November 2016
Major change in European brewing
Food & Drink Business Website:
www.fdbusiness.com
C o n t e n t s
- 43 E XPORTS
- 3 M ERGERS & A CQUISITIONS
New international action plan to boost exports of UK food and drink.
Coverage of British and international deals.
P AGE 23 PAGE 3
Antoine Fiévet, CEO, Bel Group.
- 5 C OVER S TORY Major change in European brewing.
Ivan Menezes, CEO, Diageo.
- 44 A QUACULTURE New strategy to double size of Scotland’s £1.8 billion aquaculture sector.
R EGULARS Processing & Manufacturing . . . . . . . . 13, 38-41
- 21 D ISTILLING
PAGE 25
Simon Hunt, CEO, William Grant & Sons.
Materials Handling . . . . . . . . . . . . . . . . . . . . 14
Scotch whisky exports return to growth.
PAGE 5
Akiyoshi Koju, President, Asahi Group Holdings.
Bottling & Packaging . . . . . . . . . . . . . 15, 27-32 Quality & Safety . . . . . . . . . . . . . . . . . . . 16-19 Energy & Environment . . . . . . . . . . . . . . . . . 42
- 33 M EAT
PAGE 35
Materials & Ingredients . . . . . . . . . . . . . . 45-48
Bas Alblas, CEO, Lamb Weston/Meijer.
Further expansion by ABP Food Group. Managing Director: Colin Murphy Editor: Mike Rohan Group Operations Manager: Sylvia McCarthy
PAGE 9
- 35 P OTATOES
Stuart MacFarlane, European President, AB InBev.
Tesco wins UK grocery market share for first time in five years.
Production Manager: Sylvia McCarthy
Food & Drink Business Europe is published by Premier Publishing Limited, 51 Parkwest Enterprise Centre, Nangor Road, Dublin 12. Tel: + 353 1 612 0880 Fax: + 353 1 612 0881 E-Mail: info@prempub.com Website: www.fdbusiness.com
Developments in the €10 billion European potato processing sector.
- 43 G ROCERY M ARKET
Advertising: Ian Stewart & Rachel Howard
Premier Publishing Limited can accept no responsibility for the accuracy of contributors’ articles or statements appearing in this magazine. Any views or opinions expressed are not necessarily those of Premier Publishing and its Directors. No responsibility for loss or distress occasioned to any person acting or refraining from acting as a result of the material in this publication can be accepted by the authors, contributors, editor and publisher. A reader should access separate advice when acting on specific editorial in this publication!
Design, Origination and Separations by Fullpoint Design (057) 8680873. (086) 1573510
PAGE 10
Printed by W&G Baird.
Cees ‘t Hart, CEO, Carlsberg Group.
Annual Subscription (UK and Ireland) £95 Overseas Subscription £115
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
1
M E E R R G G E E R R S S M Nestlé and R&R Create Froneri Joint Venture Nestlé and R&R have completed the transaction to create Froneri, a new joint venture in ice cream, frozen food and
chilled dairy. Froneri will combine Nestlé and R&R’s ice cream activities in Europe, the Middle East (excluding Israel), Argentina, Australia, Brazil, the Philippines and South Africa. Froneri will also include Nestlé’s European frozen food business (excluding pizza and retail frozen food in Italy), as well as its chilled dairy business in the Philippines. With sales of around Eur2.6 billion, Froneri will operate in 22 countries across the world, employing around 15,000 people. The company is headquartered in the UK and operates sites primarily in Europe, the Middle East, (excluding Israel), Argentina, Australia, Brazil, the Philippines and South Africa. Nestlé and PAI Partners, the owner of R&R, have equal equity interests in the joint venture.
Bel Group Aims to Create a Major Global Player in Healthy Snacks Bel Group, the French cheese processor, has acquired a 65% shareholding in MOM Group with the aim of creating a major global player in the healthy snacks segment. Under the agreement, Bel will become MOM’s majority shareholder, while MOM’s management will hold the remaining 35%. The MOM Group, majority owned by private equity firm LBO France since 2010, has achieved rapid business growth in France and the US. While building on its historical Materne and Mont Blanc brands sold in France, the
& &
A C C Q Q U U II S S II T T II O O N N S S A
MOM Group has developed the fruit squeezers category and established strong leadership positions with its Pom’Potes brand in France and its GoGo squeeZ brand in the US. Over the past five years, MOM has doubled in size, achieving sales of Eur362 million in 2015. The company employs 1,300 people and owns four production sites, including two in France and two in the United States. The deal values the MOM Group at Eur850 million. Completion of the deal remains subject to the approval of French and US competition authorities, who are expected to rule by the end of the year.
well-loved Kellogg brands.” The deal marks Kellogg's fourth emerging market acquisition in the last two years. In that time, Kellogg has acquired companies in each of its international regions, including Europe (Bisco Misr and Mass Food Group in Egypt) and Asia Pacific (a 50% stake in Multipro in Nigeria and Ghana). The addition of Parati further enhances the company's emerging market growth strategy.
Mars to Combine Chocolate and Wrigley Businesses
Antoine Fiévet, chairman and chief executive of Bel Group.
Kellogg Company Expands in South America With $430 Million Acquisition Kellogg Company is acquiring a controlling shareholding in Parati, a leading Brazilian food group for R$1.38 billion (US$429 million) in cash. The acquisition, Kellogg's largest in Latin America, furthers two the US food giant’s strategic priorities - becoming a global snacking powerhouse and expanding its presence in emerging markets. Parati Group net sales are expected to be approximately R$600 million (US$190 million) in 2016. “With its outstanding portfolio of popular consumer brands, Parati Group is an excellent strategic fit for Kellogg and our business in Latin America,” says John Bryant, chairman and chief executive of Kellogg Company. “Brazil is the largest economy in Latin America and this acquisition will allow us to accelerate our growth and improve our margins in the region. This means more growth for the core Parati Group business and our
Mars Incorporated plans to combine its Mars Chocolate and Wrigley segments to create Mars Wrigley Confectionery. The new segment, which brings together the successful century-long heritages of Mars Chocolate and Wrigley, will accelerate growth opportunities in a vibrant global confectionery category. Mars acquired Wrigley Company in 2008 to become the world’s leading gum manufacturer. Since then Berkshire Hathaway, the holding company for a multitude of businesses run by chairman and chief executive
wine business unit to Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada, for C$1.03 billion (US$786 million). The transaction, which includes Canadian wine brands such as Jackson-Triggs and Inniskillin, wineries, vineyards, offices, facilities, and Wine Rack retail stores is subject to regulatory approval and is expected to close by the end of the calendar year. Constellation Brands will continue ownership of Black Velvet Whisky and the related production facility in Lethbridge, Alberta, Canada. “In April, we announced plans to explore an initial public offering for a portion of our Canadian wine business as part of our strategy to focus on premium, high margin and high growth brands. We seized the opportunity to sell the entire business in a value enhancing transaction when it presented itself,” explains Rob Sands, president and chief executive of Constellation Brands. To further enhance its US wine portfolio, Constellation Brands has just announced an agreement to acquire the Charles Smith Wines collection of five super and ultra-premium wines for approximately US$120 million.
Pernod Ricard Sells Vodka Brand
Warren Buffett, has held a 20% minority stake in Wrigley that was subject to purchase by Mars over time. Mars has now completed the purchase of Berkshire Hathaway’s entire equity interest in Wrigley. The global hub for the new Mars Wrigley Confectionery will be in Chicago, Illinois. The combination is proposed to be phased in during 2017.
Pernod Ricard has completed the sale of Frïs Vodka to Sazerac, a US-based family owned business. The disposal is in line with the Pernod Ricard strategy to focus on its priority spirits and wines brands. The value of the transaction is not being disclosed. Frïs Vodka is a standard vodka selling 250,000 9-litre cases in the USA annually. Earlier this year, Pernod Ricard sold Paddy Irish Whiskey, the fourth largest Irish whiskey brand in the world, to Sazerac.
Constellation Brands Sells Canadian Wine Business For C$1.03 Billion Constellation Brands has agreed to sell its Canadian
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
3
COVER STORY
Major Change in European Brewing The European brewing industry is undergoing fundamental change with major restructuring, prompted by the £71 billion acquisition of SABMiller by AB InBev, and a marked shift in market trends, which has given rise to the rapid expansion of the craft brewing sector - there are now more than 4,000 craft breweries in Europe.
T
he European brewing industry has a new entrant in the form of Asahi Group Holdings of Japan, which has just completed its Eur2.55 billion acquisition of the brands and operations of Royal Dutch Grolsch, Birra Peroni, Miller Brands UK and the Meantime Brewing Company, which were formerly part of SABMiller. Furthermore, AB InBev is also planning to dispose of SABMiller’s beer business in the Czech Republic, Hungary, Poland, Romania and Slovakia. Consequently, AB InBev is disposing of practically SABMiller’s entire beer business in Europe.
Having just completed its acquisition of the Peroni, Grolsch and Meantime brands and their related businesses, Asahi Group Holdings of Japan has become a leading player in the European beer market.
This was deemed necessary in order to gain European Commission clearance for a deal to combine the world’s largest and second largest brewers to create a global market leader. AB InBev’s portfolio features global brands such as Corona, Stella Artois and Budweiser, while SABMiller’s included Miller, Peroni, Pilsner Urquell and Grolsch. At global level the combined business will sell twice as much beer and earn four times more profit than Heineken, currently the world’s third largest brewer, and five times more beer and 12 times more profit than fourth ranked Carlsberg, according to the European Commission. European Beer Market Within the European beer market, where Heineken and Carlsberg are respectively the first and second ranked players, the merger would have combined the third and fourth largest brewers by volume. AB InBev holds strong market positions in Belgium and Luxembourg, and is also present in Eastern Europe through Molson Coors, AB InBev’s long-term licensed bottler and distributor. SABMiller had developed strong positions in particular in Poland, Czech Republic, Slovakia, Hungary and Romania.
The European Commission was concerned that the proposed merger, as initially structured, could have resulted in higher beer prices in Member States where SABMiller was active, because it would have removed an important competitor and made tacit coordination between the leading international brewers more likely. European Commissioner Margrethe Vestager, in charge of competition policy, explains: “Europeans buy around Eur125 billion of beer every year, so even a relatively small price increase could cause considerable harm to consumers. It was therefore very important to ensure that AB InBev’s takeover of SABMiller did not reduce competition on European beer markets.” AB InBev has addressed these concerns by selling SABMiller’s Peroni, Grolsch and Meantime brands and their associated businesses in Italy, the Netherlands and the UK, and by offering to divest the remainder of its European assets. The European Commission concluded that these remedies would no longer raise competition concerns and would leave the intensity of competition in the European beer markets unchanged. Central Role For AB InBev’s European Business Although AB InBev’s European business will not be strengthened by gaining assets from SABMiller, it remains central to the enlarged, leading, global brewer’s operations. “AB InBev was born in Europe, a few kilometres away from Brussels in the city of Leuven. Today, our global headquarters are still located close to where Stella Artois was first brewed, and our European brands such as Stella Artois, Jupiler and Beck’s remain at the core of our international business,” points out Stuart MacFarlane, European president of AB InBev. “Last year, we invested more than Eur350 million, and we are planning to invest another Eur370 million this year. Europe clearly remains an important investment destination for AB InBev.” This is partly due to strong competitive advantages such as high
Pictured (left to right): Gary Haigh, managing director of Asahi UK; Hector Gorosabel, chief executive of Asahi Europe; and Akiyoshi Koju, president of Asahi Group Holdings.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
5
Carlsberg Group’s global beer volumes. The Russian beer market has declined by more than 30% since 2008 and Carlsberg has been closing breweries there to reduce operating capacity. Indeed, falling demand also prompted Heineken to close its brewery in Kaliningrad province in January 2017.
AB InBev plans to dispose of SABMiller’s beer business in the Czech Republic, Hungary, Poland, Romania and Slovakia.
