Food &drink business europe july 2013 issue

July 2013

NestlĂŠ invests over â‚Ź1 billion in European production facilities

Food & Drink Business Website:

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C o n t e n t s

- 3 C OVER S TORY

- 45 D AIRY

Nestlé invests over €1 billion in European production facilities.

- 7 & 9 D ISTILLING Global thirst for Scotch whisky fuels £2 billion industry investment.

Important year for Dairy Crest.

- 47 M ERGERS & A CQUISITIONS PAGE 3

Laurent Freixe, Zone Director for Europe, Nestlé.

John Nichols, Chairman, Nichols.

R EGULARS

Another strong year for Edrington.

Bottling & Packaging . . 10, 27, 29-31, 34-37

- 12 I RISH W HISKEY

Materials & Ingredients . . . . . . . . . . . . . . 10

Hot Melt Adhesives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Irish Distillers invests €200m in whiskey production as Jameson breaks 4m cases barrier.

Processing & Manufacturing . . . . . 16, 39, 46 The role of High Pressure Processing in beverage innovation . . . . . . . . . . . . 39

PAGE 9

- 17 F ROZEN F OODS

P AGE 19

Ian Curle, CEO, Edrington.

PAGE 47

Jean-Francois van Boxmeer, CEO, Heineken.

Information Technology . . . . . . . . . . . . 20-23

Control & Automation. . . . . . . . . . . . 25 & 26

Acquisitions bolster McCain Foods in Continental Europe.

Adams Foods – Changing the game with shop-floor automation . . . . . . . . . 25

PAGE 48 Quality & Safety . . . . . . . . . . . . . . . . . 40-41 Food Safe Lubricants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

- 19 S OFT D RINKS

Urs Riedener, CEO, Emmi.

Vimto fuels Nichols’ continued growth.

Managing Director: Colin Murphy Editor: Mike Rohan Advertising: Sylvia McCarthy

- 28 R EPUTATION Kerry Group is Ireland’s most reputable indigenous company.

PAGE 12

Anna Malmhake, CEO, Irish Distillers Pernod Ricard.

. Senior Sales Executive: Paul Lees Production Manager: Sylvia McCarthy

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- 33 B EVERAGES

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Glenpatrick invests to maintain competitive edge.

- 43 C ONFECTIONERY Lily O’Brien’s Chocolates reaffirms premium positioning.

PAGE 15

Pierre Pringuet, CEO, Pernod Ricard.

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FOOD & DRINK BUSINESS EUROPE, JULY 2013

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COVER STORY

Nestlé Invests Over €1 Billion in European Production Facilities Nestlé has recently completed or commenced capital investment projects worth over Eur1 billion across its European operations, which still account for almost a third of group sales.

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ncompassing 153 factories and 16 Other recent investments by Nestlé in R&D facilities, Nestlé’s European busiEurope include Eur41 million for a new ness achieved sales of SFr26.5 billion Nestlé Waters bottling facility in Buxton, UK; (Eur21.4 billion) in 2012 with 60% Eur243 million for a new Nespresso factory in generated in its five largest markets of France Romont, Switzerland, Eur40 million to extend (SFr5.7 billion), Germany (SFr3.2 billion), the Nestlé Professional Davigel factory at the UK (SFr2.9 billion), Italy (SFr2.2 billion) Noyal-Pontivy in France, and Eur23.5 million and Spain (SFr1.9 billion). for new distribution facilities in Vorsino, Despite the challenging economic condiRussia. tions, Nestlé continues to achieve growth and The investment at Romont will enable to invest in Europe. For example, in May, Nestlé to strengthen its premium portioned Nestlé commenced construction work on a coffee brand Nespresso to meet growing connew Eur220 million Nescafé Dolce Gusto facsumer demand worldwide. The new factory tory at Schwerin in Germany. The project repwill become Nespresso’s third production site, resents the company’s largest-ever investment with the other two also located in Switzerland. in Germany and one of its largest ever in Europe.

Severe Challenges “In spite of the difficult economic environOf course, Nestlé like other food manufacturment, we believe in Europe's strength,” says ers is facing severe challenges within Europe Paul Bulcke, chief executive of Nestlé. “We Laurent Freixe, Nestlé executive vice-president due to record levels of unemployment, are convinced that growth is possible. This is and zone director for Europe. extremely weak levels of consumer confidence why we are not only investing right now, but and poor GDP outlooks across many regions. continuously, in the European market and in convincing innovaHowever, even during this prolonged and difficult business envitions, modern technology, and highly qualified employees.” ronment, Nestle has steadily improved its trading operating profit Indeed, Nestlé’s coffee business is expanding rapidly both in margin in Europe from 13.1% in 2009 to 15.7% in 2012. Growth Europe and globally and the group is investing heavily in infrastruc- is being driven by a strong innovation pipeline coupled with a rigorture to support this continued growth. Nestlé is currently investing ous approach to efficiency which is allowing increased brand invest£310 million (Eur360 million) in its coffee manufacturing business ment and margin improvement. at Tutbury in the UK, having already spent £40 million over the Laurent Freixe, Nestlé’s executive vice-president and zone director past few years to create a European centre of excellence for Nescafé for Europe, points out that the continuing recessionary conditions in Cappuccino in Cumbria. Meanwhile, Nestlé is installing new manu- Europe are changing consumer behaviour, resulting in further polarfacturing lines at the Nescafé Dolce Gusto factory in Girona, Spain, isation of the market-place as demand grows for both low-price to double coffee capsule production at a cost of Eur44 million. products and premium products. Nestlé has managed to grow its

Nestlé is investing Eur243 million in a new Nespresso factory in Romont,

Nestlé is installing new manufacturing lines at the Nescafé Dolce Gusto factory

Switzerland.

in Girona, Spain.

FOOD & DRINK BUSINESS EUROPE, JULY 2013

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sales by responding to this polarisation through offering smaller and more affordable versions of its favourite brands, while investing in premium products like Dolce Gusto and Nespresso coffee, and Purina pet food.

Having first joined Nestlé France in the area of sales and marketing in 1986, Laurent Freixe was market head for a number of countries in Europe before being appointed to his present position in November 2008. His time as head of Nestlé’s European business has coincided with the global financial crisis and the ensuing economic downturn across the Eurozone.

currently averaging 24% across the region with much higher levels in certain countries such as Greece (62.5%), Spain (56.4%), Portugal (42.5%) and Italy (40.5%).

The ‘Nestlé in Europe’ Youth Employment Initiative will offer jobs and create thousands of apprentice positions and traineeships by 2016. Nestlé is also encouraging its 63,000 European suppliers to offer a job, apprenticeship or traineeship to young people.

“Governments alone cannot resolve the problem of youth unemployment in Europe – companies must play their part,” says Laurent Freixe. “We are committed to offering a subStrategy For Profitable Growth stantial number of young people the opportuAccording to Laurent Freixe, Nestlé’s nity to learn and develop within our company.

‘Strategic Virtuous Circle’ is driving profitable These new opportunities are the direct result growth. This entails firstly, achieving efficien- Paul Bulcke, chief executive of Nestlé. of our continued growth and investment in cies, using the savings to focus investment on Europe.” brands and innovations, which in turn drives market share gains, to Many of the new recruits will replace those who are retiring, while deliver profitable growth. other will be hired as Nestlé brings new facilities on stream following Nestlé has been focusing on ‘game changers’ within its extensive major investment across its European territories. products portfolio such as Nescafe Dolce Gusto, Baby Nes, Special “Hopefully we will inspire other businesses to be part of the soluT Nestle, Maggi So Juicy and Nescafe Frappelatte. tion,” Laurent Freixe remarks. “By investing in Europe, by growing Nestle is transforming the coffee market both in house and out of in Europe, we believe we can do something that is good for our busihome. For example, Nescafe Dolce Gusto (The coffee shop at home) ness but also which is good for society at large.” will have estimated sales o f SFr1 billion by 2015 compared to SFr4 Laurent Freixe adds: “In the context where Europe is ageing and million in 2006 indebted, Europe needs its youth at work. We need to replace the Nestlé is also driving petcare growth in Europe through premiu- generation of baby boomers when they retire.” misation. For instance, Nestlé Purina PetCare has just announced Nestlé already employs about 100,000 people in Europe, having plans to invest SFr93 million (Eur75 million) to build a new factory added 3,000 jobs in 2012, when it also offered 2,000 traineeships and distribution centre near Wroclaw in Poland. The factory, which and apprentices. Further details of Nestlé’s jobs initiative will be is due to be fully operational during the second half of 2014, will announced in September. J help support Nestlé’s expansion ambitions in petcare in Europe.

Poland, with an estimated 13 million pets, is the biggest pet food market in Central and Eastern Europe. Nestlé Purina is also spending Eur44 million to extend its factory at Buk in Hungary.

Laurent Freixe is confident of maintaining Nestle’s growth momentum in Europe during 2013 and beyond. “Southern Europe will remain very challenging, but I see opportunities in most geographies. Of course it will be easier to grow in Russia than in Spain and Italy,” he remarks.

Tackling Youth Unemployment Nestlé has decided to use its scale and influence in Europe to try to tackle the blight of unemployment, which is undermining consumer confidence and curtailing spending. The world’s largest food manufacturer has announced plans to help at least 20,000 people across Europe under the age of 30 find employment over the next three years.

Some 5.6 million young people are currently officially unemployed in the European Union with the youth unemployment rate

Nestlé is driving petcare growth in Europe through premiumisation.

Nestlé’s Recent Investments Across Europe Nestlé has recently commenced or completed major investment projects worth Eur1.1 billion across eight European countries: • Eur220 million for new Nescafé Dolce Gusto factory in Schwerin, Germany • Eur44 million for Nescafé factory extension in Girona, Spain • Eur23.5 million for new distribution facilities in Vorsino, Russia; • Eur40 million for Nestlé Professional factory extension in NoyalPontivy, France • Eur41 million for new Nestlé Waters bottling facility in Buxton, UK • Eur44 million for Nestlé Purina factory extension in Bük, Hungary • Eur243 million for new Nespresso factory in Romont, Switzerland • Eur360 million investment in coffee manufacturing at Tutbury, UK • Eur75 million for new Nestlé Purina PetCare factory and distribution centre near Wroclaw, Poland.

Nestlé has invested Eur41 million on a new water bottling facility in Buxton, UK.

FOOD & DRINK BUSINESS EUROPE, JULY 2013

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I DISTILLING

Global Thirst For Scotch Whisky Fuels £2 Billion Industry Investment Scotch whisky producers have committed to capital investment of £2 billion in new production facilities over the next few years as they prepare to meet growing future demand in global export markets. espite weak consumer sentiment group has commenced a £1 billion in the Eurozone countries, the investment programme to expand provalue of Scotch whisky exports duction of Scotch whisky, including rose by 1% to reach a record building a new malt whisky distillery, level of £4.3 billion last year – the eighth expanding existing distilleries and buildconsecutive annual increase. Indeed, ing extensive new warehousing capacity.

Scotch whisky exports have increased in Indeed, Diageo is in the process of buildvalue by 87% in the last ten years. ing a super-distillery at Easter Ross, north The Scotch whisky industry is benefitof Speyside, with the aim of producing ing from premiumisation, with sales val45 million bottles of blended whisky a ues increasing ahead of volume growth year. or despite any marginal decrease in volDiageo recently completed a £105milume. For example, although volume lion investment programme to expand its sales fell by 5% in 2012 to 1.19 billion The value of Scotch whisky exports rose by 1% to reach a Cameronbridge Distillery, which is the 70cl bottles, value sales rose, reflecting record level of £4.3 billion last year. largest alcohol beverage distillery in increased demand for more expensive, Europe, with the capacity to produce premium blended Scotch whisky and the Bright Outlook over 100 million litres of high quality singrowing popularity of Single Malts Scotch whisky is exported to more than gle grain Scotch whisky each year and 40 200 countries worldwide, and this geo- million litres of gin and vodka. Part of the whiskies. graphical diversity not only helps to offset investment programme included the conweak consumer demand in some regions struction of a £65million cutting-edge Preparing For Growth Due to the long maturation period of but ensures the continuing future success bioenergy plant. The bioenergy facility is Scotch whisky – it has to be aged for at of the industry. Global market demand is the first in the world to combine biomass least three years - distillers have to plan being fuelled by a number of factors, combustion, anaerobic digestion and water their production years in advance. The including successful trade negotiations, recovery.

Scotch is Diageo’s strongest performing industry has been investing heavily for excellent marketing by producers, growing growth in recent years with in excess of demand from mature markets, particularly global spirits category, generating 10% net £800 million in new capital investment in the USA, and the growing middle class in sales growth at the company’s last financial results. Scotland is one of Diageo’s largest production capacity over a three years emerging economies.

The confidence of the industry in period up to 2011 with major players, including Diageo, Chivas Brothers this growth momentum continuing (owned by Pernod Ricard), John Dewar into the future is reflected in the £2 & Sons (Bacardi), Glenmorangie billion capital investment that Scotch (LVMH), William Grant & Sons and whisky distillers have committed over Edrington, adding new capacity. New dis- the next three years. New distilleries tilleries opened, include Roseisle by have opened and older ones brought Diageo and Ailsa Bay by William Grant back to use to meet rising global & Sons. The £40 million investment in demand. Furthermore new maturaRoseisle was part of a £600 million capital tion, bottling and storage facilities are investment programme in Scotland by being constructed to support the extra Diageo over a six years period to build distilling capacity. high quality capacity.

With export sales set to grow well into Industry Leader the future, distillers are continuing to As industry leader, Diageo is once Scotch whisky producers have committed to capital again leading the way. The drinks investment of £2 billion in new production facilities. invest to meet future demand.

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FOOD & DRINK BUSINESS EUROPE, JULY 2013

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premium gin business of Pernod 2014. Planning permission for the project Ricard, recently re-opened its Glen was granted by Moray Council in April Keith distillery in Speyside, a region this year. which is home to almost half of It is not only the global drinks groups Scotland’s 108 distilleries. The Glen that are investing in new facilities. For Keith distillery had been ‘silent’ since instance, five whisky companies across 1999 but has now been re-opened to Scotland have just received funding from help Chivas Brothers to meet increas- the Scottish Government that will enable ing global demand for its luxury them to build new distilleries and storage Scotch whiskies, which include world- facilities and also create 40 new jobs. renowned blends Chivas Regal, Grant recipients include Adelphi in Ardnamurchan, which has been awarded Ballantine’s and Royal Salute.

