Food Business WWW.FOODBUSINESSAFRICA.COM
MARCH/APRIL 2019 NO. 35
AFRICA’S NO.1 FOOD, BEVERAGE & MILLING INDUSTRY MAGAZINE
MY FACTORY • MY STORY
BAKEX MILLERS
New milling plant, bolder vision
AFRICAN COFFEE ROASTERS Organic coffee masters with sense of style
MY CORPORATE JOURNEY
Olushola Oladejo
SUGAR REGULATION:
Flour Mills of Nigeria
Regulators ponder to tax sugar or not
COMPANY REVIEW
EVENT REVIEW AFMASS FOODTECH TANZANIA 2019
NESTLÉ:
New strategy starts to deliver results
EVENT PREVIEW AFMASS EASTERN AFRICA 2019
AFMASS CONFERENCES & EXPOS EVENTS IN AFRICA AFMASS EASTERN AFRICA EDITION - KENYA - MAY 16-18, 2019 AFMASS FOODTECH RWANDA EDITION - JULY 25-26, 2019 CONFERENCES & EXHIBITIONS
AFRICA HAPPENS AT AFMASS TM
WWW.AFMASS.COM
AFMASS SOUTHERN AFRICA EDITION - ZAMBIA - OCT 3-5, 2019 AFMASS FOODTECH TANZANIA EDITION - MARCH 26-27, 2020
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AFMASS EASTERN AFRICA EDITION - UGANDA - MAY 13-15, 2020 AFMASS FOODTECH ETHIOPIA EDITION - NOVEMBER 12-13, 2020
Africa’s Largest Food, Beverage & Milling Industry Conferences & Expos
MAY 16-18, 2019
5TH EDITION
08.00-18.00 HRS DAILY
PARKLANDS SPORTS CLUB
EASTERN AFRICA K E N YA E D I T I O N
NAIROBI, KENYA
Eastern Africa’s Largest Food, Beverage & Milling Industry Conference & Exhibition What will drive the future of the food, beverage & milling industry in Eastern Africa?
KEY SPEAKERS KEYNOTE SPEAKER: Bharat Shah, CEO & Founder, Kenafric Industries Ltd - May 17, 09.00 am Bharat Shah and Kenafric Industries embody how starting small and sticking to your goals can make all the difference. He leads the biggest confectionery maker in Eastern and Central Africa. Join us to find out from him how the company has gone through its journey, and what the future holds for the company.
Welcome as we celebrate the 5th edition of AFMASS Eastern Africa. Experience more networking opportunities, more inspirational speakers, a bigger and more diverse Exhibition Hall with more technologies and solutions, and a new, better accessible venue in the centre of Westlands district of Nairobi!
Eelco Weber
CEO, Bio Food Products Ltd
Richard Fritz
Food & Agriculture Expert Alliance, USA
Roya Galindo
Director, Regulatory Services, North American Meat Institute, USA
With conference sessions that cover from investments to food safety, innovations, sustainability, nutrition and more, there is every reason to be at AFMASS Eastern Africa this year. Sign up today!
Margaret Kibogy Managing Director, Kenya Dairy Board
Kemisola Oloriegbe Packaging Technologist, Nigerian Breweries
Amir Parpia
Financial Director, Alpha Fine Foods
2019 SPONSORS & PARTNERS
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CONFERENCES & EXHIBITIONS
AFRICA HAPPENS AT AFMASS TM
AFRICA FOOD MANUFACTURING & SAFETY SUMMIT
Discover Africa at the region's Largest Food, Beverage & Milling Industry Conferences & Exhibitions DISCOVER • NETWORK • BE INSPIRED The food, beverage and milling manufacturing, retail and food-service industry is truly on an upswing in Africa. And with it, the complexity and the need for more efficiency, productivity, food safety, sustainability, nutrition and compliance to regulatory and customer requirements. With several editions planned across sub-Saharan Africa, AFMASS Conferences & Exhibitions bring together industry leaders, Government agencies, suppliers, NGOs/development agencies, researchers and academicians to shape the future of the food value chain in Africa. AFMASS Conferences & Exhibitions, now in the 5th year, have brought together over 6,000 people and more than 180 speakers from over 80 countries in high-impact conference sessions that continue to drive the agenda of change and innovation across the Continent. At the Exhibition Hall, AFMASS Conferences & Exhibitions attract some of the world's leading suppliers of milling and processing equipment, packaging, laboratory solutions, engineering and automation, financial and other industry services - offering a one stop shop of the most diversified solutions targeted at Africa's growing industry.
Seeking to discover the pulse of Africa? Come on. Register today to discover Africa's industry, its people and market trends at an AFMASS Conference & Exhibition event near you.
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AFRICA HAPPENS AT AFMASS TM
ETHIOPIA NOV 12-13, 2020
NIGERIA
KENYA
APRIL 22-24, 2021
MAY 16-18, 2019
UGANDA MAY 13-15, 2020
TANZANIA RWANDA
MARCH 26-27, 2020
JULY 25-26, 2019
REGISTRATION OPEN. FOR REGISTRATION & SPONSORSHIP/ EXHIBITION OPPORTUNITIES, CONTACT: INFO@FOODWORLDMEDIA.NET OR CALL: +254 725 34 39 32
ZAMBIA OCTOBER 3-5, 2019
CONTENTS ON THE COVER
BAKEX MILLERS LIMITED:
OPERATIONS: Flexible Packaging 52
The new wheat milling plant building at Bakex Millers' factory in Thika, Kenya. Read this and other past issues of this magazine on www.foodbusinessafrica.com REGULARS
6 8 10 12
16 29 33 50 51 51 66 68
Editorial Events Calendar World in Numbers AFMASS Conference & Expo, Nairobi - Kenya May 16-18, 2019 Food Business News Sustainability News AFMASS FoodTech Tanzania Review/ Pictorials New Products on the Shelf Dairy Business News Beverage Tech Africa My Corporate Journey: Olushola Oladejo Supplier News
MY FACTORY • MY STORY: African Coffee Roasters
COMPANY REVIEW: Nestlé 62
TRENDS: Natural colours
42
43
MY FACTORY • MY STORY: Bakex Millers Ltd 48
IN THE NEXT ISSUE MY FACTORY • MY STORY Capwell Industries Ltd
MILLING & BAKING TECHNOLOGY Baking: Sugar reduction COUNTRY FOCUS: Grains Milling Industry in Zambia COMPANY FOCUS: Bakhresa Group OPERATIONS: Pumps and valves 6
MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
FOODBUSINESSAFRICA.COM
FOODTECH CONFERENCE & EXPO
RWANDA EDITION
Great Lakes Region's first Food, Beverage & Milling Industry Conference & Expo
JULY 25-26, 2019 KIGALI SERENA HOTEL - KIGALI, RWANDA WELCOME TO RWANDA - THE LAND OF A THOUSAND HILLS The food, beverage and milling industry in the Great Lakes Region - Rwanda, Burundi, eastern DRC, western Uganda and northwestern Tanzania is growing aggressively with a rising need for the right technologies to improve value addition, post-harvest management, processing, storage and supply chain management in order to boost local manufacturing for domestic and export markets. Join us at the first AFMASS FoodTECH Rwanda edition to meet the key decision makers in the region and discover what the Great Lakes region of Africa has to offer!
WWW.AFMASS.COM
EDITORIAL
Reversing Africa’s cocoa paradox: Why Easter celebration signals a call to action
“
What's the brain surgery in making chocolates? The price of cocoa beans always falls, but never the price of chocolates” – Akinwumi Adesina, President, African Development Bank Around the world, chocolate in all shapes and sizes symbolize Easter and bring joy to millions of kids and adults alike. And the demand for chocolate will most likely continue to increase, according to experts. There is huge opportunity for Africa, the largest producer of cocoa in the world, to rake in economic value that the global market offers. Africa produces about 75 percent of the world’s cocoa. But the region faces a daunting paradox: though it accounts for a majority of the world’s cocoa production, Africa gets just 5 percent of the US $100 billion annual chocolate market value. Africa has been unable to extract a larger share of the global chocolate market value because it exports just raw cocoa beans. “Africa is stuck at the bottom of the cocoa value chain, dominated, instead of dominating, despite being the leading producer!” exclaims Akinwumi Adesina, President of the African Development Bank.
In 2014, looking into the economics of the chocolate industry, CNN anchor Richard Quest visited Côte d'Ivoire. He made a startling revelation into this paradox: most cocoa farmers he talked to had never even tasted chocolate. Adesina is right when he says: “African farmers sweat, while others eat sweets. While the price of cocoa has hit an alltime low, profits of global manufacturers of chocolate have hit an all-time high. It's time to process Africa's cocoa in Africa, and end Africa being at the bottom of global value chains.” The African Development Bank is leading a call to action on Africa’s agro-industrialization, which is key to transforming the cocoa value chain. “Africa must not be locked at the bottom, it must rapidly add value to what it leads the world in producing”, says Mr. Adesina, adding that “it is time for Africa to move to the top of the global food value chains, through agro-industrialization and adding value to all of what it produces”. The African Development Bank has prioritised industrialization in its High 5 agenda. This could create an opportunity for African countries to add value to
"While the price of cocoa has hit an all-time low, profits of global manufacturers of chocolate have hit an all-time high. It's time to process Africa's cocoa in Africa, and end Africa being at the bottom of global value chain." their raw materials. It is this regard that the Bank’s Annual Meetings for this year has the theme “Accelerating Africa’s Industrialization”. This year’s Easter celebration signals a further call to action for African cocoa producers to start producing chocolate to compete with countries like Belgium, Switzerland, U.S. and France. This will not only bring in money, but also afford opportunities for the many cocoa farmers who are yet to taste chocolate in their entire life. The Africa Development Bank.
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www.foodbusinessafrica.com Volume 7 Issue 1, No.34 • ISSN 2307-3535
FOUNDER & PUBLISHER Francis Juma EDITORIAL Godfrey Anunda | Clement Muriuki ADVERTISING & SUBSCRIPTION Jonah Sambai | Lavender Atieno | Hellen Mucheru CONTRIBUTORS Virginia Nyoro | Ronald Onsare DESIGN & LAYOUT Frank Bett
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MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
FoodWorld Media P.O Box 1874-00621, Nairobi Kenya Tel: +254 20 8155022, +254 725 343932 info@foodworldmedia.net www.foodworldmedia.net
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Food Business Africa (ISSN 2307-3535) is published 6 times a year by FoodWorld Media Ltd. The magazine is distributed for free to food, beverage, milling and foodservice companies and Government regulatory agencies in Africa. The magazine is available through paid subscription for the other stakeholders in the food chain, including suppliers to the sector. Copyright 2018. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited. All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published.
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2. New Plant - Food Safety Champion
3. Bakery & Snack
3. New Plant - Best Plant Design
4. Soft & Alcoholic Beverage 5. Hot Beverage 6. Chilled, Fresh & Frozen
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1. Advertising Campaign of the Year
7. Sugar & Confectionery 8. Culinary & Condiments
1. Sustainable Energy Management
2. Digital/Social Media Advertising Campaign of the Year
9. New Product with Most Outstanding Packaging
3. Sustainable Waste Management
FOOD RETAILER OF THE YEAR 1. Best Retail Outlet of the Year
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10. New Product with Best Ingredients Application 11. New Product with Best Application of Nutrition Concepts
2. Sustainable Water Management 4. Sustainable Community Initiative
Sponsorship, entry and attendance queries to: TEL: +254 725 343 932; INFO@FOODWORLDMEDIA.NET
EVENTS CALENDAR EVENT HIGHLIGHT:
AFMASS FOODTECH RWANDA EDITION
Introducing AFMASS FoodTech Conference & Exhibition Rwanda edition - Rwanda and the Great Lakes region's first food, beverage and milling industry conference and expo. Set to be held at the the magnificent Kigali Serena Hotel in the centre of Kigali on July 26-27, 2019, the event is targeted at boosting processing, packaging and food safety in the growing industry in the Great Lakes Region of Africa - covering Rwanda, eastern DRC, Burundi, north-western Tanzania and western Uganda. Sign up today to be part of the network of industry leaders, Government regulators, NGOs and suppliers to the industry who will shape the growth of the manufacturing, retail and HORECA industry in the region Register today at www.afmass.com
May 4-9, 2019
June 19-21, 2019
November 13-16, 2019
IFFA Focus: Meat www.iffa.messefrankfurt.com
Hi & Fi Asia-China Shanghai, China Focus: Food, Beverages & Health https://www.figlobal.com/china/
Vietnam Food Expo Vietnam Focus: Food & Beverage https://foodexpo.vn
May 28- June 01, 2019
September 4-7, 2019
Thaifex Bangkok, Thailand Focus: Food & Beverage www.thaifexworldoffoodasia.com
WorldFood Istanbul Istanbul, Turkey Focus: Food & Beverages www.worldfood-istanbul.com
June 2-5, 2019
November 19-21
IFT & Food Expo New Orleans, USA Focus: Food & Beverage www.iftevent.org
Agrofood West Africa Accra, Ghana Focus: Food & Agriculture www.agrofood-westafrica.com
June 12-15, 2019
November 27-29, 2019
Propak Asia Bangkok, Thailand www.propakasia.com
Drink Japan Japan Focus: Beverages www.drinkjapan.jp
May 7-9, 2019 Vitafoods Europe Geneva, Switzerland Focus: Nutrition, Health & Wellness www.vitafoods.eu.com
May 9-11, 2019 Agrofood Ethiopia Addis Ababa, Ethiopia Focus: Food & Agriculture www.agrofood-ethiopia.com
May 9-11, 2019 Seoul International Seafood Show Focus: Seafood www.seoulseafood.com
May 14-16, 2019
July 11-12, 2019
SIAL China China Focus: Food Products www.sialchina.com
AFMASS Foodtech Conference & Expo Kigali, Rwanda Focus: Food, Beverage & Milling www.afmass.com
May 16-18, 2019 AFMASS Conference & Expo Eastern Africa Parklands Sports Club, Nairobi, Kenya Focus: Food, Beverage & Milling www.afmass.com
May 21-23, 2019 Sweets and Snacks Expo Chicago, USA Focus: Snacks and Confectionery https://sweetsandsnacks.com
July 17-19, 2019 Specialty and Fine Food Asia Singapore Focus: Food Service & Retail https://www.speciality-asia.com
October 3-5, 2019 AFMASS Conference & Expo Southern Africa Lusaka, Zambia Focus: Food, Beverage & Milling www.afmass.com
October 5-9, 2019 Anuga Food Fair Cologne, Germany Focus: Food & Drinks https://www.anuga.com
November 11-14, 2019 Foodex Saudi Saudi Arabia Focus: Food & Drinks http://www.foodexsaudi.com
For event listings, contact us at info@foodworldmedia.net for consideration. Terms and conditions apply
How can we help you? We are the world’s leading Food & Agri bank ¶
Rabobank Africa
We offer: P Trade and Commodity Finance P Equipment/Export Finance P Corporate Banking
Balance Sheet* Number of Employees 43,000
Network
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Rabobank Global presence with offices in 40 countries and coverage of 50+ countries.
Total assets
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Loan book
€ 408 bln
€ 37 bln
* 2017
Rating
Rabobank – Kenya Representative Office Tel: +254 202 955000; Corporate Banking: Kees.Verbeek@rabobank.com Trade and Commodity Finance: Wouter.Kool@rabobank.com Equipment/Export Finance: Peter.Maaskant@rabobank.com
Rating agency
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Aa2 A+ AAAA
WORLD
CANADA:
US$34.6B
Estimated valuation of the plant-based food market by 2029
US$15M
UK
US$997.8M
Amount offered by a consortium to acquire Wessanen UK
Amount invested by Coca-Cola Canada in mini-bottle production
UK
US$3M
Danish Crown’s Tulip plans to invest in a new snacks factory in UK CANADA:
US$318.6M
FRANCE
Amount offered by cannabis producer Tilray to acquire Manitoba Harvest USA USA
US$7M
Financing secured by Alpha Foods to enhance plant-based capabilities
30
Number of brands to be sold by Constellation Brands to Gallo Winery
4
USA
US$60M
Amount to be invested by glass producer O-I at its new France facility
USA
50%
US$200M
Amount Fairlife is investing in a new production facility in Arizona, USA
Percentage renewable energy Hormel Foods plans to use to power its operations
USA USA
US$100M
Amount committed by Starbucks in investing in food and retail startups
MOROCCO
US$2.4M
Investments in a waste management agreement between North Africa Bottling and Suez SA
US$310M
Investments by Greenleaf Foods in a new plant-based foods facility in Indiana NIGERIA
SIERRA LEONE
US$41.6M
Commercial paper issued by Nigerian Breweries for short-term funding
US$11.8M
Valuation of agricultural financial agreement signed by state and IFAD GHANA
BRAZIL
124M
Number of tonnes of soybeans expected to be produced by Brazil this year
ARGENTINA
US$11.9M
Valuation of the new milk line inaugurated by Nestle Argentina at its factory
US$150M
Amount received by the government from India to invest in agriculture
NIGERIA
US$300M
Valuation of the initiative launched by USAID to boost agribusiness
SOUTH AFRICA
US$6.9M
Amount availed by CocaCola Beverages to support supplier fund initiative SOUTH AFRICA
US$332M
Amount offered by Israeli firm Milco to buy Clover Industries
12 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
FOODBUSINESSAFRICA.COM
WORLD IN NUMBERS NORWAY
640,000T
Number of tonnes of seafood exported by Norway in Q1 2019 SWEDEN
US$114M
Nordzucker AG’s planned investment at its Sweden sugar factory DENMARRK
1%
CHINA
Percentage increase in yield achieved by Chr. Hansen’s new cheese enzyme
FRANCE
INDIA
100%
INDIA
28%
Additional stake acquired by Heineken in India’s United Breweries
151%
Percentage growth in profits recorded by Arabian Food company in 2018
MYANMAR
23.9MT
US$3M
Amount IFC is investing in agri logistics group SLCM Limited to expand its services THAILAND
INDIA
US$82M
Amount offered by AGI to acquire India based Milltec Machinery ETHIOPIA
JAPAN
Number of tonnes of feed produced by Japan in 2017/18
49%
Percentage shares sold by Coffee Day in its consultancy services business
Pernod Ricard targets 100% recyclable, compostable packaging by 2025
EGYPT
US$32M
Amount to be invested by AAK at its production facility in China
US$6.6M
Amount invested by Nestle Thailand in a new no added sugar Milo beverage
SINGAPORE
US$350B
Amount in credit secured by Olam to support digital transformation
US$52.5M
Amount invested by Kangaroo Plast in a new brewery
400,000MT
ETHIOPIA
Amount of wheat tendered by Ethiopian government to supplement local supplies KENYA
US$7.9M
KENYA
Amount to be invested by World Bank in abattoirs in Kenya TANZANIA
US$77.7M
Revenue generated from coffee exports in Tanzania in 2018/19 RWANDA
42%
Stake acquired by Devenish Nutrition in Kenya-based Sidai Africa
TANZANIA
US$34.1M
Amount invested by Tanzania in a new project to fight aflatoxin
US$1M
Funding received by Rwanda Standards Board to improve service delivery ZIMBABWE
40%
Percentage decrease in wheat to be produced under grain millers’ scheme SOUTH AFRICA
100%
Bottles introduced by Unilever South Africa for its products
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MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
13
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ADVERTORIAL | CORVAGLIA
PET capping made easy with cr-cap Having PET bottles well capped is hard. High-rejection rates on the filling line or flat bottles with no CO2 are some of the nightmares for managers in the beverage industry. For almost 30 years Corvaglia has been focusing on making capping of PET bottles easier and more efficient. The company focus exclusively on developing and producing high performing, lightweight single piece closures. Expertise in the entire value chain What makes Corvaglia different from others? It is the only company offering expertise along the entire value chain to its customers. Corvaglia designs closures according to customers’ demands, shaping them through high-performing injection moulds. In Switzerland, Mexico and USA Corvaglia has three cap production sites. And last but not least, a team of high-qualified Corvaglia technicians apply closures at the filling line. This knowhow offers Corvaglia’s partners around the world peace of mind and the liberty to have a solution designed according to their needs. Working with corvaglia gives you the confidence that capping PET bottles or injection moulding will be a challenge less to worry about. The lightest and most innovative closure solutions for PET The exclusive focus on closures allows Corvaglia to develop unique products, chosen by leaders in the beverage industry all over the world, including in Africa. Since 2007 Corvaglia has been holding the world record for the lightest closure in the market. Because material savings has to go along with performance, all closures are conceived to perform under the most stringent weather and supply chain conditions. It is not by chance that Corvaglia is a leader in the hottest region of the planet: Middle East.
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AFMASS Eastern Africa, Kenya edition celebrates 5th year with bigger, more impactful event in Nairobi Conference program and Expo Hall to feature discussions and ideas on latest investments trends, food safety regulations, nutrition, sustainability etc. • Over 2,000 delegates and visitors from more than 40 countries expected • US Department of Agriculture to send two key officials to share how US food regulations work
T
he 2019 edition of AFMASS Eastern Africa edition opens its doors on May 16, 2019 with a fresh and packed program that will showcase the latest technologies, trends and investments in the bustling Eastern Africa region. Set to be held at a new venue at Parklands Sports Club in the middle of Westlands District of Nairobi, the event features an improved conference program, a bigger Expo Hall and many more opportunities to network and trade with some of the region's key decision makers in the private sector, Government, NGOs and other stakeholders. More than 2,000 delegates and visitors from across Africa and the World are expected to grace the event, as Nairobi hosts Eastern Africa's largest food, beverage and milling industry event. "We are excited with the preparations so far from across the industry, with hundreds of delegates already confirmed, while the list of sponsors, exhibitors and partners has increased substantially. We look forward to hosting the best AFMASS event ever, and also that this event will continue our tradition of delivering value for the key stakeholders that attend the events across the region," says Francis Juma, the team leader at FoodWorld Media, the organisers of the event. More sponsors, exhibitors and partners Continuing with the goal of bringing together the food manufacturing, retail and food service sectors of the industry together, this edition of AFMASS Eastern
Event: AFMASS Eastern Africa edition When: May 16-18, 2019 Where: Parklands Sports Club, Westlands, Nairobi, Kenya Timings: 08.00 am to 06.00 pm daily Africa has received impressive support from a number of sponsors. They include ingredients solutions supplier DSM, food safety technologies provider BioMerieux, equipment leader Buhler, leading beverage company CocaCola, and a new supporter Sendy, the logistics solutions provider. The list of exhibitors has also grown, providing the most diversified solutions at the Expo Hall to the event's visitors. "Hosting AFMASS Eastern Africa, and the other AFMASS events would not be possible without the support of these companies that come to showcase their latest technologies at the event. We are excited that the number of exhibitors has increased, with new exhibitors being recorded from countries that have never participated before at the event, from across the World," Star-studded field of speakers The 2019 edition of AFMASS Eastern Africa will highlight some of the opportunities, trends and challenges that the food, beverage and milling industry faces in Eastern Africa, on the back of growing economies and rising urbanisation. The event has continued with its tradition of attracting the movers and shakers from across the region, and has received confirmations from a number of industry leaders, Government policy makers and other vital contributors to the growth of the food industry in Africa, . Some of the key speakers include Roya Galindo, the Director of Regulatory Affairs
at the North America Meat Institute and Richard Fritz, the consultant for the Food & Agriculture Export Alliance, who will shed light on the US food safety regulatory system, and how the proposed Kenya Food & Drugs Authority can learn from the US system to formulate an efficient, responsive and effective regulatory system. Other notable speakers include Bharat Shah, the Director at Kenafric Industries; Amir Parpia, the Finance Director at Alpha Fine Foods; Jesse Green, the Operations Lead at Bidco Land O'Lakes; Eelco Weber, the CEO at Bio Food Products; Charity Magwenzi, the R&D Manager at Capwell Industries; and Jacque Njonjo, the Operations Manager and IFC, among others. What's new at AFMASS Eastern Africa 2019? The following are the new additions and changes at AFMASS Eastern Africa edition: • AFMASS Healthy FoodMarket Expo will showcase some of the latest food products and engage consumers on the latest inovations, and how they fit consumer needs • AFMASS Next will showcase new technologies and products from young enterprises, universities and research institutions in Eastern Africa • Field visits will be made to the African Milling School near Nairobi, to provide exposure to the event attendees of a milling operation.