European productivity rates - Europe is AB InBev’s second most productive region behind the US. Furthermore, Europe’s robust external trade policy is also crucial as 20% of the beer brewed by AB InBev’s European operations is sold beyond Europe. “This matters because it means you don’t have to sell in the EU to secure investments in the EU. The world is your consumer,” he adds. Innovation Key For Heineken Europe is also at the core of Heineken’s business and its continued global expansion. With European sales of Eur10.23 billion and operating profit of Eur1.196 billion in 2015, representing 48% of group revenue and 35% of group operating profit, Heineken remains Europe’s largest brewer. Europe is also home to Heineken’s ‘Centre of Excellence’ for innovation, which is playing a crucial role in the brewer’s future development. However, it is crucial that the EU provides a suitable regulatory framework for European businesses to remain competitive in global markets. “As Europe's largest brewer, we regard this continent as our home. Our industry is at the heart of the European economy, supporting over two million jobs from barley farmers to bartenders and representing over Eur53 billion in annual tax revenues to European governments. Our prosperity and that of Europe are therefore inextricably linked,” comments Stefan Orlowski, president Europe at Heineken. “European business needs to increase its competitive edge versus other regions and EU institutions and governments can support this by adopting a balanced and forward-looking regulatory framework.” Stefan Orlowski elaborates: “For the brewing sector that means letting Member States set alcohol policy according to local culture and circumstances and complementing existing regulatory frameworks with effective self-regulation, better keeping pace with consumer trends, innovation and digital transformation.” Challenging Times For Carlsberg Faced with adverse trading conditions in its main markets in Eastern Europe, particularly Russia, Carlsberg Group is focused on efficiency improvements across is operations as its consolidates its position in developed markets in Western Europe, while continuing to expand in emerging markets like Asia. Carlsberg Group is the second largest brewer in Western Europe, a region characterised by mainly mature markets where beer consumption is flat or in decline. In Eastern Europe, Carlsberg Group is the clear leader in Russia, the region’s main beer market, and also leads in Belarus and Azerbaijan. In Ukraine, the second largest market in Eastern Europe, Carlsberg holds a strong second position. However, both Russia and Ukraine face socio-political and economic uncertainties. Indeed, weakness in the Russian and Ukrainian beer markets is undermining
Continued Investment Carlsberg Group is continuing to invest in its brands and markets to capture the long-term opportunities in Western and Eastern Europe and Asia. In response to the current challenging market environment, Carlsberg Group is refining its business model in order to achieve further efficiency improvements faster. In March 2016, Carlsberg launched its new strategy – ‘SAIL’22’. The immediate priorities for the current financial year are margin improvements in Western Europe, continued growth in Asia and mitigation of the currency impact and market decline in Eastern Europe. SAIL’22 is being financed by ‘Funding the Journey’, a group-wide programme designed to improve organisational efficiencies and improve operating cost management to deliver net benefits of DKr1.5-2 billion (Eur200-270 million). In addition to being used to reinvest in initiatives identified by SAIL’22, the gains from Funding the Journey will improve profitability. “Our ambition is to become a successful company,” says Cees ‘t Hart, chief executive of Carlsberg Group. “The key KPIs to measure our progress towards becoming that are gross profit optimization margin, operating profit and market share. We want to strike the optimal balance between these KPIs as we believe that striking this is key in order to drive sustainable top and bottom-line gross, going forward. Therefore, we are also building them in to our plans, and they are integrated in to incentive schemes.” In the first half of 2016, Carlsberg Group has made progress against its SAIL’22 financial priorities of organic growth in operation profit, ROIC improvement and optimal capital allocation. “Our delivery against this was satisfactory with 8% organic growth in operating profit, ROIC improvement versus H1 last year, as well as full year 2015, and strong cash flow and reduced net interest bearing debt leading to a further decline in leverage. With this satisfactory execution so far this year, we are able to maintain our organic operating profit expectations for 2016,” says Cees ‘t Hart. For the full year, Carlsberg expects to deliver low-single-digit percentage organic operating profit growth and financial leverage reduction. Newcomer Having just completed its $2.89 billion (Eur2.55 billion) acquisition of the Peroni, Grolsch and Meantime brands and their associated businesses, Asahi Group Holdings of Japan has become a leading player in the European beer market. In addition to beer, Asahi
Margrethe Vestager, European Commissioner for Competition.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
7
Group Holdings is also involved in the spirits, soft drinks and food sectors. The acquisition encompasses four businesses – Miller Brands(UK) and Meantime Brewing in the UK, BirraPeroni in Italy and Royal Grolsch of the Netherlands – employing approximately 1,650 people and operating five breweries, which produced 7.3 million hectolitres of beer last year. Asahi Group’s new European beer business achieved EBITDA of Eur170 million and EBIT of Eur128 million on sales of Eur747 million for the year ended 31 March 2016. This reflected strong year-on-year growth of 17.2% and 23.1% respectively in EBITDA and EBIT and an 11.5% rise in sales. Miller Brands(UK) has been renamed Asahi UK and the newly acquired businesses have become part of Asahi Europe, which is headquartered in the UK. Asahi Europe’s strategy is to lead the development of the continent’s super premium beer sector. The acquisition has substantially broadened Asahi Group’s presence in Europe. In the past, its international expansion had been focused on Asia and Oceania. In addition to broadening its portfolio of beers, Asahi’s new European operations will allow it to significantly increase sales of its flagship Asahi Super Dry brand, which is the top selling beer in Japan. The brand had already established some
Heineken remains Europe’s largest brewer.
traction in Europe, where it is brewed by Shepherd Neame in the UK, Baltika Breweries in Russia and Czech Republic-based Pivovary Staropramen in continental Europe. Asahi Europe Hector Gorosabel, chief executive of Asahi Europe, comments: “Consumers and customers are becoming ever-more discerning about the quality and provenance of the brands they choose. Asahi Europe has the brands, the agility and most importantly, the people, to deliver exceptional experiences to both.” Asahi Group is expected to seek other beer acquisitions globally and is capable of assuming additional debt of 300 billion yen ($2.74 billion) without harming its credit rating, according to Akiyoshi Koji, president of Asahi Group Holdings and former president of Asahi Breweries. “We are looking at the United States and Europe, where we may not see strong growth but we can count on steady growth,” he adds. Akiyoshi Koji is not intimidated by the prospect of an enlarged AB InBev controlling a third of the global beer market as Asahi Group will focus on the premium brands sector. However, he is concerned about the behemoth’s increased purchasing power in raw materials such as hops and barley. “We need to make sure we have sustainable access to ingredients,” the Asahi Group chief remarks. Surge in Craft Beers A major feature of the European and global beer markets is the surge in popularity of craft beer. Consumers are more willing to pay premium prices for a luxury product such as craft beer than for a more mainstream brand. There are currently more than 10,000 craft breweries operating worldwide, with 86% located in North America and
Stuart MacFarlane, European president of AB InBev.
Europe, according to a recent study on the global craft brewing industry, conducted by yeast expert Alltech. The top 10 locations for craft breweries in the world are: the United States, the United Kingdom, France, Italy, Russia, Canada, Switzerland, Germany, Brazil and Japan. Fuelled by the popularity of craft beers, the number of breweries in the UK has risen by 65% in the last five years to reach to 1,692 in 2015, reveals research by UHY Hacker Young Group, a network of UK chartered accountants. Indeed, the growing consumer preference for artisan food and drink products is encouraging the launch of more microbreweries. James Simmonds, partner at UHY Hacker Young Group, comments: “This increasing popularity has transformed many microbreweries into highly profitable businesses for entrepreneurs looking for a niche position in the food and drinks market.” James Simmonds continues: “As a result of their success, microbreweries across the UK have also become attractive acquisition targets for larger breweries. It is likely that larger breweries will continue to show more and more interest in the smaller breweries that are popping up around the UK so they can benefit from the interest in craft beer.” Independent Brewers Sector “The passion and innovation of independent brewers together with increasing consumer demand for diversity, provenance and excellence has created the craft beer revolution. It is the biggest thing to have happened to British beer for many years and has helped to revitalise the UK beer market and turn it into the most exciting beer scene in the world,” points out Mike Benner, managing director of SIBA (Society of Independent Brewers), which represents over 850 independent brewers in the UK. Mike Benner elaborates: “Hundreds of passionate and genuine independent brewers have brought thousands of world-class beers to
Stefan Orlowski, president Europe at Heineken.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
9
communities across the UK. However, have plateaued in recent years, howas the craft beer market has grown it is ever it could enhance its chances of being flooded with beers from across growth by tapping into the craft beer the world, often from large global movement more effectively. With the brewers.” majority of craft beers available in In order to provide greater clarity for both the on- and off-trade falling consumers looking to purchase beer into the ale and bitter segment, these from genuinely independent craft beers have garnered considerable covbreweries in the UK, SIBA has erage in recent years. Many craft launched its ‘Assured Independent brewers have prioritised ales, brewing British Craft Breweries’ initiative. To variants such as pale ale, for example qualify for SIBA’s stamp of approval IPA and golden ale, in turn driving breweries must be truly independent the popularity of premium bottled of any larger controlling brewing interales. Overall, the beer market should est and pledge to abide by SIBA’s benefit from greater craft innovaManual of Good Brewing Practice, tion.” which seeks to ensure quality throughout the independently brewed beer Acquisition Targets market. The success of microbreweries across The UK independent brewing sector the UK has made them attractive is continuing to expand. Most of acquisition targets for larger brewers. SIBA’s members made capital investFor example, SABMiller entered the ments last year, with 13% spending UK craft beer market in 2015 following the acquisition of London-based more the £100,000. The majority of Mike Benner, managing director of SIBA. Meantime Brewing Company. Also investments were for expanding beer in 2015, AB InBev purchased The production, modernising equipment and improving transportation. Almost one out of six breweries plan Camden Town Brewery, which is about to open a second brewto double their current levels of production, sales and turnover by ery in London. AB InBev recently bought Birra del Borgo, one of the leading 2018. craft brewers in Italy, to expand its portfolio of breweries in this sector. The world’s largest brewer has also completed a series of Falling UK Lager Sales The rapid growth in craft beers is impacting lager sales in the UK acquisitions of craft brewers in North America. as ales such as IPA (Indian Pale Ale) have become increasingly popular with consumers. Mintel research shows that volume sales of lager have fallen by 8% over the past five years alone, down from 3.44 billion litres in 2010. The decline in lager consumption is also undermining overall sales of beer in the UK. British consumers are estimated to have drunk 4.25 billion litres of beer in 2015, down from 4.27 billion litres in 2014. Meanwhile, value sales growth has slowed, rising only slightly from £16.61 billion in 2014, to an estimated £16.68 billion in 2015. There are, however, signs of growth in 2016 and Mintel forecasts value sales to reach £18.1 billion by 2020. Chris Wisson, senior drinks analyst at Mintel, says: “Lager sales
According to Mintel, the UK beer market should benefit from greater craft innovation.
Cees ‘t Hart, chief executive of Carlsberg Group.
10
Bavaria, the largest independent brewery in the Netherlands, has entered this sector with the acquisition of a 60% majority interest in Belgium-based Palm Belgian Craft Brewers for an undisclosed amount. The Palm Belgian Craft Brewers brewery group has a joint production capacity of one million hectolitres and sales of Eur53 million. Bavaria has an annual production of more than 6 million hectolitres of beer, 65% of which is exported, and net sales of more than Eur400 million. The acquisition is in line with Bavaria’s strategy to become the ultimate portfolio player. Bavarai plans to increase its ownership in Palm Belgian Craft Brewers to 100% by 2021. Indeed, Europe’s major brewers are expected to continue to acquire successful, smaller breweries in order to exploit the growing consumer interest in craft beer. FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
In-house Innovation Carlsberg and Diageo (Guinness) have been building their craft beer portfolios through in-house innovation. Carlsberg recently launched a new premium craft beer brand in the UK. Shed Head is a 4.6% ABV American pale ale brewed in Falkenberg, Sweden and imported to the UK. Shed Head joins Carlsberg UK’s popular Backyard Brewery range, alongside Lawn Mower and Bee 17, which have both been available in 330ml can format in the UK since 2014. “We’ve had an experimental brewery on-site for 100 years,” points out Mark Sandys, global head of Beer at Diageo. This facility based at the historic St James’s Gate Guinness Brewery in Dublin now houses a group of brewers producing about 25 different beers a year, some of which have become new product launches such as Hop House 13 Lager, Guinness Dublin Porter, West Indies Porter and Guinness Blonde American Lager. “When you look at the success factors of other craft brewers - genuine stories, real people making the beer, quality ingredients, doing things in a small batch way – we’re doing that already,” maintains Mark Sandys. Indeed, craft beer has become an important aspect of innovation activity at Diageo’s Dublin-based global beer business and in expanding the Guinness brand. “The beer industry at the moment is very different to any time over the last thirty years,” adds Mark Sandys. “In Europe and North America, people are fascinated by beer - who makes it, how it’s made, different ingredients. It’s encouraging much greater experimentation than ever before.” However, the plethora of new beers on the market is highly confusing for consumers. “As a consumer is looking at the shelf, the Guinness name is the navigation point,” Diageo’s global head of Beer explains. “Instead of saying ‘I really like IPA and therefore I'm going to chose some IPA’, there will also be some consumers who say ‘I really love and respect Guinness, I'm going to try their IPA’.” The new products are strengthening the Guinness brand in the market-place. The investment in innovation and experimentation is continuing. In 2015 innovation generated 4% of total beer sales last year compared to just 1.5% three years ago and is set to reach 5% in 2016. “We’re aiming for 10% by 2020,” says Mark Sandys. J
Mark Sandys, Global Head of Beer at Diageo.
New product launches, such as Hop House 13 Lager, Guinness Dublin Porter and West Indies Porter, are strengthening the Guinness brand.
I BEVERAGES
500,000,000+ Beer and Soft Drinks Every Day Can’t Be Wrong his tagline is Union Engineering’s T entrance to Brau Beviale in 2016. A tagline which is not just a large number but actually a conservatively estimated figure illustrating a story about a company that a substantial number of people are becoming acquainted with every day – around the globe. It is the story about the company’s position as a forerunner when it comes to developing new and innovative CO2 technologies and being passionate about green footprint. It is the number of beer and soft drinks daily produced including CO2 delivered from a Union Engineering plant.
tinues, and reveals one of the reasons why the company is holding a strong position in the segment of self-generating and extraction based CO2 plants. Joint Forces in the Name of Science
Union Engineering and Climeworks are joining forces in an exciting project.
the technology and it is now ready for the grand presentation at the exhibition. Size Matters
The patented and successful ECO2Brew is ready in a version 2.0.
A Shared Passion
Lars Klitgaard Pedersen is General Sales Manager for the beverage segment at Union Engineering, and he explains; “for our customers the focus is of course on their endproduct. They are looking at food-safety, on utility consumption and ROI, and it is our passion to provide them with the best solution for their specific needs. We have proven that we understand the market demand, and we keep improving and developing technologies meeting the key performance parameters of the market. Back in 2013, we introduced the ground-breaking and patented ECO2Brew®, which is not just able to purify CO2 without using water, but it is also over-performing when it comes to reduction in power consumption and increased recovery rate compared to the traditional technologies.” Since the first ECO2Brew® installation, Union Engineering has further improved
Craft Brewers and smaller conventional breweries can also benefit from visiting Union Engineering during the exhibition. Lars Klitgaard and his colleagues are ready to present a compact solution, which is designed for fast installation without compromising on quality and reliability. He elaborates; “We receive still more inquiries from small breweries, the need for being self-supplying with CO2 is rising. Therefore, we have developed CO2mpactBrew™, delivered as a containerised solution with all the equipment installed inside a container, featuring a maintenance aisle and easy connection points for utilities thus ensuring fast and easy installation. “As an added benefit, by recovering your own CO2 you eliminate emissions (odours) from your fermentation process, which might otherwise require additional precautions. “ The New Standard For Self-generating Plants
Besides supplying to the beverage segment, Union Engineering is also the main supplier to industrial gases companies, to desalination projects and within the biogas, natural gas treatment and petrochemical industries. The large pool of CO2 experts is also making the company a natural partner within science project. Most recently a joint project with Climeworks has become a reality. The objective of the project is to develop a standardized, competitive, low cost, modular, standalone, and onsite plant for delivery of beverage grade CO2 to bottling companies. The CO2 stems majorly from atmospheric air and is in a first step concentrated to 99.9% by a Climeworks direct air capture (“DAC”) plant. In a second step, CO2 is purified and liquefied (“conditioning”) to achieve beverage grade CO2 purity by Union Engineering technology. The project is funded by Eurostar’s programme and is called CAPDrinks. Curiosity as a Driver
Throughout decades, curiosity and the passion for innovation has driven the company to create new technologies, expressed through a wide range of patents and over 900 CO2 plants installed worldwide. This has resulted in a position as a world leader in CO2 technology. Learn more on union.dk and sign up for news and knowledge about CO2. Union Engineering is at Brau Beviale in hall 6 stand 342. J
For soft drink bottlers the NOxFlash® technology has more or less become the standard; a unique unit that eliminates use of the harmful and disposal demanding potassium permanganate (PPM). The unit is as standard delivered with all self-generating CO2 plants from Union Engineering. “We have supplied over 60 plants with this technology – and this has saved the customers a lot of trouble. PPM is not only difficult to get hold of; it is subject to strict rules when disposed of.” Lars Klitgaard con-
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
A containerized compact plug-and-play CO2 plant for smaller breweries.