The Glen Keith re-opening is just £1.8 million to build a new distillery, and one phase in a continuing £40 million Ballindalloch in Aberdeenshire, which has received £1.3 million to build a new micro Chivas Brothers, the Scotch whisky and premium gin annual capital expenditure probusiness of Pernod Ricard, recently re-opened its Glen gramme by the distiller to upgrade distillery and warehouse. J Keith distillery in Speyside. and expand its Scottish operations.

Other recent major investspirit supply centres responsible for pro- ments have included expansion work ducing around 50 million cases of leading at Glenallachie, Longmorn, Glentaucbrands of Scotch whisky and white spirits hers and Tormore distilleries – in and over four million cases of ready to addition to the Glen Keith project – drink brands annually. About 85% of which increased the company’s malt Diageo’s production in Scotland is sold distillation capacity by a further 25%, overseas. while in Paisley it opened a new Diageo currently employs around 4,000 super-premium bottling hall, focused people in Scotland and operates 28 malt on the hand-packaging of its highestdistilleries and one grain distillery and has value expressions.

Chivas Brothers’ programme of a 50% share in a further grain distillery. investment will culminate in the building of a brand new distillery at Diageo has commenced a £1 billion investment Investment by Chivas Brothers Chivas Brothers, the Scotch whisky and Carron on the River Spey, to open in programme to expand production of Scotch whisky.

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DISTILLING

Another Strong Year For Edrington Scottish spirits group Edrington has delivered another strong year of trading as it prepares to significantly expand its international reach. drington increased revenues by 6.3% to £591.3 million and profit before tax, excluding an exceptional charge taken in respect of the intangible value of the Brugal brand, by 13.3% to £168.6 million for the year ended 31 March 2013. Shareholders’ earnings rose by 10.1% to £77.6 million – maintaining the trend of double-digit growth over the last three year period – and Edrington increased its dividend by 13.3% to 34p per share.

During the year, Edrington successfully expanded the presence of its brands, which include The Macallan, Brugal, The Famous Grouse, Cutty Sark and Highland Park, in both established and emerging markets and 91% of total sales are now generated outside of the UK. For example, The Famous Grouse grew sales significantly around the world, becoming the number one Scotch brand by value and volume in the UK and the fourth largest standard Scotch brand globally. The Macallan is now the second ranked brand by value in malt whisky, having grown its worldwide sales by over 40% in the last five years, twice the rate of the malt whisky category as a whole. Other strong brand performances include Highland Park increasing profitability by 20% over the past 12 months, and Brugal growing its sales value in the USA by 22% over the same period.

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Edrington increased revenues by 6.3% and profit before tax by 13.3% last year.

During the year, the company expanded its international operations with the creation of Edrington Africa in South Africa, and Edrington is currently establising new sales, marketing and distribution companies in the USA, South East Asia and the Middle East to further extend its geographical reach.

Record Year “Edrington has delivered another record year of trading,” says Ian Curle, chief executive of Edrington. “In the face of challenging economic conditions in Southern Europe, our overall strength in both established and emerging markets has resulted in an increase in our turnover, profit and dividend.”

He continues: “Our financial strength has underpinned significant brand share growth in key markets and this will be further strengthened by the establishment and expansion of distribution activities in the US, South East Asia, the Middle East and Africa, allowing us to bring our premium brands to ever more consumers. The market for premium spirits continues to thrive, which will provide further development and expansion opportunities for Edrington.”

International Expansion Edrington is significantly expanding its international distribution network, taking control of operations that span three continents and include the world’s largest and most dynamic spirits markets. During the coming year Edrington will establish new sales, marketing and distribution companies in the USA, South East Asia and the Middle East. Collectively these markets currently account for 26% of Edrington’s total sales.

This expanded distribution network significantly strengthens Edrington’s route to market and brings the company’s premium spirits closer to consumers in these key geographies. It will allow for increased investment in Edrington brands and demonstrates the company’s confidence in the continued growth potential of its premium spirit brands.

Edrington USA will assume the distribution of Edrington brands in the USA, the world’s largest premium spirits market.

Demand for premium malt whisky is growing by 16% per annum as the market adds a million new spirits consumers each year.

Edrington USA will expand the company’s reach to major cities across the USA, opening offices in Chicago, LA, Dallas, Miami and expanding its office in New York. The company sees major opportunities for the brands, particularly The Macallan and FOOD & DRINK BUSINESS EUROPE, JULY 2013

Ian Curle, chief executive of Edrington.

Brugal Extra Dry rum.

Edrington Singapore will manage the brands in markets across South East Asia, including Singapore, Malaysia, Vietnam, Indonesia, Thailand, the Philippines, Cambodia and Laos. South East Asia has played an increasingly important role in the global success of Edrington, and The Macallan is the leading premium single malt whisky in South East Asia.

Edrington FIX is a new joint venture with FIX Wines and Spirits that will distribute spirits to growing markets in the Middle East, the Gulf and North Africa (MENA).

Edrington FIX will focus on key cities and the travel retail market.

Step Change The developments mark the latest stage in Edrington’s strategy of growing its business in both new and expanding markets. It signals a step change in Edrington’s business, according to Ian Curle. “Worldwide demand for premium and super-premium spirits continues to grow and by expanding our distribution capabilities so significantly we are seizing the opportunity to increase investment in our brands and reach even more consumers who are showing a growing appreciation of premium spirits,” he says. J 9

I PREMIUM PACKAGING

B1 Off – Chesapeake Installs World’s Longest B1 Speedmaster hesapeake’s Branded Packaging division C will extend its range of creative print finishes available to the premium spirits, fine confectionery and personal care markets it serves with the purchase of the longest ever B1 printing press produced by Heidelberg.

The Speedmaster XL 106 perfector, which has been installed at Chesapeake East Kilbride, has a staggering 17 print units – as well as an in-line cold foiling option.

Tim Whitfield, Vice-President of Chesapeake Branded Packaging, says: “East Kilbride supplies some of the world’s most prestigious brands and many of the packs it produces demand an ultra-high quality finish and outstanding shelf appeal. This significant investment will bring a number of processes inline providing greater quality control. We will be able to provide multiple colour applications, foiling and an even greater range of matt, gloss and pearlescent finishes, including metallics, spot and solid applications.”

The press is equipped with coating units both before and after printing and perfect-

ing that will allow Chesapeake East Kilbride to provide customers with a range of finishes & effects inside as well as outside the box. It will provide customers with a greater choice of substrate options, without compromising a pack’s aesthetic appeal.

The press is part of a major company-wide investment programme. Chesapeake Branded Packaging’s carton operations in the UK, Germany and Poland have all benefited from significant press investments in the last two years. The investment in East Kilbride follows the UK’s first Heidelberg VLF packaging press at its sister plant in Newcastle. That site runs the Speedmaster XL145 which has seven printing and two coating units, interdeck drying and extended delivery and also a high specification XL 105.

Jim Todd, sales director of Heidelberg UK, says: “This latest B1 press is a huge step forward in technology. This is a press

that will satisfy both current and future brand-owner requirements. This press has really advanced technical features such as Autoplate XL plate-changing and Logistics fully automated materials handling. These help to maximise efficiency and service and to seamlessly integrate into any facility. The installation at Chesapeake certainly stands out being described internally as a ‘flying submarine’!” J

Cargill Cocoa Promise Helps First Brazilian Cocoa Farmers to Become UTZ Certified s part of the Cargill Cocoa Promise, the A first Brazilian cocoa farmers have become UTZ Certified and their products can now carry the UTZ Certified label.

Cargill is a founding member of the UTZ Certified Cocoa initiative and promotes sustainable cocoa farming globally by educating and training farmers and farm workers.

In the state of Bahia, four cocoa producers have recently been audited and, by partnering with Cargill, they have become the first to produce UTZ Certified cocoa in Brazil. An additional 12 cocoa farms are scheduled to be certified by May 2014, representing about 1,000 metric tons of UTZ Certified cocoa beans. Pursuant with the global trend of increasing consumer demand for sustainable products, Cargill 10

presents an extensive portfolio of sustainable cocoa and chocolate products.

“The UTZ Certified initiative recognizes and rewards the efforts necessary to imple-

FOOD & DRINK BUSINESS EUROPE, JULY 2013

ment and enhance production processes.

By encouraging these practices we reap good fruit, both in respect to cocoa beans as well as the quality of life of farmers, rural workers and the environment. This initiative is aligned with a growing demand from our customers for more sustainable products,” explains Rodrigo Melo, Origination Manager, Cargill Cocoa and Chocolate Brazil.

In October 2012 the Cargill plant in Ilhéus, Bahia, became Brazil’s first cocoa processor to become UTZ Certified. When building a sustainable supply chain, cocoa delivery, storage, and traceability processes are reviewed. Additionally, origination, delivery, and production staff undergo training to apply and replicate the standardized procedures. J

I IRISH WHISKEY

Irish Distillers Invests €200 Million in Whiskey Production as Jameson Breaks 4 Million Cases Barrier Irish Distillers Pernod Ricard is nearing completion of a €100 million investment to upgrade and double capacity at its distillery at Midleton in County Cork and is spending a further €100 million in new maturation facilities, to meet growing global demand for Jameson, the company’s flagship Irish whiskey brand. rish Distillers was formed in 1966 following the merger of three of the major Irish whiskey distillers - John Jameson & Sons, established in Dublin in 1780; Powers & Sons, founded in Dublin in 1791; and the Cork Distillery, which dates back to 1825.

In an attempt to reverse the decline in Irish whiskey sales, the existing distilleries in Cork and Dublin were closed to consolidate production at a new purpose-built facility. A site alongside the existing distillery in Midleton was chosen as the location for the new distillery, as there was no room for expansion in Dublin. Both the Old Jameson Distillery in Dublin and the Old Midelton Distillery are currently operated as visitor centres attracting over 330,000 visitors annually.

Irish Distillers has been part of Pernod Ricard, the world’s joint leader of wine and spirits, since 1988, following one of the most protracted takeover battles in Irish corporate history. Pernod Ricard was suc-

cessful in acquiring Irish Distillers against a rival bid from GrandMet, Allied-Lyons and Guinness. Being part of an expanding international drinks group has provided Irish Distillers with access to Pernod Ricard’s growing global distribution network and resources.

Irish Distillers Pernod Ricard’s Irish whiskey portfolio includes Jam- Anna Malmhake, chairman and chief executive of Irish Distillers Pernod eson, Powers Gold Ricard.

Label, Paddy and the Single Pot Still range of Midleton – has received consistent marketing investMidleton Barry Crockett Legacy, Powers ment to stress the brand’s unique qualities, John’s Lane, Greenspot and Redbreast. It its time-honoured triple distillation and the encompasses some of Ireland’s favourite passion of its master distillers and blenders. spirit brands – Powers, Paddy, Cork Dry In 1988, Jameson sold 466,000 cases Gin and Huzzar Vodka. The company also globally, with Ireland as its main market. markets and distributes Pernod Ricard pre- Jameson reached the milestone of 4 million mium wine and spirit cases sold globally in 2012 – including 1 brands within Ireland million cases sold in the USA, now its including Absolut, largest market.

Havana Club, Malibu, “Jameson is now in its twenty-fourth Jacob’s Creek, Brancott consecutive year of growth and is experiEstate, Mumm and encing double-digit growth in 41 markets,” Perrier-Jouet. points out Anna Malmhake, chairman and chief executive of Irish Distillers Pernod The Development of Ricard. “With sales of over 4 million cases Jameson achieved in calendar year 2012, we are conWhen it gained control fident that Jameson will reach its next idenof Irish Distillers, tified milestone of 5 million cases by early Pernod Ricard was 2014.” quick to identify the massive potential for €200 Million Investment Jameson in international To support the continued expansion of the markets and made it a brand, Irish Distillers Pernod Ricard has Jameson reached the milestone of 4 million cases sold globally in 2012. flagship brand. Jameson been investing heavily in the necessary pro-

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FOOD & DRINK BUSINESS EUROPE, JULY 2013

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Irish Distillers Pernod Ricard has invested Eur100 distillery in Midleton, County Cork.

duction and maturation infrastructure. In May 2010, planning permission was granted for a Eur100 million investment in a new whiskey maturation facility in Dungourney near Midleton. This project entails building 40 maturation houses, capable of holding a total of 640,000 casks of whiskey. The new storage capacity will facilitate the increase in production of the distillery, which is expected to rise to between 7 million and 10 million cases per annum in the coming years. Irish whiskey takes between three and five years to mature.

Irish Distillers Pernod Ricard is investing an additional Eur100 million in expanding the distillery at Midleton, which has a current production capacity of more than 33 million litres of alcohol a year and is the largest distillery in Ireland. Building work employing around 250 construction workers over a period of 15 months is nearing completion, and the newly expanded distillery will create 60 manufacturing and technical jobs – 30 at Midleton and a further 30 at the Irish Distillers Pernod Ricard’s Fox and Geese bottling plant in Dublin.

tribute, sell and market Jameson are Irish from raw materials to packaging, manufacturing jobs, sales and marketing resources and shipping.”

For example, the Midleton Distillery spends in excess of Eur60 million annually on cereals, energy, capital projects and payroll in the local economy, and this figure will rise significantly as producmillion to expand its tion increases following the expansion of capacity.

Jameson is continuing to perform strongly with sales growth of 13% and 7% volume growth in the first six months of Pernod Ricard’s current financial year.

With growth of 24% in the US, Jameson was the main driver in Pernod Ricard’s strong North American performance. Indeed, with Martell cognac, Jameson was the key driver of Pernod Ricard’s overall performance in the first half.

Pierre Pringuet, chief executive of Pernod Ricard. “The value story is even more important because, at that time of acquisition, Jameson was still being sold at a discount to the big whiskey brands, particularly Scotch whisky. Today it’s sold at a premium of 20% or more in some markets like the US.” He adds: “We don’t want to grow to the extent that it affects the value or price strategy. An easy way to generate volume is to make discounts, and lower the price, but you ruin the brand equity.”

Maintaining higher prices and margins will allow for further investment behind the brand and that will in turn fuel future growth.

