Global brewer SABMiller has reported a 1% organic decline in full year lager volumes in Europe as beer market growth continued to be subdued and competitors aggressively promoted economy brands and packs. Fourth quarter volumes were down 2%. The completion of planned de-stocking in the second half of the year affected Poland and Romania, which together with the effects of continuing competitor price reductions and promotional activity, resulted in volume declines of 4% and 8% respectively for the year.

In the Czech Republic, domestic volumes were in line with the prior year supported by good performance of brand and pack innovations and despite continuing weakness in the on-premise channel. In Russia, volumes were up 2%, ahead of beer market performance, and strong growth continued in Ukraine. Both Russia and Ukraine reflect 11 months of trading prior to the conclusion of the transaction with Anadolu Efes. The United Kingdom achieved volume growth of 8% for the full year, led by the expansion of Peroni Nastro Azzurro in the on-premise channel.

Despite the difficult economic conditions, Hilton Food Group, Europe’s leading specialist retail meat packing business supplying major international food retailers in twelve countries, made good progress during 2011. The group has reported a 10% rise in profit before tax to £24.5 million as it increased the volumes of meat packed by 6% and revenue by 14% to £981.3 million for 2011. Revenue growth was driven by the start-up of a new packing facility in Denmark and comparatively strong economic conditions in Sweden and Central Europe.

Volume growth of 6.0% reflected the new business in Denmark as underlying volumes were slightly reduced, due to pressure on consumer spending levels in the face of increased meat prices. Continued strong cash generation has enabled the UK-based meat group to maintain a high level of investment in equipment and facilities, to underpin the growth of its businesses over the longer term.

The group has a strong balance sheet, with net debt level at £18.7 million only marginally increased, despite capital expenditure of £25.2 million in 2011, which included £14.6 million on the new Danish facilities. Indeed, over the eight years to December 2011, Hilton has invested over £140 million on developing its packing and storage facilities.

74% of the group’s revenue is now generated outside the UK, with 77% of the volume of meat packed outside the UK, in Northern and Central European countries.

Robert Watson OBE, chief executive of Hilton Food Group, comments:  “Once again I am pleased to report that during 2011 Hilton has delivered a good performance, continuing to demonstrate the resilience of the group’s business model. Revenue growth was strong in 2011 and further success was achieved with new product and packaging initiatives. We have been able to maintain a high level of investment in our modern meat packing facilities across Europe, designed to keep them at state-of-the-art levels.”

Barry Callebaut, the world’s leading manufacturer of high quality cocoa and chocolate products, increased its sales volume by 6.7% for the first half year ended February 29, 2012 to again outperform the worldwide chocolate confectionery market. All the company’s regions and product groups contributed to the volume growth.

Barry Callebaut reported a 3% rise (up 10.4% in local currencies) in sales revenues to SFr2.48 billion but operating profit (EBIT) fell 12.5% (5.5% in local currencies) to SFr175.1 million (Eur145 million).

Significant investments in operating structures to support further growth, ramp-up costs related to recent long-term partnership and outsourcing agreements, investments in the growth of the Gourmet & Specialties Products business as well as multiple capacity expansions led to higher operating expenses, negatively impacting EBIT. Net profit from continuing operations declined by 11.3% in local currencies (-18.0% in SFr) to SFr121.8 million.

In the second quarter, Barry Callebaut’s largest region, Europe, returned to positive growth rates and reported a strong volume increase of 3.0%, compared to -0.1% for the respective chocolate market. Overall, sales revenue in Region Europe rose by 4.7% in local currencies (-3.2% in SFr) to SFr1.17 billion. Higher factory and supply chain costs as well as investments in sales and promotion, primarily in the Gourmet business, impacted operating profit (EBIT), which decreased by 12.2% in local currencies (-18.2% in SFr) to SFr114.5 million. Barry Callebaut closed the sale of its European Consumer Products business Stollwerck in September 2011. This led to a non-recurring loss of SFr 31.7 million for the reported period.

In order to readjust the structures and processes after the sale of the Consumer Products business, Barry Callebaut will spend Eur30 million for a comprehensive reengineering project, called ‘Spring’, over the next two years. The main focus of Project Spring is on Western Europe. The company expects the restructuring to yield yearly recurring efficiency gains of at least Eur10 million.

Reflecting growth in both emerging markets and developed markets, Nestle increased net profit by 8.1% on a continuing basis to SFr9.5 billion (Eur7.8 billion) for 2011 on sales of SFr83.6 billion exhibiting organic growth of 7.5% and 3.9% real internal growth. Trading operating profit was SFr12.5 billion and the margin advanced 60 basis points (90 basis points in constant currencies) to 15.0%.

Nestle continued to grow in all regions of the world, with 5.0% organic growth in Europe, 6.4% in the Americas and 13.1% in Asia, Oceania and Africa. The business grew 13.3% in emerging markets and 4.3% in developed markets.

Paul Bulcke, chief executive of Nestle, comments: “We delivered good performance, top and bottom line, in both emerging and developed markets in 2011. It was a challenging year, and we do not expect 2012 to be any easier.”

During 2011, Nestle continued to invest in innovation and platforms for growth including new partnerships in China with Yinlu and Hsu Fu Chi, and the formation of Nestle Health Science and the Nestle Institute of Health Sciences, which both had a good start in their first year of operation.

“Our innovation is creating opportunities in all categories, whether bringing new consumers to our brands in emerging markets, or building on our consumers’ engagement with our brands in the developed world,” says Paul Bulcke.

Nestle achieved growth in Western and Central/Eastern Europe with sales up 4% organically to SFr15.2 billion and real internal growth of 1.8%. Trading operating profit margin improved by 230 basis points to 15.6%.

In Western Europe all markets overcame tough economic conditions to deliver real internal growth. Portugal, Italy, Greece and Spain collectively achieved 3.7% organic growth.France, the Benelux countries and Great Britain did well. All Nestle’s key categories grew with soluble coffee, chilled culinary, frozen pizza and petcare among the highlights.

In Central and Eastern Europe there were strong performances in Ukraine and Romania and in the Adriatic region. However, trading conditions remained tough in Russia and Poland. Innovation continued to drive Nestle’s European growth with a major contribution from brands like Nescafe Dolce Gusto, Nescafe Sensazione in soluble coffee and Herta in chilled culinary.

According to Paul Bulcke, the company is “well positioned in 2012 to deliver the Nestle Model of organic growth between 5% and 6% as well as an improved margin and underlying earnings per share in constant currencies.”

R&R Ice Cream, Europe’s largest own label ice cream manufacturer, is joining forces with Kraft Foods to bring confectionery innovation to ice cream markets across mainland Europe. In co-operation with Kraft Foods, R&R will initially develop, manufacture and distribute an indulgent ice cream range of five iconic Kraft brands – Milka, Toblerone, Daim, Oreo and Philadelphia – across ten European markets – Germany, Austria, Switzerland, France, Italy, Spain, Portugal, Netherlands, Belgium and Luxembourg. The first products will hit the shelves in Spring 2012 and are likely to appear in an individual serve ice cream format similar to R&R’s Nestle Potz range, which has proved so successful in the UK.

“We believe this venture could achieve additional sales of some Eur100 million for Kraft branded products within five years,” says James Lambert, chief executive and executive chairman of R&R Ice Cream. “It gives us a world-leading food brand across much of Western Europe and further enhances our reputation as a one-stop shop for both branded and own label ice cream products. I fully expect the Kraft deal to transform the European business in much the same way as the 2001 acquisition of the Nestle Ice Cream business changed our UK operations.”

