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AFMASS AFRICAN FOOD M A N U FAC T U R I N G & SAFETY SUMMIT CONFERENCE & EXHIBTION

Oshwal Centre, Nairobi, Kenya April 25-27, 2017

Ethiopia:

The Next Growth Frontier

Transparency:

The New catch word in the food industry AFMASS Conference & Expo 2017 Preview

VOLUME 4 • ISSUE 5 • NO. 21 • ISSN 2307-3535

Pasta & Noodles

in Africa

New tastes, excellent growth potential

A FOODWORLD MEDIA PUBLICATION


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CONTENTS

Pasta & Noodles in Africa

www.foodbusinessafrica.com Volume 4 Issue 5, No.21 • ISSN 2307-3535

FOUNDER & PUBLISHER Francis Juma ADVERTISING & SUBSCRIPTION: Mary Nzioka • Elly Okutoyi DESIGN & LAYOUT Cynthia Odero

FoodWorld Media P.O Box 1874-00621, Village Market, Nairobi Kenya Tel: +254 20 8155022, Cell: +254 725 343932 info@foodworldmedia.net www.foodworldmedia.net

RELATED PUBLICATIONS

www.foodbusinessafrica.com EDITORIAL 2

Introducing Food Business Africa Industry Excellence Awards: You have achieved your goals; it’s now time to be rewarded

www.agribusinessafrica.net

NEW PRODUCT ON THE SHELF 11

Wrigleys’ Juicy Fruit block shape /Bio Foods introduces fresh milk / SALL introduces range of milk products / Pearl Dairy introduces new ESL and UHT milk products / Brookside boldens its Ilara yoghurt

EVENT PREVIEW 15

Pasta & Noodles: New tastes, excellent growth potential in Africa

COUNTRY FOCUS: ETHIOPIA 39

Ethiopia: The Next Investment frontier for the food and beverage industry

COUNTRY FOCUS: ETHIOPIA 43

Buhler introduces SORTEX F optical sorter / tna unveils wash down VFFS packaging system / Bitzer opens first office in Kenya / Bosch introduces new packaging concept / Givaudan expands its flavour Innovation Centre in Singapore / Cargill opens innovation center in China

REGULARS 6 20 29 33

www.healthcareafrica.info

AFMASS Conference & Expo 2017

INDUSTRY FOCUS: PASTA & NOODLES 35

www.dairybusinessafrica.com

Food Business Africa News - International Food Business Africa News - Africa Dairy Business Africa News - International Dairy Business Africa News - Africa

COVER PHOTO: Pasta and noodles are a growing product line in Africa FOODBUSINESSAFRICA.COM

www.industrybusinessafrica.com SUBSCRIPTION Contact: info@foodworldmedia.net Annual Subscription: Kenya: KSh 2900 (VAT inclusive); Africa: US$ 70; Rest of World: US$ 90 (including postage) TWO YEARS: Kenya: KSh 5600 (VAT inclusive); Africa: US$ 130; Rest of World: US$ 170 (including postage) Food Business Africa (ISSN 2307-3535) is published 6 times a year by FoodWorld Media Ltd. The magazine is distributed for free to food and beverage processing companies in Africa. The magazine is available through subscription for the other stakeholders in the food chain, including suppliers to the sector. Postage is paid at Nairobi, Kenya. Send address changes to FoodWorld Media Ltd by phone or email. Copyright 2015. 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.

FOOD BUSINESS AFRICA | NOV/DEC 2016

3


EDITORIAL

You have achieved your goals; it’s now time to be rewarded and appreciated in front of your industry peers The Food Business Africa Industry Excellence Awards are set for April 26, 2017 in Nairobi, Kenya at the AFMASS Conference & Exhibition

F

“THE FOOD BUSINESS AFRICA INDUSTRY EXCELLENCE AWARDS HONOUR EXCELLENCE AND LEADERSHIP IN THE FOOD AND BEVERAGE MANUFACTURING INDUSTRY”

4

oodWorld Media, the publishers of this magazine is glad to introduce to you the Food Business Africa Industry Excellence Awards – the region’s first and only award ceremony targeted at the food and beverage industry in the region. The Food Business Africa Industry Excellence Awards honour excellence and leadership in the food and beverage manufacturing industry. They are aimed at providing an opportunity for companies and people in the region to be rewarded for planning and executing industry leading and changing innovations, practices and technologies that have made an impact on the sector. As publishers of industry focused magazines, we have seen and reported on a number of initiatives and achievements by a number of companies and individuals that have made a huge difference in the region’s industry. And we do believe that it is high time that those who excel get their moment of glory through an annual awards ceremony. The awards have a particular bias towards promoting excellence in production management; human resource development and training; supply chain excellence; innovations, new products development and marketing; environment/ sustainability; community leadership; quality and food safety management; and projects management. During the 2017 edition of the awards ceremony, applications are open for one category: The Industry Champion Award – before other categories of the awards are introduced from the 2018 edition. This award is also open to those involved in the broader industry, including those from academia, Government, NGOs focused on the food industry and related sectors. The Industry Champion Award is open to business owners, directors and managers who have made important contributions to the industry in the region. These are individuals who have through the years strived to steer their companies and the industry to greater heights, despite the challenges that their companies and sectors have faced. A number of industry champions will be rewarded each year,

NOV/DEC 2016 | FOOD BUSINESS AFRICA

providing an opportunity for them to stand before the ceremony audience and be appreciated for a job well done. The awards categories will be expanded from 2018 onwards, adding several competitive sector based awards targeting the following categories: dairy; meat, poultry and fish; milling and baking; beverages; fresh produce; and oils, oilseeds and other processed foods. The ultimate award, the Food & Beverage Manufacturer of the Year, will be awarded to the most outstanding sector award winner. Other categories, focused on various initiatives will also be introduced. The Industry Champion Award will also continue to be given out every year, with the aim of rewarding a broader range of individuals who continue to shine in the industry, including beyond the manufacturing sector. The 2017 edition of the Food Business Africa Industry Excellence Awards is planned for April 26, 2017 as part of the African Food Manufacturing & Safety Summit (AFMASS) Conference & Exhibition, which takes place at the Visa Oshwal Centre in Nairobi, Kenya. The process of nominating individuals who have made a significant contribution to the industry is open. To nominate yourself, colleague or any other person, log onto www.foodbusinessafrica.com and click on the menu: Industry Excellence Awards. In this issue, we highlight the potential of the food and beverage industry in Ethiopia, the new kid on the block in the region, providing critical information on why the country is attracting investors – and what stands in their way. We have also reviewed the growth of pasta products in sub-Saharan Africa, one of the food products with rising uptake in the continent. And lastly, we indulge into the rising tide of change in the global food and beverage industry. We wish you a good read Francis Juma Publisher

FOODBUSINESSAFRICA.COM


NEWS | INTERNATIONAL PEOPLE

Schultz to step aside as Starbucks announces new leadership to drive next wave of global growth Schultz to become Executive Chairman and to head the new ultra-premium business units Starbucks Roastery and Reserve

USA – Starbucks CEO, Howard Schultz, is set to relinquish the CEO role for the second time, as the man and the company that made coffee cool, seeks to drive the next wave of innovation in the coffee business. Kevin Johnson, president and chief operating officer and a 7-year member of the Starbucks Board of Directors, will take over from Schultz, expanding his responsibilities and assume the role of president and CEO, effective April 3, 2017. He returned to the business after an 8-year absence in 2008 to steer the company through its aggressive global growth, including opening in Africa for the first time this year. Howard Schultz will retire from the CEO role to become Executive Chairman and focus on retail innovation and accelerating growth of Starbucks ultra-premium retail formats. He will shift his focus to innovation, design and development of

Starbucks Reserve Roasteries around the world, expansion of the Starbucks Reserve retail store format and the company’s social impact initiatives. He will continue to serve as chairman of the Board. “As I focus on Starbucks next wave of retail innovation, I am delighted that Kevin Johnson has agreed to assume the duties of Starbucks CEO. This move ideally positions Starbucks to continue profitably growing our core business around the world into the future,” Schultz said. Kevin has been President and Chief Operating Officer since March 2015, leading the company’s global operating businesses across all geographies as well as the core support functions of Starbucks supply chain, marketing, human resources, technology, and mobile and digital platforms and has been a Starbucks board member since 2009, and will continue to serve as a member of the Board. “Over the past two decades, I have grown to know Starbucks first as a customer, then as a director on the board, and for the past two years as a member of the management team. Through that journey, I fell in love with Starbucks and I share Howard’s commitment to our mission and values and his optimism for the future,” said Johnson. Schultz, not used to idling by, takes the role of championing the Starbucks Roastery

and Reserve brands to the next level. “With the Roastery, we introduced into the coffee category a previously unattained level of premiumization. The Roastery has become a learning laboratory for breakthrough innovation and experiential design and a beacon for the next wave of Starbucks global growth and evolution,” said Schultz.

Schultz will become Executive Chairman and focus on retail innovation and take leading role in new Starbucks Roastery and Reserve brands Starbucks Reserve is a new, premium retail coffee format that will showcase the newest coffee-brewing methods and offer customers the finest assortment of exclusive, micro-lot coffees sourced from around the world in an all sensory experience, paired with artisanal food offerings developed with our partners from Italian artisanal baker Princi, according to Schultz.

NUTRITION

Tesco reduces sugar content in its soft drinks, as sugar levy jolts industry into action

UK – Supermarket chain Tesco has reduced the sugar content of its private label portfolio of soft drinks by 20% compared to 2011, with one in five of its own brand beverages now containing less than 5g of sugar per 100ml. The company, one of the major sellers 6

NOV/DEC 2016 | FOOD BUSINESS AFRICA

of beverages in the UK, has therefore met the requirements of the sugar levy with a good proportion of its products, as beverage processors seek to meet Government mandated reformulation efforts in order to avoid taxation, set to be introduced in 2018. “Improving health is one of the biggest social challenges we face and we all want to do what we can to live healthy, happy lives. Often though it feels harder than it should be to take the little steps to live more healthily: harder to shop for and eat good food, harder to know enough to make healthier choices and harder to be a little more active,” says the company in a statement. “Reformulating our products is a great example of this philosophy in action. We have committed to long term plans to reformulate our products, reducing

the amount of salt, fat, saturated fat and sugar. But we won’t stop there. We will continue to work hard to ensure that we give our customers healthy choices and make it easier to live a healthier lifestyle,” it continues. For example, to help customers make healthier choices, the company removed sweets, chocolates and fizzy sugary drinks from its tills and in-queue areas in January 2015. These have been replaced with healthier products in the supermarkets and convenience stores. It has also worked with Diabetes UK to raise funds for healthy causes in society. FOODBUSINESSAFRICA.COM


AFMASS

www.afmass.com Africa’s leading regional Food, Beverages, Milling and Feed Industry & FoodService Event

AFRICAN FOOD M A N U FAC T U R I N G & SAFETY SUMMIT CONFERENCE & EXHIBTION

Amir Parpia, Finance Director Alpha Fine Foods, KAM Food Sector Chairman

Rajan Shah, CEO, Capwell Industries

Benard Otundo, Energy Manager, Brookside Dairy

www.image.desk7.net

These industry leaders are some of the key speakers and panelists at the AFMASS 2016 conference. It is your turn. Register to be a speaker or panelist at the 2017 edition. Contact us for details

The region’s conference on the formulation, processing, packaging and safety of dairy, beverages, meat, fruits and vegetables, processed food, sugar & confectionery and food service

400+

Conference delegates from the food, beverages, milling, and feed industry, suppliers and Govt/NGOs

2

Conference streams

2000+

Trade visitors from agro, manufacturing, retail, Govt, NGOs from Africa


Date: April 25-27, 2017 • Venue: Oshwal Centre, Nairobi, Kenya

Bimal Shah, CEO, Broadway Group

David Kamau, CEO, Proctor & Allan

Charity Magwenzi, Group R&D Manager, Dairibord

Brian Milton, Senior Adviser, Global Food Safety Partnership, World Bank

Wayne Glenn Kleynhans, Technical Training Manager, Krones

Duncan Kimani, Country Manufacturing Manager, Nairobi Bottlers Ltd

Delegates registration is open. Register today on the website for the industryfocused event not to miss in 2017. Limited Sponsorship, Exhibition and Partnership opportunities available.

FoodWorld Media Tel: +254 20 8155022 • +254 725 343932 info@foodworldmedia.net • www.afmass.com

www.image.desk7.net

The region’s event for the post-harvest, formulation, processing, packaging and safety of grains (maize, wheat, rice, sorghum etc), milled products, snacks, baked goods and animal feed


NEWS | INTERNATIONAL PARTNERSHIPS

IFIF and FAO strengthen collaboration to ensure safe, nutritious and sustainable feed and food ITALY – The International Feed Industry Federation (IFIF) and the Food and Agriculture Organization of the United Nations (FAO) held their 15th annual meeting at FAO Headquarters in October 2016 to strengthen their collaboration on critical issues to ensure safe, nutritious and sustainable feed and food. Mr. Joel Newman, IFIF Chairman, reiterated IFIF’s commitment to this longstanding partnership and highlighted that “together with the dedicated colleagues at the FAO we have achieved very important milestones, including the Feed Manual of Good Practices for the Feed Industry, the International Feed Regulators Meetings

(IFRM) and the Global Feed & Food (GFFC) Congress Series.” Dr. Berhe Tekola, Director of the FAO Animal Production & Health Division, highlighted the importance of private partnerships to support the FAO strategic goals to the IFIF delegates. According to Mr. Newman, the joint meeting underlined that IFIF is committed to continue to support the FAO initiatives on capacity development for feed safety, the LEAP partnership and the Global Agenda for Sustainable Livestock, as well joint efforts on feed and food safety at the Codex Alimentarius. Daniela Battaglia, Livestock Development

Officer at the Animal Production and Health Division of the FAO, noted during the meeting that FAO is committed to work with the private sector and feed operators and believes that they can valuably contribute to make the livestock and food sectors more responsible and sustainable to achieve important goals such as public health, and animal health and welfare. The IFIF members represent over 80% of global compound feed production, which is made up of national and regional feed associations, feed related organizations, and corporate members.

M&A

PepsiCo to acquire fermented probiotic beverages maker, KeVita, to boost wellness offerings

USA – PepsiCo has entered into a definitive agreement to acquire KeVita, a leading North American creator of fermented probiotic and kombucha beverages in a move that will expand PepsiCo’s health and wellness offerings in the premium chilled beverage space.

KeVita is a leader in fermented probiotic and kombucha beverages with three product lines and live probiotics in every bottle. All of KeVita drinks are certified organic, nonGMO, gluten-free and vegan. They have a loyal and rapidly growing consumer base in the fast growing functional beverage space. “Under the leadership of CEO Bill Moses, KeVita has become an innovative, high–growth brand that is transforming the functional beverage space,” said Chris Lansing, general manager and vice president, PepsiCo Premium Nutrition. “This announcement is further evidence of PepsiCo’s focus on delivering Performance with Purpose by continuing to evolve our health and wellness offerings to meet consumers’ changing needs.” PepsiCo’s move comes as the leading beverage companies, including Coca-Cola

seek to expand their alternative offerings to carbonated soft drinks following changing consumer tastes and preferences and pressure by authorities to reduce sugar in beverages. Coca-Cola recently spent US$575million to buy the South American soy beverages brand AdeS from Unilever, and has a growing healthy beverage portfolio, including the Chi brand in Nigeria, that it acquired mid this year. According to Bill Moses, CEO and co-founder of KeVita, the acquisition by PepsiCo provides the opportunity to extend KeVita’s beverages to a broader audience, while staying committed to his company’s core values. Upon closing, KeVita will continue to operate independently with its production and bottling facilities located in Oxnard, California, notes the companies. The deal is subject to regulatory approvals.