Irish Whiskey Renaissance The success of Jameson has heralded a ‘renaissance’ for Irish whiskey in international market. In terms of global sales, Irish whiskey’s annual volume of about 5 million cases is dwarfed by the 90 million cases for Scotch whisky. However, Irish

Controlled Growth Since becoming part of Pernod Ricard, “Jameson has witnessed consistent and sustained investment, with a long-term strategic outlook based on premiumisation and innovation coupled with New pot stills being transported to the distillery at Midleton. strong and targeted marketing,” says Anna Malmhake. While whiskey is expanding rapidly globally and Irish Distillers Pernod Ricard is targeting attracting major fresh investment. volume sales of 5 million cases by 2014 The second largest Irish whiskey brand, and growth of up to 10 million cases in Tullamore Dew, is currently growing by Economic Contribution the longer term, this expansion will be over 15% annually and has nearly douAnna Malmhake comments: “We are controlled and Jameson’s premium mar- bled worldwide sales to almost 700,000 proud to play our role in the Irish drinks ket positioning protected. cases since 2005. The brand is owned by industry, which is a hugely important part “The volume is not the full story,” says Scotch whisky group William Grant & of the Irish economy with Sons, which acquired Tullamore annual exports of almost Dew for about £150 million in Eur1.3 billion, a value added 2010 to enter the Irish whiskey contribution of Eur2 billion to market. William Grant & Sons is the economy, and a tax contriplanning to invest Eur35 million in bution of Eur1.8 billion by a new, state-of-the-art pot still consumers. As one of Ireland’s whiskey and malt whiskey distillery most successful exports, in Tullamore.

Jameson is playing its role in US-based global spirits group the export led recovery of the Beam (formerly known as Fortune economy.”

Brands) has also recently entered the She continues: “As a product Irish whiskey category following the that is distilled, matured and purchase of Cooley Distillery, bottled in Ireland, a very signifIreland’s last remaining major indeicant proportion of all the pendent distillery, for $95 million inputs required to produce, dis- Pierre Pringuet, chief executive of Pernod Ricard. in late 20011. J FOOD & DRINK BUSINESS EUROPE, JULY 2013

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I VEGETABLE PROCESSING

Total Solutions From Tolsma Grisnich Group he Tolsma Grisnich Group offers a T total package of solutions for the potatoes, onions and carrots processing industries. Based at Emmeloord in the Netherlands, the Tolsma Grisnich Group has for the last five years been active together in the development, production, implementation and maintenance of installations for the storage and the processing of potatoes, onions and carrots.

Tolsma is active in the area of ventilation-and refrigeration systems for bulk and box storage. Tolsma manufactures inhouse ventilators, ventilation ducts, refrigeration installations, control- and climate processing systems.

Grisnich’s field of expertise’s lies in handling these products through transportation, cleaning and sorting, and the company also manufactures in-house grading machines, handling equipment, such as conveyors, box fillers and bulk bin installations. Furthermore, all control systems,

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programming and control panels are manufactured, supplied and installed by Tolsma for all the Grisnich installations.

The combined Research & Development departments are constantly developing new possibilities for storage computers and grading systems.

Information technology plays a major part in the integration of Tolsma and Grisnich systems, allowing the Tolsma-Grisnich Group to provide additional value added service, by offering complete packages to industrial customers.

In the last few years the group has further developed its international market position. It has now established its own offices in Russia, Ukraine, India and China. In these countries there is still much to be done in the area of potato cultivation improvement, and by implementing Tolsma Grisnich Group’s equipment and technology, greater efficiency can be achieved in cultivation and processing

FOOD & DRINK BUSINESS EUROPE, JULY 2013

Tolsma Grisnich has a strategic cooperation agreement with Kiremko Food Processing Equipment, based in Montfoort, the Netherlands. This makes it possible to optimise the storage, sorting and processing for several end products such as French fries and chips.

It is crucially important that machines in the areas of storage, sorting and processing are properly aligned in order to avoid problems at the end of large projects.

Tolsma Grisnich is willing, able and ready to work with the client from day one of the development of any project in order to ensure the optimal performance of the installation, whereby all equipment is working together in harmony. J

I FROZEN FOODS

Acquisitions Bolster McCain Foods in Continental Europe McCain Foods, the world’s largest manufacturer of frozen potato products, has further expanded its product offering and consolidated its leadership position in Continental Europe following the acquisition of the potato division of Pinguin Lutosa. he acquisition encompasses the Lutosa brand, its frozen, chilled and dehydrated potato products, its two production facilities and its associated resources. The transaction presents a significant growth opportunity to further strengthen McCain Group’s global position. Lutosa’s brand is positioned on the mid-range segment, complementing the premium market position of McCain’s core business.

The deal is based on an enterprise value of the business of Eur225 million. The disposal will allow Pinguin to focus on its core fruit and vegetable activities. The Lutosa business is now being integrated into McCain Foods’ operations in Continental Europe, which. spans 45 countries.

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Strategic Acquisitions “This acquisition is in line with our strategy of reinforcing our core potato business in Europe,” says Jean Bernou, chief executive of McCain Continental Europe. “The products and brand positioning of Lutosa and McCain are highly complementary. Lutosa will help us to further expand our product offering and cater to a wider range of customers while ensuring continuity in terms of investments and optimal service quality.”

However, to comply with European competition laws, the Lutosa retail brand in Europe will be licensed to a third party.

Headquartered in Villeneuve d'Ascq in France, McCain Continental Europe employs 2500 people and operates production sites in Belgium, France, Poland and the Netherlands. Within the Continental

Europe region, McCain works closely with 1700 farmer partners.

The Lutosa purchase is the second key acquisition completed by McCain in Western Europe in the past year. In 2012, McCain strengthened its core potato business while broadening its product range by acquiring Netherlands-based CelaVíta, a subsidiary of Bieze Food Group, owned by the German Wernsing Group.

Located in Wezep, CelaVíta is a leading European chilled potato producer and the market leader in the Benelux. Its product portfolio includes whole baby potatoes, cut, sliced, diced and mash potato, both natural and seasoned.

CelaVíta has developed strong and longstanding relationships with Dutch and international customers across the three main channels: retail, food service and food industry. Its activity is particularly focused in the Netherlands, Belgium, France, Germany, UK and Italy.

The acquisition has allowed McCain to grow its supply position on the European processed potato market.

Global Leader McCain Continental Europe is, of course, part of Canada-based McCain Foods, the world’s largest manufacturer of frozen French fries. Established by brothers Harrison and Wallace McCain at FOOD & DRINK BUSINESS EUROPE, JULY 2013

Florenceville, New Brunswick, a small town on Canada’s east coast, in 1956, McCain Foods has developed into one of the world’s leading frozen food producers, employing 18,000 people and operating 50 production facilities on six continents. The company is still family owned.

McCain Foods also produces a diverse range of frozen products, including pizza, appetizers, oven meals and desserts. Its products are sold to retailers and food service operators in more than 160 countries around the world. McCain Foods generates annual sales in excess of C$6 billion (Eur4.8 billion).

McCain Foods has been expanding its business globally through acquisition and organic growth. Earlier this year it completed the A$82 million (Eur58 million) acquisition of Kitchens of Sara Lee in Australia from Hillshire Brands to extend its consumer offering in the region. KOSL is a leading Australian and New Zealand frozen food company that manufactures, sells and distributes a range of Sara Lee branded products in frozen desserts, super premium ice cream, pastries, frozen savoury meals and frozen fruit categories.

In China, McCain Foods is doubling the capacity of its potato processing plant in Harbon to meet growing demand for its products in the Asia-Pacific region. The Harbin plant was built in 2005 and is one of several potato processing plants McCain operates in the Asia Pacific region. J 17

I SOFT DRINKS

Vimto Fuels Nichols’ Continued Growth Specialist soft drinks producer Nichols is continuing to outperform the UK market while delivering strong growth in international markets. onstant investment in its core brands has enabled Nichols to increase its market share both in the UK and overseas, in the still and carbonate categories.

Headed by its flagship Vimto brand, which is sold in over 65 countries, the portfolio also includes Levi Roots (soft drinks), Sunkist, Panda and Weight Watchers, which are sold in the UK. In addition to its leading market position in both the ‘stills’ and ‘carbonated’ drinks categories, Nichols is also a major player in the soft drinks on dispense market, where its brands include Cabana, Ben Shaws and Dayla.

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Strong Performance The soft drinks specialist delivered yet another strong performance, ahead of both internal and external expectations, in its last financial year with healthy top and bottom line growth. Despite the challenging retail environment in the UK, which is still the group’s biggest market, Nichols managed to increase sales by 9% to £107.8 million. Although continued high levels of raw material inflation adversely impacted UK gross margins; the solid sales growth combined with strong cost control led to increased operating margins. Overall, Nichols delivered a 13% increase in operating profit and profit before tax to £20.5 million.

UK and International Success Nichols increased its UK sales by 9% to £85.0 million in 2012, outperforming the UK soft drinks market which grew by 3%.

John Nichols, non executive chairman of Nichols.

The growth was driven by a strong performance from the core Vimto brand, which increased market share, together with new product and brand extensions such as Levi Roots and the recently launched Weight Watchers range of soft drinks. Nichols continued to invest heavily in marketing in 2012, and again increased household penetration bringing new consumers to the Vimto brand.

Nichols also enjoyed another successful year in international markets with sales ahead by 8% to £22.7 million, aided by Vimto again increasing its market share, particularly in key markets such as Africa and Europe.

Reflecting its consistent and strong international growth, Nichols was awarded the prestigious Queen’s Award for International Trade for 2012. This annual award recognises businesses that have achieved strong overseas growth for a sustainable period.

Challenging Time John Nichols, non executive chairman of Nichols and the grandson of the original company founder, comments: “2012 was extremely challenging for the UK soft drinks market and the broader grocery market as consumer spending was restrained by the economic environment.

The industry also had to deal with the effects of the second wettest summer on record, further dampening demand for soft drinks.” He adds: “Against this backdrop, the group again outperformed the market, delivering EPS growth of 14%, profit growth of 13% and increasing its cash reserves.”

FOOD & DRINK BUSINESS EUROPE, JULY 2013

Operating Model Nichols operates an outsourcing model for its production, warehousing and distribution, whereby key co-packers produce Vimto and other brands on the company’s behalf, which allows the management team to focus on marketing and selling the brands rather than managing the factory.

“The benefit is cost efficiency: our copackers are bigger than we would be on our own in terms of better buying power, which reduces cost,” explains Tim Croston, group finance director. “The model is also more flexible in terms of production capability; we have a number of co-packers offering a wide variety of packaging formats and capacity. Lastly, the model is beneficial to the balance sheet as we do not have to invest in plant and machinery our levels of capital investment are very low.”

Outlook Nichols is well placed to deliver further profitable growth in 2013 and beyond.

“Although we anticipate the UK retail environment will be just as challenging in 2013, we are confident that the group will again outperform the market with continued investment behind our brands, launching innovative new products and further growth in our international markets,” says John Nichols.

New Leadership Nichols has been under new leadership since May 2013, when Marnie Millard became group chief executive, succeeding Brendan Hynes, who stepped down after ten years at the helm, which was a transformational period for the company. Marnie Millard, who was previously managing director of Nichols UK soft drinks business, has worked in the soft drinks industry for the last 17 years in a number of senior roles with Macaw Soft Drinks, Refresco and, more recently, Gerber Soft Drinks. J 19

Technology and Expertise: The Right Ingredients For Your Business a challenging economic climate, food IITnandsystems drink companies are looking to their and their technology partners to help them build an efficient, agile business and, in many cases, to compete on the world stage.

Leading companies in the industry have chosen Datel to implement a Sage solution to increase their efficiency and agility while delivering excellent service.

Walking the Stock Tightrope It’s a tricky balance: how do you keep just enough items on the shelves to fulfil customer orders, without tying up budget and resources on surplus stock?

In today’s competitive operating climate, companies that get a firm grip on their stock can increase their margins and control the escalating costs of purchasing, storing and managing stock.

Euro Foodbrands Export Ltd, specialist exporter of food to the Middle East, has achieved this balance. The company uses a Sage-based system (Sage 200), implemented by Datel to maintain tight control of its

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stock. The trigger for moving away from an accounts software package to a more powerful, integrated platform came when the company started to offer frozen foods and needed a deeper level of analysis to track stock movement.

Hassan Ibrahim, Director of Euro Foodbrand Exports, says: “Sage 200 has addressed our core business issues and helps us to maintain control of the business as we grow and to sharpen our competitive edge.

It’s a true stock control system, so that now we have easy access to an accurate, real-time picture that enables us to understand what stock we have and what we need to order in, calculate our margins and so on. The system helps us with routine but vital tasks, such as keeping track of shelf-life and sellby details, so that we reduce wastage to the absolute minimum.”

Commenting on the help received from Datel, Hassan Ibrahim says: “We decided to award the order to Datel. We’ve been very satisfied with the outcome and are happy to recommend Datel – and Sage 200 – to other businesses.”

Less Waste, More Profit Similarly, Ruskim Seafoods has improved stock control by implementing a new enterprise resource planning system, which in turn makes a marked contribution to profitability. Ruskim Seafoods needed a solution that could be rolled out across all of its six depots and chose a Sage ERP X3 solution from Datel. Gaining visibility of stock wherever it is held means that Ruskim Seafoods avoids unnecessary duplication and waste.

Finance Director Andrew Russell says: “We have information from across the company consolidated within a single location and can view this integrated data in realtime, rather than retrospectively. We can see which stock is held at which depot and no longer have to call the depot to check.”

He also praises Datel’s expertise: “The whole Datel team is very knowledgeable and can FOOD & DRINK BUSINESS EUROPE, JULY 2013

always be relied upon to provide solutions to achieve our objectives.”

Join the Leaders Many leading companies in the food and drink industry run their business on a Sage solution from Datel. They include Nichols plc, Grace Foods (UK) Ltd, Baird Foods and Xpress Fish. Visit Datel’swebsite for the food and drink industry at www.datel.info/sectors/food-and-drink to find out why.

You can also download a report with the results of a survey of nearly 250 senior decision-makers in the food and drink manufacturing sector.

To find out how Datel’s knowledge of best practice and commercial insight could help you to meet the unique challenges of operating in the food and drink industry: Call 0845 521 1875 or Email enquiries@datelgroup.com. J

“Datel has outstanding knowledge and experience of using Sage within the food and drinks industry, and a deep understanding of our business, not just our IT infrastructure” - Allan Doyle, Group IT Manager, Nichols plc.