EVENTS PREVIEW
AFMASS FoodTech Rwanda edition set to showcase Rwanda and the Great Lakes region of Africa
Event: AFMASS FoodTech Rwanda edition When: July 25-26, 2019 Where: Kigali Serena Hotel, Kigali, Rwanda Timings: 08.00 am to 06.00 pm daily
Rwanda's's first food, beverage and milling industry conference and expo to showcase region's potential
I
t's finally here! On July 25-26, 2019, we shall be opening the doors to AFMASS FoodTech Rwanda edition - the latest leg of AFMASS Conferences & Exhibitions. Hosted at the Kigali Serena Hotel in the centre of the city of Kigali, AFMASS FoodTech Rwanda edition will be the first substantive food, beverage and milling industry trade event in Tanzania. Over two days, more than 500 delegates from the food industry, suppliers Government agencies, NGOs and other stakeholders in Rwanda and the Great Lakes Region of Africa, plus over other countries around Africa, Europe and Asia are expected to converge at the event to shape the future of the food industry value chain in the region. "We are excited that the food, beverage and milling industry key decision makers from across the World have already signed up to participate at this inaugural event," says Francis Juma, the team leader at FoodWorld Media, the organisers of the event. "Rwanda stands shoulders above many countries in Africa for its pursuit of excellence - be it in governance, environmental leadership and adoption
of technology. This event will add an extra feather to Rwanda's reputation: a manufacturing hub, not only for its population, but for the sorrounding countries: Democratic Republic of Congo (DRC), Uganda, Tanzania, Burundi and other Eastern African countries." Rwanda's food, beverage and milling industry has seen a rapid rise of investments since the 1994 genocide, taking advantage of the country's ease of doing business, rising economy, surging urbanisation and changing consumer eating habits. Some of the leading food companies with operations in Rwanda include beer and soft drink producers Bralirwa and Skol Brewery, dairy and drinks operator Inyange Industries, milling giants Africa Improved Foods, Minimex, Pembe Flour Mills and Bakhresa Milling Rwanda, and tea and coffee producers Sorwathe and Rwanda Mountain Coffee, among many others. Further, hundreds of small and medium food companies, from producers of spices, fruits and vegetables, potatoes, snacks, baked goods have popped up across the country, to take advantage of the rising demand for packaged foods in the country. A vibrant hotel, restaurant and catering
(HORECA) industry has also taken root in Rwanda to service the booming tourism industry in the country. Global and regional hotel giants including Radisson Blue, Serena, Marriott, City Blue have found a home in Rwanda. Government policy focused on exports The Government of Rwanda has laid down strategies to reduce post-harvest losses, improve local addition of produce, improve quality and food safety, with a goal of increasing availability of processed food products for the local, regional and international markets. AFMASS FoodTech Rwanda edition fits perfectly within the Government of Rwanda's strategy. By availing the latest technologies and appropriate information to the industry within Rwanda and teh Great Lakes Region, the event will bolster the food industry in the region. The conference sessions has been crafted to meet the specific needs of the food, beverage and milling industry in the region, with a coverage of the most critical issues in the region, including processing, packaging, nutrition, food safety and sustainability.
UPDATES REGULATORY & POLICY
Mauritius lifts ban on Kenyan produce, imposes strict conditions KENYA – Mauritius has lifted a ban on Kenya’s avocado produce imposed in 2015 but unveiled strict hygienic conditions for the fruit to access Mauritian market. Following the move, Kenyan authorities will have to meet high standards for the exports, including specific chemical, storage and transportation conditions as dictated by the Mauritian National Plant Protection Office, plus conditions on insect and disease infestation and traceability certifications to prove the produce is from Kenya. Investments into avocado farming in Kenya has in the recent past increased reflected by the uptick in acreage of the fruit under cultivation to about 200,000 tonnes annually, with the country seeking other markets for the produce, including China. In 2018, South Africa lifted a ban on the commodity imports from Kenya after a 10-year ban that saw the country lose an estimated US$22.78m (KSh2.3 billion) annually. Kenya is the world’s sixth largest exporter of avocados accounting for 3% of the world’s total production and the second largest producer in Africa after South Africa. The country produces is mainly exported into European market, South Africa and Qatar and now China and Mauritius could add to the market, fuelling further interest.
INVESTMENTS
Unilever Tea commissions US$21.5m tea processing plant in Tanzania
TANZANIA – Unilever Tea Tanzania Limited has commissioned a US$21.5 million (TSh49.6 billion) state-of-the-art tea processing plant in southern Tanzania with a capacity of processing 50 tonnes of green tea per day. According to David Minja, Unilever Tanzania Managing Director, the company has employed over 7,000 people and benefited over 40,000 others through its investments, including the factory. “We are committed to ensuring that we offer INVESTMENTS
World Bank pumps US$7.93m in establishing abattoirs to boost Kenya’s livestock sector
KENYA – The World Bank is set to inject US$8 million (KSh 800 million) in establishing abattoirs across major pastoralism areas in Kenya in a bid to promote the local and export market for livestock products. The funds will enable setting up wellequipped abattoirs that will enable the regions’ livestock products to compete both locally and internationally. The slaughter-houses will be constructed in Garissa, Wajir, Isiolo and 20 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
training on modern tea farming to enable farmers get quality output and get good price for their produce,” he added. Unilever Tea Tanzania has been a major player in developing the sector investing more than US$43.2 million in various projects across the country. In 2013, the firm entered into a Memorandum of Understanding with the Ministry of Agriculture to facilitate development of the tea industry and has committed to developing the physical infrastructure and avail 1,600 hectares of land to the firm to facilitate development of tea farms. Unlike its competitor, Kenya, the tea sector in the country is largely dominated by large scale farmers who contribute about 70% of the commodity while small holder farmers currently contribute 30% of green tea that is processed in the factories. Tanzania has also mapped out a strategy opening tea action centre in the country to further boost the sector.
Mandera counties and will play a key role under the economic stimulus programme. Currently, the region operates under four state-of-the-art abattoirs that export meat to the Middle-Eastern countries such as the United Arab Emirates and Kuwait, with the new investment raising the number to eight export slaughterhouses. The government has already embarked on the process of mapping out strategic locations. Earnings from animals and products rose to US$3.39 billion in 2017. FOODBUSINESSAFRICA.COM
M&A
Olam to acquire Dangote Flour Mills for US$361m, take leading position in West Africa NIGERIA – Global food and agribusiness giant, Olam International has submitted an offer to acquire Dangote Flour Mills (DFM), Nigeria’s leading wheat milling and pasta processing company for US$361 million (NGN 130 billion). The Singapore-based agribusiness company said addition of DFM further strengthens its portfolio by investing in proven businesses where it has consistently performed and gained market leading positions as it seeks to take the lead in Africa’s most populous country. The acquisition potentially makes Olam to be the largest wheat miller in Nigeria, above the leading player Flour Mills of Nigeria, and in West Africa region. Olam which currently operates wheat milling and flour and pasta manufacturing in Nigeria and Sub-Saharan Africa is looking to increase its footprint in Africa, where demand for high-quality flour is quickly rising. The transaction includes five flour and pasta production facilities operated by DFM as well as its logistics capabilities including access to two ports at Apapa and Calabar, both in Lagos. With the acquisition Olam says it has an increased manufacturing footprint to reach a broader population across Nigeria, where demand is driven by increased consumption of convenient and affordable wheat-based products, such as bakery, snacks and pasta. Olam grabs DFM after a failed attempt by Tiger Brands a few years back, and which failed, forcing Tiger to sell back the business to Dangote. Olam has identified Grain and Animal Feed business as one of its prioritised platforms for growth in its recent strategic review, with a goal to expand its wheat milling capacity in highgrowth markets, such as Nigeria and West Africa. “We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” said K.C. Suresh, Managing Director and CEO of Olam Grains and Animal Feed. Olam entered the Nigerian wheat milling market in 2010 when it acquired Crown Flour Mills for US$107.6 million. In 2016, it added another key wheat milling and pasta manufacturer, Amber Foods Ltd, part of the BUA Group, becoming the number two wheat miller in Nigeria by sales volume, increasing its wheat milling capacity to 6,140 tonnes a day from just 2,380 tonnes. The acquisition comes after the recently unveiled six-year strategic plan to invest US$3.5 billion in high potential growth businesses including grains and animal feed, while divesting four other businesses.
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INVESTMENTS
Golden Africa to set up edible oils processing plant in Ethiopia
COMMODITIES
IGC projects 14% decline in South Africa maize production, as SADC region hit by drought
ETHIOPIA – Golden Africa, a subsidiary
of Malaysian Hayel Saeed Anam (HAS) group, has unveiled plans of investing in a new edible oil production plant in Ethiopia. According to Fouad Hayel, Golden Africa managing director, the oil seeds processing factory will be operational within a two year period with the investment creating about 1500 jobs. Speaking during a meeting with Ethiopia’s Ministry of Trade and Industry Mrs Fetlework Egziabher, Mr Fuad stressed the firm will leverage on its modern processing technology, financial capacity and well-organized logistics supply chain in the investment, reports New Business Ethiopia. The investment will come as a major boost to the country’s edible oil sector, which imports more than 90% of the total edible oil consumed in Ethiopia, according to Fetlework. Despite Ethiopia’s high potential of growing oilseeds, data reveals that the country imports 73,000 metric tonnes of palm oil per annum mainly due to challenges in the oil value chain. According to the Central Statistics Agency of Ethiopia 2016, the country has annual potential of producing more than 784,809 tonnes of oilseeds. The government’s attempt to capacitate local edible oil producers had seen it impose a ban on edible oil imports by private companies in 2011. However, the government through the Ministry of Trade & Industry later selected public and private companies granting them permission for importation to cushion the country from shortages. Golden Africa will join local competitors in the country including Hamaressa Edible Oil S.C, Alle Bejimla and Belayneh Kinde Import & Export who majorly ship and distribute edible oil to the local market to meet the growing demand. The investment comes at a time when the sector has been recording an upsurge in edible oil processors, with more than 1,000 small and micro oil processing companies and an additional 27 large and medium-sized oil processors in the country. 22 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
SOUTH AFRICA – The International Grains Council has projected a 14% decline in South Africa’s maize production to 10.7 million tonnes during the 2018/19 season, as the Southern Africa Development Community (SADC) region faces lower grain production. Paul Makube, a senior agricultural economist, said that the projected decline is based on the drought conditions that have interfered with planting season of the crop and subsequently lowering the crop’s acreage. “South Africa experienced little rain in some parts of the Free State and North West provinces and this has led to lower-than-expected yields. Some of the plantations were also damaged by frost,” Makube said. According to the Crop Estimates Committee an estimated 2.3 million hectares of maize were planted for the 2018/19 production season, which could provide a potential crop of 10.5 million tonnes. Most countries in Southern Africa have received lower rainfall than normal during the current planting season which has also affected planting in majority of the countries. “Weeks of belowaverage rainfall during the summer has strengthened dryness in Angola, Namibia, southern Zambia, Botswana, Zimbabwe and South Africa,” said Wandile Sihlobo an agricultural analyst. Data from the IGC also reveals that Zambia’s maize crop is also expected to decline in the 2018/19 production season to roughly 2.4 million tonnes, 33% lower than the previous season. Despite the projected decline in South Africa’s corn production, the country is said to have a sufficient maize stock to sustain the country through to the next planting and harvest season. According to Annatjie Loio, president
Grain Handling Organisation of Southern Africa, an estimated total of 13 million tonnes of grain will be received, financed, stored, transported, fumigated and processed in the current season. “Actually we expect the country to show a surplus of stock going into the 2019/20 season as the situation is not dire but we might see a very tight surplus in that regard. Thus, we expect limited upside for maize prices in the medium term should the rand/dollar exchange rate continue to trade at current levels. As with maize, the oilseed complex also faces a decrease in output due to the reduced area planted relative to last year,” Paul Makube notes. Following the devastation brought by Cyclone Idai on Malawi, Zimbabwe and Mozambique, Wandile reports that Malawi upped its 2018/19 maize production estimate to 3.4 million tonnes, 13% higher than the market expectations, but 3% lower than last year’s, as better yields in some parts of the country have offset the impact of flooding in the southern regions. “This means that, contrary to market expectation, Malawi could have sufficient maize supplies for the 2019/20 maize marketing year, corresponding with the 2018/19 production year, with some quantities available for export market, ‘which would ease pressure in Southern Africa.’ This is, however, not guaranteed, as the government may place export ban ahead of the general elections on 21 May 2019, to contain local prices. Wandile says that Zimbabwe and Mozambique will most likely remain maize importers in 2019/20 marketing year, with Zimbabwe importing at least 900,000 tonnes in order to meet demand of 2 million tonnes a year. Mozambique will most likely double the typical maize import volume of about 100,000 tonnes a year in the 2019/20 marketing year, he adds. Despite the expected drop in production in South Africa, it still remains that most important regional maize supplier. For Zambia and Malawi, which could be the other sources, ‘domestic policy objectives of maintaining export bans when the stocks are slightly tight, and the aforementioned possible political motive in the case of Malawi’ will most likely affect the possibility as source of imports into the region. FOODBUSINESSAFRICA.COM
UPDATES INVESTMENTS
Ethiopian industrial conglomerate invests US$1.64m in new flour milling plant
ETHIOPIA – The A.S.S.E.S. Industry Plc, an Ethiopian conglomerate, has invested US$1.64 million in establishing a modern wheat flour processing plant in Amhara Regional state in Ethiopia. The new plant has a processing capacity of producing 82,000 kilogrammes of wheat flour per day. According to Sema Melaku, assistant factory manager, the strategic investment in the region was majorly influenced by the high wheat production capacity recorded in Amhara Regional
State. He also reveiled that the plant is set to expand its operation into animal feed and macaroni production in the near foreseeable future. A report by Addis Fortune reveals that Amhara is second largest wheat producer in the country accounting for 32.7% of the 4.6 million tonnes harvested during the last fiscal year. Oromia is the leading wheat producing region contributing 53% of the country’s harvest. Ethiopia is among the top three wheat producers in Africa, with wheat accounting for 20% of the nation’s total cereal production. The factory enjoins 110 registered wheat flour milling companies in the country with a majority located in the country’s capital Addis Ababa, supplying flour to 4,461 certified biscuit, cake and bread makers operating locally. More than 90% of Ethiopia’s wheat
production is grown on small farms, most of which are in the highlands. The agricultural sector contributes 34% of the country’s gross domestic product and employs over two-thirds of the workforce, where 72% are engaged in crop production. The country imports about 1.7 million tonnes of wheat as demand for wheat and wheat products such as pasta continues to put pressure on the local durum wheat supply. However, the Ethiopian government has unveiled plans of ensuring the country become wheat self-sufficient over the next four years to cut its increasing reliance on imports from volatile global markets. Among other interventions, government has rolled out a US$5.98 million agricultural mechanisation project set to take effect across major grain producing regions in the country.
STRATEGY TRACKING
Barry Callebaut achieves traceability of a third of its global cocoa volume SWITZERLAND – The Swiss cocoa and chocolate company,
Barry Callebaut has said that it has established traceability for a third of its global cocoa volume, bringing it closer to achieving its ambitious cocoa sustainability goals. The company’s commitment, which is supported by efforts to enhance a traceable supply chain in Ghana and Cote d’Ivoire, the world’s two largest cocoa producers, aims to source 100% of its ingredients sustainably by 2025. In line with this commitment, the Group said it has mapped 100% of the farms and warehouses in its direct supply chain at risk of sourcing from protected forest areas. Under the Cocoa & Forests Initiative, the company joined the governments of Côte d’Ivoire and Ghana and thirty-three leading cocoa and chocolate companies to end deforestation and restore forest areas. Central to the frameworks is a commitment to no further conversion of any forest land for cocoa production. “This means that Barry Callebaut has mapped all cocoa farms within 5 km from a protected forest area and all cocoa warehouses within 25km from a protected forest area. By the end of 2019, Barry Callebaut will have mapped all the farms in Côte d’Ivoire and Ghana it sources from, establishing 100% traceability for its direct supply chain in the world’s two largest cocoa producing countries. Overall, this means that 100% of the cocoa volume sourced in Ghana and 40% of the cocoa volume sourced in Côte d’Ivoire, by Barry Callebaut, is traceable,” said the company. The progress report reinforces the company’s Forever Chocolate commitment, which outlines plans to make sustainable chocolate the norm by 2025, to help ensure future supplies of cocoa and improve farmer livelihoods.
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UK impact investor AgDevCo invests US$3m in Rwanda’s milling firm Minimex RWANDA – UK-based social impact investor, AgDevCo has announced a US$3 million investment in Minimex Limited, Rwanda’s leading maize milling firm to help the firm expand its production capacity. The investment is supported through UK Aid’s IMSAR programme, which is aimed at helping improve market systems for agriculture in Rwanda. Harriett Baldwin, UK Minister of State for Africa said that the investment by AgDevCo will enable the firm increase its capacity as well as scale up its raw material sourcing capacity from maize farmers across the country. The investment in Minimex marks AgDevCo’s third investment in Rwanda, with the others in Kigali Farms, a mushroom grower and Uzima, a day-old chick producer. Minimex Limited has a capacity of over 40,000 tonnes per annum. It produces maize flour, grits and bran. Felicien Mutalikanwa, Chairman of Minimex said that as the company continues to experience increased demand for high-quality grain, the investment is expected to drive growth along the value chain in terms of post-harvest handling, storage and logistics. “In the next year, we hope to be producing at 65% of the factory capacity and at 80% in the next three years. We intend to buy more maize from local farmers and ensure that we don’t face stock challenges as it has been previously,” Felicien said. AgDevco recently made a multimilliondollar investment in Nakifuma Farming Company, a new 390 pig breeding and finishing farm in Kampala, Uganda, to add to its impressive list of investments in Africa, comprising investments in Ghana, Malawi, Mozambique, Uganda, Rwanda, Tanzania and Zambia.
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Equator Bottlers Limited appoints Josephat Kilungu as manufacturing manager
KENYA – Equator Bottlers Limited, a subsidiary of Coca Cola Beverage Africa, has appointed Josephat Kilungu as the manufacturing manager. Mr Kilungu holds a Master of Business Administration (MBA) in strategic Management from Kenyatta University as well as a Bachelors degree in Food Science and post-harvest Technology from Jomo Kenyatta University of Agriculture and Technology. In his new position he is expected to drive the soft beverage manufacturing plant into new heights owed to his diverse experience in the beverage sector across different countries. Mr Kilungu, who joined the beverage industry at Nairobi Bottlers Limited, since 2005, has served in different capacities including the Unit Manager before he was appointed as the Manufacturing Manager. He also worked as the Operations Manager in Ethiopia Between 2012 and 2014 during which production grew 40% in 2012and 120% in 2013 as well as facilitated capability development across various levels. During his tenure, he also played a central role towards accreditation of the
plant on various international standards including ISO 9001, ISO 18001, Food Safety System Certification as well as KO compliance in addition to promoting accountability and enthusiasm. Additionally, he was also involved in the successful mobilisation of the production teams to focus on key performance indicators subsequently resulting into great synergy and product availability. Mr Kilungu also holds a Packaging Diploma from the Durban University of South Africa among other management course from Gordon Institute of Business studies, University of Pretoria South Africa. Equator Bottlers Limited, established in 1966, is a franchise of Cola-Cola, operating bottling and distribution of Coca-Cola soft beverages serving the seven counties western parts of the country. In 2015, the facility added a modern PET plastic bottle production line with an aim of expanding production capabilities as part of the global Coca-Cola Co.’s strategic growth which has seen it grow into 20,000 outlets serving an estimated 6.5 million consumers. Equator Bottlers Limited was acquired by CCBA in 2017 and is now a subsidiary of the company producing a broad spectrum of Coca-Cola brands including the Dasani Water for the local and regional sale across Kenya and Uganda. In the run-up to 2020, the Equator Bottlers and the Coca-Cola Company has engaged in a three-pronged campaign involving the expansion of their operating capacities, mass-market activation, and corporate social responsibility (CSR) projects.
M&A
Investment group Orascom to acquire Egyptian Nile Sugar for US$217m
EGYPT – Orascom Investment Holdings, a diversified investment firm is set to acquire 100% ownership of the Nile Sugar Company, an Egypt based beet sugar and extraction plant for US$217.1 million. This follows Orascom board of director’s approval of the transaction details as informed by BDO Financial Consultants, giving way to negotiations between the shareholders. Orascom said that transaction
proceedings will see payment of 10% of the total purchase price amounting to US$20.75 million in addition to settlement of the US$4.04 million shareholders’ loan to be paid upon the closing of the deal. Orascom Investment Holding is a diversified investment firm with businesses in GSM, media, cables and mobile communications centred across Egypt, North Korea and Lebanon. FOODBUSINESSAFRICA.COM
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SOUTHERN AFRICA OCTOBER 3-5, 2019 • LUSAKA, ZAMBIA
Welcome to Zambia’s only & SADC region’s Food, Beverage & Milling Industry Conference & Expo The food, beverage and milling industry is growing rapidly in Zambia and the neighbouring Southern African countries. The industry, Government and suppliers in the SADC region finally have the only trade event that supports the future growth of the agriculture and manufacturing value chains. AFMASS Southern Africa brings together investors, top managers, technical teams and professionals to the only platform that resonates with the food, beverage and milling industry in Zambia and SADC region. Join us again in October 2019 at the second edition of AFMASS Southern Africa edition where you will achieve the following: • DISCOVER the latest milling, processing, food safety, laboratory, packaging, engineering, automation and other industry solutions from regional and international suppliers; • NETWORK with industry leaders and peers from the SADC region and beyond; • LEARN latest trends in processing, nutrition, packaging, sustainability and food safety technologies at FREE daily conferences.
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INVESTMENTS
Barry Callebaut inaugurates new cocoa processing unit in Cote d’Ivoire
COTE D’IVOIRE – Barry Callebaut, the leading manufacturer of high-quality cocoa and chocolate products, has inaugurated a new state-of-the-art cocoa processing unit at its plant at Abidjan, Côte d’Ivoire. Callebaut said that the new grinding unit is part of an overall strategic investment to expand cocoa processing capabilities in Côte d’Ivoire. The firm rolled out a five-year US$55.29 million investment plan that aims at expanding cocoa bean processing capacity in the country by over 40% by 2022. According to the company, once the processing unit is fully operational, it will employ an additional workforce of 45 people and create 120 indirect jobs. Antoine de Saint-Affrique, chief executive at Barry Callebaut Group said that the investment is also part of the company’s ambitions to contribute to the country’s economic growth. In May 2018, the firm opened its first African Chocolate Academy Centre in South Africa as a teaching and training centre for artisans and professionals. The facility aims at improving artisans and professionals skills in chocolate production and provide them with new trends, techniques and recipes in the cocoa sector. “The expansion fits with the Ivorian government’s desire to increase local cocoa processing capacity in its country and is in line with Barry Callebaut’s objective to supply the growing market for cocoa in West Africa with domestic supply,” the company noted in a statement. 26 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
TECHNOLOGY
Nestle and Carrefour partner to offer full brand traceability using blockchain FRANCE – Nestle and the French retail giant, Carrefour have partnered to use blockchain technology to offer full traceability of its mashed potato brand, Mousline purée, as the company pilots the new technology to improve traceability in its supply chain. According to a statement, customers in France will be able to have full access to blockchain data for the product, enhancing transparency across the entire supply chain. They can use their smartphone or other device to scan a QR code on the Mousline packaging, then get information on how the product is processed at Nestlé’s factory in the north of France to Carrefour stores. Some of the information that will be available to customers include production date, quality control parameters, storage times and the location of warehouses. In addition to the blockchain data, consumers will also find information on the farmers who supply the potatoes for Mousline and how the puree is made. Nestle started using blockchain in 2017 when it joined the IBM Food Trust as a founding member, as part of its efforts in sharing information on its products with consumers. It is using the blockchain technology offered by IBM to create better transparency and visibility of the whole value chain of its products. “This Mousline pilot is the result of a successful partnership with Carrefour and a great step forward on our blockchain journey,” said Vineet Khanna, SVP – Global Head Supply Chain at Nestlé. “We are using this technology to bring more transparency to our products by providing accurate, trusted and impartial information. That will benefit the whole value chain, including retailers and consumers.” The French retailer Carrefour joined the IBM Food Trust in October 2018 and has been working on blockchain technology to ensure a transparent and traceable supply chain. It recently revealed a new technology that will enable consumers to trace information about the source of its milk products, thus building confidence across the entire supply chain. INVESTMENTS
Nigeria’s Grand Cereals inaugurates US$3.3m fish feed processing plant
NIGERIA – Grand Cereals Limited, a
subsidiary of United Africa Company (UAC) of Nigeria Plc, has commissioned a US$3.3 million (N1.2 billion) fish feed processing plant as it seeks to boost the aquaculture sector in the country. Speaking during the inauguration ceremony, Mr Sanjeen Jain, the Acting Deputy Managing Director explained that the plant would begin production of 2,500 tonnes of fish feeds per month. Jian said that the new plant is aimed at bringing the firm’s products closer to the farmers as part of its commitment on developing the agriculture value chain in Nigeria, reports News Agency of Nigeria.