13
I CONVEYING EQUIPMENT
What is Engineered Sustainability by Rexnord? ustainability is the capacity to endure. Engineered SustainS ability™ by Rexnord is a product program to help you design durable conveyor systems with components that guarantee optimal product handling without compromising the ability to meet targets on safety improvement, increased productivity, water reduction and energy savings. The program highlights the ongoing commitment to creating and manufacturing environmentally-friendly conveyor equipment. Selecting the right conveyor equipment can deliver impressive energy reduction, water reduction and improved conveyor safety in comparison to more traditional conveyor concepts. Rexnord believes that everything starts with the voice of the customer. The products support customers’ goals and have been developed and manufactured in line with what customers need. KPI’s, safety goals and sustainability goals such as water usage in their production facili-
ties are studied. All this information is the basis to define Rexnord’s strategy in this area. The ‘Engineered Sustainability by Rexnord’ programme is now being successfully delivered and the upcoming BrauBeviale exhibition in Nuremberg, Germany is Rexnord’s latest opportunity to deliver its ‘Engineered Sustainability by Rexnord’ message. The booth at the trade show helps to illustrate what
Rexnord can do to help. Customers and potential customers can test the conveyor equipment and see the real time energy savings. It’s a powerful way to show the advantages of working with Rexnord. The company will also be launching two new conveyor chain designs, which have been created and manufactured with the same message in mind. The two new chains have been developed to deliver excellent benefits for both OEMs and end users, showing how environmentallyfriendly advantages such as energy savings can be achieved. For example, the chains use a plastic that lowers friction as it is self-lubricating and the weight of the chain itself is also lowered. Rexnord’s skilled engineers will help you obtain the lowest Total Cost of Ownership (TCO), resulting in significant cost savings by improving operational safety, efficiency and productivity. J
AmbaFlex – The Specialist in Spiral Conveyor Solutions mbaFlex is the partner for customised material handling systems A based on spiral conveying technology! Its unique SpiralVeyor® is used in a wide range of markets and applications for vertical transportation, temporary storage and the accumulation of single goods and packed products. AmbaFlex is an independent global company that has developed, produces and also maintains the SpiralVeyor® system to ensure that customers receive the most cost effective solutions available today. Users all over the world already appreciate the level of quality AmbaFlex delivers and its proven experience in their markets. To maintain this leading and trendsetting position, AmbaFlex continuously invests in product innovation and the develop14
ment of functional solutions in close co-operation with customers. The SpiralVeyor® SVm-Series are wide belt spiral conveyors in the AmbaFlex SpiralVeyor® program and specially designed for the mass flow handling of liquid containers. The wide belt spiral is built up from multiple parallel tracks that form one conveyor belt (AmbaFlex MultiSpiral technology). The multiple belt track arrangement ensures a very large high pull strength for high load applications. Many other options are also available to customize / configure this spiral conveyor for specific applications and functions. AmbaFlex Spiral Conveyor Solutions is exhibiting at Stand 258 in Hall 7 at Brau Beviale 2016. For further information visit www.ambaflex.com. J FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
The Pott’s Brewery Invests in New Inspection Technology he Pott’s Brewery in Oelde, Westphalia, is synonymous with swing-stopper bottles and also demonstrates this expertise when T it comes to contract-bottling for beer and beer-based mixed drinks. To upgrade the quality of its products still further, Pott’s has now invested in a new Linatronic empty-bottle inspector from Krones combined with a ModulCheck rubber seal monitor, both of which have been integrated into the existing Krones bottling line. Numerous advantages of this improved inspection unit contribute towards ensuring that the brewery’s 24,000bph filling line for swing-stopper bottles is now way ahead of its time. The line is run in two-shift operation throughout, and is used both for filling the brewery’s own beer specialties and for contract-bottling. Rubber Seal Inspection by a ModulCheck Pott’s placed an order with Krones for a new ModulCheck rubber seal monitor and for a Linatronic 735 empty-bottle inspector. The upstream ModulCheck verifies the presence and correct colour of the rubber seals on the swing-stopper bottles’ porcelain heads; it can do this for all positions of the rubber seal. Moreover, the unit detects soiling, faded rubber seals, and any labels/label residues still adhering to the swing. The new ModulCheck offers numerous advantages: it does not touch the bottles, and can also be relied upon to detect soiling in the area of the porcelain head. What’s more, it doesn’t consume any wear parts, and can easily be matched to a new variant at change-overs. Impeccable Monitoring and Upgraded Quality The latest model of the Linatronic 735 contains a variety of modules like base inspection, sealing-surface inspection, side-wall inspection or lateral-neck-finish inspection. When inspecting swing-stopper bottles, the Linatronic also takes a long hard look at the stopper itself: if the clamp-type lower part of the swing-stopper and the porcelain head are on different sides of the neck area, a fourmega-pixel neckfinish camera can be relied upon to detect this fault, and to check the sealing surface as well. J FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
15
I CLEAN IN PLACE
The Importance of Food Safety in the Hospitality Sector By Stefan Blust, Business Manager Food & Beverage, Baumer he food and beverage industry is faced with continually rising quality standards, increasing cost pressure and strict hygienic regulaT tions. As a result, requirements for processing systems and their efficient cleaning are growing. With an accuracy of 1% and a measuring range of 500 uS/cm to 1000 mS/cm, together with fast and accurate temperature compensation, the innovative CombiLyz conductivity meter has the ideal technical properties to support CIP safely and costeffectively. In order to guarantee food safety, production and filling facilities must be cleaned regularly. This is usually done using an automated CIP process (the cleaning of a process engineering system without dismantling it) and is part of a fully automated production process. In the food industry, the correct settings for a CIP process are very comprehensive, since the final CIP processes can often only be defined after the systems have been set up and meaningful tests have been carried out. There are as many requirements as there are cleaning programs. Some systems are cleaned with water only, while chemical cleaning agents like acidic or caustic solutions are used in others. Some systems recover the water from the last rinsing cycle and use it for the first rinsing cycle of the next CIP sequence in order to keep overall running costs low. Optimum Interaction of Physical Parameters
For all cleaning processes, however, the optimum interaction of different physical parameters is critical. The exact concentration of cleaning agents, while taking into account flow rate, pressure, temperature and time, defines a reproducible process in which the CombiLyz clearly illustrates its superiority. While the concentration of the acid or alkali is increasing, the conductivity meter controls the specified concentration of the relevant cleaning media. With precise measurements, it ensures no more chemicals are used than necessary. This saves resources and protects the environment. During the phase separation in the CIP return flow, the CombiLyz with its good temperature compensation quickly recognizes different media, even when temperatures fluctuate enormously. This reduces the losses of stored cleaning agents. After one cleaning cycle, the CombiLyz accurately measures the concentration of the remaining chemicals in the rinse water. With this information, the PLC can control the predefined media circuits exactly and reliably using valve nodes. This reduces the risk of food being contaminated by residual chemicals.
tance in the line, since the pipe cross-section is only minimally influenced. Deposits and impurities can be more easily transported out of the system. The hygienically designed sensing element itself can also be cleaned very easily, which is confirmed by the EHEDG certification and conformity with the 3-A standards. Furthermore, its design is exceedingly durable, and is specially made for use in applications with frequent temperature shocks. This guarantees a long service life, reduces unnecessary downtime and thus increases system availability. Thanks to its very user-friendly operation by touch screen and its modular housing, the CombiLyz is outstanding in its class. The conductivity meter is available with or without CombiView. This large, illuminated display can be rotated 360° and can thus be read easily from all directions, even from a great distance. It allows different view options, for example the simultaneous display of conductivity and concentration values as well as fully customizable text (water, alkali or acid etc.). Alarms and configurations can be visualized on the device and can also be transmitted to the higher level controller. With its integrated relay, the conductivity meter can carry out simple control tasks, for example in microbreweries with a low degree of automation, where food safety is of great importance and where valves are to be addressed directly without a process control system. The same applies to retrofitting of systems being upgraded from manually controlled to partly automated processes. The CombiLyz sensor is available as a compact and as a separate version. The latter is available with cable lengths of 2.5 m, 5 m and 10 m. If required in the application, the display and the sensing element can be installed separately. This offers maximum flexibility for optimum mounting positions. A wide range of adapters allows hygienic installation in most standard process connections. This makes it the ideal solution for many CIP systems. Further information visit www.baumer.com/CIP. J
Robust Hygienic Design and User-friendliness
The robust sensing element of the meter is made completely of PEEK. In order to meet the requirements of different installations, it is available in lengths of 37 mm, 60 mm and 83 mm. Its compact design reduces the flow resis16
The efficient CombiLyz conductivity meter proves its worth through a high level of functionality and hygienic design. It thus meets the highest standards in the food and pharmaceutical industries.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I HYGIENE
Hygienic Stainless Steel Environments Within Dairies dairy industries it is vital that hygiene ITonstandards are kept to a very high standard. do this, the choice of materials used in the construction of a dairy are required to cope with the daily processing and production demands. Drainage and wall kerbing, which make up part of a dairy, are important products that need consideration. To reduce costs, many may opt for these to be made out of concrete, however over time concrete dries out and is prone to cracking. This can jeopardise a hygienic environment as unwanted bacteria will harbour in the cracks, no matter the size. Concrete is also a hard material to thoroughly clean as it is not impermeable and can absorb some moisture, weakening the structure. In time the concrete may therefore erode and cause construction issues within a dairy, which would disrupt the daily production of their goods. Alternatively, drainage and wall kerbing can be manufactured from stainless steel. Stainless steel is resistant to caustic cleaning materials and lactic acid, which are common elements in a dairy. This resistance
ensures that the stainless steel surface does not corrode, rust or weaken making it an excellent long term solution in construction. As well as the material it is made from, the layout and design of a drainage system is also important. A drainage system will need the appropriate flow rates to cope with the volume of liquid waste water in the
area. A drainage system also goes hand in hand with the flooring design so liquid waste water drains effectively into the channels or gullies. Doing this prevents any pooling or standing water, which is prone to bacteria build up. A stainless steel wall kerbing system can also work with the flooring design. A seamless connection between the floor and the wall can be made by installing a resin wall cove onto the kerbing. This drastically improves the efficiency of cleaning by removing any creases or angled connections. In turn this reduces the amount of areas bacteria and small debris can harbour and grow. With strict hygiene demands throughout the dairy industry, Aspen Stainless has the ability to provide a tailored product package to meet your specialist requirements using its range of drainage, wall kerbing and protection. Browse the product range online, which has full technical data available to download and discuss your bespoke requirements with the Aspen Technical Team on Tel +44 (0)115 986 6321 or visit www.aspen.eu.com. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
17
I FOOD SAFETY
The Importance of Food Safety in the Hospitality Sector aintaining excellent food safety standards in the hospitality M industry is a major issue and left unchecked, it can cost companies thousands of pounds in fines. Financial repayments aside, the damage to a company’s reputation and brand loyalty can take years to rectify, if at all. One Irish company, Kelsius is providing a digital solution to this problem by revolutionising the way food is stored and cooked. With offices in the UK and Ireland and a network of partners in Europe, Middle East, Australia and the USA, it is quickly becoming an integral part of the food safety ecosystem for companies that have facilities to serve food. Its in-house bespoke product, FoodCheck uses wireless temperature monitoring technology and digital HACCP Management system, which ensures the highest levels of food safety are adhered to by staff and management, while also guaranteeing maximum product safety for complete food safety control. In addition to the safety element, it also massively reduces the costs associated with time required for maintaining these standards – in some instances up to 30 hours per week.
FoodCheck Tablet.
Major Deal
The company recently landed a major six-figure deal with Five Guys UK to provide the premier global burger chain FoodCheck. It is now supplying 50 Five Guys locations across the UK as well as other global sites such as Dubai, Saudi Arabia, Kuwait and Spain. With no freezers on site, everything in Five Guys is cooked from scratch, so food must be delivered and stored at exact temperatures. UK IT Director for Five Guys, William Day says: “The FoodCheck paperless HACCP system is easy-to-use allowing staff to concentrate on the quality of food we provide. Records are easily and securely accessed for each location and the reporting is what really sets the system apart. This makes life much easier for a HACCP audit or inspection."
Five Guys using Kelsius FoodCheck.
a recent contract Kelsius secured with Reading University to install the largest single deployment of its FoodCheck Paperless HACCP system. The deal is for 17 individual FoodCheck systems covering every element of food production and food service rolled out across the entirety of Reading University, which is comprised of three separate campuses. Neil Stafford from Reading University says: “The new Kelsius system is fantastic. I am able to add staff, tasks, vendors and products within minutes an get instant alerts on fridge and freezer issues. My aim was to provide the staff with an easy system to use, that they would not be nervous to use. I have a full tractability on everything within the system and again so easy to gain reports.” Kelsius Chief Executive, Andrew Logan, who is championing the use of FoodCheck technology across public and private sector operations, comments: “Both the Five Guys deal and the Reading University contracts are a massive boost for our company and a real testament to the strength of our product within the foodsafety sector. In both these instances, FoodCheck has proven its ability to monitor the safety of food from the moment it arrives on the premises, during the storage and cooking process and ultimately until it is purchased by the customer. The importance of this chain cannot be overstated, and companies that does not take food safety seriously are very foolish considering the massive long-term financial implications.” Find out more about how Kelsius can help your business at www.kelsius.com, www.facebook.com/paperlessHACCP and @KelsiusRealTime. J
Public Sector
The FoodCheck solution also operates extremely well in the public sector, even if the customer has multiple locations. One example is
Reading University team trying FoodCheck.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
19
I DISTILLING
Scotch Whisky Exports Return to Growth Scotch whisky exports have returned to volume growth for the first time since the first half of 2013 and distillers, both large and small, are continuing to invest in new capacity to meet anticipated future expansion, particularly in the single malt and premium categories. espite continued economic and political volatility in some markets, Scotch whisky’s global export volume grew by 3.1% during the first half of this year, with the equivalent of 533 million 70cl bottles shipped overseas, up from 517 million bottles in the first half of 2015. However, the customs value of shipments was down slightly by just 1% over the same period to £1.70 billion from £1.71 billion in the first six months of last year. The drop was much smaller than the decline in value of almost 3% experienced in the first half of 2015 – indicating another clear sign of improvement, according to the Scotch Whisky Association (SWA).