I ENTERPRISE RESOURCE PLANNING

Infor Launches Biggest M3 Release in 10 Years nfor, a leading provider of business appliIcustomers, cation software serving more than 70,000 has released Infor M3, the next generation of its ERP application focused on the specific needs of key vertical industries. This version sees more than 500 improvements tailored to the respective needs of the distribution, equipment, fashion, chemicals, and food and beverage sectors. In addition, a new accelerator pack makes it faster to deploy, as major functional enhancements can be added without the need to install an entirely new version of the software.

The first Infor ERP application within the recently launched Infor 10x suite, this release provides access to the latest Infor innovations in social, mobile, analytics and cloud technologies, and Infor plans to incorporate Infor Ming.le, Infor’s new platform for social collaboration, business process improvement, and contextual analytics. This would allow users to capture corporate knowledge, contextualize business

processes and follow news, workflows and content in real-time.

Functional Improvements Functional improvements span all areas and include alignment of payment terms to customer order lines, better allocation of discounts, clearer management of markups, markdowns and exclusions, improved backorder prevention, simplified processing of kits, and enhancements in item replacement capabilities in order entry.

The finance interface is easier to use and sees simplification of supplier invoices, improved reconciliation between logistics and general ledger, advanced payments in AP and AR, dynamic credit limits, increased analytical capabilities, and better VAT and taxation management. Inventory management sees improved statistics on demand status, enhanced ability to update items, user defined lot numbering rules, and lots with multiple statuses In addition to sales, finance, warehouse management and procurement features, specific industries will benefit from a number of features. Food and beverage companies will see better tank tracing and lot blending, features for ultra-fresh food planning, enhanced warehouse mobility support, ageing and shelf-life management, and lot status and numbering improvements.

Distribution companies will see enhancements to delivery management through

simplified movement of inventory between locations, pick corrections prior to pick list reports, new load building step for shipments, grouping of shipment packages to same distribution point, and greater control of output of pick lists.

John Gledhill, global director, Infor M3 product management, comments. “The 500+ improvements in Infor M3 13.1, combined with the new accelerator pack concept, means that regardless of whether an organization makes and distributes trousers, tortellini or tractors, they can benefit from functionality specific to their business – quickly. Crucially for both existing and new customers, the latest application has the infrastructure base to enable future new functionality to be implemented without the need for a major upgrade project.” J

I MANUFACTURING OPERATIONS MANAGEMENT

Siemens Strengthens MOM Portfolio With Preactor Acquisition y acquiring the Preactor Group headB quartered in Chippenham in the UK, Siemens is further expanding its international lead in the industry software market.

Preactor's APS software solutions will add significant new components to the Siemens Manufacturing Operations Management (MOM) portfolio. Preactor has been developing software solutions for efficient automated production planning processes for over 20 years. Once the deal is complete, the UK-based company will be assigned to the Siemens Industry Automation Division.

The purchase price was not disclosed.

The Preactor Group was founded in 1992, and currently employs a workforce of 70. Alongside its base in the UK, the company is also represented in North America,

India, France, Spain and China. Preactor's APS planning software has been installed by over 4,500 small, medium and large multinational companies in 75 countries, and is used to drive down production costs, boost productivity and improve adherence to delivery deadlines.

“By acquiring the Preactor Group, we are further extending our position as an industry software supplier in the field of production and logistics,” says Anton S Huber, chief execuitve of the Siemens Division Industry Automation. “The solutions supFOOD & DRINK BUSINESS EUROPE, JULY 2013

plied by Preactor ideally complement our MES product portfolio. We will be extending our industry software offering to include APS as a key component in the field of Manufacturing Operations Management.

With the Preactor Group, we are gaining a team of specialists with a proven track record as a preferred supplier and service provider for APS solutions the world over.”

The Preactor Group's president and chief executive Mike Novels adds: "We have no plans to divert from our existing successful course. With our highly qualified workforce and Siemens behind us, we will be in a position to supply our future-oriented APS software solutions as a global partner backed by worldwide presence and support.” J 21

Sysco Works – A Complete Software and Services Offering For the Food & Drink Industry ver the past 30 years, Sysco has worked O with many food and beverage companies in Ireland and understands the needs of the various niche sectors, whether meat, dairy, drinks, feed, seed, processing or distribution. The Sysco team has worked across all sectors and understands the cost and compliance pressures, and that in many instances, there are multiple business types or companies within a group.

Sysco was established in 1980 and employs 50 people in Dublin and Belfast, providing business software solutions to organisations throughout Ireland. Clients range from large scale distributors to discrete manufacturers, from government bodies to service-orientated companies.

Sysco’s continuous lifecycle management of its clients from the system consultation stage, through to the final implementation and on-going support, builds strong relationships and commitments to serving client's evolving needs.

Food and beverage manufacturers produce a wide range of products, and the market is volatile. Consumer demands change rapidly, and new health and specialty niches are making the market more complex. Some demands are long-term such as continual demand for lower prices, stricter safety requirements, and more detailed labeling. Others are short-term such as demand for current popular flavors or new packaging or ingredients.

Primary Business Challenges Innovation success is more of a differentiator than ever before, because customers are less loyal to brands and both consumers and direct customers are more focused on their specific needs.

While brand loyalty may be down, the number of consumers looking for products

from sustainability leaders is up. The good news is that many sustainability practices can also lower costs.

Market responsiveness is crucial to ensuring that the right products are available in each outlet of each channel at all times to capture the consumer’s business.

According to a white paper from industry analysts Cambashi Limited, new and profitable opportunities are emerging for food and beverage manufacturers who are ready to commit to innovation, sustainability, and faster market response. In the white paper ‘Innovative, Sustainable, and Responsive: Food and Beverage Manufacturers Evolve for the New Economy’, Julie Fraser speaks of some of the changes food and beverage companies must make to succeed in today’s environment.

Here are a few points about that evolution.

• Food and beverage manufacturers can no longer succeed by fine-tuning a relatively straightforward process of pushing as much through the production and supply chain operations as efficiently as

FOOD & DRINK BUSINESS EUROPE, JULY 2013

possible. They must be flexible to handle a much more complex product line and set of sales channels that appeal to specific niche buyers and their lifestyles.

• To enable employees to succeed in this more complex environment, IT can ease the burden. Comprehensive and industry-specific enterprise resource planning (ERP) and surrounding IT infrastructure tools are not only important, but necessary and increasingly available to even smaller companies.

• Most food and beverage manufacturers currently have significant gaps in data flows that result in waste and errors.

These can lead to ineffective innovation, inadequate traceability of product sources and handling issues, and slow responsiveness to market shifts.

Food and beverage companies that evolve to a business process utilising more integrated ERP tools together with mobility, business intelligence, and collaboration tools can improve business performance and seize opportunities to gain market share.

Sysco’s experience assists you through the primary business challenges and can lead you on to new and profitable opportunities. Sysco’s integrated applications and interfaces for the food and beverage industries, some examples of which are interfaces to Innova, Producer payments, Van Sales Hand-held Interfaces, third party logistics, Mobile Sales System, Route Management, Replenishment Planning with seasonal variation, Product Costing/Margin, Multiple Stock Valuation, mean that you analyse the data you want, when you want, and then you can transform this raw data into decision driving intelligence. Sysco speaks your language and speaks your customer’s language.

Sysco’s experience and insight has helped the following Irish companies forge ahead to greener pastures - Avondale Foods, Foyle Food Group, Gleeson Group, Connacht Gold, Ampersand, Odenberg Engineering, Germinal Holdings, Dawn Farm Foods, Dale Farm – saving money and improving productivity with their choice of ERP/Manu facturing software.

For further information visit www.thefood-people.com. J 23

Adams Foods – Changing the Game With Shop-floor Automation dams Foods, the UK’s leading A supplier of retail pre-packed hard cheese, is optimising the performance

manufacturing operation is utilised.

OEE reduces complex production problems into simple, intuitive presentation of information in order to systematically improve the process with easy-to-obtain measurements.

of its modern, highly automated plant at Leek in Staffordshire under its Continuous Improvement (CI) regime, which encompasses an OEE approach.

Combined Solution Adams Foods holds 30% of the The Olympus Automation solution at retail pre-packed hard cheese in the Adams Foods combines the security of UK and over 50% of the private label package verification with the ability to sector. The company was formed in capture and report OEE. Packaging 2010 as a result of the merger control ensures the correct film, label between The Kerrygold Company and date codes are used to meet the and North Downs Dairy, both wholly high demands made by major retailThe Leek site is one of the most efficient and environmentally owned English subsidiaries of the ers. OEE provides the real-time inforfriendly cheese packing facilities throughout the UK and Irish Dairy Board. mation that Continuous ImproveEurope.

Following investment of £30 milment teams need to ensure that decilion by the Irish Dairy Board in a new sions are based on accurate informastate-of-the-art factory and office complex, Automation solution could provide live tion. which opened in 2009, the Leek site is one giveaway percentages and pack weights To prove the advantages of a combined of the most efficient and environmentally directly from the checkweighers. solution, Adams Foods initially ran a pilot friendly cheese packing facilities throughout “Whilst reporting the average ‘giveaway’ installation of OEE on a single line. As the UK and Europe. The Leek facility pro- at the end of shift allows lessons to be learnt product run information was already duces over 200 million packs of cheese a for future shifts, higher savings come from recorded within the packaging control sysyear. displaying live giveaway values in real-time tem, the only additional signals required The Adams Foods cheese portfolio ensuring critical adjustment can be made,” were product counts and stop signals. includes branded cheddar in the form of points out Dave Shepherd, Continuous In addition, as most products are sold by Pilgrims Choice, and added value private Improvement Manager at Adams Foods. fixed weight, it was decided that Olympus label cheeses. Adams Foods also sells and Automation solution would link its softmarkets Kerrygold butter, the premium Overall Equipment Effectiveness ware directly to checkweigher values in Irish butter and leading consumer brand in The variety of add-on modules available order to be able to provide a real-time givethe UK. with the Olympus Automation packaging away percentage on the touch screen and to and date control solution have allowed record those values by product run.

Continuous Improvement Adams Foods to include OEE (Overall Adams Foods has been able to improve the Equipment Effectiveness) reporting and live Successful Outcome performance of its Leek factory by combin- checkweigher links to meet the growing After several months of careful evaluation ing the security of package verification with demands of the business. the pilot proved successful by providing the ability to make sound CI decisions OEE is a hierarchy of metrics developed real-time visibility of performance to target based on accurate information. in the 1960s to evaluate how effectively a and accurately quantifying all lost time, Adams Foods has deployed an especially losses due to product and Olympus Automation solution at its web changeovers. Operators can now new cheese packing facility which clearly see giveaway values for the curguarantees packaging security by conrent production run and quickly react tinuously scanning 2D barcodes and when adjustment is required. secures date codes by writing directly Adams Foods has now commisto line printers. To further increase sioned Olympus Automation to payback on the investment, Adams extend the combined packaging conFoods is also now using the same trol and OEE system across all 24 shop-floor touch screens to capture lines at the Leek production site. and report real-time OEE and accuAccording to David Shepherd, the rately measuring each second of proinstallation of a touch screen PC on duction. each line will improve the hardware Of course, most of Adams Foods’ investment by allowing the measureproducts are sold by fixed weight so it ment of OEE, reduce downtime and was crucial that the Olympus reduce giveaway. J FOOD & DRINK BUSINESS EUROPE, JULY 2013

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PDX TM Technology from Olympus Automation Targets £8 Billion Waste In the Food and Beverage Industry analysis shows that the Ithendependent potential exists for at least 10% savings in £80 billion UK food and beverage

bar code scanner to confirm products run and improve product traceability.

industry. Olympus Automation has launched a range of PDX™ products that deliver exceptional efficiencies and unlock this opportunity.

Combine Security With Performance PDX™ Performance is an innovative software that ‘bolts onto' End of Line capturing and reporting downtime in real-time, on the same hardware. The single system operates across smartphones, tablets, touch screens, desktops and large shop-floor displays and is designed to filter distractions and provide the operations team with the information they need.

PDXTM Reactor Dramatically reduce cooking/processing time whilst at the same time improving quality. The PDX™ reactor homogenises, mixes, heats and pumps simultaneously with unequalled performance. The results are quite staggering: • Greencore are already benefiting from a 83% reduction in production time for 1,000kg béchamel sauce to 15 minutes.

• Energy consumption is reduced by up to 40% • Health benefits are generated from the improved mixing process that allows certain ingredients such as salt to be reduced.

With the UK government pushing to reduce salt intake to 6g a day by 2015 and 3g by 2025, the PDX reactor is the technology to facilitate this.

PDX™ 3D Scan Your whole factory, accurate to 2mm, measurable at your desk. The PDX™ 3D Scan provides revolutionary 3D factory walkthroughs, reduces the time to create 3D factory layouts by a factor of twelve, and removes manual measurements giving pinpoint accuracy. With the PDX™ 3D Scan share best practices across sites and remodel whole areas faster.

Can You Afford to Lose £50,000?

Virtually all of the food industry is facing increasing pressure from retailers to guarantee that packaging and date codes are correct to prevent product recalls. If mistakes

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happen involving the wrong packaging or worse, the wrong date code, the food processor can expect a fine of over £50,000 and product returns. Get it wrong more than once and the processor risks losing the business.

How Can Olympus Automation Eliminate That Risk?

The PDX™ End of Line system removes the risk of product recalls, takes away much of the paperwork and provides an accurate, real-time, measurement of production performance in a single solution. Deployment starts with the installation of a touch screen on each line to give feedback to the operator and provide direct links to key equipment and drive other devices like bar codes scanners.

Once the hardware is in place the date code process is made ‘mistake proof’ by removing the need for the operator to enter date codes. Direct control of the printer from authorised product standards means changeovers and special offers are all covered automatically.

The system uses unique 2D barcodes, accepted by all the major retailers, printed onto all film and packaging. To maintain total security these include: packs, film, pots, lids; everything that makes up the finished product. All that’s left is for the operator to make sure they select the right product; if they get that wrong the 2D bar code scans will pick up the error and stop the line.

To further increase security paperless QA checks can be established to ensure the operator performs key checks at set times.

These include product images via the colour FOOD & DRINK BUSINESS EUROPE, JULY 2013

Mobile Reporting and Intelligent Targeting Individuals have different reporting needs; whilst operators are usually close to a line, team leaders have a roving brief so real-time information has to be mobile with targeted information tailored to their needs.

PDX™ Performance delivers accurate, real-time information where your team needs it, on the shop-floor pushing hard for improvements, not tied to an office desktop generating yesterday’s reports.

