lasko, remarks: “The acquisition by Heineken as a strategic investor allows Pivovarna Lasko to continue building our historic local brands and to develop our position in regional export markets, as well as give an opportunity to better utilise our production capacities.”

Leading European Pet Food Manufacturer Sold For €315 Million Pamplona Capital Management, a London and New York-based global private equity investment firm, has acquired Partner in Pet Food, one of Europe’s leading pet food producers, for Eur315 million from follow private equity firm Advent International.

Headquartered in Budapest, PPF is the second largest producer of private label wet and

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and acquisitions in both Western and Central Europe.

Marston's to Acquire Daniel Thwaites' Beer Division

dry pet food in Europe, offering a full range of cat and dog food products including. The business employs around 1,200 staff and has eight production facilities across Europe in Hungary, Slovakia, the Netherlands and the Czech Republic.

Pamplona is backing PPF’s current management team led

by Attila Balogh, who will become executive chairman, and will continue to invest in the business to support organic growth. The business plans to accelerate product innovation across both its private label and branded offerings and will also look to grow through further innovations

UK brewer and pub operator Marston’s has agreed to acquire the beer division of Daniel Thwaites for a total cash consideration of £25.1 million excluding working capital. The acquisition includes two leading, premium brands - Wainwright and Lancaster Bomber ales. Marston's has been brewing Thwaites' beers since early 2014. As part of this acquisition, Marston’s has entered into a long-term exclusive agreement to supply all beer, wine, spirits and minerals to Thwaites' pub es-tate.

This acquisition is consis-

tent with Marston's brewing strategy to focus on popular premium ales with local and regional appeal, and provides an opportunity to capitalise on the developing free trade market and wider consumer interest in the beer category.

Aryzta to Make Strategic Investment in Picard Aryzta, the Zurich-based global speciality bakery business, has entered into exclusive negotiations for a strategic investment with private equity Lion Capital in Picard, a speciality premium French food business with revenues of Eur1.37 billion. Under the terms of the agreement, Aryzta would acquire a 49% shareholding in Picard for Eur446.6 million. The purchase price will be largely funded with the net proceeds from the recent of placement Aryzta’s shares in Origin Enterprises, which yielded about Eur400 million, net of

FOOD & DRINK BUSINESS EUROPE, MAY 2015

fees and taxes).

Picard would be treated by Aryzta as an associate and would be expected to make a net contribution of 3% to Underlying EPS on an annualised basis, offsetting half of the negative 6% impact of the Origin Enterprises placement.

Aryzta would have the right to exercise a call option in three to five years to acquire 100% of Picard.

Picard has market share leadership in speciality premium food in France, with a 40 year track record of revenue growth, EBITDA growth and market share expansion.

Picard operates an asset light, replicable model, capable of transferring internationally.

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COVER STORY

€2.7 Billion Investment in EU Dairy Ingredients Processing €2.68 billion was invested between 2012 and June 2014 across the EU in the processing of dry dairy ingredients such as milk and whey powders, with the majority of these facilities in the Netherlands, Germany, Ireland and France.

A

ccording to a recent report by the French Dairy Interbranch Organisation, CNIEL, the investment in dry dairy ingredients represents just under half of a total spend of Eur5.5 billion in European dairy processing in preparation for the abolition of the milk quota regime in April 2015 - see Table One. Other key product categories to receive investment include cheese (£1.02 billion or 18% of the total investment figure), milk and dairy drinks (Eur650 million or 12%), yoghurt and chilled products (Eur330 million or 6%) and butter (Eur100 million or 1.8%). The Eur5.5 billion investment encompasses 190 projects by 120 companies with Lactalis, FrieslandCampina, Arla Foods, DMK and Glanbia Ingredients Ireland prominent amongst them.

Europe is already the world’s largest cheese exporter and the recent heavy investment in dry dairy ingredients processing will further strengthen its standing and competitive position in the global milk powder and whey powder markets.

Pictured at the opening of ArNoCo’s new production facility in Northern Germany are (from left to right): Peder Tuborgh, chief executive of Arla Foods; Christine Holt from SPX; architect Peter Klinck; and Dr Josef Schwaiger, spokesman for the executive board of the DMK Group. ArNoCo is a joint venture between Arla Foods and the DMK Group. The new site will process the whey produced from DMK’s cheese production and supply high quality whey protein concentrate and lactose to Arla’s global

ingredients business. €120 Million Lactose Plant One of the biggest investment projects in dairy ingredients is Arla Foods’s new Eur120 million lactose manufacturing plant in Jutland, Denmark. The factory will produce 80,000 tonnes of lactose every year and is situated adjacent to Arla Foods Ingredients’ existing whey processing facility, Denmark Protein. Lactose from the factory will predominantly be sold into the vibrant infant nutrition sector. Arla Foods Ingredients is a global leader in natural whey ingredients for products in a range of categories – from sports nutrition, beverages, bakery, dairy and ice cream to clinical and infant nutrition.

Arla Foods is a dairy co-operative Table One: owned by around EU Dairy Investment by Product (€) 13,500 milk farmers from Sweden, DenProduct Investment mark, Germany, Dry ingredients 2.68 billion Great Britain, BelCheese 1.02 billion gium, Luxembourg Milk, dairy drinks 650 million and the NethYoghurt, chilled products 330 million erlands. Reflecting Butter 100 million its broad geographiOther 750 million cal spread, Arla Foods has invested

in new dairy processing facilities across a number of European countries. For example, in Germany, Arla Foods recently opened a new production area at its site at Pronsfeld in Rhineland-Palatinate. About Eur110 million has been invested in the construction of a new milk drying tower, a new creamery and additional milk preparation and processing capacity.

Table Two: Pronsfeld has evolEU Dairy Investment by Country (€) ved into one of the largest dairy producInvestment tion sites in Europe Country 1.09 billion over the past 50 France 1.02 billion years. It became part Germany 870 million of Arla Foods fol- Netherlands 580 million lowing the merger Ireland with Milch-Union UK, Denmark, Poland, 200-500 million Hocheifel (MUH) in Italy, Spain Other EU Member States Less than 2012.

200 million Arla Foods was also responsible for Dairy investments announced or finalised the largest dairy between 2012 and June 2014. Source: CNIEL investment in the

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Jim Bergin, chief executive of Glanbia Ingredients Ireland.

UK during the 2012 to June 2014 period having spent £150 million on a new liquid processing site at Aylesbury in the south of England.

Another major European and global dairy group, Royal FrieslandCampina, is currently investing Eur135 million at its Borculo site in the Netherlands to expand capacity for milk powder and ingredients, and a further Eur41 million for capacity expansion in infant nutrition ingredients. The investment is part of the Dutch dairy co-operative’s ‘route2020’ development strategy, which involves a significant expansion of milk processing capacity, with an annual spend of between Eur400 million and Eur500 million. Most of the investments are taking place in the Netherlands - particularly in expanding production capacity in the infant and toddler nutrition segment, which is exhibiting strong growth due to the increasing demand from Asia for high-quality dairy products.

Leading Countries France (Eur1.09 billion), Germany (Eur1.02 billion), the Netherlands (Eur870 million) and Ireland (Eur580 million) are the four leading countries in terms of investment in dairy processing between 2012 and June 2014, followed by the UK, Denmark, Poland, Italy and Spain, where between Eur200 million and Eur500 million was spent (see Table Two). Investment in all other EU Member States was less than Eur200 million during the same period.

Reflecting its position as a leading dairy producer in the EU, accounting for 22% of cheese production, 20% of butter production, 28% of non fat dry milk production and 17% of whole dry milk production, France topped the investment table with a spend of Eur1.09 billion. France’s dairy industry is dominated by five international groups - Lactalis, Danone, Sodiaal, Bongrain and Bel – ahead of 15 smaller dairy processors, each with annual sales higher than Eur200 million. The main focus of the investment in France was on the expansion of production capacity for dried dairy products, chiefly milk powders, dried whey, and infant formula DMK, Germany’s largest dairy company with a turnover of Eur5.3 billion last year, has invested more than Eur500 million in local plants and the

development of advanced production and processing technology during the past three years.

For example, DMK is currently building one of the most modern and efficient milk powder plants at Zeven in Lower Saxony.

The German co-operative has also joined forces with Arla Foods to open a new production facility at DMK’s Nordhackstedt site (see Panel). The plant will process the whey produced from DMK’s cheese production and supply high quality whey protein concentrate and lactose to Arla’s global ingredients business. The joint venture between Arla Foods and the DMK Group is called ArNoCo. “The international ingredients business is one of our strategic growth areas,” says Dr Josef Schwaiger, spokesman for the executive board of the DMK Group. “The production facility at the Nordhackstedt site is in a logistically ideal location for processing the whey obtained from the neighbouring DMK factory. Through our subsidiary joint venture, we can exploit the synergies between Arla Foods and the DMK Group to optimum effect.” €180 million Nutritional Ingredients Plant Ireland’s leading dairy ingredients company, Glanbia Ingredients Ireland, has commenced production at its new, state-of-the-art nutritional ingredients plant at Belview in County Waterford, so completing a Eur200 million investment programme designed to increase processing capacity in readiness for the abolition of EU milk quotas. Glanbia Ingredients Ireland is a joint venture between Glanbia plc, the global nutritional solutions and cheese group, and Glanbia Co-operative Society, which is the main shareholder in Glanbia plc.

“Some Eur180 million has been invested in our new nutri-

Pictured at the opening of a new production area at Arla Foods’ site at Pronsfeld in RhinelandPalatinate are (from left): Jurgen Wolff, site director of Pronsfeld Dairy; Peder Tuborgh, chief executive of Arla Foods; Malu Dreyer, Chief Minister of Rhineland-Palatinate; and Tim Orting Jorgensen, executive vice president and head of Arla Central Europe.

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Dairy Crest will enter into a joint venture to produce GOS with UK-based Fayrefield Foods, which will provide access to the necessary enzyme and other intellectual property. Fonterra will supply lactose and will also take responsibility for marketing and selling this product. This project is anticipated to provide an eight year cash payback for Dairy Crest.

“Demineralised whey powder and GOS form an important part of Dairy Crest's strategy to grow added value sales,” says Mark Allen, chief executive of Dairy Crest. “These partnerships, with leading experts in the field, give us exposure to global growth opportunities.”

Fonterra/A-Ware Group Joint Venture Fonterra has also formed a joint venture with A-Ware Group, the Dutch cheese manufacturer. Indeed, Fonterra has just commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands.

The plant produces whey and lactose specialty ingrediPictured (from left to right): John Beech, financial director of Fayrefield Foods; Theo ents that will be used in high-value paediatric, materSpierings, chief executive of Fonterra; and Mark Allen, chief executive of Dairy Crest. nal, and sports nutrition products by Fonterra and its global customers. Built on a 25 hectare site that has tional ingredients plant at Belview, with support from been developed in partnership with A-ware Food Enterprise Ireland. It is the largest single dairy investGroup, the plant is Fonterra’s first wholly owned and ment in the history of the State and the largest infraoperated ingredients plant in Europe. A-ware Food structure investment by an indigenous company since Group’s adjacent cheese plant was also recently com1929,” points out Jim Bergin, chief executive of missioned.

Glanbia Ingredients Ireland. “Thanks to cutting edge technoloThe ingredients plant forms part of Fonterra’s fully integrated gy, the plant will produce a range of nutritional ingredients global supply chain from the farm gate direct to global conwhich are top quality and low micro, ensuring a suitable appli- sumers, using Fonterra’s milk pools and manufacturing sites in cation across a range of infant and clinical nutrition industries.”

New Zealand, Australia, and Europe.

Jim Bergin adds: “The removal of milk quotas gives Ireland a “The commissioning of our new plant in Heerenveen further unique opportunity to increase milk production and bring an strengthens our ability to deliver high quality, advanced dairy additional Eur1 billion into the Irish economy.” nutrition that meets the needs of our priority markets and globAlthough Ireland ranks fourth in terms of its total investment al customers,” says Theo Spierings, chief executive of Fonterra. in dairy processing in preparation for the abolition of EU milk “Fonterra has substantial intellectual property in the manufacquotas, it is top when measured against existing milk quotas. ture of functional whey protein ingredients and had been lookConsequently, Ireland’s investment at Eur107 per tonne of milk ing for some time for a source of high quality whey to enable us quota is 1.4 times higher than in the Netherlands, 2.4 times to commercialise these innovations. Our partnership with Ahigher than in France and 3 times higher than in Germany. ware Food Group fits well with our strategic priorities aimed at increasing the volume and value of our ingredients and branded Non-EU Investment products.”

Companies based outside the EU, particularly from China, have The new plant’s location and capacity will enable Fonterra to also invested significantly in European dairy processing facilities. better serve its European and global customer base, delivering a Much of the Chinese investment was focused on infant milk secure, reliable source of high quality ingredient products. The powders, to benefit from the high reputation for production facility will produce 5,000 tonnes of whey protein and 25,000 quality enjoyed by Europe. Companies from New Zealand and tonnes of lactose annually. It will operate around the clock - 24 Japan have also moved to invest in securing European dairy sourcing, as evidenced by the recent strategic partnership between Fonterra Co-operative Group and Dairy Crest.

This agreement will entail New Zealand-based Fonterra, the world's leading dairy exporter, marketing and selling products made by Dairy Crest for the fast growing global infant formula market. Dairy Crest, the leading UK-owned dairy foods company, is investing £45 million to manufacture demineralised whey powder, the base ingredient in infant formula, produced from the whey generated at its cheese making factory at Davidstow in Cornwall.

Fonterra will receive a commission to sell all of Dairy Crest's demineralised whey production and will also provide technical and engineering support.

The agreement is for a minimum of five years.

Dairy Crest has also announced a new £20 million capital investment at its Davidstow site to manufacture galacto-oligosaccharide (GOS). GOS is a lac- Glanbia Ingredients Ireland has commenced production at its new, state-of-the-art nutritional tose-based prebiotic, widely used in infant formula. ingredients plant.

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The infant and toddler nutrition segment is exhibiting strong growth due to the increasing demand from Asia for high-quality dairy products.

hours a day, 365 days a year.

A similar international alliance has been established between Synutra International, a leading infant formula company in China, and Sodiaal, the leading dairy co-operative in France, and its subsidiary, Euroserum, a world leader in demineralized whey powders. Under the long-term industrial and commercial partnership agreement, Synutra has commenced the construction of a new Eur135 million drying facility at Carhaix in the Brittany region of France, to manufacture powdered milk and fat-enriched demineralized whey for the needs of the Chinese group. The new facility is designed to meet the strictest European quality and hygiene standards and will be capable of producing 60,000 tons of powder per year initially, with a capacity of up to 100,000 tons annually.

