UK-based pork producer Cranswick is showing good growth in a challenging grocery market, with profits before tax (PBT) of £49.3m, according to assets management company Investec.

A report issued by Investec revealed Cranswick had continued to invest in assets, drive efficiencies and produce capacity for future growth. As a result, said Investec, Cranswick started the full year with a good “underlying revenue momentum”, which could stand it in good stead for more progress throughout the year.

“Pork remains an attractively priced protein and this has helped boost consumption by 2% per capita, but Cranswick has gained further share to post organic revenue growth of 7%,” the report said.

Cranswick’s interest costs fell this year and reflected its reduced net debt, which also fell by £2m to £20m. The group also made an important purchase of East Anglian Pigs (EAP) a fortnight ago, which was predicted to cost £13m including cash and debt. Investec said this purchase strengthened Cranswick’s supply chain, making it more secure.

Investec said: “The outlook for full-year 2014 looks solid. With new business added in Q4, sales momentum is good and we expect revenue to increase to around £940m from £875m. We are prudently forecasting margins are held at 5.7%. In theory, the acquisition of EAP should be margin-accretive, but pig prices are rising again – currently sitting just below 163p/kg, a new all-time high.”

As a result, it increased its forecast for 2014 by £400,000 from £52.5m PBT to £52.9m.

Recloseable packaging and microwaveable plastic trays were named top packaging breakthroughs that most impacted peoples’ lives over the last 25 years in an on-line survey hosted by DuPont. Together the two categories of invention captured 48 percent of the votes. The online survey was available to industry professionals from Apr. 9 through May 10, 2013.

Recloseable packaging, which includes food-storage zipper locks and stand-up pouches, earned 27 percent of the votes. Microwaveable meals, enabled by “oven-able” packaging materials, captured 21 percent of the votes. Recycled content in consumer, industrial and community programs that support social goals earned 18 percent of the votes.

“Over the 25 years, the DuPont Awards for Packaging Innovation has attracted a wide variety of truly innovative packaging developments, making this anniversary event the perfect time to honor those past achievements,” says  Shanna Moore, leader/of the DuPont Packaging Awards program. “In reflecting back on these breakthroughs, it’s hard to imagine what everyday life would be like today without them.”
DuPont created the voting project after reviewing hundreds of past winners and identifying six breakthrough groups that impacted our lives. Descriptions of those breakthroughs—which range from packaging that has enabled our current “on-the-go” lifestyle to centralized processing and packaging of meat that reduced waste and kept meat fresh longer—can be found on line here.
DuPont announced the breakthroughs that most transformed our lives during the company’s celebration of the winners of the 25th DuPont Awards for Packaging Innovation in Wilmington, DE. Nearly 300 people voted on the breakthrough choices.
The DuPont Awards for Packaging Innovation are the industry’s longest-running, global, independently judged celebration of innovation and collaboration throughout the value chain. Their sponsor, DuPont Packaging & Industrial Polymers, manufactures an extensive mix of adhesive, barrier, peelable lidding and sealant resins and provides a globally networked development team to work with customers on packaging programs that help protect the product, environment, improve shelf appeal, convenience and reduce cost in the food, cosmetics, medical products and other consumer goods and industrial packaging industries.

While Mondelēz is not expecting a significant turnaround in gum this year, the world’s #2 gum maker behind Wrigley is “actively testing a number of ideas to rejuvenate the category” that are just starting to pay off, CEO Irene Rosenfeld told analysts yesterday.

Global gum and candy revenues remain disappointing, declining 1%. The decrease was driven entirely by gum’s poor performance in developed markets. Here revenue was down high-teens as category trends continue to soften. We also lost some share.”

The decline was particularly evident in the US, where gum and candy revenues slumped about 10% due to gum weakness, she said.

“But I assure you we’re not sitting idly by and accepting these trends. We’re actively testing a number of ideas to rejuvenate the category and we have begun to roll out several initiatives to stem our share declines.”

These include changing price/size architectures (more small packs at lower price points and more value offerings in larger pack sizes); “hard hitting advertising” focusing on functional benefits such as oral care; driving better placement; and getting the right product assortment on shelf, she said.

We are starting to see some early signs of success

Early results from these initiatives have been encouraging, she said, “But due to the sheer breadth of retail outlets to be addressed as well as the timing of shelf resets rolling out these initiatives broadly have taken much longer than we would have liked.

“But we are starting to see some early signs of success and as we look at markets like the US, you will not have seen the April shares yet, but when you see them you will see where our share is up about almost 2 points. So, we are starting to see some impact from these actions.”

Meanwhile, gum sales in emerging markets are growing nicely, she said, notably in China, which is now the second largest gum market in the world.

Developing markets are growing at quite healthy rate and China is one of them.

“I would say we feel quite good about our early results, we have got a share about 5% share and it’s certainly performing consistent with our expectations and we view this entry as very complimentary to our biscuit business because in effect we’re basically putting gums on top of the biscuit infrastructure.”

Q1, 2013 highlights

First quarter revenues at Mondelēz rose nearly 1% to $8.74bn, ahead of Wall Street’s estimate of $8.68bn.

However, organic revenue, which strips out the impact of acquisitions, divestitures and other one-time issues, rose 3.8%, below the company’s long-term target of 5 to 7% growth.

In a note on the Morningstar analyst Erin Lash said: “For the first time in its six months as an independent company, Mondelēz finally recorded a sequential acceleration in its top line. However, at just 3.8%, underlying sales growth still lagged the firm’s 5%-7% long-term target.

“Revenues were hindered by lower coffee prices, capacity constraints, and its ailing gum business, pressures that we don’t think will fade over the next several quarters.”

But she added:

“We are encouraged that the firm is spending behind advertising its brands, improving its routes-to-market, and increased sales capabilities to right its ship.”

PepsiCo merger rumors

Commenting on rumors that a tie up with PepsiCo’s snacks division may be in the pipeline following reports that investor Nelson Peltz has been amassing stock in Mondelēz, she said: “We think any transaction could unlock additional value for shareholders, given the premium price that would be required.

“More specifically, we believe Mondelēz’s stock could be worth about $38 per share. Excluding synergies, such a deal would value Mondelēz at 13.8 times EV/EBITDA, but could drop to less than 11 times when our forecast for $1.8bn of synergies is taken into account.

“These synergies equate to 4% of Mondelēz 2016 revenue (compared with 3-7% synergies as a percentage of sales obtained from other packaged food acquisitions).

“What remains to be seen is whether: (1) the firms can come to terms on a buyout, (2) the credit markets could support the nearly $46bn of debt needed to consummate the deal, and (3) regulators would ultimately approve such a transaction.”

Asked about the merger speculation, Rosenfeld told reporters yesterday that ”there’s no question that there’s lots of chatter out there”, but said she was not planning to comment on it.

Mondelēz’s open innovation director Stu Stein will be speaking about how open innovation works at Mondelēz at the Food Evolution Summit in Litchfield Park, Arizona on September 17-18.

Corrugated giant Smurfit Kappa has reported growth in sales for the first three months of the year.

In first quarter results published this morning (3 May), the group reported that revenues for the period rose by 4% year-on-year to €1.89bn, while EBITDA profit slipped 2% to €241m.

Pre-tax profits, meanwhile, fell to €57m compared to €102m in the first quarter of 2012. Exceptional charges of €13m, related to the devaluation of the Venezuelan Bolivar, were included in this year’s figures while an exceptional gain of €28m was included last year.

Chief executive Gary McGann said: “The Group is pleased to report year-on-year revenue growth of 4% in the first quarter. Despite a number of one-off costs, EBITDA for the first quarter remained strong at €241m.

“SKG’s performance reflects the previously guided margin compression in Europe following OCC and recycled paper price increases which are not yet reflected in corrugated pricing.

“A €40 per tonne recycled paper price increase in Europe during the quarter supports corrugated pricing. Input costs including OCC continue to move upwards. Paper price increases and a good inventory position across Europe are creating an environment for corrugated price recovery in the second half of 2013.

“The performance of SKOC and the progress of its integration into the Group has exceeded our original expectations. We have doubled our synergy expectations from US$14m to US$28m.”

Smurfit Kappa has announced plans to accelerate its £100m investment in its paper mill in Townsend Hook, Kent.

The paper and corrugated multinational said in a statement this morning that a new paper machine at the mill that will produce 250,000 tonnes of lightweight corrugated case material each year, will now be operational by the fourth quarter of 2014 rather than the first quarter of 2015.

As part of the project, two existing paper machines that have a combined capacity of 250,000 tonnes are being decommissioned. Smurfit Kappa announced this morning that they are now expected to close on 1 July, rather than in 2014 as was originally planned.

Today’s statement said that the closure date was being brought forward “in order to extend the training period for our workforce, advance the start-up of the new paper machine and increase the pace of the expected ramp-up”.

A consultation process with a number of staff working at the mill has begun regarding the accelerated closure of the two machines.

As well as the £100m investment at Townsend Hook, Smurfit Kappa is currently undertaking a €40m upgrade at its 420,000-tonne/year Hoya mill in northern Germany that will complete during May.

The group said the investments will “enhance the lightweight capabilities of the Group, better reflecting current market dynamics”.

“Together, the investments will further increase productivity and significantly lower costs in our UK business,” the statement added.

The British Pig Executive (BPEX) has launched a new online database to showcase pigs that adhere to the Red Tractor welfare assurance scheme.

The website allows vets to upload veterinary data straight into the database via a smartphone app to reveal the welfare of pigs they have visited on UK farms.The pigs are assessed under the Real Welfare project an industry-led project funded by BPEX to help pig producers demonstrate pig welfare and boost productivity, using animal-based measures. Pigs are assessed for a range of factors including: the presence or absence of lesions; body marks and lameness.

Highest welfare standards

Meanwhile, Tony Goodger, foodservice trade manager at BPEX, told FoodManufacture.co.uk that food manufacturers should adopt the Red Tractor logo as the most effective way of displaying that their products adhere to the highest welfare standards.

In this video, he also warned that 88% of pigs entering the European supply chain are from non-compliant farms. The EU must remedy the problem now or risk people questioning what other illegal practises may be being ignored by the authorities, said Goodger.