NUTRITION

Alltech partners with poultry producer to provide selenium-enriched eggs in Mongolia MONGOLIA – Poultry producer Tumen Shuvuut, one of the two largest layer companies in Mongolia, has partnered with technology provider Alltech to introduce selenium-enriched eggs help alleviate a persistent selenium deficiency in the Mongolian diet. Made with Alltech’s Sel-Plex organic selenium Tumen Shuvuut is launching its selenium egg to help alleviate a persistent selenium deficiency in the Mongolian diet, due to variances in mineral levels in

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NOV/DEC 2016 | FOOD BUSINESS AFRICA

Mongolia’s soil, which was identified in a recent study by the country’s Ministry of Health. The new product will be available in supermarkets and other retail outlets beginning in December. Alltech will continue to provide technical and other assistance to Tumen Shuvuut as they introduce this firstever selenium-enriched egg to be marketed in Mongolia. FOODBUSINESSAFRICA.COM


KENYA, NUTRITION, HEALTH & WELLNESS EXHIBITION NAIROBI EDITION April 15-16, 2017 The Hub Karen Mall, Nairobi, Kenya Effective, safe, proven and healthy ways to nourish the body, mind and soul all come together at the first ever Kenya Nutrition, Health & Wellness Exhibition. If you are into healthy eating, healthy living and wellness, this is the event you have been waiting for. Hosted over an entire weekend at one of Nairobi’s trendiest malls, The Karen Hub, this event is a one-stop shop for sourcing and finding vital information about foods and beverages, healthcare and wellness solutions that are best for you and your entire family from a host of local and international providers who will be on site. Sponsorship, Exhibition and Speaking Opportunities available. Please contact us for details.

www.wellness.foodworldmedia.net


NEWS | INTERNATIONAL INVESTMENT

Cargill invests US$50 million to expand poultry processing operations in Thailand THAILAND – American agribusiness and agro processing giant Cargill is investing US$50 million to expand its poultry processing operations at its facility located in the Nakhon Ratchasima province in Thailand. The expansion will create 1,400 new jobs and add to the more than 13,500 employees that the company currently employs across 14 locations in the country. Cargill will engage several independent smallholder broiler farms in the local community to meet

the increase demand in broiler chicken. The expansion is due to an increase in customer demand and strong customer confidence in the high quality and safety standards of the chicken products produced by Cargill in Thailand. A new building annexed to the current facility began construction in October 2016 and is expected to start operating in the first quarter of 2018. Cargill Protein Southeast Asia has been steadily growing in this region thanks to

growing customer demand and consumer appetite for poultry products in Asia Pacific. In May, it formed a joint venture with Jollibee Foods Corporation, the largest Asian food service company, to establish a poultry processing facility in the Philippines, creating 1,000 jobs in the process. More recently in September, it started a joint venture with leading agri-food business Japfa to produce and supply fully cooked poultry products in Indonesia.

M&A

ADM sells of its stake in Australian commodity giant GrainCorp

USA – American commodity and food processing company Archer Daniels Midland Company (ADM) has sold its 19.9 percent ownership stake in leading

Australian commodity trader GrainCorp Limited for a total value of about A$387 million (US$290 million). The move comes three years after ADM tried to buy the grain trader outright during the commodity boom period, and which the Australian regulators thwarted. The tide has since turned, with commodity prices having been bartered to new lows, making ADM’s interest in GrainCorp to wane. ADM, and other commodity companies have turned their attention to higher value specialty products. “As part of our ongoing portfolio management, we carefully considered our

equity investment position in GrainCorp and determined that we could better meet our long-term returns objectives by reallocating that capital,” said ADM Chairman and CEO Juan Luciano. “This transaction will allow us to further reduce our invested capital, and it will provide cash that we can redeploy to higher-return investments as we continue to execute our balanced capital-allocation framework.” The transaction has been executed by way of an underwritten sale to an underwriter, in this case the Swiss bank, UBS.

M&A

Turkey’s Coca-Cola Içecek announces its interest in Coca-Cola Beverages Africa TURKEY – Leading bottler of CocaCola beverages, Coca-Cola Içecek, has announced its intention to take a majority stake in Coca-Cola Beverages Africa (CCBA). In a note to its investors, the company announced that it was engaging with investment banks to evaluate alternatives to The Coca-Cola Company’s previously announced interest to sell its 54% stake in CCBA to strategic partners. This followed

Coca-Cola’s intention to buy the stake from Anheuser-Busch InBev, which led the US$106 billion acquisition of SABMiller, which had been Coke’s partner in the deal. CCBA currently operates in 9 high growth countries, accounting for approximately 35% of all Coca-Cola beverage volumes in Africa - South Africa, Kenya, Ethiopia, Mozambique, Uganda, Tanzania, Namibia, Mayotte, Comoros. Coca-Cola çecek is the largest bottling

partner for Coca-Cola in the company’s Eurasia & Africa group. Others include Coca-Cola Hellenic Bottling Company, The Coca-Cola Bottling Company of Egypt and Equatorial CCBC. By taking over CCBA, Coca-Cola Içecek would take over the number three and four bottlers in the region, giving it a massive scale in the CocaCola bottling system worldwide.

PEOPLE

Fresh Del Monte Produce appoints Zakharia President and COO

Youssef Zakaria 12

NOV/DEC 2016 | FOOD BUSINESS AFRICA

USA – The world’s largest pineapple seller Fresh Del Monte Produce Inc. has appointed Youssef Zakharia to succeed Hani El-Naffy as the Company’s President and Chief Operating Officer. El-Naffy who will continue in his position as a consultant for the Company until February 28, 2017, will remain a member of the Company’s Board of Directors. As President and Chief Operating Officer, Mr. Zakharia will have responsibility for all of

the Company’s operating units worldwide and will report directly to Mohammad AbuGhazaleh, the Company’s Chairman and Chief Executive Officer. Mr. Zakharia has held positions in the Company’s management for over 16 years, most recently as Executive Vice President and as the Company’s Vice President, Europe and Africa. FOODBUSINESSAFRICA.COM


RESEARCH

Mintel highlights six key global food and drink trends for 2017 Plant ingredients, food waste utilization and sleep inducing foods some of the key trends in 2017 and beyond

UK - Mintel, the world’s leading market intelligence agency has announced the six key trends set to impact the global food and drink market – highlighting ingredient and food and drink product trends set to make an impact over the coming year. According to the agency, 2017 will be a year of extremes, from “ancient” products including grains, recipes, practices and traditions to the use of technology to create more and better tasting plant-enhanced

foods. The report reveals that the year will see a rise in both “slow” and “fast” claims as well as more products designed to help people calm down before bedtime, sleep better and restore the body while they rest. “In 2017, the food and drink industry will welcome more products that emphasise plants as key ingredients. More packaged products and recipes for home cooking will leverage fruits, vegetables, nuts, seeds, grains, botanicals and other plants as a way

to align with consumers’ nearly omnipresent health and wellness priorities,” says the report. The focus of sustainability with a focus on eliminating food waste will take hold, with more retailers, restaurants and philanthropic organisations adding their voice to change consumer perceptions. “In 2017, the stigma associated with imperfect produce will begin to fade, more products will make use of ingredients that would have otherwise gone to waste such as fruit snacks made from “ugly” fruit and mayonnaise made from the liquid from packaged chickpeas, and food waste will be repurposed in new ways, such as power sources,” it explains. The report forecasts that the evening period will be tapped as a new occasion for functional food and drink formulations due to the hectic pace of modern life, which is creating a market for food and drink that helps people calm down before bedtime, sleep better and restore the body while they rest. “This year’s trends are grounded in current consumer demands for healthy, convenient and trustworthy food and drink. In addition, Mintel has identified new opportunities for functional food and drink designed for evening consumption.

AUTOMATION

Anheuser-Busch delivers first commercial beer shipment by self-driving truck

USA - US brewing company AnheuserBusch has announced the completion of the world’s first commercial shipment of beer by a self-driving truck. The self-driving truck hauled a fully loaded trailer of Budweiser beer more than 190 km from Fort Collins, Colorado through Denver, to Colorado Springs. A professional truck driver was in the vehicle for the FOODBUSINESSAFRICA.COM

entire route, monitoring the delivery from the sleeper berth as the truck completed the route entirely on its own without any driver intervention. The truck was operated by Otto, a company that fits self-driving technology to trucks. This milestone marks the first time in history that a self-driving vehicle has shipped commercial cargo, making it a

landmark achievement for self-driving technology and the transportation industry. “The incredible success of this pilot shipment is an example of what is possible when you deploy self-driving technology,” said Otto Co-Founder Lior Ron. “By embracing this technology, both organizations are actively contributing to the creation of a safer and more efficient transportation network. We are excited to have reached this milestone together, and look forward to further rolling out our technology on the nation’s highways.” Otto and Anheuser-Busch share a vision of enhancing the safety and efficiency of America’s highways by reducing the number of fatalities on our roads, with 94% of accidents caused by human error; enable fuel-efficient driving and reduce emissions from freight trucks; and enhance truck utilization and provide a sustainable solution for the driver shortage that continues to put pressure on drivers to work long hours at the risk of safe driving. FOOD BUSINESS AFRICA | NOV/DEC 2016

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NEWS | INTERNATIONAL RESEARCH

Global tea market value to increase US$21.33b by 2024

WORLD - The global tea market is expected to reach a value of US$21.33 billion in 2024,

registering a compound annual growth rate (CAGR) of 5.0% over the forecast period due to various factors, including consumers’ urge for variety and health and wellness, recently released research shows. The research by Persistence Market Research dubbed “Tea Market: Global Industry Analysis and Forecast, 2016– 2024,” delivers key insights on the global tea market, valuing the global tea market to be worth US$13.85 billion in 2015, and is estimated to reach US$14.45 billion by the end of 2016. “Tea drinkers value quality and taste. Across the globe they are seeking for new and unique varieties in products. They are looking forward for various blends and flavors in tea products such as lemon flavor, mint flavor, fruit flavor, chocolate flavor, and others. Moreover in order to attract more consumers, tea lounge are offering wide varieties of tea with different blends, colors and flavors, owing to drive the market growth during the forecast period,” the research notes. “Increasing focus of

consumers on health & wellness, and the percolating psychological need for people to unplug in exchange for human interaction is supporting tea-specific retail outlets worldwide,” it continues. In terms of tea type, black tea segment is projected to observe robust growth and the highest revenue share, followed by green and oolong tea segments. The hyper/super market segment is expected to increase significantly in the global tea market due to increasing consumer base and ease of availability of various flavored teas in these markets. Asia Pacific, North America and Europe are expected to record high growth rates between 2016 and 2024. The market in North America is expected to remain dominant over the forecast period, and is expected to gain 2.1% to account for 37.7% revenue share of the global market by 2024. In Asia Pacific, increasing consumer demand for non-GMO ingredients are some of the factors driving the tea market over the forecast period.

CERTIFICATION

Mondelez International discontinues Fairtrade, expands its Cocoa Life sustainability programme

USA - Mondelez International, through its Cadbury business has announced a new global partnership between Cocoa Life and Fairtrade to support the roll out of its own Cocoa Life program to Cadbury brands, and thereby discontinuing direct Fairtrade certification of its cocoa products. The company projects that the expanded farmer-focused Cocoa Life, a US$400 million program, will secure a positive future for 200,000 farmers and 1 million community members in six key 14

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cocoa growing origins by 2022. Through the expansion, Cadbury products will carry the Cocoa Life logo on the front of pack globally - starting in the UK & Ireland in May 2017, with a phased roll out in key markets across the world. In the partnership, Fairtrade, the world’s largest and most recognised fair trade system, will become a partner for the whole Cocoa Life program, working together to secure the long-term future of cocoa farming communities.

Cadbury and Fairtrade will now work together on new innovative programs to enhance the future for farming communities, such as building resilience to climate change – which cocoa farmers say is already a key threat to their livelihoods. In addition, Fairtrade will work with Cocoa Life to develop farmer organisations and, together, enhance the understanding and reporting of the program’s impact on cocoa farmers, their families and their communities. In the UK and Ireland Cadbury brands will begin to transition to Cocoa Life. In Australia, Canada, New Zealand and South Africa, Cadbury Dairy Milk chocolate will remain certified throughout 2017. As part of the global roll out of Cocoa Life across Cadbury brands, they will move to carry the Cocoa Life logo on the front of pack during 2018. FLOCERT, which also works as Fairtrade’s independent assurance and certification body, will also continue to independently verify the supply chain of Cocoa Life as the program grows. This involves tracking the quantity of sustainably grown and traded cocoa and loyalty payments made to farmer organisations. FOODBUSINESSAFRICA.COM


EVENT PREVIEW

AFMASS

4 Reasons to be at AFMASS 2017

AFRICAN FOOD M A N U FAC T U R I N G & SAFETY SUMMIT CONFERENCE & EXHIBTION

The entire food, beverages, milling and animal feed industry in Eastern and Central Africa meets in Nairobi, Kenya at the premier event that covers food and feed processing, packaging and food safety. With a new venue at the business friendly Visa Oshwal Centre in the Weslands suburb, AFMASS Conference & Expo has separated itself out over the years as the industry’s most important meeting where industry leaders trade, learn and network with leading regional suppliers, Government agencies and NGOs with a focus on the food and agro allied industry in Africa. Beginning 2017, the event will have two conference streams to meet the specific needs of the delegates and other stakeholders, plus one exhibition that will showcase some of the breakthrough technologies in post-harvest management, processing, distribution and retail, packaging, food safety, nutrition and food security, sustainability and other relevant topics to the industry. The AFMASS Conference stream will focus on the technologies in the dairy, beverages, meat, fruit and vegetables, sugar and candy and food service sectors of the industry. The African Grains, Milling & Feed (AFGRAINS) Conference stream will focus on the technologies in the grains, milling, baking and animal feed sectors of the industry. The AFGRAINS Conference is a critical addition to this conference. It will become the first regular conference that targets the grains, milling, baking and animal feed industry in the region. In 2017, the utilization of sorghum and insects in human and animal feeding will be highlighted at the conference streams. Key industry leaders will attend a number of high-level panel discussions from the region. These include, “Sorghum: Unlocking the value of sorghum for use in the food and feed industry in Africa.” The other key discussion will be “Fortification: The challenges, opportunities and future trends in Africa” and the top executive focused panel discussion, “Industry Business Leaders’ Panel Discussion.” More information about the event can be found at: www.afmass.com

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Reason #1

FROM FOOD TO FEED INDUSTRY AND EVERYTHING IN BETWEEN . . . The Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo is the only regional event that brings together the food, beverages, milling, baking foodservice and feed industry from Africa and beyond. With one exhibition floor and two conference streams, AFMASS Conference and Exhibition gives a 360 degree view of the industry in Africa like no other. AFMASS is the ultimate industry focused event in the growing food, beverages, milling, baking and feed industry in Africa. Sign up today on the website to sponsor, exhibit, visit and attend the conferences today.

www.afmass.com FOOD BUSINESS AFRICA | NOV/DEC 2016

15


NEWS | INTERNATIONAL INTERNATIONAL BRIEFS INVESTMENT

Coca-Cola opens the first bottling plant in Gaza PALESTINE - The Coca-Cola Company and its Palestinian bottling partner, National Beverage Company (NBC) have opened the first Coca-Cola bottling plant in Gaza, in the Palestine territories. The new plant, which represents a US$20 million investment and expands NBC’s Palestinian operations to four bottling plants and four distribution centers, will eventually employ over 270 people and indirectly support more than 2,700 households in the region. The plant, which first began production in April 2016 and has now reached full capacity, was officially inaugurated at an event hosted by senior Coca-Cola and NBC executives and attended by leaders from the Palestinian business community and civil society. R&D

Nestlé makes breakthrough sugar reduction find SWITZERLAND – Swiss food and beverage giant Nestlé has announced a major innovation breakthrough that enables up to 40% reduction in sugar in confectionery products Using natural ingredients, the company’s researchers have found a way to structure sugar differently, enabling Nestlé to significantly decrease the total sugar in its confectionery products, while maintaining a natural taste. “This truly groundbreaking research is inspired by nature and has the potential to reduce total sugar by up to 40% in our confectionery. Our scientists have discovered a completely new way to use a traditional, natural ingredient,” said Stefan Catsicas, Nestlé Chief Technology Officer. Nestlé is patenting its findings and will begin to use the faster-dissolving sugar across a range of its confectionery products from 2018 onwards and will provide more details about the first roll-out of reduced-sugar confectionery sometime next year

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NUTRITION

Industry welcomes EFSA approval of insect protein as food in aquaculture

EU - The EU insect sector industry players have welcomed the proposal authorizing the use of insect proteins in aquaculture, and consider the guidance Courtesy: on novelAB-InBev food as good working basis. At its General meeting held on 17 November, IPIFF - the European Umbrella Organisation representing the interests of Insect Producers for Food and Feed welcomed the recent progress made by EU policy makers on ‘key’ dossiers for the sector. Notably, IPIFF welcomed the recent publication of the EU guidance on Novel Food by the European Food Safety Authority (EFSA). “The IPIFF members highly value this document as ‘baseline’ for insect producers to prepare applications in order authorize their products as food on the European market”, said Antoine Hubert, the IPIFF President. “IPIFF will now further elaborate on this document in order to outline the specificities of insect products and single

out the elements which are particularly relevant to demonstrate their safety for human consumption’ added Hubert. These include relevant information on production standards and on the substrates used to feed the insects – which are the two critical elements underlined by EFSA in its opinion. “IPIFF is now committed to collaborate with EU authorities and share with them any information which could be useful in view of the future evaluation of applications for authorization. Close cooperation among insect producers seeking for an authorization is also important,” concluded Ms de Bruin. ‘IPIFF also welcomes the recent European Commission proposal for authorizing the use of insect proteins in aquaculture. “We are particularly pleased with the recent move made by the EU Executive and we now call for a swift adoption of these proposals by EU authorities,” said Antoine Hubert. “The timely adoption of the proposed reform is indeed crucial to accelerate investments and the further growth of the EU insect sector, therefore preserving its current global leading position. This authorization will also contribute to alleviate European dependency on protein imports (70%) whilst securing a promising source of protein for EU farmers & customers,” added Hubert.