Outlook The market fundamentals remain bright for EU dairy processors with consumption of dairy products growing globally, buoyed by a marked shift to more added value products, both in consumer markets and industrial ingredients. Milk powders and cheese are projected to absorb most of the additional milk produced in the EU in the ten year period to 2024. Higher cheese production (11 million tonnes by 2024) is being driven mainly by domestic consumption. Powders (skimmed milk, whole milk and whey) are the easiest and cheapest way to transport milk, and more than half of traded dairy products are powders. By 2024, SMP production is expected to reach 1.6 million tonnes, driven by positive world demand, according to the EU. WMP production and exports could increase slightly, while whey powder production and trade are expected to 10

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Arla Foods and DMK Group Open New Joint Venture Production Facility The joint venture between Arla Foods and the DMK Group – called ArNoCo – has entered a new stage as the two companies have opened a brand new production facility at DMK’s Nordhackstedt site in Northern Germany. The new ArNoCo site will process the whey produced from DMK’s cheese production and supply high quality whey protein concentrate and lactose to Arla’s global ingredients business.

The joint venture ArNoCo was established in 2011, and the following year construction began on a new production facility.

In late 2014, the company began its first test production at the state-of-the-art whey processing facility, and since the end of February 2015 ArNoCo has been able to use the full capacity of the production facilities. With around 40 employees, the site processes around 700,000 tons of whey, which is made into 25,000 tons of lactose and 12,000 tons of whey protein concentrate per year.

With the production of whey protein concentrate, ArNoCo forms an interface between Arla Foods and the DKM Group, which own equal shares in the joint venture.

Peder Tuborgh, chief executive of Arla Foods, comments: “With our mutual investments in ArNoCo, DMK and Arla Foods can build very successfully on our strengths and experience. This new joint venture will enhance Arla Foods Ingredients’ position as one of the world’s leading suppliers of the highest quality whey protein and lactose ingredients. The market for these products is growing fast, so we are pleased to get started on this new production.”

The ArNoCo management team is made up of representatives from Arla Foods and the DMK Group. The DMK Group delivers the raw material along with processing expertise and is responsible for the production’s energy supply, IT and administration. Arla Foods refines the whey protein concentrate produced by ArNoCo into whey protein powder and derivatives used in many different areas of application – from food to fitness products and products for professional athletes.

expand significantly. Infant formula and nutraceuticals will mainly drive whey output globally.

Rabobank predicts that medium-term global demand in the global dairy market will increase at a CAGR of above 2% from 2014 to 2020. This increase will be driven by continuing population growth, urbanisation, globalisation and increasing disposable incomes. However, Rabobank points out that despite the increasing demand, the picture is not all positive, and price volatility is likely to be a key issue. As a result, extreme price variations will continue to impact dairy supply chains.

Rabobank sounds a further note of caution regarding the vast Chinese dairy ingredients market. Following a decade of rapid expansion, growth in China’s infant formula market is expected to taper off between 2015 and 2020.

Competition is also likely to further intensify, with both onshore and offshore capacity expansions underway, mostly targeting the Chinese market with an increased emphasis on quality and safety. This will require significant investment, which will likely result in lower returns than in the past. Rabobank concludes that while there is still profit to be earned in China by the well-prepared, the easy money has certainly already been made. J FOOD & DRINK BUSINESS EUROPE, MAY 2015

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I DAIRY INGREDIENTS

European SprayDry Technologies Flying the Flag pray dryer manufacturer, European S SprayDry Technologies (ESDT) has received the Queens Award for Enterprise for International Trade 2015, following several years of continuous growth. The company based in Harlow Essex, United Kingdom is the only remaining UK manufacturer of large production spray dryers.

The award is testament to the steady expansion of ESDT’s overseas markets that has seen export sales increase considerably.

Over 70% of its equipment is purchased and installed overseas. However, ESDT last year enjoyed its best sales performance in its home market for nearly a decade.

Foundation of Success

The foundation of this success has been based upon the quality of its products, a progressive design ethos and flexible working relationship between company, suppliers and clients, which has been reflected in a high percentage of repeat orders from returning customers.

The main markets for ESDT spray dryers are the food, dairy and chemical sectors.

Gareth Hine, head of the company’s sales 12

team, states: “The Ingredient and drink industry has been very important to us spray dryers uniquely designed for specific industry environments, new falling film evaporator designs and an expansion of our auxiliary products has helped fuel growth.

The dairy sector is also of strategic importance as growth in this area has been very strong and which we see continuing for the foreseeable future. A high proportion of our new equipment has been developed specifically for this industry.”

Specialist Drying Technology

Although many dryers supplied to the dairy industry are for the production of milk powders, ESDT’s expertise within this field is the design and manufacture of specialist drying technology for high value products with the majority of plants supplied today having evaporative capacities between 500 and 3000kg/hr. Materials produced on ESDT’s equipment besides whole and skim milk include protein concentrates, whey, specialist milk formulas, lactose and waste material processing. Specialist milk formulas have been produced with both cows and goats milk as its base materials.

With an ever increasing portfolio of plant and machinery the company now produces a high proportion of the component parts for its complete dairy powder production systems. Since the introduction of evaporator technology into the company’s product portfolio, ESDT has increasingly supplied wet side process as well as dry process design. Wet processing has included pasteurisation and crystallisation systems.

ESDT’s core product remains the spray dryer, which is continually developed keeping abreast of changes to technology and standards. The tall form spray dryer is the company’s flagship product that comes in several variants for single or multi stage drying and utilising on most systems high pressure nozzle atomisation technology aiding versatility and performance.

The most recent innovation has seen the development of large particle powder production and plug flow drying systems for special products.

The dairy spray dryer range supports numerous safety features that include delFOOD & DRINK BUSINESS EUROPE, MAY 2015

uge systems for fire and burst panels for explosion protection as a standard but can include suppression systems and carbon monoxide monitoring of gases.

Dairy Projects

Dairy drying projects now generally require a combination of cyclone and bag filter separation technology, maximising the removal of fine powder from the exhaust air stream. Recovered powders are reintroduced back into the drying chamber where they intermixed with the liquid feed particles forming agglomerates.

Many modern dairy production techniques require additional stages to the spray drying process. In many cases the fluid bed is the ideal partner for the process as it is extremely versatile allowing options for secondary drying, cooling, chilling and classifying within the same plant and when fitted with spraying facilities allows the addition of lecithin or binders for agglomeration.

ESDT anticipates that the recognition as marked by the prestigious Queens Award will further drive demands for its products both domestically and overseas. J

I DAIRY INGREDIENTS

Leading Technology For the Production of Infant Formulas and Dairy Powders PX offers a full range of technology for S the production of infant formula and dairy powders. Its integrated infant formula process line brings advanced mixing, UHT, cavitation and drying technology together with focus on increasing availability and production time. Through the vast experience it has from its Anhydro® brand, SPX can provide advanced equipment from stand-alone evaporator, spray dryer and freeze dryer systems designed specifically for the production of infant formula to complete processing lines.

Drying Technology

SPX Anhydro drying technology gives complete control over the characteristics of the powder including everything from moisture content to aromas and flavours.

Systems are designed to optimise energy consumption and ensure straight forward cleaning and maintenance to guarantee food safety and reliability. Automated control further ensures the process complies with the latest food standards and provides complete batch traceability.

have the potential to reduce the number of system shut downs and increase production efficiency.

Enhanced Processing Efficiency

SPX’s latest hydrodynamic cavitation process further enables enhanced processing efficiency of dairy powders. From its APV brand, the Cavitator™ is a breakthrough technology that uses a rotor with precisely machined cavities spinning in a liquid chamber that generates controlled cavitation. The process generates and collapses bubbles due to the decrease and then increase in pressure produced. As the bubbles collapse, a very powerful energy wave (shockwave) is released into the surrounding liquid. This shockwave produces a very efficient, microscopic mixing effect and controllable, scale-free heating.

When used in the production of nutritional dairy powders, the Cavitator both reduces viscosity and structurally conditions the whey and milk. This significantly enhances spray drying efficiency.

SPX solutions for the production of infant formulas and dairy powders are designed to maximize sustainability through heat recovery and ensure operational efficiency with fast and straightforward CIP processes. Through decades of experience and leading expertise, systems are carefully designed and engineered to meet individual application requirements and assure the highest levels of quality and safety.

Solutions in Membrane Filtration and Microparticulation

APV Cavitator Units.

SPX has recently released a new early warning camera software system for use with its spray dryers. This innovative technology detects powder build-up on spray nozzles within the dryer and gives an early warning to the operators if there is a buildup which could eventually start a fire in the chamber. Using this technology, customers

Through its APV brand, SPX has a rich heritage in membrane filtration and microparticulation technology for processes including protein fractionation, bacterial removal to extend milk shelf life, functionalization of whey proteins and production of fermented products. Its continual research and development in these areas has resulted in solutions that provide higher quality products and more FOOD & DRINK BUSINESS EUROPE, MAY 2015

efficient production.

Within SPX’s suite of membrane-based innovations is the ProFrac™ technology.

This is one of the most advanced membrane processes for the fractionation of casein rich milk proteins and whey proteins to enable optimum utilisation of the individual fractions.

SPX Anhydro Innovation Centre in Soeborg, Copenhagen.

The ProFrac™ solution from SPX plays a key part in the dairy industry. With a marked increase in demand for whey proteins, dairies are now forced to seek alternative routes for obtaining valuable whey proteins, and this is where the SPX ProFrac™ technology plays an important role. The ProFrac™ process benefits cheese manufacturers by enabling significant growth in cheese yield and the production of higher value, pure whey proteins; which are ideal for use in various food and beverage products in the growing nutritional and health segment.

Transforming Whey Proteins

Another revolutionary SPX technology, the LeanCreme™ process, combines the thermal and mechanical treatment of whey proteins in order to enhance the functionalities of the whey proteins. The one-step process LeanCreme™ plant can transform the whey proteins into accurately sized particles, which can be used to mimic fat globules in milk, or it can be used for obtaining added/enhanced functionalities, in yoghurts, nutritional protein drinks, ice cream or other applications, where whey proteins are widely used. J 13

I FILTRATION

Membrane Solutions From Germany n recent years, membrane filtration as a lundergone modern and innovative technology has significant developments.

The trend towards specialized membranes for specific applications is increasingly taking root resulting in spiral wound modules establishing themselves as stateof-the-art technology within the food processing industry.

MICRODYN-NADIR, leading membrane and module supplier for the micro, ultra- and nanofiltration, has been offering spiral wound modules for more than four decades. SPIRA-CEL® modules are available in a number of different configurations.

Spiral Wound Modules

MICRODYN-NADIR offers an enormous variety of spiral wound modules: by selecting the right membrane, be it a micro-, an ultra- or a nanofiltration membrane, and combining it with the appropriate spacer, allows the user to address the specific properties of any media to be filtered.

Compared to other technologies, spiral wound modules offer an extremely high packing density as well as low energy demand. The module design is based on several membrane pockets with intercostal spacer layers which are then being wrapped around a permeate pipe. The membrane pockets themselves are composed of two membrane layers with permeate spacer material in between them.

The pockets are closed on three sides in

Construction of the BIO-CEL® membrane laminate.

order to direct the permeate toward the permeate pipe.

The food processing industry is one of the biggest application areas for SPIRACEL® spiral wound modules. The spiral wound modules are being used especially in dairy applications, such as milk standardization, concentration of milk and whey, cheese production and brine clarification. Furthermore, the products are successfully employed in the concentration of liquid egg, gelatin, animal blood, starch, yeast as well as for the removal of microorganisms and cells. In addition, wine filtration is a topic of big interest.

Wastewater Treatment

In addition to the spiral wound technolo-

Design of a SPIRA-CEL® - Spiral wound module.

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FOOD & DRINK BUSINESS EUROPE, MAY 2015

gy, MICRODYN-NADIR GmbH offers submerged modules to be used in biological wastewater treatment. The BIOCEL® MBR module has a completely different design: it is a ‘hybrid’ module centering on submerged flat sheet membrane technology. Its structure can be described as a ‘hollow sheet’ comprising the advantages of submerged hollow fibers as well as of plate and frame constructions. Again, the NADIR flat sheet membranes are the core component of this module type. However, instead of winding the membrane around a central permeate pipe, the membrane is laminated onto a support layer in order to achieve a cushion-like structure which can then be completely submerged into the wastewater.

The wastewater generated in food production plants and especially dairies is usually overloaded with nutrients and therefore in many cases exceeds all legal discharge limits. In order to treat this wastewater and potentially treat it further for reuse, a membrane bio reactor is often a good choice since most contaminants will be easily biodegradable.

The BIO-CEL® module is the perfect solution for wastewater applications within the food and beverage industries as the MBR process combines the biological wastewater treatment process with membrane separation. J

QUALITY

& HYGIENE

I DAIRY

Bruker’s Dairy Solution MPA-D Wins “International FoodTec Award 2015” ruker Optik has been awarded the B “International FoodTec Award 2015” by the DLG (German Agricultural Society) and its partners during the Anuga FoodTec, the international trade fair for food and drink technology in Cologne.

Spectroscopic methods have been used for a long time in laboratories of the dairy industry, where especially FT-IR and NIR systems are an indispensable part of quality and process control. The MPA-D, a combination of the well-known FTNIR spectrometer MPA and the innovative sampling module LSM for liquids, unites and expands the various possibilities inside one system. Thus, not only a cheaper solution is offered, but the MPAD also enables the analysis of samples that could not be managed by FT-IR or other NIR systems before.

The emphasis is put on the LSM as an innovation: it includes a homogenizer for the optimum and reproducible measurement of raw milk and whey, as well as in parallel a peristaltic pump to deliver all possible liquid milk products and intermediates to the measurement cell. In addition, the MPA allows the analysis of

FOOD & DRINK BUSINESS EUROPE, MAY 2015

all other solid and semi-solid milk products particularly in reflection and transflexion as well as diffuse transmission.

The “International FoodTec Award” is conferred at three-year intervals. It is given by the DLG in co-operation with various technical and media partners. The winners are selected by an international jury of experts of different disciplines.

Dr Andreas Niemoller, International Manager for Agri, Food & Feed at Bruker Optics, states: “We are very pleased about winning this award. It shows that we were thinking in the right direction, when deciding to develop a universal analyzer based on FT-NIR for liquid and solid dairy samples alike. The MPA-D will enable also small and medium-size companies to invest into this compelling technology for a fast and efficient quality control.” J

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I DAIRY

Challenging Times For Valio Now under a new chief executive, Valio is celebrating its 110th anniversary this year but Finland’s largest dairy processor faces a challenging future. alio was founded in 1905 by 17 dairies as a co-operative to support butter exports to the UK and St Petersburg in Russia. Membership had increased to over 150 members by 1910 and continued to expand as the company grew to meet the rising demand for cheese during the First World War and to develop export sales as Finland emerged as an independent state in 1917, after years of Russian rule. During this period Valio also started to become the major dairy producer in its domestic market.