The EU banned the use of sow stalls from January 1. Goodger warned that although 10 countries are fully compliant, this only accounted for 12% of pigmeat on the market.

Sainsbury boss Justin King – “the grandfather of UK supermarkets” – has drawn praise from City analyst Shore Capital, after the nation’s third largest retailer reported sales, including fuel, up by 4.5% to £23.3bn for the year to March 16.

Shore Capital analysts Clive Black and Darren Shirley said: “Justin King has led Sainsbury to another year of steady progression in still challenging economic and sector conditions. For that the ‘grandfather’ of the sector and his team now deserve considerable credit.”

They added that the business was “materially more resilient” than when he took charge. They attributed his success to a strategy based on “considerable empathy with its core customers”, which had attracted additional footfall in conditions arguably not suited to Sainsbury, and innovative ideas such as Switch ‘n’ Save and Brand Match.

By contrast, the  management of Morrisons  has been criticised for allegedly losing touch with its core consumers.

Market leadership                                                                                                                                                                                        

Sainsbury’s clear strategy had been complemented by good in-store execution and market leadership in the mass market (big four supermarkets’) delivery of fresh and chilled foods, said Black and Shirley.

General merchandise sales – particulary its ‘TU’ clothing brand and non-food sales – had performed well, exceeding £1bn.

Online grocery sales of about £1bn sales had achieved 20% growth year-on-year.

Black and Shirley concluded: “The group has outperformed its major peers and much of the market over the last seven years of consumer economic turmoil in the UK and so gained market share; to about 17% [according to Nielsen].”

‘Grandad to be around a while longer’

Commenting on speculation that King was soon to leave the business, Black and Shirley said: “From our perspective we expect ‘grandad’ to be around for a while longer yet but for succession planning to be an understandable and sensible feature for the chairman and the wider board.”

Shore Capital retained its ‘hold’ advice on Sainsbury stock.

Despite rising sales, Sainsbury’s profit before tax fell by 1.4% to £788M. But underlying profit before tax was up by 6.2% to £756M.

King said: “Our focus on helping our customers Live Well For Less is delivering good growth in sales and profit. Our key points of difference, such as the best quality own-brand, Nectar, Brand Match, coupon-at-till and industry leading service, are recognised by our customers.

“We continue to invest in offering customers choices of how they shop with us, bringing our food, clothing and general merchandise to more customers.

“While we see no near term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth.”

Meanwhile, the supermarket confirmed today (May 8) that it will pay Lloyds Banking Group £248M for the remaining 50% of Sainsbury’s Bank it does not already own.

The retailer is the UK’s third largest after Tesco and Asda.

Sainsbury results – at a glance

• Underlying profit before tax up 6.2% to £756M
• Profit before tax down 1.4% to £788M
• Total sales (including VAT) up 4.6% to £25,632M
• Total sales (including VAT, ex fuel) up 4.3%
• Return on capital employed of 11.2%
• Proposed full year dividend of 16.7p, up 3.7%

Unilever’s ice cream sales in Europe have been hit by the poor Spring weather, it has emerged as the consumer goods giant announced its first quarter (Q1) results yesterday (April 25).

The group missed C ity analysts’ expectations in Q1 on weak volumes (up by 2.2% compared with expectations of +3.2%) and weak trading in Europe, according to Investec’s Martin Deboo. Organic sales were down by 3.1%. Part of the problem is that Unilever’s performance in Europe in Q1 was against comparatively strong trading for the same period last year.

Unilever reported increased turnover of 0.2% for Q1 to €12.2bn, which included a negative currency impact of 3.5%.

“The Q1 was against a tough prior year volume comparison, driven by an extra trading day, an earlier Easter and a strong start to the ice cream season,” said Deboo.

Extremely cold weather

In its trading statement, Unilever reported that overall ice cream sales were up slightly, despite a high prior year comparator and the extremely cold weather conditions that prevailed in much of Europe.

Magnum, now a €1bn brand, continued to make good progress supported by the roll-out of Magnum Gold to the US, the roll-out of the ‘5 kisses’ limited editions and the new pint format in Europe, and the launch of Magnum Pink and Magnum Black in Mexico and Turkey. C ornetto was relaunched in Europe, Mexico and South East Asia and Unilever introduced a new C ornetto mini variant in Europe, while Fruttare was launched in the US.

In teas, it reported that its Brooke Bond range of brands performed well in India and PG Tips grew in the UK in a strongly promotional market.

In foods, Unilever’s savoury and dressings business continued to grow in Q1, underpinned by innovations such as Knorr jelly bouillon variants, now in more than 35 markets, and baking bags, now in more than 40 markets. In dressings, Hellmann’s growth was driven by market development activities encouraging new uses of mayonnaise and the launch in Europe of a superior squeeze pack.

Spreads activity declined

Its spreads activity declined, however, driven by lower volumes in a tough promotional environment.

Unilever stated: “Market dynamics are not currently in our favour with consumers switching to alternatives. Despite the success of recent innovations such as Flora Buttery and liquid margarines, which have now been launched in Turkey under the Becel brand, we have more to do to communicate the improved taste and health benefits of our margarines to consumers.”

Commenting on the results, Unilever ceo Paul Polman said: “We maintained good growth momentum in the first quarter, despite challenging economies and the tough competitive environment. This performance is further evidence that Unilever is becoming fit to win and capable of delivering consistent growth ahead of our markets. Our strategy is working.”

He added that growth in developed markets remained sluggish. “Europe faced a particularly strong prior year comparator and whilst the overall performance was solid, the reported growth was held back by the slow start to the ice cream season and weakness in spreads,” he said.

Mondelēz Intl. has signed a three-year contract renewal with CHEP for managed pooled pallets in Western Europe and Central and Eastern Europe for more than seven million pallet movements annually.

In its simplest form, equipment pooling is the shared use of high quality standard pallets and containers by multiple customers who collectively benefit from the network scale of the pool, versus trying to manage reusable equipment individually. Pooling is a strategic business option for companies that want to reduce capital expenditure and improve day-to-day supply chain operations. A typical cycle would be:

• CHEP service center issues ready-for-use pallets and containers to suppliers, manufacturers and growers for use and movement through the supply chain.
• Products are loaded onto the CHEP equipment and shipped through the supply chain.
• At the end of the supply chain, the receiving business unloads the goods and returns the pallets or containers to the nearest CHEP Service Centre
• At the service center, CHEP inspects and conditions all returned pallets and containers.

Mondelēz Intl. is a world leader in chocolate, biscuits, gum, candy, coffee and powdered beverages. It’s portfolio includes several billion-dollar brands such as Cadbury and Milka chocolate, Jacobs coffee, LU, Nabisco and Oreo biscuits, Tang powdered beverages and Tridentgums.

Oliver Cofler, European logistics operations director, Mondelēz Intl., said, “CHEP has a broad European network that is fully aligned with our logistics strategy and growth plans. Other important benefits provided by the CHEP system are excellent customer service and flexibility, as well as pallet quality, availability and product innovation. We also appreciate the investment that CHEP is doing expanding its business to Central and Eastern Europe.”

Mondelēz Intl., whose European headquarters are in Zurich uses CHEP pallets to transport products to more than 100,000 customer locations throughout Europe. Both teams are excited about possible future growth opportunities for CHEP lane expansions in Spain, France, Italy, Scandinavia and Benelux.

The company is very interested in CHEP Europe’s recent announcement about the launch of a customer collaboration and sustainability program, which is reducing carbon emissions for CHEP and customers through shared transportation of empty pallets.

“CHEP offers an environmentally friendly business model, driven by the continuous repair and reuse of pooled pallets. It is an important advantage that we really value,” said Cofler. “Mondelēz is counting on CHEP to help us meet our own CO2 emissions reduction targets. We consider CHEP to be a supply chain leader in sustainability.”
CHEP’s vp EMEA, Key Accounts & Strategy, Jochen Behr added, “Mondelēz has a longstanding strategic partnership with CHEP based on continuous improvement and the use of technology solutions that streamline processes between both companies to strengthen our relationship

“We truly appreciate the trust that Mondelēz places with us and we look forward to continuing our partnership. Over the years, our businesses have grown together while driving overall supply chain efficiencies in a sustainable way.”

Ball Corporation said lower volume trends for standard metal packaging and poor performance of the European beverage container business affected first quarter results for 2013.

The firm reported operating earnings had fell year-on-year for all three of its segments involved in food and beverage in the three months ending 31 March 2013.

“We are encouraged by solid performance in the majority of our packaging businesses given lower volume trends for standard metal packaging during the quarter,” said John A. Hayes, chairman, president and chief executive officer.

“However, this performance was overshadowed by disappointing results in our European beverage container business.”

Segments in detail

Metal food and household products packaging comparable segment results were operating earnings of $34.7m on sales of $367.2m, compared to $39.3m on sales of $378.9m in 2012.

The recently integrated acquisition of the extruded aluminum manufacturing business in Mexico contributed favorably to results in the quarter; however, mid-single digit volume declines across the segment and higher cost inventory carried into the year by domestic tinplate operations were partially offset by improved product mix and manufacturing performance.

The previously announced closure of its Elgin, Illinois food and household products packaging facility recorded charges of $20.8m in Q1 and additional charges of $12m are expected during the remainder of 2013.

Volume declines

Metal beverage packaging, Europe, results in the quarter were operating earnings of $30.9m on sales of $402.9m, compared to $42.4m on sales of $414.5m in 2012.

First quarter comparable operating earnings were negatively affected by low single-digit volume declines, unfavorable mix and higher input costs.

Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $104m in the first quarter on sales of $995.2m, compared to $105.5m on sales of $1bn in 2012.

Demand for speciality packaging

Strong demand for specialty packaging in North America coupled with plant performance and efficiencies helped to offset double-digit 12-ounce volume declines in the quarter.

Certain surplus equipment was redeployed to existing North American metal beverage manufacturing plants from the Gainesville, Florida end manufacturing facility , which will cease operations in the second quarter of 2013.

The first quarter included charges of $1.1m related to the previously announced closures of the Columbus, Ohio, and Gainesville, Florida, facilities and voluntary separation programs.

Additional charges of $10m are expected to be recorded during the remainder of 2013.