M&A

Standards body BRC gets new owner as LGC Group takes majority stake UK - LGC Group, the leading international life sciences measurement and testing company, has made a major investment in BRC Global Standards, becoming the majority shareholder in the standards body. Through this acquisition, LGC Group will be expanding its supply chain assurance offering, creating a new business unit within its Standards division to focus on this growing market, with the BRC Global Standards transitioning from being a “Standards owner to a brand and consumer protection organisation with a range of products and services to help its customers deal with the challenges of producing safe, high quality products for the end consumer on a global basis,” according to a press statement by the company. BRC Global Standards will benefit from LGC’s global network to develop

further in new territories and accelerate its transition into a consumer and brand protection solutions leader, according to the statement. BRC Global Standards’ activities are highly complementary to LGC’s existing capabilities in reference standards, proficiency testing and sports supplements supply chain assurance. “The investment will also fuel international growth we have planned over the next five years to add to our existing presence in the UK, India and US; enable investigation of wider brand protection solutions including health and safety, predictive analytics and ethical trading; and underpin planned investment in IT development to enable real time business intelligence for supply chains,” it adds. FOODBUSINESSAFRICA.COM


PEOPLE

Klefenz to retire as Dr. König takes over at Bosch Packaging Technology GERMANY - Dr. Stefan König will become President of Bosch Packaging Technology on January 1, 2017 replacing Friedbert Klefenz, who is set to retire from the company. Dr. König, who holds a PhD in data mining and has been a member of the executive management since 2011 has been Dr. Stefan König in charge of the Technology, the Confectionery & Food and Liquid Food business units, as well as Assembly Systems and Special Machinery business units. Friedbert Klefenz will provide consulting to Bosch until his retirement on June 30, 2017. He has been President of Bosch Packaging Technology since April 2002. “Friedbert Klefenz has played a key role for years in advancing Bosch Packaging Technology as a leading provider of packaging and process technology. He has also helped make the division more international. We want to thank Mr. Klefenz for his years of commitment to the company. We also wish Dr. König great success in continuing his predecessor’s great work,” said Dr. Werner Struth, member of the board of management of Robert Bosch GmbH. Dr. König has worked at Bosch since 1997. In 2009, Dr. König transferred to the Bosch Packaging Technology division, where he initially oversaw the Assembly Systems and Special Machinery business unit. In another development, Uwe Harbauer will join the executive management of Bosch Packaging Technology on January 1, 2017 to lead the sales function.

4 Reasons to be at AFMASS 2017 Reason #2

NETWORK WITH PEERS & INDUSTRY KEY DECISION MAKERS Hundreds of industry experts, Government officials, technology suppliers and other industry stakeholders from Africa and the World will gather in Nairobi, Kenya at AFMASS Conference & Expo 2017.

M&A

Olam International acquires East African coffee specialist Schluter SINGAPORE - Olam International, a leading agri-business player has acquired East African coffee specialist company, Schluter S.A. for US$7.5 million. Established since 1858, Schluter is an independent coffee company which specialises in trading East African specialty and premium Arabica coffees. It is based in Switzerland with marketing offices in Nyon and Liverpool in the UK, and operates milling facilities in the Democratic Republic of Congo (DRC) and Burundi. “Schluter’s name has been synonymous with fine coffees out of East Africa for generations. Their team in Europe will complement Olam’s marketing efforts and further strengthen our reach and relationships with our roaster clients. Schluter is clearly a strong fit into our strategy for three key reasons – our entry into the European specialty coffee market will complement our expanding specialty coffee presence in the US; Schluter will also deepen our origination expertise in East Africa; and their focus on building sustainable supply chains with smallholders is strongly aligned to our core purpose of Growing Responsibly and our pursuit of the Olam Livelihood Charter,” said Vivek Verma, Managing Director and CEO of Olam Coffee. With the acquisition, Schluter will become the specialty arm of Olam Coffee in Europe. FOODBUSINESSAFRICA.COM

Gain industry insights, meet new and old industry acquintances and interact with industry leaders from the region for your personal growth while boosting your company’s prospects in the region. Sign up today on the website to sponsor, exhibit, visit and attend the conferences today.

www.afmass.com FOOD BUSINESS AFRICA | NOV/DEC 2016

17


NEWS | INTERNATIONAL INTERNATIONAL BRIEFS M&A

Shick Solutions acquired by Breteche Group USA – French industry supplies company Breteche Industrie Group has acquired Shick Solutions, a US-based ingredient automation company. Breteche Industrie Group is a global company with eight plants located in France, Germany and the Czech Republic that focus on the baking, dairy, pharmaceutical and cosmetics markets. The company’s most well-known brands include mixing companies Diosna and VMI, as well as ingredient handling company Esteve. Shick Solutions, run by the family of the founder, William Ungashick, has been part of the US machinery supply industry for decades. M&A

Walmart to use blockchain technology to sort out food safety in China CHINA - Global retailer has joined a pilot project with academics and technology experts to showcase leadership in food traceability efforts in China. The retailer, present in China since 1996 has opened its new Walmart Food Safety Collaboration Center in Beijing where it announced collaboration with technology provider IBM and Tsinghua University to improve the way food is tracked, transported and sold to consumers across China using blockchain technology. “By harnessing the power of blockchain technology designed to generate transparency and efficiency in supply chain record-keeping, this work aims to help enhance the safety of food on the tables of Chinese consumers,” the company said in a statement. Food safety is a particularly sore one in China, with Chinese consumers wary of locally produced food products following well-publicised cases of food fraud and safety incidents, including the melanine adulteration of milk powder in the country a few years back that led to several deaths. 18

NOV/DEC 2016 | FOOD BUSINESS AFRICA

REGULATORY

FSSAI reviewing rules for food service industry for effective compliance

INDIA - Food regulator Food Safety and Standards Authority of India (FSSAI) has said it will simplify and streamline the regulations related to the food service industry for effective compliance and look into concerns over multiple agencies governing the sector. Addressing a FICCI’s conference on food service retail, FSSAI CEO Pawan Agarwal said food business operators will have to appoint a food safety supervisor to ensure that consumers get safe and wholesome food. “Industry is worried about multiplicity of agencies regulating the food business. We do appreciate your concern,” Agarwal said

at the conference. “We are reviewing the rules and regulations framed under the Food Safety and Standards Act for food services industry. This review is for simplifying it to ensure effective compliance,” he said. Agarwal stressed on the need for streamlining of interface of government agencies with the food service industry and said the FSSAI was working with other agencies in this regard. “There is a need to look at the responsibility of each of these government agencies,” he said. Sharing other initiatives taken by the regulator, Agarwal said the FSSAI plans to make it mandatory for all food businesses, including hotel and restaurants, to employ food safety supervisor. The FSSAI is conducting a pilot programme in Goa for training of about 1,000 food safety supervisors and plans to roll out across the country in next few months. Agarwal also asked the organised food retail industry to play a leadership role and help unorganised players such as street vendors, small dhabas, in ensuring food safety - ET

AWARD

Sweet potato researchers win 2016 World Food Prize award

USA – Four scientists have been honoured with the World Food Prize for the development and implementation of biofortification, a breeding technique that incorporates critical vitamins and micronutrients into staple crops, thereby dramatically reducing “hidden hunger” for millions. The three-person team from the International Potato Center (CIP) – Dr. Maria Andrade of Cape Verde, Dr. Robert Mwanga of Uganda, and Dr. Jan Low of the United States – were awarded for developing the single most successful example of micronutrient and vitamin biofortification – the orange-fleshed sweet potato (OFSP). Dr. Andrade and Dr. Mwanga, plant scientists in Mozambique and Uganda, bred the Vitamin A enriched OFSP, while Dr. Low structured nutrition studies and

programs that convinced almost two million households in 10 African countries to plant, purchase and consume this nutritionally fortified food. The fourth winner, Dr. Howarth Bouis, the founder of HarvestPlus at the International Food Policy Research Institute (IFPRI), pioneered the implementation of a multiinstitutional approach to biofortification as a global plant breeding strategy. As a result of his leadership, crops such as iron and zinc fortified beans, rice, wheat and pearl millet, and Vitamin A-enriched cassava, maize and OFSP are being tested or released in over 40 countries. “Through the combined efforts of our four Laureates, over 10 million persons are now positively impacted by biofortified crops, with a potential of several hundred million more having their nutrition and health enhanced in the coming decades. As such, they are truly worthy to be named as the recipients of the award that Norman Borlaug created thirty years ago to be seen as the “Nobel Prize for Food and Agriculture,” notes the organiser of the award. FOODBUSINESSAFRICA.COM


POLICY

Tighter rules for ‘Made in Switzerland’ label come into force by 2017 SWITZERLAND – Tough new regulations aimed at tightening the rules over the use of the “Made in Switzerland” designation as well as the Swiss cross come into force on January 1, 2017, despite concerns by the country’s business associations and major corporates. The regulations, which were approved in June this year by the Swiss Cabinet, spell out the conditions under which businesses can claim their products as being Swiss made. Agricultural produce of plant and animal origin (including milk and milk products) need to be 100% domestic in order to use the Swiss label while for food products 80% of the raw material must be sourced within Switzerland. Arguments from Swiss businesses that it would hurt competitiveness of their products because of the strong franc did not stop the cabinet from approving the legislation. The move has been labeled as ‘unfortunate’ by the head of Nestle in Switzerland, with the company expecting to lose the Swiss cross on about 80 products following the enforcement of the law. Special provisions have been made for products like coffee and dark chocolate where the ingredients are not available in Switzerland. For such products, companies will be allowed to claim Swiss origin provided they are completely processed in Switzerland. Milk chocolate on the other hand must fulfill conditions for indigenous raw materials (Swiss milk) to claim Swiss origin. Industrial goods can claim to be made in Switzerland if at least 60% of the production costs are realised in the country. There will also be the possibility of registering non-agricultural “geographical indications of source” in a new register such as “Genève” for watches or “Valais” for mineral water. ORGANIC FOOD

Sales of organic food on the up in Western Europe and the USA EU - The organic food industry in Western Europe and the US, which has been experiencing a prolonged period of high single-digit to low double-digit sales growth, will continue on the same trend into the future, a report by Rabobank forecasts. The growth of the organic food demand will rise on the back of ongoing health, food safety, and environmental and animal welfare concerns by consumers in the two regions. “Until 2025, organic food sales in Western Europe and the US are forecast to grow by 6.7 percent and 7.6 percent, which is roughly three times faster than overall food consumption growth,” says John David Roeg, Senior Consumer Foods Analyst at Rabobank. “Food producers should increase their focus on organic, through new products and brands, or through the reformulation of existing products to help grow their top lines. This will also help them to position themselves as responsible businesses.” Short-term growth in the US is somewhat higher, but a prolonged, much higher growth rate is unlikely, as the supply chain is currently not sufficiently established, notes the report. FOODBUSINESSAFRICA.COM

4 Reasons to be at AFMASS 2017 Reason #3

TECHNOLOGY & INNOVATION MARKET PLACE Top regional and international suppliers of post-harvest management solutions, equipment, chemicals, ingredients, laboratory systems, packaging, services and food and beverage products will showcase their innovations at AFMASS Conference & Exhibition. Looking for supplies for your next project? Seeking partners or distribution opportunities with international or regional brands? For any industry leader, AFMASS is the event not miss in 2017. Sign up today on the website to sponsor, exhibit, visit and attend the conferences today

www.afmass.com FOOD BUSINESS AFRICA | NOV/DEC 2016

19


NEWS | INTERNATIONAL INTERNATIONAL BRIEFS M&A

Saudi Arabian wealth fund takes 50% stake in Alabbar’s Adeptio

MARKET TRENDS

Tetra Pak sees growth opportunities for 100% juice around the world

SAUDI ARABIA - Saudi Arabia’s sovereign wealth fund is taking a 50 percent stake in Adeptio private equity fund as it seeks to diversify its investment options. The acquisition is part of the Public Investment Fund’s strategy to boost non-oil investments, according to a statement. Financial details of the transaction were not released. Adeptio is currently working on a takeover of fast food restaurant operator Kuwait Food Co., also known as Americana, and is set to begin a mandatory tender offer for the company’s shares after acquiring a 67% stake in the company. M&A

Ingredion completes acquisition of Chinese starch producer Shandong Huanong CHINA - Ingredion Incorporated, a leading global provider of ingredient solutions to diversified industries, has completed the acquisition of Shandong Huanong Specialty Corn Development Co., Ltd. in China. The acquisition of Shandong Huanong, located in Shandong Province, adds a second manufacturing facility to Ingredion’s operations in China. It will produce starch raw material for the Company’s plant in Shanghai, which makes value-added ingredients for the food industry. “This acquisition will vertically integrate our manufacturing base for specialty ingredients. In addition to reducing costs, it gives us more control of the supply chain, with added food safety and sustainability benefits. The facility is strategically located in an ideal growing area for the specialty grains used to make our ingredients. And, it provides a base for expansion to accommodate future growth,” explained Jorgen Kokke, Ingredion President of Asia Pacific and EMEA. The terms of the agreement will not be disclosed. 20

NOV/DEC 2016 | FOOD BUSINESS AFRICA

SWEDEN - The market for 100% juice should return to growth despite global economic slowdown and the recent debate around sugar, according to a recently released 100% Juice Index report by packaging and processing provider, Tetra Pak. According to the company, the combination of emerging growth hotspots and slowing decline in established markets is stabilising 100% juice and bringing it back to growth going forward to 2018. Insights from the report show that 100% juice remains a significant part of the average consumer diet, with more than 40% of people drinking it every day. Furthermore, consumers say that they are willing to pay a premium for juices that they associate with healthy choices. These findings indicate great potential for 100% juice. Growth will come from products that meet consumer needs focused on health and out of home consumption, trends particularly strong with Millennials.

The industry has already responded with innovation in three key areas; vegetable nutrition, ‘all natural’, and specialty 100% juice products, notes the report. “It is good to see that brands globally are turning the challenges presented by changing lifestyles and the sugar debate into opportunities. They are driving growth in the 100% juice category with new products that capture the imagination of consumers, stretching beyond traditional fruit juices such as orange and apple, to a range of inventive vegetable blends, and new fruit flavours, creating endless possibilities for new recipes,” said Tetra Pak President and CEO Dennis Jönsson. The report notes that vegetable blends, where vegetables and fruit are combined, lowering the natural sugar content and adding health benefits, are now the fourth most popular 100% juice flavour globally. New product launches using vegetables as an ingredient tripled in 2015 compared with 2012. In the all-natural category, over the last six years, not from concentrate (NFC) juice has gained market share compared with reconstituted products, rising from 25% in 2009 to almost 30% in 2015. New product launches for products that make “all natural” claims have seen a compound annual growth rate of 25% between 2012 and 2015 – especially those with no additives and/or preservatives, says Tetra Pak. The survey indicates that more than 60% of consumers globally say they are interested in products with proven health benefits, producers are increasingly offering “fortified with” or “vitamin-enriched” 100% juice as well as adding vegetables into the mix. The Tetra Pak report also highlights great potential for 100% juice in emerging markets, with remarkable growth already taking place in China and Brazil, and other hotspots in countries such as Malaysia, India and Indonesia.