Exports, particularly of processed cheese, to Germany, Poland, Czechoslovakia, France, Norway, Belgium and the US commenced during the 1920s and grew rapidly. However, the Finnish dairy industry was severely affected by the Second World War as thousands of farmers were evacuated from the Karelia region of Eastern Finland when it was seized by the Soviet Union. Milk powder, cheese and butter exports started in the 1950s to countries, including Algeria and Morocco, with Valio cheeses becoming popular in Germany and Italy.

Another major setback for Valio was when the UK joined the EEC in 1973, severely curtailing Finnish butter exports. During the early 1970’s, the UK accounted for 95% of Finnish butter exports. Valio also had to adjust to Finland’s membership Annikka Hurme is Valio’s new a chief executive. of the EU and the consequent increase in competition in the domestic market during the 1990s. Indeed, advances in cold chain technology gave Valio a competitive edge in short shelf life products and cheese export sales hardened to Russia and the US. Throughout the 1990s, Valio continued to develop its foreign subsidiaries in Sweden, Russia, the Baltics, and the US, as well as Switzerland, Belgium and the Middle East.

V

Market Leader Currently owned by 17 Finnish dairy co-operatives and employing 4,375 people globally, Valio collects and processes about 85% of all the raw milk produced in Finland. Valio is now the market leader in all key dairy product groups in Finland. Its consumer products are also increasingly being sold in the neighbouring markets of Russia, Sweden and the Baltic States. The company has established subsidiaries in Russia, Sweden, Estonia, Latvia, Lithuania, the USA and China.

Valio has a strong track record in R&D and has produced a number of innovative consumer products, industrial products and technologies. For example, Valio’s patented, award winning Valio Eila® lactose free technology produces lactose free milk drinks proven to taste exactly like fresh milk – yet containing less than 0.01% lactose. Indeed, Valio was the first in the world to launch a totally lactose free milk with the real taste of milk, and is the mar-

Valio is the market leader in all key dairy product groups in Finland.

ket leader in Europe. Valio licenses its technology, provides expertise, and exports skimmed milk powders, to provide manufacturers with a complete solution to successfully enter and grow in the lactose free market. Valio maintains an R&D budget equal to 1.6% of net sales, which compares favourably with the biggest players within the global food industry.

Difficult Year As a dairy co-operative, Valio’s primary objective is to add value to the milk produced by its owners. Consequently, Valio’s financial performance is gauged by the milk return which goes to dairy farms in the form of the price paid for raw milk. However, following a record performance in 2013, last year proved difficult for the dairy group as the ban on exports to Russia and a tough trading climate domestically adversely impacted on its financial performance.

Valio reported a 3.9% drop in net sales to Eur1.95 billion for 2014 as net sales decreased by 9.0% in international markets and by 0.8% in Finland. Due to the difficult operating environment, Valio’s capacity to pay its owner co-operatives for raw milk weakened, and consequently the price paid by the co-operatives to the milk producers also fell.

The Valio Group milk margin was Eur974 million last year, down from Eur1.026 billion in 2013. The Valio Group milk return was 43.7 cents/litre against 48.0 cents/litre in 2013, while the price paid for raw milk dropped from 47.5 cents/litre to at 45.4 cents/litre.

Cutting Costs in Response to Falling Sales The decrease in net sales and product profitability has not only resulted in Valio lowering the price paid for raw milk to dairy co-operatives but also in reducing the

FOOD & DRINK BUSINESS EUROPE, MAY 2015

17

size of its workforce. Valio is currently in the process of rationalising its head office, production and logistics operations as part of a cost savings programme in response to the changing market environment following the Russian trade embargo on Western food imports and a slowdown in domestic demand.

Around 35% of Valio net sales last year were generated from exports and group subsidiaries. Valio is the biggest food exporter in Finland, and Russia was the company’s biggest export market.

Valio Russia’s net sales for 2014 stood at around Eur258 million, but would have exceeded Eur400 million under normal conditions.

Indeed, the cessation of exports to Russia has slashed Valio’s net sales by around a fifth. Meanwhile, consumer purchasing power has weakened in Finland, accentuating the focus on price. Valio cannot compete in basic milks in its domestic market due to an interpretation of the country’s Competition Law, and consequently the company’s market share of basic milks has fallen to less than 30%. Some 47% of the cheese consumed in Finland last year was imported, and Valio is now the only major domestic player making cheese from Finnish milk in Finland.

“Most of the milk that was previously exported to Russia is now processed into milk powder and industrial butter for the global market, and their profitability is of a completely different order to consumer products exported to Russia. Exports to Russia are still under embargo and uncertainty there is expected to continue for a long time,” explains Mika Koskinen, executive vice president of operations at Valio.

Valio is now in cooperation negotiations with its workforce to “investigate the most efficient way to manufacture our current product range and that for future needs,” he adds.

“Some head office operations will be reorganised, including customer marketing, consumer services and some technical services.”

Valio collects and processes about 85% of all the raw milk produced in Finland.

throughout the supply chain. Although we are undergoing perhaps the toughest times in the company’s history and major structural change in the organisation, I believe Valio will emerge from this as a strong player,” says Annikka Hurme.

She continues: “Now we have to look forward and ensure that Valio makes the tastiest and most innovative products on the market. The profits those create, sound co-operation with our customers and the efficiency and expertise in our own operations help Valio secure the operating prerequisites for Finnish milk production, which is our key task.” J

New Leader Annikka Hurme is Valio’s new a chief executive after sucMika Koskinen, executive vice president of ceeding Pekka Laakoperations at Valio. sonen last October.

She has assumed control at a difficult time as Valio faces challenging market conditions stemming from the economic slump in Europe, exacerbated by the import embargo imposed by Russia, along with adapting to the recent abolition of EU milk quotas.

Since joining the company in 1989, Annikka Hurme has worked in a variety of positions and has been a member of the Valio Group executive board from 2004. She has in-depth knowledge of Valio’s extensive activities, having headed up most of the dairy co-operative’s business and group operations between 2007 and 2014.

Focus on Strengths The new chief executive believes that Valio must focus on its strengths - the development, manufacture, sales and marketing of tasty products that attract customers and consumers in Finland and through the company’s subsidiaries, which in the current business environment means particularly in Sweden, the United States and China.

“Valio’s strengths are its ownership base of Finnish milk producers, our expert personnel, and responsible methods of operation FOOD & DRINK BUSINESS EUROPE, MAY 2015

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Rocla’s Automation Solution For Valio alio, Finland’s biggest milk processor V and the national market leader in dairy products, has chosen Rocla’s automated guided vehicles for its cheese factories in Finland. In these locations, more than 250 million litres of milk are processed annually.

The AGVs handle the routine pallet transfers from production to preparation for shipping.

The Rocla AGVs feature Valio’s product brands as design covers. These AGVs have been in full action for more than a year now. Valio logistics manager Tiina Kujala is very pleased with the new way of working.

Work Safety “Before, same pallet transfers were handled by human-operated trucks. The premises are often very confined, and distances are not that great. The work itself caused stress to employees and a challenge in work safety,” recalls Tiina Kujala.

Pallets are loaded with products at intervals of only a few minutes. In order to keep the production line running smoothly, the full pallets need to be transported right away for shipment. In the past, the drivers had to be ready all the time to move the full pallets to shipment preparation. “We were wondering why a good employee should have to handle this kind of boring work phase. We wanted to find a new solution for this,” explains factory manager Heikki Makela.

The Challenge Heikki Makela contacted Rocla, who took

up this challenge. Rocla’s professionals examined the situation and the customer needs, coming up with an optimal automation solution to replace the old way of working. The vehicles are equipped with tilting forks. This makes it possible to load and unload from gravity conveyors.

In addition, the vehicles are equipped with barcode scanners that can later be updated to operate as RFID readers. The delivery also includes the Rocla MetRo warehouse management system (WMS), which controls the warehouse and gets deliveries to the right place at the right time. The inventories are always up to date.

Fulfilled Expectations The Rocla AGVs have fulfilled expectations. Personnel have been very positive about the automation. It has increased work safety at the factory: thanks to the safety equipment and sensors, there are no collisions or damaged products anymore. Using the AGVs is also easy.

“All of the production personnel par-

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FOOD & DRINK BUSINESS EUROPE, MAY 2015

ticipated in the basic training, and a few people were trained as main users. In the beginning, Rocla’s 24/7 help desk was in use, but for quite some time the automation system has been running on its own very nicely,” compliments Tiina Kujala.

The factory manager is proud of the added image value with the Rocla AGVs. “For example, our American colleagues and other visitors have noticed the new AGVs right away – many of them are still using old technology for these transfers,” Heikki Makela says. J

I NUTRITIONAL INGREDIENTS

Whey Protein Flexes its Muscles in Fight Against Sarcopenia rla Foods Ingredients is predicting a A long-term increase in demand for whey protein ingredients suitable for use in products that address sarcopenia in seniors.

Sarcopenia is the loss of muscle mass with advancing age and is common in elderly people. It occurs as seniors become less active and consume less dietary protein, which results in a reduction in lean body mass that can impair movement and increase the risk of injury.

The recommended daily dietary intake of protein is currently 0.8g per kg of body weight – but nearly 40% of people over the age of 70 do not achieve this. In combination with the reduction in activity levels associated with ageing, the consequence of this is that an estimated 15% of people over 65 and 50% of people over 80 years will experience sarcopenia and its related physical limitations at some point.

The problem of sarcopenia is only like-

ly to worsen as a result of the world’s ageing population. The UK, Germany, France and Italy each has in the region of 11 million people aged over 65, according to Euromonitor. In the US the figure is 46 million, and the picture is similar in major growth markets such as South

Korea, Russia, Argentina and Brazil.

Peter Schouw Andersen, Business Development Manager for Performance Health & Nutrition at Arla Foods Ingredients, says: “This year, Europe will have twice as many consumers aged 55 to 74 than young people aged 15 to 24 – a trend that is mirrored elsewhere in the world. This means that growing numbers of consumers will suffer from sarcopenia and its symptoms. In turn, this creates a significant opportunity to develop convenient, tasty and healthy food and drink products that help seniors get more high quality protein into their diet and prevent or even reverse sarcopenia.”

Arla Foods Ingredients has developed a concept drink rich in whey protein to highlight the commercial potential that exists for companies to develop consumer-ready products to combat sarcopenia. J

Kerry Group and IOI Loders Croklaan to Partner on Betapol® erry Group and IOI Loders Croklaan K plan to form a joint venture company to develop and market Betapol®, a specialty lipid for infant nutrition. The parties expect to conclude agreements over the coming

22

weeks subject to competition approval. The equal share partnership will be able to reach global markets more effectively, and will stimulate joint developments to extend the Betapol® portfolio for infant nutrition, and expand into other key nutrition market segments.

Both partners will bring specific advantages and expertise to the joint venture. IOI Loders Croklaan - the creator of Betapol®, and first to introduce OPO-type fats to the market - has over 25 years of experience in the supply of specialty lipids to the infant nutrition market, and will continue to manufacture the Betapol® product range for the joint venture. Primary production is at its state-of-the-art enzymatic facility in Pasir Gudang, Malaysia with additional blending capability in Wormerveer, The Netherlands.

IOI Loders Croklaan will continue to manage all product logistics, and will further build upon its commitment to create a FOOD & DRINK BUSINESS EUROPE, MAY 2015

traceable and sustainable supply chain.

Kerry has over 30 years’ experience as a trusted partner to the nutrition market, with dedicated commercial and nutritional science teams delivering a broad portfolio of scientifically based nutritional products for all consumer life stages. Kerry’s ?100 million investment in a new Global Technology & Innovation Centre in Ireland will provide a focal point for advancing scientific nutrition research, innovative processing technologies and market leading technology platforms.

Within the partnership, Kerry will co-develop and market Betapol®, fulfilling consumer needs and expanding into new markets.

The newly formed joint venture will be responsible for business development and innovation. Betapol® will be integrated into Kerry’s global nutritional ingredients portfolio, backed by unparalleled global applications, marketing and sales support. J

I DAIRY

Strong Financial Performance as Dairygold Prepared For Post-quota Era Despite a significant decline in international dairy market returns, Dairygold Co-operative Society, Ireland’s largest farmer-owned dairy processor, has reported 2014 results in line with the previous year’s record financial performance to continue the group’s trend of achieving strong operating profits, while paying a leading milk price. perating profit was Eur27.2 million for 2014 on turnover marginally up on 2013 at Eur848 million. Earnings before interest, taxation, depreciation and amortisation (EBITDA) on core activities rose by Eur1.8 million to Eur47.2 million.

Dairygold processes almost 20% of the Irish milk pool and last year processed its highest ever milk volume of almost 1 billion litres. Dairygold’s 3,000 milk suppliers have forecasted up to a 60% increase in post-quota milk production output by 2020. This will result in Dairygold processing an extra half a billion litres of milk annually by 2020.

O

Jim Woulfe, chief executive of Dairygold.

Expansion Programme In order to facilitate the expected increase, Dairygold is implementing a phased investment of Eur120 million over eight years to incrementally expand its weekly processing capacity by 18.5 million litres by 2020.

Dairygold’s strategy is to focus on its core products of cheese and dairy ingredients.

During 2014, Dairygold completed the Eur33.5 million expansion of its Dairy

Dairygold’s strategy is to focus on its core products of cheese and dairy ingredients.

Processing Campus at Castlefarm, in Mitchelstown, to enhance its nutritional ingredients capability. Meanwhile, the Eur83.5 million investment in the first phase of the regeneration of Dairygold’s Mallow milk processing site is progressing on schedule with full commissioning targeted for early 2016.

Overall, the investment programme will bring the total weekly milk processing capacity to between 45 and 50 million litres by 2016, depending on product mix.

The investments are creating pharmaceutical standard food processing facilities which will facilitate greater volumes of higher value dairy ingredients.

Prudent Management Dairygold invested a total of Eur50.1 million in the business in 2014, while maintaining net bank debt at a prudent level, rising modestly from Eur60.9 million to Eur71.6 million. The underlying strength of the 2014 performance is reflected in the net debt to EBIDTA ratio, which despite the continued substantial capital investment, has marginally increased to 1.5:1 from 1.3:1 in 2013.