In Brazil, volumes were up strongly year-over-year due to the addition of the Alagoinhas beverage can plant. Ball also began installing a second production line in the Alagoinhas plant, which will be operational in late 2013.

In China, double-digit volume increases partially offset challenging pricing caused by industry supply/demand imbalances.

“While business fundamentals have not changed and the majority of our operations are on track to improve performance year-over-year, our first quarter results make it unlikely that we can reach our long-term goal of 10 to 15% diluted earnings per share growth in 2013,” Hayes said.

A project has begun in the UK to assess the glass packaging supply chain in the UK with respect to recycling and EU packaging waste regulations.

Supported by WRAP, the UK government’s Waste & Resources Action Programme, packaging legal compliance company Valpak is working alongside other bodies including the Advisory Committee on Packaging (ACP), Defra, the UK Environment Agency and British Glass, to establish a better understanding of the operation of the glass market in the UK.

While compliance for UK glass was achieved in 2012, according to Valpak: “The surplus carry over of Packaging Recovery Note (PRN) and Packaging Export Recovery Note (PERN) evidence into 2013 was reduced to 16,700 tonnes compared to the 57,000 tonnes carried over into 2012 (at the end of 2011), which potentially makes reaching compliance in 2013 more difficult.”

The remit of the project also takes in the issue of the quality of glass collected in the UK for recycling to remelt.

“This affects the economics of using glass cullet in place of virgin materials from the viewpoint of glass container manufacturers,” says Valpak.

The main objectives of the project will be:

• To improve market transparency and information on glass packaging recovery and recycling in the UK
• To identify and evaluate possible risks to UK compliance for glass this year, and in subsequent years to 2017
• And to develop scenarios to assess and quantify potential market supply/demand for increased glass recycling, including collection, sorting, processing and reprocessing

The project began in the last week of April 2013 and is scheduled to complete at the end of July.

The current status of the glass market will be quantified in terms of the tonnages flowing on to the market with estimates split by colour and by format, building an overall picture for the UK, and separately for Scotland and for Wales.

The project will also look back at events in the glass market to gain a better understanding of the likely evolution of glass packaging PRN/PERNs, in terms of tonnages and prices.

Steve Gough, Valpak CEO, says: “We felt that this work was of sufficient importance to commit time and resource to the project.

“We also believe that it must engage with those key stakeholders, to whom this information is essential, in terms of planning for cost effective UK compliance, identifying any barriers to more effective glass collection and recycling and ensuring that the UK is best placed to comply with EU targets and to do so at lowest cost to industry.”

ACP chairman Bob Lynsey says: “This will give us a good understanding of the glass PRN market which hopefully will be welcomed by those directly involved in the industry.”

The UK Advertising Standards Agency (ASA) has upheld 156 consumer complaints relating to an energy drink called ‘Pussy Natural Energy’, but the brand insists protestors simply twisted the meaning of an innocent word.

The ASA’s council upheld complaints relating to four out of six issues, relating to posters and a website promoting the edgy energy drink — which claims to be backed by tycoon Richard’s Branson’s offspring Holly and Sam, check out the YouTube video below – that has retail distribution through Selfridges, Tesco and Ocado.

One poster advertizing ‘Pussy Natural Energy’ appeared in various locations across the UK stated ‘pussy’ in large, bold text in the center of the advertisement, with smaller text below stating: ‘The drink’s pure, it’s your mind that’s the problem’.

‘We aim to bring Pussy within everyone’s reach’

The ASA also investigated claims on PussyDrinks.com stating ‘The Drink’s Pure: It’s your mind that’s the problem. 100% natural energy’, while smaller text at the bottom of the home page said, alongside a call for interested distributors:

“Our goal is global pussyfication, and we aim to bring Pussy within everyone’s reach.”

A Pussy Natural Energy spokeswoman told BeverageDaily.com this morning that no-one was available to comment on the ASA ruling.

Complainants alleged, inter alia, that the advertisement was (1) offensive due to its implied sexual reference (2) derogatory, sexist and degrading to women (3) that the first poster offended religious beliefs since it was placed near a church (4) the posters were unsuitable to be seen by children.

Pussy Drinks said it was ironic complaints had been made, since their drinks were pure, and their adverts pointed out that it was the mind of the viewer that was the problem.

The Oxford English Dictionary definition of a ‘cat, particularly a kitten’ was correct, the brand said, and their brand reflected feline attributes since it was beautiful, cool, natural, had attitude.

Until the OED changed its definition, Pussy Drinks insisted on its right to advertize its product, and problems had  only been caused by complainants (to the ASA) twisting an innocent word.

Oddball Egyptian reference

Puusy Drinks also said it was surprised religious people had complained about the advert, since in the ASA’s words, “they tended to occupy an idyllic place away from the crassness that sadly existed in mainstream society”.

The company also questioned which religion would be specifically offended by Pussy, since the ancient Egyptians used to worship cats; they added that children understood ‘pussy’ as referring to an animal, and thus the word was inoffensive.

Noting the common slang use of ‘pussy’, and the brand’s reference to the word’s dual “impure or problematic” meaning, the ASA council agreed that the advert could cause offence, but that it was not derogatory to women in the absence of a specific reference thereto.

And while very young children were unlikely to be aware of the colloquial meaning of ‘pussy’, the ASA said older kids would understand it, while the mention of one mind being “the problem” reinforcing their impression that it was intended as an offensive or sexually explicit reference.

CORRECTION, 25/4/13: Yesterday, we mistakenly attributed some comments above – relating to religious people and ancient Egyptians and their worship of cats – to advertising firm JC Decaux. The company informs us that these comments were, in fact, made by Pussy Drinks, but said the ASA ruling published yesterday was unclear in this respect.

UK chocolatier Thorntons has reported increased sales in the third quarter as its focus on the commercial channel drove performance over Valentine’s Day, Mother’s Day and Easter.

In a third quarter (Q3) trading update issued today, the company reported a 4% rise in total sales to £60.6m ($92.4m).

Thorntons began the process of closing just under half of its 344 own-stores in 2011 to focus on growing sales in third party retailers – its commercial channel.

Boxed chocolate share gains

Thorntons branded UK commercial sales grew by 10% in Q3 to £27.4m ($41.8m). The firm also grew its share in the UK Total Boxed Chocolate market from 11.7% to 12.2% and in the Inlaid Boxed Chocolate market from 32.9% to 35.6%.

UK commercial sales outpaced own-store sales for the first time this year, which were flat on £26m.

Thorntons CEO Jonathan Hart, said: “This period includes the important trading seasons of Valentine’s Day, Mother’s Day and Easter where we saw an encouraging sales performance in our main channels.”

The company’s Easter market share grew to 4.7% from 4% last year.

“Growing market share further demonstrates the strength of the Thorntons brand and offer. In addition as a result of actions taken over the past two years gross margins were slightly ahead of our expectations,” said Hart.

Profit outlook ‘above expectations’

He added that the firm now expected pre-exceptional profit before tax to be ahead of market expectations and said there was potential for further improvement in the final quarter.

Earlier this month, Thorntons said that the current market expectation for its full year earnings before tax was £3.1m ($4.7m).

International, private label and online

During Q3, the company also made substantial gains in export markets. International sales rose 30.8% to £1.1m ($1.7m).

The premium chocolatier is focusing on English-speaking markets such as Australia, South Africa, UAE and the USA.

Thorntons private label business, which was halted in late 2010, has restarted and made improvements during Q3, taking private label sales in the quarter to £1.7m ($2.6m).

Sales fell 4.6% for the company’s online business Thorntons Direct to £2.2m ($3.4m).The company launched a new website in September last year and said the changes were beginning to feed through.

The chocolate industry in Switzerland has reported a value sales decline in 2012 as the strong Swiss franc harmed exports and warm weather damaged consumer sentiment at home, according to trade association Chocosuisse. 

In 2012, the Swiss chocolate industry saw a 3.4% drop in turnover to CHF 1.6bn ($1.7bn) and a 2.2% fall in volume sales to 172,376 metric tons.

“The principal reason for this is the overvalued Swiss Franc which made Swiss chocolate products more expensive aboard and made imported chocolate cheaper,” said Chocosuisse, which is comprised of 18 members including Lindt, Mondelez, Nestlé (Callier) and Villars.

Exports hurt by Swiss Franc

The majority of chocolate produced in Switzerland is sold abroad (60.3%), predominantly to Germany (18.3%), the UK (13.8%), France (9.2%) and  Canada (6.9%).

In 2012, foreign sales fell 7.3% to C HF 760m ($814m) in 2012, which Chocosuisse called “a result of the continuing strength of the Swiss France and the slowdown in the world economy”.

Only white chocolate bars posted higher sales in international markets.

Value sales to EU countries fell 4.1%, but the industry did see growth outside the EU in China, Bahrain, India, Japan, the Philippines and South Korea.

Hot weather meltdowns domestic sales

In its home market, the industry maintained values sales at CHF 872m ($934m) but sales volumes fell 1.2%.

Chocosuisse said that this was due in part to a warm spring and summer heat wave.

“The decline in tourist numbers compared with the previous year has also had a negative effect on sales,” it added.

“Finally, price-conscious consumers have increasingly been buying the imported products, which have become cheaper as a result of the currency situation.”

However, the average consumption of chocolate in Switzerland remained unchanged at 11.9 kg per capita, among the highest in the world, and small chocolate bars saw 4.6% sales gains.

The global active, intelligent & smart packaging market has been experiencing strong growth according to a new report from business information provider Visiongain.

Many companies and organisations are now fully aware of the importance of the innovative packaging technology. Increasing health awareness, rising food and safety concerns and improved purchasing power dictate that the future of packaging will lie in active, intelligent and smart packaging. Visiongain believes that the value of the global active, intelligent and smart food & drink packaging market in 2012 will reach $12.66bn.

‘The Global Active, Intelligent & Smart Food & Drink Packaging Market 2012-2022’ report states, “The active, intelligent & smart food & drink packaging is a strong growth market. Having been perceived as a niche market so far, there is significant potential for profitable growth over the next ten years, which is largely driven by consumers’ and retailers’ preference for longer shelf life and healthy lifestyles worldwide.”

The report contains profiles of 27 leading companies and more than 100 charts and graphs indicating and explaining trends in 5 A&IP segments. It includes a global forecast, as well as an analysis of 10 leading national markets.