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COMMODITY PRICES

Global food prices set to stay low in 2017 - Rabobank

4 Reasons to be at AFMASS 2017 Reason #4

WORLD - Record-high stock levels are set to keep worldwide food prices low during 2017 even as inflation starts to rise in many developed economies, according to a major report from Rabobank, the leading global food and agribusiness bank. High global stock levels are expected to keep food prices low with ‘wildcard’ China potentially selling from huge reserves. Trump presidency will bring currency uncertainty, which will translate into volatile food prices, while elections in Europe will add further unpredictability. Changing global demographics continue to underpin demand for meat, dairy and animal feed. Staple food commodities like wheat, corn and soybeans – a key part of livestock diets across the world – are being stored in record volumes, weighing on the prices which are expected to be paid to farmers next year. In the Rabobank Global Outlook 2017 report, which looks at the prospects for 13 crucial food and agricultural commodities, Rabobank highlights the role of China in creating further uncertainty in the market. The world’s most populous country has huge stocks of many key commodities, with estimates suggesting it holds over 50% of corn, 40% of wheat and 21% of soybeans. If China decides to begin selling some of these reserves, this could depress global prices for commodities including sugar, corn, soybeans and vegetable oil, according to Rabobank. Stefan Vogel, Rabobank’s head of agri commodity markets and an author of the Rabobank Global Outlook 2017, said: “After three years of declining prices and extreme weather wrecking crops in many important agricultural regions, 2017 looks set to bring some much-needed stability to food prices. Nevertheless, record global stock levels mean prices are likely to remain stubbornly low – good news for consumers but less so for the world’s farmers. “Yet the most striking wildcard in this is China. Given the size of its population, its economic growth and its massive share of global agri commodity imports, it exerts a colossal influence on world food prices. And with huge stocks of many of the most important commodities – including corn, wheat and soybeans – any decision by China’s policymakers to begin selling down these reserves would have a profound effect on world markets as Chinese imports would decline.” Elsewhere, Rabobank predicts that volatility in the global currency markets will move agricultural commodity prices during 2017, with the Euro likely to depreciate as a result of French, Dutch and German elections during 2017. In terms of individual commodities, coffee prices are expected to decline significantly, with an especially bearish outlook on Arabica coffee, while Robusta coffee prices shall be supported by a large production deficit. However, lower prices are unlikely to find their way through to consumers. FOODBUSINESSAFRICA.COM

TWO HOT, COMPLEMENTARY CONFERENCES The conferences at AFMASS 2017 are designed to connect professionals, manufacturers and business owners with suppliers, regulators and other stakeholders with the latest innovations, policies and technologies. The AFGRAINS conference is the only regional conference that focuses on the vital grains, milling, baking and feed industry. The AFMASS Conference covers the dairy, beverages, meat, fruit and veg, food service, sugar and candy, and other processed food products sectors. Sign up today on the website to sponsor, exhibit, visit and attend the conferences today

www.afmass.com FOOD BUSINESS AFRICA | NOV/DEC 2016

21


NEWS | AFRICAN CERTIFICATION

Capwell Industries receives HACCP certification

KENYA - Capwell Industries Ltd, one of the most diversified food processing enterprises in Kenya, has achieved a major milestone in the region by achieving the highly respected HACCP food safety systems certification. The company, the leading processor of rice, maize flour, porridges, pulses and packer and distributor of wheat flour products and spaghetti has become one of the few milling companies in Kenya and the Eastern African region with a Food Safety Management System. The certification

also makes the company to be the only HACCP certified company in the processing of rice and pulses in Kenya and the region, according to the company. “Attainment of the HACCP certification increases our consumer’s confidence in our processes and products and also improves our prospect of trading both regionally and internationally,” says the company’s CEO, Mr. Rajan Shah. “HACCP has set a mark on food safety for Capwell industries. Stringent quality and

food safety management systems have been put in place from raw material receiving, manufacturing, storage and distribution of products in line with our company goals to exceed our customers’ expectations in supply of quality and safe products,” The decision to seek HACCP certification was in response to demand for quality and safe products from its consumers, which had come in line with exponential growth of the business, since it started operations in 1999. According to Beatrice Opiyo, the Manager, Food Safety Certifications at the Kenya Bureau of Standards (KEBS), who presented the HACCP certificate to the company on behalf of the CEO of KEBS, Capwell Industries showed commitment towards achieving the certification and was able to put in place the right structures to enable the achievement and sustenance of the certification into the future. The company plans to upgrade its food safety management system to the ISO 22000 standard in the near future, to compete even more aggressively globally, the CEO confirms.

SUPPLY CHAIN

Cargill receives direct purchasing license for cocoa in Ivory Coast GHANA - Cargill’s Cocoa & Chocolate business has established its own licensed buying company (LBC) in Ghana as it seeks to adequately manage the supply chain for the country’s largest agricultural export. The move follows the successful application for a licence from the Ghanaian Cocoa Board (Cocobod), the country’s cocoa industry regulator. The company has purchased its first consignment of beans directly from cocoa farmers in Ghana, with

around 30,000 farmers already registered with the LBC. “Direct sourcing of certified beans from farmers via our own LBC in Ghana is an exciting new business model for us”, said Lionel Soulard, Managing Director West Africa, Cargill Cocoa & Chocolate. “Cocoa sustainability is at the heart of our global growth strategy for cocoa and chocolate. Developing a direct sourcing capability in the world’s second largest cocoa-producing

country means we will be better placed to meet growing demand for sustainable, certified cocoa. Cargill has operated a cocoa processing plant in Ghana since 2008. The new purchasing model will be fully sustainable and fully certified. By operating its own LBC, Cargill will implement high standards of safety, integrity and quality throughout the supply chain in Ghana, says the company.

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TRENDS | NEW PRODUCTS ON THE SHELF

SALL introduces range of milk product targeting different uses Sameer Africa Livestock has repackaged their range of fresh milk products into a range of butter fat contents. The products include 4%, 3.4% and 2% butterfat contents to cater for various consumer needs. Claims: Natural

Bio Foods introduces fresh milk products in bottle packs Dairy producer Bio Foods has launched two types of fresh milk in new exciting packs. Packed in 1 litre plastic bottles, Bio Fresh Milk is available in whole (3.25% butter fat) and skimmed (0.5% butter fat). Claims: Pure milk, no additives, no preservatives. Free from gluten and nuts

Brookside boldens its Ilara yoghurt Brookside Dairy has repackaged its Ilara yoghurt, to feature a prominent ‘Thick & Creamy’ tag line. Available in 80, 150, 250 and 500 ml pack in strawberry, vanilla and mango Claims: None

Wrigleys’ Juicy Fruit block shape Wrigley’s East Africa expands its range of bubble gums with a new version of Juicy Fruit bubble gum

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Commodities Update: Soy production up, Maize soars

Nutrition:

Closing the fortification gap

News Update:

Investments in Kenya’s milling sector rises VOLUME 2 • ISSUE 2, NO. 3 • ISSN 2412-3366

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COUNTRY FOCUS: RWANDA - A COUNTRY FOCUSED ON EXCELLENCE | COMPANY PROFILES: ORTHNER & ORTHNER ASSOCIATES - GHANA; HOTEL DES MILLES COLLINES - RWANDA; CALLFAST SERVICES - KENYA | INTERVIEW: ANDREW MUTUMA, DHL KENYA

Milling Industry in Nigeria

Africa’s Business & Technology Magazine

Striving to feed Africa’s largest population

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Our magazines cover Africa’s industries with a focus on news, features, industry special reports, market and technology trends, interviews with industry leaders and more. Pearl Dairy introduces new ESL and UHT milk products The makers of Lato brand have introduced 90 day ESL milk in 500 ml and UHT milk in 250 ml. Claims: Natural, No preservatives, Pure, Farm fresh FOODBUSINESSAFRICA.COM

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23


NEWS | AFRICAN FAST FOOD

Burger King enters Kenya as fast food industry takes hold in Kenya KFC debuts Nakuru and Kisumu stores as QSR players take battle to upcountry

KENYA - Global fast-food franchise Burger King has made its debut in Kenya, as the leading quick service restaurants (QSR)

focus on Kenya to drive their regional footprint in Eastern Africa. Meanwhile, KFC, which is angling to be the largest QSR operator in the region has opened two new outlets away from Nairobi, where it has hitherto been expanding its restaurants, opening in the Rift Valley town of Nakuru and another one in Kisumu, marking the company’s first investments outside the capital. The company’s Nakuru outlet is located at the Westside Mall on Kenyatta Avenue in Nakuru, while the Kisumu outlet is at the United Mall in the middle of the city. KFC plans to open other outlets in Kenya, including in Eldoret and Nanyuki. Burger King, which is entering Kenya through South Africa, has opened its first

store at The Hub, Karen Mall, which is located at the high-income Karen residential area. It has plans to open its second store at the upcoming Two Rivers Mall, which is set to open in mid February. The expansion of KFC’s outlets upcountry and the entry of Burger King, occur when the QSR and restaurants industry have entered and expanded their operations in the country, seeking to tap into Kenya’s rising economy and urbanization. They are also using Kenya as the base from which to grow their footprint into the region into Uganda, Tanzania and Rwanda. Subway, Java House, Dominos, Pizza Hut, ice-cream seller Cold Stone Creamery, are some of the QSR players in the country and are focusing on the region.

COMMODITIES

SA to import GM maize for first time from US to plug deficit in production

SOUTH AFRICA - The government has approved imports of genetically modified maize from the US for the first time as the country seeks to bring in the grain after its worst drought since records began 104

years ago. The country will allow the import of both white and yellow GM maize from the US, said Dirk Kok, a spokesperson for the secretariat of the Pretoria-based South African Cereals and Oilseeds and Trade Association told Bloomberg. “The door is open to imports from the US,” said Kok, whose organisation represents grain and oil seed traders. South Africa has become a net importer of maize for the first time since 2008 after the drought slashed this year’s harvest by about a quarter to 7.97 million tonnes, the smallest crop since 2006.

That’s pushed up prices on Johannesburg’s South African Futures Exchange with white maize, used in South Africa to make the country’s staple food of maize meal, surging 80% since the end of 2014 to R3,855 (US$279) a tonne. Yellow maize, used for animal feed, has jumped 45% in the same period to R3,147 (US$228) a tonne. By the end of April South Africa may import 300,000 tonnes of GM white maize from the US and 500,000 tonnes of yellow maize, he said - Bloomberg

NEW PRODUCT

Heineken starts local production of Heineken brand in Ethiopia

ETHIOPIA - Heineken Ethiopia has commenced production of its flagship 24

NOV/DEC 2016 | FOOD BUSINESS AFRICA

Heineken brand in the country, as the company continues to ramp up its investments in one of Africa’s biggest potential markets of the future. The company is set to inaugurate its one-year expansion project executed at a total cost of 2.4 billion Br (US$107 million). The project will give the company the highest production capacity in Ethiopia’s brewery industry. When fully operational, the capacity of Heineken is expected to surpass the current leader in the industry, BGI Ethiopia by one million hectoliter. The expansion will double the capacity of the Kilinto plant, in the southern outskirt of the capital in particular and will boost the total production of three plants including Bedele and Harar to four million hectoliters,

a year, overtaking BGI as Ethiopia’s biggest beer production company. BGI is now producing three million hectoliter per a year, according to Addis Fortune. Heineken entered the Ethiopian market in 2011 following the acquisition of Harar and Bedele breweries for US$163.4 million dollars, through the government’s privatization policy. “We are investing for the future. We are preparing for a very competitive and dynamic market. Heineken [Ethiopia] is still targeting the local market,” Fekadu Beshah, external communications and sustainability manager at Heineken Breweries S.C., was quoted by the newspaper. FOODBUSINESSAFRICA.COM


M&A

Weetabix UK and Pioneer partner to take Weetabix East Africa from the Manji family

KENYA - British multinational Weetabix Food Company and Pioneer Foods of South Africa have partnered to take full control of Weetabix East Africa, the makers and

distributors of cereals in the region. In a significant move, Pioneer Foods, one of leading South African food giants with eyes on sub-Saharan Africa, bought a controlling 49.89% stake in the company from Kenyan businessman Ahsan Manji, who is divesting from the firm, the rest of the stake retained by Weetabix UK, the second such partnership for the cereal producers. Pioneer, the second largest food producer listed at the Johannesburg Stock Exchange, is the maker of leading brands including Sasko, Bokomo, Weet-bix, Ceres juice, Liqui fruit and Safari snacks. The two companies have another partnership at Alpen Food Company SA, the producers of the Alpen range of cereal products. Both Pioneer’s and Alpen’s products are widely available in Eastern Africa, as Pioneer seeks to grow its international business out of South Africa. “The Manji family is honoured to have had a long- standing relationship with

Weetabix dating back to 1978, and this new opportunity now means that the business has the financial muscle to scale with the backing of two large fast moving consumer goods (FMCG) businesses,” said Weetabix East Africa MD, Ahsan Manji. Weetabix UK is itself owned by one of the biggest Chinese food groups, Bright Food (Group) Co. Ltd. “This acquisition represents a rare opportunity for Pioneer Foods to enter the East African market with a credible partner and a profitable branded business. We believe there is strong category growth potential in this market, driven by an emerging middle class as well as by convenience-driven consumer trends. The per capita consumption of breakfast cereals in Kenya suggests good growth potential, with the added benefit of accelerating growth in neighbouring countries,” said Group CEO of Pioneer Foods Phil Roux

PEOPLE

Kennedy Ouma takes regional role at Ingredion in South Africa SOUTH AFRICA - Leading global ingredients manufacturer, Ingredion Inc. (formerly Corn Products International) has made leadership changes in their African organization. Kennedy (Ken) Ouma, previously Senior Business Manager, East and West Africa has been appointed to the role of Business Director for Africa with effect from 1st July 2016, based in Johannesburg, South Africa. Ken succeeded Alan Bradley,

previously Vice President for Africa who retired on 1st July 2016, after 31 years with the organization. Ken managed the successful implementation of Ingredion’s trading model in Kenya and prior to joining Ingredion in May 2013 he served for five years as Regional Manager for Uganda, Tanzania and Ethiopia for Tetra Pak. He holds a degree in Bachelor of Commerce from the University of Nairobi.

M&A

Ajinomoto acquires stake in Promasidor to grow its sub-Saharan Africa ambitions AFRICA - Ajinomoto the diversified Japanese global manufacturer of seasonings, processed foods, beverages, amino acids, pharmaceuticals and specialty chemicals is set to acquire a 33.33% stake in Promasidor Holdings, a major processed foods manufacturer. Promasidor, which focused on Africa with a presence in 36 countries in the continent, had net sales of US$ 673 million with about 4,000 employees, most of them in Africa, is a significant player in Africa. The company’s seasonings, processed foods, milk powder and beverages can be found in the biggest retailers and at millions of roadside kiosks in the continent. The investment by Ajimomoto, for FOODBUSINESSAFRICA.COM

US$532 million will take advantage of “Ajinomoto Co.’s extensive product development capabilities and production technologies with Promasidor’s powerful sales and distribution network in Africa,” according to the companies. Driven by increasing population, rising GDP, expansion of the middle class and greater need for convenience are trends that Ajinomoto notes in Africa. “Given these trends, the seasonings and processed foods market is expected to grow strongly in the future,” says the company in a statement. The investment fits into Ajinomoto’s Medium-Term Management Plan, that has positions the Africa/Middle East region as one of the “Rising Stars” for the company

- countries and regions targeted for accelerated business expansion along with Europe/North America as the Ajinomoto Group aims to become a genuine global specialty company. It adds to the company’s direct presence in Africa, including Nigeria, Egypt in and Côte d’Ivoire that have been focused on the umami seasoning aji-nomoto. In the medium to long term, Ajinomoto aims to establish a position as a leading player in the African market together with Promasidor. The companies will consider integrating their Nigerian subsidiaries in the near future.

SEPTEMBER/OCTOBER 2016 | FOOD BUSINESS AFRICA


EXECUTIVE INTERVIEW | ALF TAYLOR: CEO, TNA SOLUTIONS

system is now able to achieve speeds of up to 250 bags per minute. However, we always knew that business growth would not be possible with just the one product, so we gradually added more and more solutions to our portfolio and are now selling over 140 products, covering everything from fryers, conveyers, seasoning and coating systems to metal detectors, weighing and inserting and labelling solutions and of course packaging equipment.

What is tna’s vision?

Alf Taylor: CEO, tna Solutions

What is the history of tna? A:

We originally started tna in Sydney, Australia in 1982 as a consulting company to the food packaging industry. In 1984, the company was incorporated to develop high-speed VFFS packaging machines to launch our first product, the tna robag, in the Australian market. Based on ground-breaking rotary continuous motion and our now-famous ‘stripping’ action using rotary jaws, it completely redefined the performance standards of VFFS systems and is still one the best-selling VFFS machines in the world. Today, tna has 28 offices around the world and offers a wide range of integrated food processing and packaging solutions with over 14,000 systems installed across more than 120 countries. One of our major milestones was developing our first and primary product, the tna robag, in 1984. Back in those days, a lot of bagging systems in the snacks industry were using rectal linear technology and were much slower – running about 60 bags a minute compared to well over 100 for horizontal rotary continuous motion machines that packaged biscuits. For the robag, we basically came up with a way to take a rotary continuous motion machine and flip it vertically, which significantly increased the machine’s speed, allowing it to package around 90 bags per minute. That may not sound like a lot when compared to today’s industry standards, but back in 1984 it was completely unheard of and pretty much revolutionised the industry. Over the years, we continued to improve that very first prototype and the third generation of our tna robag packaging

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A: Our main vision is to provide the ultimate in food processing and packaging solutions for manufacturers around the world. We’re committed to delivering the best technology at the best value to our customers. We do this by taking time to understand their individual challenges and apply innovative thinking to find more efficient ways to package and process foods. Our first VFFS packaging system revolutionised the market in terms of performance and today, the latest generation of the tna robag is able to achieve bagging speeds which to this day are still unsurpassed. We will continue to develop marketleading technology, so that our customers can be sure they’re not only equipped with systems that meet their current demands, but that they have invested in technology that will also cover them for all their future needs. This can be a challenge at times, but it keeps us on our toes and ensures customers get the best solution and the best service anywhere in the world. At the same time, we will continue to share our success with those that are less fortunate, and in particular disadvantaged children, by providing support to philanthropic causes both in Australia and overseas to make a difference to the lives of those in need.

What has facilitated tna’s growth over the years?