Jim Woulfe, chief executive of Dairygold, comments: “Dairygold achieved its strong financial performance by optimising its diversified product portfolio to track the best market returns availFOOD & DRINK BUSINESS EUROPE, MAY 2015

able and delivering processing and operating efficiencies following the continued investment in capital and continuous improvement. The 2014 performance was noteworthy, particularly considering that it was achieved against a backdrop of an almost 50% fall in dairy market returns between February and year-end. In addition to supporting milk price beyond market returns and investing significant resources in farm development programmes and assisting suppliers with onfarm planning for post-quota expansion.”

Global Over-supply The dramatic fall in dairy market returns during 2014 was due to a substantial global dairy over-supply and weaker demand, according to Jim Woulfe. He elaborates: “Favourable production conditions in the major dairy exporting regions, combined with strong milk prices drove global milk production up 5% on the prior year, while consumption trended at its steady 2.5%, leaving a large milk surplus chasing traditional buyers. This situation was further impacted by a fall back in Chinese buying and the Russian import ban and milk price fell substantially, exposing dairy farmers to the sharp impact of international milk price volatility.”

The global market is expected to bounce back during the year ahead. “With the 23

WISHING CONTINUED SUCCESS TO DAIRYGOLD As a leading supplier of Liquefied Petroleum Gas (LPG), Flogas has the experience and expertise to supply the complete energy package. Our commitment to provide efficient gas installation and distribution with an outstanding level of customer support is reflected through the continued investment we make in our people and the business.

Dairygold’s 3,000 milk suppliers have forecasted up to a 60% increase in post-quota milk production output by 2020.

role in the development of the country’s milk industry in the post-quota era. A recent survey by Teagasc (Irish agriculture and food development authority) and Bank of Ireland found that an estimated Eur1.94 billion was invested in the Irish dairy sector between 2007 and 2013 and that a further sum of close to Eur1.5 billion could be needed up to 2020. The extra activity by the dairy industry at both farmer and processor level will bring significant benefits to both the national and local economies.

“In Dairygold’s case our milk suppliers’ forecast of up to a 60% increase in milk production output will mean processing an extra half a billion litres of milk annually by 2020. In a study carried out for Dairygold,

international market currently impacted by weather events in New Zealand reducing its milk output at the present time 2015 looks set to see a gradual recovery in dairy market returns. It will likely take global dairy markets until the autumn to rebalance into a positive recovery for Irish milk price from its current monthly levels,” he reasons.

Influential Role As Ireland’s largest farmer-owned dairy processor, Dairygold will play an influential

Dairygold is implementing a phased investment of Eur120 million over eight years to incrementally expand its weekly processing capacity by 18.5 million litres by 2020.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

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Dairygold processes almost 20% of the Irish milk pool and last year processed its highest ever milk volume of almost 1 billion litres.

it was estimated the economic benefit of this growth by 2020 would be Eur226 million annually and create 1,200 full time jobs,” points out Jim Woulfe. “As the raw material is sourced locally the majority of the Eur226 million benefit will find its way back into the local economy. The significant boost that this will give to rural Ireland will be hugely beneficial over the next five years.”

Dairygold has introduced a number of support initiatives to assist expanding dairy farmers, including a Eur1 million investment in a new three year farm development programme run jointly with Teagasc to help milk suppliers achieve profitable and sustainable dairying. “Farmers should expand cautiously,” he says. “Many will have super-levy challenges and significantly

26

higher on-farm investment costs to contend with, so prudence is to be encouraged.”

Industry Consolidation At processor level, it is also essential to maintain profitable and sustainable development and further industry consolidation could be an option to enhance efficiency through economies of scale and consequently aid milk suppliers by improving dairy market returns. Jim Woulfe explains: “Post quota expansion requires significant investment by both farmer and processor.

It’s well recognised that the sector operates on low margins so unnecessary expenditure and waste should be eliminated where possible. Dairygold believes that there is merit in exploring the opportunity to optimise efficiency via partnership and consol-

FOOD & DRINK BUSINESS EUROPE, MAY 2015

idation with other processors who share a similar business philosophy.

The Irish dairy industry has undergone a degree of consolidation but remains fragmented by international standards.

For instance, Glanbia resulted from the combination of Avonmore Foods and Waterford Foods in 1997, while more recent mergers between co-operatives have seen the creation of Aurivo, following the unification of Shannonside, NCF, Kiltoghert and Donegal Creameries, and the formation of Arrabawn when Nenagh and Midwest merged. The number of dairy processing plants in Ireland contracted by 33% between the 1980s and 2014, from 42 processing plants to 28. However, the number of processing plants in Holland has declined from 234 in the 1970s to 52 in 2014 – a reduction of 78% - while the number in Denmark has fallen from 524 to 23 during the same period – a reduction of 96%.

The Dairygold chief executive continues: “We believe that further consolidation would improve efficiency and help to maximise milk price returns to all farmers.

Dairygold pursued exploratory discussions on consolidation opportunities with neighbouring co-ops. Whilst there seemed to be little momentum for consolidation Dairygold believes that it is necessary and will keep a very open mind on the matter.” J

I WASTE WATER TREATMENT

Sustainable Water Solutions From EPS Group PS Group is a privately owned group of E companies focused on the water, wastewater and clean technology sectors.

Group services include • Mechanical, Electrical, Instrumentation, Control and Automation (MEICA) Services.

• Design, Build, Contracting • Outsourced Asset operations and maintenance for the utility, industrial and commercial Sectors • Manufacture and supply of off-site skid based solutions, assemblies and spares • Pump distribution, servicing and repairs.

EPS’s approach to the industrial market is to create and innovate new technologies to reduce energy, water demand and overall running costs. EPS guarantee an integrated approach at design stage targeting key performance indicators such as energy efficient design, water consumption/reuse and clients’ production/manufacturing goals and requirements. EPS have in depth understanding of the relationship between process, utilities and asset management.

This experience and track record allows EPS to identify Capex and Opex savings in the areas of: • Water abstraction and treatment • Water recovery • Condensate recovery • CIP • HVAC - Critical and comfort cooling • Waste water treatment and reuse.

EPS deliver savings by providing engineered solutions which: • reduce heating and cooling costs • reduce water, energy and chemical costs • reduce wastewater treatment costs by

reducing hydraulic load.

EPS have also adopted the EED (Energy Efficient Design) model across their organisation delivering Engineered solutions for: • Safety • Quality • Sustainability • Consistency • Innovation.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

EPS is a current member of LEIN (Large Energy Industry Network) and is a former winner at the SEAI Energy Awards 2012. J

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I WASTEWATER TREATMENT

Responsible Wastewater Treatment – The Benefits of Environmental Stewardship for Food & Beverage Processors ood and beverage processors typically use while responsibly addressing wastewater F high volumes of water as an ingredient, as requirements? a transportation medium for raw product, The answer? The right type of on-site and/or in the plant sanitization process, resulting in a significant amount of wastewater that must be dealt with. But changing environmental regulations, rising costs for wastewater disposal, and increasing consumer demand for sustainably manufactured products are all factors forcing food and beverage processors to re-evaluate their approach to wastewater treatment.

How can food and beverage processors

keep producing delicious, profitable products and keep environmental protection agencies and green-minded consumers happy—all

wastewater treatment technology.

The right treatment technology makes better use of what was previously wasted.

Imagine, for example, the financial and environmental benefits of reclaiming water in plant operations. Consider the payback of capturing valuable biogas from anaerobic digestion to help lower energy costs and minimize your environmental footprint.

ADI Systems Inc. provides customized wastewater treatment solutions using proven technology that allows processors to remain compliant under increasingly stringent environmental regulations and save money on O&M costs. Our technologies are robust and sophisticated, yet low-maintenance and simple to operate.

Food and beverage processing wastewaters are especially suited for ADI Systems’ anaerobic and aerobic treatment technologies. ADI

Systems’ anaerobic technology offerings can digest high-strength wastewater streams, including those with suspended solids, whey, and fat, oil, and grease (FOG) concentrations.

Regardless of what kind of food or beverage products you produce, ADI Systems has the expertise and technology to offer the best solution. ADI Systems has 30+ years of experience treating wastewater for food and beverage processors around the world. Contact ADI Systems today to discuss what technology would best fit your wastewater treatment needs - Tel +1.506.452.7307, E-mail systems@adi.ca or visit www.adisystemsinc.com. J

I WASTEWATER TREATMENT

Anaerobic Wastewater Treatment Plant and CHP Unit Chosen at Independent UK Brewer oday’s best practices in water treatment, T focus on achieving operational efficiencies, energy reduction, environmental impact minimisation and waste-to-energy solutions. An independent brewery was looking to do just that. The brewery assessed best available treatment technologies before making a decision on which anaerobic process would fulfil their needs.

The Downflow Anaerobic Carrier System (DACS)® was the chosen technology, offering a number of significant operational and performance benefits, including an attractive source of revenue benefits to the brewery in the form of renewable energy and ‘green’ tariff’s

mass, captured within a proprietary carrier system.

The wastewater with entrained biological solids flows into the DACS reactor via a simple feed pipe arrangement located at the top of the reactor. From here the wastewater passes by gravity, down through the fluidised carrier bed - treated wastewater passes out from the DACS reactor at its base.

The down flow action prevents the liber-

The Science Bit DACS is a unique anaerobic treatment process using high performance flocculated anaerobic bio-

FOOD & DRINK BUSINESS EUROPE, MAY 2015

ation of C02 and H2S within the process reactor, consequently DACS biogas is exceptionally pure (>90% methane). DACS provides even more benefits, most noticeably in terms of CAPEX, OPEX, and guaranteed process security.

At the brewery in question, all of the biogas created by the DACS anaerobic treatment plant will be combusted in a new Combined Heat and Power system. The products of this combustion will be electricity and heat energy, both of which will be reused by the brewery.

The DACS treatment plant has been designed to fit within a small section of land that was available to the brewery. The complete operational plant and all its ancillaries, are enclosed within a start-of-the-art building, providing the lowest possible environmental impact. J

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I SUSTAINABILITY

BOMBAY SAPPHIRE® Distillery Minimizes Energy Use and Increases Sustainability he BOMBAY SAPPHIRE® Distillery T at Laverstoke Mill in Hampshire, England, not only distils gin, it also harvests energy. The facility captured the world's attention at its opening in midSeptember as the number one premium gin brand unveiled how it re-captures energy with its state-of-the-art heat exchange system. The distillery is designed to operate with the greatest operational efficiencies to reduce energy use as it recycles residual heat which is a by-product from the unique "Vapour Infusion" technique used since 1836.

impact goal on the environment. This initiative requires all of the Bacardi brands to track methods such as energy expenditure and consider new ways to increase sustainability.

Globally, Bacardi has reduced nonrenewable energy use by nearly 28%, supported by a nearly 28% decrease in greenhouse gas emissions from production. This is no easy feat when you reflect on the energy and water-dependent production process of the company's portfolio of brands, including BOMBAY SAPPHIRE. With the BOMBAY SAPPHIRE Distillery at Laverstoke Mill fully operational, the company will surely move ever closer to its net-zero-impact goal.

“At the distillery, what goes around comes around as the heat used to fire the stills is channeled back from India House, the distillation room, through a series of unobtrusive pipelines to warm the property’s buildings and the gorgeous glasshouses, which are a main focal point at the renovated distillery,” says BOMBAY SAPPHIRE Master Distiller Nik Fordham.

Sustainability Initiative In accordance with the Bacardi “Good Spirited” environmental sustainability initiative for responsible sourcing, packaging and operational efficiencies, across the entire Bacardi family of premium spirits brands, BOMBAY SAPPHIRE is doing its part to fulfill the company's net-zero

Energy Reduction Nothing goes to waste during the distillation process as energy reduction starts with the hightech biomass boiler, which uses low-tech materials or any suitable organic matter such as the spent botanicals used in the gin-infusion process and wood chips to superheat water. Once heated, steam leaves the biomass boiler, travels across the 18th century courtyard to the antique stills where alcohol is boiled, turns to steam and enters the copper baskets that hold the 10 fragrant botanicals, which impart the taste that is unique to BOMBAY SAPPHIRE gin. The infused vapor is then cooled in a condenser, turning it into high-strength gin.

This gin distillation process is repeated all day long, so it made sense to actively harness every ounce of energy and water possible to passively reap the energy saving benefits. During distillation, hot water is collected in a storage tank ready to be re-

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It takes a lot of heat to make premium gin the BOMBAY SAPPHIRE® way with the historical Dakin stills. Knowing this, the Laverstoke Mill redevelopment plan offered brand owner Bacardi an opportunity to re-evaluate operations and come up with new, more sustainable ideas that could carry the iconic brand through the next centuries. The Laverstoke Mill retrofit included many energy-saving additions such as the new heat exchange system, which required a considerable amount of upfront investment for the brand. The company is proud of the pioneering heat exchange techniques that provide measurable environmental and commercial benefits to the distillery.

used, while the used gin botanicals are gathered and transported to the biomass boiler to burn them for the next distillation cycle. With this kind of circular heat recovery the distillery raises the bar among spirits companies as one of the most sustainable gin brands worldwide.

Major Environmental Features The BOMBAY SAPPHIRE Distillery’s use of renewable energy produces low carbon energy and, as a by-product, even provides the property's hot water - noteworthy accomplishments and deemed "major environmental features," according to BREEAM, the world's foremost environmental assessment method and rating system for buildings. In fact, the organization recently dedicated its prestigious 2014 BREEAM Industrial Award to the renovated distillery — a testament to the BOMBAY SAPPHIRE commitment to producing the finest spirits with only the most sustainable practices. The project scored 100% of available credits in the Energy and Management categories and more than 90% of credits in the Water, Materials and Waste categories—high marks even for non-industrial buildings.

The BOMBAY SAPPHIRE Distillery at Laverstoke Mill is a model of operational efficiency as it extracts the maximum value out of all of the energy it uses.

Sustainability is a constant commitment that Bacardi promises with every bottle.

Building on current programs and efficiencies that reduce water and energy use and greenhouse gas emissions, the Bacardi Good Spirited platform reinforces the company’s years of leadership in corporate social responsibility. J

I SUSTAINABILITY

Clearfleau Wins Sustainability Leaders Award For Nestlé On-site AD Plant learfleau, UK market leaders in indusC trial anaerobic digestion (AD) for onsite renewable energy generation, has won the Waste Treatment Project Award at the Sustainability Leaders Awards. The award is for Clearfleau’s anaerobic digestion based bioenergy plant at Nestlé’s Fawdon confectionery site near Newcastle upon Tyne which converts trade effluent and residual confectionery ingredients into renewable energy. The power generated from biogas is used in the confectionery production processes and cuts energy and disposal costs and is reducing the site’s carbon footprint.