He continues: “R&R is in great shape for 2012. The surplus cash from last November’s Eur350 million bond will be fully invested by early next year resulting in significantly increased EBITDA and free cash flows. Our cash flow generation will also enable us to further pursue our strategy of consolidating the European ice cream market and investing in our factories to reduce costs and increase innovation for customers and consumers.”

Following a challenging 2011, Carlsberg plans to reduce the number of positions in its headquarter functions across Europe by 130 to 150, of which approximately 95 positions have already been made redundant in Denmark, Poland and Switzerland. On top of this, Carlsberg is planning to transfer 25 employees from Carlsberg IT to BSP, its business standardisation project. Part of these changes will be implemented during 2012.

“We are preparing for challenging market conditions in the coming years in Europe. Our response is to focus on fewer, but more important activities and execute them with greater impact. This also means that there will be activities which we choose not to do or become a lesser priority. At the same time, we have looked for new and more efficient ways of working across the Carlsberg Group,” says chief executive Jorgen Buhl Rasmussen, mentioning as an example that Carlsberg’s digital marketing activities will now be combined into a new entity with much greater co-operation across markets.

Carlsberg is also establishing an integrated supply organisation for Europe, which will incorporate the group procurement, supply chain and logistics functions. The aim is to achieve cost savings and to improve customer service. The organisation will be located in Switzerland and will be in place by the end of 2012.

“The new supply organisation will cross borders and ensure that production is organised as efficiently as possible, capable of delivering all our supply requirements. This will allow our local markets to focus on customers and consumers,” adds Jorgen Buhl Rasmussen.

Peter Ernsting, senior vice president of this new supply organisation, comes with experience from Unilever, where he was responsible for a similar process. Bengt Erlandsson, head of Carlsberg’s procurement activities, will join Peter Ernsting in managing this new organisation.

Global brewer SABMiller has increased lager volumes by 3% on an organic basis for the six months to September 30th 2011 led by robust growth in Latin America, Africa and Asia. Reported group revenue rose by 10% to $15.69 billion with organic, constant currency revenue growth of 6%. EBITA also grew by 10% to $2.70 billion, with organic, constant currency EBITA up 6%: Profit before tax, including exceptional charges of $191 million (2010: $285 million), increased by 21% to $2.04 billion.

While EBITA growth rose by double digits in Latin America, Africa and Asia and by single digits in South Africa, profits fell in Europe and North America by 6% in both regions.

“Top and bottom line growth has been strong in most of our developing market businesses, propelled by our continued investment in brands, sales and marketing capability and production capacity,” says Graham Mackay, chief executive of SABMiller. “Market conditions have remained challenging in the USA and much of Europe and increases in input costs have continued, as expected. We have taken further steps to extend our global portfolio: our planned alliance with Anadolu Efes and recommended proposal to acquire Foster’s both represent strategically important moves into attractive markets.”

Buoyed by strong growth in emerging markets, particularly by its Scotch whisky brands, Diageo has achieved 5% organic growth in both net sales to £9.94 billion and in operating profit before exceptionals to £2.88 billion for the year ended June 30th 2011.

Exceptional operating costs were £289 million for the year including a net charge of £111 million in respect of restructuring programmes. Group profit before taxation increased by 5.4% to £2.36 billion.

Three of Diageo’s four regions –North America, International and Asia Pacific – saw organic growth in net sales, operating profits and marketing spend. However, in Europe, net sales and operating profit fell by 3% and 7% respectively and marketing spend was down 4% on an organic basis.

“The very challenging trading environments of Spain and Greece are well understood and led to the overall decline in net sales for Europe this year. However, excluding these two markets, net sales in the region grew,” explains Andrew Morgan, president of Diageo Europe. “Strong performances from our Scotch and rum brands led to double digit organic net sales growth in Russia, Eastern Europe and Germany, while Great Britain, France, Benelux and Italywere resilient, with single digit growth. Throughout the year we focused our marketing spend on the biggest opportunities.”

Diageo is continuing to restructure its gloabl business to adapt to changing market requirements. In May, the company announced an operating review which is expected to reduce cost of goods and operating costs by approximately £80 million per annum by the end of fiscal 2013. The total cost of the changes which have been identified is expected to be £160 million, of which £77 million was taken as an exceptional charge this year.

Diageo also expanded its presence in faster growing markets during the year through a series of deals worth £1.6 billion, including taking a controlling stake in Serengeti Breweries inTanzania, an equity stake in Halico inVietnam, making additional investment in ShuiJingFang in China and the £1.3 billion acquisition of Mey Icki, the leading spirits company in Turkey.

“Our leading brands and superior routes to market have delivered volume growth, positive price/mix, gross margin expansion and strong cash flow. We have strengthened the business, investing more behind our brands and in our routes to market and we have deepened our leading brand and market positions in the fastest growing markets of the world,” comments Paul Walsh, chief executive of Diageo. “In addition we have implemented changes to drive further operational efficiencies. While Diageo is not immune from a fragile global economy, this is a strong platform. It is the basis of our medium term outlook for average organic top line growth of 6%, organic operating margin improvement, with the first 200 basis points achieved in the next three years, and double digit eps growth.”

Nestle has produced a solid financial performance in the first half and is predicting organic sales growth at the top end of the 5% to 6% range and a margin increase in constant currencies for the full year. The global food and beverage group reported interim sales of SFr41.0b (Eur38b) as it achieved 7.5% organic growth and 4.8% real internal growth.

Nestle posted a trading operating profit of SFr6.2b for the period, as it improved its margin to 15.1%, a rise of 20 bps on a reported basis and up 40 bps in constant currencies from that achieved by the continuing operations in the first half of 2010. Consumer facing marketing spend was increased by 6.2% in constant currencies. Although the strong Swiss franc had a major impact on consolidation, it had little effect on operational performance.

“Nestle continued to make good progress in a period characterised by political and economic instability, natural disasters, rising raw material prices and, yes, a strong Swiss franc. This has made for an extremely tough, volatile and competitive environment. But by leveraging our competitive advantages, investing behind our growth drivers and excelling in operational efficiency and effectiveness, we managed to drive growth not only in emerging markets but also in developed countries, especially in Europe,” comments Paul Bulcke, chief executive of Nestle (pictured). “Furthermore we improved our trading operating margin while increasing investment in our brands.”

In its Zone Europe region, Nestle achieved 4.1% organic growth and 2.7% real internal growth to increase sales to SFr7.5b. It also improved the trading operating profit margin by 200 bps to 16.4%, benefiting from the robust underlying performance, encompassing volume growth, pricing and savings, as well as lower restructuring and pension costs.

In general, there was a strong, broad-based performance across the Zone’s markets and categories in what remains a challenging environment, resulting in market share gains in the great majority of them. Ice cream was strong, with some good innovation in impulse-driven products; Maggi culinary products, the Herta chilled range and Buitoni and Wagner frozen pizzas all contributed well, while Nescafe and pet care were accretive to the Zone’s growth.

In Western Europe there were strong performances inFrance,Italy, Benelux, the Nordic region andSwitzerland, whileGreeceand the Iberian region managed to achieve positive growth despite severe economic conditions. Key innovations such as Maggi Juicy Roasting, Nescafe Dolce Gusto and Felix were strong contributors to the performance of their categories.

In Eastern Europe there was double-digit growth in Ukraine and the Adriatic region. However, Russia’s growth continued to be subdued, particularly in the confectionery category.