For further information on the innovative PDX™ product range please visit www.olympus-automation.co.uk or call 01733 394700. J

“We chose the Olympus Automation packaging and date control solution as reference visits proved their system to be reliable. Their variety of add-on modules meant we were able to include Performance reporting and live checkweigher links to meet the growing demands of our business.” - Jarnail Sani, Director of Operations, Adams Foods.

I LIDDING

Longer Life High Street Solution From KM Packaging nternational developer and supplier of IPackaging innovative lidding solutions, KM Services has launched an ultrahigh performance lidding film that can double the shelf-life of premium chilled ready meals.

Aimed squarely at premium high street brands where shelf-appeal is essential, the lidding material delivers superior transparency to enhance the display of high-end, home-made effect ready meals. In addition, the film is suitable for sealing to externally lacquered aluminium foil trays and can withstand rigorous retort manufacturing processes whilst maintaining reliable seal integrity – and peelability for ease of consumer preparation.

In response to a brief from a major manufacturer of chilled prepared foods, KM Packaging’s experienced technical team developed a bespoke polyester based film laminate, which not only fully achieves the required performance requirements and seal

security but also allows the product to achieve 28 days’ shelf-life – twice the life of many chilled ready meals currently available.

KM Packaging’s managing director, Charles Smithson, explains: “Premium chilled ready meals are quite a challenge for both manufacturers and retailers. The prod-

uct not only has to achieve technical excellence but its visual appeal must justify its premium pricing. Bought by a more discerning consumer, these meals are intended to pass as home-made or purchased as a special treat; they don’t fly off the shelves like the value ranges do.

“Creating a lidding solution that can double the standard shelf-life for premium meals was a tremendous achievement for us. It will undoubtedly help manufacturers and retailers alike to cut down on waste – something about which KM is passionate - and ultimately increase their sales of higher margin products.”

KM Packaging is renowned worldwide for its unparalleled food sector knowledge and experience and is a trusted partner for major brands all over the world. For more information about KM Packaging and its vast range of flexible and reliable packaging solutions, please visit the website www.kmpack.co.uk or call 01832 274944. J

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

FOOD & DRINK BUSINESS EUROPE, JULY 2013

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I REPUTATION

Kerry Group is Ireland’s Most Reputable Indigenous Company Kerry Group, the global ingredients, flavours and consumer foods producer, has been identified as the most reputable indigenous company in Ireland. erry Group was also voted Ireland’s delivered through the 1 Kerry Business most reputable food company in Transformation Programmes and successthe annual Ireland RepTrack ful cost management is mitigating the Study, which measures the reputaimpact of input cost increases tions of 100 firms in Ireland based on Continuing business volumes are ahead more than 14,000 consumer ratings from by 2.2% on the first quarter in 2012, with members of the public. a 3.1% rise in Ingredients & Flavours Kerry Group is Ireland’s largest agri food more than offsetting a 0.2% decline in company. It operates 150 manufacturing Consumer Foods. The group trading marsites and sells its products in 140 countries gin continues to improve with a 50 basis worldwide. Headquartered in Tralee, points expansion in the quarter – with County Kerry, the group employs over Ingredients & Flavours up 50 basis points 24,000 people across its operation in 24 and Consumer Foods up 10 basis points. countries.

Kerry is investing Eur100 million to establish an industry- Consequently, despite currency headwinds Kerry’s ingredients and flavours business leading Global Technology & Innovation Centre in Ireland. and raw material inflationary environaccounts for 71% of group revenue and ment, Kerry has reaffirmed its full year 79% of trading profit. The balance is con- achieved a strong performance across all key earnings guidance of delivering 7% to 11% tributed by Kerry’s consumer foods business, technology platforms, end-use-markets and growth in adjusted earnings per share to a which supplies added value chilled foods to geographies – benefiting from the 1 Kerry range of 250 to 260 cent per share.

Ireland and Great Britain in both the brand- strategic focus and the breadth and depth of ed and private label sectors. group technologies. Sales revenue grew by Growth Through Acquisition 14% on a reported basis to Eur4.2 billion During the first quarter, Kerry has further Global Leader reflecting 3.4% like-for-like growth. strengthened its position in developing marKerry Group is the largest player within the Continuing business volumes increased by kets through the acquisition of Cape Town$50 billion global ingredients and flavours 4% outperforming market growth rates. based sweet ingredient solutions supplier market, which is growing at a rate of 2% to Trading profit grew by 15.1% to Eur506 Orley Foods for an undisclosed sum. The 3% per annum. The market remains highly million.

Orley Foods deal comes a year after Kerry’s fragmented and Kerry benefits from being a Kerry Foods, the group’s consumer foods acquisition of FlavourCraft, also in South scale player with ample scope for further business in the UK and Ireland, increased Africa, and complements the earlier purexpansion through industry consolidation. reported sales revenue by 2.3% to Eur1.71 chase of Cargill’s global flavours business.

Kerry Ingredients & Flavours develops, man- billion, reflecting a decline of 1.5% on a The Orley Foods deal is the latest step in ufactures and delivers innovative taste sys- like-for-like basis. Trading profit was flat at Kerry’s journey to becoming the innovation tems, functional and nutritional ingredients Eur130 million. However, given challenging and development partner of choice for the and integrated solutions for the food, bever- conditions in consumer foods markets in world’s leading food and beverage brands as age and pharmaceutical markets. Its business Ireland and the UK and the difficulty in cost they start to meet fast-growing local is divided into three regions EMEA (Europe, recovery following significant raw material appetites for the next generation of products Middle East and Africa) which accounts for inflation, Kerry Foods performed satisfacto- in the EMEA Region.

39% of sales, Asia-Pacfic (17% of sales) and rily due to continued innovation and investment in the division’s key brands and ongo- €100 Million Investment in Americas (44% of sales). ing business efficiency improvements.

Innovation Financial Performance To support its customers in the EMEA Kerry Group achieved a strong financial per- Promising Start to 2013 Region, Kerry is investing Eur100 million to formance in its last financial year ended 31 Kerry Group has managed to sustain the establish an industry-leading Global December 2012, increasing sales revenue by strong business development and growth Technology & Innovation Centre in 10.3% to Eur5.8 billion and trading profit momentum achieved in the final quarter of Ireland. Located on a 28 acre site at Naas in by 10.8% to Eur555 million. Continuing 2012 into the first quarter of its current County Kildare, the new facility will serve as business volumes rose by 2.8% and group financial year. a key focal point for Kerry’s customer Despite limited growth in some industry engagement activities, providing customers trading margin improved by 10 basis points to 9.5%, with the Ingredients & Flavours categories in developed markets, Kerry’s with access to the group’s complete breadth business up 10 basis points to 12% although exposure to developing markets continues to and depth of technologies, scientific the Consumer Foods division fell by 20 basis provide a platform for sustainable growth. research, innovation and applications experFurthermore, the group as a whole is bene- tise across the food, beverage and pharmapoints to 7.6%.

Kerry’s Ingredients & Flavours businesses, fiting from improved business efficiencies ceutical markets. J

K

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FOOD & DRINK BUSINESS EUROPE, JULY 2013

Kerry Group Chooses Evolution he last eighteen months has been one of considerable expansion T for Evolution Bottling and Packaging Solutions. During 2012 Evolution has rapidly integrated PE LABELLERS into their proposition and the market leading labelling machines represent a significant enhancement to the Evolution product range. In August last year Evolution went on to formalise their relationship with Logics and Controls, cutting edge supplier of inspection systems.

Complementing the expansion of product range the Evolution team has also grown in terms of support functions and is also strengthening its Sales Team.

The full Evolution product portfolio now includes, MBF for all types of rinsing, filling and capping machines; PE LABELLERS for all types of labelling machines; TMG for Depalletisers, Palletisers, Case-packing machines and all end of line machinery; Robino and Galandrino for all capsuling and wire-hooding machines; Logics and Controls for a complete range of advanced inspection systems.

The superior product range combined with the excellent customer service delivered by the up-scaled team at Evolution facilitates the

ability of Evolution BPS to meet a spectrum of customer needs whether an individual machine or a full turnkey solution.

Furthermore Evolution is now fully equipped to apply their very considerable expertise to new sectors including Food Packaging.

This is evidenced in a recent project which has seen Evolution BPS working with PE LABELLERS to supply an Automatic Rotary Self Adhesive Labeller to renowned food manufacturer Kerry Ingredients and Flavours, part of the Kerry Group Plc. The P.E labeller secured for this project is equipped with three self-adhesive labelling stations handling a range of label sizes and positions. The labeller is handling four different PET bottles, one of which has an embossing on the front. The labeller has stepperdriven motor platforms and orientates to the embossed panel using optical sensors.

The PE LABELLERS brand represents innovative technology and quality in the labelling field, manufacturing machines with exceptional quality, reliability, durability combined with limited operating costs. PE satisfy the labelling needs of a variety of sectors ranging from the Soft-drinks to the Food sectors, from Wine to Chemical, from Mineral Water to Pharmaceutical and more, all operating in ever changing markets. PE’s have labelling machinery for all types of label application and at speeds ranging from 2000bph to over 70,000bph. These include in-line as well as rotary machines.

The Evolution portfolio is now fully showcased by their newly launched website, www.evolutionbps.co.uk, allowing customers to find out more about Evolution Bottling and Packaging Solutions, and the extensive range of products and services offered by Evolution to meet the needs of all bottling and food packaging sectors. J FOOD & DRINK BUSINESS EUROPE, JULY 2013

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I HOT MELT ADHESIVES

Alphabond’s AquaPeel® and CleanPeel® Palletising Adhesives Save on Pallet Wrap Costs by at Least 60% ne of the food and drink industry’s O fastest growing suppliers, Alphabond, understands the needs and challenges of

onto plastic bags, tray and shrink packs and corrugated cartons with one grade which

supermarkets and their suppliers better than most, which is why so many leading supermarket chains are turning to the company for specialist adhesive solutions.

Alphabond commits large resources into developing new products that enable its customers to increase operational efficiency, cut machine downtime and maximise profitability.

One of the company’s recent projects was to develop unique pallet stabilisation products with the aim of reducing pallet wrap waste.

Aquapeel application equipment.

David Barkway, the palletising market specialist for Alphabond, says: “New developments from Alphabond mean doesn’t leave any damage on removal of the you can apply our AquaPeel® technology pack and leaves no residual tack on your

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FOOD & DRINK BUSINESS EUROPE, JULY 2013

product.

“Food and drink companies are waking up to the fact that the use of AquaPeel® and CleanPeel® palletising adhesives are able to save a lot of money by reducing pallet wrap by at least of 60%.

“We’ve had conversations with the major supermarkets and we’ve learned that their customers want to go in the direction of sending pallets in with no pallet wrap at all. We’re proud to be working with suppliers and supermarkets to drive packaging waste down, which is fantastic for the environment.

“Some beverage customers who have gone ‘wrapless’ on their pallets, report that out of thousands of pallets sent into supermarket distribution centres, the number of MIT’s (moved-in-transit) has been so negligible that the total number

Cleanpeel sprayed onto tray and shrink.

of cases reported didn’t come to one complete pallet!”

Alphabond have concentrated on the formulation of new technology for this area

and now offer some of the market’s leading products for both hot melt and waterbased solutions.

Alphabond’s CleanPeel® product is packed in the new Mini PillowPack® format eliminating the use of silicone paper wrapped blocks which some competitors use – thus the new pillows go straight in the tank with no unwrapping, no dust or dirt from the warehouse can stick adhesive prior to it going into the glue tank.

Cost savings for those that replaced pallet wrap have been phenomenal – with the cost saving per pack being anything from

0.03/pack – making it very attractive.

David Barkway continues: “Environment impacts are huge too – as companies are often putting on 300 – 400 grams per pallet of wrap, this typically equates to a contribution of 40 tonnes of waste for every 100,000 pallets of end product.”

Alphabond supply the whole package including the Birkstein Otler application equipment.

Alphabond develops high quality adhesive solutions that optimise productivity, presentation and profitability. This approach has proved popular with its customers, who include some of the largest and most profitable beverage and food manufacturers from Europe and Australasia.

Contact Alphabond’s adhesive experts at info@alphabond.co.uk for free advice on finding the best adhesive solution for your application, or visit www.alphabond.co.uk for information. J

Getting to Know the Power of a New Choice new 'game changing' adhesive dispensA ing system program named ChoiceTM was just recently launched by Valco Melton. Unlike other "kit solutions" the Choice program brings true innovation to all users of hot melt application systems.

The ChoiceTM is an airless, high performance, all-electric system that dramatically reduces adhesive usage with the capability to apply a limitless option of perfect adhesive patterns at the working speed needed by the customer. This system pays for itself with hard savings in as little as 3-4 months.

Pneumatic technology is old school.

Although it has been around for a while, it was never accepted by some industries because of its inefficiencies. Because these systems operate using compressed air, they are costly to manufacture and corrosive to the components that use them. Electric valves operate with near 100% efficiency.

The air flowing into the cylinder that operates the piston pump can contain moisture, debris and oil residue.

Eventually this may cause the valve to lose effectiveness and consistency. This problem requires an additional process of replacing small parts, modification of adhesive and more to try and get the system back to its optimum performance ultimately meaning downtime, spare parts and additional adhesive investment. By eliminating all compressed air usage, there is no possibility of contaminants to cause the valve to wear out.

The Choice System can be configured for pattern or stitch with only the press of a button. This option allows the operator to choose the size of the glue dots and the gap between dots without complicated calculation or programming tasks. Valco Melton’s new EcoStitchTM applies the desired stitch pattern based on what is best and required by the end user. The EcoStitch feature can reduce your adhesive usage by up to 75% while allowing you to FOOD & DRINK BUSINESS EUROPE, JULY 2013

operate at lower pressures and larger nozzle orifices. With hard savings on adhesive and parts usage, safer operating parameters and less downtime associated wi-th nozzle plugging, the Choice can be yours.

These are just a few of the immediate advantages that the industry's forefront leaders are seeing following implementation. Learn more about how the Choice System can start bringing savings to your line today here: http:// delivr.com/24zbt. J

31

I BEVERAGES

Glenpatrick Invests to Maintain Competitive Edge Glenpatrick, the Irish drinks producer specialising in retailer house brands and brand co manufacturing, has strengthened its offering following recent investment in new state-of-the-art production lines. onsisting of two companies - Glenpatrick Spring Water and Kilkenny Nutritional – Glenpatrick is the beverage division of the Queally Group, Ireland’s largest privately owned agri-food business. Employing more than 6,000 people, the Queally Group has sales of about Eur1.5 billion and exports 80% of its output to over 45 countries worldwide.