He further noted that this will also improve availability all-year round and further improve quality of the feed. However, Jian noted that in spite of its production capacity, the country still has a supply gap of about 2.1 million tonnes of fish feed. Jain called for the government to sustain its ban on the importation of frozen fish and poultry products into Nigeria in order to improve prospects in the aquaculture sector. According to the director of Nigerian Institute for Oceanography and Marine Research Lagos, Dr. Adekunle Oresegun, Nigeria spends about US$1 billion annually on the importation of fish. He further appealed for special support to feed millers in terms of tax holidays and easier access to credit from financial institutions, especially those that are currently providing extension services and market development programmes. Grand Cereals is a leading Nigerian integrated foods company that produces and markets consumer food products whose fish feed portfolio include the Vital Fish Feed brand. FOODBUSINESSAFRICA.COM
PEOPLE
Twiga Foods appoints former Coca-Cola regional head as new CEO
6TH EDITION
EASTERN AFRICA UGANDA EDITION
MAY 13-15, 2020 • KAMPALA, UGANDA
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KENYA – Kenya’s leading online grocery platform, Twiga Foods, has appointed Peter Njonjo, a former President of Coca-Cola West and Central Africa as the company’s new Chief Executive Officer. Launched in 2014, Twiga Foods is a mobile-based cashless, business-to-business supply platform that links farmers with food vendors with an aim of addressing inefficiencies in Africa’s large, but highly-fragmented informal fruit and vegetable markets. Mr Njonjo will take over from Grant Brooke, who will still retain his executive role in the organization to expand the startup’s footprint into the rest of sub-Saharan Africa, where the company is eyeing other East African cities, such as Dar es Salaam in Tanzania and the Ethiopian capital, Addis Ababa, according to a report on Bloomberg. The company plans to thereafter move on to Africa’s most populous city, Lagos. “For us the icing would be Lagos. We will remain very centric to big urban cities, because that’s where the problem is biggest.” “If my leadership was the period in which Twiga was proving a point that there’s a better way to build safe and secure food markets, Peter’s leadership will be about institutionalizing this way of doing business and scaling it. Peter’s experience in building efficient supply chains and last-mile distribution in over 33 African countries makes him uniquely suited to lead us,” said the outgoing Twiga Foods CEO Grant Brooke. Twiga Foods has signed up over 17,000 farmers across Kenya to supply produce and resells to a network of 2,500 retailers. “This appointment is a great honour for me and Kenyan corporate leadership expertise. I look forward to scaling up our vision of more efficient food markets in Africa and improved food security for our people. Twiga Foods is living proof of the latent opportunity to drive agricultural transformation and investment for local consumption,” said Njonjo.
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Uganda has made huge strides in agriculture and food manufacturing sectors win East Africa, with an increase in investments by local, regional and international companies in the last 10-15 years. Join us at AFMASS Eastern Africa - Uganda edition to discover the huge potential in Uganda and meet the key decision makers from across Eastern Africa and the Great Lakes region. Sign up today not to miss!
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COMMODITIES
Egypt unveils plans of increasing wheat output, targets 3.6m tonnes EGYPT – Egypt, the world’s largest wheat buyer has unveiled plans of increasing local production to 3.6 million tonnes in the coming season that starts in April. Egypt’s supply minister Ali Moselhy said that the state will pay farmers between US$38 and US$39 (655-685 Egyptian pounds) per ardeb (150 kilograms) of wheat depending on quality. “This is a fair and special price … We are targeting (a harvest of ) 3.6 million tonnes and the funds from the finance ministry have been secured,” Moselhy added. However, Hussein Abu Saddam the head of the farmers’ union said that farmers had requested for a government pay of US$45.92 (800 Egyptian pounds) per 150 kilograms. “I expect the crop to fall this year due to the spread of yellow rust and climate change, which will increase the losses incurred by farmers,” Hussein said. During the last harvest season, Egypt procured 3.15 million tonnes of wheat, one of its lowest tallies in years, at US$32.27 – US$34.44 per 150 kilogram unit. Traders said at the time that some of the local crop was bought by private mills, which offered higher prices than the government, as global prices rose above the government’s price during harvest time. According to a recent report by the Egyptian Ministry of Agriculture, the country is currently cultivating a total of 3.8 million acres of wheat for the season which started from September-October and expected to be harvested in April-May this year, an increase from a total of 3.2 million acres cultivated in 2018 which yielded 8.8 million tonnes, according to data from the Food and Agriculture Organization (FAO). Egypt imports 11-12 million tons of wheat annually via international tenders mainly from Russia, Ukraine and Belarus to meet high demand for bread, the most affordable meal in the country’s food basket.
28 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
PEOPLE
Zambeef Plc appoints Walter Roodt as new CEO, opens northern distribution centre
ZAMBIA – Food products and agribusiness company, Zambeef Plc has announced the appointment of Walter Roodt as the company’s chief executive director to succeed the current CEO, Francis Grogan. Roodt will take over from outgoing Grogan when he retires by the end of 2019, having joined Zambeef in July 2008 in the role of Nutritionist for the stock feed division, trading as Novatek, and serving in different positions at the company since, including General Manager of the division, and lately, Deputy Managing Director of the group. According to Zambeef, the fully integrated food producer with operations in Zambia, Nigeria and Ghana, Walter has worked in the company propelling growth in the stock feed division and positioning Novatek as not only the best performing division at Zambeef but also Zambia’s leading stock feed manufacturer. He has a Bachelor’s degree in Animal Science and a Master’s of Science (MSc) in Animal Nutrition from the University of Pretoria. Dr Jacob Mwanza, Zambeef Plc board chairperson, hailed the appointment saying that Walter has been a key figure in Zambeef ’s success and remained committed to the group. “Walter’s appointment as an Executive Director is in line with the Group’s well-considered succession plan and is validation of his hard work and commitment to the Group over the past 11 years. The Board looks forward to working closely with Walter in his new role,” stated Dr Mwanza. Meanwhile, the company has opened a new distribution and processing centre in the Copperbelt Province of Kitwe, to serve the northern regions of the country. The newly established Kitwe Processing Plant operation is set to improve the company’s efficiencies and expand the food
retailer’s operations and logistics in the Copperbelt and Northern Provinces in the vast country. The new facility will add to the food retailer’s operations and logistics from its base at Huntley Farm in Chisamba, which is located in the Central Province of the country, near the commercial capital, Lusaka. “The market for Zambeef products is growing and so is the company. We aim to give added value to our customers with the one-stop shop concept in the form of our macro outlets – which have been well received. But beyond the shopfront we are investing heavily in the processes, the machinery and the facilities that will ultimately enhance the customer experience and value offered by Zambeef,” explained Zambeef Head of Corporate Affairs and General Manager Retailing Felix Lupindula. Lupindula noted that Zambeef retail activity in the North has significantly expanded, reflected by opening of more outlets which has further necessitated the realignment of supply management to the region. He added that while Huntley Farm remains the company’s base operational and distribution centre, the new Plant will make for easier service at a decentralised level for all the inter-town retail centres from a strategic regional location. The new plant features state-of-theart facilities including a modern weighing facilities, high-capacity cold-rooms, and a bigger storage and supply chain management for the Northern region, and will also include Novatek Animal Feed and Zamhatch sales outlets to offer the firm’s portfolio of products ranging from meat and dairy to animal feeds. FOODBUSINESSAFRICA.COM
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COMMODITIES
Brazil soybean forecast to rebound 9% despite low China demand
BRAZIL – Brazilian soybean production is
expected to increase by 9% to 124 million tonnes compared to the previous year despite low demand from China. According to Global Agricultural Information Network (GAIN) report from
the U.S. Department of Agriculture, planted area for soybeans is expected to increase by only 1% even as farmers remain uncertain of the trade relations between the USA and China. Soybean yield is forecast to increase by 8% in 2019-20, from 3.16 tonnes per hectare to 3.4 tonnes, while exports will climb 9% in 2019-20 to reach 75 million tonnes, though this is still low compared to 84.1 million tonnes shipped in 2017-18. “Although in the last five years planted area averaged 4% annual growth, Brazilian producers are expected to hedge their bets next season given the uncertainty surrounding soybean demand from China, which is the largest consumer of soybeans, as well as the larger importer of Brazilian soybeans,”
the USDA said. “In addition, most of the available arable land has already been tapped in key producing states, and further sizeable area increases would require large upfront investments to convert degraded pasture land.” In the year 2018-19, Brazilian soybean demand from China grew 20% due to the ongoing trade war between the United States and China. In July last year, China stopped some soybean imports from the US after a series of tariff barriers were put in place on critical goods. Imports were further dampened as China imposed an additional 25% import tariff on U.S. soybeans. The report estimated that China’s 2019/20 soybean production will stand at 16.4 million tonnes, a 4% increase from the previous year.
INVESTMENTS
Devenish Nutrition acquires 42% stake in Kenya’s Sidai Africa KENYA – Devenish Nutrition, a North Ireland based agri-business firm has acquired a 42% stake valued at US$2.22 million (KSh 225 million) in Kenya based animal feed manufacturer Sidai Africa. Christie Peacock, Sidai Africa founder said that the transaction will enable the firm boost its operations and grow its product portfolio. “I am delighted that Devenish has decided to make this significant
investment in Sidai. The partnership will ensure that Kenya’s farmers will have the best technology available globally,” he said. “Devenish’s global reputation and experience will help us serve local farmers far much better than we did by ensuring only genuine products are sold in our branded outlets,” added Sidai Mananging Director Anthony Wainaina. Peter Wallace, Devenish executive vice chairman, said
the strategic investment in Sidai will also enable the company grow its market share as well as improve farmer earnings. Sidai was incorporated as a Kenyan firm eight years ago and has remarkably grown its business into a current 87 franchisees, 11 branded stores and 1,500 stockists under its 20 branded products and employing 120 people.
R&D
Nestle launches R&D Accelerator to boost innovation and speed-to-market SWITZERLAND – Nestle has become the latest food industry major to launched a new accelerator with a goal to utilize innovative technologies and systems to bring new products to market to consumers around the globe. Called Nestle R&D Accelerator, the program seeks to bring together expertise in food and nutrition and speed up innovation to keep up with changing consumer trends. It will be based in Lausanne, Switzerland, bringing together Nestlé scientists, students and start-ups to advance science and technology, as it strives to maintain its position as the food industry leader in nutrition, health and wellness. The experts will have access to Nestle’s infrastructure including shared labs, kitchens, bench-scale and pilot-scale equipment. The first teams to 30 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
work under the program have been selected and the accelerator will be operational by the end of 2019. “We have taken a number of steps to accelerate innovation, including our enhanced prototyping capabilities and the funding of fast-track projects,” said Stefan Palzer, Chief Technology Officer of Nestlé S.A. “With the Nestlé R&D Accelerator and its proximity to our R&D and business teams, we will bring open innovation to a new level. Combining our internal expertise and the deep knowledge of our academic and industrial partners with the external entrepreneurial creativity is a unique approach and will create an innovation power-house. It will accelerate the translation of innovative ideas and concepts into tangible prototypes and products.” The accelerator is part of Nestlé’s global
R&D network and located at the company’s fundamental research entity Nestlé Research, which employs around 800 people in Lausanne. It joins the company’s other innovation initiatives like Nestlé’s R&D organization, leading academic institutions such as the Swiss Federal Institutes of Technology in Lausanne (EPFL) and Zurich (ETHZ) and the Swiss Hospitality Management School in Lausanne (EHL). The company’s accelerator program joins a growing list of food companies that have taken the step to seek outsiders to help them increase their innovation pipeline, including beer maker AB-InBev, soda maker Pepsi, confectionery leader Mars and Canadian dairy cooperative Agropur, among many others. FOODBUSINESSAFRICA.COM
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PEOPLE
Cargill taps executives to lead global Agricultural Supply Chain and Animal Nutrition businesses
USA – The global agribusiness giant, Cargill has appointed Joe Stone to lead the company’s global Agricultural Supply Chain, effective June 1. Joe will succeed GJ van den Akker who has decided to retire as enterprise lead for Cargill’s Agricultural Supply Chain in 2020 after 30 years with the company. Joe Stone is currently enterprise leader for Cargill Animal Nutrition and as a result of his appointment to a new position, David Webster will assume the Cargill Animal Nutrition leadership. Stone began his career in Cargill’s grain and oilseeds business in 1985 before moving to the company’s world trading unit in Geneva, Switzerland in 2001. “GJ and his leadership team have improved results in our ag supply chain while also driving important progress on critical safety, digitalization and sustainability goals,” said Dave MacLennan, Cargill chairman and CEO. “Joe’s extensive risk management, trading, and grains and oilseeds experience will allow him to build on the momentum created by GJ and his team. And David is well positioned to execute on our animal nutrition growth strategy, leveraging his successful track record leading the premix and nutrition business and managing diverse global teams.” Webster joined Cargill in 1992, working in production, sales, purchasing and finance before becoming a leader in Cargill premix business with the acquisition of Provimi. He most recently served as head of Cargill’s global edible oils business. Van den Akker will continue to serve on Cargill’s executive team and lead key projects prior to his retirement. 32 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
M&A
Ethiopia seeks investors as it plans to privatize 13 sugar factories to improve efficiencies ETHIOPIA – The Ethiopian government has embarked on the process of privatizing 13 sugar factories that are operational or under construction as it seeks to enhance efficiency and improve productivity. The ministry of Finance and the Ethiopian Sugar Corporation have released a request for information (RFI) which will be used to collect information about the capabilities of potential investors. “The questionnaire helps to identify interested potential investors as well as promoting transparency and uniformity of the evaluation,” said Eyob Tekalign, the State Minister for Finance. “The questions have been designed to give respondents opportunity to bring their ideas to the table, as well as enable the Ministry to prepare a suitable tender,” Eyob elaborated. The minister said that this will also allow potential investors to present the nature of engagement - whether full ownership of a sugar factory, management contract agreement or a public-private partnership - in the privatisation. Ethiopia currently has eight active sugar plants - Wonji-Shoa, Metehara, Finchaa, Tendaho, Arjo-Dedessa, Kessem, Omo Kuraz Two and Omo Kuraz Three; and other five sugar factories that are under different levels of construction - Omo
Kuraz (Omo Kuraz One and Five), Tana Beles (Tana Beles One and Two) and Welkayte Sugar Development Projects that are at various stages of construction. The government says that when all these new projects come onstream, the country will have about 2.5 million tonnes of sugar per year, turning the country into a major producer and exporter into the East African region, especially in the Horn of Africa region - Somalia, Djibouti, North Sudan and South Sudan – which is known to comprise countries with some of the highest sugar consuming populations in the world. With current annual sugar production capacity of 400,000 tonnes, against the country’s demand of 700,000 tonnes, the government has been aggressively developing sugar estates and factories to add to the three existing plants it had in 2010, as it sees sugar demand rising to 1.4 million tonnes by 2025, and 2.5 million tonnes by 2030. In addition to the sugar factories, the state is set to partially privatise or sell some of its most profitable state enterprises, including its airline, telecoms company, industrial parks, hotels and manufacturing plants.
INNOVATIONS
Nestle Ghana launches new Maggi seasoning variant to expand health portfolio GHANA – Nestlé Ghana, leading nutrition, health and wellness company has launched a new seasoning variant of its MAGGI brand known as “MAGGI Dedede” as it seeks to grow it ambitions to provide safe and quality nutrition across the country. The product, which is made of shrimp, garlic, fish and other natural ingredients and fortified with micronutrients, fulfils the brand’s commitment of using locally available ingredients in its production. Speaking during the launch of the product, Philomena Tan, the Managing Director of Nestlé Ghana said that the formulation affirmed the company’s commitment in contributing to the growth and wellbeing of Ghanaians. “As a Nutrition Health and Wellness Company, we have a purpose to enhance the quality of life and contribute to a healthier future of consumers. We believe that we can achieve this purpose through the provision of product choices that have been developed through innovation and scientific findings,” she said. Dominique Allier, the Business Executive Officer, Culinary, Nestlé Central and West Africa, said the product had been carefully crafted to heighten the taste of Ghana’s favourite dishes while providing natural ingredients that supported the family’s health. FOODBUSINESSAFRICA.COM
Sustainability
BUSINESS AFRICA
TRENDS IN RENEWABLE ENERGY • WATER • WASTE • AIR • MANUFACTURING • MOBILITY • INFRASTRUCTURE • COMMUNITIES • RESOURCES • POLICY & REGULATION CERTIFICATION
AGRIBUSINESS
Olam strengthens cocoa traceability with commitment to end deforestation in supply chain
SINGAPORE – Olam International has announced that it has achieved 100% traceability of its sustainable cocoa supply chain in Ghana and Côte d’Ivoire and has committed to end deforestation in its entire global cocoa supply chain. The company said it is on track to achieve full traceability of its direct origination supply chain worldwide by 2020. The commitment is part of Olam’s Living Landscapes Policy (LLP), a crosscommodity sustainability policy that seeks
to promote the co-existence of prosperous farmers and thriving communities with healthy ecosystems. The policy applies across products and covers Olam’s plantations and farms, as well as its third-party sourcing network of more than 4 million small and large-scale farmers. Olam is implementing the program in partnership with its customers with a focus on three key areas: forest protection and restoration; sustainable production and farmer livelihoods; and social inclusion and community engagement. The initiatives include a commitment to support the restoration and preservation of 460,000 hectares of forest classes in Cote d’Ivoire. The company has mapped 100% of its supplier network in Ghana, with plans to use the data in identifying suppliers perceived to be in areas of highest forest risk by the end of 2019.
REGULATORY & POLICY
USDA, FDA and EPA unveil new strategy to reduce food waste USA – The U.S. Department of Agriculture
(USDA), the U.S. Environmental Protection Agency (EPA), and the U.S. Food and Drug Administration (FDA) have announced a new inter-agency strategy to address food waste. This collaborative effort is part of the Trump Administration’s Winning on Reducing Food Waste Month which looks to see success of the agricultural sector in feeding the world by reducing amount of food going to waste. The new strategy prioritizes six key action areas including inter-agency coordination, improving consumer education and outreach, partnering with the private sector, improving coordination and guidance on food loss and waste measurement, clarifying and communicating information on food safety, date labels and food donations to maximize the value of food resources. According to the FDA, confusion
FOODBUSINESSAFRICA.COM
over date labelling on food packages has significantly contributed to food waste, contrary to its intention to communicate time ranges for optimal food quality. The agency says that it is taking steps to make date labeling on foods clearer and easier for consumers to determine when a food should be discarded. FDA Deputy Commissioner Frank Yiannas revealed that more than one-third of all available food uneaten goes through waste or loss and 1 in 6 Americans suffers a foodborne illness each year. The agencies also announced a joint agreement signed with ReFED, Inc., a non-profit, data-driven guide for reducing food waste at scale to better evaluate and improve upon strategies to reduce food loss and waste. The move compliments the formal agreement signed by all three federal agencies in 2018 to reduce food loss and waste through combined and agencyspecific action.
Nigerian Bottling Company bags global water stewardship certification NIGERIA – Nigerian Bottling Company (NBC), the Coca-Cola franchise bottler in the country has received the prestigious Alliance for Water Stewardship (AWS) certification becoming the first African bottling plant to receive the award. George Polymenakos, General Manager at Nigerian Bottling Company said that the certification reinforces the company’s commitment to Coca-Cola Hellenic Bottling Company’s 2025 sustainability programme. “This is a milestone achievement for Coca Cola HBC, given that NBC is not only the first organisation in Nigeria, but also the first Coca Cola bottling plant in Africa to be certified under the AWS global water stewardship program. Water is a key focus area of Coca Cola HBC’s sustainability agenda, and water stewardship and responsible water use are at the core of our business, this recognition is yet further proof of our progress. We believe this certification will go a long way to reinforce the commitment and leadership position of NBC and Coca Cola Hellenic Bottling Company in driving and promoting key environmental stewardship initiatives,” he said. AWS is a global membership organisation comprising businesses and investors that seek to contribute to the sustainability of local water resources by adopting and promoting a universal framework for the sustainable use of water. For a business to receive AWS certification, it must undergo a rigorous audit to meet key indicators by third-party assessors independent of AWS or the site owners. As part of demonstrating its commitment to water sustainability initiatives, NBC has said that it has installed all its plants in Nigeria with effluent treatment facilities. NBC has also partnered with the Federal Ministry of Water Resources and the Federal Capital Territory Water Board to hold water sustainability sensitization workshops in Abuja as well as commission several water projects across the state.
MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
33
REGULATORY & POLICY
Rwanda’s manufacturers seek more time to phase out single-use plastics RWANDA – Rwanda manufacturers have called for more time to phase out singleuse plastics following concerns that the time limit provided would heavily impact on their performance, reports New Times. This follows the Rwandan cabinet’s approval of a draft law that proposes the ban of single-use plastics as part of the efforts to mitigate environmental impacts posed by non-biodegradable materials. The government has proposed to give a twoyear grace period to companies to stop manufacturing single-use plastics, a period which local manufacturers say is too short given that firms have heavily invested into the sector. Manufacturers said that the
time limit could expose them to the risk of losing millions since the grace period isn’t sufficient to allow a smooth transition into other alternatives. During a recent meeting with the parliamentary Committee on Agriculture, Livestock and Environment, the local manufacturers also argued that there was a possibility they could run out of packaging alternatives once the single-use plastics are banned. According to Desire Uwayo, the Food Operations Division Manager at Enterprise Urwibutso, lack of a sufficient transition period will put the businesses at risk of plunging into losses and/
or even subsequent collapse. Claudine Mukeshimana, Chairperson Rwanda Association of Manufacturers, challenged the committee to revise the draft law and, especially focus on its orientation. “The law will hopefully be a long-term solution to protect our environment, but we don’t want to see businesses closing either. I think we can find a compromise where we can protect the environment by reducing the volume of single-use plastics and engage best practices to recycle used plastics, and then take time to find packaging alternatives that will replace plastics on a permanent basis instead of doing it right away,” he explained.