D
Single Malt Whisky The global market for single malt Scotch whisky continued to grow, with export value increasing by 6% to £431 million and volume up 3% to 49 million bottles in the first half of 2016. Single malts now represent a quarter of total shipment value, with exports more than doubling in value over the last decade.
Despite the present challenging trading environment, the Scotch whisky industry is expanding at historic levels.
Brexit While the weakness of Sterling since the Brexit vote is likely to boost export competitiveness, the SWA is acutely aware of the long-term challenges of defining the UK’s future trading relationship with both the EU Single Market and other countries. David Frost, chief executive of the SWA, says: “The first half of 2016 was marked by an improving Scotch whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years. The industry-wide emphasis on craftsmanship and provenance, backed by investment, means that Scotch
Scotch whisky’s global export volume grew by 3.1% during the first half of this year.
Bottled blended Scotch whisky still represents the lion's share of exports but while volumes increased by 1% to 362 million bottles in the first half of 2016, export value was down 4% to £1.16 billion, which may have been impacted by the growth in single malts. In the United States, the Scotch whisky industry’s largest market by value, exports rose by 9% to £357 million, with both single malts, up 22%, and bottled blended Scotch whisky, up 6%, enjoying growth. This reflected premiumisation in the sector. The market in India also performed strongly with export value up 28% to £43 million. The SWA maintains that the full potential of the Indian market will only be realised through liberalisation of the exorbitant 150% basic customs duty, urging the UK Government to prioritise discussions with India as it develops its post-Brexit trade priorities.
Scotch whisky is at the heart of Diageo’s spirits and beer business, generating about 25% of group sales and third of profits.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
21
and Asian consumers have a strong affinity with Scotch given the strength of our brands in Latin America and Asia. In a premiumising category, we can lead the growth.” Reflecting its long-term confidence in the global Scotch whisky market, Diageo has embarked on a £1 billion investment in expanding production. The five year development programme is designed to expand overall production capacity by 30% to 40%. However, the recent slowdown in its Scotch whisky sales has caused Diageo to postpone certain capacity expansion projects.
David Frost, chief executive of the Scotch Whisky Association.
exports are well placed to grow in the future, appealing to consumers in both mature and emerging markets.” He continues: “It is clear, however, that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK’s future trading relationship with the EU and other countries. We are working closely with our members and government to ensure the industry’s trade priorities are well understood, to promote open markets, and to identify opportunities to grow our exports in the future. Given the continued international uncertainty, we also look to government to make every effort to put in place a competitive domestic tax and regulatory environment, supporting a key home-grown industry.”
Faltering Sales at Chivas Brothers Chivas Brothers, the second largest Scotch whisky producer in the world behind Diageo, has experienced faltering Scotch whisky sales with particular difficulties encountered in China. Chivas Brothers is the Scotch whisky and premium gin business of Pernod Ricard. Its portfolio features Chivas Regal, the world’s first luxury whisky and the leading Scotch whisky in China; Ballantine’s, Europe’s number one Scotch whisky; The Glenlivet, the world’s number two single malt whisky; and Royal Salute, the world’s only exclusively prestige Scotch whisky range. The company’s other brands include single malt whiskies such as Aberlour, Longmorn, Scapa, Strathisla and Tormore, along with blended Scotch whiskies 100 Pipers, Clan Campbell, Something Special and Passport Scotch. In its last financial year, Chivas Brothers reported a 4% decline in sales for Chivas Regal, which was impacted by a continuing downturn in the Chinese market, although sales of Ballantine’s rose by 3%.
Return to Growth at Diageo Diageo, the world’s leading producer of Scotch whisky with global brands such as Johnnie Walker, has reported a significant turnaround in performance with a return to growth in its 2016 financial year, after a 5% decline in organic sales in 2015. Scotch whisky is at the heart of Diageo’s spirits and beer business, generating about 25% of group sales and third of profits.
Chivas Brothers, the second largest Scotch whisky producer in the world behind Diageo, has experienced faltering Scotch whisky sales with particular difficulties encountered in China.
Ivan Menezes, chief executive of Diageo.
“We have the widest scotch portfolio in the industry, from affordable Scotch brands, through premium core up to unique ultra premium offerings,” points out Ivan Menezes, chief executive of Diageo. “Fiscal 16 was a better year with significant improvement in performance. Our two largest Scotch brands demonstrate this - Buchanan’s grew double digit and Johnnie Walker is back in growth led by our reserve offerings up 10%.” Diageo is upbeat about the prospects for the US market for Scotch whisky, which the group is ideally positioned to exploit. “In the US the consumer is open to exploring new tastes and is looking for heritage, authenticity and craftsmanship. This is a big opportunity for Scotch.” Ivan Menezes elaborates: “The strong multi-cultural dynamic of the US also supports Scotch growth as Hispanic
“It was fair to say it was a challenging year in Asia,” remarks Laurent Lacassagne, chairman and chief executive of Chivas Brothers. “We have seen decline of the whisky category in China at the super-premium end, with a shift from consumers to more premium, more affordable whisky brands.” As part of its annual capital expenditure commitment of £60 million to secure future malt whisky supplies and to satisfy the growing demand for its brands, Chivas Brothers is currently expanding The Glenlivet Distillery. The first phase of the current expansion project will increase annual capacity from 10.5 million litres of spirit to 21 million litres, making The Glenlivet the largest malt whisky distillery in Scotland. Chivas Brothers recently opened a new malt whisky distillery on the banks of the River Spey. The new £25 million Dalmunach Distillery is part of an investment package which has so far increased Chivas Brothers’ malt whisky distillation capacity by 17%. “As global demand for Scotch whisky increases year on year, our confidence in the long-term growth prospects for the category remains strong. The construction of the new Dalmunach distillery is a clear demonstration of our confidence and also of our commitment to invest to meet the significant growth potential,” says Laurent Lacassagne.
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
23
New Strategy For Edrington Another independent Scottish distillery company, Edrington also recently reported its financial results for the year ended 31 March 2016 which showed relatively flat organic EBIT (earnings before interest, tax, excluding effects of currency and trade sales) of £155.9 million on revenues of £574.6 million, in line with the prior year. However, profit for the year at £72.7 million was down from £79.7 million in the previous year. Edrington is encountering a challenging trading environment characterised by continued political and economic volatility and the impact of fluctuating foreign currency exchange rates in emerging markets. Spearheaded by its prestigious Scotch single malt whisky brand, The Macallan, Edrington’s brands portfolio also incorporates Brugal, The Famous Grouse, Cutty Sark and Highland Park Scotch whiskies along with Snow Leopard vodka. Edrington is now pursuing a new development strategy, entitled Edrington 2020, which prioritises further enhancing The Macallan brand, accelerating the growth of Highland Park, and developing the group’s super premium capability.
Laurent Lacassagne, chairman and chief executive of Chivas Brothers.
Record Profits at William Grant & Sons William Grant & Sons, the family owned Scottish premium spirits business that produces the Glenfiddich and Balvenie Scotch single malt whisky brands, has reported an 8.9% jump in after-tax profits to a record £147.4 million on turnover up 5.9% to £882.5 million for the year ended December 2015, reflecting strong volume and value growth across its core portfolio of premium spirit brands. Volume sales of Glenfiddich increased by 5% year on year. William Grant & Sons’ core brands also include Grants Family Reserve blended Scotch whisky, Sailor Jerry Spiced Rum, Drambuie liqueur, and the Irish whiskey Tullamore DEW. “This success was driven by our constant focus on building brands and investing in them for the long term,” comments Simon Hunt, chief executive of William Grant & Sons. “We have also continued to invest in our operational capabilities and our route to market infrastructure. It has been a challenging market place but we are well positioned to continue our growth in 2016 and beyond.”
Simon Hunt, chief executive of William Grant & Sons.
£100 Million Investment In line with this approach, Edrington is investing £100 million in a new distillery and visitor centre for The Macallan. The new distillery is designed to ensure the ongoing quality control of the production of The Macallan and to further consolidate the brand’s position as one of the world’s leading luxury spirits. Over time the distillery will deliver additional capacity to meet the growing demand from existing and new international markets.
Edrington is investing £100 million in a new distillery and visitor centre for The Macallan.
“A year on from the launch of Edrington’s new strategy, we see evidence that we have put the right strategy into effect, and that it is delivering results,” says Ian Curle, chief executive of Edrington. “During this year of transition we have faced challenging economic and trading conditions with strong performances in key markets and shortfalls in others. In combination with the influence of currency, this has adversely affected our results.” He adds: “Edrington will continue to invest in its brands and in growing markets for premium spirits. Our new distillery and brand home for The Macallan is taking shape in Speyside, and we look forward to welcoming visitors in spring 2018.” He expects that the uncertain political, economic and trading conditions are likely to endure through 2016-17. However, given the strong performance by the company’s brands in key markets, Ian Curle remains confident about Edrington’s medium and long term prospects, as it continues to invest and innovate to drive growth across its international business. Ongoing Expansion Despite the present challenging trading environment, the Scotch whisky industry is expanding at historic levels with nine new distilleries opened in the last two years and up to a further 40 planned across Scotland, according to the Scotch Whisky Association. The nine new distilleries are: Annandale, Arbikie, Ardnamurchan, Ballindalloch, Dalmunach, Eden Mill, Glasgow Distillery, Isle of Harris and Kingsbarns. Substantial investment has also been made in warehousing and bottling capacity, as well
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
25
tion sites. Scotch whisky distillers are also embracing a ‘circular economy’ in the industry supply chain. The aim is to use resources for as long as possible, extracting maximum value from them and recovering and regenerating materials. For example, by 2020 no general waste will go to landfill, compared with 13% in 2008, and product packaging will be 100% recyclable. Sustainable land use is the fourth theme. The goal is to ensure a secure supply of high quality raw materials, namely cereals and wood. This includes encouraging the use of wood sourced from sustainable oak forests to manufacture new casks. Reducing Environmental Impact John Dewar & Sons, which is part of the Bacardi group of companies, has been focusing on reducing its environmental impact for a number of years. The company currently operates whisky distilleries in Aberfeldy, Macduff, Aultmore, Craigellachie and Nairn with ageing, blending, bottling and packaging facilities in Glasgow and additional maturation facilities in Poniel in Central Scotland. The 100 acre Poniel site incorporates 18 warehouses, each capable of holding up to 72,000 storage casks where Dewar’s, White Label, William Lawson’s blended Scotch, and Aberfeldy single malt Scotch whiskies are matured. As part of its sustainability commitment, John Dewar & Sons has cut greenhouse gas emissions by 34% since 2006, achieved a 46% reduction in water use since 2009 and a 30% reduction of waste to landfill since 2010, across its five malt distilleries.
Ian Curle, chief executive of Edrington.
as renewable sources of energy. Investment is also ongoing in the independent sector, which is increasing production. For example new capacity is about to come on stream at Drimnin Distillery and Torabhaig Distillery. Of course, Scotch whisky is vital to the UK economy, contributing about £5 billion annually in added value and supporting more than 40,000 jobs. Generating annual exports of almost £4 billion, Scotch whisky is also the single largest net contributor to the UK’s balance of trade in goods. Sustainability The Scotch whisky industry is committed to sustainability and has set ambitious green targets in the areas of responsible water use, reducing greenhouse gas emissions and improving energy efficiency. Indeed, the Scotch Whisky Environmental Strategy - first launched in 2009 and the only one of its kind covering an entire Scottish industry - has recently been refreshed to broaden its remit to reflect an evolving world and changing business operations. The refreshed strategy has four themes with voluntary targets to be met by the industry by 2020 and 2050. In the area of reducing energy use and greenhouse gas emissions, the target is to have some 80% of primary energy coming from non-fossil fuels, such as anaerobic digestion and solar power, by 2050. In 2008 this figure was 3% and increased to 17% by 2014. In terms of responsible water use – the industry is aiming to improve distilling water efficiency by 10% by 2020. This target is based on companies optimising efficient water use at their produc-
The Scotch Whisky Environmental Strategy - first launched in 2009 - has recently been refreshed to broaden its remit to reflect an evolving world and changing business operations.
26
John Dewar & Sons, which is part of the Bacardi group of companies, has been focusing on reducing its environmental impact for a number of years.