Glenparick has been producing drinks for both global brands and international retailers for over thirty years. Specialising in hot fill and cold fill production, it offers a complete end to end service to customers from recipe formulation in its on-site innovation centre, packaging solutions right through to product manufacturing and delivery. Products include a full range of spring and mineral water offerings, flavoured waters, infant grade juices, kids ready to drink juices, vitamin enhanced flavoured waters, fruity iced teas and 100% fruit smoothies for kids.

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Glenpatrick Spring Water Established in 1987, Glenpatrick Spring Water is located in Clonmel, County Tipperary. The business has expanded by capitalising on its key natural resource – a secure supply of pure natural mineral and spring water, drawn from limestone rocks found beneath the southern slopes of the beautiful and conserved natural heritage area of the Slievenamon Mountain in County Tipperary.

The combination of limestone rock, the overlying protecting layers and the mountainous and remote nature of the recharge area in the Slievenamon Mountain gives Glenpatrick Natural Spring and Mineral Water its unique composition and ensures its continuing natural purity.

Indeed, All Glenpatrick’s water wells are naturally free of harmful bacteria and most importantly must be naturally protected from contamination by surface activities such as farming

preservative products along with sports nutrition drinks, smoothies, baby juices and pharmaceutical based products at the Kilkenny facility.

Glenpatrick provides customers with a complete end -to-end label drinks service for both the food service and retail markets.

The company’s service includes sourcing, recipe development, label design, testing, compliance and full warehouse and logistics support throughout Ireland and the UK. Investment in the Latest Technology In order to stay ahead of the curve with the latest in bottled production technology, Glenpatrick recently installed a new state-ofthe-art Krones production line at its facility in Clonmel.

According to Glenpatrick the new production line, which came on stream earlier this year, will drive the business forward as one of the leading bottle producers in Ireland and the UK in terms of packaging, production and energy efficiencies. By using lightweight packaging, such as 1881 technology and reel-fed labels, Glenpatrick can deliver both environmental and commercial benefits to our customers.

“This investment will allow us to fulfill our vision of being the largest and most efficient bottled water producer in Ireland,” says Kieran Hynes, managing director of Glenpatrick. “The new investment will produce the most energy efficient product available on the market in Ireland and allow for a dramatic reduction

Kilkenny Nutritional Glenpatrick operates a second production facility (Kilkenny Nutritional) located at Piltown, County Kilkenny, which was acquired in 2002 following the purchase of Kilkenny Spring Water. Glenpatrick now produces all its hot filled, free from FOOD & DRINK BUSINESS EUROPE, JULY 2013

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in carbon footprint. The investment has been secured on the back of growth in our domestic water business and is supported by leading retailers operating in the Irish marketplace.”

Due to increasing demand in for pouch products, Glenpatrick has recently installed a second dedicated pouch filler at its Kilkenny facility, to double capacity on site. Working with Gualapack, one of the leading pouch suppliers, Glenpatrick can offer a wide range of sizes with flat cap and bulbous cap (child safety) options. Indeed, Glenpatrick is currently supplying two of the UK’s top retailers with children’s smoothie pouch products, which are proving very successful. Glenpatrick also works within the neutraceutical area offering clean label, preservative free products.

Focus on Innovation Glenpatrick places a major emphasis on innovation and product development and operates a dedicated onsite innovation centre.

The company’s technologists are experts in drink development and flavour technology offering tailored made recipe solutions to meet customer needs. Glenpatrick continually monitors new product launches, market trends and activities to ensure it is able to offer both innovation and blue sky product development. J

KM Packaging’s Fog Buster Film is Clear Winner ood manufacturers across the world can F now benefit from a superior anti-fogging lidding film developed especially for foil trays

by KM Packaging Services. More than 15 years since the introduction of its revolutionary lidding film technology for smooth wall aluminium trays, KM has developed Fog Buster – a premium, optimum performance anti-fog film which offers superb clarity even through multiple temperature variables.

Thanks to their versatility - and ovenready qualities in particular - aluminium trays are one of the most popular packaging solutions used by the food industry, but demand more technically advanced lidding solutions than, say, plastic trays. As well as retaining superior clarity and seal integrity the premium Fog Buster film will help manufacturers to deal with temperature control along the supply chain even more effectively than current solutions.

KM Packaging’s managing director, Charles Smithson, says: “KM already has a 34

product range that offers significant anti-fogging benefits when sealing to foil trays, compared to alternative products on the market.

We have created these products without compromising the seal integrity and security of seal, which we know is what customers value most.

“We have continued to look at ways of improving the anti-fog further, particularly for those customers who wish to use the aluFOOD & DRINK BUSINESS EUROPE, JULY 2013

minium foil tray pack concept for some highly demanding and high added-value food products with which it has traditionally been difficult to maintain lidding film clarity over shelf life. The Fog Buster lidding films have achieved these improvements, thereby allowing the products to look their best on the shelf.”

The Fog Buster range includes high barrier, ultra high barrier and standard barrier ranges, along with a range of thicknesses.

The fog buster range can also be supplied with printing and other benefits such as laser perforation for shelf life extension of vegetables.

KM Packaging revolutionised the ready meals industry with its lidding films for aluminium foil trays and has since continued to invest in new technologies and flexible packaging solutions. For more information contact +44 (0)1832 274944, email contact@kmpack.co.uk or visit www. kmpack.co.uk. J

Webtech Offers a Full Range of Labelling and Sleeving Solutions ebtech (NI) is a privately owned comW pany and has been operating from its Enniskillen facility since being founded in 1989. The company specialises in the production of OPP wrap round labels for the European soft drinks industry and offers fulfilment services to customers in the FMCG market. Webtech can design and manufacture several forms of labels and sleeves to meet market needs and continues to be innovative in its approach to new materials, production processes and quality assurance at its state-of-the-art production facility in Northern Ireland, ensuring its customers are at the leading edge in presenting their brands and products.

Advanced Technology Webtech has invested in the most advanced flexographic printing presses in order to remain at the forefront of its industry. The company’s modern facility houses three high speed, wide-web, solvent flexographic presses, which include Webtech’s latest acquisition - a new 10 colour press. This 10 colour press allows Webtech to offer customers the option of UV eye marks and a range of lacquer finishes, while still having the ability for 8 colour printing.

Webtech’s other presses consist of two wide-web, solvent flexographic 8 colour presses, one of which offers the option of registered reverse printing via the In-setter.

To complement these presses, Webtech has three Ashe slitters and one Titan slitter.

The Titan slitter provides the option of Webtech’s innovative promotional Domino ink jet alpha-numeric coding system with up to 35 characters. Webtech’s equipment portfolio also includes shrink sleeve and stretch sleeve capability as well as the company’s own on-site material extrusion production. The production facility operates on a true 24-7 basis to ensure fin-

ished goods are delivered on time and in full to meet customers’ deadlines.

Webtech has recently installed a new state-of-the-art ERP/MIS production management tool, PECAS. PECAS allows Webtech to automatically track WIP (work in progress) throughout the manufacturing process. This gives Webtech full transparency of the manufacturing process, allowing it to report in real time on the state and position of any individual job at any given time, relaying valuable information to the customer instantly.

Market Leader As market leader in its field, Webtech is the largest supplier of flexographic Reel-Fed labels to the United Kingdom and Ireland. It is currently supplying into Europe and Scandinavia, and has strategic plans for continued growth internationally.

Webtech has an impressive list of international blue chip brands and supplies to all the major supermarkets.

Webtech, along with its customers, has recognised the advantages for companies to move to OPP Labelling and has had great success in converting paper cut and stack

FOOD & DRINK BUSINESS EUROPE, JULY 2013

customers to Reel fed OPP. Application equipment is in operation at much higher speeds with the reduced possibility of web breaks, the tensile strength of OPP allows thinner gauge material to be used giving higher yield of labels and contributes to a lower total product weight, and the brighter, gloss label gives exceptional shelf appeal.

Exceptional Levels of Service In addition to product excellence Webtech offers customers exceptional levels of service. From Sales through Origination to its multi-lingual Customer Services team and transport, Webtech focuses on customers’ needs and continues to follow its strategy of providing class leading services to all its clients.

Webtech’s success today and in the future is based on working with market leading suppliers in all areas of the business and the continual improvement of its people and processes. This is achieved through Webtech’s dedicated team, its specialist materials, its class leading equipment, operating standards and continual investment in people and equipment. J 35

I LABELLING

New AP550e Flat-Surface Label Applicator Applies Labels to Bottles, Boxes, Packages, Bags and More rimera Technology, the manufacturer of P specialty printers, has announced its new AP550e Flat-Surface Label Applicator.

AP550e is a semi-automatic label applicator that makes it fast and easy to precisely apply product and identification labels onto a wide range of flat surfaces such as rectangular or tapered bottles, boxes, packages, bags, pouches, lids, tins and much more.

Labels are applied straight, without wrinkles or folds, in exactly the location desired.

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This gives finished products a highly professional look and significantly increases the number of containers that can be labeled per hour versus manually applying labels.

Operation is simple: place the container in the mechanism and pull the arm to the container.

Variable spacing, memory for up to nine jobs, and a counter with built-in LED display are all included. No air-pressure supply is required which can be a significant advantage over other label applicators that require expensive, noisy and maintenance-prone air compressors.

AP550e is the perfect accessory for labels produced by Primera’s popular LX- and CX-Series colour label printers and digital label presses. Together, they provide a complete print-and-apply solution that’s ideal

FOOD & DRINK BUSINESS EUROPE, JULY 2013

for a wide range of manufacturers and distributors. Roll or fan-fed labels printed by other methods such as flexographic, offset and thermal transfer can also be applied with the applicator. For ro-und containers such as bottles, cans and jars, Primera also offers its popular AP360e and AP362e Label Applicators.

The AP550e is available from Primera’s Authorized Resellers and Distributors in more than 179 countries.

Primera will be showing the new Label Applicator, along with its full range of short-run colour label printers and applicators, at the Speciality & Fine Food Fair in London, September 8-10, 2013 at stand 217.

Complete product details are available at www.primeralabel.eu. J

I PACKAGING DESIGN

Perfect ‘Pick Me Up’ For Jimmy’s Iced Coffee business owner, who developed his pasA sion for coffee into a thriving new enterprise, has teamed up with DS Smith Packaging to develop retail ready packaging (RRP) to create the perfect “pick me up”.

The product, available from leading retailers, deli counters and forecourt locations, aims to add flavour and shake up the ‘grab and go’ category.

The collaboration has resulted in a high quality flexographic printed retail ready pack, which is colour coded to help the shopper navigate the range. Replacing a former plain white RRP, the new pack is made using DS Smith’s R-Flute® material, which offers a flatter, better surface for printing and presen-

tation, a crucial advantage for more and more customers as they seek brand appeal and sales success with shoppers.

Jim Cregan, founder and director of Jimmy’s Iced Coffee explains: “We started working with DS Smith at the start of the year and have been really pleased with the results as the pack has gone down very well with our buyers. Working with DS Smith has really enhanced our appreciation of the importance of secondary packaging and its role in the product development process. It’s important that the product is presented on the supermarket shelf in the best possible way.

Becky Tompkins, UK Marketing Manager (Packaging), DS Smith Packaging

commented that “we are delighted Jimmy’s chose to partner DS Smith with this development. Through the skill of our people and the PackRight business tools, DS Smith has the right recipe to produce RRP that supports sales success in store. We Make Ideas Happen.’’ J

Award-winning RRP For Cadbury Brand S Smith Packaging and Mondelïz D International worked in close collaboration on the design of an award-winning retail ready pack (RRP) which offers a multitude of in-store benefits as well as cost and carbon savings throughout the supply chain.

The DS Smith Packaging Belper team created a unique dispenser unit for Cadbury’s Pic or Mix brand, offering impact and differentiation on shelf from other products in the category. Winning Gold at the UK Packaging Awards, the pack ticked all the boxes for retail ready packaging (RRP). The fully recyclable pack incorporates a dispensing drawer which displays a variety of product. Using marketleading digital technology the design

employs a striking 5 colour flexo print which provides strong shelf stand-out, transforming it into an eye-catching stand-

alone point-of-sale (POS) unit.

Creating strong brand presence in-store is pivotal to the success of any-brand holder, but the benefits don’t stop there. The main structure remains consistent throughout the range, minimizing the use of material. Easy open ability and clear, step-by-step opening instructions printed on the pack allows for quick replenishment.

Judges felt that this pack was “excellent” and a “great concept, very well executed with strong branding”. Tony Foster, Sector Director at DS Smith Packaging, says: “The end result involves design innovation, creativity and awareness of the environmental impact of both the product and the process behind it.” J

Success For DS Smith Packaging at EFIA Print Awards Packaging has been recognised DSat Smith the European Flexographic Industry

Neil Jones (Bobst UK), David Richardson (MD, DSSP Belper),Glenn Metcalfe (South West print Development Manager, DSSP South West) and Stan Boardman (comedian and host for the night).

Association (EFIA) Print Awards, for innovative print developments of its packaging created for the food and drink sector. A total of 10 honours were awarded to DS Smith Packaging on the night, including six to the Clay Cross site, three to Bristol and one to Devizes.

The high tally of awards includes two gold; one for the design of a three-pack shipping case for Wrigley’s Starburst, and the second to Wells & Young’s for a Courage Directors Ale pack. The Silver accolade collected for the Irish Country Meats pack was followed by a bronze for both Nestlé’s Kit Kat Chunky and Wells & Young’s for Double Chocolate Stout.

FOOD & DRINK BUSINESS EUROPE, JULY 2013

Tony Foster, Sector Director at DS Smith Packaging, says: “The EFIA awards are great recognition for our hard working teams in the UK.” “Our innovations in developing materials such as R-Flute®, as well as investment in print technology, machinery and people training ensure that our products and services are always improving. This means that we can present our customers’ brand and their products in store in the best possible way, through the provision of the very best retail ready packaging, consumer packaging and point of sale materials, ultimately meaning that we help them to sell more.” J 37

The Role of High Pressure Processing in Beverage Innovation

By Errol Raghubeer, Ph.D., Vice President Microbiology & Food Technology, Avure Technologies s consumers trade in their traditional A carbonated soft drinks and fructoseladen juices for alternative beverages that are “healthy,” “fresh” and “all natural,” the global beverage industry has responded with countless innovative products – and increased competition in this rapidly growing market. It’s not surprising that for beverage manufacturers, one of the top three expected key changes in business structure is to “expand in emerging markets.”*

smoothies (Figure 1), nut milks and other blends meet the FDA 5-log pathogen reduction requirement as well as those of other countries. In the beverage industry HPP is a post lethality treatment in the final package that can be incorporated as a critical control point (CCP) in a HACCP program to ensure food safety.