A new report says that the costs of producing a key enabling technology for smart packaging, printed electronics, is about to about to drop by 99%; prompting many leading brand owners to put multi-disciplinary teams onto the adoption of the new paper thin electronics for their high volume packaging. All of these trends, including detailed ten year forecasts, are covered in the IDTechEx report “Smart Packaging Comes to Market: Brand Enhancement with Electronics 2013-2023″.

This report reveals the global demand for electronic smart packaging devices is currently at a tipping point and will grow rapidly to $1.45 billion in 2023. The electronic packaging (e-packaging) market will remain primarily in consumer packaged goods (CPG) reaching 14.5 billion units that have electronic functionality by 2023.

The rapid growth will be driven by trials now being carried out by leading CPG companies and the rapid technical developments emanating for over 3000 organisations, half of them academic, that are currently working on printed and potentially printed electronics.

For example it addresses the ageing population’s need for disposable medical testers and drug delivery devices. Electronic packaging addresses the fact that one third of us have difficulty reading ever smaller instructions.
It will provide a host of consumer benefits and challenge competition who do not adopt it. Impetus is mainly about modern merchandising – progressing well beyond static print – and dramatically better consumer propositions, including enhanced product security.

There will also be growth from existing applications such as talking pizza boxes; winking logos on multipacks of biscuits or bottles of rum; compliance monitoring blister packs in drug trials; plastic bottles of drugs that prompt the user; testers on batteries; and reprogrammable decoration on mobile phones.

IDTechEx’s projected adoption only represents a few per cent of CPG packages being fitted with these devices in 2023. There are still many challenges to be addressed, including creating sustainable e-packaging products rather than one-off projects. Cost and lack of integrators and complete product designers are current limitations. The report reveals many ways in which brands can create a sharp increase in market share, customer satisfaction and profitability. It analyses case studies of successes and failures.

Burton’s Biscuit Company is investing £13.5M in its manufacturing operations to enhance production, support new product development, and meet growing demand for its biscuits.

The company – which produces iconic brands such as Wagon Wheels, Maryland Cookies, Dodgers and Cadbury biscuits (produced under licence) – invested £12.5M in its supply chain in 2012.

This second year of significant investment is helping to drive continued growth for the firm, claimed the firm. It reported increasing international sales and a record market share of the domestic sweet biscuit market.

To help meet this demand, new technology will be introduced across all sites.

The company’s facility in Llantarnam, Wales, will pilot new control room technology, which will monitor the production process in real time. The technology will be rolled out to Burton’s other facilities throughout the year.

Other investment initiatives will focus on automation and packaging technology. The investment will further improve efficiency and provide additional capacity for the new products and formats that will be rolling off Burton’s production lines in 2013.

Changing market dynamics

Burton’s Biscuit Company’s chief supply chain officer Neil Grocock said: “Continued investment in our supply chain and manufacturing capabilities is central to Burton’s vision for being a brand-focused business, able to swiftly respond to changing market dynamics and bring new products to market quicker than any other company in the biscuit market.”

The £13.5M is being invested across Burton’s facilities in Llantarnam, Blackpool and Edinburgh.

The company said the investment would not have a significant impact on jobs, and any impact would only be felt through natural churn.

Last week Hill Biscuits announced that it had secured an investment of £276,000 from the Manchester Investment Fund to expand its business and create more than 45 jobs.

Hill Biscuits’ md Steven Wetherby told FoodManufacture.co.uk: “Everyday biscuits are a growing market because people have less disposable income.”

Biscuits are a growing market

His comments are backed by Mintel, which expects the sector to grow by 21% to reach £1.7bn by 2016. Research from the market research company suggests that biscuits’ total retail value sales have climbed by 26% since 2006 to reach £1.4bn in 2011.

It’s the appeal of everyday biscuits, or plain biscuits, such as digestives, that have boosted the fortunes of the market, with sales value up 14% in just one year (2010–11).

Younger consumers have the biggest appetite for traditional British biscuits such as Bourbon and Custard Cream, with six in 10 disagreeing that traditional biscuits are boring, compared with 55% of the over 55s.

Alex Beckett, senior food and drink analyst at Mintel, said: “They may lack TV support or big-name brands, but the humble Bourbon, Malted Milk and Custard Cream are cherished by teens and students.

“Maybe the lack of try-hard advertising appeals to them – or maybe these biscuits are just better value than the increasingly chocolate-laden new launches. Either way, the youth of austerity Britain has respect for our biscuit heritage.”

Two sisters boss Ranjit Boparan and Sir Ken Morrison both feature in the list of business leaders from the food and drink industry that earned a place on The Sunday Times Rich List 2013. Here, we highlight the 10 most wealthy individuals and families who owe their place on the list to fortunes made in the food and drink sector.

Topping The Sunday Times Rich List from the food and drink sector was heiress Charlene and husband Michel de Carvalho, with £7bn – a rise of £1.51bn. The only daughter of the late Freddy Heineken, former chief of the Dutch brewer, inherited her fortune in 2002. Heineken reported profit of £1.4bn last year – driven by strong sales to north and south America.

Galen and George Weston were in second position with £6.65bn, up by £750M. The Weston’s fortune stems partly from business interests in C anada, which includes Loblaw supermarkets and Weston Foods. The family owns Selfridges department stores and one member is the boss of Associated British Foods.

In third position was Hans Rausing and family from the globe’s largest food packaging business Tetra Laval, formed as Tetra Pak. The family’s wealth has reached £4.72bn, up by £420M from last year.

Food distributor

New entrant on this year’s list were Mohamed Bin Issa Al Jaber and family, whose wealth totals £4.52bn. The family operates the food distributor AJWA in Saudi Arabia and Egypt in addition to a portfolio of hotels and resorts.

Fifth position on the list of the nation’s wealthiest entrepreneurs operating in the food and drink sector was the spirit manufacturer the Grant and Gordon family, whose assets were estimated at £1.4bn. The business owns 30% of the Famous Grouse maker Highland Distillers.

Sixth position was claimed by former Bradford bus conductor Sir Anwar Pervez and family with £1.03bn, up by 37%. The family’s fortune stems from its cash and carry business Bestway and Batleys. The family also operates rice mills in Pakistan.

Seventh position was claimed by Sir Ken Morrison and family, whose supermarket business contributed to their wealth of £1bn, down by £105M since last year. Morrisons – which has been accused of deserting its traditional customers – earlier this month unveiled plans to axe 700 jobs as part of a move to introduce cash counting machines across its 490 stores nationwide.

Morrison has accused current management of the Bradford-based retailer, founded by his father, of making the supermarket too posh.

Eight place was taken by the Earl of Iveagh and the Guinness family, whose assets from brewing and property total £850M. The family now has little involvement with the Guinness business – except a £200M stake in Diageo, which owns the Guinness brand and brewery, according to The Sunday Times report.

Ninth position was claimed by meat entrepreneur Lord Vestey and family, whose assets total £750M. Founded in meat production, the family’s business interests now range from food to shipping and property.

Ranjit and Baljinder Boparan

In tenth place on the list of most wealthy individuals from the food and drink sector was Two Sisters boss Ranjit and Baljinder Boparan. The Boparan’s wealth was reported at £700M, down £50M from the previous list. In addition to 2 Sisters, the husband and wife team own the Harry Ramsden fish and chip shop chain and a property investment business.

Just missing out on the top 10 was Lord Sainsbury and family, whose assets are estimated £590M, up by £70M on the previous year. The Sainsbury family owns a 8.2% stake in the supermarket business.

Meanwhile, the top place on the list were claimed by mining and investment magnate Alisher Usmanov, with a net worth up by 8% at £13.3bn.

The combined wealth of the 200 people on the list this year totals £318.2bn – an 800% rise since the first list in 1989.

The UK now has 10 times as many billionaires as when the list was first compiled 25 years ago.

Moreover the rate of wealth accumulation is up 8.5% this year, compared with the previous year.

Food and drink Rich List – at a glance
1. Charlene and Michel de Carvalho – £7bn (up £1.5bn)
2. Galen and George Weston – £6.65bn (up £750M)
3. Hans Rausing and family – £4.72bn, (up £420M)
4. Mohamed Bin Issa Al Jaber and family – £4.52bn
5. Grant and Gordon family Spirits – £1.4bn
6. Sir Anwar Pervez and family – £1.03bn (up 37%)
7. Sir Ken Morrison and family – £1bn (down by £105M)
8. Earl of Iveagh and the Guinness family – £850M
9. Lord Vestey and family –£750M
10. Ranjit and Baljinder Boparan – £700M (down £50M)

Chr. Hansen is still positive about probiotics – including in Europe – despite disappointing results in another two clinical trials, according to Chr. Hansen’s chief financial officer (CFO) Klaus Pedersen.

Reporting its 2013 second quarter results, the company filed impairment charges of €8m related to its two latest probiotic-related clinical trials investigating their potential gastrointestinal benefits.

“Despite indications of positive results the studies’ primary end points were not met and consequently the data is assessed to be insufficient for approval of an EU health claim,” Chr. Hansen said in a statement.

The company’s chief financial officer (CFO) Klaus Pedersen said in an interview: “No doubt we had hoped for a positive outcome…But you could say we had a little warning in the autumn,” he said, referring to similarly disappointing results from a trial investigating probiotics’ role in immunity, which also led the company to write off €4m last year.

“We do see positive effects from taking probiotics,” Pedersen said. “But we need to adjust these to what we need to provide to get an EFSA approval.”

He said that it would take a few more months to dig into the results from these latest trials, for which preliminary analysis was carried out in March. So far, no probiotic ingredients from any company have been successful in attaining a health claim under the EU’s nutrition and health claims regulation (NHCR).

The company said that probiotic sales in South America and APMEA (Asia Pacific, Middle East and Africa) had more than compensated for declining probiotic sales in Europe and North America.

“One thing is obviously the regulatory regime, which is different from region to region but there is an understanding of probiotics [globally],” Pedersen said.

As a whole, he added that the company did not see Europe as a declining market, despite declining probiotic sales and overall slow growth. The region still accounts for by far the largest proportion of C hr. Hansen’s sales.