The AD plant handles all bio-degradable production residues from the confectionery factory. It treats about 1,200 tonnes of solid residues a year as well as over 200,000 litres per day of trade effluent and converts fats and sugars into renewable energy. Over 8% of the site’s power requirements are met from renewable energy created from

the residues.

Richard Gueterbock, founder and director of Clearfleau, comments: “This award highlights the viability of on-site anaerobic digestion as a solution to the handling of production residues. It also shows that British engineering has a role to play in reducing the environmental footprint of food production and that the UK does not need to rely on imported technology.

Clearfleau’s on-site digestion plants are now challenging previously accepted practices in the food industry.”

The plant is designed and tailored to the available materials on site and can be deployed on dairy, drinks and food processing sites as well as for biofuel plants.

There is increasing interest in on-site energy generation from effluents and food production residues and more companies are looking at how they can reduce their carbon footprint. J

Pictured with the award are: Richard Gueterbock (left), founder and director of Clearfleau, and Craig Chapman of Clearfleau.

Produce World Organics Leads the Way in Green Energy roduce World Yaxley, the Produce P World Group’s home of organic vegetables, is leading the way in green energy by installing 800 solar panels on the two factory buildings at the site. Produce World Group is the UK’s largest grower and supplier of fresh vegetables, and a leader in the organic vegetables market.

The new 200 kWp solar array will generate approximately 188,000 kWh of electricity each year to help power the site, and this is the equivalent of the annual electricity needs of 66 semi-detached three-bedroom homes.

The array will be in place for the next 25 years and will save 1,800 tonnes of carbon dioxide during this time – equivalent to the amount of carbon dioxide generated by driving nine million miles. Each year the solar array will save 80,000 kg of carbon dioxide.

The installation is part of Produce World Yaxley’s commitment to reduce its energy, water and waste output. The site is already using a closed-loop water system based on reed beds which forms part of its nat-

ural habitat area which is currently being developed.

Jamie Tointon, Factory Manager at Produce World Yaxley, says: “We are determined to match Produce World Yaxley’s status as the UK’s largest organic vegetable factory with cutting-edge sustainability credentials. The solar array means we will be generating our own electricity and will be less reliant on other energy sources. This will lead to a significant carbon and energy savings on the site.”

M3 Solutions, which installed the solar

FOOD & DRINK BUSINESS EUROPE, MAY 2015

array, took four weeks to carry out the installation. It was a challenging task as the demand for high quality organic vegetables means the site is constantly busy with workers and lorries taking organic produce to leading supermarkets all over the UK. Guy Chilvers, Business Development Manager at M3 Solutions, says: “When carrying out the installation our priority was to not interfere with the day-to-day running of the factories. Following an analysis of the site’s power usage, we decided to use four areas of roof space to fit the 800 SolarWorld panels, which made it one of the biggest factory roof installations that we had ever done.

Overall we are very happy with the final installation and confident that our carbon saving and electricity generation predictions will be realised during the next 25 years.”

The Produce World Yaxley solar array and natural habitat projects form part of Produce World Group’s 4Life strategy which puts sustainability at the core of the business. This prioritises reducing the business’s impact on the natural environment. J 31

I SUSTAINABILITY

No Steam – No Whisky! ne road, one distillery, one pub, one O shop and one community - Jura is an island with a unique spirit. Tracing its origin back hundreds of years, whisky-making runs through this island and its people.

Byworth Boilers visited the Isle of Jura to meet with the distillery’s Engineering Manager, Andy Jardine, to get his perspective on business with Byworth; the benefits of better boiler life; improved efficiency; uptime and improved customer satisfaction.

1 – What were the biggest issues you had with your previous boiler?

“The 18 year old boiler had repeated NDT failures and needed regular repairs. If you have a day’s lost production that means you don’t have 8000 litres to sell in 10 years’ time.

This was also one of the reasons for installing two smaller boilers in place of a big one.”

2 – Why did you decide on Byworth and two Yorkshireman2 boilers?

“I chose Byworth because the price was competitive, and the promise of improved efficiency was appealing. I liked the feel of the company and felt comfortable in the early sales process.”

3 – How was the project from start to finish?

“It all went very easily for me which is what I wanted because of my workload. When I place an order for something, I just want it to happen properly, with minimal input from me.”

4 – Have you seen any significant costs and energy savings?

“We’re already seeing about a 12% fuel volume reduction with the new boilers - [they] are already providing return on invest-

ment on the whole package.”

“The figure I look at is the volume of fuel required to make 1 litre of alcohol. This takes out the variation of fuel cost and production level to give realistic savings from just the new boilers compared with the old one.”

“If the fuel price goes back up to what it was then the savings will be larger.”

5 – Have you reduced your carbon footprint?

“Using less fuel reduces your carbon footprint and that’s multifaceted because using less fuel reduces carbon all through the fuel

FOOD & DRINK BUSINESS EUROPE, MAY 2015

supply chain. The reduction means maybe two less lorries a month having to come to Jura.”

6 – Was there anything remarkable that stood out from our product/service offerings?

“Unity’s [Byworth’s control system] remote support stands out. That is their engineers being able to go in and keep an eye on things remotely - you don’t get the feeling that Byworth have fitted the boilers, then walked away, instead you know that they’re keeping an eye on them.”

7 – Having access to trend data, has Unity drawn your attention to any changes in the condition of the plant?

“Yes. That is me being nosy and wondering why there is a change in the plant! Now I can phone up the distillery and say why weren’t you taking steam at 3 am!?”

“It gives me more insight and control, whereas before I was not aware of all the issues they’d have.”

8 – What would you say are the main benefits of a new boiler to anyone that has a boiler older than 10 years?

“There is an obvious improvement in technology as we have seen in Unity and with the supplied burners becoming more and more efficient.”

“The overall fuel efficiency is something you don’t get with the old boilers.”

Discover more from this story and others at: www.byworth.co.uk/explore/case-studies.

Contact us: t: +44 (0) 1535 665225 e: sales@byworth.co.uk J

33

I BREWING

British Craft Brewing Continues to Flourish With more than 1,200 breweries currently in production across the country, Britain has the highest number of breweries since the 1930s and 1940s and more breweries per head of population than any other country in the world. he British brewing industry is growing at over 10% a year, with nearly all new breweries producing caskconditioned real ales as their core products, according to Good Beer Guide 2015, published by the Campaign for Real

T

bought from whisky, wine and rum producers to give new depths of flavour to their products,” he explains.

Roger Protz adds: “Independent breweries with small and more flexible plants are able to follow trends with ease, allowing them to meet the demands of restless modern drinkers.

With some regions having up to 147 different breweries to choose from there is no end to the variety of beer on offer.”

Brewing Renaissance Representing independent The British brewing industry is growing at over 10% a year, with nearly brewers from small brewall new breweries producing cask-conditioned real ales as their core pubs through to established products. family brewers with their own pub estates, the Society Ale (CAMRA). The growth is being fuelled of Independent Brewers has been at the by small independent breweries, which are forefront of this ‘renaissance’ in British being launched across all regions of Britain.

Some 170 new breweries were established in Britain in the past year with brewery numbers in London doubling.

Real Ale “Real ale is the only success story in a declining beer market,” points out Roger Protz, editor of the Good Beer Guide 2015. “New breweries, making handcrafted beers, continue to come on stream while many long-standing regional and family breweries are expanding with new equipment and new brands. Real ale has almost doubled its market share over the past decade.”

This has created even greater choice for beer drinkers as small breweries have greater flexibility to experiment and adapt swiftly to constantly changing consumer demands.

“With every region in the country seeing an increase in breweries it means even more choice for real ale drinkers, particularly as breweries are becoming more adventurous in the beers they brew, adding herbs, spices, fruit and chocolate to beer - while a growing number are ageing beer in oak casks FOOD & DRINK BUSINESS EUROPE, MAY 2015

Roger Protz, editor of the Good Beer Guide 2015.

brewing. Founded in 1980 by 20 pioneering microbrewers, SIBA now has almost 800 members with 100 breweries joining in 2014. Indeed, 13 breweries joined SIBA in the first two months of 2015 alone, which indicates that 80 more new members will enlist in 2015.

“Looking at the whole of the UK beer market in 2014 we saw thousands of new jobs created in brewing and pub retailing, UK beer sales were in growth for the first time in a decade, there are more breweries per head of population than any other country in the world, huge increases in sector-wide investment and the lowest increases in pub beer prices since records began,” says Mike Benner, managing director of SIBA. The 2015 SIBA ‘British Beer’ Report, which details the findings of a members’ survey to ascertain the key trends within the independent brewing sector, finds that beer production is estimated to have increased by 15.8% from 2013-14, compared to 5.7% for 2011-12 and 9.4% in 2012-13.

Over half of respondents to the SIBA survey brew less than 1000 hectolitres.

While cask production still accounted for 71% of output in 2014, SIBA members are expected to steadily produce more bottled, kegged and canned beers. Consequently, 35

the cask proportion of production is projected to fall to 68% in 2015 from 84% in 2013.

Further Expansion The independent and craft brewing sector is set for continued growth. “Three out of four brewers are expecting their turnover to increase in 2015,” says Mike Benner. “On jobs, a staggering 83% of members expect to create one or more jobs in 2015 and two-thirds of employees live very local to their breweries, which often provide much needed employment in deprived and rural areas. 77% of those surveyed expect to invest in staff training in the next year.”

Mike Benner, managing director of SIBA.

According to the SIBA survey, golden ales are the most produced beer style – 92% of respondents brew at least one, followed by traditional bitter at 81%. Some 30% of members still brew a traditional mild, while 20% brew a lager.

Mike Benner continues: “It’s a win for consumers too. The market leading innovation of the independent sector together with the huge consumer-led boom in the number of brewers means beer drinkers are faced with unprecedented beer choice and access to a simply amazing and everexpanding range of beer styles.”

Beer Revolution Mike Benner comments. “With over 1,400 breweries estimated to produce around 8,000 regular beers and thousands more seasonal and one-off beers, consumers are enjoying a beer revolution never seen before. Almost every community boasts at least one brewery producing great local beers usually enjoyed sociably in community pubs.”

A benevolent tax regime has been central to the rapid development of the craft brewing sector in the UK, stemming from the introduction of Progressive Beer Duty, a system of excise duty relief for smaller brewers, in 2002, following twenty years of campaigning by SIBA. The idea behind PBD is to reduce duty at lower production volumes, to offset the higher proportional input costs to small brewers of ingredients, labour, overheads and operational logistics.

This has encouraged small brewers to reinvest in their businesses.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

Continued Investment According to the SIBA survey, nearly 70% of breweries made capital investments in 2014 as duty savings from two successive duty cuts and Small Breweries’ Relief were mainly used for more capacity, new equipment, pub acquisition and new staff. More than one out of four breweries invested less than £10,000, with 42% investing above this threshold and 12% investing more than £100,000 in their breweries.

The majority of respondents (43%) invested to modernise equipment, while others purchased or expanded their transport fleet (15%), enlarged their current premises (14%) or purchased new premises (7%). Other investment purposes (21%) varied significantly, although buying more casks and refurbishing/repairing were among the most common.

Furthermore, almost one out of five breweries plans to double their current levels of production, sales and turnover by 2018.

“Our members are keen to boost their businesses through export and clearly more support and help is needed by both Government and SIBA in this area. Tax relief is also essential to most of our members; 90% regard Small Breweries’ Relief at at least current levels to be essential or very important to their businesses and this hints strongly at the opportunity to extend this winning scheme to create even greater benefit and promote growth,” concludes the SIBA managing director. J

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I BREWING

Record Own Beer Sales For Adnams K regional brewer and pub operator U Adnams has increased operating profit by 15% to £3.8 million on the back of a 9% increase in turnover to £66.0 million for the 12 months to 31 December 2014.

Sales of the company’s own beer reached their highest ever levels at over 95,000 barrels and at the same time debt levels fell by £2.7 million to £8.0 million.

Whilst beer and pubs remain at the heart of Adnams’ business, it also owns and runs hotels, makes its own handcrafted spirits and operates nearly a dozen

Adnams Cellar & Kitchen Stores as well as an online store.

“2014 was a strong year for Adnams. We recorded our highest ever brewing year, saw continued growth in sales of our spirits and achieved profitability within our shops,” says Jonathan Adnams OBE, chairman of Adnams. “The economic outlook is by no means certain, however, we are making a confident statement in announcing the start of a major and innovative project to expand and improve our brewery and distillery.”

He continues: “Adnams is well placed to participate in the growing market for craft beers, both in cask and keg. We have an established reputation, a first class range of products and an ability to innovate and respond to consumer demands.

Alongside this, we need equipment that

Bottles to Make Beer Stand Out on the Shelf he craft beer revolution continues to boom, Tincreases and as the number of small breweries so does the demand for stand-out but affordable bottle designs.

Beatson Clark supplies beer bottles to a number of breweries, including Robinsons and Meantime in the UK and Brooklyn Brewery in New York.

“These niche breweries are looking for premium glass packaging at low volumes that can help their products stand out from their competitors,” says Chris Palmer, Business Development Manager at Beatson Clark. “With our in-house design team and our state-of-the-art embossing software we can really add value. We can design fully bespoke beer bottles if required, but many breweries are now choosing to customise our standard containers to reflect their branding by embossing their logo or name onto the bottle.”

“Many breweries are surprised to find they can have customised beer bottles at such low volumes and outlay, so the sector is proving to be a perfect fit for our small production runs and flexible approach,” he adds. “We invested in a new amber furnace and production machine at the end of 2014 so we now have additional capacity to help us meet demand in this growing sector.”

To find out more about Beatson Clark’s products and services call 01709 828141 or email sales@beatsonclark.co.uk. J 38

FOOD & DRINK BUSINESS EUROPE, MAY 2015

gives us the flexibility to deliver what the market requires. This is the backdrop to a major investment programme that we will be undertaking between now and 2018. We will be spending some £7 million on the brewery to ensure that we have the capacity to produce not just our core cask ales, but also the kegged, canned and bottled products that are in increasing demand.” J

I BREWING

Brewology – The Applied Science of Brewing n less than a year, Leeds-based Brewology Iprovider have established themselves as a leading of software, packaging equipment,

to their brewing needs.

servicing, spares and commissioning to the brewing, food, beverage and manufacturing sectors. Combining traditional brewing techniques with 21st century advancements Brewology have helped many customers keep their projects on time and under budget.

Working closely with their supply chain Brewology offer clients value for money with a complete after sales service including expert online remote support.

Brewology help their customers to improve performance, efficiency, sustainability and lifetimes of their breweries while

Tornado Cask Washers

helping them to reduce their operations costs, maintenance costs, consumptions and unplanned down times. Customers range from large multinationals to small micro breweries.