Tokyo-based Ajinomoto Co is reorganising its industrial and consumer food products business in Europe. The move is designed to strengthen sales in the consumer foods segment, by integrating operations under Paris-based Ajinomoto Foods Europe.

In July, AFE will absorb Ajinomoto Consumer Products Europe, which currently oversees the European consumer business. The company also will establish a branch office in London to strengthen sales in the UK, the largest Chinese cuisine market in Europe, and a new product-development department for local products.

In September Ajinomoto Poland will become a subsidiary of AFE to serve as the base for the consumer business in Eastern Europe and the supply of powdered seasonings and instant noodle products in Western Europe.

With the reorganisation, AFE’s focus will expand from industrial businesses to also include consumer foods segments. More flexible decision-making and greater operational efficiency will enable the company to tailor sales to local needs. In particular, AFE will concentrate on Chinese, Japanese and other ethnic Asian restaurants in Europe, which have been expanding due to consumers’ widening taste preferences and rising health consciousness.

The first-ever global assessment of the environmental costs of aquaculture shows that farmed seafood is less ecologically damaging than livestock production, and that there is great potential for improvements in efficiency.

A new and comprehensive analysis released by WorldFish Center and Conservation International (CI) has investigated the environmental impact of the world’s major aquaculture production systems and species, and offers a first-ever global assessment of trends and impacts of cultivated seafood. The analysis has found that, from the 75 species-production systems reviewed, more production means more ecological impact, but that compared to other forms of animal protein production such as livestock, aquaculture is more efficient.

The report, ‘Blue Frontiers: Managing the environmental costs of aquaculture’, along with a companion policy recommendations paper, concludes that the demand for aquaculture products will continue to grow over the next two decades as a key source of animal protein for growing urban populations, and that the industry needs to meet this demand with improved efficiencies and reduced environmental impacts.

Among the landmark report’s major findings are two key highlights: (1) the environmental impact of aquaculture varies dramatically by country, region, production system and species , and (2) a review of published information found that aquaculture is more efficient and less damaging to the environment, compared to other animal protein production systems such as beef and pork, and is likely to be among the most important sources of protein for human health and nutrition in growing urban populations in many parts of the developing world. The report also highlights that there is great room for improvement, by identifying and sharing best practices, increasing investment in innovation, and strengthening policies and regulations.

$100+ Billion Industry

Driving the scientists’ research was the recognition of aquaculture as one of the fastest growing food production sectors in the world. It has grown at an average annual rate of 8.4% since 1970 and total production reached 65.8 million tonnes in 2008 according to the Food and Agriculture Organization of the United Nations (FAO). Today, aquaculture is a $100+ billion industry that now provides more than half of all seafood consumed in the world, surpassing wild-caught seafood.

Using all available data from 2008, the study compared aquaculture’s global demands across a wide variety of species groups (13), geographies (18 countries), feed types (5) and numerous production systems in use today, allowing scientists to compare and contrast 75 different types of species-production systems, to determine their environmental impacts on acidification, climate change, energy demand, land-use demand, and other ecological factors.

Findings

Following almost two years of data gathering and analysis, researchers found that:

* China and the rest of Asia collectively supply an overwhelming majority of the world’s cultivated seafood, at 91% of global supply. China alone accounts for 64% of global production.

* On the other end of the supply chain, Europe produces 4.4%, South America produces 2.7%, South American produces 1.9%, and Africa produces 1.6%.

* Most popular aquaculture by country: carp tops the list for China and the rest of Asia; salmon is number one for Europe and Latin America, finfish (tilapias) rank highest in African aquaculture.

* Aquaculture with the highest environmental impact include: eel, salmon, and shrimps & prawns, due to significant energy and fish feeds required for production – these represent greatest opportunities for improvement.

* Aquaculture with the lowest/least environmental impact include: bivalves (mussels and oysters), mollusks, seaweed (those toward the bottom of the food chain; don’t require additional feed).

* Efficiency of salmon production methods: while salmon production trends toward the high end of the environmental impact scale due to the use of wildfish for feed, production methods in northern Europe, Canada and Chile were found to be more efficient than those in China and other Asian countries (in terms of acidification, climate change, energy demand and land occupation).

* Efficiency of shrimp and prawn production methods: cultivation in China was found to be much less efficient than other producer countries (e.g. Thailand) in terms of acidification, climate change and energy demand.

* Aquaculture vs wild-caught fisheries: aquaculture today accounts for a significant majority of all consumed seaweeds (99%), carps (90%), and salmon (73%), and also delivers half (50%) of the total global supply of tilapia, catfish, mollusks, crabs and lobsters.

Looking toward the future of seafood cultivation, ‘Blue Frontiers’ projects that global aquaculture production will continue to grow at current rates, with conservative estimates of 65-85 million tones produced in 2020, and 79-110 million tones by 2030. By comparison, 69 million tonnes of cultivated seafood were produced in 2008.

“China, India and the rest of Asia with their growing middle classes are where we can expect demand for fish to rise most significantly,” says co-author Mike Phillips, a senior scientist at WorldFish. “Current trends indicate that the majority of the increase in global production will come from South and Southeast Asia, with a continued drive by major producer counties such as China and Vietnam towards export to European and North American markets.”

PepsiCo has announced an open call for digital entrepreneurs across Europe to apply to take part in ‘PepsiCo10′, an innovation incubator program designed to discover and support emerging technology companies whose ideas and solutions can be applied to drive business value for the global soft drinks and snacks group.

Launched successfully in the United States last June, PepsiCo has now expanded PepsiCo10 to Europe. The goal of the PepsiCo10 Europe program is to identify up to 10 of the most promising companies and give them the opportunity to work with PepsiCo in the UK to deliver pilots of their technologies, whilst receiving the support and guidance from industry-leading mentors.

PepsiCo is looking to identify businesses with ‘ready-to-go’ technologies across five categories; social media; mobile marketing; place based technology; digital video; and gaming or learning platforms. Highland Capital Partners, OMD and Weber Shandwick will continue to serve as advisors to PepsiCo throughout the program.

Selected applicants will undergo a series of rigorous assessments, and a subset will be invited to participate in a second round and submit video presentations, which will be judged by senior brand representatives from PepsiCo brands Pepsi, Walkers, Tropicana and Quaker. Companies’ ideas and solutions will be evaluated on their potential ability to impact PepsiCo’s business and to deliver on ‘Performance with Purpose’, the company’s commitment to finding innovative ways to minimise its impact on the environment; to provide a great workplace for its associates; and to respect, support and invest in the local communities where it operates.  Prospective applicants can find out more about the program and apply online until July 15, 2011 at www.pepsico10.com.

Near completion, PepsiCo10′s pilot programs in the US have resulted in the execution of successful digital marketing activations across US brands. These winning technologies include: Tongal, a video sharing platform that is currently sourcing animation video for the Brisk Tea brand; BreakOut Band, a collaboration music platform that worked with Pepsi MAX to execute at the 2011 South by Southwest Interactive and Music conference; and Evil Genius Designs, a mobile gaming platform with which PepsiCo has worked to develop a virtual reality video game featuring products across the PepsiCo portfolio.

“There is a huge appetite amongst consumers for new and exciting social media technologies and for us as a business, digital is a dynamic and increasingly important area for innovation,” points out Ian Ellington, general manager for Walkers Crisps, one of the brands which will benefit from the PepsiCo10 technologies. “We’ve already used digital and social media to great success in our past campaigns, such as Walkers’ Do Us A Flavour campaign and we now look forward to harnessing the emerging tech and start-up landscape and cultivating the next generation of digital pioneers.”