PARTNERSHIP
Food and beverage majors form Africa Plastics Recycling Alliance to tackle plastic pollution AFRICA – Food and beverage multinationals
Nestle, Diageo, Unilever and The Coca Cola Company have launched the Africa Plastics Recycling Alliance in a move to promote plastic waste reduction in Africa. According to its members, the alliance aims to turn the current challenge of plastic waste in Sub-Saharan Africa into an opportunity to create jobs and commercial activity by improving the collection and recycling of plastics. “Collaboration within and across markets will be key to success so we are proud to launch the Africa Plastics Recycling Alliance today to increase those efforts and play our part as companies in finding solutions that work for Africa,” said Gabriel Opoku-Asare, head of Diageo in
Society Africa at the launch. “Plastics will remain an important packaging material if we are to give African consumers the safe and affordable products they need. Unfortunately, a lack of collection and recycling capacity in many African markets coupled with growing populations is creating a growing problem of plastics waste. We see an opportunity to tackle that problem in a way that creates jobs and reduces dependency on imported materials while alternatives to plastics are developed,” the Alliance noted. Among the goals of the Africa Plastics Recycling Alliance will include facilitating and supporting their local subsidiaries to engage proactively in market level public private partnerships, as well as industry
collaboration and alliances. The alliance was also established to provide a platform for companies to share knowledge, encourage innovation and collaborate on technical and other solutions appropriate for SubSaharan Africa while participating in local pilot initiatives. Additionally, it will enable members to engage with the investment community, policy makers and other stakeholders to accelerate the development and financing of the necessary waste management infrastructure and systems. Nestle said that the alliance will strengthen its commitment to accelerate action to tackle plastic waste, and was part of its ambitions to make 100% of its packaging recyclable or reusable by 2025.
INVESTMENTS
Chinese firm to invest US$6m in a new plastic bottle recycling plant in Kenya KENYA – Weeco Recycling Co., a Chinese plastic bottle recycling
company, has unveiled plans of investing US$6 million (Kshs 600 million) in setting up a plastic bottle recycling plant in Mombasa to expand its operations in Kenya. Wang Zhangyin, director at Weeco said the investments at the Special Economic Zone (SEZ) in Mombasa will supplement operations of its Nairobi plant and facilitate expansion outside Nairobi. Weeco, previously known as Hui Commercial EPZ, said that its Nairobi’s factory in Athi River Special Economic Zone has a production capacity of between 1,000 and 5,000 plastic bottles per month. “We plan to inject US$6 million in a new plant in Mombasa where we will buy 10 advanced machines. With this new equipment, 34 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
we will be able to dispose of 3,000 tons of plastic bottles and products per month. We also plan to expand investments in our overseas operations,” Wang said. The Mombasa plant will initially produce over 3,000 tonnes of plastic bottles per month, which is expected to double in the next year once production capacity is increased, according to a report by Business Daily, with the plant is expected to commence operations in August 2019. John Waithaka, PETCO Kenya chairman, said that the company will play a key role in recycling of post-consumer PET bottles in the country in line with its strategic objective, which targets the recycling of 5,900 tons equivalent to 247 million bottles by end 2019. FOODBUSINESSAFRICA.COM
SOLAR POWER
Nigerian Breweries signs solar power deal in renewable energy boost
NIGERIA – Nigerian Breweries Plc (NB), franchise bottler of Heineken Lager has entered into a solar energy supply deal with CrossBoundary Energy for the operation of a 650 kW solar plant at NB’s Ibadan Brewery. CrossBoundary Energy will install and operate the solar energy plant as Heineken’s first solar project in Africa, which will become operational by the end of this year.
Under the agreement, the renewable energy investment fund will operate the rooftop facility on behalf of Nigerian Breweries as part of a 15-year solar services period. The deal will see NB only pay for solar power produced, receiving a single monthly bill that incorporates all maintenance, monitoring, insurance and financing costs. The solar project will supply 1GWh annually to the Ibadan brewery at a significant discount to their current cost of power, while reducing the site’s carbon dioxide emissions by over 10,000 tonnes over the 25 year+ lifespan of the plant. Jordi Borrut Bel, Managing Director of Nigerian Breweries Plc said: “The solar plant will help power our world-class brewery in Ibadan, enabling us to deliver on commitments under our ‘Brewing a Better World’ initiatives and supporting Heineken’s global ‘Drop the C’ programme renewable energy.” Heineken’s Drop the C programme for renewable energy aims to grow its share of production related energy sourced from renewables from the current level of 14% to 70% by 2030. According to Martin Kochl, Supply Chain Director, Nigerian Breweries Plc., the project will enable the firm achieve a 40% reduction in CO2 emissions by 2030. The project will support the Nigerian Electricity Regulatory Commission’s (NERC) target of having 2,000MW of power capacity from renewables by 2020.
STRATEGY
Pernod Ricard sets sustainability goals, sets ambitious goals by 2030 FRANCE – The French spirits company, Pernod Ricard, has launched an ambitious sustainability roadmap, targeting to move to 100% recyclable, compostable, reusable or bio-based packaging by 2030. The Sustainability & Responsibility strategy sets out targets to address environmental concerns, nature conservation and social responsibility by accelerating the fight against alcohol misuse. The roadmap spells eight 2030 goals supporting the United Nations Sustainable Development Goals (SDGs), built on four key areas: nurturing land, valuing people, sustainability and responsible hosting. The company says that by 2030, 100% of its global affiliates will have a strategic biodiversity projects while by 2025, the Group will develop regenerative agriculture pilot projects within its own vineyards in Argentina, California, Cognac, Champagne, Spain, Australia, New Zealand and China. The firm aims to reduce the overall intensity of its carbon footprint by 50% in line with the Science-Based Targets initiative by 2030. By 2025, the wine maker will ban all promotional items made from single-use plastic and 100% of its packaging will be recyclable, compostable, reusable or bio-based. It will also pilot 5 new circular ways of distributing wine and spirits and help increase recycling rates in its top 10 largest markets with low recycling levels. The company aims to be water balanced in all high-risk watersheds (like India and Australia), replenishing 100% of water consumption from production sites by 2030. It will also support the fight against alcohol abuse with programs in various markets on alcohol misuse. By 2030, Pernod FOODBUSINESSAFRICA.COM
Ricard said it will expand its Responsible Party program globally to reach at least 1 million young adults to support responsible alcohol consumption. In addition to these 8 main commitments, as part of the 2030 roadmap, it has also developed plans to embed a UN Human Rights approach across its value chain, address waste water and move towards fully renewable electricity. “We know that our customers have now come to expect our brands to be responsible and respectful of the environment – values that have been at the very heart of our business since its inception,” said Vanessa Wright, VP Sustainability & Responsibility. “These 2030 commitments provide us with a focused framework across our business in helping to address some of the biggest sustainability issues, so consumers can enjoy our products in a convivial and sustainable way.” Pernod Ricard said it has reduced its water consumption per litre of alcohol by 20% and its carbon emissions by 30% per unit of production. Last year, it announced plans to eliminate the use of plastic straws and stirrers from its portfolio. MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
35
FUNDING
Coca-Cola unveils US$38m fund to tackle plastic pollution in Africa
AFRICA – The Coca-Cola Company has unveiled a US$38 million
fund to tackle plastic pollution in Southern, East and Central Africa over the next three years. The initiative by the multinational beverage manufacturer is part of global efforts in managing and reducing waste with the overall ambition of creating a world without waste. According to Bruno Pietracci, president of Coca-Cola Southern and East Africa, the holistic end-to-end strategy over the next three years will focus on various interventions that will
ensure a green economy. “We have shifted our business priorities to ensure value is added to our plastic bottles so that they don’t end up as waste. We’re investing in innovative design, collection and recycling models and partnership, to turn our bottles into valuable resources that can drive a green economy. Together with our bottling partners, we are investing over US$38 million to stimulate plastic recycling industries across Southern & East Africa and to educate people about what, how, and where to recycle,” Bruno Pietracci said. The new initiative will include expanding the group’s PET Recycling Co. (PETCO) initiative beyond South Africa and Kenya, with a target of recycling 20,000 tonnes of PET bottles in 2019 as well as taking the model to Ethiopia and Uganda. Coca-Cola says it plans to launch a new bottle under the Bonaqua brand, using 100% recycled PET. The company launched its “World Without Waste” project and with the primary aim of making its packaging 100% recyclable globally by 2025 and use at least 50% recycled material in its packaging by 2030.
EMISSIONS TARGETS
DSM sets new science-based reduction targets for greenhouse gas emissions NETHERLANDS – The global bioscience company, Royal DSM has announced new sustainability commitments that aims to reduce 30% of its greenhouse gas emissions from direct production and purchased energy by 2030. The new targets are part of the company’s strategy to deliver science-based, sustainable and scalable solutions that face up to the challenges brought by climate change. To accelerate the integration of sustainability into its business groups, DSM has joined the Science Based Targets initiative (SBTi), comprising of almost 180 leading companies with validated science-based targets. SBTi champions science-based target setting as a powerful way of boosting companies’ competitive advantage in the transition to the low-carbon economy. It is a collaboration between CDP,
the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), with an aim to drive corporate climate action. The company’s goals will be supported by energy efficiency measures and sourcing more renewable electricity. To this regard, the company has pledged to purchase 75% of electricity from renewable sources by 2030. In 2018, DSM said it achieved 41% renewable energy, in a race towards low carbon operations. It has set an even more ambitious target to reduce indirect value chain emissions by 28% per ton of product produced by 2030, mainly through its recently initiated CO2REDUCE program, focusing on encouraging and challenging suppliers to reduce their climate impact.
REGULATORY & POLICY
EU parliament approves ban on single-use plastics to fight pollution EU – The European Union legislators have approved a sweeping
ban on single-use plastic products in renewed efforts to tackle plastic waste and micro plastic pollution. The European Parliament has voted in favor of ‘The Single Use Plastics Directive’ (SUDP) which criminalizes the use of ten single-use plastics that are most commonly found across European nations. Depending on the availability of alternatives in the market, the ban on cotton bud sticks, cutlery, plates, straws, stirrers, sticks for balloons, as well as cups, food and beverage containers made of expanded polystyrene will be banned effective 2021. The EU has also committed to collect and recycle 90% of beverage bottles by 2029. This comes to address the global concerns around plastic pollution with a particular focus on bringing a solution to marine plastic pollution. The law dictates a renewed focus on raising public
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awareness, mandating producers of items such as tobacco filters, plastic cups, sanitary towels and wet wipes to explain to users how to appropriately dispose of them. The SUDP is part of the EU Plastics Strategy, which sought to lay out a European strategy for the plastic pollution crisis, necessitating the engagement of members from across the entire value chain. The SEDP also looks to introduce measures to reduce the consumption of food containers and beverage cups made of plastic and add specific marking and labeling of certain products. According to the EC, plastics make up more than 80% of marine litter, which has disastrous effects on wildlife and habitats. The World Economic Forum estimates that there are about 150 million tons of plastic in the world’s seas, while research suggests there will be more plastic than fish by weight in the world’s oceans by 2050. FOODBUSINESSAFRICA.COM
Special Thanks to
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RETURNING TO TANZANIA
MARCH 26-27 2020
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Huge potential exists in Tanzania but ease of business, better regulation required
Hassan Swedi – Project Manager, Business Development Unit, Asas Dairies; Ismail Said Albahry – General Manager, Camel Flour Mills; Griffin Murray – Director, East Africa, Black Ivy Group; Francis Mbaki – Area Sales Manager, Buhler; Jackline Kittony – Marketing Director, Tetra Pak and Sufian Kyarua – Secretary General, Tanzania Animal Feed Manufacturers Association discuss the investment opportunities, challenges and trends in Tanzania's food, beverage and milling industry
T
he food, beverage and milling industry in Tanzania offers unique investment potential but a tough regulatory and operations environment has hindered the grwoth and utilisation of this potential. This was the overarching message at the just concluded AFMASS FoodTech Tanzania edition - Tanzania's first food, beverage and milling industry trade event. Hosted at the Dar es Salaam Serena Hotel on March 29-30, 2019 in Dar es Salaam, AFMASS FoodTech Tanzania edition brought together more than 500 industry investors, managers and professionals; Government regulators; industry associations; private equity, banks and venture capitalist funds; NGOs and other stakeholders. The trade provided delegates with a networking, discovery and inspirational forum for those from Tanzania and over 10 countries around Africa, Europe and Asia to shape the future of the food industry value chain in Tanzania - one of the most vibrant and high potential countries in sub-
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Saharan Africa. The conference and expo was officially opened by the Director of Policy & Planning at the Ministry of Agriculture, Mr. Obey Assery. Fatema Dewji, the Marketing Director at MeTL Group, one of the leading players in the agricluture and food industry value chain, shared with the delegates some of the unique insights in the marketing of food products in Tanzania and some of the campaigns the company has run in the recent past, and their impact on their famous brands. Industry leaders see huge potential, seek more investments Talking during the opening session, which covered the investment opportunities in Tanzania, the panelists, which included Hassan Swedi from Asas Dairies, Ismail Said Albahry from Camel Flour Mills and Sufian Kyarua from the Tanzania Animal Feeds Manufacturers Association (TAFMA), there was a resounding consensus that the opportunities in
Tanzania have expanded over the years, driven by growth in agricultural production, rising urbanisation and a fast-growing economy. Hassan revealed that his company Asas Dairies has just commissioned a new long life milk processing plant that more than doubled its installed capacity, but that with low milk production in the country, the company will struggle to meet the rising milk demand by consumers in the country. Sufian added that the potential in the livestock value chain is enormous in Tanzania, as the country has one of the largest livestock populations in Africa. He gave a number of investment araes that should be considered by potential investors, from animal feed processing, establishment of slaghterhouses and meat processing facilities, ranching etc. The poultry value chain has made great strides in the country, but the opportunities are still open and increasing everyday, as urbanisation takes hold, and Dar es Salaam continues to grow. Griffin Murray, the Director, East Africa at the US-based investments FOODBUSINESSAFRICA.COM
company Black Ivy Group, which has just concluded the buy-out of a wheat and animal feed operation in Tanzania, said that his firm believes in the potential of the country, but that there is need to reduce regulatory burden and to instill a sense of predictability in the regulatory environment in the country, if Tanzania is to tap into the investment companies that are looking at Eastern Africa as an investment destination. From processing and packaging solutions supplier, Tetra Pak, the time to invest in Tanzania is now, says the company's Marketing Director, Jackline Kittony and Jonathan Kinisu, the Commercial Director. With unmet milk demand, Jackline says that Tanzania can tap into the right technologies on the farm and at the processing side to develop a strong dairy sector. Equipment supplier Buhler, through their Area Sales Manager Francis Mbaki, reiterated that with abundant grains, Tanzania stands a good opportunity to be the region's grain basket, but also to supply the region with processed, packaged grain products. In a related discussion, the co-Founder of YYTZ Agro, a processor of cashew nuts, gave an account of the progress Tanzania has made over the last decade to improve the production of the country's leading exports earner. He revealed of the country's efforts to improve the varieties of the crop and an intense campaign to open up new areas of the country for the crop's cultivation, that has seen Tanzania climb to be among the top of the nut's production in the World. However, following last season's government's move to ban the export of raw cashew nuts, he called for a clear, long-term strategy by the government concerning the industry into the future. The Director of Policy & Planning at the Ministry of Agriculture, Mr. Obey Assery, a veteran of working with the private sector, having been at the Prime Minister's office called for more investments flows into the country. He reiterated the government's call for more value addition, while promising that the challenges bedevilling the sector are being looked at and shall eb addressed by the government. Nick Jones, the Director at AgDevco, the specialist investor in sub-Saharan African businesses, with 40 investments, with 9 of them in Tanzania valued at US$22.4 million, said that the company sees Tanzania as a vital link to their African ambitions, and that through working FOODBUSINESSAFRICA.COM
Fatma Dewji, the Marketing Director of MeTL Group, one of Tanzania's food and agriclture giants gives her keynote speech at the event. with local communities and partners, they have made great impact in the country, by understanding the most critical aspects of the businesses that they invest in, and utilising local knowledge to drive their businesses forward. Jumanne Rajabu Mtambalike, the Founder of Sahara Ventures, an investments, consultancy and accelerator company, revealed that some of the challenges that start-up companies face in Tanzania are largely internal governance and technical skills to manage the businesses once started. He adviced small business owners in the food industry to seek partnerships, where possible, so that they can tap onto the consumer demand in the country and abroad. Regulatory environment constraints The regulatory landscape in Tanzania came under sharp focus during the conference deliberations, with a strong call by panelists for better streamlining of the regulatory bodies for efficient delivery of services to the food industry. At the food safety, regulatory and trade facilitation session, which brought together Julia Otaya, the Scientific & Regulatory Affairs Manager at Coca-Cola; Lucy Manning, the Regional Brewing & Quality Manager, East Africa, Tanzania Breweries Ltd (AB-InBev); George Akida, Exports Manager, Africado Ltd; and Marsha Macatta-Yambi – Scientific & Regulatory Affairs Manager, Nestle Tanzania, the call for a better regulatory framework was clear for all: with a clear regulatory structure, the food industry can thrive to take advantage
of the rising opportunities in Tanzania. Technical papers open new perspectives on food procesing, packaging and safety To provide technical input to the deliberations, a number of consultants and other stakeholders presented papers to the food industry stekaholders. Francis Mbaki, the Area Sales Manager at Buhler presented a case for the use of the right mixing and compacting technology for the animal feed industry, while Anban Pillai from Endress & Hauser made a case for the use of automation technologies and their benefits in the food and beverage industry in Africa. Turgay Yigit, Business Manager Turkey and Sub-Saharan Africa, Chr. Hansen discussed the ways to replace AZO dyes e.g. tartrazine in foods and beverages, and Patricia Kruger, the Technical Manager, of Sensient Technologies covered the subject of sugar and salt replacement technologies, in tune with current health challenges. Soumeya Loucif, the Business Area Manager at food safety solutions provider bioMerieux presented on the latest microbial testing technologies that save costs and improve efficiencies in food and beverage operations. Anne Wanlund, the COO at Sanku Fortification presented a case for food fortification in Tanzania and their experience while Edwin Josiah from GAIN presented on the fortification Status in Eastern Africa, with an emphasis on premix quality, standards and availability the region
MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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The Buhler team in their booth at AFMASSFoodTech Tanzania
Delegates attending the event enjoy a networking moment during the cocktail ceremony in the evening.
Patricia Kruger of Sensient Technologies explains a point on flavours and colours to a potential customer
The team from Sanku Fortification explain how to use their equipment at the Expo Hall
The Promaco Ltd team engage with delegates at their booth as they discuss their ingredients applications
Tyran, the Project Manager, Resulta Engineering explains to a customer about their technologies
The Endress +Hauser team were dazzling and ready to do business at the concluded AFMASS FoodTech Tanzania
Delegates keenly follow the discussions at the conference room.
40 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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PICTORIALS| AFMASS FOODTECH TANZANIA EDITION 2019
Francis Juma, Lucy Manning (AB-InBev), Julia Otaya (Coca-Cola), George Akida (Africado) and Marsha Yambi (Nestle) at the end of the food safety and trade facilitation panel discussion.
Colm D'Olier (GM Promaco), Patricia Kruger (Technical Manager Sensient Technologies) and Jackline Kittony (Marketing Director Tetra Pak) discussing innovations trends in dairy and beverages.
Decase Chemicals all set up in their booth to receive guests at the just concluded AFMASS FoodTech Tanzania.
Delegates engage at the local products showcase table at the Expo Hall as they seek to discover what is on the shelves in Tanzania
Delegates in the conference room listen in during presentations at AFMASS FoodTech Tanzania.
Jonathan Kinisu (Commercial Director, Tetra Pak) giving his speech that focused on the opportunities in Tanzania's dairy industry. FOODBUSINESSAFRICA.COM
AGI Frame representatives explain a point about their products to potential customers at the Expo Hall
Delegates engage with GAIN's Edwin Josiah after his outstanding presentation on the importance of fortification of food products. MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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PICTORIALS| AFMASS FOODTECH TANZANIA EDITION 2019
Displayed food and beverage products from the Tanzanian market place are on display at the Expo Hall
Asas Dairy team interact with visitors at their booth at the event
Young graduates and innovators from Tanzanian universities network at the exhibition floor as they discuss their future.
Steven Kroen (NIBRO BV, Netherlands) engage with a customer at the exhibition hall during the event
Ms. Fortunata Mmari, MD AFCO Investment under the GAIN booth engaging with her customers
Delegates network at the exhibition floor as they seek new opportunities in Tanzania's market place.
Francis Juma CEO FOODWORLD MEDIA engage with a key guest in a fireside chat Fahad Awadh from YYTZ Agro, a cashewnut processor in Zanzibar during the event.
Soumeya Loucif (bioMerieux) and Deo Mlay, the Technical Manager at Tanzania Dairy Board discuss a point during a break
42 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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43
AFRICAN COFFEE ROASTERS: Coffee roaster with a sense of style African Coffee Roasters is the first certified organic roaster in Kenya. The company, owned by Danish supermarket chain Coop, opened a new coffee roaster in Kenya in 2018 and has a plan to be a significant player in the local and international coffee scene. Food Business Africa sat down with the CEO, Jeroen Tolleraan to discuss their journey and future plans. Ronald Onsare
W
e arrived at African Coffee Roasters in their serene setup at Athi River, 40 km outside of Nairobi to a warm reception. As we were waiting at the reception on seats made from pallets and recycled sisal and jute bags from raw coffee beans, Jeroen, the company’s CEO, emerges and after exchanging pleasantries, he motions our team into their cupping room where he promptly invites each of us to make a choice of the coffee we would like. Noticing that we were greenhorns in the coffee jargon by the blank stares we threw at each other, he leads by mentioning a few types. I quickly connect with espresso and say that I would have that. My colleagues, in unison repeat the same after me. We settle down to our interview with the aroma from the freshly prepared espressos by our host wafting aggressively from our cups. Jeroen explains to us passionately about their company and some of the products they offer to their clients as the interview proceeds in earnest, intermittently interspersed with sips of the dark bitter sweet tingling liquor. African Coffee Roasters or ACR, as commonly known as, is the first certified organic coffee roaster in Kenya. The company is
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situated at the Export Processing Zone in Athi River, with the idea to develop the shortest and most efficient coffee supply chain providing shelf-ready products from Kenya to consumers worldwide. It boasts of an ultra-modern facility with state-of-the-art machinery that helps the coffee roaster to produce ground coffee, whole bean coffee and Nespresso compatible capsules. Among the services it provides are private label and white label services, contract roasting and many more. The company has its own coffee brands including Gourmet Gold, which is an espresso blend sold to cafes, hotels and restaurants and The Big Five Coffee, which is an organic and specialty coffee from five of the best coffee producing nations in Africa - Kenya, Ethiopia, Rwanda, DR Congo and Uganda which is sold locally through their web-shop and internationally as well. “For the private label, we reverse engineer a client’s taste profile. This means that we source and roast beans to the exact specifications that the client wants.” He continues to add, “Our white label services involve a client purchasing already designed FOODBUSINESSAFRICA.COM
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and roasted coffee and selling it as their own. And finally, we have contract roasting where one brings in their green coffee and we roast it for them. It’s quite the facility,” Jeroen explains. As the American award-winning author Nancy Kress said, without coffee, nothing gets really written. Because when you wake up and smell the coffee it’s hard to go back to sleep. And this is exactly what African Coffee Roasters must have smelt.