Its recently opened state-of-the-art blending facility at its Poniel Blend Centre & Maturation site features new technology to enhance water addition, mixing, and control spirit strength, as well as energy-efficient conveyers that transport casks from station-tostation on pallets. The system enables the movement of whisky between sites in tankers instead of traditional wooden casks. This reduces annual carbon dioxide emissions by 1,000 metric tons – equivalent to keeping more than 400 cars off roadways. The entire operation runs with just 24 employees, most hired from the local community. The project is part of a $500 million investment in Scotch whisky production by Bacardi. “We recognize how important it is to preserve and protect the natural resources that exist in the places where we operate. Caring for the environment is at the heart of our corporate heritage,” explains Iain Lochhead, operations director for John Dewar & Sons. “In our business, there’s real passion about sustainability. It’s something we think about from start to finish in our processes.” Indeed, John Dewar & Sons has the distinction of being one of the few businesses in the spirits industry to be certified – and recertified – by the Carbon Trust Standard. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
Lifting Spirits By James Clark, MPS VP Global Sales - Drinks ackaging plays an important role in underlying the value of a brand and in P promoting a brand to new and established consumers. Packs offer huge opportunities for brand differentiation in terms of shape, print finishes & effects and opening experiences. Despite the continued uncertainty in the global economy, established spirits markets are managing to maintain recent sales levels. However, the main source of growth, supported by enormous marketing budgets, has been in emerging markets. Here, value growth continues to outstrip volume growth and this is a clear demonstration of consumer’s ‘trading up’ from local spirits to more premium, aspirational international brands. These new consumers are buying provenance and a brand’s outer packaging is part of that experience. The gift value offered by premium packaging has long been synonymous with several parts of the drinks mar-
MPS secured two of the packaging industry’s
In 2015, MPS Arbroath was presented with an
addition, glued inner folded flaps, that remove the ‘raw’ edge of the unprinted cartonboard, present a quality finish for premium spirits brands. Varnish effects such as soft touch or silk screen textures which mimic naturally occurring materials such as leather, stone or wood grain as well as in-line reticulation are enhancing the tactile qualities of packs. 3D and holographic print that provide depth and the impression of movement are also in demand for gifting and brand extensions. Printed electronics are even now playing a part in on-trade promotions and consumer trials with new technologies such as Near Field Communication (NFC) are also taking place. This technology allows a smart phone to communicate with a chip, incorporated into the outer pack, by using the energy from the phone’s battery. NFC is being used to help communicate additional marketing information and also offers the potential to gather information direct from the consumer.
Eska Frog award for the third year in succession. This global award, organised by the carton-board supplier Eska, was presented for a striking pack for Dalmore’s 25 Year Old whisky. This complicated pack consists of 58 individual components and involves 76 separate operations to complete it.
ket, such as Champagne and Scotch whisky, and is now being recognised in up-and-coming areas such as vodka, rum and gin. New Packaging Developments During the last few years there have been a number of exciting new packaging developments. The market is increasingly using board-to-board lamination which effectively combines two pieces of cartonboard to provide a strong construction. In
most prized awards at the UK Packaging Awards 2015. MPS beat a host of other suppliers to claim ‘Cartonboard Pack of the Year’ as well as ‘Limited Edition of the Year’. The ‘Limited Edition of the Year’ was awarded to a range of packs for Diageo’s Johnnie Walker brand. The Johnnie Walker Black Label and Double Black Limited Editions were launched globally in June 2015.
from high quality cartonboards, sometimes combined with other materials such as wood or plastics, have been one of the favoured formats. Clever designs have provided the perfect stage to display finely crafted unique bottle designs whilst incorporating information booklets or complementary crystal glasses. The rigid box has been used to reinforce the very essence of these exclusive, luxury brands. Over the past few years, there have been developments in spirally wound and composite tubes that have further elevated this high-quality packaging format. The tube can be decorated in a limitless range of colours, enhanced by a foil, varnished or embossed finish. Material choice and outer print finishes offer the choice of a smooth silky touch or the contrast of a tactile raised image. The appearance of a tin-plate container or the novelty of a tripart tube are all possible. An extensive range of shapes - cylindrical, oval, triangular and square - are now available which allows further brand differentiation. MPS provides a full range of printed products to the alcoholic drinks sector including self-adhesive and wet-applied labels, folding cartons, rigid boxes, composite tubes and shaped boxes. This dedication to protect and promote the world’s great brands will see MPS help lift the value of premium spirits for years to come. J
Growth in ‘Super-premium’ Brands The push into new markets has also seen growth in ‘super-premium’ brands that demand the very best packaging formats to support high retail price points. It’s now not uncommon to see brands retailing at £500 and above at retail travel outlets. Here elaborate rigid boxes made
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
In 2015, MPS Bristol was presented with a coveted Digital Printer Award for a selfadhesive label just six months after installing the site’s first digital press, a Domino N610i. The site won the category ‘Creative Use of Substrates’ which was one of just 15 awards that acknowledge the very best examples of digital print. The award was presented for a self- adhesive beer label for the craft brewer, Redwell based in Norfolk.
27
EASY-LOCK by APLIX® ASY-LOCK by APLIX® E is a hook-to-hook reclosable solution designed for
Key Customers & Applications Thanks to its inspired design and technology, this intuitive closure offers opportunities in many additional markets such as cheese, cereals, petfood, coffee, frozen food and confectionery. Since its launch in 2010, EASY-LOCK by APLIX® has been very successful in both Europe and the United States.
flexible packaging. This closure was developed with simplicity and functionality in mind, and provides a tactile and audible feedback when opening and closing to let consumers know their package is sealed.
A Sensory & Intuitive Closure EASY-LOCK by APLIX is a sensory and intuitive closure which offers improved audible and tactile feedback when opening and closing, letting consumers know their package is sealed. This valueadded feature secures the package and provides an overall enhanced experience to the consumer. This hook-to-hook closure allows minimal pressure to close. Hooks engage on multiple levels making it easy to open and reclose. Unlike other systems, precise alignment is not required for sealing and its resistance to particulates keeps freshness locked in! The closure allows for numerous openings and closings and is excellent for dry product applications and readily seals through powders and fine particles. It keeps flexible and easy to reclose under frozen & refrigerated conditions. EASY-LOCK by APLIX® is made from a food-grade, heat-sealable polyethylene material. It runs on automated packaging machines and is available in single or mated tapes. This closure is certified BRC. Solutions For All Bag Sizes APLIX offers reclose solutions for all bag sizes:
* EASY-LOCK TOUCH: an easy closure for small bags (<1kg). This narrow closure (16 mm) provides reclose options in many markets including cereal, cheese, coffee, confectionary, dried fruit, snacks and other packaged goods. * EASY-LOCK TOUCH+: a robust closure designed for heavy bags (>1kg). This large closure (26 mm) is ideal for large opening bags with or without gussets. It is a great reclose option for markets such as petfood, detergents, fertilizers, and bulk products. 28
In Europe, it consolidated its position with key market launches with ARLA (Anchor cheddar) and Kellogg’s (Kellogg’s Extra® and Special K® cereals). “Our relationship with ARLA really changed the game for us, their commitment to innovation matched our own and this led to some great product launches such as Anchor cheddar,” says APLIX Packaging Director. EASY-LOCK is also a suitable closure for petfood bags and was selected by Affinity Petcare and Tyler Packaging. Adam Kay, Sales and Technical Director at Tyler Packaging, commented: “The APLIX closure system is a fantastic option. It’s extremely straight forward and hard wearing, meaning packaging can be opened and resealed almost indefinitely. Its ease of use makes it particularly suitable for the food industry, both pet and human, as it doesn’t need exact alignment to reseal, meaning it’s both very simple for the consumer to use and also preserves food for longer.” In the US, AMPAC, a world leader in packaging solutions, introduces its first commercial stand-up pouch utilizing the EASYLOCK closure. Millie Nuno, AMPAC Senior Market Manager for food says, “AMPAC is proud to provide an enhanced consumer experience with an innovation like the EASY-LOCK closure in their California Almond pouch”. Big Heart Pet Brands has launched Milk-Bone Brushing Chews, new dental treats for dogs, opting for the EASY-LOCK closure. “Ultimately, the reason we went with APLIX on the pre-applied pouches was due to the fact that they were the only company that could meet our needs.” says Paul Baker, Brand Senior Manager of Packaging R&D. EASY-LOCK by APLIX® has already received several awards and continues to amaze consumers with its unique features and reliable closure. Visit APLIX® at: * PACKEXPO 2016 – Chicago, USA – November 6-9, 2016 – Booth 8609; * ALL4PACK 2016 – Paris, FRANCE – November 14-17, 2016 – Booth 7C038. Please visit: www.easylock-aplix.com. For more information contact packaging@aplix.com J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I TRAYS & TRAY SEALING
Holfeld Freshens Up its VSP Range of Meat Packaging olfeld Plastics knows the value of susH tainable packaging in the meat industry. Their VSP range has recently been extended taking into account portion size, sustainability, good looks and freshness. With consumers suggested to spend three times the amount of time selecting meats compared with any other foodstuffs shelf
appeal is a significant determinator of choice - skinpacks offer a more ‘natural’ appearance – they extend shelf life, to the processor they offer operational efficiencies with direct on-tray vacuum packing and from a retailers point of view can be displayed horizontally, vertically, shingled or hung. They remove the need to touch the product and are a more effective barrier to oxygen maintaining a more natural meat freshness and appearance over a longer period of time. Holfeld’s VSP range secures and protects products in the supply chain, there are boneguard and butter insert trays. We have trays in r-PET/PE & also PP/PE for microwaveable use with bespoke options available. All Holfeld’s trays are compatible with a wide range of top film manufacturers offering a cohesive seal failure witness marking.
Holfeld is providing skinpack trays across a selection of its flagship ‘D’ range in rPET/PE, r-PET/Mono, PPE/PE/EVOH as well as offering padded options. There are 12 different profiles currently on offer – more products are continually being added to the range. For more information visit www.holfeldplastics.com and download the flyer or visit the new online products catalogue. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
29
I TRAYS & TRAY SEALING
Tray Sealing Flexibility – At Your Convenience ccordingly to heat sealing specialists A Proseal, a combination of new product development and competition in the convenience foods market puts pressure on machinery suppliers to provide solutions that maximise speed and efficiencies while maintaining product quality. The introduction of many different products and pack formats is also leading to shorter production runs. As Tony Burgess, Proseal’s Head of Sales and Control Systems, explains: “For tray sealing, as well as the different shapes and designs of trays, we are also seeing a wide variety of sealing requirements in addition to traditional atmospheric sealing, including Gas Flush, Hermetic Shrink, Vacuum, Skin Pack, Skin Plus and Skin Deep. “Nevertheless, one certainty in fast-developing markets is that pack requirements can change very quickly. That is why an element of future-proofing is vital in the development of new tray sealers, so that food manufacturers have the reassurance of knowing that they will have the capability to cope with the latest packing trend without the need to invest in new kit every time.”
Proseal’s Latest GTe Models Proseal’s latest GTe models are able to handle all of the above-mentioned sealing formats and these options can be added at any time. In addition, as the company develops new features in line with customer requirements, it ensures that these can also be retrofitted to models already out on the production floor. The GTe range combines innovative Eseal® electric sealing technology with the many proven functional and reliability benefits of Proseal equipment.
E-seal® provides an energy efficient system that delivers a high-precision seal with an extremely strong sealing force, ensuring every seal has the tightness and reliability to meet the stringent quality requirements of the retail sector. The technology achieves an increase of seal force of 260%, while only consuming 8% of the air of a machine fitted with an equivalent standard pneumatic cylinder to deliver major energy and cost savings. Eseal® also increases machine productivity through shorter seal times, reduces gas flush cycle times and ensures accurate gas flush positioning for enhanced MAP packing. The retention of some pneumatic functions means the machines offer additional benefits such as date coding of pre-printed film. Pro-Motion System Proseal’s Pro-Motion system uses following motion and intelligent buffering technology to enable trays to feed continuously into the sealer without having to pre-sort and adjust pack spacing. This delivers an increase from 15 cycles to 20 cycles per minute, equivalent to an additional 30 packs per minute with a six impression tool. Product handling is improved with fewer lines stoppages due to misplaced trays. The overall performance of the line can be analysed using Proseal’s unique ProVision data collection system, which records any stoppages and provides an accumulated set of data for each connected piece of equipment. This helps production managers and engineers identify recurring problems and develop suitable corrective action. Another advanced feature is the Pro-Tect user login security system, which provides different levels of authorisation access for individual personnel.
World First The Proseal GTe range includes the world’s first semi-automatic tray sealer for skin deep packs, ideal for smaller scale enterprises that do not require a fully automatic inline tray sealer, with compact dimensions that mean it can fit into the smallest of factory spaces. Unlike traditional manual machines where the operator has to wait for each tray to be sealed, the rotary operation of the GTR-e allows a new tray to be loaded while the previous one is being sealed, delivering higher speeds and efficiencies.
A GTR-e has been installed at Rhug Estate, an award-winning organic farm in Denbighshire, Wales, where cutting plant manager, Gary Jones comments: “We needed a tray sealing machine that would ensure our high quality meat was both presented and protected effectively, in order to reach our customers in premium condition. “With limited space available in our packing operation, we approached Proseal to help us come up with an appropriate solution. The GTR-e meets our requirements, and we have been delighted with the high standard of service from Proseal and the reliability and efficiency of the machine.” J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
31
I TRAYS & SEALING
Environmental Award Success For Packaging Automation nutsford-based Packaging Automation has been recognised for K its green credentials after being selected as a winner of a new environmental award. Packaging Automation, who manufacture innovative, versatile and cost effective filling and tray sealing solutions, has received the award from leading waste and recycling company, ACM Environmental PLC, for becoming a 100% Zero to Landfill Business. The award acknowledges that none of the waste produced by Packaging Automation is sent to landfill and instead more environmentally sustainable methods are used to recycle, recover and reuse it. By working in partnership with ACM, Packaging Automation has pledged a commitment to a low carbon future by following the principles of the waste hierarchy to achieve the diversion of 100% waste from landfill. Russ Sampson, from ACM Environmental (Manchester and Merseyside), says: “We are delighted that Packaging Automation is the first recipient of a new Zero Waste to Landfill Award. We are delighted to be working in partnership with them to help implement an environmentally-sound waste management strategy and to see them achieve, and sustain such impressive landfill diversion results is extremely gratifying.” Neil Ashton from Packaging Automation says: “We are extreme-
ly proud to be working with ACM to support our environmental policies. Waste reduction is a topic that is important to many of our customers, so achieving zero waste to landfill is an important step to ensuring we are in tune with their commitment to the environment. It is also pleasing that the work we have done with ACM culminating in the award has also delivered cost savings for our business.” J
I SHELF READY PACKAGING
Limerick Packaging is Now FSC Accredited imerick Packaging has announced that it is now FSC accredited. L “This was always going to be our next goal following ISO9001:2008 accreditation,” explains Sales Director, Mike Boland. “We have always operated on the basis that we do not inherit the earth from our ancestors, we borrow it from our children, and given this, to be able to trace our papers back to managed forests is of paramount importance to us and our environment,” he adds. Limerick Packaging’s expertise is very much directed towards the design and production of Shelf Ready Packs (SRP’s) for the food industry, and printed in all formats such as Litho, Litho-Laminated
corrugated, Flexo print, Post-Print Flexo and Pre-Print. Value Engineering programs have meant significant savings for the company’s customers where clever pack designs have led to better runnability or considerable reductions in production costs or logistics costs. According to Mike Boland: “The secret to an easy life at work is to entrust your packaging requirements to us in Limerick Packaging, and we will reward that trust with top quality products at a reasonable price and delivered ‘On Time Everytime’. Our customer is King.” Mike Boland adds: “We are not done yet. We will continue to strive for improvement with PEFC now firmly in our sights and we are also working towards OHSAS 18001.” J 32
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I MEAT
Further Expansion By ABP Food Group ABP Food Group, the largest beef processor in Ireland and the UK, has consolidated its domestic position and expanded its operations in Continental Europe with two recent acquisitions. BP Food Group employs 9,000 people and operates more than 40 manufacturing plants in Ireland, the UK, Denmark, Poland, Austria, Holland and Spain. In addition to its core beef and lamb processing activities and the production of convenience foods, the group is also involved in rendering, renewable energy and pet foods. The business is owned by founder Larry Goodman and his family. To further consolidate its position within the Irish meat industry, ABP Food Group has joined forces with Fane Valley, the Northern Ireland-based agrifood co-operative, to jointly acquire Slaney Foods and
A
meat retailers (including supermarkets) and industrial meat processors. The European Commission concluded that the proposed acquisition would not adversely impact effective competition in the EU’s Single Market as regards any of these markets.