Figure 1.

This demand for the convenience and health benefits of fresh all-natural juices and other beverages comes hand in hand with consumer expectations that these products be safe and maintain their sensory properties.

Pathogen Elimination, Nutrition and Flavor Retention, Shelf-Life Extension

Heat treatment and other processes have adverse effects on taste, color, and significantly affect vitamins and other bioactive compounds. One of the biggest advantages of HPP in the beverage industry is that the nutrients remain largely unaffected and most sensory properties remain unchanged.

Additionally, beverage manufacturers using HPP can offer natural products to their customers as there is no need for preservatives to control pathogens and spoilage microorganisms.

Beyond flavor profile and retention of nutritional value, such as Vitamin C, folic acid, niacin, and antioxidant content, (Figure 2), HPP can extend refrigerated shelf life to several months

High Pressure Processing (HPP), a mainstream pre- or post-package process, maintains the fresh taste and nutrition properties of fresh juice. With HPP, fresh juice product is subjected to very high pressures (up to 87,000 psi), for short exposure times to achieve the inactivation of foodborne pathogens such as Salmonella, E. coli O157H:7, Listeria monocytogenes and Cryptosporidium parvum, and spoilage organisms, including yeast and mold.

The results of published studies and those by Avure Technologies confirmed that the use of HPP on fresh juice, and other beverages made from fruit-vegetable blends, fruit and yoghurt combinations and Figure 2.

FOOD & DRINK BUSINESS EUROPE, JULY 2013

depending on product formulation and packaging. Longer shelf life translates to increased distribution opportunities, reduced returns, greater tolerance to cool chain abuse, and more efficient production scheduling.

Retail Opportunities For Fresh and Handcrafted Beverages With HPP

Shelf-life extension being offered by HPP is causing retailers, like Whole Foods, to take delivery of natural and nutritious beverage products created by smaller, boutique beverage purveyors that address their shelf-life needs as well as those of their customers. The profit margins to be achieved with high value beverage products are welcomed by larger retailers fighting for the beverage dollars being spent in juice and smoothie shops on street corners in nearly any locale today.

Take the example of Vegesentials, a U.K. company founded by Managing Directors Patience and Andrew Mugadu, to blend and market their line of fresh, all natural, super-vegetable juices and smoothies. Scaling up to meet retail demands meant facing the challenge of how to make a commercially viable product without losing fresh, homemade flavor and inherent nutrition.

With HPP, Vegesentials juices deliver exceptional fresh taste with complete nutrient retention that stay fresh longer – in some cases for as much as 30 days – and have been picked up by Whole Foods and other retailers, something that would not otherwise have been possible.

To learn more about Avure High Pressure Processing Solutions, go to www.avure.com/food, watch “The Science of HPP & Beverage Innovation” (info.avure.com/foodbevbiz), or call +1.614.891.2732. * Source: Global Beverage Survey 2013-2014: Market Trends, Buyer Spend and Procurement Strategies in the Global Beverage Industry. J 39

QUALITY

& HYGIENE

I FOOD SAFE LUBRICANTS

Enhancing Maintenance Through Lubrication Expertise roactive lubrication management as part P of a preventative maintenance programme is crucial to the success of any organisation that is operating machinery.

Effective operation with extended lubricant life and lubrication intervals enhances safety with the equipment being returned to less often.

The benefits can be far-reaching and have a genuine impact on the bottom line,

especially when advanced lubricants are combined with a comprehensive lubrication management and training programme.

The experience of Kluber Lubrication customers is one of enhanced reliability, reduced lubrication frequency and enhanced safety. One aspect of this enhanced safety is the recently implemented ISO21469 international registration standard for the production of lubricants.

ISO21469 sets the standards bar higher for the production of lubricants. This demands greater involvement with the end user customer and higher standards of production from lubricants manufacturers than ever before assuring safety and reliability in lubricants beyond H1; Kluber Lubrication has the broadest range of ISO 21469 registered products with over 150 registered.

KlüberEfficiencySupport delivers these

exceptional lubricants in a package designed to manage lubrication across site.

Ensuring the right product in the right place at the right frequency and volume minimises lubricator tasks minimising personal risk. Add this to typical 10% reduction in lubricants used, customer measured significant reductions in power consumption and not only is safety the right thing, it’s the economic choice.

With the unrivalled expertise and experience in lubrication management offered

by KlüberEfficiencySupport linked to the highest standards of production and product quality, Kluber Lubricants are an integral part of machine safety and reliability. J

New PURITY FG Sprays From Petro-Canada Help Plant Managers Protect Hard to Reach Places etro-Canada Lubricants, the makers of P PURITY FG lubricants, has launched a new line of sprays. PURITY FG Sprays provide a solution for lubricating hard to reach areas, allowing food processors to apply the same high standards of food safe, plant tough lubrication throughout their facilities. These new PURITY FG Sprays were developed to spray as effectively when the container is held upside down as right side up, making application easier and more thorough “With the introduction of sprays to our family of PURITY FG lubricants, we’re able to offer manufacturers a full line of food safe, plant tough lubricants to protect their machinery safely and effectively from top to bottom,” says Petro-Canada’s Christie Longhurst, Category Manager Food Grade Lubricants.

The PURITY FG Spray lineup features three new products: PURITY FG Penetrating Oil, PURITY FG Silicone Spray and PURITY FG2 with Microl MAX Spray grease. Many of the PURITY FG lubricants start with Petro-Canada’s 99.9% pure base oils and all are specially formulated to deliver industrial strength protection in even the most severe operating conditions. Collectively, PURITY FG lubricants provide longer lasting protection, excellent wear performance, and when it comes to greases, high resistance 40

against water washout. And like all PURITY FG lubricants, the new sprays fit perfectly into the HACCP system (Hazard Analysis and Critical Control Point) and GMP plans (Good Manufacturing Practice).

“Employing food grade products like PURITY FG lubricants and sprays across their full facilities provides manufacturers with peace of mind, knowing their equipment is properly protected, and products are safe for consumers,” says Christie Longhurst.

“At the same time this level of protection also helps them to meet or even exceed today’s growing regulatory demands.”

Complete food grade protection from a single source like PURITY FG lubricants can save manufacturers the time and hassle of searching for and dealing with multiple suppliers. Just ask Keith Manning, Lubricant Engineer at Muller Dairy “Switching to Petro-Canada as our sole lubricant provider minimized our lubricant stock holding, resulting in immediate cost reductions,” says Keith Manning. “With everything coming from one supplier, our logistics became much easier to manage.”

Food manufacturers can get more information about the new PURITY FG Sprays and the full PURITY FG product line at www.purityfg.com. J

FOOD & DRINK BUSINESS EUROPE, JULY 2013

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New Detectability Makes FOODLUBE® Safest Ever eading UK food-grade lubricants manufacturer ROCOL L has introduced innovative caps and actuators on aerosol spray cans in the FOODLUBE range to help reduce the risk of foreign object contamination during food and drink processing.

Building on its long-standing NSF registration for FOODLUBE and its corporate ISO 21469 certification, both of which offer crucial safety assurances about lubricant formulation, the company has now become the first in the UK to add DETEXTM metal detectable plastic actuators and caps on all aerosol cans.

This means that, unlike traditional aerosol packaging, all caps and actuators on FOODLUBE packs can be identified using standard metal detection and X-Ray equipment should they become loose in food and drink processing areas.

The patent-pending DETEX caps and actuators are themselves manufactured from safe materials deemed acceptable by the US Food and Drug Administration for use in food processing plants.

ROCOL marketing manager Joanne Ferguson says: “The addition of DETEX caps and actuators represents another important step in helping food and drink processors avoid costly downtime, product recalls and the risk of reputational damage.

“We are continuously looking at new ways to help address safety risks, and this includes utilising new technology like DETEX wherever possible. Our corporate strength as part of the global ITW Group gives us privileged access to developments of this kind.”

FOODLUBE products are available for a wide range of applications across processing plants in the food, drink and clean industries. Individual lubricants are all NSF H1 registered, which means they have been independently assessed and deemed safe for processing equipment used to produce food and drink for human consumption.

Find out more about the FOODLUBE range at www.rocol.com/foodlube. J FOOD & DRINK BUSINESS EUROPE, JULY 2013

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I CONFECTIONERY

Lily O’Brien’s Chocolates Reaffirms Premium Positioning Established 21 years ago, County-Kildare-based Lily O’Brien’s Chocolates has developed into one of Ireland’s best-loved premium chocolate manufacturers with a strong export business. ily O’Brien’s Chocolates is the brainchild of Mary Ann O’Brien, who equipped with little more than a wooden spoon, two saucepans and her passion for chocolate, began making chocolates from her kitchen and quickly gained a reputation as a wonderful chocolatier and budding entrepreneur.

Lily O’Brien’s, named after Mary Ann O’Brien’s eldest daughter, now employs 110 full time staff, achieved a turnover of Eur18.7 million in 2012 and produces up to 60 tonnes of chocolates per week from its repertoire of over 180 different chocolate recipes. The company operates from a 36,000 sq ft production facility, which was expanded in 2010 to incorporate a state-ofthe-art, high risk desserts factory producing gourmet desserts for the food service sector.

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Product Range The company creates a wide range of chocolate products for both the retail and food service sectors. Within the retail sector, the main focus is on products for gifting and sharing, including a wide variety of seasonal product lines such as handcrafted novelties at Christmas and chocolate eggs at Easter.

Within the range for food service are individually wrapped portions of some of the company’s signature chocolate recipes, as well as 2 choc boxes, cookies, and a new gourmet desserts range, which was launched in late 2010. Customers within

the food service sector include top international hotels, airlines, rail customers and cafes.

Positioned as an ‘affordable luxury’ within the premium chocolate confectionery category, the Lily O’Brien’s brand offering includes a variety of gifting, sharing and impulse pack formats, with the highest proportion of turnover generated by seasonal gifting through the retail channel.

Brand Strength “The one umbrella which unifies the range across channels and markets is the brand which remains consistent in its premium positioning and presentation,” points out Suzanne Walsh, marketing manager of Lily O’Brien’s. “The strength of the brand’s offerings, depth of range and the effectiveness of its promotional strategy are evident in its ranking as Ireland’s top performing indigenous chocolate brand within the premium confectionery category, with consistent 15% market share.”

Indeed, with 75% of the company’s annual turnover now generated through exports, Lily O’Brien’s has grown into a truly international brand. Current export markets include the United Kingdom, USA, Australia, New Zealand, Denmark, Sweden, Norway as well as parts of Asia and the Middle East. Although committed to building its brand, the company engages in limited private label manufacturing for export customers.

Challenges Like other manufacturers operating globally, Lily O’Brien’s has faced a number of challenges precipitated by the recessionary conditions in many of its markets.

“Consumers have increasingly sought value through shopping around and becoming increasingly promiscuous with their purchase behavior, while retailers have engaged in price competition to the point where all value has been removed from many categories,” says Suzanne Walsh. “However having survived the past number of years there is a sense of recesFOOD & DRINK BUSINESS EUROPE, JULY 2013

sion fatigue setting in and we believe that retailers have realised than instead of pursuing price cuts, they need to be restoring value and equilibrium across their businesses. Equally consumers are beginning to return to brands they trust, particularly for treating and gifting.”

Brand Re-Launch She continues: “Lily O’Brien’s re-launched its entire range in January 2013, improving its chocolate recipes, moving toward more classical premium packaging and adding value back into the customer journey. Our future remains within the premium sector of the confectionery category and we wanted to re-affirm our positioning with a strong statement of intent for the coming years.”

The brand re-launch has been supported by an unprecedented level of marketing communications activity including public relations, national radio advertising, instore tastings and sponsorship of the Big Egg Hunt in aid of the Jack and Jill Foundation. The Jack & Jill Foundation is an Irish children's charity set up in 1997

by Jonathan Irwin and his wife, Senator Mary Ann O'Brien, managing director of Lily O'Brien's.

In addition, the company has exhibited at key trade shows across Europe to showcase the new range to international buyers, a strategy that has proven extremely successful in securing new business for 2013/2014. J 43

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DAIRY

Important Year For Dairy Crest Following the £341.1 million disposal of its St Hubert French spreads business, Dairy Crest is now focused on the UK where it continues to grow added value sales and improve efficiency across the business. urchasing about 2 billion litres of milk annually, Dairy Crest is the leading UK-owned dairy foods company. It operates across three product categories – Cheese, Spreads and Dairies. Being a broad dairy business with strong brands has been a major strength for Dairy Crest in the current economic climate as a poor performance by the Dairies division, which is one of the UK’s major suppliers of liquid milk to retailers and the doorstep market, has been off-set by the group’s other activities in Cheese and Spreads. Dairy Crest’s medium term strategy is to improve the performance of its Dairy division through efficiency improvements delivered by a £75 million capital expenditure programme over three years, while continuing to build on the success of its branded foods business. A medium term target of 3% return on sales has been set for the underperforming Dairies division.

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Financial Performance Dairy Crest reported a 7% increase in adjusted profit before tax to £50.6 million on revenue from continuing operations down 8.8% to £1.38 billion for the year ended 31 March 2013. The reported profit before tax was a loss of £0.4 million as a result of exceptional items, including exceptional charges of £56.5 million relating to restructuring.

Dairy Crest operates across three product categories – Cheese, Spreads and Dairies.

Dairy Crest increased segment profit excluding St Hubert by £0.7 million to £69.3 million. Cheese profits recorded a small decrease to £33.3 million, reflecting increased costs of milk in 2011/12 translating into higher cost of sales in 2012/13.

Mark Allen, chief executive of Dairy Crest.

Spreads profits increased by £2.5 million to £25.7 million due to the benefit of cost savings initiatives and lower vegetable oil costs.

Dairies profits of £10.3 million were effectively flat year-on-year, with the benefit of on-going cost savings being offset by the impact of residential decline and the higher cost of raw milk.

The fall in group revenue was chiefly due to lower sales in the Dairies business, following the decision to reduce sales in the middle ground and the closure of the Fenstanton and Liverpool dairies, coupled with the ongoing reduction in residential sales.