“We will have a strong focus on cultures, including probiotics, in Europe,” Pedersen said.

He added that there is major global interest in natural colours, apart from carmine.

The company reported profit of €20.7m during the quarter, down 33% compared to the prior year period, mainly due to the impairment charges related to its clinical trials. Revenue was up 5.8% compared to Q2 last year, to €174.4m.

Danone reported sales growth in the first quarter of 2013 as demand for baby food in Asia boosted profits, despite continued weakness in Europe. 

Like-for-like sales grew 5.6% during the quarter to reach €5.34bn, also driven by strong demand for bottled water and medical nutrition – but there were big differences in performance between regions. Sales grew by more than 10% in emerging markets and North America combined, driven by ‘exceptionally strong growth’ in baby nutrition, while sales in Europe fell 5.1% compared to the prior year period.

“As we expected, the first quarter of 2013 saw a solid performance that highlighted once again the contrast between robust growth in emerging markets and the sluggish economy in Europe,” Danone chairman and CEO Franck Riboud said in a statement.

“…In Asia growth reached record highs, particularly in Baby Nutrition.”

Global like-for-like sales in the Baby Nutrition division grew 17.1% during the quarter, compared to a year earlier.

Riboud added that the emerging middle class in Latin America and Africa had contributed to a steady increase in sales, while European consumer spending remained ‘lacklustre’, particularly in fresh dairy products. In North America, the Greek yoghurt sector was the main driver of increased fresh dairy product sales, and the company said it planned to add further capacity in that region to meet demand.

“Results to date are in line with our roadmap and reflect progress in building a profitable growth model. On this basis, we stand by our full-year targets for 2013.”

European cost cutting

In February, the company announced a plan to cut 900 jobs across 26 European countries – including halving its European management units – in an effort to deal with a difficult year, which saw fresh dairy product consumption plummet in Spain and other southern European countries.

Danone said that it hoped to save €200m over a two-year period through a range of cost cutting strategies.

“The cost reduction and organizational adaptation plan we presented in February is moving ahead on schedule, and consultations with employee representatives are now under way. Initial results of all these measures are expected in the second half of the year,” Riboud said.

Nestlé has reported slower sales growth in the first quarter of 2013 hit by unrest in the Middle East and a cold start to spring, which affected sales of ice cream and bottled water.

The food and nutrition giant reported sales growth of 4.3% in Q1 to reach C HF21.9bn (about €18bn). The company has a growth target for 2013 of 5% to 6% – but it missed this goal in four out of seven categories: beverages, water, milk and ice cream, and prepared dishes.

Nestlé C EO Paul Bulcke said in a statement: “The start to the year reflects the caution we expressed in February. We continue to expect some volatility throughout 2013 but reconfirm our expectation to deliver on our commitments for the full year.”

Nestlé was also affected by ongoing weakness in Europe, where sales grew just 1% in the quarter, but Bulcke defended the company’s performance in the region.

“We are outperforming the market in Europe where consumer sentiment remains low,” he said. “We are seeing progress in our North American business and we expect to see stronger momentum in key emerging markets.

“Our global presence, unrivalled category diversity and our proven ability to bring innovative products and services to our consumers allow us to deliver in the short term while at the same time creating the right conditions for continued success over the long term.”

Petcare was the company’s best-performing category, with 7.9% growth; nutrition and healthcare was up 6.3%; and confectionery was up 5.8%. Emerging markets now account for 45% of the company’s sales.

In the Middle East, there were supply shortages after a factory that supplied the region was destroyed in Syria.

Allied Bakeries is on target to commission its largest bread plant, with a capacity of 10,000 loaves an hour, at Walthamstow in East London this summer.

The Associated British Foods (ABF) subsidiary has also started work at its bakery in West Bromwich to replace two smaller production lines with a new bread plant, which is expected to be operational by the end of the year.

Allied Bakeries’ new bread plant at Stockport has been operational since September.

This bakery investment by ABF has continued despite the highly competitive nature of the UK bread market over the past few years. The sector was also hit last year by the worst UK harvest of recent years, resulting in low volumes of wheat of inferior quality.

These details emerged today [August 23] as ABF, which is also the parent group for Primark clothing stores, British Sugar, Jordans and ethnic food manufacturer Patak’s, with operations across the globe, reported an “excellent” half year (H1) performance, with revenues up 10% to £6.333bn and adjusted profit before tax up 25% to £452M.

Sugar operations

ABF’s Primark and sugar operations were the stars of the show for the 24-week reporting period to March 2 2013. The Primark results are notable since they were achieved during a difficult time for many high street retailers.

According to Investec’s analyst Martin Deboo: “The two key divisions of Primark and Sugars, which comprised 77% of H1 profits, both beat our expectations on the operating line, by 6% each.”

C ommenting on the results, chief executive George Weston said: “This is an excellent set of results with adjusted operating profit [£496M] up 20%, a stronger cash flow and a year-on-year reduction in net debt.”

The recent weakening of sterling, particularly against the US dollar, increased net debt since last year end by £57M when foreign currency borrowings were translated into sterling at the half year. Net debt nevertheless fell by £255M from last half year to £1.337bn at the period end, after a net capital investment of £334M.

Weston added: “We are committed to the long-term development of our businesses through investment. These results have been achieved through a focus on generating good returns from the investments we have made over recent years.”

Improved result from Grocery

ABF chairman Charles Sinclair said: “Our food businesses remained on track with a much improved result from grocery, a big increase for agriculture and some stabilisation in underlying trading at ingredients. After last year’s record performance from sugar, the result this half year proved to be resilient.”

Sinclair added: “Grocery profit improved substantially and benefited from the non-recurrence of restructuring costs taken last year. Twinings Ovaltine and our UK and US businesses performed well.” Also, Twinings sales in the UK were well ahead of last year.

He noted: “Payment of deferred consideration on the acquisitions of the Jordans and Patak’s businesses, net of a deferred receipt on the disposal of our former sugar business in Poland, resulted in an outflow of £30M in the period.”

ABF’s grocery division was affected by the challenges facing the consumer food industry in developed countries, with consumers seeking more value as their disposable incomes were squeezed.

The grocery division reported an operating profit of £97M for the period on revenues of £1.832bn, which compared with £75M and £1.813M for the same period last year. The significant increase in profitability was attributed to the non-recurrence of restructuring costs in George Weston Foods in Australia and Allied Bakeries. However, Allied Bakeries has continued its capital investment over the period to reduce its cost base.

INVOPAK, the UK’s largest supplier of rigid packaging containers, has reported a vast increase in enquiries following its recent attendance at three high-profile UK trade shows.

Visits to INVOPAK’s website from January-March 2013 increased by 18% on the same period last year. The rise has been attributed to a number of factors including a marked increase in PR and marketing activities, including trade show attendance.

Chief Executive, Arjen Cooper-Rolfe, comments, “Exhibiting at trade shows plays a vital role in INVOPAK’S marketing activities. The opportunity to introduce our existing clients to new product ranges and meet potential customers face to face to discuss our capabilities is invaluable. The three shows we’ve exhibited at so far this year have proved absolutely vital in generating significant leads which will undoubtedly strengthen our operation over the coming months and years.”

The family-owned company attended the Ice Cream Expo and Packaging Innovations in February, followed by Pro2Pac in March. All three shows catered for very different audiences, offering INVOPAK an opportunity to discuss its products and services with buyers from a wide range of industry sectors.

Despite the summer of 2012 being one of the wettest since records began, the UK’s ice cream market remains buoyant. The Ice Cream Expo in Harrogate was attended by a significant number of exhibitors and visitors providing INVOPAK with an opportunity to discuss some of the latest additions to its product portfolio specifically designed for packaging icecream, sorbets and frozen yoghurt products.

Packaging Innovations, which took place at the NEC, is one of the largest shows in the industry’s calendar. INVOPAK’S 24 sq mtr stand occupied a prime position at the two day show which was attended by more than 5000 visitors including buyers from major UK brands.

INVOPAK introduced visitors to its stand to the latest service offering from lever lid tin manufacturer, Emballator. A significant investment in new printing technology means Emballator is now able to offer SME customers high-quality labeling and printing options on a par with those used by multi-national operations. INVOPAK is currently the only major UK distributor able to offer this service to its customers.

The hat trick of shows ended with attendance at Pro2Pac, a significant show dedicated to food and drink processing and packaging, held at Excel in London.

Sales Director, Scott Sandilands, says, “Pro2Pac was a very successful show for Invopak. Visitors were particularly interested in our tubs and PET jars for food products such as sauces and spices, flavours, food ingredients, soups and confectionary. We also introduced our new range of new 600 ml and 2200 ml clear polypropylene, microwaveable ready meal boxes which proved extremely popular.”

INVOPAK is part of the IPL Group of companies which recently launched the online packaging superstore, OiPPS. OiPPS is the company’s first B2C venture, specifically aimed at individuals and small scale producers across a number of industries including craft, health and beauty and food production.

Scott continues, “Pro2Pac provided an ideal opportunity to introduce some of the smaller volume food producers and caterers to OiPPS for the first time. OiPPS was very well received – website hits from the launch date to now peaked on Monday 18^th March, the second day of Pro2Pac, and sales have risen sharply in recent weeks.”

INVOPAK will be exhibiting on stand 134 at Harrogate Speciality Food Show, June 23^rd-24^th.

Plimsoll’s latest acquisition analysis has looked into the acquisition attractiveness of the UK’s largest 620 food processors companies. The study has identified 92 firms as classic acquisitions – underperforming businesses that predators would usually look for.

However, the research company suggests that it is time buyers should be looking to broaden their horizons away from these classic acquisitions and should instead take a look at the 26 companies identified as high value acquisitions.

David Pattison, chief analyst, said: “There are plenty of companies that need capital and would welcome investment. Distress sales have dominated the market in recent years as strong companies have looked to take over weaker companies and exploit ailing businesses.

“But it is now time for a change in strategy. There are 26 firms in the food processors industry that buyers should be looking at.

“These companies are privately owned, have increased in sales over the previous year, are debt free and are showing excellent profits.”

And it is these qualities, Pattison argues, that make these businesses attractive acquisitions. He added: “Taking over a weak company takes time, is diverting and is a high risk. But these high value acquisitions would immediately add value to your bottom line as well as give you instant power in the market.

