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A F R I C A ’ S

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F O O D ,

B E V E R A G E

&

M I L L I N G

I N D U S T R Y

M A G A Z I N E

FOOD BUSINESS

MY COMPANY PROFILE

BBC NIGERIA

Prahlad Gangadharan - CEO

EXECUTIVE INTERVIEW

SAINT-FRANCIS TOHLANG -

CORPORATE COMMUNICATIONS & PUBLIC AFFAIRS DIRECTOR - EAST & SOUTHERN AFRICA REGION, NESTLÉ WWW.FOODBUSINESSAFRICA.COM

COMPANY FOCUS:

NESTLÉ COMPANY HIGHLIGHT

NAMIBIA BREWERIES LTD YEAR 9 | ISSUE NO. 45 MAR/APR 2021


The Art of European Meat

Hindquarter Carcass with jowl

Mastered by the Belgian meat suppliers What makes the Art of European Meat? It’s that exceptional combination of Craftsmanship, Food Safety and Tailor-Made Service. And that’s what the Belgian meat suppliers truly master. As one of Europe’s leading meat producers and exporters, they turn their expertise into an art form. Up to you to savor it.

Find your Belgian meat master at artofmeat.eu

THE CONTENT OF THIS PROMOTION CAMPAIGN REPRESENTS THE VIEWS OF THE AUTHOR ONLY AND IS HIS/HER SOLE RESPONSIBILITY. THE EUROPEAN COMMISSION DOES NOT ACCEPT ANY RESPONSIBILITY FOR ANY USE THAT MAY BE MADE OF THE INFORMATION IT CONTAINS.


Afmass FOODEXPO

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PRAHLAD GANGADHARAN, CEO BIG BOTTLING COMPANY, NIGERIA

CONTENTS

44 Company Focus: Nestlé

YEAR 9 | ISSUE NO. 45 MARCH/APRIL 2021

Company Profile: BIG 34 My BOTTLING COMPANY The Big Bottling Company is investing in Nigeria to tap into the vast market potential. We talk to the company’s CEO Prahlad Gangadharan, as we discuss the prospects and future of the company

Focus: Namibia 39 Company Breweries Ltd

We take a deep dive into Mark Schneider's tenure as the MD of food giant Nestlé. In a world where consumer prefences are fickle and sustainability has taken a new meaning, no company reflects the future of the food industry and the tough decisions owners and managers have to make than the world's largest food and beverage firm, Nestlé, to survive the storm while at the same time,thriving.

ON THE COVER Prahlad, Gangadharan the CEO of Big Bottling Nigeria

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MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

We cover one of Africa's oldest brewing enterprises Namibia Breweries, 100 years after its start, while looking into its present, future and how it is impacting the community in Namibia. FOODBUSINESSAFRICA.COM


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Africa's Food Safety & Quality Management Conference & Expo Join over 2000 delegates at the leading pan-African international virtual food safety and quality management conference and expo. Meet and network with delegates from the food and animal feed manufacturing, retailing and distribution; HORECA; Government ministries and regulatory agencies, researchers and more.

CONFIRMED SPEAKERS

Regional Quality Head, Ferrero, Indian sub Continent

CESARE VARALLO

Food Lawyer & Founder, Foodlawlatest.com

VERONICA IDOWU ALABA Food Safety Consultant, Nigeria

Director, Nhlupo Business Optimisation Solutions, South Africa

Business Development & Innovation Executive, Armlead Private Ltd, Zimbabwe

Senior Technical Advisor, Technoserve, Zambia

DAVID MULWA

CHRIS WAINAINA

MOLLY ABENDE

PEER HANSEN

JEMI BOYEOKIT

VICTOR YAMO

DESHRAJ SHARMA

Regional Sales Manager, Ishida

Commercial Director, Bruker East Africa

Production Manager, Burton & Bamber Co. Ltd

MATTHEW NCUBE

Biochemist, University of Copenhagen

MERCY CHATYOKA

Business DevGlobal Supplier Quality Project Manager Barry Callebaut UK

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CONTENTS

YEAR 8 | ISSUE NO. 44 | JAN/FEB 2021 REGULARS 8 Editorial 10 Events Calendar

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News Updates: • Kenya launches new dairy industry regulations aimed to transform the sector • Nigerian sugar industry players rake in huge amounts of investments driving sector self-sufficiency • Bidco Uganda, Wilmar International increase investment in Africa’s edible oil industry • Alapala continues with global expansion, opens new office in Kenya • Nigeria’s Eat’N’Go extends footprint across Africa, enters Kenyan market • Sesame becomes ninth food allergen requiring plain-language labelling in the US • Dominos becomes the first US QSR to use fully autonomous vehicles for pizza delivery • CPG majors Nestle, Unilever, Mondelez post impressive Q1 results buoyed by at home consumption • Soft drink majors Pepsico, Coca-Cola rebound from the pandemic with promising Q1 results • Ethiopian dairy company Lame Dairy invests US$14.5m in new processing facility • AB InBev officially cuts ribbon to fourth brewery in Mozambique worth US$180m

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Supplier News & Innovations: Givaudan, Bühler open new protein innovation center in Singapore | Tate & Lyle to sell starches, sweeteners unit to enhance focus on food and beverage solutions | Friesland Campina Ingredients launches new product to aid in production of softer protein bars | Bühler launches new malting equipment for small scale brewers | DSM launches Hologram Sciences, a new personalised nutrition company | Bell launches new flavours to enhance sensory profile of plant-based foods

Executive Interview: SAINT-FRANCIS TOHLANG - Corporate Communications & Public Affairs Director - East & Southern Africa Region, Nestlé

New Product Innovations: Libstar Holdings: cheesecake mix and yoghurt flavours| CHI Limited: Hollandia Zero Yoghurt| Komari Beverages: Arada hard seltzer| Bio Foods: Sauces and Cheeses| Lihlungu Dairy: Yogurt| Kabarnet Water: Premium Mineral Water| Upfield: Blue Band Instant Porridge| In2food Ice Cream: Brownie Ice Cream| 254 Brewing: Craft Beer

DAIRY BUSINESS AFRICA 47 Dairy alternative products take their place as consumers vote with their wallets BEVERAGE TECH AFRICA 55 Opportunities rise in Africa for non-alcoholic malt beverages MILLING & BAKING AFRICA 61 Sub-Saharan Africa’s food security has turned out better than feared. But risks remain FOOD NUTRITION & HEALTH 67 South Africa's sugar tax plummets sale of sweetened beverages, reducing excessive sugar and energy intake – study shows 6

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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EDITORIAL

Introducing Food Business Africa TV – Your home for digital events, interviews, webinars and more

T

he Covid-19 pandemic has truly changed the way we have lived our lives over the last 15 or so months and counting. The new normal, has meant all of us – companies, teams and individuals – have been forced to find new ways of working, learning and interacting with each other, be it at home or in the factories across Africa and the World. However, as we have been forced to change our ways, a few things remain part of parcel about us: the need to keep in touch with each other, network and learn with and from each other and to keep on discovering new ideas and technologies IN COMES FOOD BUSINESS AFRICA TV! Food Business Africa TV is our virtual platform for digital summits, webinars, talks and other digital events that are focused on discovering the pulse of the developments, opportunities and challenges in Africa’s agriculture, food manufacturing and retail industry; as well as the changing consumer trends and investments landscape. Through regular engagements with leading news makers from across Africa and beyond, we look forward to deep discussions full of discovery, learning and networking. ONE VIRTUAL PLATFORM, THREE CONCEPTS The Food Business Africa TV stable has three key concepts: Food Business Africa Connect, AFMASS AFMASS Digital Summits and Food Business Africa Webinars Food Business Africa Connect is a bi-monthly magazine show that comprises of high level discussions with some of the leading food industry investors, C-Suite managers, private equity/venture capital managers, NGO and Government leaders and other stakeholders from Africa and the World. The Shows cover the most important happenings,

FOODBUSINESSAFRICA.COM

Year 9 | Issue 2 | No.45 • ISSN2307-3535 FOUNDER & PUBLISHER Francis Juma

launches, mergers and acquisitions and latest investments around Africa and how they impact the future of the food and agro industry in Africa. AFMASS AFMASS Digital Summits are one day highlevel virtual conferences and exhibitions that bring the food industry operators to outline the latest opportunities, challenges and market trends in the food industry in Africa. Some of the issues covered by the Digital Summits include investment opportunities, sustainability, nutrition and health, food safety, among other key issues, in specific sectors of the food and agriculture industry in Africa. At each AFMASS Digital Summit, you will hear from industry leaders and managers from Africa and beyond, as they share their experiences, skills and deep insights on the future of the food industry in Africa. Food Business Africa Webinars are sponsored one hour learning and knowledge sharing webinars that delve deep into new opportunities, latest technologies and new market insights that can be adopted by the food and agro industry in Africa. Some of the issues covered at these webinars include new processing, packaging, and formulation technologies; engineering, sustainability, nutrition and health, food safety, among other key issues of interest to the food and agriculture industry stakeholders in Africa. We look forward to welcoming you to these new ideas through our Food Business Africa TV platform. We do hope that through this platform we shall continue impacting the food industry in Africa and beyond More information about the platform can be found at www.foodbusinessafrica.com/TV. Have a good read Francis Juma CEO & Founder

PUBLISHED BY: FW Africa P.O. Box 1874-00621, Nairobi Kenya Tel: +254 20 8155022, +254725 343932 Email: info@fwafrica.net Company Website: www.fwafrica.net

EDITORIAL Virginia Nyoro | Catherine Wanjiku | Paul Ongeto ADVERTISING & SUBSCRIPTION Jonah Sambai | Hellen Mucheru DESIGN & LAYOUT Clare Ngode

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INFORMING AFRICA’S BUSINESS GROWTH

Food Business Africa (ISSN 2307-3535) is published 6 times a year by FW Africa. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited. All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published.

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FOOD BUSINESS AFRICA

CONNECT JOIN THE DOTS - DISCOVER THE PEOPLE & TRENDS IN AFRICA'S FOOD INDUSTRY AT OUR NEW SHOWS The food industry in general, is undergoing a tremendous transformation - as new investments in the sector facilitate business growth, innovation in new products and new markets are opened The Food Business Africa CONNECT is the bi-monthly online magazine show, where you will meet the movers and shakers from the private, public, academia and non-profit sectors of the food industry, as they engage with editors from Food Business Africa magazine, to help unravel the opportunities and trends in the Continent. Part of our Food Business Africa TV platform, Food Business Africa CONNECT is for you, your teams and everyone in between. SIgn up today to attend the next edition of the Show!

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EVENTS CALENDAR

June 1 - 3, 2021 CAMINEX 2021 Matobo, Zimbabwe Focus: Agriculture www.caminex.co.zm

August 5-7, 2021 DairyTech Bengaluru, India Fous: Dairy http://dairytechindia.in/

October 09-13, 2021 Anuga Food & Beverage Fair Cologne, Germany Focus: Food & Beverage www.anuga.com

June 16-18, 2021 GrainTech Africa Nairobi, Kenya Focus: Grain & Milling https://www.graintechafrica.com/

August 23 – 25, 2021 Africa’s Big 7 Johannesburg, South Africa Focus: Food & Beverage retail www.africabig7.com

June 16 – 18, 2021 Dairy Livestock & Poultry Expo Africa Nairobi, Kenya Focus: Dairy & Poultry www.dlpexpo.com/africa/

September 1-3, 2021 Food & Beverage West Africa Lagos, Nigeria Focus: Food & Beverages https://fab-westafrica.com/

October 28-30,2021 African Livestock Exhibition and Congress Addis Ababa, Ethiopia Focus: Livestock Focus: Animals & Pets https://www.ilri.org/events/ african-livestock-exhibition-andcongress-2016

June 23 - 25, 2021 Sweets & Snacks Expo Indianapolis, USA Focus: Confectioneries & Snacks www.sweetsandsnacks.com

September 7 – 9, 2021 Seafood Expo Global Barcelona, Spain Focus: Fisheries https://www.seafoodexpo.com/global/

June 22 – 24, 2021 Africa Agri Tech Pretoria, South Africa Focus: Agriculture & Forestry www.africa-agri.co.za

September 14 – 16, 2021 Halal Expo Nigeria Abuja, Nigeria Focus: Food & Beverages www.accinigeria.com/event/halalexpo-nigeria-2020

July 5-7, 2021 Foodex Birmingham, UK Focus: Food & Beverage www.foodex.co.uk July 14-16, 2021 Africa Food Safety & Quality Summit Virtual, Kenya Focus: Food Safety www.foodsafetyafrica.net

September 17-19, 2021 Grains Africa - International Trade Show on Grains & Technology Kampala, Uganda Focus: Grains & Milling www.mxmexhibitions.com/ grainsafrica_uganda September 22-24, 2021 Petfood Forum CONNECT Virtual Missouri, USA Focus: Animals & Pets www.petfoodforumevents.com

October 29 - 31, 2021 The Vegan & Plant Powered Show Hybrid, Cape Town, South Africa Focus: Plant-based foods www.veganandplantpoweredshow.com November 07-09, 2021 Gulfood Manufacturing Dubai, United Arab Emirates Focus: Food & Beverage www.gulfoodmanufacturing.com December 2-4, 2021 AFMASS Food Expo Nairobi, Kenya Focus: Food, Beverage & Milling www.afmass.com December 3, 2021 Africa Food Industry Excellence Awards Nairobi, Kenya Focus: Food, Beverage & Milling www.awards.foodbusinessafrica.com

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TheNest AFRICA

AT THE NEST AFRICA OUR AIM IS TO CONNECT START-UPS WITH BIG CORPORATES & FUNDERS

Start-ups and young businesses in sub-Saharan Africa face a myriad of challenges, including lack of access to technology, expertise and networks to grow. At The Nest Africa, we are creating a collaborative facility with new product development labs, production and packaging kitchens and office space for use by start-ups and young companies to facilitate their innovations and growth towards becoming the next big thing. AND WE BELIEVE THAT CONNECTING THEM TO BIG CORPORATES AND FUNDERS IS KEY TO THEIR SUCCESS Visit the website and sign up to partner with us today

www.thenest.fwafrica.net


NEW FOOD PRODUCT INNOVATIONS

Libstar Holdings No Added Sugar yoghurt flavours & Instant baked cheesecake mix Libstar Holdings, a leading dairy company in South Africa, has launched the delectable new ‘Piece o’ Cake cheesecake mix, an all-in-one product coming already mixed and prepared in a convenient tub. According to the company, one only needs to simply follow the easy on-pack baking instructions and you’re good to go. The company has also launched two No Added Sugar yoghurt flavours: Double Cream No Sugar Added Strawberries & Cream and Low Fat No Sugar Added Blackberry & Cherry.

www.libstar.co.za

CHI Limited Hollandia Zero Yoghurt

CHI Limited, Nigeria’s leading fruit juice, drinking yoghurt, evaporated milk, and snacks manufacturer, has expanded its nourishment offering with the introduction of Hollandia Zero Yoghurt. The new product is a premium innovative offering that combines the natural taste and nutrition of yoghurt, with unique benefits of Zero Added Sugar, Zero Artificial Sweetener & Zero Lactose. It is also a low-fat drinking yoghurt.

www.chilimited.com

Komari Beverages Arada hard seltzer drink Komari Beverages has introduced hard seltzer into the Ethiopian market. The drink dubbed Arada is a sugar-free cocktail drink coming in three different flavours i.e., apple, pineapple and lime with a 5% alcohol by volume. It is packaged in an artistic bottle, aimed to mostly attract the youngsters who are by far the biggest consumers of hard seltzers across the globe.

www.komari.com

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Bio Foods New Sauces and Cheeses Bio Foods, a leading dairy company in Kenya, has unveiled a new range of sauces and cheeses to meet rising consumer demand. Bio’s new sauces include Real Tomato Ketchup, Garlic Mayonnaise, and Simply Chocolate. The company has also expanded its cheese offering with launch of new cheese including Paneer, Cheddah, Halloumi, Fenugreek, Gouda, and Mozzarella.

www.biofoods.co.ke

Lihlungu Dairy New Yogurt

Lihlungu Dairy, an Eswatini startup dairy company, has launched a new range of full cream yogurts for Eswatini dairy lovers. The yogurts are available in three different flavours namely, Plain, strawberry, and choco-chip flavors. All the yogurt flavours are available in 500g plastic cups.