A: I think one of our main advantages over

the years has been our commitment to constant innovation. It all comes down to a strong passion to strive for better solutions and not just repeating what everyone else has done. We wouldn’t have been able to expand the way we did without continuously bringing something new to the table. There is a reason why we still have the fastest VFFS packaging system on the market. We’ve never stopped trying to make our machines better, faster and more efficient. In fact, approximately 80% of the time, we initiate the development of new products as opposed to customers driving our product

“Our main vision is to provide the ultimate in food processing and packaging solutions for manufacturers in the world” development. In this respect, we bring new concepts and ideas to our customers rather than reacting to their demands. We can see where the market is going and we’ll make sure that our customers are equipped with the right tools to meet those demands.

What’s next for tna?

A: The food industry is changing rapidly at the moment. There are so many new product launches on the market that it’s becoming increasingly challenging for manufacturers to keep up with the latest trends. It’s therefore up to OEMs like us to deliver the market with forward-thinking solutions that can provide manufacturers with the flexibility they need to quickly change their production setup. Whether this is a seasoning machine that allows for quick flavour changes or a packaging system that can handle a variety of different bag formats on the same line, the less time manufacturers waste on changeovers, setups, cleaning or repairs, the more profitable they are. At tna, we will continue to grow our portfolio of turnkey solutions by designing market-leading systems that deliver the performance, flexibility and simplicity today’s snack food manufacturers need.

BIOGRAPHY A graduate of Mechanical Engineering at the University of New South Wales, Alf Taylor commenced his life-long passionate involvement in the snack food industry in 1976 as a packaging engineer at Arnott’s Biscuits. By the time Taylor left Arnott’s to set up TNA Australia in 1982 together with his wife Nadia, he had accumulated a wealth of experience in packaging efficiency improvement, which enabled him to design the tna robag®, the first ever high-performance Vertical Form Fill and Seal (VFFS) packaging system. Since then, he and his wife have grown tna from a packaging pioneer into a leading global supplier of integrated food processing and packaging equipment solutions. FOODBUSINESSAFRICA.COM


NEWS | AFRICAN

WWW.FOODBUSINESSAFRICA.COM

World dairy trade faces Russia, China risks in 2017

Skim UHT to drive SA milk demand L&Z Integrated Farms signs dairy plan with Nigeria Govt. FOODBUSINESSAFRICA.COM

VOLUME 2 • ISSUE 4, NO. 4 • ISSN 2412-3366

Tetra Pak launches new PlantMaster Clover SA launches enriched, lactose-free milk products FOOD BUSINESS AFRICA | NOV/DEC 2016

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A FOODWORLD MEDIA PUBLICATION


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FOODBUSINESSAFRICA.COM


NEWS | INTERNATIONAL

ADVERTORIAL

TRADE

Study warns US dairy industry to lose billions if EU farm policy agenda passed

Neogen’s AccuPoint® Advanced receives AOAC approval Neogen Corporation has announced that it has received approval from the AOAC Research Institute for its rapid and accurate AccuPoint® Advanced ATP Hygiene Monitoring System. Neogen’s AccuPoint Advanced is the first hygiene monitoring system to receive an AOAC approval, and this approval follows a recent study by NSF International that showed AccuPoint Advanced exceeded the performance of competitive systems. Adenosine triphosphate (ATP) sanitation monitoring systems are used extensively in the food industry to instantly assess the effectiveness of hygiene programs.

US - Surrendering to a European Union (EU) seizure of common food names would cost the US dairy industry billions of dollars, slash domestic cheese consumption and increase prices for consumers, according to a new study. The European farm policy agenda, which is focused on using geographical indications (GIs) to unfairly grant European food producers a huge commercial advantage, would force farmers and food producers outside of Europe to rebrand familiar foods with unfamiliar names. The resulting confusion in the US domestic marketplace could shutter family farms, eliminate thousands of rural jobs and hurt the overall US economy, the analysis said. The EU advocates extending GI protections beyond a small number of specialty foods to cover many food names that have little to no geographic identity and have long been commonly used by food producers around the world. According to the analysis, the decline in US cheese consumption due to the loss of common food names could amount to US$5.2 billion in 10 years, costing farmers a cumulative US$59 billion in revenue and forcing several thousand family dairy farms out of business, the analysis added. “Europe’s continued expansion of geographical indications in ways that protect terms long considered generic upends the entire concept of GIs,” said Tom Suber, president of USDEC, which represents the interests of dairy producers and processors in global trade and is the founding organization of CCFN. “Instead of protecting the names of a few specialty foods linked to specific areas, the EU uses GIs to eliminate competition for its producers.” “The damage Europe’s GI agenda could do to the U.S. dairy industry is severe,” added Jim Mulhern, president and CEO of NMPF, which represents dairy producers and cooperatives. “By 2025, our dairy farmers would lose up to 15 percent of their income and the U.S. dairy herd would shrink by up to 9 percent, or 850,000 cows. Thousands of dairy farmers would be forced out of business.” “Under Europe’s GI policies, U.S. manufacturers would face a choice of abandoning markets for cheeses like feta and parmesan or selling them under names like ‘crumbly white cheese’ or ‘hard grated cheese,’” said Connie Tipton, president and CEO of IDFA, which represents dairy processors domestically and internationally. “It’s not hard to imagine the problems those name changes would create and this report finally quantifies those impacts.” According to the study, consumers will choose imported cheeses with names they recognize over domestic products with names they don’t recognize. As a result, plummeting demand for domestic cheese would put numerous U.S. cheese manufacturers particularly specialty cheese manufacturers - out of business. FOODBUSINESSAFRICA.COM

“Each time we receive a validation from an independent third party on any of our tests, it provides further assurance to the food production and processing industry that our tests perform as expected,” said Ed Bradley, Neogen’s vice president of Food Safety. “The performance of our AccuPoint Advanced system in recent independent evaluations by AOAC and NSF is very gratifying. We developed the product with the goal of creating a new hygiene monitoring system that is superior to anything else on the market.” The results in the AOAC validation report (Performance Tested MethodSM 091601) provided evidence that AccuPoint Advanced produces consistent and reliable data for evaluating sanitation program effectiveness in food processing and food services facilities. AccuPoint Advanced is an enhanced version of its earlier AccuPoint test system. Improvements with AccuPoint Advanced include: improved sampler chemistry to produce more consistent results with even greater sensitivity; an enhanced instrument to produce even faster results (less than 20 seconds); and advanced Data Manager software to easily streamline the testing process by creating test plans and syncing important data, while keeping a permanent record of hygiene test results. AOAC International is a globally recognised, independent forum for finding appropriate science-based solutions through the development of microbiological and chemical standards. The Applied Research Center at NSF International is a not-forprofit global research group that provides product development support to manufacturers and developers of products in the food safety, agriculture, clinical and life science markets. For more information on our AccuPoint Advanced AOAC approval contact us by phone: +44 (0) 1292 525 093 or by email: info_ emea@neogeneurope.com Neogen Corporation develops and markets products dedicated to food and animal safety. The company’s Food Safety Division markets dehydrated culture media, and diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and hygiene concerns. Neogen’s Animal Safety Division is a leader in the development of animal genomics along with the manufacturing and distribution of a variety of animal healthcare products, including diagnostics, pharmaceuticals, veterinary instruments, wound care and disinfectants. DAIRY BUSINESS AFRICA | NOV/DEC 2016

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NEWS | INTERNATIONAL STRATEGY

Arla to triple its business in the beverage products market

DENMARK – Danish milk producer Arla plans to challenge the soft drinks industry by launching a slew of healthier milk-based alternatives by launching a new ambition to triple its business outside standard white milk in the global beverage market by 2020. Part of the company’s ‘Good Growth 2020’ strategy, Arla plans to capture the opportunities within beverages with a portfolio that includes healthier alternatives based on milk and natural ingredients. These include for example, The company’s goal towards 2020 is to

triple the revenue of milk-based beverages from US$246m in 2015 by launching products including a sparkling milk and fruit drink, a milk and tea drink and even an energy drink rich in protein, to tap into the global market for milk-based beverages of about US$100b in annual retail sales value, which is the same size as that of the global standard white milk market. However, it is growing much faster, especially outside Europe. “By addressing the beverage market more strategically, we can double the size of our playing field for liquid milk products and capture significant growth opportunities for Arla. Through branded milk-based beverages we can create more value for our farmers,” says Hanne Søndergaard, executive vice president for global Marketing & Innovation in Arla. The company will take advantage of changing consumer habits. Modern urban lifestyle has led to people across the world increasingly snacking and getting their nourishment out of their homes. Mealtimes

are blurring, more women are working and more people are living in bigger cities, it says. “We have a big opportunity to provide people with nourishment when they need it, based on the natural goodness of Arla milk. Our milk should not only be enjoyed from litre-sized packages bought in supermarkets, it should also be available as a tasty beverage on the go. We will expand our portfolio to include products that will nourish you, fuel you or refresh you - whenever and wherever you need it. This will create new sales opportunities for us in places such as convenience stores, petrol and train stations, gyms, workplaces, cafes, bars etc., where we are hardly even present today,” says Hanne Søndergaard. The company has recently debuted beverages such as Arla Protein and Arla Move with natural ingredients as part of this strategy, which also include a partnership with Starbucks.

PEOPLE

Former Monsanto executive to lead IDFA USA - The International Dairy Foods Association has selected Michael D. Dykes, D.V.M., as the new President and CEO of IDFA, replacing long serving Connie Tipton. Dykes, who has spent his professional career leading and executing agricultural government affairs policies and strategies will assume the CEO role in January 2017. He has served as vice president of government affairs for agricultural technology giant Monsanto for 19 years, where he was responsible for developing and implementing a portfolio of U.S. government relations strategies and programs that included agricultural biotechnology policy. For the past, he led Monsanto’s office in Washington, D.C., and served as the company’s primary point of contact for elected officials, regulatory

authorities, U.S. farm organizations, key industry participants, trade associations, international organizations and embassies. He directed the company’s efforts in state and local government affairs, in addition to government affairs in Mexico and Canada. “Michael’s policy experience combined with his food and animal science background could not be a better fit for IDFA” said Jeff Kaneb, executive vice president of HP Hood LLC and chairman of the transition committee. “He brings energy, enthusiasm and a track record of success to IDFA.” “I’ve known Michael for more than 20 years,” said Tipton, who announced in January that she would retire after spending 35 years representing the dairy foods industry in Washington, D.C. “His friendly manner and deep background in

the food and agriculture industry will give him a running start for what I know will be a successful tenure with IDFA. I look forward to introducing Michael to our industry and all of my colleagues in the association community.” The IDFA represents the US’s dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies within a US$125 billion a year industry. It is made up of the Milk Industry Foundation, the National Cheese Institute and the International Ice Cream Association. IDFA’s nearly 200 dairy processing members run nearly 600 plant operations, and range from large multinational organizations to single-plant companies

INVESTMENT

Amul to set up milk processing plant in West Bengal, India INDIA - Amul, a brand owned by Kaira District Cooperative Milk Producers’ Union in Gujarat, will set up its seventh centralised milk processing plant at Sankrail food park in Howrah, West Bangal. “We have got around 17 acres in the food park from West Bengal Industrial Development Corporation to set up our centralised milk processing plant in the 30

NOV/DEC 2016 | DAIRY BUSINESS AFRICA

country,” Managing Director Amul Dairy K Rathnam said. Work on the plant would start in 2017, and will be completed by end of 2018, he said. The proposed plant will manufacture UHT milk, yoghurt and ghee besides normal milk. The company also plans to set up a spray dried milk plant in the same location in future – ET FOODBUSINESSAFRICA.COM


M&A

Dean Foods forms joint venture to grow the Organic Valley milk brand

USA – Dairy producer Dean Foods and CROPP, an independent farmer cooperative, have partnered in a strategic joint venture to bring organic milk to retailers as the demand for organic milk products grows in the US. The 50/50 joint venture will serve

as a strategic growth platform for both companies, where Dean Foods will provide processing services and distribution through its extensive refrigerated distribution network, while Organic Valley will provide a select portfolio of brands and products, marketing expertise, and access to an organic milk supply from its organic dairy farmers. “Adding Organic Valley to the current lineup of Dean Foods branded dairy products enables Dean Foods to offer retail customers the largest and most comprehensive dairy offering across multiple segments with national brands that consumers know and trust. It also allows us to further leverage our manufacturing and distribution network,” said Gregg Tanner, CEO of Dean Foods. “We believe the dynamic and growing Organic Valley brand of organic milk is the perfect complement to our own category-leading DairyPure and TruMoo brands and gives Dean Foods a strong position in the organic

dairy segment.” Organic Valley is America’s largest independent cooperative of organic farmers and one of the nation’s leading organic brands. Organized in 1988, it represents more than 1,850 farmers in 36 U.S. states, Canada, Australia and the United Kingdom and achieved $1.04 billion in 2015 sales. “This partnership reinforces Organic Valley’s mission to support more organic farmers and grow our business,” said George Siemon, CEO of Organic Valley. “Consumers will enjoy the same Organic Valley quality they’ve come to know and trust: the same farmers will supply the same organic milk. But now more Organic Valley organic milk will be on more grocery shelves across the country.” The joint venture expects to begin processing and shipping Organic Valley products in mid-to-late 2017

Your partner for winning dairy products Ingredion is a leading supplier of naturebased speciality starches, texturising ingredients and sweeteners to the global dairy industry. Combining high quality ingredient solutions with the latest market, consumer and applications insight, Ingredion has the expertise and the tools to help you get differentiated dairy products to market first

Our promise to you: We deliver an ever-expanding range of clean label ingredient solutions to help you simplify your ingredient lists We provide and develop innovative starch-based ingredients that help customers reduce costs

Our teams are committed to developing pioneering solutions that enhance the textural and nutritional appeal of dairy products With our finger on the pulse of the latest trends across EMEA, we ensure our customers are always one step ahead.

Formulation advice Ingredion is the ideal partner for manufacturers of dairy products Offering established dairy formulation expertise Providing a dedicated team of technologists that work closely with customers, even after the development period Employing sensory capabilities with specific expertise in optimising texture. Our dedication to problem solving and our flexible approach make us the partner of choice. CONTACT US AT: Find out more Ingredion.com/emea FOODBUSINESSAFRICA.COM

Ingredion Kenya +254 (0) 20 362 8000 dairy@ingredion.com DAIRY BUSINESS AFRICA | NOV/DEC 2016

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NEWS | INTERNATIONAL TRADE

World Dairy Trade faces strong headwinds from China, Russia as 2017 beckons WORLD - The trade in dairy products has suffered a number of massive blows in the last three years and is set to continue face headwinds going forward, notes a research note by Rabobank. The Russian trade embargo, the slowing of demand growth from China, the impact of low oil prices on demand from oil exporting countries and the strengthening of the US dollar have all had an impact on the demand for imports.

The expansion of production surrounding the removal of production quotas in Europe added to the pain and resulted in a period of extremely low world prices, according to Rabobank’s report “Strong Headwinds Weigh on Trade Growth.” “And when we look forward”, says Kevin Bellamy, Global Strategist Dairy at Rabobank. “We see that none of these issues has been resolved. The Russian ban will be in place at least until 2017. Demand

from China will continue to grow but at a slower rate, oil prices are forecast to remain at around the USD 50 per barrel mark, and the dollar is forecast to maintain its high value against other currencies. As a result, dairy trade is likely to grow at a slower rate than in recent years, driven more by population growth than per capita consumption increases.”

RESEARCH

Courtesy: Whitewave

Dairy alternative market to reach US$21.7 billion globally by 2022

WORLD – A new report forecasts that the global market for dairy alternative products is expected to garner US$21.7 billion by 2022, even as the growth of mainstream milk products wanes in developed countries. According to a report, Dairy Alternative

Market Report, published by Allied Market Research, the dairy alternatives market demand, including that of soy milk, almond milk, rice milk, and other dairy alternative sources will register a CAGR of 13.3% during the period 2016-2022. According to the report, Asia-Pacific generated the highest revenue of $4 billion in 2015, followed by North America. AsiaPacific would continue to dominate the overall market throughout the forecast period owing to the increase in demand from countries such as China and India. Soymilk accounted for the bulk of the market share of 53.2% in 2015, because of its extensive usage in refreshment drinks. Popularity of beverages formulated by the combination of soy beverages and fruit

drinks has increased in countries such as China. Almond milk is projected to be the fastest growing segment with the CAGR of 14.4%, owing to its high demand in developed regions such as North America, driven by the rising vegan and obese population in countries such as the U.S. Beverages such as milk shake, energy drink, fruit mixed drinks, and others, prepared from soy, almond, coconut and other dairy alternative sources, are increasingly becoming popular. Market for dairy alternative products prepared from other sources such as coconut, cashew nut, oat and others would witness attractive growth during the forecast period.