Danish heritage, focused on Africa
The African Coffee Roasters story started when Coop Danmark, ACR’s biggest shareholder, wanted to strengthen the commercial arm of a CSR project called “Coffee for a Better Future”, which started in Othaya FCS, a cooperative in Nyeri County, Kenya. Denmark’s largest retailer of consumer goods wanted to grow the project beyond its first site in Othaya and that is how ACR was born. The company is owned by two entities in Denmark: Coop Danmark and IFU, the financial vehicle of the Danish government. A cooperative with more than 1,700 shareholders, Coop Denmark is the country’s leading retailer with about 1,200 supermarkets, hypermarkets and discount stores throughout the tiny nation. Its shops operate under the Kvickly, Dagli’Brugsen, Irma and Super Brugsen banners among others. Coop Danmark also operates the fastest growing 340-store Fakta discount chain with about 40% market share and continues to grow. Its owned by Cooperative FDB, which comprises of 1.4 million members of Danish Consumers Jeroen Tolleraan, CEO, African Coffee Roasters Cooperative Society. The company came to Kenya about 2013 out of the interest of the facility was not an easy feat. First, we had to get all our licenses getting organic produce and were targeting East Africa. “One of the in order before we were able to operate legally as a business. We commodities in European retail market is coffee, the main reason also had to renovate our offices and factory building and fit the we started looking for organic coffee in Kenya, which unfortunately factory building with state-of-the-art machines before production wasn’t there”, states Jeroen. We also knew at Coop that the global commenced in August. The first container shipment happened on system of trading in coffee is a tough thing because it goes through in early September 2016,” he reveals. The firm strategically chose to set up its facility at the Export traders who eventually diminish the benefits to farmers.” Processing Zone in Athi River to ease its operations since a big chunk of their trade is in exports. “Since our main customers are Streamlining supply chains “The project at Othaya FCS in Nyeri was aimed at assisting the abroad, we had a huge incentive and serious benefit in participating farmers to increase their yield. Coop funded the research in assisting and joining the Export Processing Zone (EPZ) in Athi River, farmers to increase their yields and to become more familiar with Kenya. It’s an important tool to allow export of the products and the latest technology when it comes to pruning, alternative varieties import of raw materials because we equally buy beans from Eastern of trees to plant, disease resistant trees etc.,” Jeroen looks back at African countries. So, the location was ideal to facilitate our operations especially from the export point of view. This benefits the nascent roots. “The project was quite successful leading to the establishment us and the farmers as well,” Jeroen underscores these advantages. The challenge initially was, while Coop was looking for organic of African Coffee Roasters in 2015, with the aim of setting up a produce, Kenya sadly was the only country in East Africa which factory to roast East African coffee in Kenya and leave the other did not produce certified organic coffee beans. Because of organic value in the supply chain to the farmers. This is a preferred way of coffee’s importance in the European retail market, African Coffee boosting the income of the farmers and reducing costs by sharing Roasters started helping and assisting Kenyan farmers to grow roles in the coffee supply chain in East Africa.” Jeroen informs our organic coffee. However, it’s been daunting and challenging to team as he adds that this was justified by the long coffee supply convert farmers from the conventional practices to the organic way. chain in East Africa because of numerous traders and all kinds of “It has been tough, it hasn’t been easy, though it has gained more marketing within the supply chain. By having a factory at one of traction than at the initial stages. It’s a task of convincing people the countries of origin, African Coffee Roasters eliminated most to basically uproot trees they have, which are fairly old, between of these middle players and consequently managed to reduce costs 65-70 years. The farmers need to be persuaded that their current and increase the income accruing to farmers, he shares. This was trees yield less than young trees and the overall benefits of the also in line with the plans to grow the project beyond the initial more sustainable and more durable species. They also need to see project site in Othaya FCS and to transpose their private label the gains of switching from the chemical fertilizers to the natural, products while paying more attention to sustainability. manure fertilizer. The farmers have been raised typically using The factory was constructed in 2016 and commercial chemical fertilizer in the past and it becomes quite a challenge to production ensued in September of the same year. “Establishing convert to the manure option. This is further complicated by the FOODBUSINESSAFRICA.COM
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The company has installed two Loring coffee roasters that boast unique environmental attributes
THE LORING COFFEE ROASTERS ENSURE THAT THE COFFEE IS ROASTED WITH LESS OXYGEN RESULTING IN MORE CONSISTENCY AND REPRODUCIBILITY OF THE ROAST PROFILE triggered decrease in yields by replacing chemical fertilizers because trees had been accustomed to it,” elaborates Jeroen. Nonetheless, the firm is very lucky and fortunate to have a ready market through Coop for the products that gives African Coffee Roasters the outlet for what they have produced. Without which, as Jeroen alludes, even if one has loads of money to build magnificent factories and procure the choicest of beans, without a ready market it comes to naught. “The biggest incentive with our partnership lies in the assured market and this is a spin off for the farmers who have been improving their volumes gradually by increasing the number of trees,” says Jeroen.
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Environmentally-friendly roasting facility
The African Coffee Roasters factory is a up-to-the-minute facility, in line with their vision to sell high quality coffee to their consumers at a fair price while contributing to the development of the producers’ business and living conditions. The factory has two installed Loring roasting machines. According to Jeroen, the Loring roasting machine, widely referenced as the Rolls-Royce of coffee roasting machines, ensures that coffee is roasted with less oxygen resulting in more consistency. Due to its comprehensive tracking provision at the end of each roast, reproducibility of a particular roast profile can be recreated exactly. He informs us that there are only four of this kind of machine in Africa and two belong to Africa Coffee Roasters at their Athi River factory. The patented Loring single-burner design roasts coffee beans while incinerating smoke, eliminating the need for an after burner resulting in consistent roasts, lower emissions and the lowest operating costs compared to conventional roasters. Allowing the roaster to provide high quality coffee in Nespresso compatible capsules, they have installed the Opem
CR-3P capsule filling machine that fill up to 210 capsules per minute. The weighing in the machine is by in-line sensors that automatically reject non-conforming capsules. To keep the coffee fresh and aromatic the capsules are filled with 99.5% nitrogen. African Coffee Roasters prides in packaging their own coffee as well. They have machines for both whole bean and ground coffee. To do this, they have installed Dolzan packaging machines than can run 12-16 bags per minute, including a comprehensive nitrogen flush to increase the shelf life of the coffee to one year. Talking with Jeroen we get to understand that, operating the coffee roasting plant from the onset to present has involved continuous improvements in processes and equipment. This is reflective of market expansion and dynamics and the ever-changing customer demands and preferences. These demands dictate expansions, improvements and realignment to emerging realities. Specific demands by customers emanates from packaging material, bag and print requirements, etc. Customers also have different wants in terms of the roast profile, which is informed mainly by different experiences with coffee in different markets all over the world. “Our initial equipment had a capability to be adjusted to meet the various specifications. But with time, some customers wanted particular packaging and to address those requests we have progressively added on to our processes and equipment and will continue investing in these lines in response to the dynamics in the industry and market place,” states Jeroen.
Coffee formats to meet market needs
African Coffee Roasters produce coffee in three different forms: ground coffee, whole bean coffee and capsule coffee. Aside from roasting they pack the coffee that is dispatched to various customers and could go directly to the shelves. Their coffee is roasted for both private and white label distributors. Although their products are mainly for the export market, this has not excluded the local market where they are available via brands that are obtainable through their webshop, www.thebigfivestore, coffee shops and supermarkets across the country. When we asked Jeroen about The Big FOODBUSINESSAFRICA.COM
MY FACTORY, MY STORY | AFRICAN COFFEE ROASTERS
Five brand, he inhaled deeply as if he was really smelling the coffee, then lightened up to inform us. “I love to speak about the Big Five. This was our first brand that we introduced in early 2018. This has nothing to do with the animals, but these are specialty coffees from the five countries/regions we source the beans from – Kenya, Uganda, DR Congo, Rwanda and Ethiopia. All these five coffees are distinct in their own ways and are preferred differently along these distinctions by our global customers,” he tells us with transformed verve and unbridled enthusiasm. The Big Five coffee is a premium coffee brand from five origins known for producing the best coffee in Africa. The beans come from a single origin and are specialty coffee, among the top 5% best beans in the world, he says. “We have opened a Big Five Coffee shop at the Karen Crossroads Mall inside the Tuskys supermarket, the only location selling organic specialty coffee in the country,” beams Jeroen. They have a lot to offer at the shop including filter coffee, cappuccino, latte and so much more. This offering is anchored by young, qualified and talented baristas who are always more than happy to serve customers. Gourmet Gold is another brand that they own, which is coffee produced mainly for brewing espressos and is mainly sold to cafes, restaurants, hotels and other coffee establishments. The other products in their repertoire are what they call the Coop products, including Mocca Cirkel Kaffe, Mount Kenya Cirkel Kaffe, Okologisk Cirkel Kaffe, Bla Cirkel Kaffe, Kenya AA Cirkel Kaffe, Kenya AA Espresso Cirkel Kaffe and Etiopien Cirkel Kaffe. All these coffees are far from a one-sided flavor experience, they are individually distinct and unique as is their origin, blending and roasting.
The Big Five coffee bags feature coffees from five of the best coffee producing nations in Africa.
Stirring the tea cup in Kericho
After starting out with farmers in Mt. Kenya at Othaya FCS, African Coffee Roasters have found themselves setting foot in Kericho, a town in Kenya’s Rift Valley and which is synonymous with tea growing and production in Kenya. So how did they end up at the tea land? “We didn’t plan to go to Kericho. We were asked to go there because the farmers wanted to try something different away from the traditional tea crop in the region. More and more tea farmers wanted to change their line of business and were looking for alternative crops and luckily, they settled on coffee and fortunately into our way of doing things in the organic approach,” Jeroen puts the record straight. He says that the coffee farmers in Kericho own small farms and are in fairly small cooperatives, but this size has given the firm the agility to progress speedily and to benefit from the virgin land which the farmers have. “This is an absolute advantage when you want to go the organic way because of the unspoilt nature of the soils by chemical usage. This was a beautiful start for both of us in the journey to becoming organic certified. Since there is no certified coffee in Kenya, the farmers are working hard towards that and we as a company pay them a premium for the organic coffee,” says Jeroen. Part of the larger CSR move by African Coffee Roasters is not only to go for organic coffee, but to have the farmer benefit from it. Delayed payment has hurt farmers for a long time and has impacted negatively on the overall coffee venture. “Farmers have in general been paid 6-9 months after delivery of their beans, but we have changed that to paying farmers within 14 days to a month upon bean delivery. The impact of this is tremendous as you would FOODBUSINESSAFRICA.COM
The Big Five monthly cupping event at the Crossroads Mall in Nairobi
The African Coffee Roasters processing plant in Athi River
George Wanja, the head roaster during a cupping session at the facility MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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BY HAVING A FACTORY AT ONE OF THE COUNTRIES OF ORIGIN, AFRICAN COFFEE ROASTERS ELIMINATED MOST OF THESE MIDDLE PLAYERS AND CONSEQUENTLY MANAGED TO REDUCE COSTS AND INCREASE THE INCOME ACCRUING TO FARMERS. imagine. Delayed payment affects farmers cash flows, holding incomes that are needed to offset production costs and improve their day to day lives. Initially this predicament exposed the farmers to expensive bank loans which ended up eroding the value of the whole venture, ultimately making coffee farming unattractive. We are changing this. If farmers grow the cherries, they should be rewarded for their efforts without unnecessary delays or avoidable expenses by paying them promptly and at a premium for their coffee,” Jeroen prides in their initiative.
Process embedded in quality and Fairtrade
In the coffee roasting business, the start justifies the end. It all begins with the right kind of green coffee. An up-tostandard roasted coffee can only be borne out of up-to-standard green beans. African Coffee Roasters sources and buys coffee from farmers in Kenya, Ethiopia, Rwanda, Burundi, Uganda and DR Congo. The proximity of the roasting facility to the farmers from all these regions has enabled them to foment a close association with the farmers helping them source even better coffee. The diverse sourcing helps them produce blends with unique and consistent taste profiles aligned to their international repute of outstanding quality and distinctive tastes. “We source our coffee objectively, not blindly. Before settling on the best, we taste samples from all over the regions while striving to buy a lot of Fairtrade certified or organic coffee,” stresses Jeroen. To ensure that only quality coffee is roasted, the arriving coffee is extensively tested for moisture, water activity, density, size, chemical residue and taste. The last, taste, is actually the first frontier of quality and through cupping every batch is established to meet the set standards. The roasting is given attention to detail that is bolstered by the intelligent Loring machine that makes it easier to 48 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
monitor quality and maintain consistency. Nonetheless, since defects in the coffee are hard to spot sometimes, they employ regular electronic checks for color of the coffee to guarantee uniformity. Ultimately, pressure and air composition tests are conducted at the lab after the coffee has been packed in nitrogen flushed packaging to ensure that the packaging is intact, secure and all oxygen has been rid of the packaging. When it comes to quality, African Coffee Roasters are punching within their weight range if not above. The first EU organic certified coffee roaster in Kenya has a number of other certifications up its sleeves. They are FSSC 22000 certified, demonstrating that the company has a robust food safety management system in place that meets the requirements of its customers. This injects confidence on the highest hygiene standards and stringent procedures put in place by the firm. Beyond quality, these coffee aficionados are Rainforest Alliance certified, which is a standard with a rigorous set of environmental, social, and economic criteria that promote sustainability on farms around the world. Alongside this deliberate commitment, the company is a member of UN Global Compact, where they are devoted to respect the ten principles of the Sustainable Development Goals (SDGs), which include matters on human rights, labor, environment and anti-corruption. To top it up, their obligation extends to the creeds of Fairtrade and hence African Coffee Roasters are appropriately and fittingly Fairtrade certified. This sums up the resolve and intent of the firm whose aim is not only to meet the demands of their customers but also promote sustainable coffee farming and roasting practices. The establishment takes pride in their interaction with farmers from the five countries who grow the coffee beans and relish seeing the positive impact coffee production has had in the local communities.
The coffee expert
Our team managed to catch up with George Wanja, the Head Roaster at African Coffee Roasters. He has vast experience as a barista, consultant and barista trainer, the training having taken him to Dubai and many foreign countries to offer his services. “Just call me a coffee expert,” emphasizes George ask we settle down for our chat. “I am in all sections of coffee here other than
IN NUMBERS
20
NUMBER OF PRODUCTS BY THE COFFEE ROASTER the green coffee, from receiving the green coffee, sampling, roasting, cupping, barista training and of course quality” George takes as through the process from ordering the green beans to arriving at the desired product. “We usually receive the pre-shipment sample from which we do cupping to establish the qualities of the coffee. If the quality conforms, we make an approval to buy in bulk. When the consignment comes in, we subject it to screen tests for grading, we check the water activity and the moisture content too. All these factors determine the roast. The parameters have to match the preshipment sample” Once the consignment is accepted a sample roasting is done to get the specifics of that consignment from which a blend will be made depending on the product at the end. “We currently have about 20 products,” alludes George. “A blend is arrived at by combining beans from different origins (regions) to get the desired product. The roast profile is a critical part of coffee roasting and largely affecting this are the size of the bean, moisture content and water activity of the bean. These factors also affect the storage of the bean.” George, with over 7 years’ experience as a barista, tells us that different beans will have different roast curves, which is basically how the heat is applied during roasting from the charging temperature, the temperature at which beans are introduced into the roaster to the drop temperature, the temperature at which the beans exit the roaster. The heat application will give rise to the various types of roasts as would be preferred and these are light roast, dark roast, medium roast and espresso roast. “After roasting the color of the beans is checked by a color track machine that helps ensure that the colors of the first, second and third roast are all the same,” he adds. “We finally do cupping of every batch roasted to determine the aroma, acidity and body from which any adjustments can be done if need be to get the correct product." FOODBUSINESSAFRICA.COM
MR HITEN SHAH
Managing Director, Bakex Millers Ltd
BAKEX MILLERS LTD :
BREAKING BARRIERS BY INVESTING IN THE FUTURE TO MEET NEW CUSTOMER NEEDS Bakex Millers Ltd is part of the Broadway Group of Companies. Just as its sister companies in the Group, the miller has a knack for breaking barriers as well. Recently, the Food Business Africa team visited the miller and sat down with the MD, Mr Hiten Shah, to hear their story of firsts.
B
akex Millers’ journey begun in earnest in 1983 when the company bought a wheat mill from Spain with a capacity to produce 150 tonnes of wheat flour per day. At the same time, it also installed three 1,000-tonne silos to store raw wheat, becoming one of the first private wheat millers in Kenya. The company prides itself in the many ways it has broken new barriers in an
FOODBUSINESSAFRICA.COM
industry that has not only seen increasing demand, but also intense competition. The miller has continued to greatly expand its capacity over the last few years. Two years from its start of milling, the company installed five more 1,000-tonne silos in 1985. In 2013, a second Buhler wheat mill with a capacity of 250 tonnes per day was bought to replace the first one, which had been running for close to 30 years. In
preparation for this, four 4,000-tonne silos were also installed. A new 300 tonnes-perday Buhler wheat mill plant was installed in 2017. In a continuation of its innovative spirit, it installed the first specialized Atta mill in Africa. The miller’s stellar growth was obviously anchored and buttressed by the great work of the founding fathers of the Broadway Group whose story goes back to 1912. The MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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“WE INTRODUCED PHULKA BECAUSE OF THE HEALTH BENEFITS TO THE CONSUMER. PEOPLE ARE GETTING MORE AND MORE CONSCIOUS ABOUT THEIR HEALTH AND THIS FLOUR FITS WELL WITH THEIR HEALTH ASPIRATIONS, ESPECIALLY FROM THE DIETARY FIBER POINT OF VIEW.” Mr Hiten Shah Managing Director, Bakex Millers Ltd
Group is now being driven by the second generation in the lineage and to this Hiten is never hesitant to pour out his appreciation with fortitude. “I would like to express our gratitude to our fathers on whose vision we celebrated Broadway Bakery’s 60th anniversary last year. The company is installing new storage to cater for increased demand I did my milling technology in Switzerland and then I went to do further milling training in India. I came back in 1984 and joined the family business after having started the milling plant in 1983. My father and my uncles used to come to the mill every day. Because of their guidance, that is the reason we have excelled and grown as a company’” says Hiten. “We were the first private miller to get a license to import wheat into Kenya,” he added, saying that the pace of growth has picked up with more than 80% of flour demand from biscuit manufacturers being supplied by Bakex Millers. Due to the rise in demand, the company has installed two new milling plants The company's range of products comes in various pack sizes and formats in the last 5 years.
Investments rise in wheat milling
The Pesa Mill investment by the company is the only one in the region
The milling manager is all smiles with the new plant's capabilities 50 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
Kenyan wheat millers have been on an investment drive in the last 3-5 years to take advantage of the increased interest in wheatbased products. This has either been in new plant expansions or in advanced stages of investing in the same and Bakex Millers has been at the forefront in this mix. “In the last five years, we have expanded the mill capacity by 300 tonnes by putting in a stateof-the-art wheat mill,” Hiten begins. “In addition to that, we are the first company in the whole of Africa to have a specialised Atta plant which is also from Buhler with a capacity of 75 tonnes,” he adds, informing us that they too are also expanding their storage capacity by 24,000 tonnes by installing new silos, marking the new projects they have recently embarked on. The equipment in the new plant employs the latest technology. “The manufacturer has gone a long way to make machines that are beneficial to buyers. These new machine models have a 20-30% saving on energy which is aligned to the desire by everyone to go green and reduce the carbon footprint,” Hiten, who has efficiency and product quality close to his heart, delves. The main driver that motivated these investments is the everincreasing demand for wheat flour due to population growth and improved incomes. The growth of wheat products consumption in the country has been faster than the common staple maize by a significant margin. According to a report by Report Buyer in 2013, the Kenyan wheat flour market was expected to reach US$1.15 billion per annum by 2020, up from USD 738.1 million in 2015. The discovery that if you manufacture quality products you will always have an edge over competition gave the ambitious miller even more fuel and impetus to make the expansion decision to align itself with the future, because of the bulging demand. Initially, FOODBUSINESSAFRICA.COM
MY FACTORY, MY STORY | BAKEX MILLERS LIMITED
the sole reason to begin milling was presented by the headwinds they faced in sourcing bakers flour from local millers after the drought had hit the country in 1982. This was a blessing in disguise, a silver lining indeed. Rather than take the challenge negatively, the company acquired a milling license from the National Cereals and Produce Board of Kenya to start their own wheat flour mill and now it is counting its blessings.
availabilities of new printing technology. “Technologies are changing in all fields. The printers of packaging material were limited back then, but nowadays their capabilities and options are many,” he says. “To be in the market and face competition, you have to flow with the trends of the day and most old millers have changed their packaging or totally rebranded.”
Phulka – whole wheat flour with unique benefits
Rising wheat products consumption aside, Kenya is forecast to continue to rely on imports to meet its demand which will continue to grow in the medium term according to the USDA. The country has seen local production fall to about 250,000 tonnes per annum in the last five years due to unstable weather conditions, wide use spread of recycled seed use by farmers and the prevalence of the wheat stem rust (Ug99) disease. These wheat deficits have to be covered by imports by all millers and this is where Bakex’s pain lies. Hiten says that wheat importation clearly impacts on their operations. The local wheat production can only meet 30% of the total wheat requirement in the country, meaning 70% must be satisfied by imports. Local wheat is more expensive than what is imported by 20-25% more, he informs our team. “The government needs to look at this imbalance. The other headache is the unnecessary delays at the port. Clearing a consignment takes ages on end. This has created a lot of storage challenges to millers which eventually impacts on the cost of the final product of which the consumer has to foot,” laments Hiten while feeling that the government agencies need to tighten their efficiency shoes to hasten clearance at the port and help millers reduce storage costs. At the moment, the miller is using the new standard gauge railway (SGR) which runs from Mombasa to Nairobi, though there is a challenge because the rail terminates at Nairobi while the mill is based some 40 kilometers away in Thika. “Today, Bakex Millers imports 85% of wheat from different parts of the world, such as Russia, Canada, Argentina, USA, the Black Sea and Australia. Bakex Millers supplies Broadway Bakery with 2,000 metric tonnes of baking flour a month. Bakex Millers also supplies flour to more than 30 medium-sized bakeries, three of the largest biscuit manufacturers and the home-
Bakex Millers currently produces the Bakex Standard Bakers flour, Bakex Biscuit flour, Oboma Home Baking and Atta Mark 1 flours and Vitafla Home Baking and Atta Mark 1 flours which are known for their unique, flexible packaging format. Phulka, a whole wheat flour, is the new kid on the miller’s stock block. “We introduced Phulka because of the health benefits to the consumer. People are getting more and more conscious about their health and this flour fits well with their health aspirations, especially from the dietary fiber point of view,” exclaims Hiten while adding that Phulka is beyond just a brown flour; it is a whole wheat flour.” To enable the miller to produce the whole wheat flour, Bakex Millers has installed the latest high-compression Pesa Mill which was specially developed for the production of various flours including Atta flour and whole wheat flour. The highlyflexible system enables the miller to set high standards of food safety and energy utilization, while delivering the most unique and nutritious Atta flour in the market that Hiten is proud to present to the local market. “With Phulka, we continue with our tradition of innovating well ahead of the curve in our region, breaking new barriers that place us ahead of our competitors and enabling us to serve our consumers with affordable, nutritious products,” he beams. The miller is evidently riding on the heightened consumer awareness and has angled its marketing deliberately to educate the consumer on the benefits of whole wheat flour, though they feel more needs to be done on that front to reach as many people as possible. In addition to the new product, their home baking flour, Oboma, has a new look. When asked about the new look, Hiten attributes the rebranding to the FOODBUSINESSAFRICA.COM
Local production stalls as demand rises
baking market and is currently churning out 550 tonnes of flour a day,” Hiten says. Hiten adds that as they celebrated the 60th anniversary of Broadway Bakery, they were glad that the new wheat mill can also produce pasta flour, eliminating the need to import pasta flour into the region. When asked about his overview on the investments in milling and how competition is shaping up, Hiten expects the Kenyan market to continue growing. “Most millers have expanded. Competition is always going to be there and it is healthy. However, the person who will be more efficient and produce quality goods will have an edge. This is what we strive for through our investment decisions. We have put up the state-of-the art machinery with a sole purpose to be at the forefront in quality,” he asserts. He feels that back then, people had little choice and there wasn’t much awareness, but this is changing because today’s consumer is more educated and producers have made a lot of effort to inform the consumer about the various products and their benefits. This can particularly be seen by the specific requirements from bakeries who are demanding quality flour that are to the standards stipulated for their applications. The home consumer also knows what they are looking for in flour for their mandazis and chapatis.
Future focus and CSR
So is the miller looking at further expansions in the near future? The miller believes that marketing is a key ingredient for success of any brand. If you don’t market no one wants to know you. Consequently, Bakex is aggressively marketing their products and adjusting to the day-to-day dynamics of the market place. The main focus for them at the moment is to run the industry efficiently and to give the customer the best quality. From that position they will evaluate the need for further expansion. The miller, besides making sure the Kenyan consumer get their daily bread, has gone an extra mile to give back to the society. “As the Broadway Group, we are actively involved in CSR. We are supporting a school we built 15 years ago – Broadway High School. Besides that, we support the local community via donations. Our activities are concentrated in Kiambu County,” Hiten concludes
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NEW PRODUCTS ON THE SHELF SPRITE WITHOUT SUGAR
Coca-Cola Kwanza - www.ccbagroup.com
NEW SUGAR-FREE SPRITE GOES COLOURLESS ON THE PACK Coca-Cola Kwanza has introduced a new sugar-free variant of its Sprite lemon-lime flavoured drink, with a twist. Instead of the regular green bottle that is common across the region, the new plastic packaging is clear. It is available in 500ml pack size. Declaration: Without sugar
BIO ACTIVE TUSKER PREMIUM ALE
East African Breweries Ltd - www.eabl.com
EABL GOES THE CRAFT WAY EABL has added a new line of products to its popular Tusker brand with the addition of Tusker Premium Ale, a full bodied premium-crafted ale. Available in a new shape 500 ml glass bottle, the company says that the new product is as a result of extensive consumer research to meet the needs of the discerning consumer looking to extend their drinks repertoire and new experience in a beer. Alcohol content: 5% alcohol by volume.
HAVE YOUR NEW PRODUCTS LISTED IN THIS PAGE FOR FREE! Do you have any new product innovations you would like to see on this New Products on the Shelf page? Please send us the pertinent details about the product and you may see it listed here for FREE in a future edition of the magazine.
7UP H2OH! LIGHT SPARKLING WATER SBC Tanzania Ltd
SBC Tanzania Ltd, a sisbsidiary of PepsiCo has launched H2Oh! sugar free lightly sparkling water that is availed in 500 ml plastic bottles in tangerine and lime-lemon flavours. Declarations: low calories, no sugar. 52 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
What we require to list a product on this page: • High resolution photos of the product • Name of the product • Types of SKUs available • Varieties (e.g. flavours) available • Brief description of the product covering target market, unique product profile, declarations etc NOTE: The product should be one year old or less from the time it was launched to be considered. Send details to press@foodworldmedia.net or call us on +254 725 34 39 32. FOODBUSINESSAFRICA.COM
NEW PRODUCTS ON THE SHELF YOLA-NEW CEREAL MILK DRINK
Capwell industries Ltd; www.capwell.co.ke/yola
CAPWELL INDUSTRIES LAUNCHES INNOVATIVE NUTRITIOUS BEVERAGE BRAND Capwell Industries Limited, one of the most diversified food processing enterprises in Kenya has added a new innovative beverage product line to its basket, with the launch of YOLACereal Milk drink. First of its kind in the Kenyan market using a totally newly researched process. It is packed with all-in-one tasty goodness of cereals, milk, vitamins and minerals, Filling meal on the go, high energy & affordable. Available in 450ml & 250ml in four tantalizing flavours Vanilla, Mango, strawberry & banana. Declaration: Contains no artificial preservatives
ORGANO FRESH MILK
Organo Milk Ltd - P.O. Box 54280-00200, Tulaga, Kenya
FREE RANGE MILK BRAND LAUNCHED Organo Milk Ltd has launched what it calls real free-range milk. Available in 500 ml pouch packaging, the company says that is creamy and nutritious with an organic freshness. Butterfat content: 3.5%
YOGIES NUTRI YOGHURT
Bio Food Products, Kenya - www.biofoods.co.ke
HAPPY COW LAUNCHES DRINK YOGHURT Happy Cow Ltd has introduced Yogies Nutri Yoghurt. Available in 500 ml plastic bottle, the product is availed in vanilla and strawberry flavours.
TREE TOP JUICE BLEND
Sky Foods Kenya Ltd - www.biofoods.co.ke
EXPANDING TO TAP INTO NOSTALGIC TREE TOP BRAND Four years since re-launching the Tree Top brand after acquiring it from Unilever, Sky Foods has expanded the range of its juice and drinks products into the carton packaging options. Available in 1 litre options and in various flavours including orange, apple, tropical and orange. FOODBUSINESSAFRICA.COM
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TRENDS
FOOD SAFETY
OPERATIONS
FORMULATIONS
REPORT
FLEXIBLE PACKAGING: Offering convenience and more sustainable option to users By Ronald Onsare
T
o understand flexible packaging, we must define its opposite, rigid packaging. Rigid packaging encompasses tin cans, glass bottles, boxes and other corrugated products. These options provide structure and support for some of the most vulnerable products that are on our shelves. On the other hand, flexible packaging is basically a package or container made of flexible or materials that, when filled or closed, can bend while still holding the shape and is used for consumer and industrial applications to protect, market and distribute numerous products. Paper, plastic film, foil or any combination of these can be used to make the packaging. Flexible products include rollstock, bags, pouches, labels/wraps, lidding, shrink sleeves and stretch film. The flexible packaging market is largely driven by increased consumption of processed foods and beverages, innovations in flexible packaging, and environmental advantages of this type of packaging. Manufacturers have endeavored to bring innovative solutions that improve the design, while developing products that can offer optimal adhesion, convenience and reliability. In a nutshell, flexible packaging is in the lead of important packaging trends in product protection, design and performance, consumer convenience, and sustainability, all which positively impact the environment, consumers, and businesses.
Innovation enabler
Flexible packaging has facilitated many of the products in our grocery stores today—products that simply did not exist a few years ago. Today’s shoppers buy bagged salad greens that stay crisp for days; frozen vegetables that steam right in their packages; bags of cereal that stay fresh with zipper closures in flexible packaging. Consumers are conscious of the products they purchase and the packaging that holds and protects those products. They are seeking the convenience, extended shelf life, and sustainability features flexible packaging provides. Compared to back then, paper, metal, aluminum, and cellophane were the major packaging options, innovation and technology have led to the development of substrates that provide moisture and oxygen barriers, can be printed, and create lightweight packaging that includes clarity, strength, product protection, extended shelf life, and the ability to be resealed and microwaved.Flexible packaging
Customizing to meet product protection specifications
In flexible packaging, different products require different types of protection. Some flexible packaging is made from a single material, however, in some cases, multiple materials are required to provide the appropriate barrier and protection. In multiplematerials packaging, each layer performs a different function in protecting and preserving the product. By using materials with properties geared toward specific performance, manufacturers can meet their customers’ varying needs, including product protection, contamination prevention, extended freshness; puncture, tear and 54 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
burst resistance; tensile strength, and seal strength. Flexible packaging offer extended shelf life, reduce shipping costs, improve food quality, and reduce cooking time. Smart flexible packaging enables consumers to authenticate products to combat counterfeiting and provides extensive product information, while films scavenge food odors and prevent leaks. Further, QR codes and Radio Frequency Identification (RFID) technology printed on flexible packages provide product and traceability information.
Sustainability benefits
When assessing sustainability, examining the full life cycle of a package is critical. Flexible packaging is the optimum environmental choice because it uses fewer resources, generates fewer emissions and creates less waste in the first place. Flexible packaging starts with using fewer resources and has the ability to package the most product in the least packaging possible, positively impacting municipal solid waste, energy use in manufacturing and transportation and green-house gases (GHG) emissions. Producing a flexible food service pouch requires 75% less energy and generates just 10% of CO2 emissions during production than a metal can for the equivalent amount of product. 1.5 pounds of flexible packaging will package the same amount of beverage or liquid foods as 50 pounds of glass. Recent advancements in materials and production processes have reduced the weight of some flexible packages up to 50%, consequently lowering product shipping costs while maintaining or improving product protection.
Viable end-of-life options
There is no single solution that can be applied to all communities when it comes to the best way to collect, sort, and process flexible packaging waste. Viability will be influenced by existing equipment and infrastructure, material collection methods and rates, volume and mix, and the relative location of the processor and demand for recovered material. Single material flexible packaging (about half of flexible packaging waste) can be mechanically recycled, currently using store drop-offs programs. Resource recovery, which generates energy feedstock, is an end-of-life option for the other half Sources: Flexible Packaging Association (FPA) www.flexpack.org and Quora FOODBUSINESSAFRICA.COM
Dairy
BUSINESS
TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF DAIRY PRODUCTS INVESTMENTS
Ultra-filtered milk producer Fairlife to build US$200m production facility in the US
USA – Coca-Cola’s brand of ultra-filtered milk, Fairlife, has
unveiled plans to build a new production facility worth US$200 million in Arizona, US with a goal to expand its production facilities. The new 300,000 square foot production and distribution facility will enable the company expand production of different dairy-based beverages at its production plant in Coopersville, Michigan. It is expected to begin operation in the half of 2020,
with enhanced production lines to meet the growing consumer demand for dairy products. With the investment, Fairlife expects to increase its distribution network in its main markets which include beverage retailers in the United States and Canada. “I’m extremely proud that the demand for our milk has grown so much that we now need another manufacturing site! In choosing a new plant location, it is essential that the new facility be built in an area where dairy farms are willing and able to follow Fairlife’s responsible animal care and sustainable farming practices while producing the highest quality milk,” said Tim Doelman, Chief Operating Officer for fairlife LLC. The new facility will incorporate advanced manufacturing technologies and efficient, energy-saving equipment to reduce power consumption, according to the company, and create more than 140 jobs and contribute to the local and national economy. Fairlife produces a range of ultra-filtered milk products, and the brand claims that its filtration process removes lactose and sugars from milk while retaining the milk’s natural vitamins, protein and calcium content. Coca-Cola partly owns the company and is responsible for the distribution of the products, that are available in the US and Canada.
M&A
Brimstone exits Clover buyout deal following criticism from anti-Israel groups SOUTH AFRICA – Brimstone Investments
Corporation, a South African investment firm has announced that it will not participate in the US$343.95 million acquisition deal of South Africa’s largest dairy firm, Clover Industries following continued pressure arising from criticism by the lobby group Boycott, Divestment, Sanctions (BDS) South Africa on its involvement in the transaction led by an Israel based company. The acquisition is led by Israeli beverage firm Central Bottling Company (CBC), part of Milco SA in which Brimstone was to hold a 15% stake. According to a report by Reuters, Brimstone however said that it is in advance talks with a potential empowerment
FOODBUSINESSAFRICA.COM
partner to replace its position in the deal as part of its plan to facilitate smooth exit. Additionally, the investment firm unveiled that it is also in negotiations with another partner in Milco SA to acquire its stake if it had not found a suitable replacement by the end of 2019. The International Beer Breweries Limited (IBBL), a Nigerian based beverage company and subsidiary of the consortium is among the firms that Brimstone has engaged as it seeks a replacement empowerment partner. Under the terms of the proposed agreement, IBBL would acquire Brimstone’s entire stake on December 31 2019, should Brimstone not find another investor to acquire it.
The Central Bottling Company (CBC) will hold the majority stake (59.5%) in the consortium whose other members include Ploughshare Investments, which will acquire 10.9%, and IncuBev with 8.3% while Clovers management will retain a 6.3% stake. CBC, based in Tel Aviv, is a privately owned international food and beverage group whose subsidiary companies, including IBBL, serving more than 160 million consumers worldwide. It also owns the Tara dairy, Israel’s secondlargest milk processing dairy, produces and distributes its own brands and Muller brands, and it operates the licence for the Müller brand in Romania.
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PEOPLE
Fonterra appoints Miles Hurrell as new Chief Executive Officer
NEW ZEALAND – Dairy giant Fonterra has named Miles Hurrell as the company’s new Chief Executive Officer, after serving in the position as interim since August last year. During his tenure as interim CEO, Hurrell has been hailed to have demonstrated strong leadership and commercial skills in the co-operative, which is a leader in the world’s dairy exports. He succeeds Theo Spierings who stepped down from the company effective September 1, after six years at the helm. Almost at the same time, Fonterra which said was having challenges to maintain profitability, announced the resignation of company Chairman, John Wilson for health reasons. “My six months as interim CEO have reinforced my view that, despite the challenges with our current performance, the fundamentals of this business are strong. To realise our potential, we need to get the basics right and that means a full review of our strategy and ultimately, a fundamental change in direction,” said Miles Hurrell. Under the new chairman and CEO, Fonterra has embarked on a global strategic review of its operations to support its ambitious growth strategy. In the financial year 2018, the company posted a net loss after tax of US$128.4 million, citing US$288 million write down on its investment in Chinese company, Beingmate. The firm which has since cut its annual earnings outlook and is struggling with price fluctuations as well as milk supply problems as a result of dry weather in New Zealand. The review strategy includes reducing debt by US$544 million by the end of 2018/19 fiscal year through selling assets or reducing ownership in certain assets. 56 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
INVESTMENTS
EBRD’s US$7 million to fund Obour Land dairy’s new greenfield dairy farm – The European Bank for Reconstruction and Development (EBRD) has announced that it is providing a US$7 million loan to support the expansion plan of Obour Land, the leading Egyptian white cheese, UHT packaged milk and juice producer. The loan, targeted at fostering the Egyptian dairy sector, aims to increase dairy production, boost exports and improve the adoption of the latest technology for dairy milking operations in the country. It will enable the dairy company to establish a dairy farm with an estimated production of 60,000 litres of milk per day, with imported milking equipment and 2,500 dairy cows. The farm will supply raw milk to newly established long life packaged milk operations. Obour Land had announced it was embarking on in 2017 where the company planned to spend about EGP 115 million (US$6.5 million). The company listed on the Egyptian Stock Exchange in 2016, having started operations in 1997. The EBRD says that the prospects for expansion in the demand for dairy products are promising in Egypt, driven by high demand and by consumer preferences shifting towards packaged milk following increased health and safety awareness in Egypt, which has encouraged dairy farms
EGYPT
to expand rapidly, with many of the players seeking backward integration to boost and secure their sources of milk. Apart from the greenfield dairy farm, staff will also be trained by experts in the latest dairy operations, technologies and processes, resulting in high-quality milk production, which will increase the potential for exporting of the company’s products into the neighbouring countries, says EBRD. By the end of 2017, Obour Land sales had reached EGP 2.1 billion (US$114.8 million). It operated 13 production lines, including 12 carton pack production lines and one plastic tubs production line, with a total annual production capacity of about 134,400,000 litres per annum. According to Euromonitor, cheese recorded current retail value growth of 35% and retail volume growth of 8% in 2017 due to the devaluation of the Egyptian pound. A modest pick-up in economic growth to 5.5% is expected in 2018/19 in Egypt, supported by the continued boost in confidence in the economy, recovery in tourism, increase in foreign direct investments, continued strengthening of exports, the start of natural gas production from the Zohr field, the implementation of business environment reforms and prudent macroeconomic policies, says the EBRD.
AGRIBUSINESS
FrieslandCampina, IFDC partner to boost milk production in Nigeria
NIGERIA – FrieslandCampina WAMCO Nigeria has partnered the International Fertilizer Development Center (IFDC), a science-based public organization, in a project that aims to boost milk production for pastoralist milk producers in Nigeria. Through the partnership, the Nigerian subsidiary of the Dutch multinational dairy cooperative will work together with pastoralist milk producers in Oyo
State, to boost the quality and quantity of local milk and improve the livelihoods of farmers. Under the 2SCALE project, the dairy partnership seeks to alleviate the contribution of women in the country’s dairy farming sector by specifically focusing on women and their needs. This partnership involves 1,800 milk producers, of whom 950 women. The project has integrated technology aspects that will give women and young men the opportunity to participate in technical, entrepreneurial and leadership trainings. The project also seeks setting up water points at milk collection centers and a dairy scheme, which included crop farmers who were previously in conflict with pastoralists. FOODBUSINESSAFRICA.COM
FINANCIALS
Zimbabwe’s Dairibord doubles profits in 2018 FY as revenues shore up
INVESTMENTS
Danone Nutricia invests US$271m in a new infant formula facility in Netherlands NETHERLANDS – Danone has announced that it has opened a
ZIMBABWE – Dairibord Holdings Limited, a leading dairy
company in Zimbabwe, posted profit after tax increase by more than two-fold to US$6.48 million in its 2018 financial year up from US$1.94 million posted in the previous year. The dairy firm’s revenues in the full year ended December 31, 2018, grew by 28% to US$126.44 million, despite a weak operating environment which according to Josphat Sachikonye, chairperson at Dairibord, which had negatively impacted the company’s product supply and the cost of doing business, reports NewsDay. “The operating environment deteriorated during the period under review, in particular the second half of the year which was characterised by worsening foreign currency shortages and rising inflation. These developments had a negative impact on product supply and the cost of doing business, leading to consumer price increase. Year-on-year inflation closed at 42.09%, while the foods and non-alcoholic beverages inflation surged to 53.68%,” he said. The group recorded an increase in raw milk intake, improving by 20% compared to the national growth of 14%, which reflects the positive outcome of the firm’s milk supply development strategy. Early this year, the firm was granted a special dispensation by the government to import raw milk from Mozambique in order to increase production as part of an overall strategy to continue capacitating the dairy industry in the country. Sachikonye revealed that liquid milk volumes grew by 9% and volumes sold from continuing operations increased by 3%, but growth was constrained, worsening foreign currency availability to buy raw and packaging materials. However, the company expects the operating environment in 2019 to improve that as it preps for growth in its operations. The company recently revealed its plans to sell its Malawi dairy business to focus on its operations in Zimbabwe.
FOODBUSINESSAFRICA.COM
new sustainable Nutricia plant in the Netherlands to meet the growing need for specialized infant formula. Danone said it has invested US$271.52 million (£240 million) in the facility, located in Cuijk, Netherlands with a goal to increase its capacity in production of formula for specific health conditions, especially infants diagnosed with specific medical conditions such as cow’s milk protein allergy, as well as standard infant formula. Once fully operational, the state-of-the-art facility, which it says is among the largest investments in its European production network in the last ten years, will employ close to 500 employees and support up to an additional 2,000 jobs through indirect employment. To check on its carbon and environmental footprint, the Cuijk plant features sustainable initiatives including zero waste and is powered with 100% renewable electricity, will cut water and energy consumption as well as CO2 emissions. It will use 60% less water, 25% less energy and emit 50% less CO2 than the legacy plant. The Cuijk plant supports the expansion of Danone’s range of specialized infant formula products specially tailored for babies with specific health needs. According to Danone, global prevalence for allergy is steadily rising, and approximately 2-5% of infants develop cow’s milk protein allergy within the first year of life.
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STRATEGY
Government halts New KCC privatisation plans to focus on capacity building KENYA – The Kenyan government has
suspended its plans to privatise the stateowned dairy producer, (New KCC), saying that it will now focus on capacity building of the dairy firm. According to a Business Daily report, Peter Munya, Trade and Industry Cabinet Secretary said that one of the major players in the country’s dairy sector, New KCC, is a critical state investment that plays a critical role in controlling the market prices. Despite being in the privatisation list for more than a decade now, Mr Munya said that the Cabinet agreed to delay the process and instead focus on building its capacity. “New KCC is a strategic government investment in the country and the Cabinet did not find any good reason why it should be privatised at this stage,” Mr Munya said. The Cabinet Secretary highlighted that the move will also play a critical role in protecting consumers against high costs of the commodity. However, he noted that “we [the government] might consider to privatise it in the future” to a strategic investor once the dairy sector in the country has stabilised. According to the initial proposed privatisation plan, 34% of the New KCC stake was to be floated at the Nairobi Securities Exchange (NSE) while farmers were to receive 42% stake. In addition, the company employees were to hold a 4% stake, leaving the government in control of the remaining 20%. However, the proposed allocation of shares had been facing resistance especially from dairy farmers who opposed the planned sale of New KCC to an investor, which subsequently slowed the privatisation process. Following the move, the government is now set to pump more resources into company to expand its milk intake capacity and production of long life products. The dairy giant revealed recently that it had invested US$10 million in its modernisation programme to improve production capacity across its plants in the country, that has enabled the company to improve its market share from 23% to 32%, contributing to growth in its annual turnover to US$100 million (KSH10 billion). 58 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
FOOD SAFETY
FDA calls for preventive strategies against bacteria in ice cream production – The U.S. Food and Drug Administration (FDA) has released a report highlighting the need for strategic preventive measures against bacterial contamination in commercial ice cream production. The report follows FDA’s inspection and environmental sampling of ice cream production facilities for Listeria monocytogenes and Salmonella carried out in 2016 and 2017. The FDA says the efforts would help better understand microbial hazards and prevent contaminated products from reaching consumers. The report underscores the need for commercial ice cream makers to control hazards in accordance with the Preventive Controls for Human Food rule established by the FDA Food Safety Modernization Act (FSMA). The FDA conducted inspections and environmental sampling of 89 ice cream production facilities, and according to the agency, some of the samples detected contamination with Listeria monocytogenes as well as Salmonella. “Following a string of safety issues
USA
related to a number of U.S. ice cream distributors, the FDA engaged a team to inspect and obtain environmental samples from 89 ice cream production facilities in 32 states to test for Listeria monocytogenes and Salmonella,” said Frank Yiannas, FDA Deputy Commissioner for Food Policy and Response. “Although many of these facilities were adhering to good manufacturing practices, we did find that some were in violation of the law.” The agency began the sampling assignment following 16 recalls of ice cream products that occurred from 2013 to 2015 due to the presence of pathogens, and an outbreak of listeriosis linked to an ice cream maker in 2015 that involved three deaths. No objectionable conditions or practices were observed in nearly half of the ice cream production facilities inspected. However, the agency detected Listeria monocytogenes in 19 of the facilities, while one of them was found to have the pathogen on a food-contact surfaces. It also detected Salmonella in one facility. As a result of these findings, three voluntary recalls were conducted in 2017 and 2018.
STRATEGY
Muller to review dairies, enters logistics partnership with Culina Group UK – UK dairy producer Müller Milk &
Ingredients has announced that it is set to carry out a strategic review of its network of dairies and enter a logistics partnership with its sister company, Culina Group. The review is part of the Project Darwin programme launched in February to save £100 million (US$129 million) in costcutting and margin improvement initiatives across its entire dairy supply chain. Project Darwin includes a comprehensive review of MMI’s operations, logistics, back office and people organisation to simplify the business, reduce costs and increase customer focus and accountability. The company has rolled out a 45-day statutory collective consultation process to assess the feasibility of capacity requirements and utilization at its network of six dairies. Some of the strategies it said it might adopt include necessary closure
of any manufacturing facility found not in line with both capacity and customer requirements. “Project Darwin is making excellent progress with the whole workforce fully engaged in securing a vibrant, progressive future for our fresh milk business and very positive collaboration with customers who share our desire to reinvigorate this important sector,” said Patrick Müller, Chief Executive Officer of Müller Milk & Ingredients. Muller said the partnership with Culina Group, a chilled distribution and transport specialist owned by its parent company Unternehmensgruppe Theo Müller hopes to optimize costs while enhancing customer service. It will assume day to day management control of MMI Distribution from June 1, 2019. FOODBUSINESSAFRICA.COM
Beverage TECH TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF BEVERAGE PRODUCTS
STRATEGY
Heineken commissions US$100m brewery plant in Mozambique – Heineken, the global leading beer maker, has commissioned its first brewery in Mozambique, after investing to the tune of US$100 million in developing the new modern plant. Located in the district of Maputo, the new brewery will have a production capacity of 800,000 hectolitres (80 million litres). The plant will produce four international brands – Heineken, Amstel, Sagres and Strongbow – as well as Txilar, a new beer specially made for Mozambican consumers
MOZAMBIQUE
using locally sourced maize. Speaking during the inauguration ceremony, Jean-François van Boxmeer, chief executive officer at Heineken, highlighted that the investment will play a key role in contributing to and strengthening country’s economy. “We believe in Mozambique. The population is young and vibrant, the middle class is growing and living increasingly in cities, the economic perspectives are encouraging and the beer market has a great potential to grow. The construction of Heineken’s first brewery is a major step for the company’s presence in the country,” van Boxmeer said. “Investing in a new market like Mozambique supports Heineken’s ambition to expand its footprint and be the number one or a strong number two in all markets in which it operates. With our extensive experience and existing business in Africa, we also aim to be a partner for
growth today in Mozambique as we already are throughout the continent,” Boudewijn Haarsma, Heineken International MD for East and West Africa, said. The investment will enable Heineken leverage on the country’s beer market, whose consumption is currently at 10.5 litres per capita, with beer consumption growing nearly 20% per year. In its previous financial year, Heineken branded beer volume grew 7.7%, its strongest performance in more than a decade and boasts of ten markets now selling more than 1 million hectolitres of Heineken branded beer. Heineken’s new plant joins AB-InBev’s current beer plant in Mozambique, where AB-InBev also announced the start of the construction of a new beer plant with a capacity of 2 million hectolitres (200 million litres) in mid-2018.
M&A
Danone’s venture arm invests in Impact Water Nigeria to enhance access to safe drinking water
NIGERIA – Danone, through its investment fund and social business incubator, Danone Communities has invested in Impact Water Nigeria to develop access to safe drinking water in the country. Impact water is a social business operating an innovative model, with easy to maintain water treatment units to enhance access to safe drinking water to schools and communities in Nigeria, Kenya and Uganda. FOODBUSINESSAFRICA.COM
According to Danone, this was the 7th investment in access to safe drinking water, with the program having recorded 3 million beneficiaries around the World. With a strong portfolio and innovative model of water access, Danone says it will be able to serve the 4 billion people who still don’t have access to safe drinking water. “Four billion people do not have access to safe drinking water. In this context, Danone Communities announces a new investment in Impact Water Nigeria, a social business whose mission is to deliver safe drinking water, at scale, to schools and universities in Nigeria,” said the firm in a statement. Danone has been a catalyst in spreading the pioneering model called Safe Water Enterprises (SWE), a cost-effective mechanism to deliver safely treated
drinking water to poor communities. The SWE model is expected to benefit 200 million people and according to Danone Communities, adoption of the model and further collaboration will scale access to safe water to more people and communities around the World. A 2017 World Health Organisation (WHO) report indicates that while 2.1 billion people around the globe lack access to safe, readily available water at home, 4.5 billion lack safely managed sanitation. According to a statement by Danone Communities, 90% of water in Nigeria is contaminated implicating on the health system of the country which is fast growing demographically. The partnership builds on Impact Water’s expertise in installing decentralized water treatment units mainly in schools and universities.
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M&A
INNOVATIONS
Coca-Cola to launch its first energy drink in Europe starting April EUROPE – The Coca-Cola Company has
announced that it will launch its first, ownbranded energy drink in Europe in April, marking its entry into a space dominated by Monster and Red Bull. Dubbed Coca-Cola Energy, the new beverage will first debut in Spain and Hungary with plans to launch the energy product in additional countries through 2019 and 2020, mainly in Europe. It is made with caffeine from naturally-derived sources, guarana extracts, B vitamins and has no taurine. The company said it will also offer a no-sugar, no-calorie option, targeting the health-conscious consumers. Both the regular and the no-calorie options will be available in 250-ml cans, featuring a circular red Coca-Cola mark and a claim to be ‘the only energy drink with a great Coca-Cola taste’. “Coca-Cola Energy includes ingredients from naturally-derived sources and a delicious and refreshing taste of Coca-Cola,” said Javier Meza, global chief marketing officer, sparkling business, The Coca-Cola Company. “We kept these two qualities at the heart of how we developed the recipe and are proud to offer it under the Coca-Cola brand, inviting people to try a new and different energy drink that is designed to complement upbeat and busy lives.” Meza said that the company plans to introduce Coca-Cola Energy in additional countries through 2019 and 2020, and will
confirm plans and timings if a decision is made to launch this new brand in a certain market. Betting on beverages such as energy drinks and outside the carbonated drinks category is a path the company is undertaking to account for the dwindling soda sales in some of its major markets in Europe and USA.
The controversial Soft Drinks Industry Levy was introduced to address childhood obesity and encourage manufacturers and traders of soft drinks in the UK to reduce the sugar content of drinks products
Kevian Kenya secures US$10.93m loan from German fund for expansion KENYA – Leading juice producer, Kevian Kenya has secured an additional US$11 million (KSh 1.1 billion) credit facility from German sovereign wealth fund DEG to finance its expansion drive. This is the second funding that the company has secured from DEG following an earlier loan of US$7.86 million (KSh 786 million) issued to the soft beverage firm in 2012. Kimani Rugendo, Managing Director, Kevian Kenya said that the loan will enable the firm introduce more products and expand its production capacity as it continues to explore the potentials in the local beverage market. “The loan will also go towards supporting the expansion of the firm as happened with the previous loan which Kevian has paid back. We see untapped opportunities in the local processing and manufacturing industry mainly in new beverages targeting children and young adults. This is the new line of business we are eyeing,” he said. The expansion will see the company hire an additional 200 direct employees on permanent basis and 300 casual workers. The facility comes as a boost to the firm as it strives to diversify from its mainstay Afia and Pick N Peel juices, Mt Kenyan bottled water, tomato sauce, carbonated drinks, ready-to-drink coffee, energy drinks and vegetable soups.
INVESTMENTS
Ethiopia’s Kangaroo Plast Plc invests US$52.34m in new brewery plant ETHIOPIA – Kangaroo Plast Plc, a familyowned business group with diverse interests has invested US$52.34 million in setting up a new brewery plant in Ethiopia. According to Ephrem Yirga, Board Chairman of United Brewery and Kangaroo Plast, the new multimillion plant has a production capacity of 1.6 million hectolitres and 800,000 hectoliter packaging capacity a year. Ephrem said that the new facility features modern technology whose whole production system is fully integrated with SAP technology and has modern waste management and treatment plant that seeks to enhance highly efficient operation. 60 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
“We used the most advanced technology of the industry. We used the technology of a well-known machine manufacturing German company. The company has solely done all the manufacturing and installation of the machines,” he said. The new brewery, which is realized with the venture of United African Beverages, is set to create about 230 job opportunities. “We have also allocated enough budgets to undertake corporate social responsibility activities benefiting the societies and the environment around the brewer. We are so lucky to find high-quality groundwater, which doesn’t need that much treatment. Modjo is a very strategic location for us to
easily access Addis Ababa market as well as the central part and south eastern markets of the country,” he explained. Over the past years the beer market in Ethiopia has been growing attracting many investors as they seek to capitalise on the increasing demand across the beverage sector, with giants Heineken, Diageo, Castell and Bavaria having local operations following privatisation of the sector. Distell, a South African based wine and spirits producer, has unveiled plans of making entry into the country as part of its African expansion plan.
FOODBUSINESSAFRICA.COM
MARKET TRENDS
Global wine production on record high, Italy remains largest producer
WORLD – Global wine production reached a record high level of 292.3 MHL (millions of hectolitres) in 2018, as Italy remains the world’s largest producer, according to recent report by the International Organisation of Vine and Wine (OIV). The year’s production was exceptionally high compared to 2017, when production registered 8.2% decline to 246.7 MHL, with the largest declines in the European Union. 2018 was characterized by stable consumption rate (at 246 MHL) and high intensity in the international wine trade recording 108 MHL traded in volume, and a 1.2% rise in value to reach 31.3 billion Euros (US$35.42 million). France was the world’s second largest wine producer with 49.1 MHL, followed by Spain, which produced 44.4 MHL. In Europe, production was impacted by unfavorable weather conditions in some countries. In Portugal, output was impacted by bouts of downy and powdery mildew.
Data available for China suggest production levels of 9.3 MHL in 2018, which is lower by 2.3 MHL compared with 2017. In the US, production by more than 0.5 MHL while production in Argentina grew by 2.7 MHL to reach 14.5 MHL. South Africa produced 9.5 MHL, a decrease of 1.4 MHL from 2017, attributed to the impact of the drought in some wine producing areas. Total world area planted with vines was estimated at 7.4 million hectares, while there has been a steady decline in the global vineyard area since 2014, driven primarily by a reduction in the vineyard area in Turkey, Iran, the United States and Portugal. According to OIV figures, world wine consumption was estimated at 246 MHL in 2018, about similar levels to 2017 figures at 243 MHL, after three years of rising consumption, although this now appears to have stalled, due to a drop-in consumption in China (down 6.6% to 18 MHL) and the UK. The world’s largest wine consumer, the US saw consumption in 2018 grow 1.1% to 33 MHL. A modest decline was observed in South America, except in Brazil, where 2018 consumption, at 3.6 MHL, remained virtually stable compared with 2017, noted the OIV. Consumption in most countries in Europe remained stable, with the exception of Spain, where it increased for the third consecutive year to reach 10.7 MHL, Portugal (5.5 MHL), Romania (4.5 MHL) and Hungary (2.4 MHL).” Global trade in 2018 increased slightly in terms of volume, with 108 MHL traded, while value rose by 1.2% reaching 31.3 billion Euro. Spain remains the biggest wine exporter by volume with 20.9 MHL, representing 19.4% of the global market. France was the biggest world exporter by value, with 9.3 billion Euros exported in 2018. Spain, Italy and France together accounted for over 50% of the global market by volume, equating to 54.8 MHL. Bottled wines made up 70% of the total value of wines exported. By value, sparkling wines accounted for 20% of the global market, despite representing only 9% of the total volume exported. The five main importing countries – Germany, the United Kingdom, the United States, France and China –accounted for more than half of total imports.
REGULATORY & POLICY
India’s alcohol makers to include statutory warnings on liquor bottles – FSSAI INDIA – The Food Safety and Standards Authority of India (FSSAI) has announced that alcoholic beverage makers will need to seek approvals from excise commissioners to adopt new labelling norms, including statutory warnings on liquor bottles. According to FSSAI CEO Pawan Kumar Agarwal, the new set of labelling regulations are expected to be fully operational by the end of 2019, and manufacturers have been given a sixmonths grace period to use unused labels and printed cans, which will then be faced out of the market if the set period elapses before they are sold. FSSAI has also FOODBUSINESSAFRICA.COM
allowed alcoholic beverages manufactured prior to April 1, 2019 to be sold in the market up to March 31, 2020, when the new labeling rules will come into full force. With the new rules, all liquor bottles will carry the warning, ‘Consumption of alcohol is injurious to health. Be safe - don’t drink and drive’. “I think for alcoholic beverages sector, the implementation of these standards is a significant way forward in order to improve the quality and standards of alcoholic beverages available in the country,” said Agarwal. “So far, it was primarily regulated by excise commissioners and they were
only looking at alcoholic content and the toxic substances in alcohol. Now, there are far more elaborate standards that are benchmarked with the global standards and in certain cases, they have taken the Indian context also in consideration.” On the labelling norms, the FSSAI’s CEO said the new labels including statutory warning would be fully effective from October 1. “We are not changing norms for languages as it is a sensitive issue as in many states, they do it in English and in other states, they do it in English as well as local languages,” Agarwal said.
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NATURAL COLOURS:
When it has to look nice to the consumer, naturally
F
ood colour is any dye, pigment or substance that imparts colour when added to food products, and come in many forms: liquids, powders, gels and pastes. The importance of having the right colour for any food or beverage product cannot be over-emphasized since consumers associate certain colours with certain flavours, and the colour of food can influence the perceived flavour of food and beverage products. And since consumers base so much of their food choice on a colour, the food industry utilizes colourants to enhance a product’s aesthetics, consumer appeal and acceptance. In recent times there has been a shift from the use of artificial colours to use of natural colours in processed foods. There are three classifications for food colours: artificial colours, which are chemically synthesized; selectively extracted additive colours, that originate from a natural source and undergo selective extraction, often through the use of chemicals, to create a functional additive (e.g. beta-carotene, carmine, annatto extract) and colouring foods: edible raw materials that have not undergone selective extraction of the naturally occurring pigments.
NATURAL COLOURS BECOME THE NORM
According to Future Market Insights (FMI), the market growth for natural food colours is estimated at a healthy CAGR of 6.5% per annum in terms of value over the forecast period of 2018 through 2028. Shifting consumer preference from chemical and synthetic ingredients towards natural ingredients coupled with increasing demand for clean label products and a general “health and wellness” trend influence the demand for natural food colours. The company’s research notes that beverages have the highest share of demand for natural colours, followed by packaged food, dairy, and confectionery and bakery products. “Brands are moving away from artificial ingredients, reformulating their products, and building their brands around natural ingredients. The pace of change differs from 62 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
region to region. Some markets have almost fully converted from artificial to natural and are now moving to minimally processed colours like fruit and vegetable juices”, says Gaia Saccani, the Senior Marketing Manager Chr. Hansen Natural Colour Division. The shift from artificial to natural ingredients is a response to rising awareness. Consumers have become increasingly concerned about their health, wellbeing and the foods they eat. They want appetizing, convenient, healthy foods made with natural ingredients. And they expect their favorite brands to meet these demands, she says.
Trends to using natural colours in beverages
According to GNT, the producer of EXBERRY Colouring Foods and leading global provider of natural colour solutions, beverage selection is largely influenced by the colour of the drink itself, with shoppers selecting products on the basis of their appearance and not by the flavour type. From enhanced waters, flavoured teas and botanical beverages, juice drinks and smoothies, ready to drink alcoholic beverages and sparkling drinks, natural colours are gaining traction around the world. GNT reveals that consumers today expect more from beverages than just to quench their thirst – they have to provide bursts of flavour, while suiting people’s individual lifestyles. Beverage manufacturers must think of innovations
that satisfy consumers’ thirst for variety. The company has compiled five pathways food and beverage manufacturers should to take to meet this challenge:
1.Beverages must offer multiple sensory experiences - Consumers
brains connect certain flavours with certain colours, and therefore, each flavour usually comes in a designated colour range. Breaking this pattern by mixing up colour and flavour will get customers’ attention. This can be done by creating multi-sensory experiences. Consumers’ growing wish for surprising creations is especially high in the adult soft drinks sector. Alternatives to alcoholic beverages should serve a sophisticated taste and go beyond the typical sweet and fizzy lemonades.
2. Rely on plant power - The current high demand for naturalness holds great opportunities for the beverage industry. Plants offer exciting new flavours, for example when mixing fruit based drinks with herbs, grains or even algae. They can replace industrial sweeteners or flavourings, supporting current sugar reduction and clean label trends. And, with colours made from fruits, vegetables and edible plants, manufacturers can replace artificial colours while maintaining a great colour variety in their portfolio. 3. DIY-sets for creative beverages
People find pleasure in preparing food themselves again – mixing smoothies
FOODBUSINESSAFRICA.COM
TRENDS
and pressing juices is only the beginning. DIY-sets with base mixes and matching recipes for cocktails or lemonades are highly popular as they enable consumers to be their own barkeepers. Key elements are powder bases in various colours that make it particularly easy to create customized drinks. With special micronised powders, producers can guarantee homogenous colours for any powder mix.
4. Deliver the extra benefit - People are constantly striving
for self-improvement – mentally and physically. Beverages can contribute to this with dietary supplements in waters, juices or sports drinks: added superfoods like chia or hemp seeds provide extra fibre and guarana or other plant based caffeine substitutes are perfect for the occasional energy boost. A perfectly adjusted colour concept can support the beneficial impression.
5. Discover the new in the old - Consumers are very loyal
to brands or products they know and trust. Plus, familiar things simply evoke positive feelings. But in order to stay competitive, manufacturers need new creations. Mixing well-known drinks of popular brands leverages new aspects in old favours. Launching special flavours or adding new colours also brings a fresh breeze to the supermarket shelves and is likely to attract new customers while pleasing the old ones.
Factors to consider in beverage applications
Gaia Saccani of Chr. Hansen enumerates seven key factors that are key to the successful adoption of natural colours in your formulation. She notes that it is an important consideration to work with your preferred natural colours provider to ensure that your process can fit in with the product attribute and that the final product can match your goals.
1. Regulatory compliance key to smooth, safe conversion
As a food manufacturer, you must ensure your product meets all regulatory and safety requirements in your markets. This applies to everything from pigments, the applications they can be used in, to how the colours are manufactured.
2. Food composition can affect shade and stability
Practically all components of a food system influence colour intensity and stability over time. Though most finished foods have a target range for ingredients, any shifts within that range can influence colour. For example, colour stability is often better in a product with a full sugar matrix than a reduced-sugar or no-sugar version, as sugar generally stabilizes colour, and products that contain natural colours from red berries like strawberries or other ingredients which are very heat sensitive, such as sugars, will turn brown during heat treatment or over the shelf life of the product. Further, high minerals content in added water can slightly influence the colour shade and intensity.
3. pH levels impact natural colours - The pH level of a food
system will affect the colour hue of your product, as some colours will change hue at different pH levels. For example, at low pH, some anthocyanins (the natural red polyphenol pigments in many red fruits and vegetables) are red and pink, but when used in a dairy-based product with a neutral pH, they will appear more blue and be less stable. Certain natural colour pigments, such as
FOODBUSINESSAFRICA.COM
FOOD SAFETY
OPERATIONS
FORMULATIONS
REPORT
annatto, carmine and chlorophyll are completely water soluble at high pH but can precipitate and form sediments at low pH, unless they are protected by other ingredients that make the pigment more acid stable.
4. Added nutrients affect colour stability - Vitamins and
minerals are necessary for consumer health and wellbeing, but when used to fortify foods and beverages, added nutrients can impact colour stability. For example, Vitamin C (ascorbic acid) helps prevent carotene oxidation in most drinks, but in high concentrations it destabilizes anthocyanins, which can result in fading or browning, while calcium and magnesium, like other divalent minerals can complex bind with anthocyanins, causing them to fade rapidly. When added in large concentrations, the same ions may interact and destabilize colour emulsions, causing cloudiness or accelerate the formation of neck rings and zinc, like other mineral ions, can also complex bind with pigments and precipitate if not added at the right pH or in the right order.
5. Packaging – container choice matters - Packaging can play a major role in consumer choice, as the material, shape and size of the packaging can influence a product’s colour and appearance. For example, a bottle with a small diameter will make a beverage appear lighter than a bottle with a larger diameter. It is therefore important that the size and shape of the container or product are consistent throughout the colour matching process, and that the application is tested in the intended shape and size. Many natural colours are light and oxygen sensitive. Thin, transparent PET bottles may be easier to handle and store than a glass bottle, but they are more permeable, which increases the risk of pigment oxidation. 6. Pair flavour with the right colour - As flavours often involve carriers and solvents, they must be selected together with colour during the product development phase. Colours that are stable with an ‘artificial’ flavour system are not necessarily compatible with a ‘natural’ flavour compound. This is because natural flavours tend to be weaker than artificial flavours and a higher dosage is required to achieve the desired flavour, which increases the concentration of reactive carriers and solvents. 7. Timing and processing matter - Natural colours react
differently to artificial colours. Chemically created artificial colours are robust and can be added to a production process at any point without impacting the result. This is not the case with natural colours. Heat, shear, pressure, and exposure to oxygen during the production process can greatly alter the appearance of natural colours. Further, what works during the pilot phase may not work in full-scale production, as the scale and variables involved in the manufacturing environment differ. This applies to three criteria in particular: Heat stability varies across colour pigments and formulations. For instance, when a heat sensitive pigment like red beet is added after pasteurization in a UHTtreated dairy product, it provides a beautiful red shade; if added before pasteurization it will turn brown. High level of shear can stress emulsified colour solutions, which can result in emulsion breakdown or create excessive foaming if the colour has a naturally high protein content, while high temperatures combined with high pressure can have a profound effect on natural colours MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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NESTLÉ:
New strategy takes hold as leading food and beverage giant sees a brighter future
W
hen Mark Schneider took over as the new CEO at Nestlé in January 2017, he had his work cut out for him. Four years of sluggish growth, when the company failed to meet its ambitious sales growth targets, a changing food industry landscape and a company that was used to winning in the marketplace, and which was forced to start looking at itself differently if it was to continue being the world’s largest food and beverage company. Add to the mix an activist investor, Dan Loeb of Third Point, who in 2017 pressured the company to pursue higher profit margins over scale, at one time pushing for the company to be split in three, to accelerate growth, Mark has had a tough time shepherding the company – and silence the company’s critics. An outsider who became the first CEO at Nestlé not to have come from inside the company since 1922, Mark came to Nestlé from a very different background. As CEO of European healthcare company Fresenius since 2003 till his appointment at Nestlé, Mark had grown Fresenius through tactful acquisitions, that more than doubled the company’s employee numbers, quadrupled its revenues and grown its net income by more than twelve times. When Nestlé, the world’s leader in nutrition, health and wellness company, tapped Mark from the healthcare sector, the company signaled its ambition to break from its past - and seek new ways to find a growth momentum. Speaking when the company unveiled him as the next CEO, replacing long serving Paul Bulcke in mid 2016, Mark said. “With consumers around the world taking a deeper interest in their personal health and wellbeing, Nestlé’s industry-leading global food and beverage business positions it well for advancing the vision of nutrition, health and wellness.”
Nestlé struggles to meet its goals, changes tact
Since taking the helm, Mark has had to face strong headwinds 64 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
“WITH CONSUMERS AROUND THE WORLD TAKING A DEEPER INTEREST IN THEIR HEALTH AND WELLBEING, NESTLE'S INDUSTRY LEADING GLOBAL FOOD AND BEVERAGE BUSINESS POSITIONS IT WELL FOR ADVANCING THE VISION OF NUTRITION, HEALTH & WELLNESS.” Mark Schneider, CEO, Nestlé
brought by lower growth, as economic strains in markets such as Brazil and slow growth in developed markets in the US and Europe take their toll on the company’s growth ambitions. The company has had to redefine its business and strategy including lowering its long held goal of mid-single digit sales growth targets and profitability goals following years of unconvincing growth. Reporting organic sales growth of 4.2% in 2015 financial year, the company has faced three more years of below par performance, with 3.2% in 2016, 2.4% in 2017, the first year Mark was at the helm, and 3% in 2018. The latest financial figures for the first quarter 2019 came in at an improved 3.4%. In late 2017, at an investor strategy briefing in London, UK and under pressure from jittery investors, Mark unveiled the company’s new targets, providing a roadmap to getting back to growth and profitability, in a market where consumer preferences have changed and smaller, nimble and more innovative start-ups are taking business away from the industry giants. In the review, the company confirmed its mid-single digit organic growth target for 2020 and set an underlying trading operating profit margin target of 17.5% to 18.5% by 2020, up from 16.0% in 2016. FOODBUSINESSAFRICA.COM
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The company also affirmed its strategic focus on food and beverages, with consumer healthcare as an additional growth platform. The strategy also placed emphasis on the need to balance growth with increased cost discipline and margin expansion as well as improved capital efficiency. To enable the company to deliver on its most critical market segments, Mark also revealed that the company will focus capital spending on advancing the high-growth food and beverage categories of coffee, pet food, infant nutrition and bottled water and build on its strong position in emerging markets while pursuing growth opportunities in consumer healthcare. “The pace of change has picked up. We need to execute faster than before. Things will change but the way we approach business will not change. This company got, for a reason, to the leadership position it has today, and it is hell-bent on not losing it,” he reiterated at the briefing. The company also announced its intention to avail an additional US$20 billion for acquisitions and share buybacks from 2017 to 2020.
New strategy begins to pay off
The strategy set forth in 2017 is already showing signs of delivering for the company. The mood and undertones at its first quarter financial results briefing in mid-April 2019 was more upbeat than before, with the company reporting an organic sales growth of 3.4% growth and reported sales increasing 4.3%, while real internal growth (RIG) grew by 2.2%, higher than similar companies, according to its Chief Financial Officer FrancoisXavier Roger, led by rebounds in Brazil, strong performance in the United States and China. “Quarter 1 came in a little stronger than we expected. We are pleased with Nestlé's solid organic sales growth in the first quarter, building on our fullyear 2018 momentum. Our increased speed, innovation for a changing world and execution focus are clearly paying off,” Mark said. The company also confirmed its full-year guidance for 2019 with continued improvement in organic sales growth and underlying trading operating profit margin towards it’s 2020 targets, while underlying earnings per share in constant currency and capital efficiency are expected to increase. The company’s growth momentum is delivering for Nestlé as it solidifies and consolidates its position at the top of the food industry through tactful acquisitions and investments. To move away from FOODBUSINESSAFRICA.COM
sugar-laden confectionery that are not in tune with its health and wellness focus in the sensitive north American market, the company sold its US confectionery business for US$2.8 billion in cash to Nutella maker Ferrero in late 2017, even as it remains with its confectionery businesses around the world, with a focus on its KitKat brand. It is currently undertaking strategic reviews for its Nestlé Skin Health and cold cuts and meat-based products, to focus on the plant based products wave, while it divested its water business in Brazil in 2017. In sub-Saharan Africa, the company reorganized its operations, closing the Nairobi, Kenya-based Equatorial Africa Region (EAR), which was then split. In the new configuration, Angola and the Democratic Republic of Congo (DRC) joined the Central West Africa Region based in Accra, Ghana, while the renamed Eastern and Southern African Region now includes the Horn of Africa, Southern, Eastern and Island clusters of the former EAR, based in Johannesburg, South Africa. “Our team in EAR has done a tremendous job, but after trying for nearly ten years we can no longer sustain the cost of the regional head office with the size of the business there,” said the company when it announced the move. The company also closed its plant and business in the DRC. However, even as the company has been forced to retreat from its venture in some African countries and regions, it continues to make significant investments in the continent. In Egypt, the leader in packaged coffee acquired Caravan Marketing Company SAE, a leading Egyptian instant coffee company producer and the owner of the Bonjorno brand, while in 2016, it invested in a joint venture that packages the popular Abyssinia Springs brand of bottled water in Africa’s second most populous country, Ethiopia. In Nigeria, its Waters business unit invested about US$25 million at the Abaji factory complex to produce Nestlé Pure Life, it’s second water processing facility in Central and West Africa, complementing the Agbara factory in the Ogun State.
Increased investments and innovations to tap growth
The company continues to invest in new plant, extensions and into its innovations capabilities around the world. New product innovations, especially those that target new, niche consumer segments continue to
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thrive at the company. In April, it launched a new 100% plant-based burger in Europe, with plans to roll out the same in the United States. Dubbed Garden Gourmet Incredible Burger, the new ‘cook from raw’ plant-based burger expands Nestle’s reach into the meat-free market that is quickly expanding due to preference for healthier food products. It is made with natural protein from soy and wheat while natural plant extracts like beetroot, carrot, and bell pepper help create the look of a beef burger before, during, and after cooking. In Ghana, it launched Maggi Dedede, a new variant of its popular Maggi brand, as it seeks to grow its ambitions to provide safe and quality nutrition across the country. The bouillon cube is made of shrimp, garlic, fish and other natural ingredients and fortified with micronutrients, including iron. In Thailand, the company recently availed its Milo UHT No Sucrose, which is a variant of its malt beverage but contains no added sugar to respond to the country’s
THE COMPANY AFFIRMED ITS STRATEGIC FOCUS ON FOOD AND BEVERAGES, WITH CONSUMER HEALTHCARE AS AN ADDITIONAL PLATFORM sugar reduction policy. To respond faster to meeting changing consumer needs around the world, the company launched a new accelerator program that will utilize innovative technologies and systems to bring new products to consumers around the globe. The Nestle R&D Accelerator, will be based in Lausanne, Switzerland, and will bring together Nestlé’s scientists, students and start-ups to advance science and technology as it strives to maintain its position as the food industry leader in nutrition, health and wellness. Earlier, it opened a new R&D in Beijing, China to accelerate trend-based innovation and meet consumer demand in the Asian region, with a focus on creating new food and beverage products that meet the changing tastes and preferences among the Chinese consumers as well as other customers in Asia
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SUGAR REGULATION:
To tax or not to tax sugary beverages rage on across the World
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iscussions surrounding sugar in beverages seem to never end, even as governments across the World continue to enact sugar tax on high-sugar soft drinks. Though activists and experts hope for endorsement of a tax to discourage consumption of sweetened beverages, a concrete consensus is yet to be reached on whether sugar tax on soft drinks is useful in sorting out the health concerns around massive consumption of sugar and calories, or is just a revenue raising measure by governments. The World Health Organization (WHO) is the number one advocate of the sugar tax, which it claims is critical to pursuing the fight against child obesity and diabetes. The UN agency in October 2016 made a non-binding recommendation that governments should impose a 20% tax on ‘sugary’ drinks. In 2015, the agency issued guidelines that recommended adults and children reduce their daily intake of free sugars to less than 10% of their total energy intake, while recommending a further reduction to below 5% or roughly 25 grams (6 teaspoons) per day would provide additional health benefits. “We have solid evidence that keeping intake of free sugars to less than 10% of total energy intake reduces the risk of overweight, obesity and tooth decay,” said Dr Francesco Branca, Director of WHO’s Department of Nutrition for Health and Development. Despite the lack of a strong backing from an independent panel on soft drink sugar tax held in 2017, WHO DirectorGeneral Tedros Adhanom Ghebreyesus reiterated the agency’s commitment to tackling child obesity. “One thing I would like to assure you is that the WHO position cannot change because of this report,” he told a news conference. Further, in the UK in 2015, the Scientific Advisory Committee on Nutrition (SACN) recommended that no more than 5% of consumers’ daily calories should come from sugar. This was the basis for Public Health England’s (PHE) sugar reduction program, which challenged the food industry to reduce 20% sugar from the food categories contributing the most sugar to diets of children up to 18 years, by 2020. PHE insists that the sugar reduction 66 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
guidelines for industry go beyond sugar reduction, and should also be accompanied by reductions in calories where possible, no increases in saturated fat and the achievement of current salt targets.
Governments bet on sugar tax to ease public health burden
More than 30 countries around the globe have either put in place sugar tax regulations or are in the process of enacting the same. Sugar taxes are generally applied to sweet beverages but certain criteria are applied to different markets. In some countries, dairy and juices are exempted from this burden, thanks to their ‘high’ nutritional value. Health practitioners and physicians’ groups have long taken a stand for the need to reduce consumption of sugary drinks, especially among teens. They have also called for a decrease in marketing of sugary drinks to children and teens, inclusion of sugar content on nutrition labels and menus, and the adoption of healthy beverages like milk and water. Mexico has become the poster child of the sugar tax, introducing the measure in 2013. The country with one of the highest per capita consumption of soft drinks in the World, the success, or failure, of Mexico’s
IN NUMBERS
12.1%
REDUCTION IN SUGAR CONTENT IN THE UK OVER 5 YEARS BY MAJOR FOOD INDUSTRY PLAYERS - FDF regulation continues to elicit mixed reactions, with both proponents and opposers failing to agree on the scale of its impact. The Mexican beverage industry association ANPRAC says that the legislation has not reduced the level of obesity in the country and has had minimal impact on calories that consumers take through soft drinks, since it just represented a reduction of 6.6 calories per person, compared with the 3,072 that Mexicans consume daily. “The drinks has been proven ineffective in reducing consumption, however it has been very effective in collection terms – after four years of implementation, the amount collected is more than US$5.5 billion.” A study by the Autonomous Technological Institute of Mexico (ITAM) noted that the tax generated a substitution FOODBUSINESSAFRICA.COM
“THE ONLY WAY WE ARE GOING TO MAKE GREAT PROGRESS IS THROUGH COLLABORATION. WE CAN PROVIDE A VOICE ON BEHALF OF CHILD HEALTH.” Former CEO the Alliance Healthier Generation, Dr. Howell Weschler.
effect, in which consumers migrated to lower-priced products or with similar caloric content, which explains why there have not been significant changes in the consumption of total energy per household. But the challenges in Mexico’s regulation has not discouraged more countries from adopting sugar tax legislations. United Arab Emirates, Saudi Arabia, Portugal and Sri Lanka are among the latest countries to introduce sugar tax on soft beverages. The UK introduced its Soft Drinks Industry Levy (SDIL) in April 2018, while Ireland also introduced the same in May 2018, similar to UK’s two-tier system. South Africa’s Sugary Beverages Levy came into effect in April 2018, fixed at 2.1 cents per gram of sugar content that exceeds 4g per 100ml. The levy exempts fruit juice and in the first six months, it is said to have raised around R800 million (US$56.2 million). Malaysia announced the implementation of sugar tax starting April 2019. Elsewhere, Saudi Arabia and UAE imposed a 100% tax on energy drinks and a 50% levy on carbonated drinks while Thailand is phasing a sugar tax in over six years. Other countries where the tax has been introduced or is being considered include: various states in the United States, Spain, Estonia, France, Portugal, Chile, Mexico, Colombia and Philippines. The UK said it is targeting 520 million pounds to some 240 million pounds in revenues between 2018 and 2019. In the first seven months of the regulation, the government said it had raised 153.8 million Euros, putting it in line with expectations. Industry players have argued that it is not only bad for business but also cost jobs. Some governments including Lithuania, Australia and New Zealand have resisted calls by medical associations to adopt these punitive taxes.
Food and beverage companies respond
With the threat of taxation looming, some of the major beverage manufacturers have made adjustments to their formulations, pack sizes, marketing activities and consumer engagements to forestall the impact of the taxation on their businesses, even as they insist that the sugar tax on its own won’t solve obesity, and instead, a holistic, multi-stakeholder approach should be adopted. The move towards lower or no-sugar beverage products has seen a flurry of reformulation actions like never before. From the big giants Coca-Cola, PepsiCo to Nestle, the beverage industry has taken a bold approach to getting their products to meet the needs of the regulators, and in many cases, introduced these products even in markets where such regulations have not yet even been introduced. And the industry is determined to be part of the change. “Over time, the consumer is moving in a different direction. They are looking for healthier alternatives for their drinks with less sugar for their kids. So, we are committed to it all the way,” said Al Carey, President, PepsiCo North America. The UK’s Food & Drink Federation (FDF), a grouping of the largest food and beverage players in the UK, in a recent report said that its members over the five year period to 2018 reduced energy in the average shopping basket by 5.5%, sugars by 12.1% and reduced FOODBUSINESSAFRICA.COM
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salt content by a further 11.4%, continuing to build on more than 15 years of steady reformulation work. The report highlighted a range of industry action, including reformulating products to reduce salt, fat and sugar, to limiting portion sizes and innovating to bring new, healthier options to the market. There is more progress across the World. According to the industry association, the Mexican soft drink industry had worked on diversifying and reformulating of its products portfolio, with 50% being low- or no-calorie products by 2018. The world’s largest producer of sugar sweetened beverages Coca-Cola, which has faced mounting pressure on this issue, has not only introduced its Zero Sugar line of soft drinks across its major markets like the US and China, but into such small economies such as Tanzania and Kenya. It has also debuted smaller pack sizes, dropping the 500 ml for the 400/425 ml size for some of its products in some markets. PepsiCo, through its Pepsi Next brand has also joined the fray. Even such critical matters of how the soft drinks are marketed has changed a great deal, with for example, Coca-Cola marketing its regular and zero calorie drinks side by side, providing the consumer with a wide choice to choose from, according to their needs. “We are learning an awful lot about what works and what doesn’t in terms of communicating with the consumer. There is a lot of local marketing to get the initiative in front of the consumers,” says Roger Collins, President, Direct Store Delivery, Keurig Dr Pepper.
Collaboration is key to progress
As the industry seeks for ways to meet the rising need for a choice of beverages to buy and consume, the power of collaboration has become the new catch-word, as processors seek ways to engage with government authorities, NGOs and other stakeholders on the journey towards a lower sugar future. Be it on getting the right sugar replacers or ingredients approved, getting consumers to diversify their diets and food choices to whether there is need for a sugar tax or not, the way to the future involves all stakeholders working together on this critical issue. In the US, the three big soda giants, Coca-Cola, PepsiCo and Keurig Dr Pepper, have shown the power of collaboration in tackling the sugar issue. Through their joint efforts with the Alliance for a Healthier Generation, which works with schools, youth-serving organizations, and businesses to build healthier communities that support healthy kids in the country, the bottlers have made great progress in tackling the sugar issue in their biggest market. “A lot of consumers want less sugar, so we have come together because it is the right thing to do for the industry and the marketplace,” says Jim Dinkins, President Coca-Cola North America. “The only way we are going to make great progress is through collaboration. We can provide , a voice on behalf of child health,” says the former CEO for the Alliance for a Healthier Generation, Dr. Howell Weschler. Through continued collaboration with Governments across the UK and other industry stakeholders, we are committed to being part of the solution and to improving the nation's diet,” adds Kate Halliwell, FDF Head of UK Diet and Health Policy
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MY CORPORATE JOURNEY | OLUSHOLA OLADEJO
OLUSHOLA OLADEJO
FOOD & BAKERY TECHNOLOGY MANAGER - FLOUR MILLS OF NIGERIA PLC. S. Coumantaros. There are over 12,000 people working in the organization and it is one of the oldest (if not the oldest) multinational food companies in Nigeria. Working in FMN has helped to shape my career as a food technologist. I have had the opportunity of working with some of the best and most experienced food technologists and scientists in the country. Working with FMN has also given me the opportunity to be amongst the people that have developed some of the most innovative food products in Nigeria. My career goal is to manage a customer centric food company that is focused on both product and process innovation with a view to build value for all stakeholders. Working in FMN is helping me gather all the necessary expertise and experience that I need to achieve this goal.
Describe your current role, your key responsibilities and the most critical deliverables? I am a Food Technologist with about six years’ experience in startup and multinational food companies spanning product development, product improvement, laboratory management, training, customer insights gathering, quality control, quality assurance, regulatory affairs, and food processing. I have worked with Multinational Food Companies like UAC, Leventis and I currently work with Flour Mills of Nigeria Plc. I have a bachelor’s degree in Food Science and Technology and a master’s degree in Food Technology. I am currently pursuing a PhD in Food Processing and Value Addition from the World Bank assisted Centre of Excellence in Agricultural Development and Sustainable Environment (CEADESE) in the Federal University of Agriculture, Abeokuta. In my current role as a Food Technologist with Flour Mills Nigeria Plc, I am responsible for conducting comprehensive analysis and benchmarking analysis of products to suit customer’s quality specification. I also conduct sensory evaluation analysis, make reports for product improvement and management review. I contribute to key product improvements, new products development, and other technically-based, business driven objectives. I provide technical support to customers by collaborating with sales/ marketing department and conduct customer satisfaction survey, analyze data and make reports for decision making. Tell us about your company and how it fits in with your career goals. I currently work with Flour Mills of Nigeria (FMN). FMN is a Nigerian agribusiness company founded in 1960 by George 68 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
What are the most important skill sets in achieving success in your role? There are several skills required to be a successful food technologist. Some of them are: • Science Oriented Skills: Food technologists have the responsibility of developing and improving existing food products and setting standards for producing, packaging and marketing food. In doing these, we use chemistry, microbiology, engineering and other scientific methods to study the food and food products. It is therefore important that people who aspire to be successful food technologists have some of these science-oriented skills. • Analytical skills: As a food technologist, I analyze the products of food companies with a view to identify areas that we can improve our existing products or even develop new ones. It is therefore important a successful food technologist have some analytical skills. • Good observation and communication skills. As a food technologist you must be observant and be able to use your five senses effectively. (Sight, taste, smell, feeling and sound). You should also be able to communicate your findings to relevant stakeholders. • Creativity: As a food technologist you must be creative. You must be able to solve problems creatively. Developing new products and improving on existing products and processes needs a very good level of creativity. • Lastly, you need to pay attention to details. As a food technologist you must be detailed and accurate when conducting research. What were some of your previous roles? How important were these roles in shaping your current role? I started my career as a Quality Line Inspector at Leventis Foods. I was then promoted to become a Quality Compliance and Safety Officer. These two roles gave me hands-on experience on what happens in a food factory and helped me understand ways that organizations can continuously improve the quality of their products and the processes involved in food production. FOODBUSINESSAFRICA.COM
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I was given the opportunity yet again to manage the laboratory and regulatory affairs of Leventis Foods. In this role, I was responsible for analyzing products in the laboratory and interacting with regulatory authorities in the food and beverages industry in Nigeria. The role, therefore, helped me understand the various regulatory requirements that can help food and beverages companies to retain their going concern status. What have been some of the key turning points in your career? Have you ever had a change in career direction? If so, how did you handle the change? What lessons did you derive from this change? I have not really had a major change in my career path. I am still in the food industry and I will always have something to do with food. The high points for me so far is revamping the microbiology laboratory at Leventis Foods and registration of new products with the National Agency for Food and Drugs Administration & Control (NAFDAC) and the Standards Organisation of Nigeria (SON) when I was at Leventis Foods. I am also proud to have been part of the team that developed the Golden Penny Classic flour, Easy-Bake flour and Mai-Kwabo pasta in late 2018. My department was recognized as the best department of the month. What makes your role interesting? What do you enjoy most about your role? What has been the role of mentors and family in the achievement of your professional goals? What makes my role very interesting for me is that it gives me new challenges every day. We are constantly listening to customers, analyzing competitors’ products and developing innovative products that will help us meet the dynamic customer demands. The role also gives me the opportunity to develop new recipes and standard operating procedures and improve on existing recipes and products. The role of family and mentors cannot be overemphasized. They are my support system and I believe everyone needs a support system around them. I am lucky to have a supporting family that keep me going. My husband has been particularly supportive… God bless the day I met that man! I also have some mentors that have helped my career. Without God and these mentors and support system, I won’t be where I am today. Briefly, what is the typical day like in your role and company? Every day presents new challenges and new opportunities. Most times, while driving to work, I would have planned out the activities that I intend to do during the day only to end up meeting new things that require my attention. The dynamism of my role is one of the things that I love about it. What challenges do you face in delivering on your current role and how have you overcome them? My role requires a lot of collaboration with other functions. I am constantly collaborating with various stakeholders. Most of the challenges that I face are around how to manage these stakeholders and keep them all happy. I have therefore had to improve my collaborative skills to succeed on this role. What is the status of the sector in which you operate in the region and Africa and what do you think are FOODBUSINESSAFRICA.COM
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the opportunities, challenges and market trends in the sector? We operate in the food industry in Nigeria, West Africa. There are huge opportunities in the food industry in Nigeria, especially in food processing and value addition. Most of our agricultural produce in Nigeria are exported to other countries in their raw form. There are therefore tremendous opportunities of adding value to these agricultural products to create finished or semifinished food products for local consumption and export. This will reduce the amount of finished goods beeing imported, increase exports and create more jobs due to the establishments of more food processing companies. The major challenges I see especially in my country Nigeria are access to low interest loans, inadequate infrastructure like power and un-friendly government policies. How do you wind down after a hard day at work? What are your personal hobbies? How do these hobbies contribute to your personal and professional development? Getting home to my family and playing with my children is my way of winding down after a hard day’s job. I love reading novels, because it helps my imagination thereby helping me improve my creativity. Like I stated earlier, creativity is very key to succeeding as a food technologist. What are some of the personal or community activities you engage in to develop yourself or your community? www.foodpreneurshub.com is an online platform I created personally to support food entrepreneurs, aspiring food entrepreneurs and professionals in the food industry by posting relevant and targeted content on the website and on the social media platforms, @foodpreneurshub on Instagram, twitter and facebook. How can young people who may aspire to a career choice like yours plan their journeys? Firstly, they must develop interest and have passion for food processing. Secondly, they will need to get the necessary trainings and education in Food Science and Technology. What else would you want to do in future? What EDUCATION would you want to accomplish in your career before you step away from the industry? I will always have something to do in the food industry. My future plan is to manage a customer centric food company that is focused on both product and process innovation with a view to build value for all stakeholders. EDUCATION BACKGROUND I have a bachelor’s degree in Food Science and Technology and a master’s degree in Food Technology. I am currently pursuing a PhD in Food Processing and Value Addition from the World Bank assisted Centre of Excellence in Agricultural Development and Sustainable Environment (CEADESE) in the Federal University of Agriculture, Abeokuta. MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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SUPPLIER NEWS & INNOVATIONS PEOPLE
Australian machinery supplier tna appoints African operations head SOUTH AFRICA – Food processing and
packaging solutions provider, tna solutions has appointed Matthew Walters as branch manager to head up its African operations, based in South Africa. In his new role Matthew will be responsible of supporting food manufacturers across Africa with tna’s portfolio in the food processing and packaging solutions. He will be tasked with driving the sales of the firm’s confectionery
and snacks processing solutions, including its range of kitchens, starch moulding and finishing equipment, while helping to further develop tna’s local service and support team. Mathew is degree holder in mechanical engineering and started his career at a South African based FMCG company, where he was responsible for the successful implementation of a number of high profile projects.
Mathew has in the past delivered as a project manager, overseeing and managing projects across all stages from strategy development and stakeholder engagement to installation and commissioning. tna said that he will be instrumental in supporting the firm’s customers base through continued provision of advanced food processing and packaging technology.
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Kerry invests US$65m in a new savory R&D facility in the US USA – The food ingredients supplier, Kerry,
has inaugurated a new savoury research and development center in the US, after investing US$65 million to expand its leadership in flavour innovations. Located at its Taste Center of Excellence in Clark, New Jersey, the facility expands the company’s capabilities in the development and manufacturing of savoury solutions for consumers. It is a state-ofthe-art facility featuring sophisticated equipment with safety, quality control, and supply chain efficiency, said Kerry, and is home to research and development experts
and flavourists across Sweet, Savory and Natural Extracts, a customer engagement and innovation suite, and sensory and analytical capabilities. “This investment demonstrates not only Kerry’s impressive Taste portfolio and expertise, but also our dedication to continuously raising the bar when it comes to the safety of our people, the quality of our products and delivering a best-in-class experience for our customers,” said Mark Shipley, Chief Operating Officer, Kerry North America. Along with Kerry’s Sweet & Natural
Extracts Center of Excellence, the expansion aligns to the company’s “Towards 2020 Sustainability” commitment which looks to do business in an environmentally-friendly manner. Kerry said the investment will create 85 additional jobs, bringing the total number of people employed at the facility to 276. It is a zero waste to landfill facility and is a member of SEDEX, a platform that empowers ethical supply chain, and provides taste solutions for end use markets such as meat, prepared meals, sauces, and beverages, among others, mainly driven by demand for clean label solutions.
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Packaging group Huhtamaki inaugurates US$26m packaging plant in Egypt EGYPT – Huhtamaki, a global food packaging firm based in Finland, has inaugurated a new state-of-the-art flexible packaging facility in Egypt with an investment worth US$26 million. The food and drinks packaging major said that the investment is expected to serve the Egyptian market as well as export market into other African countries as well as Europe. “The Egyptian market is sizeable, and with the rapid population growth in Africa we expect future growth opportunities both for us and our customers. Until now we have served flexible packaging customers in Egypt from our units in the United Arab Emirates and India. With the new plant we can offer our current and new customers – both in Africa and Europe – the same top quality, with shorter lead times,” said Olli Koponen, EVP Flexible Packaging. Located in Cairo, the packaging unit sits on a 37,000 square meters land and is expected to offer approximately 250 employment opportunities as the firm continues to consolidate its position in the packaging business. The firm has also launched a new range of recyclable flexible packaging known as the ‘blueloop’, providing innovative polyolefin structures to pack coffee, snacks, dry food, personal care and other fast-moving consumer products. 70 MARCH/APRIL 2019 | FOOD BUSINESS AFRICA
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FOODTECH CONFERENCE & EXPO
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