Kabarnet Water Premium Mineral Water Kabarnet Water, a fast-rising water bottling company in Kenya, has expanded its water portfolio with the launch of new still and sparkling water brands. The new executive water brands are created with sustainability in mind as they are packaged in in stylishly designed, returnable glass bottles. The premium version is available in 200mls, 330mls, 500mls and 750mls while the sparkling version is available in 500mls and 750mls.

www.kabarnetwater.co.ke

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NEW FOOD PRODUCT INNOVATIONS

Upfield Blue Band Instant Porridge Upfield, the owner Blue Band brand, has launched new instant porridge into the Kenyan market. The plant-based, whole milled composite flour is fortified with 10 vitamins and 5 minerals, offering consumers a nutritious breakfast meal. Consumers can prepare their porridge in under two minutes by mixing the flour with hot-water and properly stirring it to their preferred consistency.

www.blueband.com

In2food Choc Brownie Ice Cream

South African premium food business company In2food has launched Choc Brownie Ice Cream in partnership with Froneri Dairymaid’s Gelato Roma Brand. The decadent gelato is made with chocolate sauce and brownie pieces to create the perfect balance of soft chewy texture at a frozen temperature.

www.in2food.co.za

254 Brewing Craft Beer 254 Brewing Company, has launched what they call 'Kenya's first line of naturally clarified, small-batch craft beers'. The line is comprised of 13 different beers that are “full of character and have no added chemicals.” The beers range from an alcohol content of 4.2% to 8.5% and are available in 330ml glass bottles.

www.254brewing.com

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NEWS UPDATES by www.FoodBusinessAfrica.com INVESTMENTS

AB InBev officially cuts ribbon to fourth brewery in Mozambique worth US$180m MOZAMBIQUE – Anheuser-Busch InBev (AB InBev), the world’s largest beer producer has officially inaugurated its new US$180 million brewery in Mozambique through its subsidiary Cervejas de Mocambique (CDM). The new site has a production capacity of 2.4 million hectolitres per year, with potential to expand to 6.7 million HL. It also has a filling line with the capacity to produce 80,000 bottles per hour. CDM says that the brewery uses modern technologies of production, packaging and filling, designed to guarantee excellence in the quality of the beers, while at the same

time maintaining sustainability of the environment. Located in Marracuene, 30 km north of the capital Maputo, it represents the biggest investment in the sector in Mozambique. Tomaz Salomao, President of CDM called it, “The biggest and most modern factory in the country and in Africa,” adding that it aims to supply markets throughout the region. Its construction began in December 2018 and the brewery is AB InBev’s fourth factory in Mozambique, with the others located in Maputo, Beira and Nampula.

M&A

ETG receives US$115m from DFIs, Seed Co clinches US$25m loan from Proparco

AFRICA – Agri Commodities and Finance (ACF), the main trading company of Export Trading Company (ETC) Group, has clinched a US$115 million syndicated loan facility from a consortium of Development Finance Institutions (DFIs), to enable it to expand its operations across Africa. The facility was arranged by the Dutch FMO with participation from FinDev Canada and OeEB of Austria,

aimed to allow ETG strengthen its operations across the agricultural value chain. By improving processing capacity and logistics, the deal will lead to less post-harvest crop loss and food waste, support the livelihood of existing farmers and also create an estimated 5,000 new jobs in Sub-Saharan Africa. Meanwhile, listed seed producing giant, Seed Co has received a US$25 million loan financing from French development financial institution Proparco, to strengthen food security in the region. The seven-year support is divided into two tranches, each for US$ 12.5m, with a 7-year maturity and will be channelled towards research and international expansion via a loan to Seedco Zambia. The support will also enable the construction of a corn dryer at its Zimbabwe unit, which will increase the production capacity, double farmers’ harvests and do more to address the climate risk.

REGULATORY & POLICY

Kenya launches new dairy industry regulations to transform the sector KENYA – The Agriculture ministry of Kenya has introduced new dairy industry regulations to streamline the management of the industry, encourage investment, ensure safety of the products and to boost both local and export trade. The new regulations are in the form of eight sets of directives touching on critical areas such as registration, traceability of produce, compliance, sales contracts and safety standards. During the launch of the regulations, the Kenya Dairy Board Managing Director Margaret Kibogy said that the laws were necessary as the sector has been rapidly growing at a rate of 5% p.a. in production and that

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the past regulations could not substantially support the new developments. The new laws provide for requirements for dairy farms, collection centres, milk bars and milk processing establishments including cottages, mini dairies, and largescale processors to meet minimum hygienic conditions for the production of safe and quality milk. They provide for the safety of dairy products through labelling, examination, calibration, records, storage, and distribution through the value chain actors. They also streamline information access and regulate trade both locally and with other countries.

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NEWS UPDATES

INVESTMENTS

Nigerian industry giants announce huge investments to drive country's quest for self-sufficiency in the commodity

NIGERIA – Leading Nigerian conglomerates BUA Group, FMN Plc and Dangote Group have announced new major investments in the local production of sugar as the Central Bank of Nigeria plans to halt foreign currency for sugar and wheat imports to conserve national foreign reserves. In line with Nigeria’s National Sugar Master Plan (NSMP), BUA Group, a leading food and infrastructure conglomerate has invested over US$300 million in its Lafiagi Sugar Company (LASUCO) in Kwara State, which is in an advanced stage to completion. The facility is expected to commence operation in the first quarter of 2022. The integrated milling factory comprises of a 20,000-hectare sugar plantation, a 10,000tcd sugar mill, a 220,000mtpa sugar refinery, 20,000,000litres per annum ethanol plant, and a 35-megawatt power plant that will be integrated into the national grid. The aim of the investment is to provide Nigerians with cheaper alternatives from imported sugar with O’tega Ogra, BUA Group Head Corporate Communications saying, “At BUA we are very committed to ensuring that Nigerian’s can get the benefits of the National Sugar Master Plan.” Meanwhile, Flour Mills of Nigeria (FMN), one of the country’s leading foods and agro-allied groups has acquired an additional 5,200 hectares 16

of land in Sunti Golden Sugar Estates located in Mokwa, Niger state. The investment is a move to further reaffirm its commitment to the NSMP as well as the overall growth of the sugar industry in Nigeria. The upland acquisition will bring the total land size of its sugar milling THE FACTORY COMPRISES OF A 20,000-HECTARE SUGAR PLANTATION, A 10,000 TCD SUGAR MILL, A 220,000 MTPA SUGAR REFINERY. subsidiary Sunti Golden Sugar Estate substantially to 22,000 hectares of land, while the total land area under cane will be 15,000 hectares. Once fully developed, it is projected that Golden Sugar Company, operator of the estate will have over 25,000 hectares of land under cane, including an earlier announced proposed investments in Nasarawa state. This will result in the production of approximately 250,000 tonnes of sugar per year, significantly increasing its local sugar production. The company also revealed that the total projected cost to achieve this bold plan is set at a minimum of about N160 billion (US$419m), including the new Sugar mill at Nasarawa. Dangote has also noted that sugarcane planting has commenced

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

BRIEFS Ethiopian dairy company Lame Dairy invests US$14.5m in new processing facility ETHIOPIA – Lame Dairy, the subsidiary of Midroc Ethiopia Technology Group, has opened a new dairy facility in Addis Ababa, constructed at a cost of Br 600 million (US$14.5m). The new factory more than doubles the dairy processors capacity from 70,000 litres of milk a day to 160,000 litres and will produce the longlife Shola Milk brand. The bottled products will enable distribution to far-off and remote areas, as well as reduce wastage and will also produce other by-products such as cheese and yogurt. Lame’s new facility started to be constructed in 2019 and the machinery installed were imported from Italy. Its processing is automated thus minimizes manual handling, ensuring production of high quality and safe products.

in two other BIP locations: Tau Sugar Project in Taraba State and Tunga Sugar Project in Nasarawa State. The integrated sugar complex to be located in Tunga, Awe Local Government Area of Nasarawa state, comprises an initial 60,000-hectare sugar plantation and two sugar factories with the capacity to produce 430,000 tpa of refined white sugar. The initiative is a 10-year sugar development plan aimed to produce 1.5 million metric tonnes per annum of sugar from locally grown sugarcane. As the investments rise, the Federal Government has also prohibited the importation of refined sugar and its derivatives from the nation’s Free Trade Zones to protect the sugar industry, which is governed by the NSMP.

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FOOD

LOGISTICS

MARKET TRENDS

Consumers want their products to be sustainably packaged as concerns about climate change abound WORLD – A new report has affirmed that the demand for sustainably packaged products is continuing to rise as consumers become more environmentally aware. According to the recent Global Buying Green Report by Trivium Packaging, two-thirds (67%) of consumers consider it important that the products they buy are in recyclable packaging. The report based on a survey conducted by Boston Consulting Group further revealed that more than half (54%) of consumers take sustainable packaging into consideration when selecting a product. Furthermore, almost one-third (29 percent) of consumers

said they take environmental factors into account when choosing food. The demand for sustainable packaging is being mainly driven by younger consumers, those 44 years and younger, with 83% reporting that they are willing to pay more for it, compared to 70% of all consumers. Another study conducted by YouGov on behalf of First Milk revealed that 76% of UK adults are concerned about climate change in general, while 29% take the overall impact on the environment into consideration when buying food. It also revealed that 33% think that farming and the production of dairy foods significantly contributes to climate change. Meanwhile, 46% of consumers think rearing animals for meat consumption contributes to climate change, while 37% think food waste substantially contributes to climate change. Additionally, the report revealed that UK consumers were concerned about the welfare of animals that produce their food. More than three-quarters of UK consumers would most prefer to buy milk and dairy products guaranteed to come from cows with access to pasture/the outdoors (78%), with almost two-thirds (63%) saying they are concerned about the welfare of dairy cows in the UK.

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The Food, Logistics, Cold Chain & E-Commerce Expo showcases the latest technologies in the supply chain, logistics, storage and e-commerce for food and agriculture sector in Eastern Africa, including: Cold Chain Solutions • Warehousing Solutions • Mobility Solutions • Fintech & New Technologies • Last Mile Connectivity Solutions • Mobile Technology & Apps • Food Delivery Services & Solutions • Clearing & Forwarding Services • Freighting and Transport Services

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NEWS UPDATES

INNOVATIONS

African alcohol industry players bring hard seltzers into the region AFRICA - Distell Group, leading producer of wines, ciders, spirit and ready-to-drinks beverages in Africa has launched hard seltzer in the South African market, the alcoholic sparkling water that has been hugely popular in the United States and European markets. A market innovator, Distell has introduced the Vawter Hard Seltzer, a first of its kind in SA, combining sparkling water with a dash of vodka and infused natural f r u i t flavours, ideal for everyone looking for an alternative light alcoholic beverage. The new offering contains low alcohol content, low sugar and low calories, aimed to give consumers the opportunity to balance fun times with responsible choices. Competitor AB InBev through its subsidiary South African Breweries has also introduced Flying Fish Seltzer, giving consumers more options to choose from. In Ethiopia, Komari Beverages, a newly built US$12m alcohol manufacturing company, has launched the drink in the market under the brand name Arada. It is packaged in an artistic bottle, aimed to mostly attract the millennials who are by far the biggest consumers of hard seltzers across the globe. Hard seltzers have shown enormous popularity world-wide, and the category is currently the fastest growing ready-to-drink segment, as it offers a unique, easy-drinking alternative to ‘lite’ beers. 18

INVESTMENTS

Bidco Uganda, Wilmar International increase investment in Africa’s edible oil industry UGANDA – Bidco Uganda Limited, Uganda’s leading producer of edible oil and the only company that owns and operates palm oil plantations in East Africa, is seeking to double its output to 80,000 tonnes by establishing a second plantation in the country. BUL, jointly owned by Wilmar International, Josovina Commodities Pte Ltd. of Singapore and Bidco Africa Ltd. of Kenya, is already producing as much as 40,000 tonnes of palm oil from its Bugala island estate on Lake Victoria. The company is establishing its second palm oil project on Buvuma Island and targets to have 1,000 hectares under trees this year and 5,000 hectares in four years, according to Connie Masaba, head of the Ugandan agency supervising the project. Small-holder farmers supplying Bidco are expected to plant a total of 2,500 hectares by 2025. To support the project, the government is providing land, as the investment is aimed at slashing crude oil imports BUL IS ALREADY PRODUCING AS MUCH AS 40,000 TONNES OF PALM OIL FROM ITS BUGALA ISLAND ESTATE ON LAKE VICTORIA. into the country. Meanwhile, Wilmar International’s subsidiary in South Africa has commenced construction of the US$81m processing facility that is set to be completed in April 2022. The crude vegetable oil refining facility at Richards Bay Industrial Development Zone (RBIDZ) will be used to produce cooking oil, mayonnaise and margarine. It will boast of advanced waste treatment systems and will be sustainably operated using renewable energy.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

BRIEFS Twiga Foods elevates Peter Njonjo to Group CEO, appoints East Africa CEO in readiness for regional expansion KENYA – Twiga Foods, Kenyan-based technology food distribution platform, has announced the elevation of its Co-founder and CEO Peter Njonjo to the position of Group CEO, effective June 1 2021.

Yebeltal Getachew CEO, Twiga East Africa

In his new role, Peter will be focusing on building the organization’s capacity and capability, as it embarks on its expansion across the African continent. He will be supported by the newly elected Chief Executive Officer of Twiga East Africa, Yebeltal Getachew. YG has taken over the role as of 3rd May 2021 to lead the commercial growth and expansion of Twiga’s business in Kenya and across the borders into the wider East Africa market, in line with the strategic goals of the company. YG has over 20 years commercial and franchise leadership experience gained leading business operations in East Africa, as Country Manager in Tanzania, Ethiopia, Eritrea, Uganda, and Mozambique and later Managing Director/Vice President in the Nigeria business for the Coca-Cola Company.

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INVESTMENTS

Global shipping company Hapag-Lloyd expands presence in Africa AFRICA – Hapag-Lloyd, one of the world’s leading liner shipping companies has opened a new office in Kenya as part of its growth strategy in Africa. The German shipping company mainly transports agricultural goods out of Kenya, especially tea, coffee, fruits and textiles, and ships in chemicals, foodstuffs and a wide range of goods made of plastic or rubber. Setting base at East Africa’s largest economy, Hapag-Lloyd’s main business in Kenya will be managed from the port city of Mombasa served by 19 staff members and supported by an office in Nairobi with 6 employees and 1 employee in Uganda. The move will further enhance the company’s regular inland connections to and from Mombasa with landlocked East African countries – such as Uganda, Rwanda, Burundi and South

Sudan. As part of its growth strategy, the shipping company is seeking to develop inland connections to Somalia, Southern Ethiopia and Northern Tanzania. “Kenya is the economic hub of East Africa and the most important growth region on the continent. By opening our new office in Kenya, we expect to continue our robust growth on the African continent,” said Dheeraj Bhatia, Senior Managing Director Region Middle East at Hapag-Lloyd. With the opening of the new office, Hapag-Lloyd now has five offices on the continent: South Africa, Egypt, Ghana, Nigeria and Kenya. Meanwhile, the logistics company is seeking to take full ownership of the Dutch container shipping company Nile Dutch Investments B.V. The sale and purchase agreement are subject to the approval of antitrust authorities.

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process EXPO

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With over 40 years of expertise, Nile Dutch is one the leading providers of container services from and to West Africa. The company is present in 85 locations across the world and has 16 own offices in the Netherlands, Belgium, France, Singapore, China, Angola, Congo and Cameroon.

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WWW.AFMASS.COM The Process & Pack Expo showcases the latest food and animal feed milling, processing, packaging and laboratory technologies, including: Milling Equipment • Processing Equipment • Packaging Equipment & Supplies • Automation Solutions • Laboratory & Food Safety Equipment • Solar Energy & Energy Storage Systems • Refrigeration & Cooling Solutions • Engineering Services & Supplies • Storage & Post-harvest Solutions

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NEWS UPDATES

BRIEFS Alapala continues with global expansion, opens new office in Kenya

KENYA – Turkey’s premier milling equipment company, Alapala, has expanded its presence in the Eastern African region with the opening of its new office in Kenya. Located in the country’s capital city Nairobi, the new base is part of its global expansion and is aimed to better serve its local customers. “With continued growth and our commitment to providing outstanding service, we are now even stronger in East Africa with our new office in Nairobi,” highlighted Alapala on a LinkedIn post. ALAPALA IS VERY ACTIVE IN THE AFRICA MARKET WITH ITS LOCAL EXISTENCE IN SENEGAL, ZAMBIA, ANGOLA, KENYA, TANZANIA, MOZAMBIQUE AND GHANA. Alapala is very active in the Africa market with its local existence via branches, country offices, and a wide representative network; as well as numerous flour, semolina, and maize mill references throughout the region, in Senegal, Zambia, Angola, Kenya, Tanzania, Mozambique and Ghana.

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M&A

RCL Foods makes plant-based food more accessible in Africa through newly formed JV SOUTH AFRICA – South African consumer goods company, RCL Foods has formed a plant-based joint venture with US-based alternative foods supplier LIVEKINDLY Collective, amid a growing consumer interest in plant-based foods and more sustainable living globally. The establishment of the local JV, LIVEKINDLY Collective Africa has already been approved by the Competition Commission. It will market, sell and distribute all of LIVEKINDLY Collective’s brands – including the well-known local Fry Family Food Co. and the international brands LikeMeat and Oumph! – in South and sub-Saharan Africa, with the aim of accelerating the move towards a more sustainable food system and enhanced consumer choice. The partnership will leverage on

RCL Foods’ farm to fork capability and established market presence to build a robust plant-based ecosystem in the region – from agriculture all the way down to go-to-market brands and infrastructure. On the other hand, LIVEKINDLY Collective will bring together its cutting-edge brand and technology intellectual property. “In line with our passion – More Food to More People, More Often – we are excited to partner with LIVEKINDLY Collective in taking plant-based protein from niche to mainstream in South and sub-Saharan Africa, which will provide people with more options and encourage more sustainable food choices,” said RCL Foods CEO Miles Dally. The JV will address evolving global environmental challenges, nutrition trends, changing consumer needs and the perennial problem of hunger and malnutrition in Africa.