CAPTION:

PepsiCo10 winner BreakoutBand brought an interactive music beat maker to the Pepsi MAX Lot at SXSW Interactive 2011, giving music fans a chance to mix their own beats on-site, form virtual bands and create original songs via their mobile phones.

Greater focus on its priority brands and increased investment in emerging markets has allowed Diageo to deliver 7% organic net sales growth in its third quarter, and to increase sales by 5% on an organic basis and volume by 2% in the nine months ended March 31st 2011, compared to the comparable period last year. However, while its regional markets of North America (3%), Asia Pacific (9%) and International (!4%) all registered organic net sales growth, Europe declined by 3%.

On a reported basis net sales grew by 3% in the quarter ended 31 March 2011 and by 2% in the nine months ended 31 March 2011, against the comparable prior period in each case.

Paul Walsh, chief executive of Diageo.

‘Trading in the third quarter was in line with our expectations that the second half would be stronger than the first,” comments Paul Walsh, chief executive of Diageo. “In North America consumer trends are improving, albeit modestly, and Diageo’s scotch, vodka and tequila brands performed strongly in the quarter. Better mix and lower discounts offset volume decline to drive top line growth. Overall trading in Europe continues to be challenging although in the quarter stronger price/mix in Great Britain and Russia offset weaker price/mix in Ireland and Greece and a deterioration of the on trade in Spain. Further improvement in price/mix in both International and Asia Pacific in the quarter were driven by the continuing strength of our scotch brands especially around Chinese new year, improving trends for our beer brands in Africa, especially in Nigeria, and stronger growth in South Africa and Australia.”

He adds: ‘This overall improving trend is the result of our focus on our priority brands and our strengths in market. We remain confident that our up weighted marketing investment together with the increased investment we have made in emerging markets in the year will continue to deliver improving performance.’

Global brewer SABMiller has reported that its lager volume in Europe declined by 3% in the 12 months to March 31st 2010, reflecting a particularly challenging first half impacted by generally weak economic conditions. Fourth quarter volumes were up 2% benefiting from a weak comparative period due to prior year excise increases in Russia and the Czech Republic.

Poland’s volumes were down 4% for the year with the market impacted by widespread flooding and alcohol sales restrictions during a nine day national mourning period in the first half, as well as significant competitor discounting in the economy segment. In the Czech Republic SABMiller’s volumes were down 6% due to continued weakness in the on-premise channel, further downtrading into lower value segments and increased competitor discounting.

Russia’s full year volumes were 1% ahead of the prior year as a result of a stronger second half supported by a gradual economic recovery, and despite competitor price reductions in the local premium segment. In the fourth quarter Russia’s volumes grew by 17% reflecting lower volumes in the fourth quarter of the previous year following significant buy-in ahead of the January 2010 excise increase.

Volumes in Romania were down 8% as the market remained in recession and continued to be impacted by government austerity measures.

Findus Group, one of the leading frozen food businesses in Europe with sales over Eur1.3b, is reported to be renegotiating its covenants with its lenders in order to gain greater financial flexibility for funding expansion. Indeed, some industry sources suggest that Findus is attempting to assemble a Eur1 billion war-chest for funding future acquisitions.

The food group, which is controlled by private equity firm Lion Capital, holds market leading positions in frozen foods in France, Sweden, Norway, and Finland and a market leading position in frozen and chilled seafood in the UK. Findus Group operates across many categories including ready meals, seafood, vegetables and potatoes.

Helped by strategic acquisitions, Aryzta, the Switzerland-based international speciality bakery group, increased EBITA by 52% to Eur173.1m on revenue up by 36% to Eur1.89b for the first six months ended January 31st 2011. Group EBITA margin increased by 90bps to 9.1% and underlying fully diluted net profit rose 40.9% to Eur116.3m.

The core Food Group increased revenue by 60% to Eur1.28b during the period. However, acquisitions were responsible for 54.3% and currency factors for 5.5%, leaving underlying growth at just 0.4%. The European food business increased revenue by 10% to Eur585.3m but after stripping out acquisitions and currency gains underlying sales actually declined 1%. Food Europe’s EBITA grew 8.7% to Eur66.0m.

Revenue at Aryzta’s North American food business increased by 140% to Eur610.5m but underlying growth was 2%. EBITA grew by 118% to Eur76.9m.

Food Rest of World increased revenue by 591% to Eur87.4m with underlying growth of 18.4%. EBITA grew by 504% to Eur12.5m.

Owen Killian, chief executive of Aryzta.

In addition to its food business, Aryzta also hold a 71.4% stake in Origin Enterprises, a leading agri-business group with operations in the UK, Ireland and Poland.

“While the major feature of these results is the enormous contribution from our recently acquired businesses, we are most encouraged by the improvement in underlying revenue growth as consumers adjust to improving economic circumstances in most markets,” says Owen Killian, chief executive of Aryzta. “We have initiated business combination projects in Europe and North America which, as we roll out the Aryzta Technology Initiative (ATI), will create the opportunity to unlock the potential within our enlarged customer base.”

He adds: “The speed and severity of food raw material price increases was unexpected and is again a major focus in the business. In such an inflationary environment, bakery plays an important role in a food menu or basket and provides an innovative value proposition for consumers.”

According to the latest glass recycling estimates – published one year ahead of the official Eurostat data – more than 67% of glass bottles and jars were collected for recycling in the European Union in 2009. The figures released by FEVE, the EU Container Glass Federation, translate into about 11 million tonnes or 25 billion glass bottles and jars being collected throughout the European Union, confirming the steady and positive trend of the last years (66% in 2008).

“Glass recycling increases each year thanks to the commitment of consumers everywhere. Our industry is able to turn this waste into a valuable resource to make new bottles and jars because glass by nature is 100% recycleable,” says Niall Wall, president of FEVE – the European Container Glass Federation.

Recycling glass avoids the use of virgin raw materials, reduces energy consumption and greenhouse gas emissions. Glass recycling contributes to creating and securing economic growth and local employment in Europe because glass is locally collected, locally recycled and locally produced. The act of recycling means that glass producers can make use of the same materials over and over again. This characteristic of glass puts the material at the centre stage in the ambitious strategy of the European Commission to make the European Union a ‘circular economy’ where recycling is the key factor to waste reduction and where waste is considered as a valuable resource.

Belgium has the highest glass recycling rate at 96% followed by Switzerland on 95% and Netherlands on 92%. The UK recycled 62% of its glass bottles and jars in 2009 and Ireland achieved a rate of 80%.

Benefiting from an improvement in the global economic environment and favourable currency factors, Pernod Ricard has achieved strong sales and profit growth in the first half ended December 31st last. Net sales increased by 13% to Eur4.28b – up 7% organically – and group share of net profit from recurring operations rose by12% to Eur726m.

Pernod Ricard increased advertising and promotion spend by 11% organically to Eur765m; raising it from 17% to 17.9% of sales. The French and international drinks giant improved its operating margin (profit from recurring operations/sales) by 30bps to 28.3% and also significantly reduced debt by Eur864m during the period.