NEW PRODUCTS

Nestlé India launches NESTLÉ a+ PRO-GROW targeting children INDIA - Nestlé India has launched NESTLÉ a+ PRO-GROW to strengthen its core of Nutrition, Health and Wellness by offering products, which combine great taste and healthy nutrients. NESTLÉ a+ PRO-GROW is the latest addition to the NESTLÉ a+ brand and offers 20% higher milk protein, with the company specifically targeting it to growing children. “NESTLÉ a+ PRO-GROW addresses specific needs of protein for growing children. All mothers are anxious about their child’s growth and want to make sure that their children get the best nutrition for growth. NESTLÉ a+ PRO-GROW, which comes in two exciting flavours of vanilla and chocolate, caters to this need as it has 20% more milk protein and contains all the essential amino acids.” Mr. Bhandari adds, “We have attempted to introduce nutrition benefits through milk for a new consumer segment. With high quality protein being 32

NOV/DEC 2016 | DAIRY BUSINESS AFRICA

critical during a child’s growing up years, NESTLÉ a+ PRO-GROW provides the perfect combination of taste and health,” said Arvind Bhandari, General ManagerDairy, Nestlé India. NESTLÉ a+ PRO-GROW comes in two packs, 1 litre pack for regular in-home consumption and 180ml small trial packs. The product will be available across key cities in the first phase of the launch. The NESTLÉ a+ brand attempts to offer nutritional benefits to specific members of the family. The range currently has three different offerings: NESTLÉ a+ Nourish which is a milk product for the whole family; NESTLÉ a+ Slim that has 15 times lower fat than regular milk for fitness focused adults and now NESTLÉ a+ Pro-Grow containing 20% more milk protein for growing kids.

FOODBUSINESSAFRICA.COM


NEWS | AFRICAN RESEARCH

Rising consumption of semi-skimmed UHT milk to drive SA’s dairy market growth

SOUTH AFRICA - Ultra-high temperature (UHT) milk is slated to gain prominence in South Africa’s milk industry, attaining

an estimated US$1,185.3 million in market value by the end of 2019, due to its longer shelf life in a market dominated by poor cold supply chain availability. According to a research by Persistence Market Research, the growth of South Africa UHT milk market is forecasted to rise from 601.7 million liters in 2010, to reach the US$1,185.3 million in market value by the end of 2019 as consumer attitude towards UHT milk changes. “Consumers are accepting UHT milk as a long-lasting and affordable alternative to regular packaged milk or raw milk, which is driving the growth of South Africa UHT milk market. Schools opting for UHT milk for their feeding programs indicate the growing proliferation of UHT milk market in South Africa,” notes the report. Competition in the retail space and the rise of private label brands have presented opportunities but also threats to the dairy processers in the country. “Presence of

a large number of private label brands in South Africa’s milk industry defines the sheer competition faced by participating companies. Dominating the retail store shelves has stimulated the UHT milk distributors to enter such fierce competition, which has influenced the growth of South Africa UHT milk market,” it continues. However, powdered milk products are threatening the consumption of UHT milk in South Africa. Additionally, the unavailability of necessary capital and lack of expertise is further disheartening the progress endured by UHT milk manufacturers and distributors in South Africa, the report adds. Urbanization, with over two-third of the country’s population living in urban areas, with cities such as Polokwane, Rustenburg, Nelspruit, Vanderbijlpark, and Ekurhuleni developing at rampant pace, is also impacting the growth of South Africa UHT milk market.

AUTOMATION

Tetra Pak introduces new PlantMaster to give manufacturers end-to-end plant control SWEDEN – Packaging and processing leader Tetra Pak has launched a new version of the Tetra Pak PlantMaster, enabling manufacturers to programme their entire plant through a single data management system. The upgrade includes the Tetra Pak PlantMaster MES Suite (Manufacturing Execution Systems), a new software programme specifically designed for the food and beverage industry, which provides a user-friendly interface. In the food and beverage industry, manufacturers often have equipment

at Tetra Pak said: “The new Tetra Pak PlantMaster provides customers with a simple end-to-end solution by unifying plant control in one single data system. We are pleased to see that customers find value in this new system, reducing complexity in their management processes and increasing productivity, which in turn, positively impacts the bottom line”. The new Tetra Pak PlantMaster is available globally as an upgrade to existing services, or as a new installation.

from different suppliers in one plant, using separate information systems. Some of these machines even require manual data collection. With the new software, the Tetra Pak PlantMaster provides a single set of tools that integrate all operations, from incoming raw materials to finished, palletised products. This gives manufacturers complete control of the plant. It streamlines data collection, facilitates accurate data analysis and, ultimately, improves efficiency. Charles Brand, Executive VP Product Management and Commercial Operations

NEW PRODUCTS

Fonterra launches new range of premium Anchor products in China CHINA – Leading dairy producer Fonterra has introduced a new range of premium milk products in response to the ongoing growth in demand for dairy products in the country. The new ‘Upline’ range features two new UHT milk products. LiveUp is a high-protein milk with 50% more protein than standard UHT (with 5.7 grams of protein per 100ml), while NaturalUp is made from certified fresh organic milk from New Zealand that meets Chinese and New Zealand organic standards. “(These products) are a response to FOODBUSINESSAFRICA.COM

changing consumption patterns, where Chinese consumers are increasingly seeking out more premium and healthy options,” said Fonterra Greater China President, Christina Zhu, noting that the new products build on the strength of the Anchor brand and will help meet changing consumer needs in China. According to research from the Boston Consulting Group, Chinese consumers are now the world’s most health conscious. 73% are willing to pay a premium price for items proven to be healthier, which is 12% above the worldwide average, notes Fonterra.

“Pushing more into this high-growth premium space is a natural progression for the Anchor brand, which has been performing well since it launched in China in late 2013,” Ms Zhu said. LiveUp will be available in physical stores in China and online, while NaturalUp will have a dedicated launch on e-commerce platforms, which is a fast-growing sales channel in China, according to the company. The company has also refreshed the existing range of Anchor UHT products in China, with fresh packaging place across INTOinAFRICA the full range of products.

DAIRY BUSINESS AFRICA | NOV/DEC 2016

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NEWS | AFRICAN

Viju extends its product lines to include yoghurt drinks NIGERIA - Viju Industries Nigeria Limited, makers of dairy-based fruit drinks, which come in different flavours, has announced it will be adding yoghurt drinks to its product line, reports Beverage News NG. The Chinese dairy company, which entered the Nigerian market in 2004, makes dairy-based fruit drinks derived from milk powder, sugar and fruit juice. Its sales have grown over the years and it now wants to add fast growing yoghurt segment to its product line. According to a statement from the company, the new Viju Drinking Yoghurt comes in two variants – plain sweet and vanilla.

“Viju industries Nigeria Limited is known for its quality products, made from stateof-the-art machine. The plain sweet and vanilla flavours are fortified with energy, protein, fat, carbohydrate, other vitamin and calcium for stronger bones, healthy teeth, quick growth and muscular body,” the statement said. The yoghurt segment of the dairy sector has seen strong growth in recent years, accounting for 20% of dairy sales of US$2.6 billion in Nigeria in 2014, according to Kevin Bellamy, global dairy strategist at Rabobank. This has attracted investments from foreign multinationals such as French dairy giant Danone, which in 2013 took a 49%

stake in a joint-venture partnership with Abraaj Group, a Dubai private equity firm to buy Fan Milk, a Danish ice cream and yoghurt company with strong presence in Nigeria. Other players in this segment include Chi Limited, Ranona Nigeria Ltd, a unit of Olam Group, L&Z Integrated Dairy Farms, Shagalinku, among others. “Yoghurt is a high-margin business and in line with current trends in favour of healthy products; consumption in Nigeria, under normal economic conditions, will massively increase,” says Miguel Azevedo, head of African investment banking at Citi.

PARTNERSHIP

L&Z Integrated Dairy Farms signs deal with Minister to develop dairy in Nigeria

NIGERIA - The government of Nigeria and local dairy firm L&Z Integrated Dairy Farms have signed a Memorandum of Understanding (MoU) with the aim of developing the dairy sector in the country while also seeking to resolve conflicts between Fulani herdsmen and farmers.

The MOU signing which took place in Abuja had the Minister of Agriculture and Rural Development, Chief Audu Ogbeh sign for the Federal Government, while L&Z Integrated Dairy Farm chairman Keith Richards signed for the company. Chief Ogbeh decried the high amount of imported powdered milk and other dairy products running into millions of dollars, which he said has negatively impacted the economy over the years. He however expressed optimism that the MoU signing would help accelerate the development of the dairy sector; help improve nutrition and curtail the migration and roaming of herdsmen, an unhealthy situation for the sector. L&Z Dairy Farms, which started in 1999,

now processes 3,000 liters of milk a day into yoghurt, ice cream, and other dairy derivatives with a capacity to increase to 24,000 liters per day. It has risen over time to become a household name across various states for quality dairy products and one of the major suppliers for supermarket chains nationwide, including Shoprite. The MoU would facilitate the formation of herdsmen co-operatives, add value to their businesses and enhance the collection of raw milk for production. The MoU will also enable the training of herdsmen on best practices in livestock production with quality service delivery for improved dairy production in Nigeria.

NEW PRODUCTS

Clover debuts new enriched, lactose-free products to meet unique market needs SOUTH AFRICA – Leading dairy producer Clover has introduced a new set of products, as the dairy Group seeks to offer more choice into its dairy, beverage and functional drinks product lines. The company has introduced Clover Care Full Cream Milk that the company says is the first enriched milk in South Africa, with nutrients lacking in the South African diet. The product contains 11 vitamins, nine amino acids and three minerals, and is a good source of protein and calcium. It is available in fresh and long-life options in one-litre packs, and hit the supermarket shelves in September. The company has also recently 34

NOV/DEC 2016 | DAIRY BUSINESS AFRICA

introduced Clover NoLac Lactose Free Milk, a solution for lactose intolerant people, promising to deliver lactose-free milk that has been hitherto been availed only in specialised and select retail stores. The company is betting on its extensive distribution network and footprint to ensure product availability across the country, taking advantage of growth in the global lactose-free dairy market, which experienced a 10% growth in 2015. Available in one-litre packs (both fresh and long-life milk), the product has been boosted by the addition of calcium and vitamin D, which lacks in those with lactose tolerance FOODBUSINESSAFRICA.COM


Pasta & Noodles: Grabbing a share of the consumer’s plate in Africa Africa provides the next growth market for pasta and instant noodles, driven by a growing population, cost and convenience. We review the hotspots of growth in Africa and seek ways to drive faster adoption in this product category.

Locally produced pasta in Ethiopia

C

atherine, a young college going lady in Nairobi, Kenya has found the ultimate food for herself and her colleagues. With the least of efforts and at only KSh. 30 (US 30 cents), she can make a meal of Indomie noodles for herself within 10 minutes and be back to class for her afternoon lessons, saving her the hassle of making a regular meal like rice or ugali, a regional staple – and saving some cash, as the semester draws to a close, and cash gets tight. “Instant noodles and spaghetti are the staple of university students. Noodles are preferred more because of their ease of preparation. Soak them in some hot water, add some tomato sauce and butter or margarine and you are good to go,” she tells the writer. “Once in a while, when we have adequate time, we usually add some soy mince on top of the noodles to add some extra protein on top of the noodles, or even cook some spaghetti with the soy mince,” she explains. Catherine could be any of the young FOODBUSINESSAFRICA.COM

lads in any of Africa’s bustling university and college scene, be it in Dar es Salaam, Tanzania, Douala, Cameroon or even in Addis Ababa, Ethiopia. Young, short of time and adventurous in their food habits, the growing young generation of Africa is driving an appreciation of new food products from other cultures and regions. And as urbanization takes hold in the continent, noodles and pasta products are experiencing a big boom in Africa.

Production and consumption in Africa

The growth of pasta and noodles in most African countries is still relatively in the infancy stage. However, it is notable that the adoption of pasta and instant noodles in the continent could be one of the most critical dietary changes in several decades, despite being a recent phenomenon. In Africa, the consumption of products from maize, cassava and sorghum, or a mix of two or three of these has dominated the lunch menu in many countries. The consumption

of rice and wheat based products (for example bread and chapatti, a regional favourite in Eastern Africa) has also grown substantially, and are of greater importance in the Western and northern parts of the continent. Pasta and instant noodles, already staples in a number of African countries, are seeking to join the big league in the other parts of the continent where they have always been seen as a luxury food item, especially for pasta. According to the International Pasta Organisation (IPO), Tunisia is the leading consumer of pasta per capita in Africa, with each person in the North African country taking 16 kg of pasta per year. Only Italians, who are considered to be the originators of pasta and the largest producers and exports of pasta in the World, consume more, taking 25.3 kg per person. Other countries with significant per capita consumption of pasta in Africa are Libya, taking 2 kg per person per year and South Africa, which consumes 1.9 kg per person per year. In terms of total consumption figures by FOOD BUSINESS AFRICA | NOV/DEC 2016

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country, Tunisia consumed 172,800 tonnes of pasta in 2015, followed by South Africa, which took 91,000 tonnes. According to the IPO, Africa produces just 5.8% of the pasta in the World, with the Middle East producing 4.1%, with significant growth prospects expected. The organisation says that it expects the Middle East & Africa region’s market size in the dried pasta to grow from US$2,875 million in 2013 to US$8,836 million in 2018, a growth of 25.5% per year; surpassing the European Union that is forecasted to fall from US$8,270 million to US$8,047 million during the same period. For the noodles category, the World Instant Noodles Association (WINA) reports that Nigeria consumes 1,540 million servings of the product, the highest in Africa. It is critical to note that the WINA report shows a reduction in China, the world’s largest producer and consumer, from 46,000 million servings in 2014 to 40,430 million servings in 2015 in a market that seems to have flattened out, while Nigeria has recorded a gradual increase from 1,260 million servings in 2011 to 1,540 million servings in 2015. Other notable consumers of noodles in Africa are Egypt (200 m), South Africa (190 m) and Ethiopia (50m).

Significant production capacity increase in Africa

Africa largely relies on imported pasta from Italy and Turkey; significant intraAfrica trade, especially from Egypt into the COMESA region also meets rising local demand. Egypt exported 72,372 tonnes of pasta in 2013. The top five importers of pasta in Africa in 2013 included South Africa (15,148 tonnes), Morocco (8,327), Ghana (10,801), Kenya (10,763), and Algeria (5043), according to the IPO. The increasing demand and interest in pasta and noodles in Africa has elicited a wave of investments, with Nigeria leading the way. K. C. Suresh, the Managing Director of Olam Grains contends that the size of the Nigerian flour market, which is in excess of US$2 billion, grows at 3.5% per year. But the pasta market is growing at the rate of 8% per year, providing a strong economic driver to investors, he says. Grain milling companies in the country have over the last decade extended their product lines to include pasta and noodles, on top of their wheat and baking product lines. These include the Dangote Group, Flour Mills of 36

NOV/DEC 2016 | FOOD BUSINESS AFRICA

Nigeria, the Dufil Group, and Honeywell Flour Mills among others. Dangote Pasta has a total capacity of 30,000 instant tonnes of pasta per year, and has three noodles plants in Ikorodu, Kano and Kano. Olam, a new entrant into the Nigerian market, bought out the pasta producer, Amber Foods to enter the pasta sector to take advantage of the growing market. Amber Foods, which was part of the BUA Group, operated two wheat mills and a pasta manufacturing plant in Lagos, and had a non-operating mill in Kano, and a wheat and pasta manufacturing plant under construction in Port Harcourt. Honeywell Flour Mills Plc, another giant, introduced its pasta products in 2009 and in 2010 debuted its noodles product lines. Flour Mills of Nigeria Plc, operates one of the largest pasta and noodles plants in the country. The Indonesian origin Indomie brand of instant noodles, made by the Dufil Group in Nigeria, has also invested substantially in Africa, with the brand found in tens of countries, from Kenya, to Nigeria and Ghana, having started off by importing the brand into the continent. But the investments in pasta and noodles manufacturing have gone beyond Nigeria. The Indomie brand is currently being manufactured in Kenya at a factory put up by the local distributing company Sawake in 2014 to serve the East African market. The company also manufactures the popular brand in Ethiopia. But Sawake is not alone. Nissin Foods, the Japanese food group, has been distributing their brand of noodles in Kenya for a few years now in partnership with the Jomo Kenyatta University of Agriculture & Technology, with plans to set up a plant in Kenya in future. Kapa Oil Refineries, a leading processor of oil and fat products is processing locally a line of instant noodles, Numi, to its products list to take advantage of rising demand in Kenya. On the milling side, Broadways Group is currently erecting a new wheat mill with capability to process flour for pasta processing, a regional first. Demand in Ethiopia, driven by Italian influence and a large population offers the next biggest bet for pasta and noodles in Africa. The country imports a substantial amount of pasta from Italy and Turkey, despite the presence of over 20 local manufacturers. According to the USDA, pasta demand in Ethiopia is increasing aggressively but “some of this demand

International Pasta Organisation expects the Middle East & Africa market size for dried pasta to grow from US$2,875 million in 2013 to US$8,836 million in 2018, a growth of 25.5% per year; surpassing the European Union goes unsatisfied, since there are insufficient supplies of pasta-quality wheat.”