100,000 head to 250,000 cattle per year. ABP Food Group began operations in Poland in 2011 through the acquisition of a facility in Pniewy and this was followed by the purchase of a second facility in Klosowice in 2013. Following its latest acquisition, the Irish food group will now employ almost 600 people in Poland and has invested significantly in the country making its processing plants amongst the highest standard in Europe. Production has already started at ABP Tykocin, which supplies some of Europe’s leading retailers and food service providers. The main markets for beef produced at the facility include Poland, Germany, France, Italy, the Netherlands, Spain, Slovenia and Lithuania.
Joint Venture The businesses being acquired by ABP Food Group and Fane Valley Continual Investment will be operated as a joint venture ABP Food Group continually invests in between the two companies. improving its facilities. The group recently “The joint venture will enable completed a Eur50 million redevelopment of both ABP and Fane Valley, its Irish flagship plant at Cahir in County through the Slaney Foods JV, to Tipperary, to expand production capacity to grow our respective businesses by one million packs of meat each week for supbringing a stronger product offer- ply to both national customers and export ing to international markets where markets. ABP Food Group is one of Europe’s leading privately owned we compete with much larger globABP Food Group has also spent £30 milagribusiness companies. al players,” explains Frank lion in upgrading its plant at Ellesmere in the Stephenson, chief executive of ABP UK to establish the site as a carbon neutral Slaney Proteins. The proposed deal has just Food Group. He believes EU clearance for operation. Incorporating a new combined received clearance from the European the deal, “will allow the parties to enhance heat and power unit and onsite water treatCommission. an already highly competitive beef processing ment plant as well as a biodiversity corridor, Operating three meat processing plants in sector in Ireland and to grow their main the Ellesmere site is one of the most Ireland, Slaney Foods comprises two divi- export markets through the JV. This transac- advanced and sustainable beef processing sions - Slaney Foods International, incorpo- tion has always been about securing better facilities in Europe. J rating its cattle slaughtering and beef meat international markets for meat processing business located in Ireland, and products and developing an indusIrish Country Meats, encompassing its try that needs to evolve to remain sheep/lambs slaughtering activities and mut- relevant and compete effectively on ton and lamb business in Ireland and the global stage.” Belgium. Slaney Proteins operates a rendering plant for the processing of animal by- Further Expansion in Poland products generated by the activities of Slaney Meanwhile, ABP Food Group has Foods in Ireland. expanded its operations in Poland All three companies – ABP Food Group, with the acquisition of a third proFane Valley and Slaney - are active in the duction facility in the country at purchase and slaughter of live cattle, sheep Tykocin. The facility, acquired and lambs, as well as the de-boning and pro- from Polish processor Sklodowsky, ABP Food Group has joined forces with Fane Valley, the cessing of meat. Their activities cover also the will increase ABP Food Group’s Northern Ireland-based agrifood co-operative, to jointly acquire marketing of fresh beef, lamb and mutton to production capacity in Poland by Slaney Foods and Slaney Proteins. FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
33
I POTATOES
Developments in the €10 Billion European Potato Processing Sector The leading players are continuing to invest to strengthen their market positions within the dynamic €10 billion European potato processing industry. aving recently invested Eur120 million to expand its frozen potato facility at Bergen op Zoom and a further Eur20 million on an automated potato receiving area at its Kruiningen plant, both in the Netherlands, Lamb Weston/Meijer has now entered a joint venture with the Belaya Dacha Group of Russia to build a new Eur100 million French fry plant in Lipetsk to serve the rapidly growing Russian market. Bas Alblas, chief executive of Lamb Weston/Meijer, explains: “Our new joint venture will provide us with a unique opportunity to expand our position in the Russian market, while supporting our international key clients in optimising their own value chain, growing their businesses in the region and meeting local needs.” Lamb Weston/Meijer is a 50/50 joint venture between Lamb Weston ConAgra Foods of the US and Meijer Frozen Foods of the Netherlands. Of course, Lamb Weston is a world leading brand in high quality potato products, and is sold in over 100 countries around the world. Lamb Weston/Meijer serves markets in Europe, the Middle East, Africa (EMEA) and Brazil.
H
Bas Alblas, chief executive of Lamb Weston/Meijer.
Headquartered at Kruiningen in the Netherlands and employing 1,300 people in the EMEA region, Lamb Weston/Meijer supplies frozen potato products like Twisters, Potato Dippers and Connoisseur Fries to customers in the food service, quick service and retail segments. Lamb Weston/Meijer is also an ingredient solutions provider for the food industry. The company operates five factories - three in the Netherlands, one in the United Kingdom and one in Austria.
Lamb Weston/Meijer has entered a joint venture with the Belaya Dacha Group of Russia to build a new Eur100 million French fry plant.
ties - one in the Moscow region and one in the Republic of Tatarstan. The newly formed collaboration will enable Lamb Weston/Meijer and Belaya Dacha to combine their complementary knowledge and skills. Belaya Dacha is the majority shareholder in the joint venture. Victor Semenov, co-owner and chairman of Belaya Dacha Group, comments: “Both companies benefit from each other’s unique knowledge, skills and expertise. We can take advantage of Lamb Weston/Meijer’s in-depth experience in potato growing and high quality French fry production, while leveraging Belaya Dacha‘s experience in the Russian quick service and retail market and our own construction division.” First French Fry Factory in Russia The new factory will be the first French fry factory in Russia. It will be constructed in the special economic zone in Lipetsk, situated 450 km south of Moscow. The total investment for this new factory is over Eur100 million. The project will be financed with equity and long-term financing from Sberbank, one of the largest financial institutes in Russia. The new factory will have a production capacity of 90,000 tons per year, and is due to come on stream in early 2018. To secure potato supply, the joint venture will make use of its own farm in the Tambov region and will work closely with a dedicated network of Russian farmers. Developments at McCain Foods Canadian frozen food giant McCain Foods, which is the world’s largest manufacturer of frozen potato products, is also continuing to
Belaya Dacha Group The Belaya Dacha Group combines a variety of businesses specializing in growing and processing vegetables, planting trees, garden and landscape design and in recent years extensive real estate development. Belaya Dacha is the number one brand in the fresh-cut salads category on the Russian market and operates two production faciliFOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
35
factories and employ more than 2,700 people. The transaction will give Van Geloven access to McCain’s extensive network across Europe. “We are very excited to partner with McCain, whose global scale and expertise in frozen food will not only help further strengthen our position in the Benelux region but will also accelerate our growth internationally as we continue to develop our European customer base,” says Peter Doodeman, chief executive of Van Geloven. “With the backing of McCain and TowerBrook we will continue to grow our business substantially through ongoing product innovation and market expansion.” Dirk van de Put, chief executive of McCain Foods, comments: “Whilst Van Geloven will operate as a standalone company within the McCain Group, this acquisition truly complements our strategy for growth within our European markets. Van Geloven’s market
McCain Foods GB, which is the largest purchaser of British potatoes, is using innovation to stimulate market growth in the UK.
further its strategy for growth in Europe by widening its product portfolio in the region with the acquisition of a majority stake in Van Geloven. Based at Tilburg in the Netherlands and with sales approaching Eur200 million, Van Geloven supplies a full range of frozen convenience snacks and foods to both the retail and out of home channels. McCain Foods purchased its majority stake for an undisclosed sum from TowerBrook Capital Partners, the private equity group. TowerBrook Capital Partners, together with management, acquired Van Geloven in March 2015. TowerBrook, which has a strong track record of significantly developing portfolio companies during Lamb Weston is in a process of change as parent group ConAgra Foods prepares to spin-off the business.
leading brands and products offer us a fantastic opportunity to strengthen our overall appetizer and snack food market presence within the region.”
Dirk van de Put, chief executive of McCain Foods.
its period of ownership, will remain a shareholder in Van Geloven and continue to support its expansion plans under McCain Foods’ ownership. The deal is in line with McCain Foods’ ambition of creating a leading frozen snacks company in Europe. McCain Foods operates 41 production facilities on six continents and its products are used in restaurants and sold at retail stores in over 160 countries around the world. In addition to frozen French fries, McCain Foods also produces a diverse range of frozen products, including appetizers, oven meals and desserts. McCain Foods generates annual sales in excess of C$6 billion (Eur4.4 billion). Extensive Network McCain Foods’ operations in Continental Europe cover 50 countries, incorporate eight 36
European Strategy McCain Foods’ strategy in Europe is to stimulate growth through innovation, quality and service, and by taking advantage of its position as market leader to retain its competitive edge. Continual investment in product innovation and maintaining an efficient and sustainable field to fork supply chain is central to helping McCain Foods to consolidate its leadership positions within a challenging frozen potato products market-place. McCain Foods entered the European market initially with imports to the UK in 1965, before building its first production facility at Scarborough in North Yorkshire in 1968. Indeed, Britain was the group’s first major overseas market and this was used as a foundation for further expansion into continental Europe throughout the 1970s and 1980s. Innovation Still headquartered at Scarborough, McCain Foods GB, which is the largest purchaser of British potatoes, is using innovation to stimulate market growth in the UK. Operating five factories in England and a seed potato business at Montrose in Scotland, McCain Foods GB is the leader in the UK retail and food service sectors in frozen potato products such as French fries, potato specialties, and appetisers. The company invests continually in new technology in order to meet customer demand for more varied products while minimising manufacturing costs. For example, McCain Foods GB recently launched a new range of
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
New Leadership ConAgra Foods director Timothy R McLevish will become the executive chairman of the board of directors of Lamb Weston, effective upon the completion of the spin-off. Additionally, Thomas P Werner, currently president of Commercial Foods at ConAgra Foods, will become chief executive of Lamb Weston and will serve as a director on the Lamb Weston board. “I’ve had the opportunity to get to know this business very well, and I believe it has terrific prospects as a stand-alone company,” remarks Timothy R McLevish. “We are extremely well-positioned for long-term growth and shareholder value creation.”
Sean Connolly, president and chief executive of ConAgra Foods.
fries designed to appeal specifically to adults - McCain Spicy PeriPeri Fries and McCain Steakhouse Ridge Cut Fries. Another new addition to the McCain Foods GB product portfolio is frozen mashed potato, which can be heated up in the microwave in three minutes. Although its turnover declined from £444.8 million to £440 million for the year ending 30 June 2015, McCain Foods GB managed to increase pre-tax profits from £54.7 million to £63.7 million, despite intensifying competition from rivals in continental Europe, who benefited from cheap potatoes and the weak Euro. Lamb Weston Spin-off McCain Foods’ global rival Lamb Weston is in a process of change as parent group ConAgra Foods prepares to spin-off the business. “We believe that this separation will create two focused companies that are well-positioned to unlock unique growth opportunities to win in the marketplace and create value for stockholders,” says Sean Connolly, president and chief executive of ConAgra Foods. “We remain on track to complete the separation by the fall of calendar 2016.” Lamb Weston’s portfolio will consist of frozen potato, sweet potato, appetizer and other vegetable products, as well as a continued presence in retail frozen products under licensed brands and private brands. With distinct competitive advantages in key geographies, Lamb Weston will leverage this strong foundation to build upon its proven track record of growth. Lamb Weston will focus on opportunities to expand share domestically and accelerate international growth, particularly within fast-growing emerging markets.
Rapid Expansion in Belgium More than 90% of the potatoes used for processing in Europe are grown in five countries - the Netherlands, Belgium, the UK, France and Germany. Indeed, potato processing is also concentrated in these five countries. At the heart of this region is Belgium, which has recently seen a remarkable growth in its potato processing industry, which converted just under 4 million tonnes of potatoes into fresh or frozen fries, mashed potato products, crisps, pre-cooked potatoes, flakes and granulate in 2015 as investment in the sector continued to increase, reaching a record Eur167 million last year, with this figure likely to be sustained for some time.
Lamb Weston/Meijer recently opened a new Eur20 million automated potato reception area at its Kruiningen plant.