With engineering firmly at the heart of the business, Brewology strives to provide customers with the best possible solutions

It is with much excitement and after months of testing and input from brewers and brewery owners Brewology have launched a range of craft cask washers. The Tornado Cask Washers are de-signed to clean to the highest standards in the industry using tried and tested methods developed over the last 30 years combined with the latest of technologies to bring you an easy to use, cost efficient and reliable machine.

Ranging from 32 to 82 casks per hour the Tornado Cask Washers improves performance, efficiency and sustainability while reducing operating costs, maintenance costs and consumptions.

The key main features for the Tonado Cask Washer range include: • Final rinse water recycled for pre-rinse, only 4 to 6 litres of water used per cask • Unique high pressure pulse cleaning system with rotating cutting action producing 5 to 6 Bar • Optimal loading height designed to FOOD & DRINK BUSINESS EUROPE, MAY 2015

reduce back strain • Simple one button start • Temperature controlled with electric heating • Input your production hours and the washer will be ready to run • Remote diagnostics and software upgrades via the internet.

Brewology are currently testing a range of Cask Fillers and Keg Washing and Filling machines to be launched throughout the summer.

Best Possible Service

Brewology’s handpicked, highly skilled team of service engineers work closely with clients to ensure they receive the best possible service with the least amount of down time. Whether it is a routine service or an emergency breakdown Brewology's proven track record and knowledgeable staff give customers peace of mind at all times.

Brewology’s services include: • brewery automation, PLC, software and control systems • site commissioning and installations • annual & routine servicing • emergency breakdown servicing • spare parts and machine tooling • brewhouse, vessel and machine sales.

For more information on Brewology and their services visit www.brewology.co.uk. J 39

I BREWING

The Muntons Difference untons are a little different from M your average maltster. Yes they make malt but they also do much more. They

also make a wide range of ingredients, including ranges of malt extracts designed for use within the brewing industry made from their own top quality brewing malts. These include brewing quality malt extracts that are used as brew length extenders, ideal where a brewery is reaching its brewing capacity or wants to make something a little special. Another product which is capturing market interest is their ultra-dark malt extract, which

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is used to add a touch of dry bitterness and is perfect for final beer colour adjustment.

But what really makes them different is that not only do they make malt but they can replicate the craft brewing process in their own one HL pilot brewery housed in Muntons stand-alone facility the ‘Centre for Excellence’ - their New Product Development facility. This stateof-the-art stainless steel brewery not only allows them the luxury of being able to test brew new malts that they are developing but is available for their customers to use as well.

Muntons ‘Centre for Excellence’ is also where you will find Sophie De Ronde, Muntons Brewing technologist, who is happy to provide

FOOD & DRINK BUSINESS EUROPE, MAY 2015

technical brewing advice and help with recipe development. A service that is being used more and more as brewers take advantage of the opportunity to experiment and test brew beers before committing these brews to full scale production.

Yes Muntons are a little different, in a good way, they really care about their customers and their products – you could say they have a passion.

Muntons are the 2015 RMI Analytics Global Brewing Supply Maltster of the Year.

For more information: sales@muntons.com.

Tel: 01449 618300. J

I COCOA

Meeting the Challenges Facing World Cocoa Production roducing more than 70% of the world’s P cocoa supply, Africa is central to the continued supply of cocoa to markets glob-

among members within and across work streams.

ally. However, despite significant investments in cocoa sustainability initiatives by the public, private, and non-profit sectors in recent years, cocoa farming continues to face significant challenges.

Farmers encounter increased competition from other cash crops, declining soil fertility and lack of access to and knowledge of how to apply fertilizer, and a lack of access to and knowledge about good agricultural practices and environmental stewardship.

Consequently, cocoa farming has been losing its appeal as a viable livelihood among younger generations of farmers.

Critical Time “Our industry is at a critical moment, and CocoaAction is our strategy to ensure that collective cocoa sustainability efforts go deeper and wider,” says Bill Guyton, president, World Cocoa Foundation. “With CocoaAction, industry leaders are embarking on an unprecedented effort to improve farmers’ lives and ensure they benefit more from the cocoa they grow.”

Since being launched in May 2014, CocoaAction has already made significant progress. Essential to CocoaAction’s success – sustaining the cocoa industry and improving the quality of life of farmers and communities in the focus countries – is the creation of and adherence to benchmarks and measurable goals. Since the inception of CocoaAction, demonstrable progress has been made among CocoaAction members regarding alignment in measuring and tracking progress toward sustainability in the cocoa value chain.

WCF Action Plan To tackle this issue, the World Cocoa Foundation (WCF) has initiated CocoaAction, a programme that aims to boost productivity and strengthen community development in Côte d’Ivoire and Ghana, the two largest cocoa producing countries in the world which together account for close to 60% of global supply.

WCF is an international membership foundation of more than 115 companies that promotes a sustainable cocoa economy by providing cocoa farmers with the tools they need to grow more and better cocoa, market it successfully, and make greater profits. WCF's membership includes cocoa and chocolate manufacturers, processors, supply chain managers, and other companies worldwide, representing more than 80 percent of the global cocoa market.

Focused on helping cocoa farmers improve their productivity and supporting community development initiatives in Ghana and Côte d’Ivoire, CocoaAction represents a new level of coordination and seeks out best practices in promoting cocoa sustainability. CocoaAction’s goal is to work with no fewer than 300,000 cocoa farmers and their communities by 2020.

Currently 11 companies have committed to CocoaAction including ADM; Barry Callebaut; Blommer Chocolate Company; Cargill; ECOM Agrotrade; Ferrero; The Hershey Company; Mars Incorporated; Mondelïz International; Nestlé; and Olam.

The Vision The vision for CocoaAction is a rejuvenated and economically viable cocoa sector, starting in Côte d’Ivoire and Ghana, which can compete with alternative crops and provide opportunities to cocoa farmers and cocoa communities. CocoaAction is organized around six work streams, or thematic areas, that focus on the greatest needs of the cocoa sector in Côte d’Ivoire and Ghana Planting Material; Fertilizer and Soil Fertility; Community Development; Government and Donor Alignment; Innovation/Future Forms of Agricultural Extension Work; and Shared Commitment to Measuring Progress and Impacts.

All six work streams are led by CocoaAction members, self-selected based on their respective expertise and carried out in partnership with governments of the two countries. As the strategy’s convener, WCF provides technical expertise and facilitates knowledge sharing and collaboration FOOD & DRINK BUSINESS EUROPE, MAY 2015

Key Performance Indicators In October 2014, at the World Cocoa Foundation’s annual partnership meeting in Copenhagen, Denmark, members agreed upon a common set of key performance indicators (KPIs) that will underpin all CocoaAction activities in Côte d’Ivoire and Ghana. The KPIs were developed with input from the governments of Côte d’Ivoire and Ghana, and others with expertise in measurement systems.

“What’s new is that we are working with the governments of Côte d’Ivoire and Ghana as CocoaAction - not individual 41

companies - for the good of all parties involved,” points out Andy Harner, Vice President for Global Cocoa, Mars Incorporated.

The Backbone For example, the first of CocoaAction’s six work streams, Work Stream 1: Planting Material, serves as the backbone for the comprehensive strategy, providing an avenue to help farmers rehabilitate cocoa farms and increase productivity. Although some companies have been implementing rehabilitation elements for some time, CocoaAction brings those efforts together into one approach, providing the power and opportunity of alignment. To keep up with demand, it is estimated that 50 million new cocoa trees need to be planted in Côte d’Ivoire and 30 million in Ghana each and every year. Productivity gains offer increased income potential for farmers through more cocoa on less land, which provides opportunities for diversification into other food and cash crops.

“It hurts a farmer to cut down a cocoa tree. It’s a hard decision, but it needs to be made because trees are aging and not producing. Through CocoaAction, we’re easing the burden by making access to training, fertilizer, and planting materials more readily available,” explains Darrell High, Cocoa Manager, Nestlé.

Collaboration and fine-tuning of the strategy will occur as members gather more important data about the efficacy of these strategies and will ensure important

progress toward the goals of CocoaAction.

“The goal of CocoaAction is not to use a one-size fits all approach, but to work toward the same outcomes for the benefit of future generations of cocoa farmers and their families,” says Christine McGrath, Vice President, Well-being and External Affairs, Mondelez International.

Indonesian Cocoa Sector The WCF is supporting a similar venture Green Prosperity – Sustainable Cocoa Production Program (GP-SCPP) – launched earlier this year. GP-SCPP’s overall goal is to reduce poverty and greenhouse

gas emissions in the Indonesian cocoa sector. A partnership between Swisscontact Consortium and Millennium Challenge Account – Indonesia (MCA-Indonesia), with equal investment from both, the initiative will bring US$15 million to the cocoa sector in Indonesia.

The consortium, led by Swisscontact, includes Veco Indonesia, Bank Rakyat Indonesia, PT Bank Pembangunan Daerah NTT, Rabobank, World Cocoa Foundation (WCF), seven private sector companies’member of WCF namely Barry Callebaut, BT Cocoa, Cargill, Guittard, Mars, Mondelez International and Nestle.

GP-SCPP is being implemented from April 1, 2015 to March 30, 2018.

GP-SCPP aims to strengthen the skills and knowledge of 2,000 farmer groups consisting of 58,000 cocoa farmers benefitting also women and vulnerable groups - in environmentally friendly cocoa farming, improved nutrition practices, and application of prudent financial practices.

Moreover, the program also works with national and local Governments, the Cocoa Sustainability Partnership (CSP), and regional cocoa forums to ensure strategic alignment and promoting knowledge management in the sector.

The program promotes inclusive business models embracing all stakeholders along the cocoa value chain. The ultimate purpose is to establish a self-sustaining model where participating farmers will increase their cocoa revenues and companies that integrate services into their business model. J

Olam Opens State-of-the-art Cocoa Processing Facility in Côte d’Ivoire Olam International, the Singapore-based global agri-business, has opened a new cocoa processing facility in San Pedro, Côte d’Ivoire, following investment of US$75 million. The Olam Cocoa Processing (OCP) plant and the processing operations are amongst the most advanced cocoa facilities in Africa, focusing on both quality and the environment. The plant has a grind capacity of 75,000 metric tonnes per year and produces whole bean and nib roasted liquor, cocoa butter and cocoa cake.

An Olam cocoa nursery.

The cocoa beans are sourced through Olam’s extensive farmer networks throughout the country providing a completely sustainable and traceable supply chain. The complex has created employment for 450 people locally, which includes skilled roles such as engineers, R&D technicians, finance and administration managers, on-site nurses, as well as HR and IT professionals. It is the second major industrial processing investment in the country for Olam which overall has created employment for 6,000 people in Côte d’Ivoire. Olam has been present in Côte d’Ivoire for twenty years.

“Olam has remained committed to Côte d’Ivoire over the years, significantly growing our investments in the cocoa, cashew, coffee, cotton, palm and rubber sectors. We continue to believe in the future prospects for the

country and will invest and grow our business profitably and responsibly,” says Olam CoFounder, Group Managing Director and CEO Sunny Verghese. “We are firmly committed to the country and share its ambition to become an emerging economy by 2020.”

According to Gerard Manley, Managing Director and Global Head of Olam Cocoa, the inauguration of “one of the world’s most advanced cocoa plants is testament to the importance the cocoa industry attaches to Côte d’Ivoire, the largest producer of cocoa globally. The OCP complex enables us to provide our international customers with sustainable beans and products.”

Olam Cocoa is now one of the world’s top three largest processors and suppliers of cocoa liquor, powder and butter following the US$1.3 billion acquisition of the global cocoa business of Archer Daniels Midland Company (ADM) late last year. The deal transformed Olam Cocoa into a market leading global integrated player with an origination footprint in all key producing origins, including Brazil. The acquisition increased Olam Cocoa’s processing capacity from 100,000 metric tonnes to approximately 700,000 metric tones.

Olam Cocoa now accounts for about 16% of global cocoa processing, behind Cargill and sector leader Barry Callebaut.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

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I COCOA

Cargill’s Gerkens® High Impact Cocoa Powders Offer Rich Chocolate Taste With Deep Dark Colour ased on the trend towards sophisticated, B darker and more adult chocolate flavours, Gerkens® high impact cocoa powders from Cargill’s cocoa and chocolate business are ideally suited to provide the rich, diverse colours and tastes that consumers are demanding.

Suitable for use in a wide range of applications, such as dairy, ice cream, bakery and confectionery, Gerkens® high impact cocoa powders are expertly created to produce a rich chocolatey taste with a dark colour, without bitterness. All Gerkens® powders can be tailored to meet the unique colour and taste requirements of each manufacturer.

Cargill’s expertise in cake blending is matched by its technical and applications know-how, which manufacturers can harness to develop innovative recipes for products that stand out from the crowd.

Working with Cargill means that customers benefit from the near endless possibilities of optimizing recipes or testing products in its Application Centers.

These centers allow manufacturers to capitalize quickly on local market trends by offering tailored advice on getting the best from Cargill’s ingredients, and by making optimum use of other ingredients such as milk and stabilizers.

Marcel Nouel, Product Line Manager, Cocoa Powder, comments: “The majority of strong alkalized cocoa powders have a bitter taste; this is often described as a ‘rough edge’. Our broad spectrum of Gerkens® high impact powders have such a well-balanced flavour compared to many competitor products that less sugar is required to achieve a delicious chocolatey taste, without the rough edge.

Amongst the broad range of applications where our high impact cocoa powders can be included are protein shakes, where the powder is used to mask the off-taste of protein.” J

I SEASONINGS

Lean Blending a Time and Money Saver n innovative new service for A food processors and other users of seasonings, including butchers and bakers, has been launched by Unbar Rothon. Called Lean Blending, it has been created by the third generation, Essex-based flavours house to cut administration, labour and storage costs for customers whilst guaranteeing food safety.

Unbar Rothon uses its purchasing muscle to deliver keen prices and manages stock levels to avoid shelf life expiry and waste issues for users of many slower-moving or minor ingredients.

The company mixes the precise blend required and delivers in individual batch packs (anything between 100g and 25 kilos) to the end user, thus minimising the use of space and operational costs such as storing, picking and weighing a multiplicity of minor ingredients is ren44

dered unnecessary.

A big attraction for end users in a selective test market was the peace of mind generated by Unbar Rothon’s shouldering of the responsibility for food safety, legality and quality issues through its assessment of all raw materials used and by its worldwide early-warning problem scanning serFOOD & DRINK BUSINESS EUROPE, MAY 2015

vice.

Customers also appreciated the reduction in administration generated as a result of an order for a single, pre-blended product replacing multiple orders for a lot of minor ingredients.