Capacity and technology required in Africa

While local interest in pasta and noodles production continues to increase in the continent, there is an urgent need to increase local capacity of the stakeholders to support the growth of the sector. “The industry is in need of investments in training in milling technology targeting the pasta industry, and technical and quality aspects of pasta and noodles production in the continent,” advises a consultant in the industry in Ethiopia. This will support the growth of the sector, minimizing the difference between imported products and locally manufactured ones, improving consumer acceptability, he says. Challenges also remain with the consumers, who lack the exposure to the various types of pasta products or more unique flavours of the noodles products. While on the Eastern Africa side spaghetti has the bulk of the pasta market, in Nigeria, macaroni is the preferred option. “A wider variety of pasta products are available on the shelf, but consumers’ exposure on the other varieties is very limited in Kenya, so we sell mainly spaghetti,” a Marketing Manager of a leading importer says. Opportunity is also available to incorporate local grains (like sorghum, cassava, teff, amaranth etc) into pasta and noodles produced in Africa that also seek to improve the nutritional quality of the grains, and utilize local raw materials. Specific knowledge on formulations management and quality control will be required in this area.

FOODBUSINESSAFRICA.COM


TRENDS | TRANSPARENCY

Transparency: The new trend in the food and beverage manufacturing and foodservice industry Rising consumer awareness, surging disease and obesity burden, the rise of new media and recent negative news has lead to a surge in consumers’ demand for transparency and simplicity in the food supply chain. The food and beverage manufacturing and foodservice industry in Africa better take note.

F

ood science and the food industry, two complementary parts of the same coin are facing a moment of reckoning. Responsible for enabling the development of foods and beverages vital for nutrition and variety in the foods we eat over the last few decades, changing consumer attitudes, rising health concerns and new media are beginning to place the industry on the defense – sometimes defending some of the core basic activities and innovations, even when evidence shows that the industry is on the right side of science. As the industry has evolved, and driven by globalization, the need to trade has introduced more complex and long supply chains in the food industry. This has made the industry to be vilified by consumer groups and other parties, with the term ‘Big Food’ being used to refer to the excesses that the industry players have gone to in pursuit of their own selfish interests. The industry is changing quite fast, and it is high time the industry in Africa took notice. FOODBUSINESSAFRICA.COM

What consumers want

The changing nature of the food industry is exemplified by the rising tide of pressure on the industry to build transparency, simplicity and trust in its entire operations, from the farm, into distribution and storage, to processing. “While total fast-moving consumer goods (FMCG) sales volume has been flat over the past four years, sales of products with health and wellness claims are outpacing total category growth by a significant margin in many categories,” notes research firm Nielsen in its report dubbed Global Ingredient and Ingredient Sentiment survey, released this year. Consumers, fed up by the increasing industrial nature of food production and processing, are embracing the adoption of older ways of food production, when food was produced locally and consumed locally, with minimal use of additives or aggressive processing. Processes such as UHT for milk for example, responsible for improving milk shelf life and enabling distribution without any additives, are beginning to get shunned for new technologies, even if the new options do not offer the same

benefits. Consumers are also seeking a more transparent system of food labelling and processing, seeking to be given more information on the same, in easy to understand formats. They are also asking for the use of few ingredients that they know and can pronounce in food products, not chemical sounding names that they have never heard of – the kind of products they use regularly in their kitchens. They are also concerned with inhumane ways of raising animals and the use of human antibiotics in raising the animals. The major food companies, faced with stagnating or falling consumer demand in the major developed countries have been forced to make critical changes to meet the rising tide; even regulators are stepping in. Beverage giant Pepsi was forced in 2015 to remove aspartame, a high intensity sweetener, from its Diet Pepsi product due to consumer pressure; the Food and Drugs Administration this year passed a law to enforce labelling of products with genetically modified (GM) ingredients, despite several years of insisting that GM products are safe, and don’t have to be labeled so; McDonald’s, one of the major quick service restaurants, is removing artificial preservatives from its products, and has removed chicken raised with antibiotics used in human medicine from its menu; while a number of states in the US voted to introduce taxation on soft drinks during the latest elections in the US, adding to a growing list of countries, including the UK and South Africa, that have recently done the same. These are just a few examples.

Focus on Africa

The proliferation of mobile phones, the internet and a youthful population in Africa makes the continent a fertile ground for the adoption of new types of foods and beverage categories, new eating habits and critically, exposure to trends, real or false, through these new media. “Mobile technology and FOOD BUSINESS AFRICA | NOV/DEC 2016

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Lactose/Dairy Free Halal Free Low  Fat   Low  Sugar Low  Sodium Low  Carbs Vegetarian Wheat/Gluten   36% 28% 13% 17% 16% 8% 8%

48%

Vegan

Percentage of  people  who  say  they  follow  a  restricted   diet  in  Middle  East  &  Africa   Kosher  

4% 16%  

Flexitarian Vegan  

6% 48%  

Halal Lactose/Dairy  Free  

8%

Wheat/Gluten Free  

8%

Vegetarian

16% 17%  

Low Carbs   Low  Sodium  

13%

Low Sugar   Low  Fat    

28% 36%  

Source: Nielsen

social media is already improving consumer access to wide-ranging food related information and is set to continue,” notes ingredients solutions supplier Ingredion in its 2020: The Future of Simple, Natural and Clean Label Food report launched mid 2016. According to the report, four main food industry trends including clean label, natural, free-from and organic are evident, with three themes emerging, which would impact all of the four trends: transparency, trust and technology, with advances in technology being a key driver of change. The demand for clean and simple foods is expected to continue with quieter, simpler labels becoming the norm worldwide, including Africa. “Whilst still a relatively new trend in the region, natural and clean label ingredients have established themselves, especially in South Africa, and we see the demand also in other African markets. We expect this to continue and broaden with a heavy focus on the nutritional content of affordable foods,” says Constantin Drapatz, the Business Development Manager Africa at Ingredion. Mobile technology will make it easier for information to be taken off-label and on-line, while still being accessible at the point of purchase, explains the report. The rapid rise of the free-from food market (for example gluten free foods) is expected to continue and as choice and quality of products increases, it will become established as the norm among consumers, the report adds. A recent study by packaging and 38

NOV/DEC 2016 | FOOD BUSINESS AFRICA

processing leader Tetra Pak supports the Ingredion report. According to Tetra Pak’s 100% Juice report, consumer needs focused on health trend particularly strong with Millennials, with the industry focusing its innovation in three key areas: vegetable nutrition, ‘all natural’, and specialty 100% juice products. New product launches for products that make “all natural” claims have seen a compound annual growth rate of 25% between 2012 and 2015 – especially those with no additives and/or preservatives, says the report. The survey indicates that more than 60% of consumers globally say they are interested in products with proven health benefits.

Even in Africa, the population is seeking healthy food

It may appear from first glance that Africa, with all its unique challenges, may not necessarily be in need of healthier food and beverage options, considering the general lack of adequate nutrition in the continent. The recent survey by Nielsen (see Graph) shows that consumers around the world are increasingly focused on clean eating and the benefits of eating more healthfully, with 70% of global respondents, including from Africa, saying they actively make dietary choices to help prevent health conditions. The survey shows that 50% of respondents from Africa and Middle East region reported that themselves or someone from their family suffer from food allergies or intolerance, compared to 22% in Europe, 31% in North America and 42% in Latin America. From the region, respondents also reported following a special diet that limits

6%

Flexitarian Kosher 16%

4%

INGREDIENTS CONSUMERS ARE AVOIDING The Nielsen study reveals that artificial flavors (62%), preservatives (62%) and colors (61%) are the most avoided food ingredients among global consumers. Foods with GMOs have also become a critical group to be avoided by some consumers, with about 30% of Americans avoiding them; a higher percentage (44%) however prefer to see products with GM content labeled. Low calorie sweeteners and added sugar (26% of global consumers consume low sugar foods) are also common on the list of those looking for a healthier life. Consumers are also seeking to limit or avoid wheat or gluten based foods (9%), according to Nielsen.

or restricts specific foods or ingredients; with 36% following a low fat diet; 28%, low sugar; 13%, low sodium; 8%, wheat or gluten free foods and lactose/dairy free, 8%. There was also a high requirement for Halal foods, with 48% following a Halal diet.

Finding African solutions

So how can food and beverage companies in Africa meet the rising tide of new consumer demands, while remaining relevant in the African environment? “Focusing on the African continent, there are additional, specific requirements that need to be considered. The majority of African consumers are dependent on affordable, yet nutritious food. Whilst there is a premium segment, accessible only to higher income groups, where global consumer trends transcend into localised new product development and innovation, it is critical to consider the level of sophistication of the market,” Drapatz says “Here foods that deliver an added-in function and nutritional benefit, such as supplementary vitamins, fibre and protein will be of interest. This will result in an increase in positive messaging which will complement the growth of the free-from category. Products will need to be healthy, functional and great tasting, whilst remaining affordable. Improving affordable food products for shoppers in the low and medium income segments and at the same time developing new, innovative premium products that are clean and simple might require different solutions,” Drapatz advices. FOODBUSINESSAFRICA.COM


COUNTRY FOCUS | ETHIOPIA

The lure of Ethiopia’s food and beverage industry Ethiopia offers a unique profile to investors interested in Africa’s burgeoning food and beverage industry Africa. One of the few remaining unexploited locations in Africa, recent moves by the Government to attract investors on the back of a growing economy, increasing population and urbanization has made Ethiopia to be on the ‘next-frontier’ category for regional and international food and beverage processors and suppliers.

T

he lights go off momentarily as we labour up the stairs leading to the Heineken Ethiopia offices in Addis Ababa, Ethiopia. But then, they are back, just as fast as they disappeared. As we continue up the narrow stairs, we pass through floors teeming with young men and women who are either working the phones or are talking animatedly to colleagues in the local dialect Amharic, or sitting on their desks tapping on computer keys, probably sorting out some urgent emails. Heineken Ethiopia entered the Ethiopian industry in 2011 following its acquisition of Harar and Bedele breweries, two enterprises that were previously owned by the Ethiopian Government. From the company’s office within the Yezelalem building in Kirkos Sub City, you cannot fail to notice the African Union building, the headquarters of the African Union (AU), built by the Chinese Government to house the top-most political organ in the continent. Looking out through the FOODBUSINESSAFRICA.COM

The beer industry is booming in Ethiopia

window from the Heineken Ethiopia office at the tall, imposing AU building, one cannot fail to imagine the company’s grand ambitions in Ethiopia, and wonder for how long they may be at the bustling Yezelalem building. The two scenarios above, the black out and the teeming office with young men and women play out in many food businesses in Africa. But in Ethiopia, the two scenarios are really reflective of the real and potential opportunities and challenges of operating in the country.

Agriculture powerhouse

For one to appreciate the opportunities in Ethiopia’s food and beverage industry, a good start is certainly the country’s rich agricultural potential. The country is a leading producer of a number of cereals, coffee, pulses and legumes and other important crops, providing great opportunities for food and beverage companies to tap into the rising local

demand and for export. As part of the Government of Ethiopia’s (GoE) Agricultural Transformation program (GTP I that ran from 2010 to 2015 and the current GTP II that runs from 2016 to 2020), the country has made some of the most transformational improvements in the agriculture sector in Africa. The ambition to increase value addition in agricultural value chain through agro-processing is central to the country’s agricultural growth strategy in GTP-II, with a focus on high value crops. With a goal to utilize agro-processing to boost the role of manufacturing in the country’s economy, GoE’s investment in agriculture has played a key role in making Ethiopia a prime location for the food and beverage industry. “With more than 10 million of irrigable land with only 3% utilized today, it shows the vast potential that Ethiopia has to unearth its agriculture,” notes the State Minister of Industry, Dr. Mebrahtu Meles. FOOD BUSINESS AFRICA | NOV/DEC 2016

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Table 1: Production figures of key crops in Ethiopia in metric tonnes (MT)

PRODUCTION FIGURES OF KEY CROPS IN ETHIOPIA IN METRIC TONNES (MT) Crop

Production value

Comments

Pulses

2,614,000

Growing exporter of pulses

Coffee

390,000

First in Africa, 5th in World

Wheat

3,800,000

No. 4 in Africa

Maize

6,300,000

No. 3 in Africa

Sorghum

3,700,000

No. 2 in Africa

Teff

4,300,000

Only major producer in the World

Sugar

400,000

Major investments in last few years.

Barley

2,000,000

No. 2 in Africa

Source: USDA, other sources. Figures are mostly 2015/16 season forecasts by the USDA

New Zealand’s Fonterra opened a milk powder packaging plant in Ethiopia last year

Ethiopia is the leading producer of coffee. The country is famous for being the origin of coffee, with coffee intertwined with local culture and food habits. With 390,000 tonnes of coffee per year, the country dominates coffee production in Africa, and is number four in the World in its production. With about half of the country’s coffee production exported, mostly in raw form, the potential in coffee processing in the country is enormous. In the cereals area, Ethiopia punches above its weight, producing 3.7 million tonnes of sorghum, 6.3 million tonnes of maize and 3.8 million tonnes of wheat, with the country number 2, 3 and 4 in Africa, respectively, in their production. Teff, a cereal that is indigenous to Ethiopia and is used to make the uniquely Ethiopian injera flat bread, has had tremendous interest outside the country for its unique taste and nutritional benefits. The country produces 4.3 million tonnes of the grain, mostly for local consumption. 40

NOV/DEC 2016 | FOOD BUSINESS AFRICA

Ethiopia is Africa’s No. 2 producer of barley, producing both food and malt barley to meet increasing demand from its population that utilizes food barley to make a range of food products; and malt barley whose demand is rising to meet the country’s rising indulgence in bottled beer. Ethiopia has a rising production trend in the sugar sector, where vast amounts of money has been invested to enable the country to be self-sufficient in the commodity in the short run, and to be one of the world’s top ten largest sugar producers and a major exporter by 2023. With projected sugar production of 400,000 tonnes in 2015 according to the USDA, the country was expected to import about 200,000 tonnes to bridge the deficit. With most of the country’s sugar irrigated, the country hopes to stop sugar imports by end of 2016. See Table 1. In the livestock sector, Ethiopia has Africa’s largest number of livestock. The country’s 50 million livestock contribute 40% of agricultural GDP. “Since 2010, the production of commercial livestock products - meat and milk, skins and hides, and poultry - has increased by more than 50%,” notes the International Livestock Research Institute (ILRI). “Demand for animal-source foods continues to rise faster than supply, particularly for meat and eggs,” the report adds. The dairy processing sector is setting up from a low base, but challenges with milk sourcing, access to appropriate technology and low demand for processed milk will continue to weigh down on the sector Another critical crop in the country’s ambitions to be a major source of exports of raw and processed produce is the pulses category, which includes several bean

Cereals on sale at a supermarket in Addis Ababa

varieties (legumes) and oilseeds (soya beans, sesame and groundnuts). Ethiopia is already the largest producer of chickpeas, lentils and faba beans in Africa, and clocking the fastest growth rates in the production of haricot bean, according to FAOSTAT. Oilseeds are also important in Ethiopia, totaling 790,000 tonnes in 2015. Sesame is the second most important crop in the country, bringing in 20% of the total foreign exchange earnings, with sesame bringing in US$480 million in 2015, according to FAO. The country is the World’s fourth largest producer of the oilseed after India, China and Sudan. “Pulses are central in many Ethiopian dishes, e.g. shiro, a popular pulse-based sauce. Moreover, Ethiopians have a fasting period of over 200 days a year, and a range of pulses is consumed during this fasting period,” notes USDA in one of its yearly reports. Production of legume crops is increasing, and legumes are the third-largest export crop after coffee and sesame in Ethiopia. “Ethiopia has become a significant exporter of pulses, globally and regionally. Ethiopia’s main pulses export is kidney beans, which accounted for 59% of Ethiopia’s pulses exports between 2012 and 2014,” the report continues. See Table 2.