Pierre Pringuet, chief executive of Pernod Ricard:

The group’s 14 strategic spirits and champagne brands grew 8% in volume and 13% organically in value, reflecting a very favourable price/mix effect. These 14 strategic brands represented 59% of group sales in the first half of 2010/11, compared to 55% in the first half of the previous year: Indeed, eight of 14 brands posted double-digit organic sales growth: Martell (+32%), Royal Salute (+31%), Perrier-Jouët (+21%), Jameson (+18%), Ballantine’s (+13%), The Glenlivet (+12%), Chivas Regal (+11%) and Havana Club (+10%).

Pernod Ricards sales in Europe (excluding France) showed a marked improvement in the first half, growing 2% organically against a 5% decline in 2009/10. This came from strong growth in Central and Eastern Europe and moderate growth in Western Europe.

According to Pierre Pringuet, chief executive of Pernod Ricard: “This strong performance enables us to revise upwards our guidance for organic growth in profit from recurring operations to a level close to 7% over the full 2010/11 financial year. We will pursue our policy of sustained investments in our strategic brands and markets.”

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

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

Nestle improved its group EBIT margin from continuing operations by 30bps to 13.4%, while increasing the investment behind its brands with marketing expenses up by 100bps, and consumer facing marketing spend up 13.2% in constant currencies. The improvement in EBIT margin was driven by sales growth and business mix, as well as by the achievement of operating efficiencies of over SFr1.5b through the Nestle Continuous Excellence programme.

Paul Bulcke, chief executive of Nestle.

During 2010, Nestle concluded acquisitions worth more than SFr5b, including Kraft’s frozen pizza business, Vitaflo (clinical nutrition products) and Waggin’ Train (dog snacks). Nestle invested SFr4.6b in its operations across the world with strong emphasis on emerging markets such as India, Indonesia, the Philippines, the Equatorial African Region and Poland.

Other highlights of the year included the creation of Nestle Health Science and the Nestle Institute of Health Sciences to pioneer a new industry between food and pharma, and the opening of a R&D Centre for biscuits in Chile. Nestle also completed its SFr25b three-year share buy-back programme and launched a new SFr10b programme.

“In 2010, we delivered another year of strong top and bottom line growth, outperforming the market. We increased investment in our brands, our operations and our people. We continued to drive efficiency and effectiveness in both developed and emerging markets while at the same time accelerating innovation, serving well over a billion consumers a day across the world,” comments Paul Bulcke, chief executive of Nestle.

He continues: “We are starting 2011 with continued momentum, well placed to face uncertainties ahead, including volatile raw material prices. We are therefore confident of achieving the Nestle Model in 2011 – organic growth between 5% and 6% and an EBIT margin improvement in constant currencies.”

Helped by the integration of its FEMSA acquisition in Latin America and continued growth of its flagship brand, Heineken increased net profit by 41% to Eur1.44b for 2010 on revenue up 9.7% to Eur16.13b. On an organic basis, net profit (beia) rose by 19.7%, driven by solid EBIT (beia) growth and lower interest costs, but consolidated beer volume and revenue were down by 3.1% and 2.2% respectively.

During the year, Heineken successfully completed the integration of the beer operations of FEMSA. On a pro forma basis, EBIT (beia) of these operations increased 44% to Eur397m and pre-tax cost synergies of Eur42m have already been realised. Heineken’s Total Cost Management (TCM) programme delivered Eur280m pre-tax savings in 2010.

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

“Heineken delivered a robust performance, generating double-digit organic net profit growth for the fifth consecutive year. We achieved this against a backdrop of an improving yet still challenging economic environment in a number of our key markets. At the same time, we have made significant investments in our platform for future growth. The most transformational event being the acquisition of the beer operations of FEMSA which provide us with significant new opportunities in three of the four largest profit pools in the global beer market: Mexico, Brazil and the USA,” comments Jean Francois van Boxmeer, chairman and chief executive.

He continues: “I am particularly pleased that the Heineken brand has once again outperformed our broader brand portfolio, the overall beer market and the international premium segment as a whole. We will continue to invest in our leadership position in this segment. In addition to the acquisition of the beer operations of FEMSA, our new partnership in India and strong growth in Africa and Asia have further enhanced our exposure to emerging beer markets.”

Outlook

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

Heineken expects volume sales in Latin America, Africa and Asia to benefit from ongoing robust economic conditions aided by the group’s marketing and investment programmes. Despite an improving economic environment in Europe and the US in 2011, the impact of austerity measures and high unemployment will result in continued cautious consumer behaviour in these markets, according to Heineken.

The international premium segment will continue outgrowing the overall beer market, benefiting the Heineken brand and supporting improved sales mix. Heineken forecasts a low-single digit increase in input costs and plans to mitigate this impact through increased pricing.

In Europe, Heineken will shift its prime focus towards volume and value share growth, with increased investments in marketing and innovation in Heineken and other key brands, further supported by the international roll-out of higher margin brands. Whilst this is expected to affect profit development in Europe in the near term, it underlines the brewer’s commitment to strengthening its leadership position in the region.

The TCM programme will deliver further cost savings, although at a lower level than in 2010 following the earlier than planned realisation of savings in 2010. As a result of ongoing efficiency improvements, Heineken expects a further organic decline in the number of employees.

Raisio, the Finnish food and functional food ingredients group, increased net sales by 17.9% to Eur443.0m in 2010. EBIDTA fell from Eur37.5m (excluding one off items) in 2009 to Eur35.3m last year. EBIT was Eur19.4m (Eur20.5m excluding one-off items), which accounts for 4.4% (5.5%) of net sales, which is in accordance with Raisio’s all-year guidance.

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

Matti Rihko, chief executive of Raisio.

In the first half of 2010, Raisio acquired Glisten to enter the snacks and confectionery market in Great Britain. Since its year end, Raisio has acquired Big Bear Group for Eur95.3m to gain a stronger branded foothold in the snacks and breakfast cereals markets in Great-Britain and Western Europe. The acquisition supports Raisio’s growth strategy to become the leading provider of healthy snacks in Europe.

Matti Rihko continues: “We will continue to be active in the acquisitions front. The group’s strong balance sheet and cash flow provide a good foundation for acquisition activities as far as there are suitable companies available fitting our strategy and meeting our preset criteria. During the growth phase, Raisio aims to maintain the earlier 4-5% level of profitability.”

Great-Britain has now become the largest market area for Raisio’s food business with Eur140-150m of net annual sales.

Despite a 3% decline in Europe, Diageo achieved organic net sales growth of 4% to £5.32b for the six months ended December 31st 2010 and 2% organic operating profit growth (before exceptional items) to £1.73b. Diageo reported a 12% rise in operating profit to £1.72b for the period and profit before tax was £1.61b, against £1.39b in the first half of 2010.

According to Diageo, the overall economic and consumer environment in Europe continues to be weak. In Greece and Spain, the financial crisis has led to a further decline in consumer confidence and to trade destocking. In Ireland, the ongoing contraction of the on-trade has led to a decline in Diageo’s predominantly beer business. In Great Britain, net sales growth was driven by the growth of wine which reduced margins as did the very competitive pricing environment on spirits. In contrast, the consumer recovery in Russia and a bounce-back in Eastern Europe, aided by some wholesaler restocking, led to strong double digit growth in these emerging markets.

Paul Walsh, chief executive of Diageo.

Europe accounts for almost a third of group profit. The key markets of Spain, Great Britain and Ireland generate about half of the region’s sales for Diageo.