“We have streamlined processes for customers so they no longer have to blend their own seasonings.

That reduces the dangers of cross contamination and our batch packaging service is a further benefit that reduces the associated risks even further,” says Unbar Rothon director, Richard Rothon.

A trump card for the company proved to be its quality guarantee which is based in part on a refusal to spot buy in favour of consistently sourcing from regular suppliers who understand the company’s requirement for reliable, consistent, top quality products. For further information visit www.unbarrothon.co.uk. J

STORAGE

LOGISTICS

I THIRD PARTY LOGISTICS

Partner Logistics Delivers Industry-leading Quality and Performance artner Logistics is a leader in the proviP sion of sustainable warehousing and fully integrated supply chain solutions, primarily for frozen foods. It currently operates six large-scale facilities – two in the UK, three in The Netherlands and one in Belgium.

Its European network of multi-functional cold storage facilities has a combined storage capacity of over 500,000 pallets and oversees 5.5 million pallet movements each year.

Supply Chain Solutions Partner Logistics delivers industry-leading quality and performance, with metrics consistently achieving over 99 per cent accuracy for variables such as order picking, load perfor-

The Partner Logistics warehouse in Wisbech, Cambridgeshire is the largest cold store in the UK.

mance and order fulfilment across all sites.

Every site also offers a variety of value-added logistics services such as stickering on cases or consumer units, repacking and vendor-managed inventory.

To accommodate transport and distribution services, Partner Logistics works in collaboration with a selective group of partners that provide services that support supply chain synergies, optimised vehicle fill and minimal empty mileage. By using specialised partners, Partner Logistics is capable of offering a comprehensive network and flexibility without excessive investments.

Sustainability By employing a fully automated end-to-end system and the use of high density pallet racking, Partner Logistics has been able to build warehouses typically five times or more the volume of conventional cold warehouses. As a result, the surface area to volume ratio of the warehouses and pallets stored per m? is significantly improved which means that they use 50% less energy than the European Cold Storage and Logistics Association best standard, and only 50% more energy than facilities one tenth of their size.

Partner Logistics also takes part in a number of innovative energy-saving projects including a facility enabling HGV drivers to

Partner Logistics offers transport and distribution solutions alongside its primary cold storage.

continue to refrigerate their load whilst un/loading by using sustainable electricity, utilising double-stack pallet shipments, and practising horizontal collaboration.

Looking to the future The Partner Logistics mission is: “To offer a fully integrated frozen supply chain network in Europe that takes care of the complete logistics process: from factory collection to delivery to the end customer.”

The strapline of ‘together we deliver’ encapsulates the vision of the company as it looks to create partnerships whilst delivering operational excellence within the supply chain. J

Nagel Langdons are First Past the ESOS Post with Sustain ustain Ltd have announced that Nagel S Langdons, one of the UK market leaders in chilled & frozen food distribution, are their first client to become fully ESOS compliant. Working with Sustain, Nagel Langdons have successfully met the requirements of the ESOS Regulations well ahead of the December deadline. In addition to achieving compliance, the company received a full assessment of the potential for fuel savings across the fleet. The assessment confirms that Nagel Langdons’ existing fuel-saving initiatives are effective, and they are on track to deliver substantial cost reductions

over the next three years.

Compliance has been met quickly and effectively, some nine months before the Department of Energy and Climate Change (DECC)’s 5th December 2015 cut-off date.

Sustain have worked closely with Nagel FOOD & DRINK BUSINESS EUROPE, MAY 2015

Langdons’ internal stakeholders to complete the required fleet-wide energy audit and produce an assessment report detailing the ESOS measures, ensuring compliance.

Good fleet management is not just about using the latest technology.

Sustain’s transport audit process examines everything from vehicle specification and maintenance, to driver training, route planning and load factors. The audit found that Nagel Langdons is already operating to best-practice standards in many areas, particularly vehicle specification and driver development. J 45

I MEAT & POULTRY

European Meat Processors Facing Leaner Times The European meat processing industry is becoming increasingly consolidated and international in nature as it adapts to changing market challenges. queezed by escalating input costs and price sensitiveness by consumers, meat and poultry processors have been exploring new ways to improve efficiency in order to protect profit margins. The European meat industry has also been impacted by a number of ‘food scares’ such as the horsemeat scandal, which was first discovered in January 2013, and immediately undermined sales of meat products such as beef burgers and beef-based ready meals. Poultry consumption has also been affected by outbreaks of Avian Flu and the problem of campylobacter on fresh chickens.

despite the abolition of EU export subsidies in January 2014 which had been propping up profits.

“We are satisfied that we have demonstrated that our company has been able to improve cash flow and achieve positive operating results without subsidies,” says Arnard Marion. “Investments of around Eur30 million have been made meanwhile, to further strengthen the position of Groupe Doux.”

S

These food safety and quality scares highlight the fragility of the supply chain in the food sector. The meat industry has since been investing in ensuring tighter, more integrated and more transparent supply chains.

Internationalisation Although the majority of EU meat processors remain local and national in nature with no operations outside their domestic markets, the biggest players have been investing in assembling overseas production assets and the industry is steadily becoming more consolidated and international. Over half of EU-27 meat volume production is now generated by 100 companies. About 30% - up from 23% ten years ago – is currently controlled by the top 15 European meat processors - Vion, Danish Crown, Tonnies, Bigard Group, Westfleisch, LDC, HK Scan, Veronesi Group, Cooperi, Doux Group, Plukon Food Group, Terrena, ABP, Moy

Park and 2 Sisters Food Group.

However, most of the largest meat processors are still dependent upon their domestic operations for the bulk of their sales.

Consequently, the process of internationalistion of the European meat processing industry is still at a comparatively early stage.

Financing internationalisation remains challenging and EU meat processors need to extract greater synergies from their international operations in order to yield higher trading profits and competitive advantage to finance continued expansion.

Collapse of Doux Group International expansion has proved problematic for one of Europe’s leading meat groups. French poultry giant Doux Group collapsed into administration in 2012 with debts estimated at Eur450 million due to rising commodity prives and a costly move into Brazil following the acquisition of Frangosul in 1998. The world’s third largest poultry exporter has been recovering under the guidance of chief executive Arnard Marion, who was initially appointed by the administrators, and after a restructuring of the ownership of the group with French investment fund D&P taking a 52.5% stake, Saudi Arabian food distribution business Almunajem taking 25% and the Doux family’s holding being reduced to 22.5%.

Debts have since been reduced to about Eur90 million, according to Arnard Marion, as Doux Group has focused on the challenges of cutting the debt burden, achieving profitability and securing the long-term future of the business. Doux emerged from administration 16 months ago and has managed to become profitable in its two activities - processed products and exports FOOD & DRINK BUSINESS EUROPE, MAY 2015

Restructuring at Vion Dutch meat group Vion Food has also been undergoing a major restructuring entailing focusing on cost efficiencies and investment in operations in order to facilitate more sustainable production and to improve profitability. The cost reduction programme has centred on achieving better co-operation between Vion’s various locations, a coordinated approach to purchasing, and a more efficient supply chain, but has necessitated the closure of a number of sites along with disposals.

Kjeld Johannesen, chief executive of Danish Crown Group.

Vion brought in a new chief executive, Michiel Herkemij, to implement a new strategy which entailed reducing costs by Eur100 million over two years, implementing a closed chain with retailers and farmers, intensifying exports to Asia and starting exports to Africa, and achieving a good balance between fresh products and added value products. The strategy envisaged investment of Eur100-150 million in the re47

structuring of Vion’s processing/production footprint.

Under Michiel Herkemij’s leadership, Vion Food has seen an increase in operating profits for the first time in years as a result of a more commercial and customer-orientated approach. Having orchestrated the turnaround to ensure greater financial stability at the company, Michiel Herkemij announced earlier this year that he is leaving Vion.

“Under the leadership of Michiel, the outlines of a solid future for Vion have become visible. It is a basis we can rely on to look forward confidently to the future,” says Sipko Schat, chairman of Vion Food. The Vion board subsequently appointed director Tom Heidman as interim chief executive officer.

Consolidation in the UK Vion’s disposal of its meat and poultry operations in the UK has resulted in further consolidation of the meat industry there. Vion entered the UK in the late 1990’s with the acquisition of Key Country Foods, followed

by Tranfield and subsequently Grampian Country Food Group in 2008. By the time of its decision to exit the UK in November 2012, its operations encompassed 38 sites employing 13,000 people.

VION’s UK pork division was sold to a management buy-out consortium in December 2012 for an undisclosed price.

The deal was led by Seamus Carr, managing director of Vion’s pork business unit, and was backed by UK private equity firm Endless. The business has since been renamed Karro Food Group.

Vion’s poultry and red meat processing businesses in the UK were subsequently sold, again for an undisclosed sum, to 2 Sisters Food Group, the UK convenience food and poultry processor. The VION acquisition marked 2 Sisters’ entry into the red meat processing.

2 Sisters has a strong UK presence in the poultry, red meat, chilled and frozen food categories, and is a major branded player through its Fox's Biscuits and Goodfella's Pizza operations. The company produces a third of all the poultry products eaten in the UK. In addition to its poultry and recently acquired red meat activities in the UK, 2 Sisters also operates six poultry sites in Holland and one in Poland.

Headquartered in Birmingham, 2 Sisters was established in 1993 by Ranjit Singh, and is one of the largest privately-owned food groups in the UK and Europe. The enterprising business has evolved from a small scale frozen retail cutting operation into a world class food group, serving the retail, food service and manufacturing sectors.

Reflecting its acquisition of Vion Foods, 2 Sisters Food Group increased sales by 18.5% to £3.42 billion for 2014, with likefor-like sales advancing 2.4% to £2.87 billion despite the tough trading conditions. 2 Sisters is in the process of integrating the Vion business, which was loss making at the time of acquisition in March 2013.

Developments at Moy Park Another UK-based poultry processor which started from humble beginnings and has

FOOD & DRINK BUSINESS EUROPE, MAY 2015

since developed into one of the largest players in Europe is Moy Park. Part of Brazilian meat group Marfrig since 2008, Moy Park is one of Europe’s leading poultry companies and the UK’s largest producer of organic and free range chicken. Having access to Marfrig’s international sales network and its broad portfolio of products has provided new growth opportunities for Moy Park.

Indeed, Moy Park is now fully responsible for Marfrig’s entire European business, having assumed this role in 2013.

Reflecting its continued growth in sales, chiefly to customers outside its Northern Ireland base, Moy Park has commenced a £170 million expansion programme across its three Irish sites at Dungannon, Craigavon and Ballymena. “Moy Park started as a small farming company in 1943 and has grown into a top UK business with a £1.5 billion turnover. We continue to have big ambitions and this investment will allow us to further grow our operations and create new jobs in Northern Ireland,” says Janet McCollum, chief executive of Moy Park.

Arnard Marion, chief executive of Doux Group.

Marfrig has decided that, subject to market conditions, it will launch an initial public offering (IPO) of Moy Park most likely in the second or third quarter of this year.

The IPO will enable Marfrig to reduce debt, while retaining a comfortable majority stake in Moy Park, and to inject additional capital to support more rapid organic growth in Europe and Asia.

Changes at Plukon Plukon, which operates poultry slaughterhouses and food processing plants across Germany, Belgium and the Netherlands, has also changed ownership. With annual sales of about Eur1.3 billion, Plukon is the largest chicken slaughterer in the Netherlands, and has doubled annual sales since 2008 through organic growth and acquisition.

Plukon was acquired by Gilde in 2009 but the private equity firm has now reduced its majority stake. Plukon is presently owned by a five member consortium entailing 49

Contact Interfrigo Steeple Industrial Estate, County Antrim, Northern Ireland, BT41 1AB. Telephone: 028 9446 4599. Fax: 028 9446 4597 Email: info@interfrigo.co.uk To arrange a tour of our facilities contact Brendan McAlonan on 028 944 64599.

footed. I therefore see the results for the year as confirmation of the strength of the Danish Crown Group’s business model with the role it plays in large parts of the value chain and its significant geographical spread,” explains Kjeld Johannesen, chief executive of Danish Crown Group.

However, he points out that earnings from the Danish slaughterhouse activities are still unsatisfactory, and that the robust results are due to the group’s international structure. Danish Crown is currently in the process of merging with fellow Danish cooperative slaughterhouse company Tican.

Moy Park has commenced a £170 million expansion programme across its three Irish sites.

Gilde, feed manufacturers Agrifirmfeed and De Heus, German genetics company EW Group, with management holding 25%.

Plukon now plans to further expand its existing slaughter and processing facilities and to extend its domestic markets of the Netherlands, Germany and Belgium by opening up a fourth ‘home’ market in Central Europe.

French Poultry and Beef Alliances The growing pressure for consolidation and internationalisation are evident within the meat industry in France. Two French poultry processors, Sofiproteol and LDC Group, recently formed an alliance in order to improve competitiveness to counter the growing threat of imports and to boost their influence on the international market. The initiative is intended to recapture domestic market sales by developing French production and reducing the share of imports, which have grown to about 42%. The deal will also strengthen the standing of LDC as a major player in poultry in Europe.

The alliance is expected to invest more than Eur100 million in the new set up over the next five years.

France’s second largest beef processor, Elivia, has also forged an alliance to spur international growth by selling a 49% stake to Dawn Meats, the Irish meat group.

Elivia, which is loss making with sales of Eur1 billion, is owned by Terrena, one of France’s largest farming co-operatives.

Privately-owned Dawn Meats, which has sales of over Eur1 billion and exports beef and lamb products to more than 40 countries, has the option to increase its shareholding to 70% in 20018 and 20019.

Some Eur100 million will be invested over the next three years in modernizing Elivia’s production facilities and developing new information systems. According to Hubert Garaud, president of Terrena, the joint venture provides the opportunity “to establish with Dawn Meats a major player with solid prospects and long-term outlets on both the European and world market.”

The deal allows Dawn Meats to play a

role in industry consolidation. “It’s a case of eat or be eaten,” says Niall Browne, chief executive of Dawn Meats. “The reality is that consolidation is happening, and Irish businesses in the food industry must adapt to this.”

Export Markets Of course the EU meat processing industry has been adversely impacted by the Russian agri-food import sanctions, starting with a ban on pork exports in January 2014.

Danish Crown Group, the world’s largest exporter of pork, has been affected by the Russian trade embargo and also developments in the US pork market but, due to its constant focus on costs and its broad international presence, it has so far been able to weather the storm. In addition to being the world’s second largest, and Europe’s largest, pig slaughtering business, Danish Crown is also Denmark’s largest cattle slaughterhouse business.