The key drivers to Ethiopia’s attraction

Population - The attractiveness of Ethiopia is down to a number of factors, chief of which is a huge population whose economic potential is beginning to be realised. Ethiopia is the second most FOODBUSINESSAFRICA.COM


COUNTRY FOCUS | ETHIOPIA

Table 2: Ethiopian production of legumes and oilseeds in 2014

CROP

PRODUCTION (TONNES)

Pulses (total)

2,614,131

Beans, dry

513,725

Broad beans, horse beans, dry

838,944

Chick peas

458,682

Lentils

137,354

Teff

342,637

Pulses, nes

71,350

Faba beans (Vetches)

251,439

Soybeans

72,184

Groundnuts

103,706

Sesame

487,000

Source: FAOSTAT, USDA

populated country in Africa after Nigeria, with a population of over 100 million, projected to reach 140 million people by 2030 by the International Futures. The demographic distribution that favours the youth, with 64% of the population 24 years and younger, and a median age of 17.8 years, offers huge potential for investment in key food commodities by local, regional and international companies. Urbanisation – The majority of Ethiopians still live in rural areas, but the rate of urbanisation of 4.9% a year means that this is another key driver of an increased demand for food and beverage products. The 19.5% of the population that lives in urban areas is expected to reach 39 million by 2030. Increasing prosperity – Ethiopia has been and is forecasted to be one of the fastest growing economies in Africa and the World, growing in double digits for almost a decade to 2015. Though the economy is planned and is largely in the hands of the public sector, private sector contribution is increasing as the GoE opens up some key sectors to private investment to private and external investors, including the food processing sector. The country’s Gross Domestic Product per capita (PPP terms), has risen from being one of the lowest in the World, to US$1800 in a fairly short time, compared to Kenya’s US$3200.

Foreign-based food and beverage majors zero in

The food-processing industry in Ethiopia is the largest manufacturing industry, taking up 39% of total value added by the FOODBUSINESSAFRICA.COM

manufacturing industry in 2009/2010, equivalent to US$900 million. The market scenario has changed somewhat since 2010, including an accelerated privatization of the food and beverage sector in the country. Heineken has not been alone in taking up the opportunity to invest into the country, with BGI Castel having entered the country earlier, producing St. George’s beer before the market was completely opened up to more investors. The growth of the beer industry in Ethiopia is one of the most vibrant in Africa at the moment, where per capita consumption is still in in the regions of 6-7 litres per person per annum, compared to about 60 in South Africa and Kenya at about 12 litres per person per annum. “Ethiopia is attracting more investment as a business and world tourism destination and has become a lucrative market for the wine and beer industry,” states Aklilu Kefyalew, Ethiopian Food Beverage and Pharmaceuticals Industry Development Institute.’’ With three breweries in Harar, Bedele and its new brewery Kilinto, Heineken has just inaugurated an expansion project that places its brands, Walia, Harar, Bedele and the recently introduced Heineken brand at the top of the beer industry in Ethiopia. The production of the internationally recognised brand Heineken in Ethiopia marks the first time the brand is being brewed in the region. The beer industry, reported to grow 15% per annum, also has other international conglomerates including Diageo, which bought the Meta Abo brewery in 2012 for US$ 225 million. Other beer companies

GOVT. BOOTS CAPACITY, TO BUILD INTEGRATED PROCESSING PARKS Ethiopia has come a long way from the days in the 1980s when it was in the news for the wrong reasons: famine due to lack of food, to being an investors paradise of sorts. The country received net foreign direct investment (FDI) worth US$2.132 billion in 2014, with investors putting their money into the country’s food and beverage processing, cement, chemicals and construction materials sectors. To consolidate the gains, the country currently runs one of the most modern railway lines; connecting Addis Ababa to the Djibouti Port, providing a critical link with the country’s major import terminal. Huge investments in major power projects will add further capability, removing some of the most outstanding logistical and power challenges faced by manufacturers in the country. The GoE also promises a safe, stable political environment to potential investors, despite the recent disturbances that led to the some foreign firms facing loses after local communities attacked their farms and factories. The GoE has thrown in a schedule of FDI incentives, including tax holidays and tariff-free incentives to attract major corporations to develop the agro and food processing industry, considering the net effect of the industry to absorb labour in the country, and its ability to boost agricultural production of major crops. It also looks at the sector as an important contributor to foreign exchange. It is worth noting that the GoE allows 100% foreign investment in food processing; in a country where other sectors like telecoms and banking are ring-fenced for local ownership only. To boost agro-processing, the country has put in place a plan to set up Agroprocessing industrial parks in the states of Tigray, Amhara, Oromia and Southern Nations, Nationalities and Peoples’ states (SNNP), worth US$2.5 billion. A total 17 agro-processing locations have been identified and will be developed, according to the Ministry of Trade. FOOD BUSINESS AFRICA | NOV/DEC 2016

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include Dashen brewery, Habesha brewery (with investment by international brewer Bavaria), Zebidar and Raya brewery. Beyond beer, the wine industry in Ethiopia is also a critical player in the export market, earning for the country projected export revenue worth US$17 million by the end of 2016, according to Aklilu. The country’s two wineries produce wine for local and export market. Awash Wines, the country’s oldest winery is currently partly owned by 8 Mile LLP, whose ownership include the famed rock artist Bob Geldof. Castel Winery, part of the Castel Group, one of Africa’s largest beer and wine producers, opened its winery in Ethiopia in 2014, producing Acacia and Rift Valley wine brands for export and local consumption. The other sectors with significant international operators include the soft beverages industry; where Coca-Cola and Pepsi bottlers vie for market dominance in the sector. Coca-Cola operates two bottling plants, one in Addis Ababa and the other in Dire Dawa. It is currently building a new plant in Bahir Dar city, with plans for two more plants by 2020 in the country. Pepsi, which through its bottler Moha Soft Drinks Industry operates seven bottling plants in the country is also constructing two more plants to meet rising need for soda and water in the country. Other multinationals including Unilever have set up in the country in the past year, making a return after folding its operations from the country. Nestle has also invested in the country’s beverage sector in the past year, taking a stake at Abyssinia Springs, a bottled water company. Beyond the international giants, private equity (PE) funds including Schultz Global Investments (SGI) have invested in Ethiopia, tapping into former GoE owned and private enterprises. These include two beverage and a baking firm in the country. Other PE firms, which have entered the fray include Catalyst Principal Partners, 42

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which acquired a 50% stake in Yes Brands Foods & Beverages Co., a leading bottler of water. Ethiopia has also attracted major PE players beyond the food industry, including the PE fund KKR, which invested in Afriflora, a floriculture grower and exporter. “Ethiopia is fast becoming the ‘mustvisit’ destination for virtually all private equity funds with an emerging sector focus,” Zemedeneh Negatu, the head of advisory services at EY, told FT recently, saying that his team had seen a surge of interest from PE funds in the country since 2011. But beyond the companies and PE funds from the developed world, major investments have also poured into Ethiopia from China, Turkey and India. Global and regional suppliers to the food and beverage industry have also recently turned their focus on Ethiopia, to tap into the growing manufacturing base, and to serve their clients in the country. Wayne Kleinhans, the Training Manager at bottling equipment supplier, Krones, told this magazine mid this year that the company’s focus has shifted somewhat to Ethiopia, where they have several projects as the beverage and brewing sectors up their investments. Other suppliers from Europe, Turkey, USA, Brazil, Dubai, Kenya, South Africa, India and China have also made forays into the country, with every Kenya Airways, Ethiopian Airlines and Emirates flight that lands at the Bole Airport bringing in those with interest in supplying ingredients, packaging and equipment to the sector.

Operational challenges remain

The ambitious goals of the GoE to attract investments into the country’s food and beverage industry continues to face headwinds from its own restrictions on operations that hinder the growth of the industry due to the planned nature of the economy. “One of the key success factors to succeeding in Ethiopia is understanding how to manage the operational challenges once you invest in the country,” warns a consultant in the country. “One of the challenges we face here is a lack of clarity regarding certain matters of regulation and commercial laws,” Gabriel Schultz, the CEO of SGI told Ethiopian Business Review, a local publication this year. “I think the regulatory uncertainties are factors. But they are getting better bit by bit – we are seeing progress and am still very hopeful,” he added.

Strict import regimes, restricted availability of foreign exchange and bureaucracy in the regulatory environment stand in the way of having the flexibility to operate efficiently in the country. “Forward planning is key, considering that majority of ingredients, packaging and equipment are imported from outside the country,” he advises. Availability of reliable and quality power, despite the country currently installing one of Africa’s largest power capacity, remains a challenge in Ethiopia, with companies forced to have a second power option of generators to run smoothly, with heavy cost additions to their operations. The other critical challenge is the

“Strict import regimes, restriced availability of foreign exchange and bureaucracy in the regulatory environment hinder the industry in Ethiopia availability of well-trained and experienced personnel to manage the food and beverage factories and critical functions. “The whole private sector is in its infancy. Hence it doesn’t always have the talent availability found it other African countries,” Francis Agbonlahor, the CEO of Diageo in Ethiopia says. “The biggest challenge for us is finding the human resources we need for our portfolio companies. Even more than other countries we invest, in Ethiopia that is a major challenge for us. Particularly, human capital and skilled management with experience has been the major frustration for us because it has been very difficult to find in Ethiopia,” explains Gabriel Schultz. A World Bank study released in 2010 on the challenges facing Chinese investors in the country still has relevance: “Many Chinese firms claim to suffer from inconsistency of tax law explanation and frequent law amendments. More than 70 percent of the surveyed firms find the inconsistency of tax law explanation and the frequent law amendment a major obstacle to doing business.”

FOODBUSINESSAFRICA.COM


NEWS | SUPPLIER NEWS & INNOVATIONS NEW PRODUCT

Buhler introduces SORTEX F optical sorter for the frozen fruit and vegetable industry SWITZERLAND - Bühler, a global leader in optical sorting technology for the removal of foreign material contamination, has developed the most hygienic optical sorter available today, to help reduce the risk of microbial contamination. The sorter’s pioneering hygienic design principles help reduce the risk of food-borne illness, meeting the increased scrutiny of hygienic processing practices in the frozen fruit and vegetable sector that have intensified recently, following several high-profile food contamination outbreaks. Bühler product manager, Stephen Jacobs, explains: “The past couple of years in particular have seen some very high

profile cases of product contamination. For instance, earlier this year there was a major listeria outbreak in the United States that was traced back to a frozen fruit and vegetable processing plant.” The SORTEX F optical sorter, with its innovative open access, for quick, easy and thorough cleaning, has been designed to prevent the build up of pathogenic bacteria that can induce food-borne diseases such as Salmonella, E. coli, Listeria spp and Norovirus, according to the company. The SORTEX F features a pioneering retractable chute that can be repositioned to allow operators to physically step inside and access internal areas of the machine.

NEW PRODUCT & M&A

tna unveils wash down VFFS packaging system and acquires Italian equipment maker Sabalpack

AUSTRALIA – tna, the leading global supplier of integrated food processing and packaging solutions has announced the launch of a new vertical form fill and seal (VFFS) system with full wash down functionality. The company has also confirmed that it has acquired Sabalpack, a leading Italian manufacturer of all stainless steel VFFS technology for the fresh and frozen sector, earlier this year.

some of the strictest sanitary regulations, so a simple and hygienic equipment design is critical. Sabalpack has a long history in the development of all stainless steel equipment, which made the company’s portfolio a great fit for our own range of high performance VFFS technology.” Central to the design of the new tna arctic 3 is the system’s A2 (AISI 304) stainless steel, corrosion-resistant cubicle, which ensures that key components like motors, vacuum pump and sealing jaws are fully protected from any dirt or water ingress. The tna arctic 3 is able to withstand intensive wash down procedures - a key consideration in the fresh and frozen sector, where frequent sanitation is essential to comply with stringent global hygiene standards.

Featuring a hygienic design, the tna arctic 3 is able to run efficiently and reliably in hostile wet and cold processing environments, whilst maintaining the highest levels of sanitation and flexibility. The tna arctic 3 is the latest generation of Sabalpack’s existing arctic range of full wash down VFFS systems and the result of the combined engineering expertise of the Australian packaging pioneer and the Italian fresh/frozen expert. “We’re extremely excited to announce the integration of Sabalpack into the tna business together with the launch of the tna arctic 3,” comments Michael Green, Group General Manager at tna. “We see immense opportunities in the fresh and frozen foods sector – in particular as people continue to look for foods that blend convenience, health and indulgence. Food manufacturers in this segment, however, need to adhere to

NEW OFFICE

Bitzer opens first office in Kenya with focus on the region KENYA – Bitzer, the German specialist refrigeration and air conditioning provider, is convinced of the growth opportunities in East Africa and has opened an office in Nairobi to serve the region The office in Nairobi, which reports to the company’s Middle East regional base, will place the company in close proximity to users and enable it to “get better acquainted with the market situation in East Africa,” FOODBUSINESSAFRICA.COM

says the company. “Thanks to its increasing population and improved prosperity, Kenya offers enormous growth opportunities. This, in turn, has led to a high demand for reliable refrigeration and air conditioning technology for a whole range of applications, including supermarket refrigeration, floriculture and horticulture industry, meat and fish processing, restaurant chains, catering and

dairy production,” it adds. The company is also planning to build a certified service centre within a year in the country. ‘We have recently facilitated the direct import of Bitzer goods from Germany through our local partner Frigitec Supplies Ltd. Users will therefore have access to a large volume of certified Bitzer products at reasonable prices,’ says Stefan Leitl, Managing Director of Bitzer Middle East. FOOD BUSINESS AFRICA | NOV/DEC 2016

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NEW PRODUCT

Bosch introduces new packaging concept to sugar producer GERMANY – Packaging solutions provider Bosch Packaging Technology has introduced new dust-tight mono-material paper bags replacing film-based packaging material with sealable paper on a vertical form, fill and seal (VFFS) machine. The company has since introduced the product to Pfeifer & Langen GmbH & Co.KG. the third largest sugar producer in Germany, with locations all around Western, Central and Eastern Europe. The revolutionary concept was based on the idea of replacing film-based

packaging material with sealable paper on a VFFS machine, which would both enhance product protection in comparison with standard paper packaging and improve brand position at point-of-sale. “It was at interpack 2014 when we sat down with the customer and our partner, BillerudKorsnäs, and the idea transformed from a vision into a project. After receiving the letter of intent, we started developing the prototype and delivered the machine within 12 months to the customer’s site in Elsdorf, Germany,” explained Marcus

Velezmoro, responsible for the VFFS ZAP portfolio at Bosch Packaging Technology. Until now the production of monomaterial paper packaging was only possible with glued pre-made bags or formed paper bags on mandrel-wheel technology. The cooperation between Bosch, and a paper material manufacturer – BillerudKorsnäs, resulted in developing the first dust-tight solution for dry food products combining the benefits of VFFS technology with sustainable packaging material

INVESTMENT

Givaudan expands its flavour Innovation Centre in Singapore to enhance regional capability

SINGAPORE – Leading flavours and fragrances company Givaudan has invested CHF 5 million (Euro 4.7m) to expand its Flavour Innovation Centre in Singapore. The expanded Singapore centre will

include a new fully integrated culinary space for concept development, as well as new or expanded savoury, bakery, confectionery, beverage and dairy facilities to serve all market sectors. The investment enhances Givaudan’s innovation capabilities in the Asia Pacific region, facilitating a regional focus on applied innovation, collaboration and knowledge sharing, to complement its global network, says the company. “The expansion of the Singapore Flavour Innovation Centre supports our 2020 strategy of investment in high growth markets, and builds on our recent

developments in Nantong, China; Karachi, Pakistan, and Pune in India. It demonstrates our continuing commitment to growing with our customers and providing them with differentiated flavour solutions for consumer preferred products that meet local market needs,” said Givaudan Chief Executive Officer, Gilles Andrier. Expanded capacity in Singapore will enable greater collaboration and innovation with customers to meet their needs, and those of a growing mass market with a desire for quality products with natural ingredients, notes Givaudan

INNOVATION CENTRE

Cargill opens innovation center in China to create food of the future

CHINA – Leading global company Cargill has opened an innovation center designed to create innovative food products and new flavors for its customers in China. Dubbed Cargill ONE, the new centre pulls together Cargill’s resources and expertise 44

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across broad areas in food, including animal protein, edible oils, sweeteners, starches, cocoa, and texturizing solutions, into one innovation centre that employs nearly 50 researchers, scientists, nutritionists and chefs who will work with customers to develop nutritious and safe food that meet the changing tastes of consumers. Cargill ONE is Cargill’s first innovation center in Asia that brings together so many of its different product lines. It is located in Shanghai. The centre will focus on three main areas of innovation: taste and flavors, food ingredients and menus that appeal to changing consumer demand. “We have multiple innovation centers around the world specializing in distinct food groups, such as animal protein, sweeteners, food texturizers, feed and such. Cargill ONE is our first innovation center in

Asia that pulls together all this knowledge from our many businesses to offer a onestop consultancy to our customers in China,” said Todd Hall, senior vice president of the company. The centre will be used to respond to changing diets of the Chinese consumer and the way they view their food, according to Cargill, with food safety at the base of all consumer requirements in the country. The centre will deliver the food and flavors that the Chinese consumers want in their diet in a safe, healthy and nutritious way. It will also be a platform for public education on food safety and nutrition, notes the company. According to Hall, the company will extend the Cargill ONE concept to other markets across Asia Pacific in future. FOODBUSINESSAFRICA.COM


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Innovations for a better world.

Food Business Africa incorporating Dairy Business Africa Nov/Dec 2016  
Food Business Africa incorporating Dairy Business Africa Nov/Dec 2016  

Africa's food, beverages, dairy, milling and food service magazine