“Momentum is building in our business. Our top line performance was stronger and price/mix improved. We have increased marketing spend significantly, up 10%, but in a very focused way. 35% of the increase was behind strategic brands in US spirits to build the brand equity as we move away from promotional support and over 60% of the increase was on our brands in the faster growing emerging markets,” comments Paul Walsh, chief executive of Diageo. “Despite the economic weakness in much of Europe, our first half performance gives me increased confidence that we will improve on the organic operating profit growth we delivered in fiscal 2010.” Diageo’s organic operating profit growth was 2% in 2010.

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

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

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

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

“Now, as we enter 2011, we do so with solid momentum. This year marks the 125th anniversary of Coca-Cola, and the second year of our 2020 Vision,” says Muhtar Kent, chairman and chief executive of Coca-Cola. “The fact that we are a thriving business after nearly 125 years is a testament to our youth, not our age. There is something special indeed about an enterprise that is in a state of constant renewal and dynamic growth. And while we recognise that challenges remain in our worldwide marketplace, we are confident that we are advancing our global momentum to deliver long-term sustainable growth and value for our shareowners.”

Finnish food group Raisio has acquired UK-based Big Bear Group for Eur95.3m (£82.0m) to further its growth strategy of becoming the leading provider of healthy snacks in Europe. In the financial year to the end of August 2010, Big Bear Group’s net sales were Eur65.1 m, EBITDA was Eur13.6m and EBIT was Eur12.1m. Nearly 70% of net sales are generated by breakfast and snack products and 30% by confectionery. The company employs some 250 people and has production in two locations in Leicester and in Southall, London.

Big Bear Group was founded in 2003 and it has acquired traditional, well-known brands in Britain. In breakfast category, the company owns the brands Honey Monster, Honey Waffles and Sugar Puffs, in snack bars Harvest Cheweee and Fox’s in confectionery. The product range includes breakfast cereal products mainly for the children’s category as well as healthy snack bars and cereal products with no artificial flavours or colours.

With the acquisition, Raisio will gain a stronger foothold in the branded snacks and breakfast markets in Great Britain and Western Europe. The deal will also strengthen the company’s position in the UK confectionery market. Great Britain becomes the largest market area for Raisio’s food business with Eur140-150m in annual net sales. Raisio is already present in the British snacks market with Glisten, which it acquired for Eur22.8m in 2010.

Matti Rihko, chief executive of Raisio.

“Big Bear complements extremely well the earlier acquisition of Glisten and brings the necessary critical mass for the future,” says Matti Rihko, chief executive of Raisio. He points out that Raisio’s growth is proceeding according to plan and that the company will continue to be an active player in the acquisition market. Big Bear Group will be integrated into Raisio’s Western European brand operations.

Big Bear Group was owned by the company’s senior management together with a group of institutional investors including specialist private bank Investec.

Investec has realised an Internal Rate of Return on its original investment of over 37%. Investec has supported Big Bear since its inception, backing its first acquisition in September 2003 of a non-core division from Northern Foods and the subsequent acquisition of the Sugar Puffs, the Honey Monster and other brands from Pepsico in 2005.

Investec backed a management team led by Paul Wilkinson, John Jackson (joint chairmen) and Mario Giannotta (chief executive) to build the business via acquisition and organic growth. Since the first acquisition, management has increased group EBITDA from £1m to £12m.

Netherlands-based Refresco Group is acquiring Spumador, the largest producer of private label carbonated soft drinks and mineral water in Italy from private equity firm Trilantic Capital Partners for an undisclosed sum. Refresco is the market leader in the production of private label soft drinks and fruit juices in Europe.

Spumador is a major producer for the Italian retail market with five production locations in Northern Italy. In addition to private label carbonated soft drinks and mineral water, Spumador also manufactures ready-to-drink (RTD) iced teas, sport drinks and fruit juices and owns a number of trademarks, including San Antonio, Valverde and San Attiva.

In 2009, the company generated Eur170m in revenue, an increase of 7% compared to 2008, and produced a total of 958m litres, up more than 9% over the previous year.

The acquisition of Spumador is Refresco’s second substantial acquisition within a year. It follows the acquisition of Soft Drinks International (SDI), a German producer of soft drinks and mineral water with revenues of Eur140m in September 2010. The acquisition of Spumador is in line with Refresco’s ‘buy and build’ strategy, which is geared towards further strengthening and expanding Refresco’s leading position in Europe in the area of soft drinks and fruit juices. This is Refresco’s first move into the Italian market and marks another step towards the consolidation of the fragmented European market for private label soft drinks and fruit juices.

“With the acquisition of Spumador, we will create a very sizeable position in an attractive new region. It is our first step into the growing Italian private label market, where growth of 6% is predicted in the soft drink market segment for the coming years,” points out Hans Roelofs, chief executive of Refresco. The transaction is expected to be completed within a few months.

Cargill is expanding its cocoa and chocolate business in Europe through the acquisition of. KG Kakao Verarbeitung Berlin (KVB), an integrated chocolate company based in Germany, for an undisclosed sum. KVB operates two production plants, both in Berlin.

The two plants have a capacity of over 75,000 tonnes of chocolate per year and employ around 180 people. Upon completion of the deal, after clearance from the regulatory authorities, KVB and its employees will become part of Cargill’s global network of cocoa and chocolate businesses.

“This acquisition marks a significant step in Cargill’s chocolate growth strategy in Europe and our ability to better serve our existing and future customers,” comments Jos de Loor, head of Cargill’s cocoa and chocolate business. “The acquisition will strengthen Cargill’s position in Germany, the largest chocolate market in Europe, and create opportunities to expand our chocolate business into new markets.”

KVB’s two Berlin plants will complement Cargill’s existing German cocoa and chocolate facilities in Klein Schierstedt and Hamburg. Completion of the acquisition is expected in the first part of 2011.

Constellation Brands, the world’s leading premium wine company, has agreed to sell its Australian and UK business – Constellation Wines Australia and Europe – to Champ Private Equity of Sydney for A$290m (Eur220m). Constellation will retain a 20% interest in the business and receive cash proceeds of about $230million.

The transaction, which is expected to close by the end of January 2011, includes virtually all Constellation’s Australian, UK, and South African brands, wineries, facilities, vineyards, and the group’s 50% interest in Matthew Clark, the UK wholesale joint venture.

“During the last two years, Constellation has implemented a strategy focused on driving profitable organic growth through premiumising its world class brand portfolio and improving margins, return on invested capital and free cash flow,” says Rob Sands, president and chief executive of Constellation Brands. “The CWAE business sells quality wines from the important Australian appellation and has significant scale, but continues to be faced with challenging market conditions. Therefore, the business is no longer consistent with Constellation’s strategy.”

North American chocolate confectionery manufacturer Hershey is stepping up its growth in Europe as part of its strategy to reduce its reliance on its domestic market by developing internationally, especially in emerging markets such as Asia and Latin America. The UK’s second largest retailer, Asda, will commence selling Hershey products next year and the American confectionery group has now established a European subsidiary, located in London.

Last year, only 14% of Hershey’s total turnover of $5.3b was generated outside of North America. Hershey was linked to a possible bid for Cadbury, which would have helped to internationalise its business, but lost out to Kraft Foods.

Coca-Cola Enterprises, the world’s third-largest independent Coca-Cola bottler, has appointed Garry Watts as a director with immediate effect. He will serve on the finance and audit committees of CCE’s board of directors.

He currently serves on the board of directors at Stagecoach Group, where he is senior independent director and chairman of the audit committee, and previously served on the boards of Celltech Group, Medeva and Protherics.

Mr Watts most recently served as chief executive of British consumer healthcare products company SSL International. While there, he led the company’s successful turnaround, resulting in its recently-completed sale to Reckitt Benckiser.