In its 2014 financial year, Danish Crown posted revenue of DKr58 billion (Eur7.8 billion), which is on a par with the previous year, while operating profit at DKr1.995 billion, was slightly below the DKr2.018 billion achieved in 2013.

“When global markets are affected to this extent, it increases the risk of being wrong-

Janet Mc Collum, chief executive of Moy Park.

Danish Crown’s geographical spread meant that the challenges encountered in the US were more than offset by the European processing companies in its DC Foods business. DC Foods has in fact been further strengthened in the past year through the acquisition of the remaining 50% of Polish company Sokolow. “We are now guaranteed full access to the Polish market, and our efforts to create synergies across the group look promising within all business areas,” adds Kjeld Johannesen.

Nordic Region HKScan, the leading Nordic meat group, which produces pork, beef, poultry and lamb products, processed meats and conve-

Irish meat group Dawn Meats has taken a 49% stake in Elivia, France’s second largest beef processor.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

51

Decontamination in seconds

G G G G

Effective microbial reduction Only few seconds of treatment No chemicals used Green technology

SonoSteam is a minimal processing technology reducing the risk from foodborne diseases, by use of steam and ultrasound

www.sonosteam.com sonosteam@sonosteam.com

nience foods, has also been impacted by the Russian trade embargo on EU pork products, which caused global over-supply and negatively impacted sales, profits and volumes. HKScan’s home markets are Finland, Sweden, Denmark and the Baltics, and it also exports to close to 50 countries.

HKScan has been streamlining and simplifying its operations since the end of 2012 and this restructuring has now been completed. This has helped it to weather the turbulent trading environment during 2014.

“The development programme was essential in mitigating sales and margin shortfalls.

Work to improve our operational profit will continue as part of our continuous improvement efforts,” says Hannu Kottonen, president and chief executive of HKScan. “We will continue building synergies between our home markets, focusing on improving productivity and investing in our top brands.

Last autumn we initiated feasibility studies

in preparation for major investment programmes in Finland and Estonia. The investments are targeted at consolidating the group’s foothold in value-added product categories and growing segments. Our strategic target is profitable growth.”

The Eur2 billion turnover meat group is now exporting Finnish pork to China after its pork slaughtering facility in Forssa gained export certification from the Chinese food authorities following inspections carried out in August 2014.

US Market While the Russian market remains closed to EU meat exporters, the US market has been re-opened for beef. The US market was closed to any EU beef in January 1998 following the BSE crisis of the 1990s. The US ban on exports of beef from the EU is now being progressively lifted starting with Ireland.

ABP Food Group has become the first company to win a supply deal to the US. ABP processes more than one million cattle each year across its facilities in Ireland, the UK and Poland, and is the largest processor of beef in Ireland and the UK, and one of the top three in Europe.

ABP has agreed to source beef for Sysco Metro New York and Sysco Boston, initially focusing on steak houses and restaurants in those markets. “We look forward to developing and growing our partnership with Sysco who will be key in helping us bring our sustainable, grass fed, hormone free Irish beef to the plates of US consumers,” says Paul Finnerty, chief executive of ABP Food Group. “Our initial focus will be on the North-eastern region of the US where we will concentrate on establishing Irish beef in a sustainable and measured way.” The Sysco deal could be worth up to Eur15 million per year. J

Hannu Kottonen, president and chief executive of HKScan.

Faccenda Foods is UK Processor of the Year Faccenda Foods, one of the UK’s leading food companies, has won the Processor of the Year award at the Pig and Poultry Marketing Awards. These annual awards recognise excellence within the industry and aim to ensure that the UK pig and poultry sectors receive the recognition and promotion they deserve.

All pork, poultry and egg producers were eligible for the award, which was sponsored by Cobb. The awards highlight companies that have developed successful food supply chains, built on good relationships and sound business principles.

It also hopes to promote companies and individuals nationally for their innovation and their forward thinking attitudes.

Faccenda Foods won for its focus on partnerships to develop innovative products, its responsibility in managing the supply chain and commitment to put people at the heart of its strategy.

Managing director Andy Dawkins

comments: “We pride ourselves on recognising the importance of good supply partnerships and developing our people, so this award is great recognition of our achievements so far.”

Faccenda Foods is a vertically integrated food business delivering fresh and convenience food solutions for the UK retail and food service sectors. It is one of the UK’s largest food businesses with a turnover of over £500 million and employing 3,500 people across its UK chicken, turkey and duck operations.

Following the full integration of its chicken and turkey operations to become Faccenda Foods in 2014, the business has recently completed a major factory expansion programme at its Telford facility and has purchased the Cherry Valley Foods duck business. Faccenda Foods is wholly owned by the Faccenda family and has been successfully supplying the UK consumer for six decades.

FOOD & DRINK BUSINESS EUROPE, MAY 2015

53

QUALITY

& HYGIENE

I FOOD SAFETY

Food Safety and Campylobacter T in the UK

Continuous or periodic use of SonoSteam on conveyer belts can control the microbial level during ongoing production.

here has been much recent focus on Campylobacter and chicken in the UK following the publication last autumn of the first 6 months results of the Food Standards Agency (FSA) Retail Survey for fresh whole chickens.

These results named major retailers for the first time and were widely reported by the media. This “naming and shaming” was introduced to motivate retailers and producers to increase their efforts on food safety and the approach caused much debate. However, whilst it is acknowledged that the UK chicken industry is committed to reduce the risks caused by Campylobacter in chicken, it is still far from clear how this can be achieved.

Many producers are directing their efforts to reducing Campylobacter within Agriculture and primary production, whereas others are investigating options during the slaughtering process.

Faccenda Foods is a leading processor and in December, they installed and commissioned a SonoSteam system into one of their Evisceration lines. This system uses a combination of steam and ultrasound to reduce Campylobacter on whole birds just after slaughter and before entering the chiller. Faccenda and SonoSteam are completing an extensive testing programme during January and February and the results will be shared with the FSA, processors and retailers through the ACT Board.

No Silver Bullet

The SonoSteam system has previously been reported to have the potential to achieve a 90% reduction of Campy-lobacter on poultry, and at Faccenda this is being tested as an in line process at full Evisceration line speed. The Campylobacter reductions achieved by SonoSteam are also expected to increase with higher initial levels of the microorganism (more than 1000 cfu/g) so in this way the technology should support achievement of the 2015 Campylobacter reduction target (less than 10% of fresh whole chickens with more than 1000 Campylobacter per g).

However it is doubtful that the SonoSteam system by itself will be the ‘Silver Bullet’ to remove the Campylobacter reduction challenge, and most people agree that a multi hurdle approach from farm to fork is essential with improvements needed in Agriculture, in Processing, in Packaging, and in Consumer education and practices.

SonoSteam on Non-food Surfaces The SonoSteam process installed at Faccenda Foods. An average of 90% Campylobacter reduction should be achieved at normal line speed.

Cross contamination is a common cause of the spread of Campylobacter between farms, sheds and birds, and Live bird crates are an obvious risk.

Even after washing at the slaughterhouse, high levels of Campylobacter can be found when crates are swabbed. The SonoSteam technology is very effective on this type of non-food surface, and a greater than 6 Log TVC reduction can be achieved with just 1 second of treatment. Tests on naturally contaminated live bird crates have shown significant Campylobacter reduction.

In addition, many types of conveyer belts can also be effectively decontaminated and as SonoSteam works without any chemicals, the process can be used during production. This has the benefit of keeping the microbial counts as low as from start of production to after many hours of production. This is currently being validated in work with Arla Foods.

The Working Principle of SonoSteam

Live bird crates can be an important source of cross contamination between farms. Full disinfection can be achieved in less than 2 seconds with SonoSteam.

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Why is SonoSteam different from just using steam and what is the benefit of Ultrasound? The sound works as a catalyst enabling the steam to get to the surface in a highly efficient way. High intensity ultrasound disturbs the sub laminar layer of air which otherwise protects the surface from the steam; however it is still the heat from the steam that kills the microorganisms. Microorganisms in the microstructure and cavities of the product surface are also killed by the steam because the ultrasound causes the steam to be continuously forced into pits and pores on the surface. J

FOOD & DRINK BUSINESS EUROPE, MAY 2015

Fully Automated Solution For Packaging Sausages isualize a chaotic pile of sausages and V then a neatly packed tray of sausages in a supermarket display. How do you automatically and carefully orient difficult-tohandle products such as long sausages in a tray and how do you ensure the right amount of product?

The solution is simple, yet advanced.

Based on more than 40 years of experience Cabinplant offers a winning formula of an innovative turnkey solution perfectly designed according to customer needs.

The essence of the innovation and the great advantage for sausage producers is accurate portion weighing to fixed weight and accurate counting of product.

Automation (horizontal and stepwise filling) is obviously the key parameter since vertically oriented packing of a long product has always involved a large amount of operators.

Cabinplant´s solution incorporates a large number of their existing key machines, such as their multihead weigher with vibratory feeding. The combinatorial weighing principle ensures minimum giveaway and the state-of-the-art sausage depositor results in a labour-saving solution which is no less than a revolution for the customer.

The distribution tool and form parts are exchangeable, allowing various tools to be used on the same packing machine for different tray sizes or quantities. Sausage type

and length, tray size and number of sausages per tray depend on customer request. Capacity is up to 120 portions per minute.

“With this innovation, the sausage producers can now automate and optimize their packing process. The result is reduced labour cost, a more flexible production setup and reduced give-away,” says Johnnie Erichsen, Senior Vice President, CCO, Cabinplant.

Cabinplant equipment not only enables production of competitive, value-added products, but is also designed to ensure fast return on investment by reducing operating costs. J

Packaging Innovations From Mondini . Mondini Spa have been at the foreG front of packaging innovation for the poultry and red meat industry for many years. Pioneers in the development of Modified Atmosphere Packaging, Mondini have continued to look at more efficient and innovative ways of producing in the meat industry with new ideas on a worldwide platform.

The latest Platform Technology now provides huge flexibility and performance by delivering a wide range of packaging formats on a single machine. From the 2 cavity Trave340 machine to the 16 cavity Trave1400 machine Mondini offers a machine that meets all your production requirements whatever your company size and budget.

Alongside the company’s Super

Protruding Skin pack solution for joints Mondini are able to offer on a single machine the very latest high speed Darfesh® on Tray skin packs with its film saving design that delivers both environmental and economic benefits. From High Speed automated Mince Lines to the Whole Bird poultry solutions G. Mondini’s vast experience and knowledge gives customers the confidence and security to offer the latest innovations in the meat packaging industry.

Mondini’s very latest developments include Hybric Flat® 3D technology and Flex Flex packs which offer product differentiation on the shelf, extended communication platform and further environmental packaging benefits.

With over 6000 installations G. Mondini is the tried and tested solution in the meat industry delivering consistency, reliability and high volumes on equipment that FOOD & DRINK BUSINESS EUROPE, MAY 2015

allows customers to deliver today’s pack formats and tomorrow’s vision on a single platform.

With Mondini your decision is simple, security and reliability for today, flexibility and capability for tomorrow.

If you would like to know more about Mondini’s offer and vision you can visit the “Future Food District” at the Milan Expo from 1st May to 31st October or book your place at Mondini’s Darfresh® on Tray showcase in conjunction with Sealedair’ Food Care Division at Packforum® in Paris on 23rd to 25th June and see in person the machines in action.

For more information on Mondini’s products and events email Nicki@gmondini.co.uk or call 0044 (0)1785 812512. J

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Tetra Pak Launches New Consumables to Improve Efficiency etra Pak has launched a range of hotT melt adhesives and lubricants specifically formulated for use with its own filling machines. The adhesives, developed in partnership with the world’s leading adhesive producer, Henkel, offer improved bonding, lower adhesive consumption and reduced maintenance costs for cap, straw

and secondary packaging applications.

The products were recently trialled by Al Buheira Lacnor Dairies LLP (Lacnor), the United Arab Emirates’ category leader in fruit juice and dairy, with impressive results.

“The new adhesives delivered marked improvements in operational performance,” says Alfred Fernandes, Production Manager at Lacnor. “During the two month trial, we saw a 49 per cent reduction in maintenance costs and our total consumption of hot melt adhesive dropped by 37 per cent.

These results would translate into annual saving of more than US$100,000 across all our packaging lines, significantly offsetting the additional cost of the new adhesive.”

Improvements of a similar order of magnitude have also been achieved by Tetra Pak’s new range of synthetic H1 Food

Grade lubricants. Initial testing found that the lubricants last up to three times longer, and wear rates are reduced with 67%, compared with conventional mineral oils. The lubricants are specifically designed for food manufacturing equipment and are certified

by NSF International – a leading independent food assurance organisation. J

Measom Freer in Perfect Harmony easom Freer has announced the addiM tion of the stunning new Yin Yang bottle to its portfolio of standard products. This

415) R4 neck size which will fit any of their fine ribbed caps, flip caps, disc caps and lotion pumps. Its easy to grip shape makes it suitable for a wide range of product sectors and screen printing in one or several colours is available in house to complete the product.

For further information contact Measom Freer & Co Ltd on Tel +44(0)116 2881588, Fax +44(0)116 2813000, E-mail sales@measomfreer.co.uk or Buy Online at www.measomfreer.co.uk via pc or tablet. J

bottle is uniquely shaped for high impact shelf appeal with two bottles fitting perfectly together just like yin and yang, making it ideal for duo products.

Manufactured in the UK in natural HDPE with colours available to order and currently stocked in 250ml (Ref 6187) with more sizes to follow, it has a 28mm (28-

Pearlfisher Creates the Future of Innocent Juice On-the-go earlfisher London has re-designed innocent’s P on-the-go juice range, completing the picture of innocent as the entrepreneurial leaders in juice. Work spans creative strategy, graphic and structural packaging design.

Innocent’s latest in-home juice carafe proposition has been a great success and the iconic brand wanted to emulate this in the on-the-go (OTG) category, making the carafe proposition relevant for the more active, transient world of OTG drinks. Pearlfisher’s challenge was to use design to inject these quiet little on-the-go bottles with challenger spirit that disrupts, creates irresistible desire and explodes their sales potential.

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Mike Beauchamp, Pearlfisher 3D Design Director, comments: “The OTG drinks category is dominated by me-too juice, fizzy drinks and water brands all fighting for the same shelf space and consumer attention. Our challenge was to create a structural design that completes the innocent juice family in a beautiful mini-carafe form and disrupts the competitive OTG category. The new structure – which comes in the form of a modern ‘carafette’ – is fresh, confident and immediate, creating a positive category story for retailers as well as providing a new consumer experience.”

For further information visit www.pearlfisher.com. J

FOOD & DRINK BUSINESS EUROPE, MAY 2015