According to Belgapom, the association for the Belgian potato trade and processing industry, the potato processing sector in Belgium has developed into the largest exporter of frozen chips in the world, as Belgian potato products continue to appeal to a growing number of consumers across all continents. Using the slogan ‘potato products from the country of real fries’, Belgian fries are gaining popularity in world markets by focusing on taste, perception and authenticity, in addition to innovations and sustainable logistics. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
37
I VEGETABLE PROCESSING
Haith Multi-Wash System the ever demanding vegetable packing companies are always looking to Inindustry
increase margins by reducing the amount of waste while improving the quality of the product supplied to the end user. Haith is constantly working on new designs which will not only improve pack out and quality, but also give reduced ener-
38
gy costs, lower water usage and save labour. The latest concept, the Haith Multi-Wash, ticks all the boxes and with Haithâ&#x20AC;&#x2122;s all in one process transfer of vegetables from one section to the next is very gentle. Haith Multi-Wash System offers Destoning-barrel washing and brush polishing all in one unit, the latest and important upgrade is the split barrel which allows the washing section to rotate in the opposite direction to the polishing rollers. There is a separate inverter speed control on each section giving more flexibility and control over the amount of washing and polishing required. Included in the system is a waste removal tank with water recycling, the compact all in one plug and play design makes installation and set up very simple, there are a number of options and configurations available to suit your specific requirements. There is a feature on the control to allow
simple and fast emptying of the system when changing varieties. This new vegetable washing concept combines all the proven qualities of the popular Haith Supaflume De-stoner with the excellent wash quality of the Haith Semi-Submerged barrel washer whilst incorporating polishing with the tried and tested direct drive Haith Root-veg Polisher. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I POTATOES
Total Solutions From CPM Wolverine Proctor By Robin Holding, Commercial Director, CPM Wolverine Proctor Ltd he humble potato is one of the most versatile and flexible root T crops known to man – there are hundreds of varieties, all with differing skin colour, flavour and texture, and our ingenuity in terms of what we do with them seems to know no bounds. The potato on its own can be baked or roasted, cut, sliced/diced or cubed and then boiled, fried or mashed to make something that can be eaten as a snack or as part of virtually any meal, at any time of the day or night. Then there are the derivative products such as potato powder, flake or starches which can be used as they are and mixed into doughs for further processing, or modified to take advantage of their unique properties – indeed, whole industries have sprung up around them, including for applications such as wallpaper paste. Challenges
This presents a great challenge to the potato R & D teams and, further upstream, to the machinery manufacturers. Clearly, we need to work together to develop new processes and products to be able to satisfy consumer demand, but there can often be a trade-off between what is desirable and what is practical or cost-effective. This is where it is particularly important to develop an effective dialogue between the marketing, R & D and supplier’s engineering personnel, so that ideas can be explored, analysed and then discounted or pursued as appropriate. CPM Wolverine Proctor Ltd., has been supplying processing machinery to the food industry since early last century and continues to do so on a global basis. We have manufacturing facilities in Europe and the USA and our customers are becoming progressively more reliant on us as a total solution supplier, partly because they have had to reduce their own engineering resources to remain competitive, but also because they value the depth of experience that we have built up over the years. We have product development facilities available in both the UK and USA and we encourage our customers to carry out secure lab trials when developing a new product with us. This can cover everything from extruded snacks to predried fries, roast patties or baked chips.
Project Management and Engineering Resources
In order to meet demand, we have developed our project management and engineering resources, bringing in new design initiatives and process knowledge, allowing us to draw on experiences that may have come from unexpected applications in other industry sectors and enabling us to offer a truly turnkey supply. For all types of foodstuffs, we are able to offer complete plants based on batch or continuous cooking, forming, drying, baking, roasting and toasting. Our recent acquisition of TSA Griddle Systems now enables us to add another dimension to our overall capability with waffles and pancake systems. At the detailed engineering level, hygiene continues to be a major driving force when developing our design features, benefitting the potato processor in areas such as washdown, cleaning and drainage, minimising downtime and avoiding cross-contamination, energy wastage, etc. Naturally, we do not profess to manufacture every machine that we supply, but by teaming up with other specialist machinery manufacturers and technologists, we can offer potato processors a “onestop shop” for everything from raw material handling right through to finished product palletization, all managed by a dedicated project management team. Preferred Machinery Supplier
Our continuing drive to be the preferred machinery supplier means that we are actively encouraging our customers to talk to us about what they like and dislike, listening to their ideas and identifying the priorities for their business. Only then can we hope to meet and exceed their expectations by supplying them with the optimum solution. We are proud to be a major supplier to many of the most iconic potato processing companies around the world and we look forward to continued success with them, as well as with new players in the future, whatever their product lines might be, potato-based or otherwise. J FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
39
I FRUIT JUICE
Juice Preservation Technologies and the Latest Trends By Katarina Ternstrom
rowing consumer demand for products that are natural, healthy G and environmentally friendly is driving interest in new preservation technologies that can deliver these attributes, while also lowering the impact on the environment and reducing production costs. Here’s a quick guide to some of the technologies in thermal and non-thermal preservation technologies, for a more detailed factsheet visit tetrapak.com/juiceindex. Preservation Options
As we all know, food preservation techniques are designed to kill microorganisms, or restrict or prevent their growth and it is important to have the confidence of a long proven track record of delivering food safety at a commercial level.
When using thermal preservation technologies, the temperature itself is used to secure microbial deactivation and therefore ensure food safety. At Tetra Pak, we recently introduced a new approach to pasteurization that reduces the temperature of the second step,
40
of the two-stage process from 95°C to 80°C, without compromising the safety of the juice produced. The result is an energy saving of up to 20%. Other options are Ohmic heating which uses an electrical current and is a rapid preservation method; and Microwave heating uses electromagnetic waves of certain frequencies. Non-thermal preservation can only achieve commercial sterility with water products, unless the process is combined with heat. High Pressure Processing is a preservation technology that requires a pressure of 300-1000 MPa to inactivate microorganisms. Ultraviolet light (UV-C) treatment is commercially used for disinfection of water and it is possible to use for clear juices; and Pulsed Electric Field (PEF) is a process based on short electric pulses at high intensity. Clearly it’s important that the preservation process parameters used ensure microbial deactivation and are well proven and established. Equally, ensuring that long-standing technologies are not standing still in this area. We continuously test current and new technologies and research trends, always looking for the best options for our customers that can apply the highest standards of food safety. Preservation technology is at the heart of processing, and is essential for ensuring safe and nutritious products, which is even more important today as health and wellness becomes an increasing focus. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I BAKERY
Indonesia Market Leader Chooses GEA Comas and GEA Imaforni For New Cookie Production Line EA has brought together the longG term expertise of its leading bakery technology companies – COMAS and IMAFORNI – to build a complete line for the production of wire-cut and soft centre biscuits at the Khong Guan factory in Jakarta, Indonesia. With an average production of 1.5 tons/hr premium cookies, the new line is fully automatic and provides significant benefits in terms of product quality and consistency, productivity and reliability. Khong Guan is a top Indonesian manufacturer specialized in biscuits, wafers and wafer sticks. The company’s success has resulted from its insistence on using the finest ingredients, the latest machinery and robotized packaging systems to meet customers’ requirements, hygiene standards and food safety regulations. Single Supplier
The company has used Imaforni equipment before and has always been impressed with its performance. However, this was the first time Khong Guan had built a complete line using just a single supplier. “The latest addition (2016) is a soft cookie line made up of GEA Comas and GEA Imaforni equip¬ment,” explains Mr Chew Soo Kok, Director of Khong Guan. “It is capable of doing jam-filled cookies, wirecut cookies, deposited biscuits, and bars. With the help of a food technologist to fine-tune the recipes, we were able to start-up the production line in a short period of time. The line now runs wonderfully.” The GEA line includes a high capacity DFV3 extruder capable of simultaneously depositing two different types of dough, as well as a third, fluid filling; the hybrid steel band tunnel baking oven; and all the necessary mixing and conveying equipment. But according to Marco Gandini, GEA’s Head of Bakery Applications, the technology itself is only part of the story. “What makes this line special is the way
in which the experience of both the GEA brands has been able to come together to provide the highest performing solution,” he explains. “By choosing equipment that is of the highest quality and perfectly compatible, we have been able to build a line that is reliable and capable of producing large amounts of cookies at the finest quality for Khong Guan.” Marco also points out that in the unlikely event of a problem there can be no doubt as to who is responsible for fixing it. “It’s a 100% GEA line,” he says. “We built it and we will maintain it at optimum performance for our customer throughout its working life.” Sometimes the relationship between customer and supplier may be critical, but not in this case: Mr Soo Kok has no doubt that he has made the right choice with GEA. “The services provided have been first class; and the engineers are well-trained, knowledgeable and friendly which made the installation and commissioning process a smooth one. The aftersales service is equally as good with prompt replies and follow-up to our queries.”
Indonesian Market
With the increase in population in Indonesia and good economic growth, the market size for Khong Guan’s products has grown tremendously. The purchasing power of the Indonesian consumer has grown and the middle-income population is increasing and so Mr Soo Kok believes that the market will continue to grow. “However, we must introduce better quality products and new varieties of biscuits and cookies,” he explains. “To prepare ourselves for the future, we will need to continue to invest in good, and reliable equipment to ensure a high quality production output.” All food manufacturers operate in an intensely competitive environment in which the highest standards of hygiene, production, and product innovation are essential to prosper. By choosing GEA to provide a complete production line, Khong Guan has ensured that its facilities are world class and has secured the combined expertise of some of the industry’s finest process engineers to make sure that its leading position is maintained well into the future. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
41
ENERGY I
ENVIRONMENT
CHP SYSTEMS PROVIDER BASEPOWER ADDRESS RISING ENERGY COSTS AND HOW TO MAKE THE BUSINESS CASE FOR ENERGY SAVING PROJECTS
Are We Sailing into a Perfect Storm For Energy Prices? elieve it or not, UK industry has been enjoying a B two-year cheap energy holiday, with costs for 1MWh of power/gas as low as £85/£15 for some. But that mini-era is coming to an end. Goodbye to Fair Energy Waters Consider these facts: • With commodities priced in dollars, the low postBrexit pound is already pushing up the cost of heat and power. • The non-commodity costs of power are rising faster than inflation, and will surpass £55/MWh for many industrial users in the next 12 months. • The closing gap between generation capacity and demand is driving further volatility. Prices spiked as high as £1,000/MWh in May 2016, even before Brexit.*
Indeed, most suppliers’ power price forecasts are now much worse than DECC’s last attempt in late 2014. Tinkering at the edges isn’t going to solve this problem and it’s not just about getting a better deal out of your supplier. Riding out the energy price storm means using less energy. Battening Down the Energy Hatches First, get a mixed-discipline team together. Your engineers usually have an idea where the savings can be made, but they will need help to make the case. As a minimum, co-opt someone with commercial skills and the language and influence necessary to get investments and interventions signed off. A senior environmental person is also very useful as energy savings mean carbon savings, and that’s a good supporting story. Second, it’s impossible to make a valid investment case without data. Collect an hourly picture of energy use for each major plant 42
item throughout the year for the engineering team to analyse for usage and wastage, and calculate how much it will cost to put right. When the team has identified where savings can be made and what the investment requirements are, then it can make the case for intervention. In some cases the solution will be behavioural, such as turning off plant when production stops or optimising flow and temperature settings. In these cases employees will need to feel that adjusting settings will not compromise normal operations. And it helps to share the benefits that savings bring – even if only with praise. Moving on to technical solutions, there are an increasing number of ‘plug and play’ fixes that are easy to install and have well-documented paybacks. Examples include LED lighting, boiler economisers and variable speed drives. The impact of any one of these in isolation is relatively small. However, demonstrating successful payback is really effective in building confidence for more ambitious interventions. Once some of these are in place, then larger energy saving projects can be considered. Combined Heat and Power (CHP), boiler house refits or ‘de-steaming’ will save the largest sums. BasePower’s own CHP technology is proven to save between 10-20% of the cost of energy supplied; for sites using over 1MW of power this can be a sizeable six-figure sum. The larger savings serve to justify the additional complexity and the need for third party expertise to interpret vendor sales pitches. It looks like stormy energy waters are ahead for high-energy users in narrow margin industries such as food and drink manufacturing. Ask your electricity supplier for a five-year power price projection if you doubt it. Our advice is to get the team together and start looking at your energy use data now. For more information contact Basepower on info@basepower.com or visit www.basepower.com. *UK electricity prices spike after power stations break down, FT.com, 10 May 2016. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
I GROCERY MARKET
Tesco Wins UK Grocery Market Share For First Time in Five Years he latest grocery share figures from Kantar Worldpanel, for the T 12 weeks ending 9 October 2016, show Tesco increasing sales by 1.3% – marking a return to growth for the UK’s largest retailer for the first time since March 2015. Tesco has grown ahead of the overall market, where sales increased by 0.8% on last year. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “Foods including ready meals and produce have been among the fastest growing areas at Tesco, helped by its ‘Farm Brands’ but also its standard own label lines. Tesco has attracted a further 228,000 shoppers through its doors to help the grocer grow to a 28.2% share of the market – its first year-on-year market share gain since 2011. Sales growth has been strongest among family shoppers, while improved trading from its larger supermarket and Extra stores has supported this month’s gains. “While the threat of rising prices is on a lot of minds at the moment, we’ve seen the 27th consecutive period of grocery price deflation, albeit at a slower rate. The price of everyday groceries fell by 0.8% compared with a year ago and in contrast to the -1.1% reported last month, with deflation particularly noticeable among pork, crisps and poultry products.” Other retailers winning market share this month include Iceland, Co-op and Waitrose. Iceland increased sales by 6.9% with success across the store, not just in its core frozen lines which this period accounted for only 41% of sales. Chilled and ambient grocery sales also grew, as did Iceland’s branded soft drink and frozen ready meal lines, and market share rose by 0.1 percentage points to 2.1% as a result. Co-op recorded its 17th consecutive 12 weeks of growth this period. Fraser McKevitt comments: “Co-op’s sales are up by 3.1% compared to a year ago, taking share up to 6.5% of the market. Consumers are continuing to buy from Co-op stores more frequently with the average shopper now visiting almost twice a week – an 8% increase. The convenience retailer is responding to chal-
lenges from the wider market by focusing on its own label lines, with its re-launched membership card rewarding shoppers who choose Co-op’s own products.” At Sainsbury’s sales fell by 0.4%, while Morrisons continues to feel the effects of a smaller store portfolio with sales down by 3.0%. The re-launch of its ‘The Best’ range has had a positive impact on its premium own label sales, which increased by 6%. There was a similar picture at Asda where sales were down by 5.2% – its slowest rate of decline for four months – despite a premium own label sales increase of 8%. Waitrose is still enjoying a sales uplift from its September half price event, with sales growing by 3.5% and contributing to a market share increase of 0.2 percentage points to a total of 5.4%. At Aldi sales increased by 11.4% while at Lidl they grew by 8.4%, taking market share up to 6.2% and 4.6% respectively and maintaining the combined market share high of 10.8% which the two retailers achieved the previous month. J
I EXPORTS
New International Action Plan to Boost Exports of UK Food and Drink ambitious new action plan to grow exports and bring a £2.9 Anbillion boost to the UK economy has been launched by the
Government. The new International Action Plan for Food and Drink will see Government and industry working together to boost food and drink exports over the next five years. The plan identifies nine markets across 18 countries with the best potential for growth. It sets out new ways to tap into these markets, including targeting: • An extra £185 million in exports to Japan through demand for classic British products like tea, jam and biscuits and new opportunities for British beef; • An additional £293 million of exports to Australia and New Zealand, where there is a growing thirst for British beer and cider; • A £215 million export boost in Mexico and Latin America through growing demand for a wide range of British products including whisky and gin. The Great British Food Unit which was launched earlier this year to promote exports, support inward investment and champion the excellence of British food and drink at home and abroad will support industry to achieve the targets set out in the plan. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
43
I AQUACULTURE
New Strategy to Double Size of Scotland’s £1.8 Billion Aquaculture Sector A group of leading businesses and organisations in Scotland’s aquaculture industry have come together for the first time to create an ambitious new growth strategy for the sector.