Spreads revenue also decreased but Cheese revenues increased slightly. Dairy Crest’s Clover and Country Life spreads brands both gained market share during the year and Cathedral City (the UK’s leading cheese brand) grew ahead of the market.

Dairy Crest’s focus on innovation is continuing to drive added value sales - 5% of total revenue and 9% of key brand revenue is now generated from products introduced in the last three years. Ongoing efforts to improve efficiency and cut costs across the group resulted in annualised cost savings of£23 million in 2012/13, with a further £20 million identified for 2013/14.

Restructuring The sale of St Hubert has resulted in a UKfocused business which has subsequently been reorganised by the removal of diviFOOD & DRINK BUSINESS EUROPE, JULY 2013

sional operating and management structures. The cash proceeds have allowed Dairy Crest to restructure its debt after the year end and make a one-off contribution to the pension fund as well as retain capacity for future investment in the UK business.

For example, Dairy Crest is reported to be considering investing over £35 million in the construction of a new whey processing facility to increase the value added aspect of this area of its business and to be able to compete in the fast growing and high margin sports nutrition and infant nutrition markets. ”This has been an important year in the history of Dairy Crest. The sale of our French spreads business and subsequent restructuring of our balance sheet has strengthened our financial position and leaves us well placed to invest for growth in the UK, either internally or through acquisitions,” comments Mark Allen, chief executive of Dairy Crest, “In line with our long term strategy we have continued to manage proactively the business and remain focused on driving efficiencies. Taken together, our four key brands have increased their market share in the face of falling UK consumption. We have also started to restore profits in our Dairies business.”

He continues: “Dairy Crest is today a more streamlined business, and all three of our product categories have encouraging medium-term profit growth prospects.

Whilst we expect the consumer environment to remain subdued, we have strong foundations in place and trading in the current financial year has started in line with our expectations.” J

A medium term target of 3% return on sales has been set for the underperforming Dairies division.

45

I LEAN MANUFACTURING

Lean – New Horizons and New Challenges ood industry practice over the past 30 G years has shown that major efficiency gains can be achieved through the application of a Lean Manufacturing strategy.

However, global economic pressures show few signs of abating and manufacturing companies who may already be implementing Lean are responding by looking for ever new ways of managing ongoing cost pressures and operating constraints.

Gill Bowen, MPL Group Managing Director, observes that, amongst MPL clients, margins are being squeezed in the FMCG space with shorter product refresh cycles, lower volumes and margin pressure.

Consequently brand owners are seeking to streamline their operations to focus only on those aspects of their manufacturing process which generate core value. Other activities can be outsourced. This is giving rise to a new era of mobile, often agencybased labour, co-manufacturing and copacking partnerships and outsourced logistics.

This brings an excellent new opportunity to drive cost out of the manufacturing and delivery chain and increasing flexibility improves competitive position. Lean provides a strong methodology to make the entire process efficient, but this new world brings further challenges. How to control, implement and sustain process management across multiple links that cross different geographic locations and even different companies? Service level agreements between different links in the process chain need to be created and managed. How to make this chain fluid and flexible while still maintaining tight control?

One of MPL’s clients, an international confectionery manufacturer, uses large 46

pools of temporary labour to meet varying demand and to remain agile in a diverse group of operations under one corporate umbrella. Their challenge is to manage this pool of labour to ensure the right level of skill is available at the right time in the right place, whilst trying to manage the agency costs to whom the labour supply is contracted This involves a connectivity of international management and local operations planning coupled with traditional lean techniques to gain the greatest efficiency of labour. Implementing a labour planning system that couples the production to the agency supply has already resulted in cost savings of a seven figure sum in only a few months.

Another MPL client is a major manufacturer of snack products who wish to focus their operation on their core competitive advantage of a special form of baking. On that basis they are in the process of outsourcing non-core expertise to co-packing and co-manufacturing organizations that gain advantage through volume operations.

This entails the need to implement end-toend service level agreements and KPIs across multiple sites and several companies.

MPL is working with both the insource and outsource elements of this chain to extend well proven Lean techniques across the boundaries supported by the power of its web based Advanced Lean Driver software platform. KPI measures developed from the short interval control process will become critical commercial factors in measuring the performance of this chain.

Alan Edwards, an MPL Director, has been working with a major fresh food manufacturer to create a management level set of common KPIs across a diverse business where plant consolidation and business margin improvement are core strategies.

Traditionally each plant has run an efficient operation targeting OEE as the core measure of performance. The challenge is that this KPI is constructed slightly differently for each operation and this makes comparison challenging. By using a common measurement methodology and linking the KPIs through a common web connected platform, this enables management to become more agile and to start to connect FOOD & DRINK BUSINESS EUROPE, JULY 2013

operational KPIs with the more general business led measures of profitability. With an increasing presence of Private Equity ownership in the industry where investment teams are often more focused on financial results than long term allegiance to a specific project, the need to develop a common language is essential for communications.

Beyond Lean itself and the technology used to capture and move information between operational elements, there also becomes a strong people behavioral challenge. Dr Peter Bowen, MPL founder and a three-decade veteran of deploying Lean techniques, points out that establishing a common purpose across these diverse elements of the manufacturing chain is a key challenge. Improving the Lean coaching cycle and implementing easy to use mobile tools will become critical elements to making this aspect work.

Over the past 28 years MPL, through its 400 plus client projects, has witnessed the evolution of Lean into a stable and reliable strategic tool to reduce cost and drive efficiency. Ex Microsoft veteran Graham Brant has recently joined the MPL team to lead the development and deployment of Lean-based web platforms. Graham is working with clients to embrace latest anytime/anywhere information technologies using cloud based web enabled tools.

These are now extending the proven power of Lean methodology across organizations and between different companies.

Working with its clients, MPL is delivering a new style of manufacturing operating system. This platform is able to deliver the flexibility and most importantly the sustainability that is necessary to support business in today’s fast evolving FMCG environment. J

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Heineken Sells Finnish Brewery For €470 Million to Unibrew Heineken is selling Oy Hartwall, its Finnish multi-beverage business, for Eur470 million to Danish Royal Unibrew.

The transaction is expected to close in the fourth quarter of 2013 at the latest and is subject to customary closing conditions, including anti-trust approvals.

Heineken and Royal Unibrew have also agreed on the principles of extending their existing partnership to the effect that, for the next ten years, Royal Unibrew will obtain a license to brew Heineken beer for Finland, Estonia, Latvia and Lithuania. At the moment Royal Unibrew already brews the Heineken brand in Denmark and distributes the brand in the Baltic countries. In addition, Hartwall will remain the exclusive distributor of Heineken's global and international brands in Finland, including Sol, Strongbow, Newcastle Brown Ale, Krusovice and Murphy's Irish Stout, and will continue to brew Foster's beer under license in the country. Heineken acquired Hartwall as part of the Scottish & Newcastle transaction in 2008.

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

Royal Unibrew operates as a leading regional player in a number of markets in Western and Eastern Europe, including Denmark, Germany, Italy, Lithuania and Latvia. In 2012, the company posted revenue of DKr3.4 billion (Eur455 million) and sold 5.4 million hec-

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tolitres of beer, malt and soft drinks. The group, which is based in Faxe, Denmark, has around 1,600 employees.

Unilever Increases Stake in Indian Business Unilever has acquired 14.8% of Hindustan Unilever for Eur2.45 billion to increase its stake in the Indian business from 52.5% to 67.3%. Unilever’s voluntary open offer had aimed to increase its stake in Hindustan Unilever up to 75%.

Hindustan Unilever is a market leader in the fast moving consumer goods business in India, with brands spanning categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers. The business generated over INR270 billion (Eur3.8 billion) turnover and net profit of over INR38 billion (Eur0.5 billion) for the financial year ending 31 March 2013.

Diageo Now Major Shareholder in India’s Leading Spirits Company Following the acquisition of a further 14.98% stake in United Spirits Ltd (USL) for £344.2 million from United Breweries (Holdings) Ltd (UBHL), Diageo is now the major shareholder in the leading spirits company in India with a total shareholding of 25%.

Diageo purchased an initial 10% stake for £249.3 million in May 2013. Diageo has invested a total of £594.4 million in acquiring 25% of USL. This represents a 18x multiple of USL’s EBITDA for the year ended 31 March 2013 and the transaction is expected to be eps accretive in year 2 and economic profit positive in year 5 assuming a 12% WACC. Diageo has funded the acquisition through existing cash resources and debt.

Ivan Menezes, chief executive of Diageo, comments: “Through this acquisition we have transformed Diageo’s position in India, a market which is one of the biggest growth

opportunities in our industry.

India will become one of Diageo’s largest markets and with its increasing number of middle class consumers looking for premium and prestige local spirits brands as income levels rise it will also become a major contributor to our growth ambitions.”

The board of Britvic has rejected the proposal and has agreed with AG Barr to terminate discussions.

Britvic's chairman Gerald Corbett says: “Under Simon Litherland's leadership, our performance has significantly improved and this, combined with the £30 million cost reduction plan and accelerating international expansion, means that our future is bright. The execution and delivery of this is now the absolute priority of the Britvic team.”

Chinese Group Takes 20% Stake in French Dairy Business

Ivan Menezes, chief executive of Diageo.

Britvic and AG Barr Terminate Merger Discussions UK soft drinks producers Britvic and AG Barr have decided not to proceed with a possible merger even though the proposal had received clearance from the Competition Commission. According to Britvic, it received a new proposal from AG Barr for a merger with a shareholder ratio for the combined business of 65% Britvic 35% A G Barr, which represented only a small improvement on the previous terms as announced in November 2012 and was at a considerable discount to the current market capitalisation ratios of the two companies.

Gerald Corbett, chairman of Britvic.

FOOD & DRINK BUSINESS EUROPE, JULY 2013

Biostime International Holdings, a supplier of pediatric nutritional and baby care products in China, is acquiring a 20% stake in French dairy group Isigny Sainte Mere for Eur20 million. ISM will use the investment, as well as financing from other sources, to build a new infant formula production and packaging facility, so increasing its total infant formula capacity up to 50,000 tons by 2016. Biostime has

agreed to purchase 18,000 tons of finished products per year from ISM. The co-operation between the two companies began in 2011, when ISM started supplying infant formula to be distributed by Biostime in the Chinese market from milk sourced from the Normandy region of France.

ISM processed about 250 million lites of milk and had a turnover of approximately Eur250 million in 2012, with around 42% of output exported. ISM currently employs 708 people, and was the first company to implement full spray47

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dry technology in France.

Biostime’s product portfolio includes premium probiotic supplements for children, infant formulas and dried baby food products marketed under the brand name of Biostime, and baby care products marketed under the brand name of BMcare. Biostime has been listed on the main board of the Stock Exchange of Hong Kong since December 2010.

Grupo Osborne Expands in Brazil Grupo Osborne, the Spanish food and beverage group, has purchased 51% of Natique, a company founded in 1996 and engaged in the production and marketing of cachaca and vodka in Brazil. The purchase of a majority stake in Natique for an undisclosed sum enables Osborne to gain a competitive

position within the Brazilian spirits industry.

Owner of brands such as Cinco Jotas, Sanchez Romero Carvajal, Anís del Mono, Veterano, Magno, Carlos I and Montecillo, Grupo Osborne had net sales of Eur222 million and an EBITDA of Eur32.5 million in 2012. The beverage unit represents 78% of the group’s business.

Campari Expands in Asia Pacific Italian drinks group Gruppo Campari has agreed to pay A$20 million (Eur14.2 million) to acquire Copack Beverage, a leading contract beverage packer in Australia. Copack specialises in can and glass packaging and is currently used by Gruppo Campari for its ready-to-drink sourcing. The acquisition fur48

ther strengthens Gruppo Campari’s international supply chain capabilities and provides the opportunity to support future growth in the AsiaPacific region.

In 2012 the Australian market accounted for 6.1% of

Gruppo Campari’s net sales.

Gruppo Campari established its own marketing and sales organisation in Australia in 2010 following the 2009 Wild Turkey purchase, the largest acquisition ever completed by the group.

Gruppo Campari currently owns and operates 15 plants in nine countries - Italy (four facilities), Greece, Scotland, Ukraine, Jamaica (three facilities), Mexico, United States, Argentina, Brazil (two facilities).

It also owns and operates four wineries - three in Italy (Sella & Mosca, Teruzzi & Puthod and Enrico Serafino) and one in France (Lamargue).

Emmi Acquires Italian Dessert Manufacturer Swiss dairy group Emmi is acquiring Rachelli, a company

based in Pero Milano, Italy, for an undisclosed price. Rachelli manufactures and markets topquality speciality desserts, which are sold in more than a dozen countries. This acquisition will allow Emmi to reinforce its position as a leader in the European market for Italian speciality desserts and to strengthen its expertise in a niche market with steady growth rates.

Following the acquisition, the desserts will continue to be produced in the Milan region and Rachelli will continue to operate largely independently in the market. The management team will remain in the company.

Urs Riedener, chief executive of Emmi.

Dairy Crest Further Reduces Exposure to Middle Ground Milk Market Dairy Crest Group, the leading UK-owned dairy foods company, is to sell its depot-based milk delivery business in the

FOOD & DRINK BUSINESS EUROPE, JULY 2013

North West to Creamline Dairies for £1.15 million. The sale will further reduce Dairy Crest’s exposure to the ‘middle ground’ milk market. Deliveries to residential and middle ground customers in this region have become less profitable following Dairy Crest’s closure of its Liverpool dairy last year.

Mark Allen, chief executive of Dairy Crest, comments: “The proposed sale is in line with our strategy to reduce our exposure to parts of the middle ground market which do not provide us with an appropriate financial return. It would be another step on our journey towards restoring our Dairies business to a 3% operating margin in the medium term.”

Origin Enterprises Disposes of Marine Proteins and Oils Interests Origin Enterprises, the agri-services group, has agreed to dispose of its 50% interest in its Marine Proteins and Oils joint venture, Welcon Invest, to its joint venture partner Austevoll Seafoods for a cash consideration of NOK740 million (Eur93 million).

Origin and Austevoll formed the Welcon joint venture in February 2009 following the merger of their respective Irish, UK and Norwegian fishmeal and fish oil operations, creating a European player in the manufacture and distribution of marine based feed ingredients.

The proceeds from the disposal will be used ultimately for investment in Origin’s core agri-services business. The AgriServices business through its manufacturing and distribution operations in Ireland, the United Kingdom and Poland has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients.