Tag Archive | "Food"

Bell supplies Jetran packaging for food


Bell-Jetran-620x330Bell Packaging has announced that is now able to supply Jetran packaging suitable for presenting food.

Traditionally Jetran has been used for non-food items and the only opportunity for food and confectionery producers to use this unique packaging is for pre-wrapped items.

Director Peter Lennie said: “For many years Bell have worked in the non-food sector and established a network of agents and distributors.  Our plant in Luton operates the world’s largest production of clear tubing and with over 300 standard sizes we have excess capacity and are looking for new markets.

“When we introduced the new flat top design of end cap in 2015 more than half the enquiries we received were from food companies.  Having consulted with them alongside our High Street customers it is clear that Jetran® is wanted in the food sector.”

Jetran packaging has been used by many of the world’s leading confectionery brands for gift sets.
Both designs have received international success and the Cadbury’s Éclair pack won the prestigious Indiastar packaging innovation award.

With a track record of nearly 40 years and exports to 17 countries the company is well positioned to deliver packaging solutions throughout Europe.

Bell has recently completed trial orders for presenting citrus fruits and other specialist fruit and vegetables, reporting positive feedback from customers.  The packaging protects the product but also can be used as storage and is a useful container for other purposes after the product has been consumed.

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Plastics are Future will meet in Valencia


plastics are futureAIMPLAS is holding on 26 and 27 April an international meeting, where they will be tackled the future of plastic materials and the latest innovations of sectors such as medicine, packaging, automotive, water supply and lighting.

Since their inception in the last century, these polymers have extended their applications to almost all the sectors of economic activity to the extent that the current society cannot be understood without them. But the future is also theirs. Automobiles, new energy sources, intelligent and high-barrier packages, respect for the environment, curing of diseases, sustainable production challenges, are only a small sample of the infinite number of applications that will be further developed and will demand a constant and endless evolution of these materials.

For companies, the exploration of the polymeric materials that are coming is really important to promote and generate new market strategies. For this purpose, this meeting must be an unavoidable event for them. Moreover, sharing new realities on plastic materials must be a breeding ground to create new start-ups and small technology-based companies. For social agents, Plastics are Future will also raise the awareness of investing in the future and supporting new solutions that innovation in materials makes possible.

jeydee-1549235Plastics are Future will be a bridge and a meeting point between different sectorial realities, whose result will be the enrichment in new ideas and opportunities. Enhancing the knowledge in innovative materials is a fundamental objective to be able to forecast the market opportunities. Intelligent nanomaterials, sensors, supermaterials for extreme applications, new-generation foams, aerogels, shape-memory materials, biomaterials with active properties and many other possibilities on polymers will be the protagonists in this event.

From floating containers to medicine

During the two-days meeting, experts from companies and entities, such as Aurburg, Ava Biochem, CDTI, Centexbel, Comher, the Virgen del Rocío University Hospital, Novamont, Stratasys and the Universities of Alicante, Valencia and Warwick, will tackle exciting topics.

From the presentation of new high-performance composites, such as those based in recycled carbon fibres, to those who are flame-retardant and their applications in extreme situations, or reinforcement-shaped ones for fabrics that allow the transportation of thousands of fresh water tonnes by sea.

At the same time, it will be tackled the application of biopolymers in so different sectors as packaging (replacing PET) and medicine, thanks to 3D printing applied to cardiology or bio-based elastomers with shape memory for biomedical applications. They will be presented biocomposites reinforced from PLA and new biodegradable and compostable bioplastics.

optical-microscope-5-1413633Tools and innovative processes, such as electronic microscopy, additive manufacturing and examples of the emergent 4.0 industry will be also disclosed, as well as self-repairing materials and conductive plastic solutions to produce smart LED systems.

AIMPLAS is a non-profit research association with the object to operate as a technological partner for enterprises from the plastics industry and thus offering them integral and customized solutions by coordinating research, development and innovation projects as well as technology services (analysis and testing, technical assistance, formation as well as competitive and strategic intelligence).

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New GM risk to EU supply chain


gmo-heroAn expert on Non-GMO has highlighted a new GM risk that may appear in the EU food supply. Those in the food industry should be alert to CV 127, (known as Cultivance), a new genetically modified soy bean that has been inserted with genes that give it herbicide resistance and can now be legally imported into UK and EU marketplace, under the label ‘soybean’.

“CV127 soybean poses a new challenge for manufacturers and retailers to protect stringent Non-Gm practices, supported by robust Non-Gm0 certification”, explains Richard Werran, Managing Director of Cert ID Europe, the global market leader in Non-Gm0 certification.

Werran said: “Whilst CV127 has been reported as safe for human consumption by the EFSA, safety aueument, we’re advising customers to revisit their risk assessments. PCR testing protocols will need to be updated as CV127 isn’t detectable by traditional GMO markers. FOr ingredient suppliers, regular sampling and testing of soybean materials, as well as checking on the compliance of the agents and brokers in their supply chain will be necessary.”

“This is not a GM contamination, CV127 is a fully legal genetically modified soybean product. However, those wishing to keep their ingredient supply GM free should be aware of this new GM strain and take appropriate action in testing for this when testing for other GM strains. New testing protocols will need to be introduced as CV127 isn’t detectable using traditional GM testing. No contamination is being insinuated by Cert ID Europe, but companies due diligence may include testing for GM ingredients if they intend to make a Non-GM claim about their product” he adds.

“CV127 is expected to account for 0.2-0.316 percentage of GM soy grown in Brazil alone, even though CV127 was introduced late into the last GM crop planting season,” Werran adds, “CV127 is not expected to reach more than 0.1-0.2% of volume. Regardleu this still accounts for a huge metric weight of Cultivance produced in Brazil alone and is a threat to no GM compliance.”

Cert ID Europe, sister company Genetic ID Europe has recently developed a validated detection method for the CV127 GM soy variety. CV127 contains no ‘clauic’ GM markers like 355 promoter or NOS terminator so common testing strategies need to be amended with a CV127 specific assay.

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Canary seed gets novel food approval


canary-seedCanary seed, which has been used almost exclusively as birdseed, has received novel food approval from Health Canada as well as GRAS (Generally Recognized as Safe) status from the U.S. Food and Drug Administration.

“With the achievement of this milestone, we’re hopeful that the food industry and consumers will begin to adopt this nutritious, high protein, gluten free grain,” said Canaryseed Development Commission of Saskatchewan chair, David Nobbs. “Up until now, production potential has been limited by the size of the market for birdseed.”

Producer levies paid to the commission over the past decade supplemented by various government programs have made food approval possible. Extensive compositional, nutritional and toxicological work was required.

“Canary seed is the first novel cereal crop to be approved in Canada,” said Dr. Carol Ann Patterson of The Pathfinders Research and Management. Patterson is the food scientist who piloted all the work necessary for food approval. “Projects are continuing to determine the best food applications.”

Canary seed flour can be used to make bread, cookies, cereals and pastas. Whole seeds can be used in nutrition bars and sprinkled on hamburger buns in place of sesame seed.

The approval covers glabrous (hairless) canary seed varieties, with both brown and yellow-coloured seeds. The glabrous varieties currently grown by farmers are brown when the hull is removed.

Dr. Pierre Hucl, the canary seed breeder at the University of Saskatchewan’s Crop Development Centre will be seeking approval for a yellow line at the variety registration meetings in February. Nutritionally, brown and yellow are very similar, but the yellow seeds are more aesthetically pleasing in many food products.

It was Dr. Hucl’s work to develop glabrous canary seed that started the effort for food approval. Beyond the breeding, it was Dr. Elsayed Abdelaal, a member of Dr. Hucl’s team, who did the initial compositional, nutritional and toxicological analysis on the first hairless variety, CDC Maria, to show its similarity to other cereal grains. His work provided the core safety data for the Health Canada submission.

While canary seed is gluten free, those individuals with a food allergy to wheat may also be allergic to a protein in canary seed. Canary seed and canary seed products for human consumption will have to be labelled with a statement such as, “This product contains canary seed which may not be suitable for people with a wheat allergy”.

“We hope that further work will lead to the removal of this labelling requirement at some future date,” said Patterson. “On food products where wheat is a labelled ingredient, the cautionary statement will not be necessary.”

Another area of ongoing commission activity involves the approval of crop protection products.

“The herbicides and other crop protection products registered for use on canary seed for birdseed do not immediately have their registration extended to canary seed for food use,” said Kevin Hursh, executive director for the CDCS. “These products are registered on other food grains, and the commission is working to get expanded registrations for products that are important to canary seed production.”

The food use approval is for dehulled canary seed. Commercial dehulling capacity may be required as food demand for the crop expands.

Saskatchewan is the world’s top exporter of canary seed. Nearly 2,500 Saskatchewan farmers have marketed canary seed within the last three crop years. In 2015, an estimated 149,000 tonnes of canary seed with a farm gate value of roughly $90 million was harvested from over 300,000 acres.

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The Great Fragmentation of health drives growth for small and niche brands


The massive fragmentation of consumers’ beliefs about health is contributing to the break-up of traditional food and beverage markets and opening the doors of opportunity for start-ups and small brands, says Julian Mellentin, director of New Nutrition Business and author of 10 Key Trends in Food, Nutrition and Health 2016.

“Big food companies are being forced to rethink their business models,” he says.

Key Trend 5: The Great Fragmentation explains how high volume opportunities are scarce and becoming scarcer. “In some markets they may already be history”, says Mellentin.

The shift in the food landscape is influenced by 25 years of digital sampling, mash-ups, music sampling, remixing, restaurant fusion food – all an established part of the culture that surrounds people.

Just as the person who listens to Bach’s Goldberg Variations at home also listens to Aerosmith or Black Sabbath while driving to work, people’s ideas about food and health have become a menu of choices from which they select and change as new information becomes available. We’re all food explorers now, looking for novelty and variety.

This is producing a proliferation of niches that smaller companies and new brands – often premium – are perfectly placed to serve.

In the future, smart companies will only rarely launch mass-market brands aiming to rapidly get high volume. Instead they will build portfolios of small brands, finely targeted at an ever-more fragmented consumer market. A few of these will become big brands, some will be big niche, most will remain niche.

The report gives the example of US giant General Mills as one of the few larger and more visionary companies already embracing the change. It has set up a new business unit – called 301 Inc. – to invest in entrepreneurs and early stage food companies.

INFOGRAPHIC The Great Fragmentation“The rapidly evolving consumer landscape is dramatically changing the game in the food industry,” said John Haugen, general manager of 301 Inc. “Tremendous opportunity exists…to partner with and foster emerging food brands.”

As the Great Fragmentation moves forward, this new model will become the standard for large food and beverage businesses. The market-redefining power of this trend is illustrated by Key Trend 7: Plant-Based Foods and Beverages. Non-dairy plant “milks” such as almond milk have seen sales jump by between 20% (Spain) and 50% (US).

This trend is not driven by beliefs in veganism or vegetarianism, but rather by consumers’ love of variety and novelty. We’re all flexitarians now, using cows’ milk on our cereal, almond milk in our smoothies and coconut milk in our cooking as it suits us. And the halo of health and sustainability around plant-based foods means consumers feel good about their choices.

This trend has also been made possible by massive improvements in the taste of plant-based foods (which accounts for almond milk’s rise at the expense of soy milk), and by technical advances that make it easier to include plant-based ingredients such as beans and seaweed in good-tasting snack formats.

Fragmentation also underpins Key Trend 1: Beverages Redefined. Beverage giants’ sales have peaked, soft drink sales are plunging and fruit juices are struggling.  Small niche drink brands are reshaping the market. Plant waters such as coconut and birch water meet consumers’ desire for products that are naturally healthy, have no additives, are naturally low in calories and sugar, and sustainable. “Plant waters will be a $4 billion market by 2025,”

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Food and packaging waste workshop for manufacturers in Scotland


Resource Efficient Scotland is running a free food and packaging waste workshop next week for manufacturers in Scotland.

This  workshop has been specially designed to help food and drink businesses in Scotland benefit from reduced food waste and improved packaging design.

Using tried-and-tested techniques, best practice case studies, facilitator-led sessions and industry-leading guest speakers, this workshop will help delegates reduce packaging and food waste and save money in their organisations.

Speakers include Iain Ferguson, environment manager for the Co-operative food; Dr Richard Swannell, director of sustainable food systems and technical Lead at WRAP; Catherine Weetman, SCALA; and Andrew McCaffery from Valpak.

The event takes place at Edinburgh Zoo on Wednesday December 2.

For more information, visit www.resourceefficientscotland.com

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Foodex 2016 to bring UK food and drink manufacturing sectors together


Foodex 2016, the UK’s premier trade event for the food and drink processing, packaging, ingredients and logistics industries, will return to the NEC Birmingham in April 2016. The show provides a business platform for professionals across full industry spectrum including bakery, beverage, dairy, fresh, ingredients, logistics, meat and seafood.

Run over three days (18–20 April 2016), the show will focus upon the buoyancy of the British food and drink manufacturing sector, discussing the trends that are shaping the industry, whilst showcasing the technologies allowing manufacturers to work more efficiently and productively.

Visitors can discover the latest new ingredients and super foods to make an impression on the industry as well as discovering how to improve traceability, consumer trust and transform productivity.

With more than 300 exhibitors expected at the 2016 show, the latest technologies and product launches from across the UK’s manufacturing industries will be on display. Returning for the 2016 show, exhibitors including Multivac UK, ULMA Packaging, Reiser UK and Handtmann will join a raft of new exhibitors to showcase the latest innovations.

Darren Turrell, Managing Director, EFAFLEX UK Limited, commented on his decision to exhibit at the show: “Foodex 2016 is a first for EFAFLEX. We feel that the show will provide EFAFLEX with an excellent opportunity for us to demonstrate the quality and operational benefits of our products, while directly engaging with the individual needs of users within this key market. We’re excited to be a part of this exhibition and look forward to April 2016.”

Features at this year’s show include The National Meat Products and The Premier Young Butcher competitions. The National Meat Products Competition, hosted by the National Federation of Meat & Food Traders (NFMFT), will be returning to the event for the sixth consecutive occasion.

Foodex 2The competition, the biggest and best yet, will comprise of 20 categories and will see for the first time the inclusion of charcuterie in addition to the standard favourites of sausages, bacon, burgers, ready meals and pies.

In addition, the Premier Young Butcher event will see talented 18 to 23-year-old apprentice butchers compete to produce and display the most innovative Ready to Eat, Stuffed Roast, Seam Butchery, Barbecue and Kitchen Ready products.

Meanwhile, the centre stage will host a comprehensive programme of demonstrations, interactive debates and seminars across all three days. Speakers at last year’s event included presentations from the likes of The Fabulous Baker Brothers, representatives from Campden BRI, Lord Rooker, former chairman of the Food Standards Agency, and representatives from the National Skills Academy for Food and Drink and the Institute of Food Science and Technology.

Aside from exploring the show floor and frequenting the lively debates, plenary sessions and interactive master classes, visitors can head to the Engage @ Foodex zone. This is an interactive visitor destination, highlighting all sectors of the industry and offering visitors and exhibitors the chance to meet, interact and relax whilst sourcing industry information.

Dan Dixon, Event Director, said: “Foodex 2016 represents an ideal environment for decision makers from across a wide range of industries to network with key figures in the food industry, all set against a backdrop of innovation and industry expertise.”

Foodex is co-located with Food & Drink Expo, National Convenience Show and Farm Shop & Deli Show.

To register for free, receiving entry to all co-located shows, visit:  www.foodex.co.uk

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UK Food and Drink Exports Top £12 Billion


UK food and non-alcoholic drink exports rose to over £12 billion (£12,152.4m) in 2011, exceeding expectations and confirming significant potential for overseas growth over the next decade. The previous year’s results (2010) proved a landmark for the industry when figures broke through the £10 billion barrier, but the 2011 results show performance is up by 11.4% on 2010. The £12 billion figure is good news for the food and drink manufacturing industry which has set itself the ambition to grow 20% by 2020.

Export growth has been fuelled by strong performance in new and emerging markets including Eastern Europe and the Far East. China entered the top 20 export destinations for the first time with a 55% increase on 2010, partly due to changing tastes and an increasingly westernised diet. South Korea increased by 37% and Hong Kong by 41%. Established non EU markets also performed well with exports to the US rising by 25% between 2010-2011. The non EU share of the £12 billion total was 23% compared to 77% for the EU.

The UK’s traditional EU customers also remained loyal, with Ireland remaining the top export destination closely followed by France and the Netherlands. Dutch interest in UK products increased with a 30% increase echoed by Belgium (29.9%) and Germany (15%).

Interesting percentage rises were recorded in many key product sectors. The highest percentage rises in food were seen in fish fillets (32%); beef (32%); milk and cream (20%); lamb (20%) and cheese (18%). Prepared foods (including prepared meat; sweet biscuits and soft drinks) all exhibited double digit growth and the export of chocolate, the UK’s biggest value added product, grew by 16%. Some sectors have reversed previous declines, including breakfast cereals as companies have broadened their export activity to non EU customers.

Exports are of key importance in the food and drink manufacturing industry’s drive for growth. The sector has proved resilient during the recession, bucking the general downward trend in manufacturing industries. An exports action plan was recently launched, a joint initiative between industry and Government to work together to increase export potential and remove barriers.

FDF director general Melanie Leech comments: “Whilst the domestic market is growing at a steady rate we are seeing very strong performance from food and drink exports. There remains considerable interest in British heritage brands and around our health and wellbeing innovation. Companies understand the importance of developing new markets, competing successfully in many cases against other experienced exporters in France, Germany and Spain.”

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UK Shoppers Plan and Shop Around More to Secure Best Value


An increasing number of consumers in the UK are now planning before going out to do their food and grocery shopping, compared to three years ago, according to the latest IGD shopper research. Nearly seven in ten shoppers (67%) plan most of their food and grocery shopping before they even get to a store, up from 47% in 2008.

Consumers have also increased their shopping frequency: with half of them (49%) making three or more trips a week to their supermarkets, compared to 39% in 2009.

“Most of us are facing stagnant wage increases but rising costs, such as public transport or fuel prices. As a result, shoppers are investing more of their time in order to secure the best value when buying their food and groceries,” points out Joanne Denney-Finch, chief executive of IGD.

She adds: “They are trying to manage their budgets by making more supermarket trips, but aiming to buy only what they need. By making more frequent visits they are topping up when required and also hoping to secure the best promotions, stocking up when they see ones that appeal to them.”

UK consumers are also doing their main grocery shop less often as other forms of shopping, such as online or convenience stores, increase in popularity.

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International Buyers With Purchasing Power of €18 billion Attend Irish Food and Drink Event


The Irish food and drink industry’s ambitions for growth and expansion moved a further step forward today when over 520 food buyers from 28 countries across four continents, gathered at Dublin’s Convention Centre to attend Marketplace International 2012, a major one-day business development event organised by Bord Bia. Some 177 Irish food and drink companies, ranging in size and profile from small enterprises to multinationals, are meeting with targeted buyers during 4,500 pre-scheduled ‘speed-dating’ style meetings taking place throughout the day.

The trade buyers, with a collective buying power in excess of €18 billion, represent some of the world’s key retail and food service operators including Sainsburys, Selfridges, Tesco, Asda, Carrefour, Delhaize (Belgium), Mercadona (Spain) and Alcampo (Spain). Marketplace International 2012 is the largest buyer event Bord Bia has ever staged.

In addition to a strong representation of UK and European buyers, 14 representatives from leading Chinese retail and food service companies travelled to the event; while 17 buyers from the Middle East and 12 from Russia also attended.

The value of Irish food and drink exports increased by 12%, or €1 billion, in 2011 to reach an all-time high of €8.85 billion. It is estimated that volume growth accounted for 25% of the rise in food and drink exports. The strongest performing categories were dairy (€2.6 billion), meat (€2.59 billion), prepared foods (€1.5 billion) and seafood (€420 million). The value of exports outside of Europe grew by 20%, or €350 million, to reach almost €2.2 billion.

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Ireland’s Food and Drink Exports Reach Record Levels


The value of Irish food and drink exports increased by 12%, or Eur1 billion, in 2011 to reach an all-time high of Eur8.85 billion, according to Bord Bia, the Irish Food Board. For the first nine months of the year, food and drink exports increased at three times the rate of Ireland’s total merchandise exports. As a result the sector accounted for 25% of the rise in total export revenue. Over the last two years, the value of Irish food and drink exports has increased by Eur1.8 billion or 25%.

Michael Carey, chairman of Bord Bia, comments: “This is an excellent achievement and the industry is to be commended for its strong export performance, which affirms its positioning at the heart of the Irish economy. Global market conditions, reflected in strong commodity prices, remain favourable and exporters are voicing continued optimism about their business prospects for the year ahead. The industry is well on track to deliver on the ambitious targets of Food Harvest 2020.”

The 2011 export performance was boosted by global prices for major commodities, a positive supply/demand balance in some key categories, a tentative return to price inflation across most major European markets and reduced volatility in exchange rates. Agricultural commodity prices remain at record levels with the FAO food price index recording growth of 26% during the first 11 months of 2011. A number of key sectors – including dairy, beverages and pigmeat – also recorded higher output. Overall, it is estimated that volume growth accounted for 25% of the rise in food and drink exports. The strongest performing categories were dairy (Eur2.6 billion), meat (Eur2.59 billion), prepared foods (Eur1.5 billion) and seafood (Eur420 million).

“Among the notable developments during the year are the continued diversification by industry into new markets, with exports to Asia up by one-third, the exceptional performance of the beef industry in achieving an increase in market returns almost twice the European average, and the expansion intentions of producers that assures future growth,” says Aidan Cotter, chief executive of Bord Bia. “The meat and dairy sectors account for almost two-thirds of total food and drink exports, and indications that breeding herds are expanding, combined with the lifting of milk quotas from 2015, will underpin export growth into the future.”

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A Record Year For Scottish Food and Drink Exports


With overall food exports breaking the £1 billion mark for the first and whisky exports also at a record high, 2011 was a momentous year for Scotland’s food and drink industry. Combined food and drink exports reached an all-time high of £4.5 billion with whisky exports worth £3.45 billion.

The most popular food export from Scotland was fish and shellfish, worth £623 million. Scotch beef and lamb exports reached £100 million in 2011, for the first time since 1996. The top market for food and drink exports is France, followed by USA, Spain, Singapore and Germany.

“Despite a difficult economic environment in 2011, our food and drink sectors have exceeded all expectations and are now a huge success story,” comments Scottish Rural Affairs Secretary Richard Lochhead. “Exports are continuing to rise and we are committed to helping the industry deliver a 50 per cent increase in the value of exports by 2016. So it’s great news that there are a number of key growth markets – including China, South Africa and Poland – where exports of Scottish produce are seeing significant growth. Thanks to our quality ingredients, clean environment and passionate producers, Scotland is developing an enviable reputation for creating first-class products.”

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Ireland’s Food and Drink Exports to Approach €9 Billion in 2011


Irish food and drink exports in 2011 are expected to reach a record high of €8.9 billion, an increase of more than 12%, or almost €1 billion, on 2010 levels. This follows growth of €700 million in 2010 leaving Ireland’s food exports in 2011 some 25% ahead of 2009 levels. Meanwhile, against a backdrop of strong global demand and high prices, eight out of ten exporters surveyed by Bord Bia rate their prospects as improved or very improved compared with this time last year.

 

All major categories are expected to show growth this year, led by dairy and meat, which combined account for more than 60% of Ireland’s total food and drink exports. Strong global prices are driving export growth, with the FAO food price index 26% ahead of this time last year, however increased volumes of dairy products, pigmeat, whiskey, cider, confectionery, sauces/soups and mushrooms are also boosting revenues. It is estimated volume growth across these categories will account for up to 30% of the total.

 

“As world supplies struggle to keep pace with the growth in global demand, the outlook for food exporters for the remainder of the year and into 2012 remains positive,” points out Aidan Cotter, chief executive of Bord Bia.  “The latest surge in world food prices is further evidence that the era of cheap food is at an end, yet while forecasts point to a longer term upward trend, the conditions for volatility in prices remain in the form of weather-related events, fluctuating stock levels, exchange rates and market speculation.”

 

Figures for the first half of 2011 show some change in the market distribution of Irish food and drink exports. The UK remains the principal export destination, although its share of total exports fell from 44% to just over 40% compared to the same period last year. This reflects the fact that much of the growth in dairy and to a lesser extent prepared foods, beverages and beef has occurred outside of the UK market.

 

The proportion of exports going to other European markets jumped by two percentage points to 35% for the period as stronger dairy, beef, beverage and prepared food exports boosted trade. International markets accounted for 25%, driven in particular by stronger dairy exports.

 

While the consumer search for value continues apace, the initial signs of rising consumer prices have emerged acrossEuropeduring 2011. In July 2011, the consumer food price index for the euro area was almost 3% ahead of a year earlier while UK prices were 6% higher than a year earlier.

 

The ongoing volatility in exchange rates presents a challenge for Irish exporters. Current exchange rates leave the euro 9% stronger against the US dollar and 5% stronger against sterling than September 2010.

 

The Irish manufacturing sector has improved its competitiveness over recent years with Ireland’s Competitiveness Scorecard for 2011 published by Forfas showing a more productive and cost competitive industry. During the period April 2008 to February 2011, Ireland’s harmonised competitiveness index depreciated by more than 12% in real terms, which is helping the sector’s competitiveness on export markets.

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Interim Profit Down at Lantmannen’s Food Business


Lantmannen, one of the largest agriculture, machinery, energy and food groups in the Nordic region, has reported flat sales and a drop in profit at its food business for the first half of 2011. Food operating income for the first half was MSEK304 against MSEK351 in the corresponding period of 2010. Net sales for the first half were static at MSEK7,252. Lantmannen’s food division incorporates four businesses- Lantmannen Unibake, Lantmannen Cerealia, Lantmannen Kronfagel and Lantmannen Doggy.

Lantmannen Unibake is the largest manufacturer of frozen bread products for both the food service and grocery sectors in Northern Europe. Lantmannen Cerealia encompasses the majority of the group’s brands in the areas of flour, breakfast foods, mixes, pasta and ready-to-eat meal concepts. Lantmannen Kronfagel is the largest producer of chicken in the Nordic countries, with market-leading positions in Sweden and Denmark. Lantmannen Doggy is the Swedish market leader in cat and dog food.

Operating income for Lantmannen Cerealia and Lantmannen Kronfagel showed positive growth in the first half compared with the previous year, mainly as a result of cost savings.

Operating income for Lantmannen Unibake and Lantmannen Doggy was lower than in the previous year. Lantmannen Unibake’s results were adversely affected by commissioning and running-in costs at its new bakery in Bedford in the UK and the fact that price increases made in response to commodity price increases were not fully reflected in the results due to a lag effect.

In addition to opening a new bakery, Lantmannen also expanded its Lantmannen Kronfagel chicken facility at Valla during the first half. The expanded and modernised Valla facility was opened in May and will be fully operational by the end of the year, when it will be Sweden’s largest chicken production facility.

Per Stromberg, president and chief executive of Lantmannen.

“The slowdown in demand for consumer goods over the last six months is having a clear effect, and our expectations for Easter volumes were not fulfilled,” comments Per Stromberg, president and chief executive of Lantmannen. “Meanwhile, further price increases prompted by rising commodity prices are having a lagged impact, which is affecting results. We shall continue to give priority to these price increases in order to maintain our margins, even if this has a short-term adverse effect on our volumes.”

He continues: “Lantmannen Kronfagel’s results are largely in line with the previous year, mainly due to a strong performance from the Danish operations. Lantmännen Cerealia is keenly feeling the reduced demand, which has caused volume declines in both the consumer and B2B segments and has resulted in a somewhat lower income than in the previous year. Lantmannen Unibake is experiencing a lag effect in pushing through price increases in pace with rising commodity prices. This in turn leads to pressure on margins.”

Lantmannen is owned by more than 40,000 Swedish farmers.

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Nestle Partners With King’s College London on Food and Gene Research


The Nestle Research Center in Switzerland will collaborate with King’s College London on a joint research project into the relationship between food and genes. Due to begin later this year, the six-month project will examine the interactions between genes and food ingredients, and how they can affect human health.

It will look at how our genes and their encoded proteins determine important bodily functions; including how efficiently we metabolise food, respond to the environment and detoxify our bodies from potentially harmful agents.

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Record Fall in UK Food Prices


UK prices of food and non-alcoholic beverages fell by 1.4% between February and March this year compared with a rise of 0.3% between the same two months a year ago, according to the Office for National Statistics. The 1.4% this year was a record fall for a February to March period.

The downward effects were widespread and reflected supermarket led sales this year. The most notable contributions came from fruit where prices fell by 4.7% this year (also a record February to March movement) but rose by 0.7% a year ago, and bread and cereals where prices fell by a record 2.6% this year compared with a fall of 0.2% a year ago

The downward pressure from food and non-alcoholic beverages was a major contributor to a drop in CPI (Consumer Price Index) annual inflation, which was down from 4.4 per cent in February to 4.0% in March.

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UK Food and Grocery Industry Recovers 115,000 Tonnes of Waste


Participants in a scheme run by ECR (Efficient Consumer Response) UK are well on the way to achieving targets set last autumn to prevent and recover waste in the FMCG supply chain in the UK. By thinking differently about waste when looking at products, packaging design, range and forecasting, consumer goods manufacturers and retailers have prevented 38,000 tonnes of waste from being created in the first place and redirected a further 115,000 tonnes away from landfill and sewer.

In total, 33 leading food and grocery companies announced last autumn they are voluntarily committing to prevent 75,000 tonnes of waste being created by the end of 2012. All signatories are IGD members and leading retailers, manufacturers, wholesalers or food service operators. They have signed up to the target to totally remove this volume of waste from their supply chains.

Joanne Denney-Finch, chief executive of IGD.

The industry has made great strides in recovering waste, rather than disposing of it. To drive this progress even further the companies have pledged to meet an extra target. They have challenged themselves to divert a further 150,000 tonnes of waste from disposal, mainly from landfill and sewerage, to more productive outputs such as anaerobic digestion.

The food and drink manufacturers participating in the scheme include ABF, Bakkavor Group, Coca-Cola Enterprises, Dairy Crest, Gerber Juice Company, H J Heinz, Kraft Foods, Mars Chocolate UK, Molson Coors Brewing Company (UK), Muller Dairy (UK),

Nestle UK, Northern Foods, PepsiCo UK & Ireland, Robert Wiseman Dairies, Unilever UK, United Biscuits, VION Food UK and Warburtons.

“Food and grocery businesses are constantly striving to reduce waste from their operations and the majority of the supply chain’s product and packaging waste is now recycled or recovered, rather than disposed of,” points out Joanne Denney-Finch, chief executive of IGD. “IGD has brought the industry together to draw up, commit to and deliver these challenging targets – and the industry is making great progress.”

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McDonald’s Boosts Irish Beef Exports


McDonald’s Restaurants of Ireland, which employs nearly 4,000 people, increased its exports of Irish beef to Eur110m in 2010, up from Eur80m in 2007. The restaurant business sources all of its beef from Bord Bia certified Irish farms.

McDonald’s opened in Ireland in 1977 and there are now currently 77 restaurants in operation nationwide. Approximately 5,000 tonnes or Eur6.5m worth of Irish beef is consumed across McDonald’s restaurants in Ireland annually with a further Eur110m exported into the McDonald’s international supply chain in 2010.

McDonald’s Europe is the single largest purchaser of Irish beef and one in every five hamburgers sold in McDonald’s across Europe every year is of Irish origin. An economic analysis prepared by Indecon International Economic Consultants last year showed that McDonald’s is facilitating exports of Irish-origin food produce of Eur195m to McDonald’s internationally.

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Consolidation in Irish Grain and Feed Industry


Irish agri-nutrition and food company Origin Enterprises, which is 71% owned by international bakery group Aryzta, has together with W&R Barnett completed the transaction to establish an all-Ireland grain and feed handling, logistics and trading business. The new enterprise will be formed through the integration of Origin’s business of R&H Hall in the Republic of Ireland with the business of Origin and Barnett in Northern Ireland.

The combined business brings together two of Ireland’s indigenous grain and non-grain feed ingredient importing businesses servicing the animal feed and cereal milling industries.

Barnett is paying Eur28m to acquire a 50% stake in R&H Hall mirroring the economic interests of Origin and Barnett in the Northern Ireland business. R&H Hall generated an operating profit of Eur5.1m for the year ending 31st July 2010 on revenues of Eur301m. Origin will use the proceeds to initially repay debt and ultimately to fund development of the group.

For the year to 31st July 2010 the Origin’s agri-nutrition division generated revenues of Eur1.08b and operating profit of Eur48.2m. Its food division had sales of Eur260.1m and operating profit of Eur13.8m.

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Food Sales Lift Marston’s


Helped by growth in its sales of food and premium ales, Marston’s has increased underlying pre-tax profit by 4.6% to £73.5m on revenue up 0.9% to £650.7m for the year ended October 2nd last. The British brewer and pub operator also managed to reduce debt by £17.1m to £1.08b during the year.

Operating profit fell in the tenanted and leased pubs division but was up in the managed pubs business. Marston’s Beer Company increased underlying profit 1.3% to £16.2m and revenue by 4.5% to £106.1m.

“We have adapted well to market conditions and trends,” says Ralph Findlay (pictured), chief executive of Marston’s. “We are benefiting from our focused, differentiated strategy as demonstrated by our robust results in 2010 and a strong start to the new financial year. Our plans are affordable, deliverable, and target sustainable growth and strong returns in the future.”

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Healthy Balanced Diet Communications Guide For Food Companies


A new guide to help UK food businesses communicate with consumers in a clear and consistent way about achieving a healthy balanced diet is being published by IGD, the international food and grocery experts. The Best practice guide to communicating to consumers about a healthy balanced diet has been developed to ensure information provided is relevant, appropriate and in line with government messages about healthy eating, such as in the Change4life campaign.

There is a great deal of conflicting information available on nutrition and health, particularly on the internet, and this can lead to confusion. Some of the fad or ‘celebrity diets’, for example, have suggested limiting your intake of starchy foods, such as bread and pasta. But the Government’s eatwell plate says they should make up a third of your diet.

The guide offers a step-by-step checklist to develop an effective communications strategy, such as:

* Know who your target consumers are, eg gender, age, ethnicity;

* Ensure the language and tone suit the outlet and target audience, eg using short and positive sentences;

* Select the optimum communication route(s), eg on-pack, TV/radio, cookery demonstrations;

* Confirm the messages and claims comply with labelling and advertising regulations (both UK and European legislation).

Joanne Denney-Finch, IGD chief executive.

“What we eat is one of the important factors in determining good health, so it is crucial to encourage people to adopt a healthy and balanced diet,” points out Joanne Denney-Finch, IGD chief executive. “The most effective messages in influencing healthier choices are those that are easy to understand and are used consistently, such as the five-a-day campaign.”

She adds: “Consumers are bombarded with a great deal of nutritional information, a lot of which is conflicting – leading to much confusion. The IGD guide has been developed to ensure communication with consumers is consistent with government advice and provides ideas that are simple, practical and helpful.”

The Best practice guide can be downloaded from: www.igd.com/healthybalanceddiet.

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Early Recovery in UK Food and Beverages to Boost M&A Activity


69% of senior executives at UK-based food and beverage producers expect M&A activity to increase in the next 12 months, according to a report by Grant Thornton UK LLP which indicates that the sector has recovered early from recession. 20% (10 of the 50 respondents) said that they were planning to broker a merger or acquisition in that period.

By 13th August 2010, only 13 M&A transactions with a total value of £113m had been recorded involving food and beverage targets. The deal value was low compared to 2009, when this sector accounted for 27 deals with a total value of £14.3b. However, the 2009 result was inflated by Kraft’s £13.7b takeover of Cadbury (adding Cadbury’s net debt to the purchase price).

“Food and beverage producers had to digest sharp increases in input prices in 2007 and 2008, leaving the survivors in good shape to bear the recession. Most producers are already targeting growth, while 43% of our respondents are still cutting costs,” comments Trefor Griffith, corporate finance director at Grant Thornton.

In terms of growth strategies for the next 12 months, 46% of respondents are considering expansion into new markets, compared to 66% who are considering new product launches.

“It is remarkable that not a single respondent to the food sector survey highlighted competition from foreign firms as a significant challenge and less than half of them said that the weakness of Sterling was bad for business. Successful British exports include ready meals to France, Indian sauces to Spain, cheeses to Japan and breakfast cereals to China,” he explains.

22% of respondents saw greater domestic competition as one of the biggest challenges facing their business. This compares to 32% who named reduced consumer spending (or spending on premium goods) as the biggest challenge.

In terms of prospects, 52% said that the increasing emphasis on health and wellness presented a significant opportunity. 25% identified the fair trade and free range markets as providing significant opportunities, while 23% said the same about green consumer and local produce.

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Nestle to Target New Opportunity in Personalised Health Science Nutrition


Nestle is creating Nestle Health Science and the Nestle Institute of Health Sciences to pioneer a new industry between food and pharma. These two separate organisations will allow Nestle to develop the innovative area of personalised health science nutrition to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer’s disease, which are placing an unsustainable burden on the world’s healthcare systems.

Nestle Health Science, a wholly-owned subsidiary of Nestle, will become operational on 1st January 2011. The new company will be run at arm’s length from Nestle’s main food, beverages and nutrition activities, and incorporate the existing global Nestle HealthCare Nutrition business, which had a turnover of SFr1.6b in 2009. Nestle Health Science will also have access to external scientific and technological know-how through Nestle’s innovation network as well as a number of venture capital funds in which the group has interests.

The Nestle Institute of Health Sciences will be part of Nestle’s global R&D network. Nestle plans to invest hundreds of millions of Swiss francs over the next decade to build a world-class Institute of Health Sciences, which will conduct research in relevant areas of biomedical science to translate this knowledge into nutritional strategies to improve health and longevity. The Institute will be based in the multi-disciplinary scientific environment of the Swiss Federal Institute of Technology (EPFL) in Lausanne, where Nestle is already involved in two life science initiatives.

“The combination of health economics, changing demographics and advances in health science show that our existing healthcare systems, which focus on treating sick people, are not sustainable and need redesigning. Nestle has the expertise, the science, the resources and the organisation to play a major role in seeking alternative solutions. Personalised health science nutrition is about finding efficient and cost effective ways to prevent and treat acute and chronic diseases in the 21st century,” explains Peter Brabeck-Letmathe, chairman of Nestle.

Paul Bulcke, chief executive of Nestle.

“The creation of Nestle Health Science and the Nestle Institute of Health Sciences is the best way to focus our attention and organise our unique capabilities and competencies to seize this promising business opportunity. The new set-up will give us a pioneering and leading role in this entirely new industry, while at the same time allowing us to keep the necessary focus on Nestle’s extremely important food, beverages and nutrition business,” says Paul Bulcke, chief executive of Nestle.

Nestle first entered healthcare nutrition in 1986. Over the last three years, it has made a number of strategic acquisitions in this area such as Novartis Medical Nutrition and Vitaflo. Nestle HealthCare Nutrition, currently an integral part of Nestle Nutrition, has a long established reputation as a science-based organisation and has also been setting the trend for personalised nutrition and related services in recent years.

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UK Food and Drink Exports Deliver Strong First Half Performance


UK exports of food and non-alcoholic drinks grew to more than £5b in the first half of 2010 – a rise of 4.3% on the same period in 2009 – and full-year sales to overseas markets are forecast to break the £10 b barrier for the first time, according to figures released by the Food and Drink Federation.

This first half growth has been characterised by an almost entirely flat EU export market but buoyant growth to non EU markets, which increased by 23.1% from £927.6m to £1.14b. All non-EU markets showed growth, but particularly strong markets included North America, up 34.9%, Asia up 34.6%, Latin America up 20.8% and the Middle East, up 20.0%. The fastest growing export market for UK food and drink is Hong Kong, which was up 49.3%.

Dairy proved to be the strongest sector, driven by a 15.2% growth in cheese exports.

Looking at the performance of individual sectors, dairy proved to be the strongest sector, showing growth of 21.3% to £464.3m, driven by a 15.2% growth in cheese exports, especially cheddar and blue cheeses. This in direct contrast with 2009, when dairy was the worst performing sector. Fish and seafood also performed well, growing 7.1% to £575.7m, including a 22.3% rise in fresh salmon export sales, which now account for 65% of fresh fish exports. Within the prepared foods sector, both sauces & condiments and jams & preserves performed well, growing by 10.6% to £98m and 9% to £16m respectively.

“I am delighted to see another strong export performance from UK food and drink manufacturers,” says Melanie Leech, director general of the Food and Drink Federation. “If these levels continue throughout 2010, we should see our sixth consecutive full year of growth and break the £10 billion mark for exports for the first time.”

The UK food and drink industry directly employs 440,000 people; generates £73b of turnover and value added of £21.6b; and accounts for 15% of total manufacturing output. The export figures further highlight the sector’s importance to the UK economy.

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Tata Global Beverages Seeking to Diversify into Food


Tata Global Beverages of India, which owns the UK-based Tetley Tea business, is planning to move into food via acquisitions. The beverages group is reported to be considering raising funds for acquisitions by selling a stake to private equity investors, and has already approached Blackstone and Advent International.

Following the recent integration of its five beverage businesses, Tata Global Beverages is aiming to build a strong global Tata brand as it continues its transformation from being a tea and coffee commodity business to become a world leader in ‘good for you’ beverages. About 70% of the group’s sales are generated outside of India.

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First Half Improvement at Wimm-Bill-Dann Foods


Russian dairy, food and beverages group Wimm-Bill-Dann Foods increased net income by 7.1% year-on-year to US$69.5m on revenue up 17.1% to US$1.26b for the first six months ended June 30th 2010. EBITDA rose marginally to US$159.7m from US$158.3m in the same period of 2009.

The revenue increase was driven by volume growth in the group’s dairy, beverages and baby food segments and favorable pricing across all segments. Group revenue in rubles increased 6.6% versus the same period a year ago. However, gross margin declined 400 basis points to 29.9% as a result of the continued pressure of raw milk costs in the first six months of 2010.

Tony Maher, chief executive of Wimm-Bill-Dann Foods.

“Our performance continues to be strong, with significant improvements in market share across our dairy, beverages, and baby food segments, as demand resturns back to levels we have not seen since before the global economic crisis,” says Tony Maher, chief executive of Wimm-Bill-Dann Foods. “However, we continue to face the challenges in raw milk procurement, which adversely impacted our gross margins in the dairy segment in the second quarter. Despite some temporary input difficulties, we are favorably positioned across our segments to achieve our objective of expanding profitability through efficiency gains and a greater share in high value categories.”

Wimm-Bill-Dann Foods is the market leader in dairy products and children’s food in Russia and one of the leading players in the market for non-alcoholic drinks in Russia and the CIS. The group operates more than 35 production facilities in Russia, Ukraine and Central Asia.

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Strong Profits Growth at Refocusing Sara Lee


Despite a 0.8% drop in net sales to $10.8b, reflecting lower volume sales and prices, Sara Lee increased operating income by 88.6% to $918m in its 2010 financial year, driven by improved profits from across all of the US-based food and beverages group’s five continuing business segments. In particular, the North American Retail and International Beverage segments showed impressive results, while the North American Foodservice segment increased operating income in a challenging environment. Group net income jumped 39% to $506m.

Sare Lee’s discontinued International Household and Body Care businesses also reported strong fiscal 2010 results.

Sara Lee made substantial progress toward divesting its International Household and Body Care businesses in its 2010 financial year. The company announced and closed transactions for the disposal of the air care business to Procter & Gamble for Eur320m (closed in early fiscal 2011) and the Indian insecticides business to Godrej for Eur185m.

Sare Lee is working on the sale of its global body care business to Unilever for Eur1.275b and on the disposal of the non-Indian insecticides business to SC Johnson for Eur153.5m. Both proposed transactions are expected to close in calendar year 2010.

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Strong First Half From Nestle


Benefiting from deeper penetration in emerging markets of the world, the continued success of its premium products in both developing and developed markets and extra marketing investment, Nestle has increased net profit by 7.5% to SFr5.5b (Eur4.0b) on group sales up by 5.9% to SFr55.3b for the first half of 2010. Organic sales growth was 6.1%, including real internal growth of 4.6%.

The group’s EBIT margin increased by 100 basis points to 15.1%, or by 70 basis points on a like-for-like basis in constant currencies. The ongoing efficiency drive under the Nestle Continuous Excellence programme contributed to the improvement in EBIT margin, even after increased investment in the business to improve long-term performance.

Sales from Nestle’s Food and Beverages business increased by 5.6% to SFr51.0b with organic growth of 5.7% and real internal growth of 4.2%. Food and Beverages’ EBIT was SFr6.7b as the margin improved by 60 basis points to 13.0%, reported and in constant currencies. The higher EBIT margin was achieved while increasing the Food and Beverages consumer-facing marketing spend by over 14% in constant currencies.

Paul Bulcke, chief executive of Nestle.

Within Europe, Nestle exhibited organic sales growth of 2.2% and real internal growth of 1.3% as sales reached SFr10.7b and the EBIT margin rose by 10 basis points to 11.9%. In Western Europe, Nestle managed positive real internal growth in all key markets as it concentrated on increasing distribution, improving customer service and accelerating innovation and renovation. In Southern Europe, positive growth was seen in Italy and the Iberian region and, in Eastern Europe, Poland and the Ukraine were strong performers. In Russia, Nestle experienced good performances in many categories although ice cream and confectionery remained soft.

“The group’s very successful first-half performance is due to the excellent execution of our proven strategies in all parts of the world, covering the full range from premium brands to value-priced offerings, combined with the ongoing successful implementation of Nestle Continuous Excellence,” says Paul Bulcke, chief executive of Nestle.

“We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half, which allows me to reconfirm our earlier full-year guidance for Food and Beverages: organic growth of around 5% combined with an increase in EBIT margin in constant currencies.”

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PureCircle Wins Major Global Contracts


PureCircle, the world’s leading producer of high purity stevia products, has won a number of new contracts with major food and beverage companies. In addition to its existing global supply contracts with PepsiCo, Merisant and Firmenich, PureCircle has secured global multi-year contracts with customers including Danone, Unilever, Bimbo Bakeries, Dean Foods and Kerry Ingredients.

“We have successfully diversified our client base from one exclusive customer to a number of major stratigic global F&B clients and over 100 regional and local invoicing customers around the world. Although the decision to go directly to the market has had short term impact on our sales in the early stages of the development of the industry, we are absolutely confident that it was the right decision for long term growth of the company,” says Magomet Malsagov, chief executive of PureCircle. “The breadth and depth of the client base we are developing across many food and beverage categories reflects our leadership in the fast developing stevia market.”

The PureCircle Group develops and manufactures natural food ingredients for supply to the global food and beverage industry. The current focus is exclusively in the production and sale of extracted natural high intensity sweetener (HIS).

The PureCircle Group’s objective is to take advantage of worldwide trends towards healthier diets and concerns over the use of non-natural ingredients in foods and beverages by selling natural HIS to food and beverage manufacturers.

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Steady Volume and Sales Growth at Danone


French food and beverage giant Danone has reported an 11.2% increase in consolidated sales to Eur8.35b in the first half of 2010 and a 7% rise on a like-for-like basis. The like-for-like sales growth was driven by a 9.8% jump in volume and a 2.8% decline in value. Trading operating income increased by 2% on a like-for-like basis to Eur1.28b.

Danone’s trading operating margin was stable at 15.30% compared to the average margin in 2009. However, compared to the first half of 2009, the margin decreased by 74 bps on a like-for-like basis. The reduction mainly reflects the negative price effect of the Reset program, the effect of rising raw material prices and a difficult comparable basis. The impact of higher raw material prices in the first half of 2010 has been largely offset by Danone’s various cost savings initiatives, which are expected to generate up to Eur500m in the current financial year.

Danone assumes that the financial, economic and social crises will continue to weigh on consumption trends in Europe, while emerging markets are expected to keep developing well overall. Consequently, Danone will continue to focus on, and invest in, growth opportunities in key categories and geographies, on the strength of its competitive positions and on the development of its brands. Productivity gains as well as the growth of free cash flow will continue to be key priorities.

In line with this strategy, Danone recently entered into an agreement to acquire Medical Nutrition USA for approximately $62m in cash. Danone is also to merging its fresh dairy product businesses in the CIS area with those of Russian company Unimilk. The new entity will become the leader for dairy products in the CIS area as a whole, and particularly in Russia.

Outlook

For full year 2010, Danone is targeting like-for-like sales growth of at least 6%; a stable trading operating (EBIT) margin versus 2009 on a like-for-like basis; and an increase of the free cash flow from operations of at least 10% versus 2009 on a reported basis.

Franck Riboud, chairman and chief executive of Danone.

“Our results in the first half of this year confirm our strong start in 2010. We continue to invest in countries, products and brands with a strong potential: baby nutrition in Asia, dairy products in the US, in Brazil as well as in Russia where the Danone-Unimilk alliance provides us with significant long term growth opportunities. In the Waters and Medical Nutrition divisions we continue to identify new growth opportunities in emerging markets as well as new business models. We simultaneously continue to focus on productivity, which is critical in light of the volatile raw material prices,” says Franck Riboud, chairman and chief executive of Danone.

“Lastly, our cash-flow generation keeps increasing steadily.  Investments, productivity and cash flow are essential as they build the performance of today, but also the Danone of tomorrow, more global, more efficient, stronger, at the service of its mission and of value creation.”

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Innovation and Investment at Heart of UK Food and Drink Industry Success


An ongoing commitment to innovation and high-value production are key reasons why the UK’s food and drink industry has emerged from recession in better shape than many other manufacturing sectors, according to a new report commissioned by the Food and Drink Federation from the Institute for Manufacturing at the University of Cambridge. From May 2008 to May 2009, the production index for food and drink fell by only 1.9 compared to 13.1 for manufacturing overall – a clear indication of the industry’s resilience.

“As Government builds the strategy for economic recovery, this report provides a timely reminder of the important financial, strategic and social contribution of the UK’s biggest manufacturing sector,” points out Melanie Leech, director general of the Food and Drink Federation. “We have placed innovative research and development at the heart of our industry and continued to invest in our products, our factories and our people in a hugely challenging economic climate – and are now well-placed to capitalise on these strong foundations as the country emerges from recession. We are a high value added sector offering world-beating capabilities and a rich range of career choices. The Government can place us with confidence at the heart of its strategy for recovery.”

The UK food and drink industry invests more than £1.1b a year on R&D – a comparable level with the automotive sector. It has launched 1,500 new products each quarter since the beginning of 2008. As well as NPD, the UK food and drink industry has expended considerable resource in responding to consumer demands for products that are lower in salt, fat or energy.

UK food products are also in demand overseas – 2009 saw the 5th consecutive rise in food exports, growing in value by 4.4% to £9.65b in 2009, significantly outperforming other manufacturing sectors, which experienced an 11.8% slump in overseas sales.

The food industry has been one of the most resilient manufacturing sectors in terms of output during the recession.

Indeed, the food industry has been one of the most resilient manufacturing sectors in terms of output during the recession and FDF members are confident about increasing their investment in UK production facilities in the next three to five years.

Business expenditure by the food and drink industry also supports its increased commitment to investment. According to ONS time series figures, between Q1 2009 and Q1 2010, UK manufacturing business expenditure dropped by almost 25%. Within the same time frame, the food and drink industry increased its business investment by 7.2%, raising its percentage of total manufacturing business expenditure from 13% to 19%.

The report also shows that:

* 65% of UK food and drink manufacturers have more than 75% of their production in the UK . UK manufacturers also invest heavily in UK design and research work, with very similar percentages to UK production;

* Nearly 40% of UK food and drink manufacturers plan to increase investment in production and research and design over 3-5 years;

* 94% of employees in the UK food and drink sector are full-time;

* UK food and drink employees are paid well above the national average;

* Average tenure within the food and drink industry is 9 years;

* 20% of employees are graduates.

“The food and drink industry has weathered the recession best of all manufacturing sectors and appears to have continuing strength in R&D. The sector will be a bell weather for changes to come, as the industry addresses environmental and health issues, two areas intimately related to food production,” comments report author Finbarr Livesey, director at the IfM.

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Sara Lee Refocusing Continues With €320m Disposal


US-based food, household and body care products group Sara Lee has completed the sale of its air care operation to Procter & Gamble for Eur320m. The disposal is part of the divesture of Sara Lee’s household and body care business as it seeks to refocus on its global food and beverage activities.

Brenda Barnes, chairman and chief executive of Sara Lee.

To date, Sara Lee has completed the sale of its 51% stake in its Godrej Sara Lee joint venture to Godrej Consumer Products for a total consideration of Eur185m. In addition, Sara Lee expects to close the sales of its global body care and European detergents businesses to Unilever and its remaining insecticides business to SC Johnson by the end of 2010.

This will leave Sara Lee focused on five businesses – North American Fresh Bakery, North American Retail, North American Foodservice, International Beverage and International Bakery.

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The Kerrygold Company and North Downs Dairy to Merge


The Kerrygold Company and North Downs Dairy, both wholly owned British subsidiaries of the Irish Dairy Board, are merging to create one consumer foods business, Adams Foods. This will take effect from 3rd October 2010.

The new company will combine the marketing capability of both organisations to grow the Kerrygold and Pilgrims Choice branded portfolio and will harness the respective strengths of the two cheese packing operations to efficiently deliver the broadest range of pre-packed hard cheeses to the UK market. The combined business will have an annual turnover of £335m and will aim to drive an aggressive added value growth agenda in the UK market.

The factory facilities of both The Kerrygold Company, based in Leek, Staffordshire, and that of North Downs Dairy, based in Wincanton, Somerset, will remain fully operational.

Carl Ravenhall, currently managing director of The Kerrygold Company, will become the managing director of Adams Foods. “Our aim is to be the most enterprising dairy marketing company in the UK and a leading supplier of cheese, butter and other dairy products to the retail and foodservice sectors,” he explains. “By combining our strengths we are creating one company that can market, sell, produce, and distribute the Kerrygold and Pilgrims Choice branded portfolio in addition to the broadest range of retailer brand hard cheeses across the UK.”

Alastair Jackson, currently managing director of North Downs Dairy, will become marketing director for Adams Foods.

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New Chairman For Premier Foods


Premier Foods, the UK’s largest domestic food processor, has appointed Ronnie Bell, the former president of Kraft Foods Europe, as non-executive chairman with effect from 1st October 2010. Ronnie Bell spent 30 years with Kraft, the world’s second largest food company. During this time he held a number of senior management appointments culminating in his appointment as president of Kraft Foods Europe. In this role he was responsible for all the group’s coffee, chocolate and grocery brands in the region.

Ronnie Bell.

Ronnie Bell is currently non-executive chairman of Milk Link, a leading UK dairy co-operative, and a non-executive director of Ansell, an international healthcare group, and The Edrington Group, the Scotch whisky distiller. Ronnie Bell has been a non-executive director of UK convenience food business Northern Foods since 2005 but has stepped down from this role in order to take up his appointment as chairman of Premier Foods.

Premier Foods has also announced the appointment of Charles Miller Smith as non-executive deputy chairman also with effect from 1st October 2010.

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Atlantic Grupa Expands With Slovenian Acquisition


Atlantic Grupa, the largest food and healthcare company in Croatia, is acquiring Slovenian food manufacturer Droga Kolinska from energy, tourism and food group Istrabenz. In addition to Slovenia, Droga also has production units in Croatia, Serbia and Bosnia. The purchase price is Eur382m but will be reduced by Droga’s net debt, which was not disclosed.

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Nestle Completes SFr25b Share Buyback and Starts New Programme


Paul Bulcke, chief executive of Nestle.

Nestle has completed the remaining SFr10b (Eur7.2b) share buyback of its SFr25b share buyback programme initiated in August 2007. Since August 2009, Nestle has repurchased 203,400,000 of its shares for a total of SFr10b at an average purchase price per share of SFr49.17. The average purchase price per share for the whole SFr25b share buyback programme was SFr48.31.

Nestle is now starting a new share buyback programme of SFr10b, subject to market conditions and strategic opportunities. This new share buyback programme will entail Nestle buying back around SFr5b in shares in the second half of 2010, bringing the total of shares repurchased in 2010 to SFr10b. The new SFr10b share buyback programme is expected to be completed during 2011.

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Heinz Continues Drive into Emerging Markets With Expansion in China


HJ Heinz is acquiring Foodstar, a leading manufacturer of soy sauces and fermented bean curd in China, from Transpac Industrial Holdings, a private equity firm. The acquisition will increase Heinz’s annual sales in China to about $300m and enable the group to enter the nation’s fast-growing $2b retail soy sauce market.

The purchase price consists of a cash payment at closing of $165m and an earn-out potentially payable in 2014 based on the performance of the business. The completion of the proposed acquisition is subject to regulatory approval in China.

Foodstar’s Master Weijixian light premium soy sauce is the leading brand of Weijixian soy sauce in the southern region of China. Foodstar’s Guanghe fermented bean curd, a popular flavor enhancer that is used in cooking, also holds a strong regional market position. Based in Guangzhou, Foodstar has four manufacturing sites and 2,500 employees in China. A new manufacturing facility is being constructed in Shanghai.

“The acquisition of Foodstar gives Heinz a strong growth platform in China’s huge, rapidly growing soy sauce market. Foodstar’s leading brands have strong equity with Chinese consumers and they are a natural fit with our core global capabilities in sauces and condiments,” says William Johnson, chairman, president and chief executive of Heinz. “The acquisition is another important step in our strategy to accelerate growth in dynamic emerging markets like China, where Heinz is already well positioned with our growing infant nutrition business and Long Fong, a leading brand of frozen dim sum.”

Heinz has been in China, the world’s most populous nation, since the 1980’s, when the US-based food giant opened a factory in Guangzhou to produce Heinz infant cereal. Including China, emerging markets generated approximately 30% of Heinz’s reported sales growth and 15% of the company’s total sales in fiscal 2010. Heinz expects emerging markets to generate as much as 25% of sales by 2016.

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Vandemoortele to Extend Margarines and Fats Business


Belgium-based Vandemoortele Group, which specialises in the production of frozen bakery products and margarines and fats, is acquiring the margarine and frying fats activities of Dutch company Van Dijk Food Products, part of the EFS Group, for an undisclosed sum.

Located in Zeewolde, the margarine and frying fats business of Van Dijk Food Products, achieved a turnover of about Eur138m in 2009 and employed 145 people. Van Dijk Food Products owns the well-known Diamant en Gouda’s Glorie brands and is also an important producer of margarines and frying fats under private labels for both retail and food service. Group Vandemoortele has 5000 employees and a turnover of Eur1.1b, of which Eur450m is generated by margarines and fats. The acquisition is subject to approval by the competition authorities.

Last year, Vandemoortele disposed of its Alpro soy products business to US-based Dean Foods for Eur325m.

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Austrian Dairy Merger


Austria’s largest and fourth biggest dairy groups, Berglandmilch and Tirol Milch respectively, are planning to merge. The deal is subject to agreement by the two companies’ 16,000 dairy farmer members and approval by the competition authority.

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Emmi Strengthens Position in Swiss Cheese


Emmi has consolidated its position within the Swiss cheese market following approval of its proposed acquisition of Fromalp by the competition authority. Fromalp, which specialises in the manufacture and distribution of typical Swiss cheese products, employed 150 people in 2009 and generated sales of approximately SFr100m (Eur70m), with exports accounting for 40%.

Emmi expects that the integration of the Fromalp business will increase efficiency and reduce costs. This will give Emmi greater financial leeway to strengthen its standing within the liberalised domestic cheese market and to boost its sales abroad.

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Aryzta Makes Strategic Acquisitions Worth $1.08b


Switzerland-based speciality bakery group Aryzta has made two strategic acquisitions to significantly strengthen its position in Europe, North America and in other international markets. Aryzta has acquired Fresh Start Bakeries (incorporating Pennant Food and Sweet Life) and Great Kitchens for $900m and $180m respectively.

Operating 29 specialist production facilities across the US, Canada, Germany, Poland, Sweden, Spain, Brazil, Australia and New Zealand along with joint ventures located in North America, Chile and Guatemala, .Fresh Start Bakeries is a global supplier of speciality bakery products with a leading position in the Quick Service Restaurant (QSR) segment. Pennant Foods is a leading provider of speciality bakery products and solutions to the North American QSR, food service and retail in-store-bakery channels. Sweet Life is a leading innovator and manufacturer of sweet baked goods servicing the North American and Asian QSR channel.

Great Kitchens is a leading supplier of pizza and appetisers with a focus on the deli segment of the North American retail grocery channel. The combined revenue of the businesses being acquired is $1.03b, with associated EBITDA of $133m.

The acquisitions double Aryzta’s manufactured volumes and permit greater access to a broader customer base within the expanding QSR and retail segments. Moreover, they also provide Aryzta with a more balanced exposure to its core markets of North America and Europe, while extending its geographical footprint in rapidly expanding developing markets. Indeed, Aryzta is renaming its ‘food developing markets’ segment as ‘rest of the world’. This reporting segment will include territories across South America, Asia, Australia and New Zealand.

Meanwhile, greater diversification in terms of customer mix enhances the defensive characteristics of the Aryzta’s business model. “From a business perspective we will operate with a greater geographic footprint and with much better channel access to consumers. These acquisitions double our manufactured volumes with an additional 30 production locations in nine countries,” says Owen Killian, chief executive of Aryzta.

Following the transactions it is anticipated that Aryzta’s net debt/EBITDA ratio will be in the region of 3 times for the year ending 31st July 2010.

Created in 2008 by the merger of Dublin-based IAWS Group and Hiestand Holding of Switzerland, Aryzta has a primary listing on the SIX Swiss Stock Exchange and a secondary listing on the Irish Stock Exchange.In Europe Aryzta has a mixture of business to business and consumer brands, including Hiestand, Cuisine de France, Delice de France and Coup de Pates.

CAPTION:

Owen Killian, chief executive of Aryzta.

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Dairy Crest Reduces stake in Wexford Creamery


Dairy Crest has reduced its stake in its Irish dairy joint venture, Wexford Creamery, from 80% to 30%. Wexford Milk Producers, Dairy Crest’s partner in Wexford Creamery, has increased its stake from 20% to 70% after the approval of its farmer members for the transaction.

The deal is in line with Dairy Crest’s strategy of concentrating on developing its key brands and further reducing its exposure to volatile commodity markets. The UK dairy group will retain a minority stake in Wexford Creamery and will continue to provide a range of services to the creamery, including packing and distribution, and will also sell Wexford branded cheese in the UK for a transitional period.

Dairy Crest will use the cash proceeds from the transaction of around Eur9m to repay bank debt.

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Danone Bolsters US Medical Nutrition Business


Danone is acquiring Medical Nutrition USA for $ 62m in cash. MNI introduced the concept of liquid protein supplements for elderly people in the US long-term care market in 2003. The company’s flagship range of products now addresses protein supplementation and wound care support. MNI, which had revenue of $16m last year, will become part of Danone’s medical nutrition division. Danone’s North American medical nutrition business, Nutricia North America, had sales of $70m in 2009.

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Valio Opens New €40m Butter Plant in Finland


Finnish dairy group Valio has officially opened a new Eur40m butter facility at its plant at Seinajoki. According to Valio, the new 100,000 tons per annum production unit is the most modern of its type in the world.

Built in 1979, the Seinajoki plant produces all of Valio’s butter and spreads and also houses a powder plant. The recent investment programme in state-of-the-art production and packaging lines has raised capacity for butter and spreads as well as increasing the range and volume of other value-added dairy products. Meanwhile, Valio is constructing a new processed cheese plant in Russia.

CAPTION:

Pekka Laaksonen, chief executive of Valio.

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Carlsberg to Increase Stake in Chinese Brewer


Carlsberg is increasing its shareholding in Chongqing Brewery Co from 17.5% to 29.7%. The purchase price for the 12.25% stake in CBC is approximately RMB2.385b (DKr 2.1b) in total. With 15 breweries in China, CBC is market leader in the Chongqing province and operates in the surrounding provinces of Sichuan, Guizhou, Guangxi and Hunan and in the eastern Chinese provinces of Anhui, Zhejiang and Jiangsu. In 2009 CBC’s Chinese volumes were approximately 10m hectolitres.

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Private Equity Group Grabs Plum Baby


Darwin Private Equity has completed the acquisition of UK organic baby food business Plum Baby for £10m. Launched in 2006 by Susie Willis, Plum has pioneered the premium baby food sector in the UK and is on track to achieve retail turnover of £15m in 2010.

Its range of over 50 products, created with the ethos of ‘real food for babies, not just baby food’, is distributed in most major supermarkets and includes baby food puree pots, purees in pouches, baby cereals, fromage frais, baby biscuits and snacks.

The acquisition by Darwin comes at a critical point in the development of Plum as the business is transitioning from an early stage entrepreneurial operation into a professional consumer branded business. Darwin’s experience of growing UK consumer brands, working alongside talented entrepreneurs, will help the company continue this transition and transform it into a major player in the UK baby food market whilst at the same time retaining its entrepreneurial roots and flair for innovation.

Founder Susie Willis will remain in the business as creative director, while chief executive Patrick Cairns has decided to leave the business on completion of the deal. He will be replaced as chief executive by Paul Kaye, an experienced manager in the food sector having worked at Dairy Crest, Northern Foods, HJ Heinz UK and Mars (Masterfoods).

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R&R Ice Cream Increases Presence in Mainland Europe


R&R Ice Cream, with operations in the UK and Germany, is expanding its international business with the proposed acquisition of Rolland, the third largest ice cream manufacturer in France, for an undisclosed sum. Producing private label, branded and licensed products, Rolland produces about 65m litres of ice cream a year with roughly 25% exported to more than 20 countries.

The acquisition, if approved by the French competition authority, would create the second largest ice cream group in terms of supermarket sales in the UK, Germany and France. The combined business would have annual sales of over 500m litres of ice cream.

“This acquisition marks an important stage in our strategy to grow our company on mainland Europe. The ice cream manufacturing sector continues to consolidate. This period of consolidation within the industry will also result in further growth opportunities and I fully expect to be announcing more acquisitions soon,” explains James Lambert, chief executive of R&R Ice Cream.

R&R Ice Cream was created following the £180m acquisition of UK-based Richmond Ice Cream by US investment company Oaktree Capital in 2006 and its subsequent merger with Roncadin, the largest own label ice cream manufacturer in Germany.

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Sodiaal Closes in on Acquisition of Entremont Alliance


French dairy group Sodiaal has reached a preliminary agreement to acquire Entremont Alliance, its loss making rival. The deal would create the fourth largest dairy group in Europe with combined annual sales of more than Eur4b and processing over 5b litres of milk annually. Sodiaal owns French milk brand Candia and also has a joint stake in Yoplait, the international yoghurt brand.

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Raisio Launches Benecol Bread in Romania


Finnish food group Raisio has introduced Dobrogea Benecol, a cholesterol lowering bread, in the Romanian market. Launched by Raisio’s Romanian partner Doprogea Grup, Benecol bread is the first cholesterol-lowering foodstuff in Romania. Dobrogea Grup is a leading company in the milling and bakery industry in Romania and had net sales of Eur60m in 2009.

The launch will not only open a new market for cholesterol-lowering foods in Romania but will also increase the awareness and visibility of the Benecol brand in Eastern Europe. Raisio, with its local partners, is continuing to prepare new Benecol-based products for launch in new markets.

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Danone and Unimilk to Create Leading Dairy Business in Russia and the CIS


Global food giant Danone is to merge its fresh dairy products business in the CIS area with Unimilk, Russia’s second largest manufacturer of dairy products and baby food. Established in 2002, Unimilk operates 28 production plants in Russia, Ukraine and Belarus and has 14,000 employees. Unimilk’s sales in 2009 amounted to Eur1b (up 7% on 2008).

Spanning operations in Russia, Ukraine, Kazakhstan and Belarus, the merger covers all dairy products. It will make Danone-Unimilk the leader for dairy products in the CIS area as a whole, and particularly in Russia, where it will account for around 21% of the total market and hold strong positions in high-value, high growth segments.

The new entity will generate annual sales of approximately Eur1.5 billion and employ over 18,000 people. It will be chaired by Andrey Beskhmelnitsky, current chief executive of Unimilk, while Filip Kegels, current general manager of Danone Fresh Dairy Products in Eastern Europe and Central Asia, will take charge of operational management.

Highly Complementary

The two businesses are highly complementary: In terms of geographical presence, Danone operates mainly in western Russia, while Unimilk has a higher profile to the east. The product ranges are also complementary with Danone’s strength in the value-added health segment enhancing Unimilk’s strong positions and powerful brands in core markets.

The merger will allow Danone-Unimilk to benefit from significant sales and cost synergies, and to take advantage of strong growth momentum in the region’s dairy products market. Danone will control 57.5% interest in the new entity, while the current shareholders of Unimilk will hold 42.5%.

The transaction will be carried out principally through a contribution of assets, supplemented with a cash purchase of shares by Danone. Danone’s net financial debt will increase by Eur1.3b principally as the result of the value of the put options which will be granted to the current shareholders of Unimilk. These options will allow them to dispose part or all of their shares in the new entity, Danone being able to hold 100% of these shares in 2022. The operation will be accretive to Danone earnings per share starting in 2011.

“Almost 20 years after taking our first steps in Russia, Danone-Unimilk represents a strategic move for Danone in a region which is offering a promise of growth in the years ahead, and where we will be pursuing ambitious goals for the future,” says Franck Riboud, chairman and chief executive of Danone. “It is also an important new step in Danone’s drive to extend business into new geographical markets.”

The transaction is subject to regulatory approvals in the countries concerned. Closing is currently expected to take place towards the end of 2010.

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Cognac Fortifies Remy Cointreau


Helped by a strong performance from its cognac division, French drinks group Remy Cointreau has reported a 7.2% organic growth (2.2% on a published basis) in operating profit to Eur140m for the year ended March 31st 2010 on turnover of Eur807.8m, up by 12% organically (13.1% published). Group organic operating profit margin fell from 19.2% to 18.4%, primarily reflecting increased advertising and promotional investment.

Net profit from continuing operations was Eur86.0m after tax, reflecting a more favourable tax rate than in the previous year, which was affected by the non-tax deductible capital loss incurred on disposing of the group’s shares in the Maxxium distribution joint venture.

Within the cognac division, Remy Martin recorded a remarkable 28.2% growth in turnover to Eur405.7m, benefiting from significant price increases, distribution integration and an excellent performance by its premium cognacs, particularly in Asia which has become the brand’s leading export market. Current operating profit jumped by 37.8% to Eur105.9m, and the operating margin rose to 27.6% organically, from 25.7% the previous year, although there was a significant increase in advertising investment.

However, the champagne division, which is significantly export-oriented, was adversely affected by the international economic climate. Turnover declined by 23.7% and the division incurred a current operating loss of Eur4m as Remy Cointreau continued its deliberate policy of maintaining prices to the detriment of volume.

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Britvic Completes €237m French Acquisition


In line with its ambitions to expand internationally, UK-based Britvic has acquired Fruite, an independent French soft drinks producer with market leading positions in syrups and ambient juice with brands such as Teisseire and Moulin de Valdonne, Fruite and Pressade, for Eur237m.

The acquisition gives Britvic entry to the attractive Eur12.5b French soft drinks market and provides a platform for targeting other markets in mainland Europe. Britvic anticipates Eur10m of cost synergies by 2013 from a number of areas including procurement and supply-chain, along with a Eur7m contribution from revenue synergies through the marketing and launch of some of Britvic’s existing stills brands in France and beyond.

“With a portfolio of iconic, market-leading still brands and as France’s leading independent soft drinks company, Fruite is an excellent strategic fit for Britvic. The acquisition would extend our soft drinks focus into continental Europe, would drive our already strong portfolio into new markets and would enhance our GB offering,” explains Paul Moody, chief executive of Brtivic. “Our successful integration of Britvic Ireland gives us the confidence that we will deliver significant cost synergies and revenue upside, and therefore deliver material incremental value for our shareholders.”

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