“Indeed, buying one of these companies would give you quick access into a fast growing market and would instantly give you power – essentially forcing many of your already-weakened competitors out of the game.

“Of course some of these high value acquisitions would command a high price premium, but this new analysis tells you why some companies are worth more than others and enables you to seek out growth.

“Most successful businesses work with Plimsoll. For over 25 years we have worked with many of the leaders in this sector and recognise the challenges. A few minutes with a Plimsoll report can change perceptions and open minds to much greater profitability.”

The new Plimsoll report – Acquisitions – provides an in-depth market and industry analysis of the 620 leading companies in that industry. Plimsoll’s user-friendly analysis tells you which businesses could be worth investment

The ageing global population, together with the increasing number of people making up the older age groups, represents both a challenge and an opportunity for the global food industry according to a new report from Leatherhead Food Research. According to Leatherhead’s report, ‘An Ageing Population – Trends & Opportunities for the Food Industry’, official projections from bodies such as the United Nations suggest that the percentage of the global population aged 60 and over will increase from 11% in 2000 to 22% by 2050, during which time the number of people falling into this age category is expected to grow from 605 million to around 2 billion. Many of these people have an increased risk from adverse health conditions such as coronary heart disease (CHD), osteoporosis and dementia.

These trends carry numerous implications for the global food industry as this increasingly affluent demographic group becomes more inclined to seek out products that promote health and longevity, as well as helping them to maintain a healthy and active lifestyle past middle age. This trend has already been observed in sectors such as milk, yoghurt drinks, bottled water and ready meals, and seems set to shape NPD activity to an ever increasing extent over the coming years.

From a supply perspective, many of the leaders within the global market for functional foods represent the key suppliers of products geared towards the older age groups. Many companies now supply distinct functional food ranges which are thought to carry particular appeal to the older age groups and are purchased for their alleged health benefits. Examples include heart health products such as Unilever’s pro.activ cholesterol-lowering dairy spread, as well as fibre-enriched products such as Fiber One from General Mills.

An Ageing Population – Trends & Opportunities for the Food Industry reviews the world’s changing demographic make-up at some length, as well as highlighting which aspects of health are particularly important for older consumers. Some of the more significant product sectors and their related health claims are reviewed, examples of which include green tea, cholesterol-lowering yellow fats and food and drinks fortified with functional health ingredients such as omega-3 fatty acids. Future strategic directions, as well as likely implications for marketing personnel, are also included.

The full report An Ageing Population – Trends & Opportunities for the Food Industry is available from Leatherhead Food Research, priced at GBP895 + VAT, with a discounted price of GBP695 + VAT available to Leatherhead Members. Visit www.leatherheadfood.com/ageing-population for more details, or contact publications@leatherheadfood.com.

Research just published by Grant Thornton highlights that the Irish food and beverage sector needs to look beyond the ‘greenness’ of food production. Sustainability is also about the financial stability of the sector, and the sharing of risk, reward, and effort across all participants in the supply chain.

Businesses need to act now to capitalise on the opportunities brought about by a rapidly growing global population, who are demanding increased quantities and varieties of food, combined with fundamental shifts in productivity, technology, supply chain efficiency and innovation.

The report ‘Food 4.0: The dynamics of Supply & Demand’ highlights that:

* 30% of EU citizens will be 65 or older by 2060, compared to just 12% in the 1960s. This creates challenges and opportunities for producers and consumers alike.

* Cereal prices have risen by 17% in the past 3 months worldwide, creating new waves of food inflation and causing input cost pressure for the feed dependent poultry and pig-meat sectors.

Ciara Jackson (pictured), Head of Food & Beverage at Gant Thornton, says: “In a volatile and fast changing food and beverage industry sustainability will only occur if fundamental changes in productivity, smart innovation, pricing transparency and co-operation are agreed across the Irish food supply chain.”

The report argues that there are fundamental changes underway in food commodity prices, regulation and access to funding. Productivity improvements and technology-led innovation are challenging the production dynamic across all sectors. This changing dynamic is causing many businesses, countries and international organisations to reflect on how food is sustainably produced, to secure supply to meet the needs of tomorrow’s consumer. There is however no simple or single answer to the global challenges of feeding the world’s expanding population, doubling food production and creating a secure and sustainable supply chain.

Ciara Jackson continues: “Consumer insights are key. Understanding how core purchasing decisions are shaped by relative prices, incomes, age, preferences and technology will be the ‘new normal’ in which clever data capture and analysis will be as important as the manufacturing process of the product itself.”

Grant Thornton believe that the Irish food and beverage sector is at a critical inflection point. At present 85% of Irish food and beverage output is exported, with many ofIreland’s export markets experiencing austerity. Competition, therefore, for share of wallet is intensifying.

Today’s global consumers are:

* eating a more varied diet;

* increasingly more frugal and cost-conscious;

* living longer, with a rise in a more fitter, more active older segment;

* interested in value, convenience, health and wellness and provenance; and

* using technology to change how, when and where they shop.

Through progressively adapting to a fast-changing farm, processor, retail and consumer environment, Ireland has a unique opportunity with its rich natural resources and deep knowledge base to be a global leader in sustainable and profitable food production.

A copy of the full report is available for download at www.grantthornton.ie/foodreport.

Total global fish production, including both wild capture fish and aquaculture, reached an all-time high of 154 million tons in 2011, and aquaculture is set to top 60 percent of production by 2020, according to new research conducted by the Worldwatch Institute (www.worldwatch.org) for its Vital Signs Online service. Wild capture was 90.4 million tons in 2011, up 2 percent from 2010. Aquaculture, in contrast, has been expanding steadily for the last 25 years and saw a rise of 6.2 percent in 2011, write report authors Danielle Nierenberg and Katie Spoden.

“Growth in fish farming can be a double-edged sword,” says Nierenberg, co-author of the report and Director of Worldwatch’s Nourishing the Planet project. “Despite its potential to affordably feed an ever-growing global population, it can also contribute to problems of habitat destruction, waste disposal, invasions of exotic species and pathogens, and depletion of wild fish stock.”

Humans ate 130.8 million tons of fish in 2011. The remaining 23.2 million tons of fish went to non-food uses such as fishmeal, fish oil, culture, bait, and pharmaceuticals. The human consumption figure has increased 14.4 percent over the last five years. And consumption of farmed fish has risen tenfold since 1970, at an annual average of 6.6 percent per year. Asia consumes two thirds of the fish caught or grown for consumption.

The fish sector is a source of income and sustenance for millions of people worldwide. According to the UN Food and Agriculture Organization, for every one job in the fish sector, three to four additional jobs are produced in secondary activities, such as fish processing, marketing, maintenance of fishing equipment, and other related industries. And on average each person working in the fish sector is financially responsible for three dependents. In combination, then, jobs in the primary and secondary fish sectors support the livelihoods of 660 million to 820 million people—-10-12 percent of global population.

Although Africa is only the fourth largest producer of fish in the world, its water resources are highly sought after by larger, more-competitive fishing trawlers. Extreme over-fishing occurs when foreign trawlers buy fishing licenses from African countries for marine water use. In West African waters, foreign trawlers pose a threat because factory ships from the United Kingdom, other countries within the European Union, Russia, and Saudi Arabia can out-compete the technologies used by local fishers. In Senegal, for example, a local fisher can catch a few tons of fish each day in the typical 30-foot pirogue. In contrast, factory ships from industrial countries catch hundreds of tons daily in their 10,000-ton factory ships.

Wild fish stocks are at a dangerously unsustainable level. As of 2009 (the most recent year with data), 57.4 percent of fisheries were estimated to be fully exploited – meaning current catches were at or close to their maximum sustainable yield, with no room for further expansion. Of the remaining fisheries in jeopardy, around 30 percent were deemed overexploited, while a little less than 13 percent were considered to be not fully exploited.

A number of government initiatives give some hope to a future of sustainable fishing. In the United States, the Magnuson-Stevens Act mandated that overfished stocks be restored; as of 2012, two-thirds of US stocks are fished sustainably and only 17 percent are fished at overexploited levels. In New Zealand, 69 percent of stocks are above management targets, but Australia only reports 12 percent of stocks at over exploitation levels due to increased government fishery standards.

To maintain the current level of fish consumption in the world, aquaculture will need to provide an additional 23 million tons of farmed fish by 2020. To produce this additional amount, fish farming will also have to provide the necessary feed to grow the omnivorous and carnivorous fish that people want. Aquaculture is being pressured to provide both food and feed because of the oceans’ overexploited fisheries.

With the total amount of foreign fast food outlets in China set to break the 50,000 mark this year – up from 48,477 in 2011 and 36,037 in 2006 – and 44% of Chinese consumers saying that they plan to spend more on fast food in the coming year, the potential for the sector is clear.

However it seems that there is further opportunity for operators wanting to tap into this lucrative market, as new research from Mintel reveals that breakfast is still the under penetrated day-part for foreign fast food outlets. Indeed, only one in five (21%) urban Chinese consumers eat at fast food restaurants in the morning (4am-11am) – as opposed to 75% during lunchtime.

Tan Heng Hong, Senior China Research Analyst at Mintel, comments: “Despite having the upper hand in quality, safety and service, foreign fast food still has much work to do in flavour, affordability, health and variety in order to compete more effectively against Chinese fast food, which has the largest share of the fast food sector. To increase consumption of foreign fast food, more has to be done to unlock opportunities in the breakfast market where usage is the lowest.”

Overall, it seems foreign fast food outlets still have a way to go to match their Chinese counterparts. Mintel’s research has found 86% of respondents have eaten at Chinese fast food restaurants compared to 68% at foreign fast food restaurants in the past year. However, inclusion of local menu items could help bridge this gap.

Mintel’s research finds nearly three quarters (76%) of consumers express an interest to see more fast food options with local flavours on the menu. When asked about what consumers would like to see more of at foreign or Chinese fast food restaurants, the majority of consumers selected the introduction of food with local flavours as their top pick (15%).