“Garry’s experience in the European fast-moving consumer goods industry and his extensive accounting and financial expertise will provide tremendous value to our board of directors,” says John Brock, chairman and chief executive of Coca-Cola Enterprises.

CCE is the sole licensed bottler for products of The Coca-Cola Company in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden.

Prague, Amsterdam and Berlin have been named the top European destinations for a beer, according to a new report into European beer drinking culture by SABMiller, one of the world’s largest brewers.

The report, ‘Whose Round?’ which was researched across 12 European countries, found that 20% of all respondents named Prague as their top city for a beer, although British participants chose London, followed by Dublin, as their beer-drinking destination of choice.

Prague was chosen as the top city by respondents from five countries and was particularly popular with beer drinkers from its Eastern European neighbours. Second placed Amsterdam trailed with 13% of the vote. London was fifth overall, proving most popular with Romanian, Czech and Dutch drinkers – as well as Brits.

As well as the British; Dutch, Germans and French beer drinkers all showed their national pride by voting their own capital the top place for a pint. Propping up the bottom of the league table were Bucharest, Bratislava and Warsaw, landing only 1% of the vote each.

Nigel Fairbrass from SABMiller says: “It is no great surprise that Prague is the most sought-after city for Europeans to enjoy a pint; the Czech Republic produces some of the world’s finest beers and is home of the original Pilsner, Pilsner Urquell. Equally it’s interesting to note that Brits don’t think London can be beaten when it comes to beer.”

‘Your Round?’ surveyed a range of beer drinking cultural trends across Europe, including which countries are most likely to socialise after work – and which have the most generous bosses; which nation of men are most likely to expect a woman to pay her way on a date; and the celebrities that Europeans would most like to go for a beer with.

Great Britain, Romania and Italy have the most generous bosses when it comes to buying beer. The Dutch are the least likely to go out drinking with colleagues (34%) but when they do, they have the most generous bosses, with 37% saying that their boss will sometimes or always stand a round.

Brits’ choice of celebrity beer drinking buddies were Cheryl Cole and Stephen Fry, whilst Barack Obama and Angelina Jolie were the most popular across Europe.

Other findings include:

- Britain is the biggest round-buying nation, with 82% of people saying that they buy beer in rounds – three times more than in Germany, where drinkers prefer to pay for their own drinks individually

- British bosses are amongst the most sociable in Europe – and the most generous, whereas French bosses are the least likely to ever go out for a beer with their teams

- British women are big believers in equality – more than half think that men and women should split the beer tab on a date.

SABMiller, one of the world’s leading brewers with operations and distribution across six continents, has increased reported EBITA by 13% to $2.47b for the six months to September 30th 2010. The growth was 10% on an organic, constant currency basis, as key operating currencies strengthened against the US dollar compared to the equivalent period in the prior year. Profit before tax advanced 13% to $1.69b, including exceptional charges of $285m.

Reported group revenue increased by 7% (4% on an organic, constant currency basis) to $14.24b, benefiting from higher sales volumes and price increases mainly taken in the second half of the prior year. Lager volumes increased 1% on an organic basis with growth in Asia, Africa and South Africa

Graham Mackay, chief executive of SABMiller.

However, in Europe EBITA fell by 4% on an organic, constant currency basis due to volume decline and down-trading. North America EBITA grew 27% as firm pricing and synergies more than offset volume declines.

“In trading conditions which remained mixed across our markets, the group benefited from its global spread of businesses, delivering a strong financial performance. The strength of our brands, which supported price increases taken largely in the prior year, contributed to good revenue growth,” explains Graham Mackay, chief executive of SABMiller. “Cost reductions, driven by lower raw material input costs and further fixed cost efficiencies, helped to finance increased investment behind our brand portfolios and assisted margin enhancement.”

CIAA (the Confederation of the food and drink industries of the EU) has welcomed the publication of the European Commission’s ‘Communication for An Integrated Industrial Policy for the Globalisation Era – Putting Competitiveness And Sustainability Centre Stage’.

The document presented under the guidance of DG Enterprise, aims to put industrial competitiveness ‘front and centre’ of the EU executive arm’s socio-economic and political ambitions. As an important pillar of the EU economy, the food and drink industry welcomes plans to strengthen the functioning of the EU Internal Market – a key priority for food operators across the Union.

Boasting an annual turnover of approximately Eur965b, food production is the largest manufacturing business in Europe today. The industry generates over 4.4 million jobs directly and is renowned as the largest food and drink importer and exporter across the globe.

Accounting for over 310,000 companies, the industry is also highly fragmented – over 99% of operators are SMEs (employing up to 250 staff). In light of today’s political reality, the development of an Industrial Policy which provides for a more integrated approach to policymaking across the EU, could help reduce the administrative burden on manufacturers and pre-empt policies on matters which affect how operators do business.

“The objectives, approaches and actions outlined in the Report on the Recommendations of the EU High Level Group on the competitiveness of the agri-food industry are a crucial starting point for the development of an EU Industrial Policy for Europe’s food and drink sector,” comments Jesus Serafín Perez, president of the CIAA. “Given the recent creation of the High Level Forum on the better functioning of the food chain, we are delighted to see that the latter will act as the mechanism to take forward the competitiveness goals for our industry, and, we look forward to playing an active and positive role in this new structure.”

PepsiCo plans to roll-out globally its new i-crop farming technology that will enable the soft drinks and snacks group’s farmers around the world to monitor, manage and reduce their water use and carbon emissions, while also maximizing potential yield and quality. The web-based crop management system was developed by PepsiCo in conjunction with Cambridge University in the UK.

Trials of i-crop are currently underway at 22 farms in the UK, where PepsiCo has ambitious plans to reduce carbon emissions and water usage by 50% across the farming of its core crops in the next five years.

The technology will be rolled-out throughout Europe during 2011, with planned introductions in Holland, France, Germany, Belgium, Spain, Portugal and Turkey. The company hopes to take it to India, China, Mexico and Australia by 2012.

As one of the world’s largest food and beverage businesses, with brands including Quaker, Tropicana, Gatorade, Pepsi-Cola and Frito-Lay, PepsiCo is a major investor in global farming. In 2010, the company announced 15 global goals and commitments to guide its work to protect the Earth’s natural resources through innovation and more efficient use of land, energy, water and packaging.

In the UK, the company is the largest purchaser of British potatoes and one of the largest purchasers of British oats and apples, using 100% British produce in Walkers crisps, Copella English Apple juice, Quaker Oats, Oatso Simple and Scott’s porridge.

“Farming is in the DNA of our business – we rely on fresh produce every day. Finding ways to produce more food with less environmental impact is essential to our future,” explains Richard Evans, president of PepsiCo UK and Ireland. “I-crop has the potential to revolutionise the way we farm, enabling our farmers to save costs and water and carbon consumption, while at the same time improving their yields.”

In its first ‘Sustainable Farming Report’, PepsiCo UK outlined how it is working in partnership with its 350 British farmers to reach its aim of ‘50 in 5’. Other initiatives announced include trials of new low-carbon fertilizers and plans to replace more than 75% of PepsiCo UK’s current potato stock with varieties that will significantly improve farmers’ yields and decrease wastage by 2015.

Commenting on the PepsiCo UK sustainable farming report, Richard Perkins, senior commodities adviser at WWF says: “The food industry is starting to recognize that in order to fully embed sustainability and biodiversity in its business practices, a large part of the focus must be on the agricultural supply chain. In this respect PepsiCo UK has taken a leadership role in recognising that it is, at its heart, an agricultural business. The focus of the business on improving its key environmental impacts, such as greenhouse gas emissions – in the field and on the farm – is most welcome.”