T
he 2030 Aquaculture Strategy identifies key actions required to double the economic contribution of the industry from £1.8 billion in 2016, to £3.6 billion by 2030. It is estimated this will generate over 9,000 new jobs in the sector and establish Scotland as a global leader in the industry.
Aquaculture in Scotland is diverse, from the farming of salmon and other finfish species, to the production of mussels and oysters and the harvesting of seaweed. The industry is already a real success story in Scotland – salmon is the country’s top food export – however the new strategy seeks to unleash the sector’s full potential contribution to Scotland’s economy, environment and communities. The Strategy The strategy, developed after industry-wide consultation, sets out key recommendations for action by both the industry itself and government. The recommendations cover six themes: industry leadership; regulation; innovation; skills development; investment; and infrastructure. Amidst 20 specific recommendations, three are identified as critical to the sustainable growth of the industry: • The creation of a new industry leadership group to drive alignment between industry and government in order to deliver growth • A restructure of the role of Marine Scotland - the government agency that regulates the sector - to maintain its regulatory role but to remove its industry development role • The introduction world-leading innovation sites to trial cuttingedge equipment, technology and fish health strategies.
sentatives of the Scottish Salmon Producers Organiation, Scottish Aquaculture Innovation Centre, Scotland Food & Drink, Association of Scottish Shellfish Growers, Highland Council, as well as leading businesses in the sector: Aquascot, Gael Force Group, Ferguson Transport & Shipping and Wester Ross Salmon. Stewart Graham, group managing director of Gael Force Group and co-chair of the Working Group, comments: “This new strategy reflects the industry’s ambition to drive sustainable growth and for Scotland to be a world leader in aquaculture. We have developed a roadmap to 2030 which can make a transformational impact on Scotland’s economy and our rural communities.” He adds: “However, the real work begins now and we want to forge a new partnership between the industry, government and its agencies to unlock the full potential of sustainably farming Scotland’s seas. The creation of a new Industry Leadership Group to reflect that collaborative partnership will be a critical first step. The strategy must act a catalyst to drive growth throughout the aquaculture supply chain through innovation, skills development and investment, and by ensuring we have proportionate and enabling regulation which balances economic growth and environmental sustainability.” J
Working Group The Working Group that has produced the plan comprised repre44
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
Cargill Direct Purchasing Licence Boosts Cocoa Sustainability argill’s cocoa & chocolate business has established its own C licensed buying company (LBC) following the successful application for a licence from the Ghanaian Cocoa Board (Cocobod). The new LBC is now fully operational and Cargill has purchased its first consignment of beans directly from cocoa farmers in Ghana, with around 30,000 farmers already registered with the LBC. By directly sourcing the beans, the company is now able to diversify the way it sources sustainable beans and rolls out the Cargill Cocoa Promise more effectively to better serve its customers. “Direct sourcing of certified beans from farmers via our own LBC in Ghana is an exciting new business model for us,” says Lionel Soulard, Managing Director West-Africa, Cargill Cocoa & Chocolate. “Cocoa sustainability is at the heart of our global growth strategy for cocoa and chocolate. Developing a direct sourcing capability in the world’s second largest cocoa producing country means we will be better placed to meet growing demand for sustainable, certified cocoa.” Lionel Soulard adds: “We are confident this business model will add value at every level particularly for farmers who, as a result of working directly with us, will make a better living out of cocoa farming, and we are really proud of this development.” Cargill has been operating a cocoa processing plant in Ghana since 2008. The move to direct sourcing of cocoa via its 60 strong team in the country reflects the company’s commitment to growing the business in Ghana. It will also enable a more direct approach to supporting more productive, profitable and sustainable farms. The new purchasing model will be fully sustainable and fully certified. By operating its own LBC, Cargill will implement high standards of safety, integrity and quality throughout the supply chain
Pictured are just some of the almost 30,000 cocoa farmers who have already registered with Cargill’s new LBC.
in Ghana. “We already source directly from cocoa farmers or farmer organisations in the other cocoa producing countries in which we operate. By moving to this model in Ghana we will be much better positioned to fully implement the Cargill Cocoa Promise,” Lionel Soulard explains. “This means expanding our sustainability activities to enable farmers to benefit from premium payments for certified sustainable cocoa beans. Farming communities will also be able to benefit from training, community and farm development support which will also help with improving their livelihoods. For example around community support, we will be building four new schools to serve the children of cocoa farmers in the four districts where we will operate.” “It is our objective to work hand in hand with the Ghanaian authorities to improve the livelihoods of cocoa communities for generations to come,” concludes Lionel Soulard. J
Arjuna Launches Natural Clean Label Shelf Life Extender rjuna Natural Extracts has launched A X-tend, its natural preservatives range that keeps food fresh and increases shelf life. X-tend addresses three major food trends: natural, clean label and food safety. Arjuna opened a new food technology division at the company’s Cochin R&D facilities in the south of India’s Kerala State to serve food and beverage companies in addition to its established nutraceuticals clients. The new line consists of distinctive formulations of proprietary blends of essential oils and oleoresins. Arjuna’s R&D team identified a unique selection of botanical extracts possessing antimicrobial activity and comprehensively tested them in multiple food and beverage applications. The sensory profiles indicated no change in taste or mouthfeel.
“Consumers’ growing demand for food free from preservatives directly influence food manufacturers’ and retailers’ decisions in developing and marketing new products,” says Benny Antony, PhD, Joint Managing Director for Arjuna. “Millennials, especially, are actively seeking
safe foods without artificial ingredients. New product developers can help ensure success by focusing on clean labels. Consumers want natural, healthy products and our mission is to make it happen, and at the same time to guarantee food safety.” Arjuna’s R&D team developed a range of natural preservatives that do not change the organoleptic properties of food and beverage products such as bread, yoghurt, cheese sausage, humus, mayonnaise and vegetable oils, fruit juices, and fruit pulp. The company’s ingredient scientists combine herbal extracts used in traditional medicine with methods of fermentation for bacteriocins, in concert with advanced technologies, such as microencapsulation and emulsification. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
45
I YEAST
Using Baker’s Yeast to Reduce Acrylamide By Steve Campbell ince its discovery in 2002, acrylamide continues to cause concern as a carcinoS genic public health risk in many manufactured foods and beverages. While fried potato products such as french fries and potato chips contain the highest levels of acrylamide and get the most media attention, baked goods - such as breads (soft and crisp) and snacks, pretzels, crackers, etc also contain acrylamide. In fact, when adjusted for consumption levels, baked goods actually contribute 40-50 percent to the average person’s overall daily dietary intake of acrylamide. In addition to its carcinogenic status, acrylamide is also mutagenic and genotoxic and furthermore, it poses a disproportionate health risk to babies and children. For example, the acrylamide in foods consumed by pregnant women has been shown to reduce a baby’s birth weight and head circumference - key indicators of a child’s future health. In addition, according to Health Canada, because of their smaller bodies and the types of foods they consume, young children are typically exposed each day to twice as much acrylamide (per kilogram of body weight) as adults. Clearly, acrylamide is a quality and safety issue many food manufacturers would want to address, if there was a reasonable solution. In the last year or two, government regulatory authorities across the globe have weighed in with reports advocating measures to mitigate the levels of acrylamide contained in many food products. Most recently, in June 2016, the US FDA issued its voluntary mitigation guidelines for food manufacturers. While no agency has yet enacted mandatory allowable limits, it appears that the European Food Safety Agency is planning on setting these in 2017, with ALARA (as low as reasonably achievable) levels possibly being the goal.
46
Quality Control and Safety Issue For food manufacturers, there is no escaping acrylamide as a quality control and safety issue. Almost all carbohydrate-based products will contain acrylamide due to the ubiquity of the precursors - reducing sugars and asparagines - and the practice of using cooking temperatures above 120 degrees Celsius. This becomes even more problematic during post-manufacture consumer/ restaurant toasting or heating; for example, when heating bread into toast, acrylamide levels are boosted many times above what is found in the original product. Given the widespread consumer movement toward clean labels and healthier food production, manufacturers taking aim at reducing acrylamide contaminant levels to ALARA levels is a goal likely to be welcomed by both governments and consumers. However, in order to meet potential acrylamide regulatory limits or voluntary reduction guidance to ALARA levels, food manufacturers require robust and effective tools. For example, a non-GMO, baker’s yeast with the ability to reduce acrylamide by up to 95 percent with minimal changes to the food production process has been developed by Renaissance Ingredients Inc and is ready for review by food manufacturers. Renaissance Renaissance recently achieved an important milestone toward commercialization when the US FDA issued a no-objections letter to the yeast’s status as GRAS (generally regarded as safe), the same status as conventional baker’s yeast. When starchy, carbohydrate-based foods like potatoes, wheat, rice, and other grains are heated above 120 degrees Celsius by frying, baking, roasting or toasting, an amino acid they contain naturally asparagines - reacts with sugars to form acrylamide. Although baker’s yeast (Saccharomyces cerevisiae) has a natural ability to consume asparagine, under most food processing conditions this aspara-
gine consumption is minimal. Therefore, conventional yeast is not effective at reducing acrylamide within typical industrial food processing timelines and parameters. Non-GMO Baker’s Yeast Strain Instead, by using an adaptive evolution strategy to select for the yeast’s ability to quickly degrade asparagine in all conditions, Renaissance has been able to develop a non-GMO baker’s yeast strain capable of reducing acrylamide in a wide variety of foods much faster. In baked bread and dark toast lab testing, the yeast reduced acrylamide levels by 80% while in sliced potato French fries exposure to the yeast in a water wash reduced levels by 50% almost immediately and 70% after ten minutes. The ability to reduce acrylamide formation will not only mitigate the health threat to both adults and children, it will also enable the food industry globally to provide high-quality products that are as low in acrylamide as reasonably achievable. Steve Campbell is a Vancouver-based communications consultant who writes for and about food technology companies. Reach him at scampbell@campbellpr.bc.ca. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
DuPont Nutrition & Health Launches New Cheese Cultures rawing on its long history of innovation and expertise in the D development of dairy cultures, DuPont Nutrition & Health has introduced two cheese cultures for use in soft-ripened cheese making. These new DuPont™ Danisco® CHOOZIT® brand cheese cultures, CHOOZIT® ST 20 and CHOOZIT® PC FAST, are specifically designed to optimize production and consistently produce high-quality soft-ripened cheese. “Consumers prefer soft-ripened cheese with a nice and stable white surface and soft texture,” explains Annie Mornet, global product leader, Cheese Cultures. “While cheese manufacturers want to satisfy these consumer desires throughout a cheese’s shelf life, they also want to maintain a high throughput level. These objectives don’t always align.” Controlling acidification and rind formation times are essential in making consistent, high-quality, soft-ripened cheese. CHOOZIT® ST 20 and CHOOZIT® PC FAST cheese cultures address these challenges. CHOOZIT® PC FAST cultures offer more rapid development of stable white rind, enabling packaging to begin earlier. And CHOOZIT® ST 20 cultures offer direct vat inoculation in the milk with an early and controlled acidification to achieve desired cheese texture. “Another benefit of CHOOZIT® ST 20 cultures is a significant reduction in the risk of phage issues,” said Mornet. “This helps our customers maintain consistent cheese production times and optimize yield, while maintaining a high standard of cheese quality and food safety.” CHOOZIT® brand cheese cultures and all DuPont™
Danisco® brand cultures are supported through a global network of food scientists and dairy technologists with unique know-how and experience across the cheese and dairy industry. Additionally, DuPont production facilities dedicated to soft-ripening cheese cultures located in France ensures optimal management of production and functionalities. This combination of resources gives dairy manufacturers the ability to deliver unparalleled consumer value to the marketplace with their cheese products. No matter which cheese process is being used by dairy manufacturers, DuPont has the right combination of skills, expertise and ingredients to deliver a complete solution for specialty and industrial cheeses. More information is available at www.food.dupont.com. J
Low-fat Mayonnaise – Hydrosol Develops Integrated Compound Without Starch ayonnaise is one of the world’s most popular deli products, M but its high fat content is a disadvantage from a health point of view. To reduce this without sacrificing texture, normally some of the fat is replaced with substances like starch that bind water.
48
While economical, this procedure is undesirable in certain markets like Russia and the Middle East, since it is considered to reduce the quality. Hydrosol’s stabiliser experts have now developed a starchfree integrated compound that enables the production of highquality, low-fat mayonnaise. The final product has a creamy, pleasantly light consistency with a very good mouth feel and excellent taste. “Replacing fat with starch in low-fat mayonnaise products has economical as well as processing advantages. But consumers often see it as a kind of deception,” reports Dr Dorotea Pein, Product Manager Hydrosol. “For this reason we have developed a new formulation that uses hydrocolloids and vegetable fibre to provide texture while still giving a pleasantly soft, creamy texture that can absolutely measure up to a full-fat mayonnaise.” The new Stabimuls M30 NOS integrated compound is based on powdered egg yolk, dairy protein, vegetable fibre and hydrocolloids. It can be used to make salad creams with fat contents as low as 30 percent. Like all Hydrosol integrated compounds for mayonnaise, this new product is easy to use in manufacturing. It needs only water, seasonings, oil and vinegar. Following suitable shearing, the final product can be filled and packaged. J
FOOD & DRINK BUSINESS EUROPE, NOVEMBER 2016
Specialists in Shelf-Ready Packs