Tan Heng Hong continues: “Chinese fast food restaurants, which serve Chinese staples including rice and noodles, are more popular as they win on price, variety, nutrition and flavour. Hamburgers, pizza and Japanese noodle or rice dishes served by foreign fast food restaurants are less popular because they are perceived to be more expensive or less healthy, which makes foreign fast food an occasional indulgence, rather than an everyday purchase. It is clear that consumers demand local flavours on their menu and this can be applied to the breakfast day-part, especially with items that integrate well on the menu, like porridge. The challenge for foreign fast food chains is to come up with new innovative products that can meet the demand for a more localised taste.”

The market for foreign fast food inChinahas seen steady growth over the past five years as Chinese consumers have incorporated it ever more into their lives and culture.China’s foreign fast food sector grew at a compound annual growth rate (CAGR) of 19% from 2006-11 to reach a market value of RMB 75.1 billion or 11.8% of the overall fast food sector. And there is further good news for the market for foreign fast food in China, as Mintel forecasts the sector to increase to RMB 171 billion by 2017, growing by about 95% on the expected value for 2012 or a CAGR of 14.3%. Furthermore, the number of outlets, chained and independents, is expected to increase to 71,964 outlets by 2017, up 39% on the expected number for 2012.

With estimates that 70-75% of the world’s population may be lactose intolerant and with total milk, yogurt and cheese consumption at over 200 million tonnes in 2011, lactose free dairy products represent a substantial opportunity for dairy manufacturers. In a comprehensive study of the lactose free dairy market across 33 countries around the world, leading food and drink consultancy Zenith International found that the most developed markets include the USA, Scandinavia, Germany and Spain.

Families are an important target market for lactose free dairy products, especially for parents who wish their family to benefit from dairy nutrients even if they are lactose intolerant. Plant and nut-based dairy alternatives such as soy beverages, are a competitive threat, but these do not always provide the nutrients that consumers can obtain from dairy. Encouraging dairy consumption is particularly important in addressing deficiencies in calcium and vitamin D.

Although lactose free dairy products are currently a niche segment, it is clear that they have considerable long term potential. Most significant opportunities lie in markets with a prevalence of lactose intolerance and where dairy consumption is rising, such as Asia and Latin America. Manufacturers are in a strong position to drive milk and dairy consumption through lactose free offerings, provided they meet the challenge of affordability for lower average incomes.

“Another vital challenge for manufacturers looking to enter underdeveloped markets is education,” comments Zenith senior analyst Laura Knight. “Consumers need to be educated about what lactose intolerance is, how lactose free dairy products can help them manage their condition and to overcome the misconception that lactose free milk is not real milk. Education of health professionals is also important, so they are encouraged to advise those who are lactose intolerant to avoid cutting dairy products from their diets and use lactose free products as a way of continuing to consume dairy without experiencing discomfort.”

There are also opportunities in more developed lactose free dairy markets to broaden the range of lactose free dairy products available and to drive consumption in non-retail channels. Given the higher price points that lactose free dairy products often command, there is great potential to help manufacturers drive value growth despite the current challenging market conditions.

The 2012 Zenith Report on Opportunity for Lactose Free Dairy contains over 110 pages of market commentary, tables and analysis, together with brand profiles. Contact Zenith International on Tel +44 (0)1225 327900 or E-mail mi@zenithinternational.com.

UK convenience stores’ sales are forecast to reach £44 billion by 2017, according to the latest research by IGD. This represents a 29% increase from the current value of £34 billion. The average annual growth rate for the convenience sector is set to be 5.1% between now and 2017.

IGD’s ShopperVista research highlights some of the trends helping convenience stores to grow:

* Shoppers are favouring a ‘little and often’ approach, with 49% of them now doing their grocery shopping three or more times a week, compared to 39% in 2009

* Seven out of ten (72% of) convenience store shoppers can see themselves using these shops to pick up parcels if they are not home for a delivery, saving people time while giving another reason to visit convenience stores and boost sales.

“Despite the tough trading conditions, the UK convenience sector is performing well and growing faster than the total grocery market,” points out Joanne Denney-Finch, chief executive of IGD. “The convenience market is benefiting as people favour a ‘little and often’ approach to their food shopping that helps them budget and spread the cost. The sector is also more competitive than ever, with operators raising their game to attract more customers. This includes offering stronger promotions, a greater choice of goods and better value for money.”

Nearly three-quarters (72%) of convenience stores are still independently owned, either by an unaffiliated retailer or as part of a symbol group such as Nisa or Spar. So they stand to benefit from the considerable interest in supporting local communities and businesses.

She adds: “People are leading increasingly busy lives and might not be home when online deliveries or bulky post arrives. Convenience stores can help by offering the facility to pick up parcels, giving shoppers the opportunity to do grocery shopping at the same time, and providing another reason to use them. The stores could do more to embrace technology and make convenience shopping easier. Two-thirds (65%) of shoppers can see themselves using money-off coupons sent to their mobile phones when doing their convenience store shopping.”

Sainsbury’s has launched a major new study into fish consumption and attitudes in the UK which shows a marked shift in consumer buying habits as more and more people purchase lesser known, alternative fish which are more abundant in our oceans. Following a year of high profile awareness campaigns of sustainable fish, including Sainsbury’s own Switch the Fish initiative, a shift in fish buying habits has resulted in sales increasing across species including:

* Seabass +57%

* Fresh Pollack +15%

* Trout +29%

* Tilapia +117%.

The Our future with fish report, commissioned by Sainsbury’s and produced by the Future Foundation, predicts that this trend is set to continue as consumers make more informed and sustainable choices around the fish they eat. By 2030 over half (52%) of all fish products sold will be outside of the UK’s most popular Big 5 species (cod, haddock, tuna, salmon and prawns).

The report also reveals that the population will be eating more fish, with UK adults set to eat twelve extra fish meals a year by 2030 increasing their weekly consumption by 17% (from under 8 million kilograms today to 9.23 million kilograms by 2030). The so-called tradition Fish Friday is set to continue as meals have increased by 4.4% since 2008 and are predicted to rise from one-in-five today (21%) to one-in-four (25%) in the next ten years.

The Our future with fish report found that one of the primary drivers for increasing UK fish consumption is personal well-being, with 51% of people stating that health concerns have encouraged them to eat more fish over the last year. However the report also identified some of the key barriers to current fish consumption levels in the UK, these include a lack of recipe knowledge (35%), lack of availability of fresh fish in local shops (28%) and lack of time to prepare fish from scratch (28%).

Ally Dingwall, Sainsbury’s aquaculture and fisheries manager, says: “We want to encourage more consumers to vary the fish and seafood in their diet which is why we commissioned the Our future with fish  report to build on our existing knowledge, to better understand why our customers have the current preferences they do and to look ahead at the future of fish being eaten in the UK. At Sainsbury’s we recognise the important role retailers have to play to continue the debate and interest in sustainable, alternative fish choices. That is why we invest in campaigns such as Switch the Fish which help our customers make informed choices about the fish they buy and attempt to break down the key barriers that prevent consumers eating fish regularly.”

In his latest book Something to Chew On, UCD Professor of Food and Health, Mike Gibney dispels some of the commonly held beliefs about organic foods, food additives, and public nutrition studies.

Gibney on organic foods:

• “The widely held belief that organic food is more nutritious than conventional food does not stand up to scrutiny. There is no evidence of a difference in nutrient quality between organic and conventionally produced foodstuffs”

• “Carrots taste like carrots, whether they originate from organic or conventional systems of agriculture”

“The oft-stated superiority of organic versus conventional farming in terms of environmental impact quickly crumbles when carefully examined”

Gibney on food additives:

“All chemicals, which are synthetic, are subject to intensive testing. Natural plant chemicals are not. If they were, many would not pass the rigorous standards set for their synthetic counterparts”

• “E-numbers have become feared and largely misunderstood. In the EU, because of the multilingual nature of the region, food additives were assigned E-numbers for any consumer who wanted to avoid a particular food additive”

Gibney on public health nutrition studies:

• “When you read a study linking meat with colon cancer, or almond with heart disease or whatever, bear in mind that upwards of 40% of people are not truthfully reporting their dietary intake”

About the book:

Something to Chew On is an informative and entertaining book which covers from a scientific point of view all of the worldwide controversies dominating the popular press in relation to the safety and wholesomeness of the modern food chain. It deals with the topics of organic food, GM foods, obesity, growing old, the integrity of food research, global warming, global malnutrition, consumer perception of food-borne risk, our gut bacteria, and how nutrition during pregnancy primes us for health in later life.

The book is highly suitable for the general reader and will be an invaluable guide to the science of nutrition for students of food and health.

About the author:

Professor Mike Gibney is Director of the Institute of Food and Health at University College Dublin. He has a global reputation for research on food and nutrition and he has served on all high-level advisory committees of national, EU and UN agencies. He is the author of a popular book Nutrition, Diet and Health (Cambridge University Press).

Book Details:

ISBN 978-1-906359-67-6

190pp

€22

Contact Details: Author

Professor Mike Gibney

Director UCD Institute of Food and Health

University College Dublin

E: Mike.Gibney@ucd.ie

Ph:

Contact Details: Publisher

UCD Press
Newman House
86 St Stephen’s Green
Dublin 2
Ph: 353 1 477 9813

Uniq, which sells desserts, sandwiches and chilled foods to retailers including Marks & Spencer, is one of the day’s biggest risers after an agreed bid from Irish rival Greencore.

Greencore, which missed out recently on buying Northern Foods, is paying 96p a share for Uniq, valuing the business at £113m. It is funding the deal with a rights issue and £53m debt refinancing. In the market Uniq has climbed 17.25p to 93.75p.

Earlier this year the company’s pension fund took control of the business as part of a move to deal with its huge deficit, and subsequently put it up for sale.

Clive Black at Shore Capital issued a buy note on Greencore following the deal, saying:

The acquisition of Uniq by Greencore comes after a period of considerable corporate activity for the company with disposal activity turning the group into a focused largely UK prepared foods group, plus the disappointment of not seeing through the merger with Northern Foods, which went to Boparan Holdings.

During and following the Northern Foods process it is clear Greencore’s management did not sit on its hands and so other opportunities have been explored, including Uniq. Therefore, that Greencore has announced an acquisition and that it is Uniq does not come as a major surprise to us. Note: another potential transaction that may have been reasonably high on the Greencore ‘maybe acquire’ list was, we believe, RF Brookes/Avana (Premier Foods) and the fact that it has not is, we believe, bad news for embattled Premier.

Two recent reports by the European Commission add further weight to calls for significant structural change within the EU fish catching sector and a far reaching reform of the Common Fisheries Policy (CFP). The 2010 Annual Economic Report on the EU fishing fleet shows a reduction in economic performance of the EU fishing sector in recent years. The report lays out economic trends in the EU fisheries sector in the period 2002-2008. It notably shows that 2008 was the second consecutive year in which the profitability of the EU fleet declined.

A second report, on Member States’ fishing capacity, concludes that the size of the EU fishing fleet continues to decrease at a very slow pace, maintaining a situation of overcapacity in most of the fleet. To address these issues, the Commission is currently finalising its proposals for a thorough reform of the Common Fisheries Policy, in which sustainable solutions will be proposed to turn this situation around and ensure a viable economic future for the EU fisheries sector.

The 2010 Annual Economic Report suggests that lower incomes and higher fuel prices in 2008 impacted significantly on the profitability of the fishing sector. The amount of value added generated by the sector was Eur2.1 billion in 2008, a decrease of around 23% from 2007. Overall, fleet profits declined each year between 2006 and 2008. Although the EU fleet made an overall profit of Eur250 million in 2008 (around 6% of total income), analysis by fleet segment revealed that during the period 2002-2008, 30-40% of assessed segments made losses on average, meaning that these segments made insufficient returns on invested capital.

The data reveals that vessels operating with passive gears (such as longliners, purse seiners, netters, vessels using traps and pots) generally performed better than active gears (such as demersal trawlers, beam trawlers and vessels using polyvalent active gears), with certain gear types struggling to ensure profitability, such as demersal and beam trawlers. The causes of this low economic performance include poor evolution of fish stocks, impacts of fuel prices and fish prices, and the existence of overcapacity in parts of the EU fleet.

The Report on the Member States’ efforts during 2009 to achieve a sustainable balance between fishing capacity and fishing opportunities confirmed the existence of overcapacity. During 2009, the overall reduction in fleet capacity continued to be between 2% and 3% on average, as it was during previous years. However, with this rate of capacity reductions, which are at least partly compensated by technological progress, it will be difficult to eliminate overcapacity in the short term if no changes are made to the current policy.

The global functional food market is continuing to exhibit healthy growth. Leatherhead Food Research’s latest report – Future Directions for the Global Functional Foods Market – values the functional foods market (defined as ‘food and drink products making a specific health claim’) at $24.2b in 2010. Since 2003, Leatherhead estimates that the market has grown substantially, increasing by almost 1.5 times. Moreover, the functional foods market has been growing significantly faster than the headline rate of growth of the global food and drink market of around 4% per year.

A number of factors have facilitated the growth of functional foods. Changes in consumers’ diet, lifestyles, awareness and interest in their own health and well-being are important factors creating a demand-pull for products with the potential to deliver beneficial health outcomes. Supply-push factors are evident too. Expanding scientific knowledge and technological capability, particularly ingredient exploration and development, has led to increased product innovation. Consequently, the number of new product introductions making functional claims has been growing by approximately 28% per year and the diversity of claims and suggested health benefits have been diversifying.

Growth Factors

The ability for the functional foods market to continue to grow is dependant on several factors:

* First, consumers want proof, substantiated by independent scientific research, that functional products deliver the benefits they promise.

* Second, whilst it appears as if the major economies have recovered from recession, for the next year at least household budgets are still under pressure (and in many cases are deteriorating) as unemployment continues to rise and governments implement tough fiscal measures to rebalance their economies. The positive news is that throughout the recession the functional foods market has continued to grow, indicating robust demand, but this should not be taken for granted.

* Third, EFSA decisions as to the efficacy of functional claims will have a significant impact on the development of the market. By legitimising functional claims consumers are more likely to trust and therefore buy functional products. However, the high rejection rate of claims by EFSA illustrates the difficulty companies face in getting new products to market with substantiated claims and this may slow down innovation.

* Fourth, health, nutrition and wellness are key features of many of the world’s biggest food and drink company’s strategies, and they are looking to the functional foods market for growth opportunities. Whilst we do not overlook the many SME’s that make up the functional foods market, the potential for significant expansion is more likely to come from multinational food giants and the rate at which they can bring new products to market.

A SenseReach survey of over 1,500 UK consumers revealed that functional food consumption is fairly widespread; over a quarter claiming to consume functional products daily and a fifth claiming to consume them fortnightly. However, just under a third of consumers surveyed claim they do not (and never will) consume functional food products because they do not believe they work. In fact, when all survey respondents were asked what would encourage them to eat more functional food products the majority stated they would like to see definitive proof, substantiated by independent science, that the product ‘does what it says on the tin’.

The SenseReach survey supports the widely held view that efficacy of health benefits claims is key to driving market growth and that consumption growth is more likely to come from increasing the frequency and volume of consumption of existing users rather than ‘converting’ those who do not buy into functional food products.

Future Directions for the Global Functional Foods Market updates Leatherhead’s ongoing research of the functional food market. This new report reviews sales of functional foods in the world’s key markets in areas such as anti-ageing and heart, gut and bone health, as well as discussing consumer attitudes. The report also discusses recent regulatory developments, industry structure and trends in new product activity. For further information visit www.leatherheadfood.com/functional-foods.

With sales of biscuits, cookies and crackers having increased 22% over the past five years to reach a delicious £2.2 billion in 2010, Mintel forecasts that the UK biscuit market will grow a further 15% to reach £2.6 billion by 2015.

Mintel estimates the biscuits, cookies and crackers market will grow by 2.7% this year to reach £2.3 billion in 2011. Sweet biscuits continue to dominate the sector and are forecast to represent 83% of the market in 2011.

The ritualistic nature of eating biscuits appeals to consumers, with over half (54%) eating sweet biscuits with a hot drink, demonstrating how ingrained this occasion is within British culture but emphasising the need for the category to expand beyond the tea-drinking audience.

With snack/individual packs appealing most to the 16-24s for sweet biscuits and 25-34s for savoury, packaging innovation such as Fox’s Party Rings (six 25g bags per pack) and Ryvita’s Crackers for Cheese (which comes in four packs of six) is helping to attract a younger consumer base.

“The UK biscuit industry has benefited from consumers reaching for the biscuit barrel throughout the recession, although rising commodity costs and an inability to appeal to a younger and more discerning consumer base are threatening the market,” says Amy Lloyd, senior food & drink analyst at Mintel.

Advertising campaigns that focus on quality and taste in order to fend off competition from own-label, should find favour with the third of consumers that believe that branded sweet and savoury biscuits actually taste better, Mintel points out.

However, consumers are willing to experiment with flavour, particularly women, therefore new flavour variants need to appeal to this demographic who are more likely to be buying sweet and savoury biscuits and who most enjoy experimenting with new variants.

According to Mintel, products with a healthy eating message, such as low-calorie or high-fibre, can be used to tap into the 37% of consumers who are cutting down on the amount of sweet biscuits they eat because of health reasons and the 26% of consumers who buy low-salt/wholemeal/high-fibre varieties of savoury biscuit.

Savoury biscuits should do more to push cross category promotion with complementary products such as cheese and particularly British cheese (which has seen growing popularity), maximising on the current trend towards all things British.

A KPMG study into the Irish processing sector reveals that low profitability of the sector may force it to switch to a different milk pricing structure. The report, conducted on behalf of the ICOS (Irish Co-operative Organisation Society) outlined a number of key areas of competitiveness that the sector needs to address. 

The €450,000 study was conducted in the wake of the Food Harvest 2020 report. The Food Harvest 2020 report outlines a number of goals for the food and agriculture sectors including a target of a 50% increase in output for the Irish dairy sector.

“The analysis shows that investment in new product innovation is low when compared with our international peer companies,” said the ICOS. The report also had some good to say about the sector most notably the positives that are gained from working with other co-ops.

In a copy of the report’s key findings seen by the Farming Independent the authors state that “profitability in the Irish dairy sector appears low compared to international peers”.

ICOS chief executive Tom O’Callaghan said, “The analysis conducted by KPMG has been invaluable in that it has laid out the facts in relation to the actual position on the Irish dairy industry in its global context. The work to date highlights the tangible efforts and achievements made to date, while demonstrating that there is no room for complacency.”

Overall volume sales in the UK bottled water market grew by 0.7% in 2010 to 2,055 million litres. Zenith International’s 2011 Report on UK Bottled Water also shows retail sizes under 10 litres, which accounted for 83% of the total, achieved 2.4% growth.

In contrast, the bottled cooler market declined by 8.3%, due to ongoing challenging economic conditions and continued loss of business to plumbed-in water coolers, also known as point of use machines.

“There remain five key dynamics in the UK bottled water market at the moment and they are not all pointing in the same direction,” comments Richard Hall, chairman of Zenith. “We have always believed that the benefits of convenient healthy hydration create an underlying momentum towards long term growth. Against that, concerns have been raised about environmental impact, but these are progressively being answered. The economic downturn has been another adverse factor in the past three years, putting greater emphasis on value for money.

He continues: “The weather is also an important variable – very poor in both 2007 and 2008, but somewhat more favourable in 2009 and 2010. Finally, the water cooler segment has changed dramatically – from rapid growth in bottles to even higher consumption from point of use.”.

Amongst other findings of the 2011 Zenith report were:

* Still water was responsible for 86% of 2010 volume and sparkling water 14%.

* Natural mineral water took a 61% share, spring water 28%, purified water 2% and other waters 9%.

* Locally produced waters accounted for 76% and imported waters 24%.

* Bottled water coolers have fallen to 14% of consumption, compared with 21% in 2004.

* Packaged retail volumes are 4% higher than five years ago.

* The most popular retail pack size is 50cl, followed by 2 litre and 1.5 litre.

* The top five retail brands by volume are Evian, Highland Spring, Volvic, Buxton and Aqua-Pura.

Zenith’s forecasts anticipate continuing moderate overall growth, taking sales up a further 14% to 2,340 million litres by 2015.

For further information on the 2011 Zenith Report on UK Bottled Water call Zenith International on +44 (0)1225 327900.