Kraft Foods has opened a European Gum and Candy Research & Development Centre at Eysins in Switzerland. The $14m state-of-the-art facility will focus on innovation and new product development for many of Kraft Foods’ confectionery brands, including the world’s leading gum brand Trident and the world’s leading candy brand Halls, as well as other brands like Bassetts, Carambar, The Natural Confectionery Co, Trebor and V6.

Worth $23 billion annually, the global gum market has grown by almost a quarter since 2005, and is one of the fastest-growing categories within confectionery. Kraft Foods has a number of gum brands with leading positions in markets across Europe, such as Hollywood in France, Trident in Spain, Greece and Portugal, and Stimorol in Denmark and Switzerland.

The new centre will be home to a team of product and package developers and quality experts who are responsible for breakthrough gum and candy innovation, such as the new Fresh & Clean gum product which is currently launching in markets across Europe. As the European Centre for innovation and technology for gum and candy, the team based in Eysins will collaborate closely with the Kraft Foods Global Gum & Candy Centre of Excellence, based in New Jersey in the US, to drive innovation and new technologies that support the company’s European gum and candy business and global category growth platforms.

The Center in Eysins joins 14 other Kraft Foods R&D Centres supporting the company’s global businesses including beverages, biscuits, cheese, chocolate, coffee and gum and candy.

Having just completed the disposal of its North American bottling business to The Coca Cola Company, Coca-Cola Enterprises is now focused purely on Europe where it generates annual sales of $7.3 billion, operates 18 manufacturing facilities and employs 13,000 people. Coca-Cola Enterprises is the sole licensed bottler for Coca-Cola products in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden, and leads the soft dinks markets in these countries.

“Europe represents an outstanding platform for long-term, profitable growth,” says John Brock, chairman and chief executive of Coca-Cola Enterprises. In September, CCE announced updated long-term financial objectives for its Europe-based business, including: revenue growth of 4% to 6%; operating income growth of 6% to 8%; earnings per share growth in a high single-digit range; and return on invested capital improvement of 20 basis points or more per year.

Swiss and international speciality bakery group Aryzta has reported a 2.2% increase in operating profit (including associates and joint ventures) to Eur305m from underlying revenue up 8.6% to Eur3.01b. The core Food Group – Aryzta also owns 71% of Origin Enterprises, the Irish agri-nutrition business – increased operating profit by 4% to Eur227m on underlying revenue ahead by 6.7% to Eur1.68b.

The Food Group’s customer base is an evenly balanced mix of convenience and independent retail, large retail, quick service restaurants and other food service categories. Revenues declined during the period across most channels and markets. Convenience retail and food service on the island of Ireland and the UK were the most severely impacted channels and markets. Continued pressure on the consumer in Europe and North America made for a challenging year. Operating profit remained stable, helped by Aryzta’s cost curtailment and operating efficiency initiatives.

Owen Killian, chief executive of Aryzta.

“Economic conditions for consumers remain very challenging. Aryzta has responded by continuing to focus on operating efficiencies, cost management, innovation and cash flow generation, while working alongside its retail and food service partners to provide fresh and convenient, high quality baked goods at competitive prices,” comments Owen Killian, chief executive of Aryzta. “The operating environment is likely to remain difficult in many key markets. Aryzta’s business model is therefore focused on operational resilience, while remaining well positioned to benefit from any economic recovery.”

The acquisitions of Fresh Start Bakeries and Great Kitchens in Aryzta’s current financial year will provide additional product expansion in North America, greater geographic expansion across Europe and the rest of the world, increased access into retail and quick service restaurant channels and a substantially increased bakery capability and capacity.

“Securing two complementary acquisitions in Fresh Start Bakeries and Great Kitchens substantially enhances Aryzta’s strategic market position by developing partnerships with leading operators in every consumer channel. Aryzta’s expanded product range, increasingly diversified geographical footprint and greater channel access to consumers offers further opportunities for growth over an enlarged business base,” he adds.

German-based Sudzucker, which is Europe’s largest sugar group, has reported a 57% increase in operating profit to Eur282m on sales up by around 5% to Eur3.07b for the first half ending August 31st 2010. All business segments – sugar, special products, cropenergies and fruit – contributed to the earnings improvement.

For the full year, Sudzucker now expects a slight increase in group revenues to around Eur5.8b, up from Eur5.7b in the previous year, and a rise in operating profit to a level of more than Eur450m, against Eur403m in the previous year. The boost in earnings will be driven predominantly by the sugar and cropenergies segments. The full interim report for the first half year 2010/11 will be published on October 14th 2010.

Northern Ireland’s £1.5 billion meat industry must work on strategies that will reduce costs and increase its ability to exploit opportunities that will grow in Europe and other global markets over the next decade. The business opportunities and threats, including rising feed and other costs, as well as consumer trends facing the local industry, which employs over 9,000 people, are highlighted in a major study by GIRA, a leading French consultancy specialising in the global meat industry, commissioned by Invest Northern Ireland in conjunction with the Livestock and Meat Commission (LMC).

Commenting on the 117-page study, ‘Long-Term Strategic Trends in World Meat Markets 2010-2012’, Ian Murphy, Invest NI’s managing director of clients and entrepreneurship, says: “This is one of the most significant documents that we have produced because meat processing is vitally important here in terms of the scale of its contribution to the local economy, especially rural communities, in areas such as exports, new product development and, of course, employment. Currently the industry contributes around 50 per cent of the £3 billion earned by food processing here.”

He continues: “Ensuring its long-term growth, therefore, is immensely important to Invest Northern Ireland and, of course, to the wider community. What this study does clearly and concisely is highlight the opportunities, particularly in Europe, and the challenges our companies will face increasingly from global competitors from South America, China and the US and from rising input costs such as feed stuffs and energy, as well as from the sharpening focus, particularly among European consumers, on food safety and sustainability.

“Our companies should draw great encouragement, however, from a number of points in the study. There is good news for our companies in terms of the protection provided against competition in the EU with its agri-food and environmental policies.

The study also highlights new business opportunities especially in poultry, one of Northern Ireland’s strengths, pigmeat and beef and the good reputation Northern Irish companies enjoy with key retailers which are increasingly developing their international presence. What companies must do is to redouble their efforts to ensure efficiency, productivity and overall, exports, innovation in areas such as higher value added products for niche markets, and overall competitiveness. For instance, the report identifies the advantage that companies that guarantee food safety through greater control have over their supply chain globally.

“Our commitment is to continue to work with local companies to enable them to apply the relevant points in the study, to harness the opportunities ahead and to overcome the challenges especially in key areas such as costs,” he adds.

Among the key points in the study is the projected continuing growth in poultry products. Demand for most meat products will be driven by rising populations.

While other meats will also continue to grow in sales, poultry will gain the most market share. Poultry is described as the cheapest and easiest of the farmed meats to produce. Demand in the developing world, especially China, will increase for most meat products.

EU growth will favour ‘cheaper, quicker growing species’ with chicken continuing to win market share.

Forces driving change in the industry are likely to include – increasing animal welfare concerns which would mean higher costs, higher oil prices, currency volatility, rising costs as sustainability grows in importance, and nutrition concerns among consumers and governments.

Production in some regions will be impacted adversely by issues such as water shortage and land degradation.