M&A

The Coca-Cola Company to offload portion of its stake in CCBA through IPO SOUTH AFRICA – The Coca-Cola Company has announced plans of listing its largest bottler in Africa, Coca-Cola Beverages Africa (CCBA) as a publicly traded company. The giant soft beverage manufacturer intends to sell a portion of its shareholding in CCBA via an initial public offering, that will see shares traded on the JSE and Amsterdam. The decision is in line with The CocaCola Company’s objective of focusing its resources on building consumerloved brands and innovation. It also underscores the company’s continued and long-term belief and commitment to the African continent and the leadership of CCBA from South Africa, the firm says. The IPO will allow CCBA to operate as an independent, Africa-focused, South African-headquartered, managed and

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domiciled business. “The Coca-Cola Company sees Africa as a key growth market and views a separate listing of CCBA as an opportunity to deliver a broad, supportive, long-term investor base for the on-going development of the business,” said Bruno Pietracci, President of the Africa operating unit of The Coca-Cola Company. CCBA is the 8th largest Coca-Cola bottling partner in the world by revenue, and the largest on the continent. It accounts for 40 percent of all Coca-Cola products sold in Africa by volume. Its African footprint encompasses South Africa, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Comoros, Mayotte, Zambia, Botswana, Eswatini and Lesotho.

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PARTNERSHIPS

HOTELS RESTAURANTS & CATERING

USAID partners Cargill to launch US$33m livestock management initiative

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AFRICA – The United States Agency for International Development (USAID) has launched a five-year US$33 million Transformational Strategies for Farm Output Risk Mitigation (TRANSFORM) initiative, aimed to improve livestock management and combat the threat of zoonotic diseases to both human and animal health in the region. USAID has tapped on the expertise of a consortium of industry players led by Cargill and including Ausvet, Heifer International, and the International Poultry Council (IPC). The initiative will harness innovation to sustainably improve animal health, strengthen animal agriculture production systems in Africa and Asia and enhance global health security. As a farm- THE INITIATIVE WILL HARNESS based initiative, INNOVATION TO STRENGTHEN AGRICULTURE TRANSFORM will ANIMAL PRODUCTION SYSTEMS IN prioritize efforts AFRICA. to significantly decrease the risks of antimicrobial resistance (AMR) and zoonosesii, diseases spread from animals to humans such as foodborne pathogens, anthrax and Avian and swine influenza. The group will also consider transboundary animal diseases (TADs,) such as foot-and-mouth disease and African swine fever, indicates USAID. The program, set to commence in 2022, comes at a time that Nigeria has recorded catastrophic losses in the poultry industry amounting to over US$13m in Kano State, following an outbreak of Avian Influenza, with reported cases of human infections across the country. Together, Cargill, Ausvet, Heifer International and the IPC will increase the capacity of government, agribusinesses, and farmers to prevent and, if needed, identify and quickly respond to these threats to human health.

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The Hotels, Restaurants & Catering Expo showcases the latest solutions and technologies to the HORECA industry from Kenya, Africa and the World to a local, regional and international audience, including: Equipment • Ingredients • Cutlery • Cookery and cooking Solutions • Laundry Solutions • Security & Asset Tracking Solutions • Franchising & Distribution Services • Food & Beverage Products • Food & Beverage Serving Solutions • Safety & Quality Assurance Services • Storage and Warehousing Services and Solutions • Accounting Software & Services • Refrigeration & Cooling Services & Products • Bathroom Solutions • and many more

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SUSTAINABILITY

Shoprite further commits to use sustainable energy, finds buyer for Nigerian unit

SOUTH AFRICA – Shoprite, Africa’s largest retailer has inked an agreement which will see the group procure 434,000 MWh of renewable energy per year for the next seven years, a first of its kind in Africa by any retailer. Further to that, the supermarket chain owner has made strides in reducing green-gas emissions by installing rooftop photovoltaic panels at 19 sites in South Africa and

Namibia, generating 12,300 MWh of electricity – a year. The Group has also fitted 649 solar panels to the roofs of its refrigerated trucks, which generate 760 MWh annually – enough power to run 1,040 refrigerators for a full year, allowing drivers to switch off truck ignitions at delivery locations, reducing noise and exhaust pollution, while keeping the cold chain intact. “At Shoprite we recognise that climate change poses direct and

indirect risks to our business and the communities we serve. Therefore, we are taking measures to tread more lightly on our planet,” said Sanjeev Raghubir, Sustainability Manager for the Shoprite Group. In a bid to find innovative ways to reduce electricity usage, the group has also replaced fluorescent lamps with energy-efficient LED lamps. The process cost R98.3 million (US$6.7m), and in the four years since its inception has saved 83.8 million kWh of energy. Meanwhile, the retailer has found a buyer for its Nigeria based subsidiary, Retail Supermarkets Nigeria Limited. Nigerian property group Persianas emerged the winner of a bidding process organized to find a buyer for the business. The deal is subject to regulatory approval and its finalization will mark the end of Shoprite’s direct control of the business which spans over 15 years. The company plans to formulate a franchise agreement for the brand to remain in Nigeria, as well as a services agreement to provide support to the new owner.

INVESTMENTS

Nigeria’s Eat’N’Go extend footprint across Africa, enters Kenyan market KENYA – Eat’N’Go limited, Nigeria’s master franchisee for Domino’s Pizza, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yoghurt has announced its expansion into the East African market. The leading Quick Service Restaurant operator in West African has successfully acquired the franchisee which operates Cold Stone Creamery and Domino’s Pizza in Kenya. Om Nom Nom Ltd, the master franchise holder of Domino’s Pizza and Cold Stone Creamery in Kenya, opened its first store in 2014 in a market with leading brands like Pizza Hut, Pizza Inn and Debonairs, among many others. The move provides Eat’N’Go with 22

their first foreign market expansion, making them a Pan-African company with a total number of 147 outlets across Africa and largest Domino’s pizza and Cold Stone Creamery Master Franchisee in the region. “Over the years, we have fostered the mission to not just bring the best QSR brands to Africa, but to directly impact on Africa’s economy and we are glad we are finally on the way to making this happen. Studying the growth of the Kenyan market in the last couple of years, we are convinced that now is the time to extend our footprint into the country,” said Group Chief Executive Officer and Managing Director Eat’N’Go Limited, Patrick McMichael.

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The expansion to this new region is in line with the company’s plan to reach 180 stores across Africa by the end of 2021.

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M&A

Sanlam PE acquires majority stake in SA premium red meat supplier Cavalier Group SOUTH AFRICA – South Africa’s state-owned development bank Land Bank, alongside agricultural and trading firm Griekwaland-wes Korporatief Bpk (GWK), have sold their stake in Cavalier Group of Companies, a supplier of premium red meat products in SA to Sanlam Private Equity (SPE). The transaction whose amount has not been disclosed was undertaken through SPE’s Legacy Range-Private Equity Fund, one of its three impact funds launched in June 2020. To this end, Sanlam has acquired a majority stake in Cavalier Group, specializing in creating the shortest and most cost-effective route for red meat products from farm to fork. The group consists of five entities: Cavalier Foods, Cavalier Livestock, Cavalier Abattoir, Cavalier Feeders and the holding company.

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The investment by SPE comes at a time when the meat processor had started embarking on various growth initiatives, which needed a strong and empowered equity partner to help it achieve its growth plans. This planned growth is aimed to create further employment opportunities – another win for jobs at a time of record-high SA unemployment levels. “We are excited to have a partner such as Sanlam Private Equity in our business. With their strong empowerment credentials and their strategic focus of helping businesses grow, we are confident that our partnership will be a very successful one in the future”, said Kabols Le Riche, CEO and founder of Cavalier Group. The new partnership will also enable the organization venture

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This will be an addition to its current market base of supplying major retailers. Cavalier is one of only two Woolworths-approved red meatpackers in South Africa.

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THE NEW PARTNERSHIP WILL ALSO ENABLE THE ORGANIZATION VENTURE INTO THE EXPORT MARKETS SUCH AS THE MIDDLE EAST AND SUPPLYING QUICKSERVICE RESTAURANTS AND HOSPITALITY BUSINESSES.

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into the export markets such as the Middle East and supplying quickservice restaurants and hospitality businesses.

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WWW.AFMASS.COM The Milling, Bakery & Snacks Expo enables consumers, traders, distributors and the general public to touch, feel and taste the latest packaged grains, milled products and baked goods, including: Infant Foods • Grains & Legumes • Bread • Cakes • Processed & Packaged Flours • Biscuits • Cookies • Confectionery & Sweets • Snacks • Chocolate • Animal feed • Aqua feed • Petfood • Fats & Oils • Nuts • Oilseeds • Plant Based Foods • Extruded Snacks and Fruit based snacks, Snack bars and more • Pastries, wafers, sponge cakes etc • Chocolate and chocolate products • Snacky seeds, nuts, grains and legumes • Baked snacks and sandwiches

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NEWS UPDATES

BRIEFS Argentine candy maker Arcor partners with Webcor to establish US$45m confectionery factory in Angola ANGOLA – The Argentine multinational company Grupo Arcor, one of the world leaders in the confectionery, agri-food and packaging sector, is nearing completion of its US$45 million confectionery factory in Angola. The project which is undertaken in partnership with its Angolan distribution partner Webcor, will specialize in production of cookies, biscuits and chocolates and is expected to produce 6,000 tonnes of products of different brands annually, serving both the local market and neighbouring countries of Congo, Namibia, Zambia and Botswana. The industrial unit is located in the Luanda/Bengo Special Economic Zone and is in an advanced stage of implementation, with its inauguration scheduled for November 2020.

M&A

FrieslandCampina enters fast growing Africa cheese market, forms JV with Egyptian Domty

EGYPT – The Dutch dairy co-operative,

FrieslandCampina has partnered with the Arabian Food Industries Company, popularly known as Domty to establish a joint venture that will focus on the export of cheese. Both cheese majors are combining their efforts in a new company that will export and sell affordable cheese to markets in Africa and the Middle East from Egypt. Talks of the agreement began in 2020, with the two parties signing a Memorandum of Understanding (MoU) in September 2020. Under the agreement, FrieslandCampina will hold a 51 per cent interest in the joint venture and Domty, 49 per cent. “We have been seeking this venture as a company for long. We believe

that our products can fit well into the African market and joining forces with FrieslandCampina will help us a lot to do so. We are optimistic about the venture and its ability to grow in the future,” said Mohamed Damaty, Vice CEO, Arabian Food Industries. Arabian Food Industries is one of the biggest cheese manufacturers in Egypt, with its market leader cheese brand Domty, while, FrieslandCampina’s brands, Frico and Kroon, have been dominant market leaders in hard/semi-hard cheese in several North African countries for decades. “We are very excited about the joint venture with Domty. Combining our joint expertise, capabilities and footprint will allow us to nourish more African families than ever before. Over the next few years, we will bring exciting innovations that will create new cheese propositions that are more healthy, affordable and accessible to consumers across Africa and the Middle East,” Dustin Woodward, Managing Director, FrieslandCampina Consumer Dairy Africa, said.

FUNDING

Poultry company Uzima Chicken receives US$3m follow-on debt from AgDevCo

RWANDA – AgDevCo, UK based social impact investor with a focus on Africa’s agricultural sector has made a US$3.0 million follow-on mezzanine debt investment into Uzima Chicken Limited, a poultry company operating in Rwanda and Uganda. 24

The East African poultry farm produces and distributes day-old Sasso breed chickens, with the aim to create value for rural households by providing better quality meat and eggs for consumption and sale. The recent investment will provide Uzima with further capital to expand its production capacity, vertically integrate into poultry feed and widen its reach across the Great Lakes region. This is a second boost from AgDevCo who in 2017 injected US$3m of debt to support Uzima’s establishment in Rwanda. The support gave the poultry farm

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

operational funding to grow rapidly in its home country in line with the Government of Rwanda’s strategy to achieve poultry self-sufficiency and expand to Uganda. “AgDevCo backed us before our first chick was hatched in Rwanda. Now four years and some five million birds later we are pleased to be deepening our relationship with AgDevCo to drive further expansion,” David Ellis, Co-founder of Uzima Chicken said. In addition to providing growth capital, AgDevCo has supported Uzima with technical assistance, including by recruiting and training a network of veterinary staff.

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BEVERAGES

COFFEE & TEA

PARTNERSHIP

FrieslandCampina WAMCO, global dairy giants partner to boost dairy selfsufficiency in Nigeria

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– Nigeria’s leading dairy processor FrieslandCampina WAMCO, has partnered with global dairy and animal feed technology players URUS, Barenbrug and Agrifirm to set up a strategic partnership to boost selfsufficiency in Nigeria’s dairy industry. Tagged ‘Value4Dairy’ the partnership will contribute to the country’s quest to meet its milk production target from the current 600,000 metric tonnes to 1,700,000 metric tonnes by 2024, in a bid to reduce the US$1.5 billion dairy importation bill incurred by the country annually. The consortium is built on the companies’ global achievements and experiences with which they will accelerate sustainable dairy development to deliver high quality nutrition for everyone involved in the dairy chain from farmer to consumer. “Over the past months, we have discussed with these partners on ways to accelerate the progress of the Nigerian dairy sector. Our goal is to invest in local business models to enable the dairy sector become self-sufficient and profitable throughout the entire chain,” said Managing Director, FrieslandCampina WAMCO Nigeria PLC, Ben Langat. FrieslandCampina WAMCO has been a necessary part of most Nigerian homes since 1954 through its iconic brand Peak Milk and will bring its expertise in specialized milk collection and processing. URUS, a top provider for bovine genetics, cattle management software, dairy management reports, milk and soil testing, and calf care products, among others, will offer better breeding technologies under the partnership. Proper roughage production will be undertaken by Barenbrug, a Netherlands headquartered company with115-years’ experience in research, development and production of grass seeds and legumes for agricultural and recreational markets. Leading Dutch cooperative Agrifirm founded over 120 years ago, will provide the right animal feed to Nigeria’s dairy sector.

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The Beverages, Coffee & Tea Expo showcases packaged and processed beverage, coffee, tea and other hot beverage products to a local, regional and international audience, including: Beer • Wines • Spirits • Alcohol Free Beverages • Ciders • Cocktails • Coffee • Tea • Chocolate Drinks • Fruit Juices • Packaged Water • Cordials • Blends Packaged coffee, tea, cocoa and other hot beverage products • Ready-to-drink coffee, tea, cocoa and other hot beverages • Wellness and other plant-based hot and cold drinks • Medicinal and functional drinks • Equipment and solutions for preparing, cooking and serving coffee, tea, cocoa and other hot beverages • Ingredients for preparing coffee,tea and other hot beverage products

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NEWS UPDATES

REGULATORY

Sesame becomes ninth food allergen requiring plainlanguage labelling in the US

USA – Sesame has become the ninth food allergen for which the US Food and Drug Administration requires plain-language labelling following the signing of a new law by US President Joseph Biden. With the new law, food manufacturing companies making foods formulated with sesame will be required to clearly label sesame as an allergen from 1 January 2023. The legislative milestone marks the first time since 2004 that a new allergen has been added to the Food Allergen Labeling and Consumer Protection Act. Sesame will join peanuts, tree nuts, fish, shellfish, soy, dairy, eggs and wheat to make “the Big Nine” Food allergens that account for about 90 percent of food allergy reactions. Generally, processing aids that

are present in the final food in insignificant levels and do not have any technical or functional effect in that food are not required to be identified in the ingredient list. A major allergen, however, must be identified regardless and with sesame becoming one, the over 1.6 million people that are allergic to Sesame will now be able to easily determine whether a product actually contains the allergen. The FASTER Act amends Section 201(qq)(1) of the Federal Food, Drug

& Cosmetic Act by adding sesame as the ninth major food allergen, in an effort to help consumers to make more informed decisions. The Act also requires that food allergy research be given greater priority by the federal government, meaning that it will also benefit the wider group of 85 million Americans affected by food allergies and intolerances.

Dominos becomes the first US QSR to use fully autonomous vehicles for pizza delivery

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Nestlé launches innovation hub to support start-up businesses scale their solutions AFRICA – Nestlé has partnered with COOi Studios to launch a groundbreaking, open-innovation platform dubbed Nestlé Hatcher that is aimed at solving some of the current business challenges across the East and Southern Africa Region (ESAR). COOi Studios is an innovation lab that helps enterprises rapidly move

SESAME WILL JOIN PEANUTS, TREE NUTS, FISH, SHELLFISH, SOY, DAIRY, EGGS AND WHEAT TO MAKE “THE BIG NINE”

TECHNOLOGY

USA – American multinational pizza restaurant chain Domino’s has launched an autonomous pizza delivery service in the US city of Houston, allowing customers to experience futuristic delivery services handled by robots. Robotics company Nuro will provide its Nuro R2 robots for the exercise and will also oversee the logistics behind the success of the autonomous delivery service. According to Domino’s, the robot to be used in pizza delivery is the first

BRIEFS

completely autonomous, occupantfree on-road delivery vehicle with regulatory approval from the US Department of Transportation.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

from problem to a tested solution by using design thinking methods. The platform encourages the application of emerging technologies; artificial intelligence, machine learning, virtual and augmented reality, 3D printing and internet of things to validate an idea. The platform will offer innovators and start-up businesses an opportunity to work with the food manufacturing company to identify sustainable and scalable solutions that will help to accelerate the innovation of products and services in order to meet local consumer needs. “The Nestlé Hatcher innovation programme is part of our research and development efforts to accelerate the innovation of products and services that meet local consumer needs whilst collaborating with various stakeholders,” Bruno Olierhoek, Chairman and Managing Director of Nestlé ESAR said.

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SUSTAINABLE AGRICULTURE

PepsiCo, General Mills commit to advance regenerative agricultural practices to cut emissions

USA — PepsiCo and General Mills, two of America’s largest food corporations, have joined a growing list of food companies taking sustainability efforts to the farm, in an effort to cut down greenhouse gas emissions in their entire value chains. General Mills, Inc. has on its part, committed to advance regenerative agriculture on 1 million acres by 2030, representing approximately 20% of its

sourcing footprint in North America. The maker of Cheerios cereal brand says that its regenerative agriculture efforts will focus on its most greenhouse gas emissions-intensive ingredient categories (wheat, oats, dry corn/sweeteners, fats and oils, dairy, sugar, chocolate/cocoa, meat, nuts and miscellaneous grains (barley, cassava, rice). According to the firm, the 10 priority ingredients

account for 40% of the company’s annual raw material purchases. Meanwhile, US beverage giant PepsiCo has said that by 2030, it plans to spread regenerative farming practices across 7 million acres, an area equal to the same size of land it uses to grow crops for its products. This will see more initiatives like PepsiCo’s Walkers crisps using “circular potatoes” technology to turn the peelings into low-carbon, nutrient-rich fertilizer, coming online. The use of this fertilizer is expected to reduce Walkers’ carbon emissions from growing potatoes by 70%. The circular farming practices are part of PepsiCo’s Positive Agriculture agenda, which focuses on soil health, sequestering carbon, enhancing watershed health, increasing biodiversity and improving farmer livelihoods.

FINANCIALS

Heineken, Molson Coors struggle to achieve growth in Q1 as pandemic hurts sales

WORLD - The first quarter of 2021 was a difficult period for beer manufacturing giants globally, with the closure of bars and restaurants during the pandemic hurting sales. This has been reflected in their Q1 financial results. Heineken, the world’s second largest beer company, managed to maintain beer sales at 2020 levels despite most of its markets being FOODBUSINESSAFRICA.COM

subjected to lockdowns and other restrictions of movements that hampered sales. The company’s Heineken brand however had a strong performance, well ahead of the overall market, growing 12.1% in the quarter. Despite the stagnating beer volumes, the company was, however, able to grow its profits from €94m in 2020 to €168m in 2021. Heineken noted that lower on-trade volume in Europe was more than offset by the performance of other regions and continued cost mitigation efforts. Molson Coors was, however, not as lucky as Heineken and reported a 9.7% decline in first-quarter net sales as on-premises restrictions in key markets hurt sales, even as the company “makes progress” against its revitalization plan. The maker of Coors beer brand

posted net sales of US$1.9 billion in the quarter, compared to US$2.1 billion the same time last year. The company attributed much of the decline to challenges, particularly in the UK and Canada. HEINEKEN BRAND HAD A STRONG PERFORMANCE, WELL AHEAD OF THE OVERALL MARKET, GROWING 12.1% IN THE QUARTER.

Meanwhile, Danish brewing company Carlsberg is a happy lot after managing to record volume growth of 12.8% in the first quarter, as a strong performance by China offsets the ontrade plummet in Western Europe.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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NEWS UPDATES

FINANCIALS

CPG majors Nestle, Unilever, Mondelez post impressive Q1 results buoyed by at home consumption WORLD - Consumer packaged goods giants have been experiencing a boom during the pandemic thanks to elevated at home consumption. The pandemic boom has resulted in CPG majors such as Nestle, Unilever, and Mondelez al recording higher singledigit growths. Nestlé, the world’s biggest company, recorded 7.7% organic sales growth in the quarter ending March 31, as net sales rose to CHF 21.09 billion (US$23.02 billion), up from the CHF 20.8 billion (US$22.72 billion) achieved during the same period last year. Unilever reported a 5.7% growth in sales for the quarter ending March 31, as strong performance in emerging markets offset declines in Europe, where volumes were impacted by lockdowns. The company’s Food and Refreshment segment reported underlying sales growth of 9.8%, with 7.3% achieved from volume and 2.3% from pricing. The firm noted that the price growth of 2.3% was led by tea, as

the company increased prices in India in response to significant commodity inflation. Meanwhile, American multinational snack and food company Mondelēz International achieved 7.9% growth in first-quarter net revenue to US$7.24 billion, driven

and Hu. The owner of Oreo and Cadbury

by organic net revenue growth of 3.8%, favourable currency and the impact of its acquisitions of Give & Go

snack brands says that part of the of the growth could also be attributed to the strong growth it experienced in emerging markets.

NESTLÉ, THE WORLD’S BIGGEST COMPANY, RECORDED 7.7% ORGANIC SALES GROWTH IN THE QUARTER ENDING MARCH 31

FINANCIALS

Soft drink majors Pepsico, Coca-Cola rebound from the pandemic with promising Q1 results

USA – The soft drinks business was among the worst affected in the food industry, with on-trade restrictions 28

wiping up most of their sales, particularly in developing markets, but as Covid-19 restrictions began to relax in many markets globally, PepsiCo and Coca-Cola, the two biggest beverage companies in the world, have started seeing signs of business returning to pre-pandemic levels. In the first quarter ending March, Coca-Cola reported a 5% growth in net revenue for its first quarter, as coronavirus-related uncertainty eases in some markets. The owner of Coke and Fanta beverage brands reported net revenue of US$9.0 billion in the Quarter, boosted by 5% growth

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

in concentrate sales, and a 14% rise in operating income. Meanwhile its competitor, PepsiCo had a 2.4% jump in organic net revenues in quarter 1, with net revenues jumping 6.8% to US$14.82 billion. Pepsico’s impressive Q1 performance mainly benefited from accelerated return of the foodservice channel and the acquisitions of Chinese snack company Be & Cheery and South Africa’s Pioneer Foods. The acquisition’s impact could also be reflected in the company’s operating profit, which jumped 20% to US$2.31 billion, up from US$1.92 billion last year.

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COMMODITIES

World cereal production in 2021 to increase for the third consecutive year – FAO China where the livestock sector is recovering from African swine fever. The FAO notes that for the current 2020-21 marketing season, global cereal utilization is now forecast at 2,777 million tonnes, 2.4% higher than the previous year. As a result, world cereal stocks at the end of 2021 are anticipated to decline by 1.7% from their opening levels to 808 million tonnes. WORLD - The Food and Agriculture Organization (FAO) has projected that the world’s cereal production in 2021 will increase for the third consecutive year, thanks to sharp rebounds in key production markets in Europe, India and South Africa. According to the FAO, global wheat production is forecast to reach a new high of 785 million tonnes in 2021, up 1.4% from 2020, driven by a likely

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sharp rebound across most of Europe and expectations of a record harvest in India. Above-average outputs also are expected for maize, with a record harvest anticipated in Brazil and a multi-year high in South Africa, according to the FAO’s Cereal Supply and Demand Brief. As grain output rebounds, global cereal utilization is also expected to soar, driven mainly by demand from

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A SPECIAL PAVILLION AT:

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ACCORDING TO THE FAO, GLOBAL WHEAT PRODUCTION IS FORECAST TO REACH A NEW HIGH OF 785 MILLION TONNES IN 2021, UP 1.4% FROM 2020

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SUPPLIER NEWS & INNOVATIONS

NEW PRODUCTS

Bühler launches new malting equipment for small scale brewers SWITZERLAND – Swiss food technology group Bühler has launched a new malting equipment specifically meant for small to midsized craft beer producers. Called RimoMalt, the new equipment offers users unprecedented flexibility and brings investments down to an all-time low, according to the company. The company notes that with the new equipment craft producers can start off with very small batch sizes with an output that is easily scalable from 1,000 to up to 17,000 tons per year thanks to its modular system. The fully insulated and cladded steep house starts at a volume of 16 metric tonnes but can be upscaled in two steps to 32 and 56 tonnes simply by adding height-extending rings. “For the first time it is possible to start a production with very small batch sizes and extend each box individually at any later stage,”says Johannes Kolb Sales Manager for malting and brewing at Bühler. The company says that at times of volatile markets, quickly changing consumer preferences and emerging niche tastes, the individually customizable RimoMalt presents a possible solution to current challenges and malting trends. According to Johannes Kolb, RimoMalt can facilitate various portfolio demands simultaneously by producing different special malts at the same time within a full 24-hour batch cycle. Bühler says breweries producing up to 1.1 million hectoliters annually will be able to fully produce their own malt for their beer, including the possibility to quickly increasing their production as demands rise.

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INVESTMENTS

Givaudan, Bühler open new protein innovation center in Singapore

SINGAPORE – The APAC Protein

Innovation Centre in Singapore has been officialy opened by Givaudan and Bühler and is expected to play a major role in accelerating plantbased product development on a global scale. Located at the Givaudan Woodlands site in Singapore, the Protein Innovation Centre is a first of its kind establishment leveraging the expertise of both companies to accelerate development of high quality plant-based proteins. The facility is outfitted with a pilot scale wet and dry extruder, a stateof-the-art product development kitchen, storage facilities, meeting amenities to ensure a flawless endto-end process of plant-based protein production. At the Centre, customers can develop high-quality products suitable

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

for Asian culinary applications at scale as the facility can produce up to 40 kilograms of plant proteins an hour. The facility is also connected to a vast network of R&D innovation centers in Switzerland and key hubs across the region further enhancing its ability to accelerate development of plant-based proteins. Singapore, where the innovation lab is being launched is referred to many as a core of Southeast Asia’s vibrant food ecosystem and rightly so as the city state became the first country in the world to approve AT THE CENTRE, CUSTOMERS CAN DEVELOP HIGHQUALITY PRODUCTS SUITABLE FOR ASIAN CULINARY APPLICATIONS cultured meat, among many other firsts in the novel food industry. Its more liberal food regulations more food companies to set up protein innovation centers within the city state’s jurisdiction. Recently, ADM also opened a new plant-based innovation lab within its Biopolis research hub in Singapore, adding to the number of companies leveraging the city’s regulations to advance protein innovation.

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NEW COMPANY

M&A

M&A

DSM launches Hologram Sciences, a new personalised nutrition company

Tate & Lyle to sell starches, sweeteners unit to enhance focus on food and beverage solutions

Olam Food Ingredients to acquire US private label spices manufacturer for US$950m

NETHERLANDS – Global biosciences company DSM has launched Hologram Sciences, a new nutrition company that aims to provide consumers with personalised nutrition solutions. The Netherlands-based company said it is investing US$100 million into the development of the company, which will seek to disrupt the nutritional marketplace by creating brands that target various health conditions. Hologram Sciences brands will

UK – Tate & Lyle has confirmed its

USA – Olam Food Ingredients has announced that it is acquiring Olde Thompson, a leading US private label spices and seasonings manufacturer, at an enterprise value of US$950 million. The company said the acquisition - its first since it was spun off from its parent company, Olam International - was made through its wholly owned subsidiary Olam Holdings Inc. According to a statement by the Singapore based firm, the acquisition aligns with its vision and accelerates its growth strategy of delivering sustainable, natural, value-added food and beverage ingredients and solutions. Established in 1944, Olde Thompson operates two highly automated bi-coastal facilities in Bayonne, New Jersey and Oxnard, California and has built a significant formulation, blending, packaging and distribution capacity to serve customers across the US. The company has over the years benefited from increased penetration of private label in the spices and seasonings space, as well as the growing demand for healthy, natural, organic, clean-label spices, and ethnic savoury flavours. It has also built long-term relationships with a diverse group of blue-chip retail customers across the club, mass, grocery, discount and dollar store channels. Olde Thompson’s acquisition is expected to bolster OFI’s spices business and also expand private label capabilities across the OFI portfolio.

offer consumer-facing personalised nutrition solutions that have been clinically proven to address a variety of health needs, including those related to immunity, the gut and brain. Along with nutritional supplements and diagnostics, the company’s proprietary digital platform will provide consumers with access to registered dieticians. The company will be led by Ian Brady, co-founder of US financial services firm SoFi.

FOODBUSINESSAFRICA.COM

intentions to sell a controlling stake in its Primary Products unit to a new long-term financial partner, as it looks to focus on its Food and Beverage Solutions arm. It is reported that the sale could be worth up to £1.2bn (about US$1.45bn). US private equity giants Apollo Global Management and Cerberus had held talks with Tate & Lyle over the sale. Tate & Lyle’s Primary Products business manufactures nutritive sweeteners, industrial starches used in paper and packaging, as well as acidulants and products used for animal nutrition. The division, which made revenues of £1.8bn (US$2.17 billion) in the physical year 2020 or more than 60% of the total revenue, competes with larger US-based rivals Ingredion and Archer Daniels Midland. Through the divestiture, the company looks to focus on its smaller Food & Beverage Solutions business which made annual revenues of £942m (US$1.138 billion). The division develops ingredient solutions to help companies reduce sugar, calories and fat, as well as add fibre THE DIVISION MADE REVENUES OF US$2.17 BN IN THE YEAR TO APRIL 2020 OR MORE THAN 60% OF THE TOTAL REVENUE and provide texture and stabilities in a variety of applications including dairy, beverages, bakery products, soups, sauces and dressings. It is reported to deliver higher profit margins and has more growth potential than its sweeteners operation, as consumers turn to healthier eating options.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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SUPPLIER NEWS & INNOVATIONS

NEW PRODUCT

NEW PRODUCT

Friesland Campina Ingredients launches new product to aid in production of softer protein bars

NETHERLANDS – FrieslandCampina Ingredients, a subsidiary of Dutch multinational dairy cooperative Royal FrieslandCampina N.V., has unveiled a new portfolio of ingredients designed to help processors make softer protein bars. The new portifolio, according to the company, is comprised of six dairy-derived ingredients including Excellion Calcium Caseinate S, Nutri Whey 800F, Nutri Whey Isolate, Biotis GOS and Excellion EM9, as well as the new Excellion Textpro. Of the six, the Dutch company notes that Excellion Textpro has been developed to impart a softer mouthfeel in protein bars. The ingredient is based on pending patented technology, developed specifically for use in high protein bars and contributes to a softer mouthfeel, reducing hardening throughout shelf life. The company notes that high protein (>30%) applications, which represent one in three of all bars in the European market, have a tendency to harden over time. Thus the new 32

ingredient will be a key solution to addressing the hardening problem that many formulators currently face. As the sports nutrition market continues its impressive growth, both consumer demands and competition are intensifying. This means formulating with creativity, tight quality standards and robust health credentials is critical, notes FCI. It further adds that palatability continues to be a major issue for THE NEW INGREDIENT WILL BE A KEY SOLUTION TO ADDRESSING THE HARDENING PROBLEM THAT MANY FORMULATORS CURRENTLY FACE. many formulators. Companies that don’t get it right in terms of texture and flavour, however risk losing out because the “modern consumer is not prepared to compromise on taste or texture”.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

Bell launches new flavours to enhance sensory profile of plant-based foods

EUROPE – Bell Flavors & Fragrances has launched a portfolio of functional flavors to aid European manufacturers in mitigating specific off-notes, while creating a more neutral and appealing sensory profile in plant-based foods. Plant proteins often generate unwanted bitter or beany off-notes or lack specific sensory attributes, making them less appealing for consumers. To address this problem, experts from Bell identified the potential off-tastes of various protein sources, including soy, wheat, pea, rice, oat, almond and coconut. Primary focus was on studying the ingredients’ organoleptic effects on taste and other characteristics, including texture and mouthfeel. Bell’s team of flavorists and sensory experts then investigated specific flavors that help achieve rounded taste characteristics, such as full-bodied umami, meaty notes or creamy profiles. They then developed a new range of functional food flavours under the Plant Future portfolio to help enhance the flavour profile of plant-based dairy, meat and fish alternatives. “We aim to provide functional flavor solutions based on the respective off-tastes of the various plant protein sources,” noted Agneta Hoffmann, marketing manager of flavors at Bell. “In the case of oat drinks, for example, our masking flavor highlights the creaminess, the milky taste and adds a slight sweetness.”

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PRAHLAD GANGADHARAN, CEO BIG BOTTLING COMPANY, NIGERIA


MY COMPANY PROFILE: BIG BOTTLING COMPANY

BBC Nigeria: Investing in a new bottling line to grow Nigeria’s soft drinks industry The soft beverages industry in Nigeria is bigger than any other market in Africa. The Big Bottling Company is investing in the country to tap into this vast opportunity, where competition is stiff, and challenges abound. In this interview with the company’s CEO Prahlad Gangadharan, we discuss the prospects and future of the company By Francis Juma

B

ig Bottling Company (BBC), a relatively young company in Africa’s largest economy by Gross Domestic Product (GDP), Nigeria has huge ambitions to serve the growing demand for soft drinks in the country. The continent’s most heavily populated country with 200 million plus people, the firm’s CEO, Prahlad Gangadharan, and the Board of the company have their eyes and goals set on riding the wave, as the country’s economy grows further and its population, which the UN projects will double by 2050 to more than 400 million, become more urbanized and thereby demand more of the company’s menu of products. Having joined BBC in November 2018, but with vast experience in the country’s beverage industry for over 15 years, Prahlad has his work cut out, a task that he relishes, with pride. “Prior to joining the Big Bottling Company, I was in the FMCG space and I have worked with companies such as Coca-Cola, Cargill and the Shell Petroleum Company,” he informs Food Business Africa on a Zoom call from Lagos, where he is based. “I also have experience in the telecoms sector as well. In short, I am basically a sales and marketing guy with an eye for technology and development. Beverage has been my passion and looking at Africa, the future beholds well, especially for Nigeria that has a large population consisting mainly of young people and there is availability of natural resources.” BOTTLING NIGERIA’S DRINKS BBC is the bottling company for AJE, one of the largest global multinational beverage companies that is based in Lima, Peru, and the brand owner to the BIG Cola franchise of brands. FOODBUSINESSAFRICA.COM

It is owned by DUET Group, a British private equity company and a principal investor in emerging and frontier markets after the Group acquired a majority stake in AJEAST Nigeria Limited, the sub-Saharan Africa subsidiary of AJE in 2018. With a total investment in the transaction in excess of US$50 million, DUET is targeting a young demography of growing socio-economic segments, capturing both the significant advance of middle-income households, as well as the demographic dividend of the country’s expansive youth base. Commenting about the transaction, Henry Gabay, Co-Founder at Duet Group, said: “At Duet we strongly believe in the African consumer growth story. As the number of middle-income households in Nigeria and select West-African markets keeps expanding, and more consumers are entering the formal economy through urbanisation, the demand for products such as BIG Cola will grow exponentially.” Prahlad informs us that after the acquisition by DUET, the company embarked on a restructuring process of its business, from organizing a new team to starting a new bottling line. The plant is located in Agbara on the outskirts of Lagos, the commercial canter of Nigeria. With Nigeria set to have the world’s third-largest population after India and China by 2050, he believes that the opportunity is still at its infancy, with a huge demand for carbonated soft drinks and water for years to come, in a market that consumed north of 45 billion litres of bottled water in 2019. In contrast, with a volume of approximately 2 billion liters the carbonated soft drinks segment in Nigeria is modest, but growing from a low base, compared to the rest of the world. The company believes that there is a huge potential for growth in the hotly

We have plans of expanding into the neighboring countries in the future, because we often get enquiries from Togo, Ghana and the likes; but first we aim at satisfying the in-house demand in Nigeria.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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MY COMPANY PROFILE: BIG BOTTLING COMPANY

contested market, that is dominated by large multinationals and number of medium scale local players. BBC’s product portfolio includes BIG Orange, BIG Lime and Lemon, BIG Tropical, BIG Green Apple and BIG water, with the products available in either 650ml, 525ml or 360ml sizes. “All our portfolio is completely in PET and we do not intend to go into any other packaging format because that is where our expertise lies.” DOUBLING CAPACITY FOR GROWTH Prahlad says that with an installed capacity of about 3 million cases capacity a month, or 36 million cases a year, that is equivalent to about 18 million litres of liquid per annum, the beverages maker is poised for growth – having recently doubled its capacity by installing a new state-of-the-art bottling line. “We have a huge population of about 200 million people plus here in Nigeria and that itself is potential - that is why we doubled our capacity. We were confident that we would find the market and it turns out that we were right.” The new PET line, which was installed by KHS, is one of the more notable investments by the company in recent times. With a capacity of up to 48,000 bottles per hour, the line comes with the InnoPET BloFill stretch blow molder/filler block that forms the heart PRAHLAD SAYS THAT WITH AN INSTALLED CAPACITY OF ABOUT 3 MILLION CASES CAPACITY A MONTH, OR 36 MILLION CASES A YEAR, THAT IS EQUIVALENT TO ABOUT 18 MILLION LITRES OF LIQUID PER ANNUM, THE BEVERAGES MAKER IS POISED FOR GROWTH – HAVING RECENTLY DOUBLED ITS CAPACITY BY INSTALLING A NEW STATE-OF-THEART BOTTLING LINE. of the line. The stretch blow molder has been equipped with the AirBack Plus air recovery system, in order to meet BBC’s sustainability targets, that recycles the compressed air used in the stretch blow molding process, reuses some of it and in doing so reduces the amount of compressed air needed - thereby cutting the amount of energy consumed during compressed air generation by up to 36%.

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MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

BBC'S NEW PET LINE WITH A CAPACITY OF UP TO 48000 BOTTLES PER HOUR.

The line’s volumetric Innofill PET DRV filler, with its very short setup times, gives the company the flexibility it needs and ensures extremely high line availability. The line is further supplemented by various packaging and palletizing equipment that includes a labeler, packer and palletizer, among other machinery. PIVOTING DURING THE PANDEMIC The Covid-19 pandemic has devastated the food industry, including in Nigeria. However, the CEO is full of praise for his team’s resolute determination to succeed, even during the toughest of times. “2020 was a very tough year for almost everyone across the globe, but for us we are proud that our team was resilient, and we continued production, while still putting up strong precautionary and safety measures while ensuring that our staff were able to survive through the pandemic. We obviously spent quite a sum of money on these measures but on the other hand the payoffs were huge; for example, we launched new products in the

FOODBUSINESSAFRICA.COM


KEY NUMBERS

36 MILLION NUMBER OF CASES THAT BBC NIGERIA PRODUCES IN A YEAR

The price of plastics has gone up by 8090% but we still give our customers the same beverage; we have raised prices by only 20% - a price which they can afford. We have to strike a balance in order to maintain both our customers and investors too. The profit margin is very low during these times, but we have grown in terms of volume because our customers have put their trust in us. We believe that the future is brighter and that is why we have taken this opportunity to put forward strong but risky measures.”

2020 was a very tough year for almost everyone across the globe, but for us we are proud that our team was resilient, and we continued production, while still putting up strong precautionary and safety measures FOODBUSINESSAFRICA.COM

middle of the pandemic. “We also realized that it took small contributions from many people from within and without the company for us to survive the pandemic, right from our salespeople, who helped their customers deposit money in the banks by driving them there and ensuring that the products were delivered on time and in full. We took time to get closer to our customers to help them do business, so that they wouldn’t suffer as much or close down in the middle of the pandemic. That was the secret behind the growth of our business, because obviously if you take care of your staff, who in turn take care of your customers, you will grow as a business.” He adds that the lessons learnt from the pandemic will go a long way to facilitating the company’s growth into the future. “One of the lessons that we have learnt is that consistently maintaining a high level of quality is the way to survive in this business. Input costs have phenomenally gone up, for example, for some of our main ingredients the prices have doubled.

WE ARE LOOKING AT HOW MUCH GREEN ENERGY WE CAN GET, HENCE WE ARE CURRENTLY WORKING ON COMMISSIONING A 1 MW SOLAR PLANT TO SERVICE OUR NEEDS FUTURE PLANS The future of BBC is bright, according to the CEO, and they will seek further growth into the Nigerian market to ride into the unique opportunities in Africa’s largest market, before venturing out into other countries in West Africa. “We are concentrating in Nigeria for now. The demand here is huge and that is what we are aiming to meet. We are looking into expanding and starting new lines in different locations in the country, in order to be able to deliver to our customers faster and more cost effectively. We also have plans of expanding into the neighboring countries in the future, because we often get enquiries from Togo, Ghana and the likes; but first we aim at satisfying the in-house demand in Nigeria.” On the new products innovations front, BBC had plans before the pandemic struck to roll out more variants of its soft drinks, which were accelerated during the pandemic, despite the inherent risk of failure at the time.

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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MY COMPANY PROFILE: BIG BOTTLING COMPANY

COMPANY PROFILE

Sector: Soft beverages bottling Country: Nigeria Main Contact: Prahlad Gangadharan Website: www. bigbottlingcompany. com Email Address: customercare@ bigbottling.com.ng

BBC HAS A WELLBALANCED PORTFOLIO OF PRODUCTS: CARBONATED SOFT DRINKS, WATER, VALUE-ADDED WATER, JUICES, ENERGY DRINKS, AND MALT.

Telephone: +234 9098800628 Address: The Eastern Section, Plot c 2 1/6 Anioma Close, Agbara industrial Estate, Agbara, Ogun State, Nigeria

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“Fortunately for us, since the flavours were of a higher quality and taste better than those of our competitors, they have been accepted easily.” With a well-balanced portfolio of products: carbonated soft drinks, water, value-added water, juices, energy drinks, and malt, the CEO expects the firm to grow into the future along these product categories, where it has its core strengths. According to Prahlad, competition is intensifying in Nigeria because every major bottler is shifting focus to Africa, where abundant opportunity lies. “We welcome competition because we are very confident that our products are good and also that our service levels on our regular market are tailor made to service the consumers of Nigeria. At the end of the day, there is space for everyone.” The firm is also seeking new ways to adopt its sustainability initiatives to reduce its impact on society. “We take a lot from

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

nature and the society as well, which gives us the responsibility of giving back to both. We choose the KHS line because it is very energy efficient. We have also shifted from diesel to natural gas, which is a less polluting fuel. As an organization, we are looking at how much green energy we can get, hence we are currently working on commissioning a 1 MW solar plant to service our needs.” “We will continue offering consumers with better value for money products, we are here to stay, and you should expect more excitement coming the consumer way. We have a lot of stuff and we will put it down to the consumer at the right time.”

FOODBUSINESSAFRICA.COM


Namibia Breweries: Celebrating 100 years of leading the growth of the

BEER INDUSTRY IN NAMIBIA FOODBUSINESSAFRICA.COM

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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COMPANY HIGHLIGHT: NAMIBIA BREWERIES LTD

I

By Catherine Wanjiku

t is not every day that a company marks 100 years of existence; such a journey is characterized by resilience, reinvention and the collective efforts of not only the proprietors, but the stakeholders and community at large. One of Southern Africa’s leading beverage manufacturing companies, Namibia Breweries Limited, is one of those companies that has lived the test of time and on 29 October 2020 they proudly marked a significant milestone celebrating its centenary. “We are officially 100 years! What an adventurous journey it has been for our business!” stated an excited Marco Wenk, Namibia Breweries Limited (NBL) Managing Director (MD) on the centennial of Namibia’s most loved brewing company. 100 YEARS OF GROWTH The journey of NBL began in 1920, when Hermann Ohlthaver and Carl List, founders of Ohlthaver & List Group – the parent company of NBL - obtained a majority shareholding in four local breweries in Namibia: Omaruru Brauerei, Kronen Brauerei in Swakopmund, Klein Windhoek Brauerei and Felsenkeller Brauerei, both in Windhoek, following their liquidation. At the time, the breweries were struggling to survive because of the war and its after-math and, with the difficult economic circumstances, no one had funding to sustain them. The four companies are said to be among the pioneers of beer brewing in the then South West Africa, as until the late 1800’s beer in the region was imported from Germany. The imported beer had a high alcohol content to preserve it during the long journey to Namibia by sea. It quickly became obvious that the beer was too strong for consumption in the hot African climate. With the acquisition, NBL consolidated the breweries to form what was at the start known as South West Breweries (SWB), setting the malting and mashing rolling and until to date, the turbines keep whirling. O&L Group Executive Chairman and great-grandson of Carl List, Sven Thieme, reflected with nostalgia the company’s rich legacy spanning over ten decades. “Today, we remember and honour our founders and we celebrate the fact that what they envisioned 100 years ago has become a reality. When everyone saw four distressed breweries, they saw potential. We recognize and appreciate a century of visionary and inspiring leadership which has over the years embodied the core values and vision, which has resulted in NBL’s reputation and legacy as a world-class brewing company.” In his speech, he did not forget to applaud all the team players for their continued commitment and support, which has made NBL the unique and great community it is today. “Indeed, you have added a colourful layer to the rich history of the NBL story by building more than just

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a company – touching so many lives together; investing in each other’s dreams and creating a century worth of memories!” Sven Thieme remarked. The 100-year journey were marked by a range of milestones. STRATEGIC PARTNERSHIPS FOR GROWTH After the formation of SWB in 1920, the founders later acquired Hansa Brewery in Swakopmund in 1967. During this time, the company became the only remaining independent commercial brewery in Southern Africa. A major shift happened in the company when the breweries in 1983 upgraded and moved to the new state-of-the-art brewery in Windhoek. SWB later renamed to Namibia Breweries Limited (NBL) in 1990, correlating to the same time when Namibia got its independence. It listed on the Namibian Stock Exchange (NSX) in 1996 and became a publicly owned company with the O&L Group as controlling shareholder. Being a fully-fledged brewing company and seeking strategic partnerships, NBL partnered with Diageo, the world’s largest distiller and brewer Heineken in 2003. The agreement saw Heineken – Diageo, acquiring 44% in NBL Investment Holdings Limited, which was being held by Interbrew, a division of Anheuser-Busch InBev (AB InBev). In addition, the two companies acquired a direct stake of 6.8% in NBL and as a result, Heineken and Diageo had an effective 28.9% stake in the brewery. In 2008, a joint venture DHN Drinks was formed with NBL owning 15.5% of the company and the rest split

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NBL's beer portfolio is comprised of Tafel, Amstel Lager, Hansa, Camelthorn, King, Windhoek, Heineken, Horizon and Amstel.

Co, the first Namibian craft brewery in 2014. To further reinforce its association with craft-style beer, NBL entered into a partnership with Stellenbrau, a Stellenbosch-based craft brewer in 2016. NBL’S EXTENSIVE VALUE CHAIN NBL is one of the few large-scale commercial breweries in Africa that brews according to the German Reinheitsgebot - Purity Law of 1516, which requires the exclusive use of three ingredients: malted barley, hops and water. Having a significant share of the premium beer category in Namibia, beer makes up 93% of the company’s total volumes sales, as it strives to quench the thirst of Namibians with 108 litres per capita beer consumption, according to World Population Review. Its beer portfolio is comprised of brands such as Tafel, Amstel Lager, Hansa, Camelthorn, King Lager, Windhoek, Heineken and Amstel. Some of the products are owned by the company, others are brewed under licence, with NBL acting just as the distributor. The beer major undertakes its production at its Windhoek brewery, with a total technical brewing capacity of 3 million hectolitres. In addition to that, it has a microbrewery at the Swakopmund Brewing Company, serving as

between Heineken and Diageo. DHN Drinks held the licences for the combined beer, RTDs and cider portfolio of the three partners. It sourced beer from NBL’s facility in Windhoek and from the Sedibeng Brewery Limited in Johannesburg. The latter was co-owned by Heineken (75%) and Diageo (25%). Later in 2015, DHN Drinks’ portfolios were split, with Diageo taking full ownership of the spirit segment and selling its indirect stake in NBL to Heineken. This resulted to NBL holding a 25% stake in DHN Drinks and a 25% stake in Sedibeng, with Heineken holding a 75% stake in both entities. The decision to split from Diageo allowed the beer partners to focus solely on the beer category which would be beneficial to growing key brands in South Africa. Currently, O&L Group and Heineken respectively hold an effective 29.69% and 29.68% share in the entity through the NBL Investment Holdings, accounting for a total 59.37%, with the remaining 40.63% is publicly held. The strategic partnership between Heineken and NBL, which is still in existence until to date, enables them to benchmark, transfer skills and collaborate on brand campaigns. In addition to leveraging one another’s brand portfolios and supply synergies, both parties have a volume migration agreement that provides joint access to the Sedibeng Brewery in Johannesburg and NBL’s brewery in Windhoek. This creates production flexibility and efficiency options. Other deals NBL has undertaken to strengthen its business include acquisition of Camelthorn Brewing

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NBL IS ONE OF THE FEW LARGE-SCALE COMMERCIAL BREWERIES IN AFRICA THAT BREWS ACCORDING TO THE GERMAN REINHEITSGEBOT - PURITY LAW OF 1516, WHICH REQUIRES THE EXCLUSIVE USE OF THREE INGREDIENTS: MALTED BARLEY, HOPS AND WATER.

a pilot plant for crafting and testing new beer recipes. The company also has access to further brewing capacity through the production agreement with Heineken SA, who own the Sedibeng Brewery in Johannesburg with a capacity of 4.5 million hectolitres. To feed its plants, most of the raw materials such as malted barley and hops are imported from Europe. Only King Lager is produced using locally sourced barley, courtesy of trials and research conducted by NBL in partnership with the University of Namibia and the Ministry of Agriculture, Water and Forestry in 2011. King Lager was conceptualised to encourage the development of a Namibian barley industry to support local procurement, job creation and empowerment. It was launched in October 2015, after years of extensive research and product development. After production, the beers are packed in different sizes of glass bottles, cans and kegs, filled at its five packaging lines at the Windhoek site. In 2019, NBL injected N$49.5 million (USD 3.2 million) to upgrade its lines and invested in 12-pack capability.

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COMPANY HIGHLIGHT: NAMIBIA BREWERIES LTD

TRANSITIONING TO A TOTAL BEVERAGE MAKER Other than beer, the beverage maker’s portfolio is also comprised of a range of soft beverages and low/nonalcoholic products, produced at its Windhoek plant. The expansion of its portfolio from beer happened in 2012, the same time that NBL made a record-breaking sale of over 1 million hectolitres of beer in Namibia for the first time in its history. Transitioning from a brewery to a total beverage manufacturer, the company introduced a selection of soft beverages featuring labels such as AquaSplash water sourced and bottled in Okahandja and Outjo; Mckane range of mixers; and Fruitree nectar drink. Its low and non-alcoholic drinks are variants of its leading brands Windhoek and Tafel, in addition to its recently launched Horizon brand. NBL’s products are not only available in its home country but in the greater Southern African Development Community (SADC) region courtesy of an extensive distribution network. They are exported to 13 countries NAMIBIA BREWERIES LIMITED HAS INSTALLED AN ON-GRID SOLAR PHOTOVOLTAIC (PV) FACILITY, WHICH HAS MET 7.9% OF ITS ELECTRICITY DEMAND IN THE YEAR 2019/2020. outside Namibia and South Africa. To efficiently serve its wide market, the beverage company delivers the products to six depots and five agencies in Namibia. In 2019, NBL opened a new warehouse facility in Walvis Bay, which was constructed at a cost of N$27 million (USD 1.7 million), in a bid to offer customers and employees a safe and pleasant working environment. With the opening of the new space, the brewery completely closed the old Hansa Brewery in the central Swakopmund business district which was acquired in 1967 and later converted to a warehouse in 2005. The company also extended its main site warehouse at the Windhoek plant by approximately 1, 127 m2 to pick mixed pallets and enable direct drops. SUSTAINABILITY INITIATIVES AT THE CORE Consumers across the globe are more aware of the impact that their consumption habits have on themselves or on society. This leads to them expecting transparency and ethical behaviour from brands, with Innova Market Insights’ Top Ten Trends in 2021 highlighting that 60% of global consumers are interested in learning more about where their foods come from. As a purpose-driven company, NBL has always considered this important and has aligned its contribution to a sustainable world to the United Nations SDGs. The company’s environmental initiatives focus on maximizing

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production in an efficient and effective way that ensures fewer resources are utilized to ensure the sustainability of the business for the benefit of all its stakeholders. For a start, NBL is the biggest industrial consumer of water in Windhoek, as water is the primary ingredient in its products and is used in almost all manufacturing processes. Following a sustained regional drought in 2016, NamWater, the national bulk supplier of water to the City of Windhoek, announced a 40% requirement for water savings. Heeding to the call NBL obtained licences from the Department of Water Affairs to drill boreholes at its premises to cater for part of its water needs and implemented further watersaving options such as reclamation in the brewing and packaging plants, and water reduction measures in the production process. As a result, the total litres of water used for production has declined by 9.4% over the past eight years. Further to that, the excess water used during production is reclaimed and transferred into the city’s effluent system, where it gets recycled. Going by its slogan of more beer, less water, the company purchased equipment to extract beer from surplus yeast, to further reduce its water consumption, effluent volume, organic load in effluent, and heat and cooling costs. The beverage company has also mulled investments in the establishment of alternative energy systems that will lower its carbon footprint. It established its first biomass boiler at the Windhoek brewery, which is still the biggest wood boiler in the country. The boiler has replaced the use of about 4.6 million litres of heavy fuel oil since it was taken into production in 2017, equating to a CO2 emissions reduction of 12,300 tons. With the system, the company was targeting to generate 80% of thermal energy by 2020, which it has indicated that it was on track to meet the target before the COVID-19 related lockdowns. In addition, the company has installed an on-grid solar photovoltaic (PV) facility, which has met 7.9% of its electricity demand in the year 2019/2020. Overall, the solar plant, which was established in 2012 has provided NBL with approximately 8,958,574 kWh of green energy, thereby saving 8,958 tons of CO2 emissions. NBL is also fully self-sustainable in its CO2 production and consumption needs and sells the surplus to external customers. This was made possible thanks to the company replacing its outdated carbon dioxide recovery plant with a modern, efficient and environmentally friendly plant, having an additional 98 tons of storage capacity. As part of its efforts to further its sustainability agenda, about 50% of the company’s production is packaged in returnable containers that are collected through an extensive network to minimise waste. During the financial year 2019/2020, NBL achieved a return ratio on its 500-ml and 750-ml returnable bottles of 99.7%. To ensure effectiveness of the initiative, the company has entered into an agreement with AB InBev Namibia to

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KEY NUMBERS

300M

NBL'S BREWING CAPACITY PER YEAR AT ITS WINDHOEK BREWERY

#TakesANation campaign that is aimed at encouraging responsible behaviour when consuming alcoholic beverages of any kind. The #TakesANation campaign is a callto-action to shop responsibly; drink responsibly; socialize responsibly; entertain responsibly and enjoy responsibly.

Marco Wenk Managing Director, Namibia Breweries Ltd exchange returnable bottles weekly. In its communities, NBL encourages recycling through Project Shine, the schools recycling competition, and through its founding membership of the Recycle Namibia Forum. COMMUNITY LEADERSHIP Other than being a leader in the beverage sector, NBL is a highly stakeholder-oriented business. The company’s emphasis is not only on the products it sells, but on how the entire business contributes to the well-being of the system in which they operate in. They have done this through framing its material matters which are in support of its purpose of Creating a Future, Enhancing Life. Taking its role as a corporate citizen seriously, NBL has formulated long-standing partnerships with various Corporate Social Investment (CSI) partners. Key elements in its CSI portfolio include commitment to responsible drinking, environmental preservation, health and education as key drivers of social upliftment within communities.

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One of its notable initiative is the DON’T DRINK & DRIVE and ENJOY RESPONSIBILITY campaigns, which NBL has been running over the past years in a bid to promote responsible behaviour among motorists and road users. The irresponsible and life-threatening act of driving under the influence of alcohol is one of the contributors to road accidents and fatalities in Namibia, which has proven to be a great concern. In its pursuit of creating a future through education, through the Desks for Education project, NBL employees and group engineering company Kraatz repurpose steel from packaging waste into quality school desks that create a comfortable and positive learning environment for students. The company’s involvement in the society has also been seen and felt during the current COVID-19 pandemic. In line with its vision to be “a catalyst for positive change, creating new realities and fulfilling dreams”, NBL has embraced the ‘new world’ through its newly launched

AWARDS WINNING COMPANY NBL’s 100 years of operations has led it to become one of the iconic beverage companies in the region as clearly depicted by the numerous awards, accolades and recognitions it has received over the years. In 2020, the company was the recipient of the long-term product quality award from the Deutsche Landwirtschafts Gesellschaft (DLG) for the 13th consecutive year. Participants only qualify for this award if they have received DLG medals for five years in a row. The international DLG Quality Evaluation rates beer brands brewed according to the Reinheitsgebot (“Purity Law”) of 1516 against quality specifications for taste, analytical and biological standards. NBL became the first African brewery to be acknowledged by the award in 2005. Other awards it has received include the European Beer Star Award; NMA Corporate Manufacturer of the Year award; Great Place to Work certification for Africa 2019; and it was listed on the 2018 Sunday Times Top Brand Awards beer category, among many others.

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COMPANY REVIEW: NESTLE

NESTLE CEO, MARK SCHNEIDER

Steering Nestlé to the World’s No.1 Nutrition, Health and Wellness Company By Paul Ongeto

Mark Schneider transforms Nestlé to new growth as it responds to a food industry undergoing a revolution

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hen Henri Nestlé brought an infant formula to the market in the small Swiss town of Vevey in 1860, he probably had no idea that his company would grow and become the behemoth that it is today. He was however out to create something great. Of his cereal he said, “My infant cereal has a tremendous future because there is no food to compare with it.” His biographer Albert Pfiffner described the former pharmacist assistant as an “entrepreneur continually observing consumer and society’s needs to find new opportunities to earn his living.” 160 years later, Nestlé

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has remained true to its founder’s principle and has grown into the world’s biggest food company. Over a billion of its products are consumed every day in almost all corners of the world. The company has a market value of US$336 billion and annual sales of more than US$92 billion at last count. The last decade, however, saw many food companies struggle with growth. Consumer-goods businesses were not growing as fast as shareholders would have desired. At Nestlé, things were not looking good either, as organic sales growth had fallen from an annual 7.5% in 2011 to 2.4% in 2016. The company badly needed a caffeine shot to

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get back on track. That shot was in the form of Mark Schneider who joined in 2017, becoming Nestlé’s first “outsider” CEO since 1922. With vast experience in the healthcare industry in Europe, Schneider joined the company at an opportune time when shareholders of the company were seeking a magic wand to steer Nestlé into a new direction, even as it wanted to remain perched at the top of the world’s food industry. For the years he has been at the helm, Schneider has managed to steer Nestlé back to growth by simply staying true to the founder’s principle: “continually observing consumer and society’s needs to find new opportunities to earn [a] living.” Under the guidance of Schneider, Nestlé has transformed from a consumer goods stalwart into a health, wellness, and nutrition empire. In this issue, we review how Nestlé has reinvented itself and managed to revive confidence in organic sales growth, a metric that had fallen to record levels before Schneider took charge of the company. ACCELERATING INNOVATION A combination of changing diets, digitalisation and deflation in parts of the rich world, as well as sluggishness in emerging markets all contributed to slowed organic growth in the consumer goods business in the past decade. E-commerce, for instance, helped small upstart brands to elbow aside the established behemoths by selling directly to consumers. To counter this, Nestlé responded by forcing its research and development (R&D) team to bring the company’s ideas to market more quickly, often digitally. The company also significantly expanded its R&D facilities in Switzerland, China, and Ireland to enable faster launch of consumer-centric products. The result has been phenomenal, as rarely a week passes without Nestlé announcing a product launch. This has enabled the company to keep up with the changing needs of the modern consumers. With increased innovation, Nestlé was able to report a 3.6% organic growth in 2020, the highest the company had ever recorded in 5 years. The transition to e-commerce has also proven to be successful. In 2020, E-commerce sales grew by 48.4%, reaching 12.8% of total Group sales. RIGHT SIZING OPERATIONS TO UNLOCK GROWTH When growth in food businesses started slowing down, skin and beauty treatments became part of a strategy for many CPG giants to accelerate growth. Nestlé also joined this bandwagon and created Nestlé Skin Health (NSH) business with an aim of jump-starting growth. This however failed to deliver, as the unit never made any meaningful contribution to the company’s bottom line. Realizing its mistakes, Nestlé abandoned this broadspectrum approach like other CPG majors and has opted

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THE COMPANY HAS CONTINUED TO BEEF UP THIS DIVISION WITH ACQUISITIONS OF MORE HEALTH AND NUTRITION COMPANIES SUCH AS VITAL PROTEINS, PERSONA, ZENPEP AND US NUTRITION AND SUPPLEMENT MAKER THE BOUNTIFUL COMPANY to pursue a nutrition, health and wellness strategy. As a result, it began selling businesses that did not align to this strategy. This included NSH, which was sold in 2020 for over US$10 billion, the U.S. ice cream and confectionery businesses, and most recently the Nestle North America Water business that was sold to a consortium of private equity funds for US$4.6 billion. Nestlé’s right sizing has also involved acquisition

of business that aligns to its new nutrition, health and wellness strategy. The company has particularly bolstered its Nestlé Health Sciences (NHS) business with acquisitions such as the 2018 acquisition of Atrium, a global leader in nutritional health products, for US$2.3 billion. The company has continued to beef up this division with acquisitions of more health and nutrition companies such as Vital Proteins, Persona, and ZenPep. Most recently, the company announced that it has agreed to acquire the core brands of US nutrition and supplement maker The Bountiful Company for US$5.75 billion, bolstering the division even further. Investments in NHS have started paying off as the division alongside Purina Petcare and Americas were the major drivers of its historic growth recorded in 2020. Nestlé CEO Schneider believes the company is yet to achieve the right portfolio mix that delivers on its strategy. He promised at the start of his tenure as CEO to replace 10% of Nestlé’s portfolio by the end of 2021. We therefore expect Nestlé to continue unloading unfashionable brands even as it focuses more on investments in ventures that align to its health and wellness strategy. BETTING BIG ON A PLANT-BASED FUTURE

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COMPANY REVIEW: NESTLE

KEY NUMBERS

US$1.32B

THE COMPANY'S PLANNED INVESTMENT OVER NEXT 5 YEARS IN REGENERATIVE ACRICULTURE

The plant-based food market is the fastest growing category in the food industry at the moment particularly in the US and other leading economies. According to a recent report by Meticulous Research, the plant-based food market is expected to grow at a CAGR of 11.9% from 2020 to 2027 to reach US$74.2 billion by 2027. The double-digit growth potential that this market offers is simply too irresistible for any food company more so Nestlé, which has its eyes on ventures that offer higher growth, higher margin, and appeal more to health and sustainability. The company in 2017 acquired Sweet Earth Foods, gaining an immediate entry into the plant-based foods segment in the US. Since the acquisition, the brand has debuted more than 45 vegetarian and plant-based products, expanding into faux beef, chicken, sausage and deli meats, as well as bowls and burritos. In Europe, the Swiss conglomerate has also been THE COMPANY RECENTLY EXPANDED ITS OPERATIONS IN CHINA, ANNOUNCING PLANS TO SET UP ITS FIRST PLANT-BASED FACILITY IN ASIA, AS PART OF EFFORTS TO GRAB A SHARE OF THE COUNTRY’S MEAT-FREE MARKET aggressively expanding its plant-based offerings under the Gourmet brand, launching plant-based sausages and burgers to the delight of customers who have readily embraced the plant-based option, if the 40% growth achieved by the brand is anything to go by. The company also recently expanded its operations in China, announcing plans to set up its first plant-based facility in Asia, as part of efforts to grab a share of the country’s meat-free market, which has skyrocketed by 33.5% since 2014 and is predicted to be worth a staggering US$11.9 billion by 2023, as reported by Euromonitor. CEO Mark Schneider has bigger plans for the company’s plant-based market. “This story is way, way, way, beyond the burgers,” he said. To Schneider, this is “a once in a generation opportunity to revive, rejuvenate, reenergize” its US$13.15 billion prepared dishes and cooking category, which has not been performing exceptionally well. Consequently, the company has started incorporating

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plant-based options to items that traditionally use the animal-based protein such as its DiGiorno Rising Crust and Meatless Supreme and Stouffer’s Meatless Lasagna. Of plant-based foods, Ryan Riddle, R&D specialist of vegetarian meal solutions at Nestlé USA said: "It's one of most important spaces that Nestlé is really investing heavily in. I don't think that it's a short-term fad that we're trying to chase. We really believe that it's the future of food." SUSTAINABILITY AT THE CORE OF OPERATIONS According to Saint-Francis Tohlang, Nestlé’s Corporate Communications & Public Affairs Director – East & Southern Africa Region, protecting the planet is key to Nestlé’s operations, and thus the company’s existence is directly dependent on the survival of the planet. To this end, Nestlé has made several pledges aimed at ensuring that the company has a positive impact on the environment. The firm has, for instance, pledged to halve its greenhouse gas emissions by 2030 and to achieve net zero carbon emissions by 2050. The company has further pledged to make 100% of its packaging recyclable or reusable and to reduce virgin plastic use by a third by 2025. To achieve these ambitious pledges, the company in 2020 said it will invest CHF1.2bn ($1.32b) over the next five years in regenerative agricultural practices as part of a CHF3.2bn (US$3.51bn) to combat climate change. Nestlé also expects to complete the transition of its 800 sites in the 187 countries where it operates to 100% renewable electricity within the next five years and is reformulating its products to make them more environmentally friendly. DELIVERING ON THE PROMISE Nestlé’s performance has been impressive. The company has been able to reinvent itself, shake off underperforming businesses, invest in high growth enterprises and amid a pandemic, deliver its highest growth in 5 years. In Q1 2021, the Swiss food giant delivered a 7.7% organic growth, a testimony that it is on course to deliver the 4-6% a year sales growth that the firm promised in 2017. The business is currently well diversified with 42% of its revenue coming from emerging markets and 58% from developed markets. Moreover, the “high growth” segments of the business represent 61% of revenue, meaning that although Nestlé is not immune to industry-wide problems such as slowing growth in emerging markets, low incomes among the young that will depress their purchasing power, and a pandemic that is threatening to tear economies apart, it certainly will survive. Needless to say, Nestlé, has been around for more than 160 years, it has certainly survived worse.

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Dairy

BUSINESS

TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF DAIRY PRODUCTS

Dairy alternative products take their place as consumers vote with their wallets By Catherine Wanjiku

Concerns on sustainability and animal welfare and innovative ideas drive surge

C

onsumers are increasingly conforming to vegan and flexitarian diets, seeking dairy alternatives, as interest in health, sustainability, environmental protection and ethics continue to bulge across the World. With the increasing shift in consumer preference, the global diary alternatives market is expected to chalk out remunerative growth trend through a diverse range of verticals. According to a research by the world’s leading

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food processing and packaging solutions company Tetra Pak and Lund University, demand for dairy alternatives could increase by 25% to 65% by 2030. During the forecasted period, the dairy alternative segment has a potential of occupying up to 50% of the dairy market, with the demand for animal-based dairy foreseen to reduce by between 35-75%. “The food & beverage sector will undergo an enormous transformation over the next decade, with the dairy MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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DAIRY BUSINESS AFRICA: DAIRY ALTERNATIVES

industry feeling this most acutely. The key to success in the new landscape will be in embracing flexibility and proactively responding to the wave of disruptive changes,” Frederik Wellendorph, Vice President Business Unit Liquid Food, Tetra Pak said. Market research firm, Research and Markets concurs with this finding, highlighting that the once niche dairy alternative market estimated at US$22.6 billion in 2020, is projected to reach US$40.6 billion by 2026, recording a CAGR of 10.3 % in terms of value. Asia Pacific region accounts for the largest market share in the segment owing to the increasing consumer inclination towards vegan food, ascribing to religion, culture or altruism, and increase in reported cases of milk allergies and lactose intolerance. North America has also accounted for a considerable share in the global plantbased milk market. However, Europe is projected to be the fastest-growing market of the segment, driven by rising health awareness among consumers, especially the millennial who focus on the nutrition factor, along with environmental concerns and sustainability issues. In the Middle East and Africa, the market is projected to grow at a CAGR of 6.76% during the forecast period (20202025), according to Mordor Intelligence, as majority of the population in the region are lactose intolerant thus turning

KEY NUMBERS

US$40.6B

PROJECTED MARKET POTENTIAL FOR DAIRY ALTERNATIVES BY 2026, GROWING 10% A YEAR

towards dairy alternatives so as to maintain the required nutritional level in the body. South Africa is the largest market in the region. In the long run, the outbreak of COVID-19 is expected to trigger market growth, as it has increased awareness about the various health benefits of plant-based dairy products. In addition, initiatives taken by governments and other organizations to promote the consumption of alternative protein products have also contributed significantly to market growth. For instance, the government of Canada has launched the Protein Industries Canada (PIC) super-cluster, in order to grow the plant-based food & beverage business in the country. Under this project, the Canadian government invests in various plant-based businesses. Apart from this, global animal rights organizations such as People for the Ethical Treatment of Animals (PETA), promote the consumption of plant-based food & beverages by conducting various awareness events and campaigns. WIDE BREADTH OF OFFERING COUPLED WITH READILY AVAILABLE RAW MATERIALS With the dairy alternatives category presenting itself as a key battlefront contender in the consumer-driven revolt, manufacturers have resorted to formulate products with a broad range of positioning. Non-dairy options cover a gamut of products to include milk, ice cream, frozen desserts, yogurt, cheese, drinks, creamer, butter and dressing, among many others. In place of animal sourced dairy, the segment has expanded far beyond the traditional soy milk to incorporate different plant sourced bases – almond, cashew, coconut, rice, oat and even hemp, flax, quinoa etc. These are the ingredients of choice as they are low on fats, cholesterol and have zero concentration on lactose. Most importantly, advances in formulation of products that meet the ideal taste, stability, nutrition and mouth feel, has made consumer to excitingly explore the new offerings. Seeming like a bingo moment is the fact that they are readily available raw materials. For instance, global soy production has increased to around 361 million metric tons in 2018 from 320 million metric tons in 2014, according to SOPA reports. USDA reports that the global almond production has also grown

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DAIRY EXPO to 1.480 million metric tons in 2019/2020, from the nearly 1.069 million metric tons in 2014, while the global oat production in 2013 was 20.73 million metric tons, growing to 22.8 million metric tons in 2019/2020. Joseph Poore, a researcher at the University of Oxford, published a study looking at the impact of soy, oat, rice, and almond milk on the environment. In terms of carbon emissions, almond, oat, soy, and rice milk are all responsible for around a third or less of the emissions dairy milk puts out, with almonds the lowest of the bunch at 0.7 kg per litre, followed by oat (0.9 kg), soy (1 kg), then rice (1.2 kg). Dairy milk is responsible for 3.2 kg of emissions per litre of milk and the farming alone contributes 4% to the total emissions of greenhouse gases from human activity – that is about two billion tonnes of CO2 equivalent every year. Land use shows an even more dramatic split, with nine square metres of land needed to produce just a litre of dairy milk, compared with less than a one square metre for plantbased milks, ranging from 0.3 square metres for rice milk to 0.8 square metres for oat milk. Further to that, oats are regarded as a valuable part of crop rotation systems, thus not contributors to deforestation and excessive utilization of water. Even almond milk, a notorious water-hogger, takes less water to produce than dairy – needing on average 371 litres of water per litre of milk produced, compared to dairy milk’s 628 litres. Rice milk follows shortly behind, needing 270 litres of water per litre of milk. Soy and oat, on the other hand, need just 28 and 48 respectively. THE OUTBREAK OF COVID-19 IS EXPECTED TO TRIGGER MARKET GROWTH, AS IT HAS INCREASED AWARENESS ABOUT THE VARIOUS HEALTH BENEFITS OF PLANT-BASED DAIRY PRODUCTS. INITIATIVES BY GOVERNMENTS AND OTHER ORGANIZATIONS TO PROMOTE THE CONSUMPTION OF ALTERNATIVE PROTEIN PRODUCTS ALSO CONTRIBUTE SIGNIFICANTLY TO MARKET GROWTH. “In fact, for some plant milks, the environmental impact of the crop itself is almost negligible in comparison to dairy cows,” says Poore. To further ensure accountability in the industry, players like Alpro, a Danone subsidiary say they only buy soy directly from farmers so they can trace their origin, and that most of the beans that goes into their milk comes from France, a region revered for its sustainable farming operations. MILK FROM THE LAB Science has also taken stage in the evolution of the dairy industry, with Singapore based biotech company Turtle Tree Labs, making milk from cells without stepping foot on a farm by using giant bioreactors.

9+

SPECIALTY & COUNTRY PAVILLIONS

0+ 500 S NDEE

ATTE A AFRIC FROM ORLD W & THE

1000+

PROD UCTS & SOLU TIONS FROM AFRIC A & BEY OND

The Dairy Expo enables consumers, traders, distributors and the general public to touch, feel and taste the latest processed and packaged dairy products, including: Packaged Milk • Yoghurt • Ice Cream • Cheese • Butter • Ghee • Milk Powder • Dairy Alternatives • Traditionally Fermented Milk

DECEMBER 2-4, 2021

SARIT EXPO CENTRE, NAIROBI, KENYA

Afmass FOOD EXPO

A SPECIAL PAVILLION AT:

The Future of Food in Africa

WWW.AFMASS.COM


DAIRY BUSINESS AFRICA: DAIRY ALTERNATIVES

“We have already seen other companies do something very similar with meat. And consumers are increasingly pushing for cruelty-free products, they are more conscious of reducing their greenhouse gas emissions. By extracting milk from cells in our lab, we can get real milk without having to harm the planet and harm the animals, so this is the future,” said Max Rye, chief strategist at TurtleTree Labs in an interview with BBC. The pioneer of cell-based milk solution, recently raised US$6.2 million in an oversubscribed Pre-A funding round, to accelerate research and production of bioactive compounds found in human milk, which will be applied to both infant and senior nutrition. INNOVATIONS DRIVE THE SEGMENT Danone, Nestle, Kroger, Chobani, Oatly, Eden Foods, Alpro, Harmless Harvest, Alden’s Organic, Hain Celestial Group and Sunopta, are some of the key manufacturers in the industry. IN AFRICA, CHI LIMITED OF NIGERIA INTRODUCED SOYA MILK UNDER ITS HOLLANDIA BRAND, WHICH IT LATER EXPANDED WITH A 100ML CONVENIENT PACK IN 2018, TO MAKE THE PRODUCT MORE AFFORDABLE AND ACCESSIBLE

The players are extensively focusing on product innovations and new product launches in a bid to capture greater market share and secure it. Some of the notable launches include Danone's plant-based So Delicious Dairy Free brand expanding its offerings to include shredded and sliced cheeses, as well as creamy spreads. This was followed with Barry Callebaut launching a 100 percent dairy-free milk chocolate coined “M_lk Chocolate” as part of its new “Plant Craft Indulgence” range. Nestle has also unveiled plant-based creamers under its Natural Bliss brand. Innovations have also graced the market in the previous years with Del Monte Foods introducing a new line of nondairy parfaits dubbed Fruit Crunch Parfaits, made with coconut cream. Alcohol beverage maker Diageo changed the game with the launch of 13% ABV dairy-free version of its Baileys liqueur in the UK, which is made from almond milk in 2018. Unilever’s Ben & Jerry’s has over the years introduced new flavours of its dairy-free ice-cream range. In Africa, Chi Limited of Nigeria introduced Soya Milk under its Hollandia brand, which it later expanded with a 100ml convenient pack in 2018, to make the product more affordable and accessible. Further in East Africa, Jetlak Foods an established food and beverage manufacturinG company based in Kenya recently launched its Nuziwa plant-based nutritional drink range, made from soya

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coming in original, unsweetened, chocolate, strawberry, caramel and banana flavours. In South Africa, products brought into the country by the local importer and distributor such as Infinite Foods, Vfoods and Health Connection Whole Foods, compete for the market share alongside products by local players such as Good Hope International Beverages, Clovers, Blue Diamond Almonds and private label brands by retailers such as Pick n Pay, Checkers, Woolworths and Spar. INVESTMENTS AND BUY-OUTS INCREASE The plant-based dairy arena is also characterised with mergers, acquisitions and huge denominations of investments, which is seemingly threatening the traditional dairy industry. French multinational dairy company, Danone has invested US$12 million in a new plant-based production line at its Parets del Vallès factory, near Barcelona, Spain, which will produce coconut and oat-based yogurts. “Answering the new food trends, such as flexitarianism, brings us closer every day to our ambition to offer a healthy, sustainable and inclusive food choices,” said Paolo Tafuri, CEO of Danone Spain. Food giant, Nestlé SA has inaugurated a new research and development (R&D) accelerator in Konolfingen, Switzerland, to drive innovation and speed-to-market of sustainable dairy and plant-based dairy alternatives that will serve start-ups, students and scientists and help bring products from ideation to commercialization. As investments in alternative dairy companies continue to skyrocket, tradition dairy segment clutches at straws, with firms such as Dean Foods, an American food and beverage company, announcing the shutdown of its major Illinois facility in 2018, with ‘decreased dairy consumption trends’ among the reasons given for the decision. Prior to the move, the company started diversifying its portfolio with acquisition of stake in plant-based brand Good Karma, which it later sold-back in 2020 after filing for bankruptcy. The rapid uptake in alternative dairy products is keeping manufacturers on their toes as they strive to hack the right product formulations to deliver on the ideal taste, texture and nutrition composition in comparison to animal sourced dairy. IDENTITY WARS Despite the alternative dairy category edging out a substantial market share for itself, all is not rosy as questions have arisen as to whether plant-based dairy products should adopt the identity of their traditional counterparts. In October 2020, the European Parliament voted to ban the use of dairy-related terms for all plant-based alternatives, which would prevent the use of dairy descriptors, such as ‘almond milk’ and ‘vegan cheese’, cream-imitation, as well as ‘yogurt-style’ for dairy-free

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with protein levels of 3.4 g per 100ml versus 3.5 g per 100ml of cow’s milk, on average. However, rice milk, coconut milk and almond milk provide minimal amounts of protein, and they need to be fortified with vitamins such as calcium, D and B12, to be “dairylike”. “To put it bluntly, milk sounds better than nut juice,” Galen said, acknowledging that it makes sense companies would rather identify their products with the former option. In a bid to secure and protect the fast-growing sector, Danone, Hain Celestial and other plant-based food companies operating in Canada, formed the Plant-Based Foods of Canada (PBFA) lobbying organisation products in Europe. The vote follows a Foods Association (ENSA) members in 2018 to advance the interests of 2017 ruling, which saw the European have and will always make the plantthe plant-based foods sector in the Court of Justice (ECJ) ban the use of based nature of their products clear country. “The time has come for dairy names such as ‘milk’, ‘butter’, to consumers. Making it easy and the plant-based food industry to ‘cheese’, and ‘yogurt’ for purely plantunderstandable for consumers is all build upon its collective voice within based products – with the exception of that should matter,” Sue Garfitt, CEO Canada. In the next five to 10 years, coconut milk, peanut butter, almond of Alpro said. we are going to see rapid growth in the milk and ice cream. The fight has also been presented interest and consumption of plantUnsurprisingly, the European Dairy in the USA, with the Food and based foods. It’s happening already. Association (EDA) welcomed “As industry continues to the move highlighting that move into the mainstream, it will help avoid consumer IN OCTOBER 2020, THE EUROPEAN it’s critical that it has confusion, between products PARLIAMENT VOTED TO BAN THE USE OF a voice to accurately that are different in terms of DAIRY-RELATED TERMS FOR ALL PLANT-BASED represent it and help shape origin, ingredient composition ALTERNATIVES, WHICH WOULD PREVENT the direction it takes for the and nutritional value. The THE USE OF DAIRY DESCRIPTORS, SUCH AS benefit of all Canadians,” ruling is, however, a major blow ‘ALMOND MILK’ AND ‘VEGAN CHEESE’, Beena Goldenberg, CEO of to the plant-based dairy sector, CREAM-IMITATION, AS WELL AS ‘YOGURTHain Celestial Canada said. with many players lamenting STYLE’ FOR DAIRY-FREE PRODUCTS IN EUROPE. PFBA’s agenda is to the outcome. work with governments “We deeply regret the to raise awareness of the emerging vote in favour of far-reaching and Drug Administration (FDA) in 2018 issues shaping the sector, in order entirely unnecessary restrictions signalling plans to start enforcing a to foster the growth of the sector on the descriptions of plant-based federal standard that defines “milk” and encourage innovation, while dairy products,” said ProVeg vice as “the lacteal secretion, practically providing Canadians with plant-based president Jasmijn de Boo. Jasmijn free from colostrum, obtained by food choices which meet consumer further raised concerns that plantthe complete milking of one or more expectations. Its core mission is to based dairy businesses could now healthy cows.” Though non-dairy support the regulatory and market be ‘saddled with significant financial beverages are often substituted interests of plant food companies burdens’ and ‘practical challenges’ for cow’s milk, “they are not able to in Canada that make and market around renaming, rebranding, and completely mimic the nutritional vegetarian products that are similar remarketing their products. Dairyprofile,” according to Vandana to traditional animal protein products. free yogurt producer Alpro also added Sheth, a registered dietician and its voice to a coalition of nearly 100 spokeswoman for the Academy of plant-based proponents speaking out Nutrition and Dietetics. against the push. “These additional According to a report by BBC, restrictions are neither necessary, nor soy milk is the only one that really proportionate. European Plant-Based comes close in comparison to milk FOODBUSINESSAFRICA.COM

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DAIRY BUSINESS AFRICA: FOOD CULTURES

Food cultures continue centuries-old impact on food industry By Catherine Wanjiku

Cultures continue to grow in food and beverage applications due to their versatile nature

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he human society has evolved from small, nomadic groups of hunter-gatherers, to largestationary civilizations, relying on modern methods of food production and processing, such as food preservation techniques. This has enabled food producers to avail products to consumers far from production points, sustain populations through periods of reduced productivity and preserve surplus products for later utilization. To make this possible, the food industry has turned to the use of food cultures, which have not only been utilized for thousands of years to preserve foods through fermentation, but also give them desirable characteristics. The European Food and Feed Cultures Association (EFFCA) defines food cultures (FC) as safe live bacteria, yeasts or moulds used in food production, which are in themselves a characteristic food ingredient. They include, but not limited to starter cultures, dairy starter, ripening cultures,

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meat cultures, sausage starter, protective cultures, wine cultures, malolactic cultures, sourdough starter, probiotics, etc. The food-grade microorganisms preserve and conserve food through formation of pathogen inhibitory metabolites such as organic acids, alcohols, bacteriocins, etc. by means of fermentation, often in combination with decrease of water activity. The fermentation process also improves organoleptic qualities by producing food products of desirable appearance, body, texture, and flavour. Cultures also contribute to shortening time taken in processing of a products e.g. ripening. Further to that, they boost the nutritive value with the addition of probiotics, which have been reported to improve gut health by stimulation of the intestinal immune system and enhance intestinal peristaltic activity. Being a highly important food ingredient and

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multifaceted, global bioscience company Chr. Hansen, has shifted its business focus to microbial science, as part of its 2025 strategy. “With the launch of our 2025 strategy we are stepping up our game to unlock the next wave of value creation by advancing Chr. Hansen into a focused global bioscience player that specialises in fermentation technology and microbial solutions. “At Chr. Hansen, we will continue to pioneer microbial science to improve food and health, for a more sustainable future. Already today, more than 80% of our revenue contributes to the United Nation’s Sustainable Development Goals, and we are committed to continuing to leverage the power of good bacteria,” Chr. Hansen CEO Mauricio Graber said. WIDE ARRAY OF CULTURED OPTIONS Currently, more than 3500 traditionally fermented foods exist in the world. Although some of them can be made without inoculating cultures, the addition of microorganisms in known concentrations provides a basis for ensuring that products are manufactured on a consistent schedule; bring about safe, desired and predictable changes in the finished product. Some of the notable spontaneous fermentation processes involve cocoa beans, coffee grains and tea leaves, which are fermented after harvest in order to develop their typical flavour profiles. Progress in substituting the fortuitous food fermentation processes by cultures can be observed in meat technology, yoghurt and cheese production, brewing, sour dough processing, wine making, fermentation of vegetable, among many others. Yoghurt is one of the best-known fermented beverages,

KEY NUMBERS

3500

NUMBER OF TRADITIONALLY FERMENTED FOODS THAT ARE AVAILABLE IN THE WORLD

drinks doubled in the Asia-Pacific region in 2018, with kefir highlighted as an emerging drink with strong potential. Other common cultured dairy products include cheese, sour cream and fermented milk. Key categories for fermentation outside the dairy category include sausage, sauces and seasonings, bread, beer, wine, pickles, sauerkraut and kimchi, and beverages such as kombucha. It is important to note that kombucha, the ancient fermented tea drink from China, has been available in other countries for some years. However, with rising interest in functional beverages and fermented products, it is moving out of the specialty corner into the mainstream, positioned as a sustainable, health-boosting alternative to more traditional soft drinks. South Africa based In2food, recently launched a wide range of the fermented tea drinks in a number of flavour options: Ceylon tea kombucha with raspberry, Rooibos tea kombucha, Rooibos kombucha with beetroot and Green tea kombucha with apple, ginger and lemon. In Kenya, craft brewery 254 indulges its consumers with its raw kombucha drink dubbed Booch. ADVANCES IN FOOD CULTURE PREPARATIONS Food culture preparations are formulations, consisting of concentrates of one or more live and active microbial species and/or strains, commercially available in liquid, THE FERMENTATION PROCESS ALSO IMPROVES ORGANOLEPTIC QUALITIES BY PRODUCING FOOD PRODUCTS OF DESIRABLE APPEARANCE, BODY, TEXTURE, AND FLAVOUR.

but the success of probiotic yogurt was followed by a revamp and repositioning of other related spoonable and drinkable cultured dairy options, including crème fraiche, Smetana, skyr, ayran, lassi and kefir. According to Innova Market Insights, launches of drinking yogurt and fermented

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frozen, or lyophilized form from several companies serving regional or global markets. According to a report titled “Production and Conservation of Starter Cultures: From “Backslopping” to Controlled Fermentations”, a process called “backslopping” was used to originally generate starter cultures for future fermentations. The traditional method entailed the use of a small portion of a previously successful fermentation to inoculate fresh substrate. However, these processes fell from favour in the nineteenth century, concurrently with

MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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DAIRY BUSINESS AFRICA: FOOD CULTURES

the rise in public interest and governmental regulations concerning food safety, as they were prone to slow or failed fermentations, contamination, and inconsistent quality. Food cultures for mass-produced fermented foods were subsequently required to be produced from defined Generally Recognized as Safe (GRAS) microorganisms, with consistent product quality and predictable production schedules, as well as stringent quality control to ensure food safety. New methods of mixed-strain starter culture production, particularly immobilized cell reactors, present attractive alternatives to the more traditional batch reactors, due to their ability to produce a more robust and diverse starter all in one step. Additionally, advances in culture preservation technology, like freeze- and spraydrying, have increased the long-term viability and reduced the cost of starter cultures.

management and gut health performance management. On a similar track, Kerry Group plc has announced its intention to acquire the Spanish company Biosearch Life. Based in Granada, Spain, Biosearch Life is a leader in the nutraceutical and functional food sectors. The company has an extensive range of probiotics and is a recognised leader in premium probiotics obtained from human breast milk, scientifically backed innovative botanical extracts

INDUSTRY GROWS AND CONSOLIDATES The modern starter culture industry provides cultures for nearly every type of fermented food and beverage. And although there are many small culture manufacturers throughout the world, specializing in cultures for specific products or applications, the industry is dominated by a small number of large companies such as Chr. Hansen A/S, International Flavors & Fragrances (IFF), DSM N.V., Kerry Group and Dohler among others. The leading players are focusing on product innovations and have adopted mergers and acquisition strategies, in a bid to expand their presence, to enhance their brand portfolio, and to cater to various preferences of product manufacturers. Big news recently emerged with the completion of merger between IFF and DuPont’s Nutrition & Biosciences (“N&B”) business in February 2021. The new business, operating under the name IFF, has created a new global ingredients and solutions leader within the Taste, Texture, Scent, Nutrition, Enzymes, Cultures, Soy Proteins and Probiotics ingredient categories. DuPont received a onetime US$7.3 billion cash payment and its shareholders own 55.4% of the combined company while IFF’s stakeholders own 44.6%. Deep pocketed Chr. Hansen has also been writing cheques to purchase other firms such as American probiotics company UAS Labs for US$530m; HSO Health Care to grow its women probiotics offering; and collaborated with MISTA, a California-based start-up optimizer focusing on the development of sustainable, innovative foods, to accelerate development of its fermented plant-based solutions. Other notable deals in the food cultures sub-sector include Royal DSM, a Netherland based, health and nutrition player, acquiring Erber Group’s Biomin and Romer Labs for an enterprise value of EUR980 million (US$1.1 billion). Biomin specializes primarily in mycotoxin risk

and natural omega-3. All these companies are in a race to clinch the microbial culture market which is projected to reach US$ 2.2 billion by 2024, growing at a CAGR of 5.5% during the period of 2019-2024, according to research company Mordor Intelligence. The growth is catapulted by rising number of healthconscious consumers, demanding foods with microbes like probiotics, as well as functional products. Also, changing lifestyles, increase in a number of working population, as well as urbanization has fuelled the demand for processed food during the last decade.

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THE MICROBIAL CULTURE MARKET IS PROJECTED TO REACH US$ 2.2 BILLION BY 2024, GROWING AT A CAGR OF 5.5% DURING THE PERIOD OF 2019-2024, ACCORDING TO MARKET RESEARCH COMPANY, MORDOR INTELLIGENCE.

ASIA-PACIFIC IS THE FASTEST GROWING MARKET Shifting focus on the regional outlook, North America and Europe are the largest markets for microbial food cultures, as there are many health-conscious individuals within the region. These regions are slated to remain in dominance over the forecast period due to the ease in accessibility of advanced equipment. Asia-Pacific has been cited as the fastest-growing market, owing to strong demand surge from developed countries such as China. From the earliest fermentation of milk and bread baking to the probiotic foods, which have been appearing on supermarket shelves over the last two decades, the application of microbiology to the food industry will certainly continue well into the future.

FOODBUSINESSAFRICA.COM


BeverageTECH TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF BEVERAGE PRODUCTS

Opportunities rise in Africa for NON-ALCOHOLIC MALT BEVERAGES By Oladapo O. Loto - Applied Brewing Solutions, Lagos, Nigeria.

Investors in Africa can leverage on the craft brewing revolution to start small non-alcoholic malt drinks businesses

I

n Nigeria, the non-alcoholic malt drink category represents a substantial percentage of the total volume and revenue of breweries. This dark beverage is produced in much the same way as beer, except that it is not fermented and therefore contains no alcohol. The drinks are very popular, not only in Nigeria, but in the rest of West Africa as well as Central Africa and parts of East Africa. While the cost of setting up the huge breweries that dominate the brewing sector in Africa is out of the reach of most African investors, the craft brewing revolution that is

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taking place all over the world represents an opportunity for investors to quietly enter the industry as a producer of non-alcoholic malt drinks. LOWER COSTS OF EQUIPMENT The Covid-19 pandemic, which seems to have had adverse effects on the beer business everywhere, has not stopped people from investing in craft brewing. The first microbrewery in Lagos, Nigeria opened in February 2020. The upsurge in the number of craft breweries all other the World has accelerated a lot of innovations in

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BEVERAGE TECH AFRICA: NON-ALCOHOLIC MALT BEVERAGES

NON-ALCOHOLIC MALT BEVERAGES ARE GAINING POPULARITY AS A SOURCE OF NUTRITION AND AS AN EFFECTIVE ALTERNATIVE TO HIGH-CALORIE SOFT DRINKS. strategic partnerships with distributors over the coming years, while local production of the beverages will rise as well. It adds that the Middle East and North Africa (MENA) region is predominantly a market for non-alcoholic malt beverages, as alcoholic products are banned in many countries in the region. As the region’s governments of Saudi Arabia, UAE and Qatar shift towards promoting investment in food and beverage sectors to expand the manufacturing output, new market opportunities in this category will be discovered.

the development of plants and machinery in the brewing sector. This has led to a reduction in the cost of setting up standard microbreweries as well as bottling and canning plants. Small microbreweries are now able to purchase small, quality brewing and packaging plants based on their budgets. When the craft beer movement started, a lot of the pioneers had to improvise to be able to produce their products. But now, machinery suppliers can supply lowcapacity plants capable of producing small batches. Even packaging plant suppliers are already producing small high-quality plants for beverage products. These include automatic bottling and canning plants that can produce as low as 500 to 1,000 bottles or cans per hour. Small tunnel pasteurizers, bath pasteurizers, returnable bottle washers and labellers are also available. MARKET FUNDAMENTALS RISE According to Hexa Research, among the factors that are driving the rise in demand and popularity of non-alcoholic malt drinks is the category’s perception as a source of nutrition, which regulates appetite and keeps bones and skin healthy. They are also gaining popularity as an effective alternative to high-calorie soft drinks. Further, the rising consumption of non-alcoholic malt beverages as sports drink among gym professionals and athletes will also add to the increasing consumption in the coming years. The company notes that population growth and rising disposable income in Nigeria, Ethiopia, and Kenya are projected to spur malt drinks manufacturers to establish

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OPPORTUNITY IN MALT BEVERAGES Investors can take advantage of these developments in the craft brewing sector to invest in microbreweries producing non-alcoholic malt drinks. A few hundred thousand US dollars in investment will be enough to acquire the machinery for a small plant capable of delivering up to 1.2 million litres of malt drinks a year, packaged into both glass bottles and cans. Production from this plant can be further enhanced by the use of a mash filter instead of the regular lauter tun for mash filtration, as more batches can be made in a day with the use of a mash filter. In Africa, non-alcoholic malt drinks can be packaged into generic malt bottles initially. This will save the prospective investor a lot of start-up funds as he or she will not need to invest in a very expensive customised bottle mould that will also require that a huge quantity of bottles be ordered from bottle manufacturing factories. With the generic bottles being used by other breweries, a few pallets can be ordered. In the same manner, plain cans can be used instead of printed cans. The plain cans can be labelled with shrink sleeve labels or sticker labels. Using plain cans means small producers will not need to tie up huge sums of money in stocks of cans that will be required by cans suppliers if the investor chooses to use printed cans.

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Energy drinks set to surge in Africa as beverage makers respond to rising consumer awareness By Paul Ongeto

Increased consumer awareness, lower prices and more variety add to the category’s growth

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nergy drinks in Africa have transitioned from an aspirational product sold exclusively in retail outlets and service stations to finding everyday relevance. In the busiest bus termini across the region – from Zambia, Tanzania, Nigeria or Ghana - energy drinks are finding their place alongside other snacks such as biscuits, soft drinks, nuts, and confectionaries. Street vendors have added them to their daily stock, selling the drinks directly to consumers looking for a way to power through workdays that can begin as early as 4 a.m. and end as late as 10 p.m. Drivers of public service vehicles and trucks have particularly embraced the drink as an energy booster — allowing them to stay alert and increase productivity for longer. The growing popularity among consumers is enough proof to the market potential of energy drinks in Africa.

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In South Africa, the region’s largest market, GlobalData research from 2018 ranked the energy drink category second in the Top 5 Best Performing Soft Drinks in the country by value. Meanwhile, a Mordor Intelligence report indicates a projected value growth of 10.9% CAGR and volume growth of 10.2% CAGR between 2020 and 2024 in Africa. With new innovations, the category could have even greater gains. Considering the entire region, the research firm projects the energy drinks market in the continent to register a CAGR of 3.9%, during the forecast period of 2020 – 2025. KEY GROWTH DIVERS IN THE SECTOR RISING MIDDLE CLASS AND EXPANDING URBANIZATION DRIVE GROWTH One of the main drivers of growth of energy drinks in the

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BEVERAGE TECH AFRICA: ENERGY DRINKS

continent is the rising affluence of African households and the spread of urbanization. Ingredients company Kerry notes that with more disposable incomes to spend, African consumers living in urban areas are now regarding energy drinks as products that complement their new, fast-paced urban lifestyle. The growth is expected to continue, as Africa’s middle class - the largest consumers of energy drinks, currently estimated to be 313 million is projected to rise to almost 1.1 billion by 2060, according to the African Development Bank (AfDB). Urban areas, where most energy drinks are sold, are also expected to contain twice the current population in the next 25 years, according to the AfDB, presenting further opportunities for growth in the energy drinks segment. ADVERTISEMENT AND PROMOTIONAL ACTIVITIES BRING ENERGY DRINKS TO CONSUMER DOORSTEPS Mordor Intelligence notes the popularity of energy drinks in the continent can be directly linked to the aggressive marketing campaigns of their manufacturers. Energy drinks companies such as Red Bull, Coca-Cola, and Rock Star Inc., have flooded consumers with adverts promoting that energy drinks ignite the mind, refresh the body, and enhance performance and stamina. For instance, Monster Energy’s expenditure on advertisement and promotion increased with a 14% growth rate during the period between 2016 to 2018. This has brought energy drinks to the knowledge of many consumers and influenced many of them, more so those with busy lifestyles such as those working late, studying, training, or partying into embracing the drinks. But it is not only the big giants which are having their voices heard. In Zambia and Tanzania, two of the countries where energy drinks have taken hold, radio and TV stations and social media are awash with adverts promoting popular energy drinks as consumers sip away. LOWER PRICED ENERGY DRINKS SPUR FURTHER GROWTH The African energy drinks was previously dominated by multinationals such as Monster Beverages (part of CocaCola) and Red Bull. Their products were mostly pricey and exclusively sold in retailer retail outlets and service stations. The rise of smaller brands such as Reboost from SoftBev (Pty) Ltd, Dragon from Kingsley Beverages Pty Ltd, and Azam Energy Drink from Bakhresa Group has however played a big role in the expansion of the energy drinks market. Unlike their bigger rivals, these brands had no place in the premium sections of soft drinks, their place was in the streets where most consumers are. Packaged mostly in PET bottles and costing less than a quarter of the cost of their bigger rivals, these products were readily accepted by consumers in demand for an

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energy boost but lacking enough money for the pricier drinks. At 4 a.m. in a Kenyan or Tanzanian bus terminus,

the energy drink you are most likely to find in the hands of bus drivers and their assistants is Azam energy and not Monster or Red Bull. OPPORTUNITIES FOR FURTHER GROWTH DEMAND FOR NEW TASTE EXPERIENCES Kerry notes that as energy consumption in Africa grows, consumers have begun desiring for new taste experiences. People want something more than the average energy drink with elevated levels of caffeine and taurine. Kerry notes that flavors with potential for new innovative taste profiles in beverages and energy drinks include mainstream favorites like ginger and grapefruit and lime, which deliver a more stimulating drink experience. Blackberry, blood orange and botanicals including turmeric and basil are other flavors which are up and coming, while florals and fruit flavour combinations, such as vanilla rose blossoms, are also appearing frequently in beverage recipes. Additionally, exciting, and unexpected flavours and flavour combinations have been winning over consumers in the continent. A study conducted in South Africa revealed that 24% of women and 23% of men are keen to try novel flavours in soft drinks or beverages infused with new ingredients. Providing consumers with new taste experiences is thus an immense opportunity that manufacturers could tap into to attract new consumers and to sustain consumer interest in energy drinks. SHIFT TOWARDS HEALTHIER OPTIONS Health is increasingly becoming a top priority for consumers around the world and the situation is not any different in Africa. The perception of energy drinks as being high in sugar and caffeine, is of particular concern to most health-conscious individuals. This is compelling

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the industry to start moving away from ingredients that are synthetic or perceived to be bad for health, towards more sophisticated offerings that go beyond an energy boost. This had led to the rise of “better-for-you” energy drinks with formulations that are now low-calorie, low-sugar and preservative-free, with claims of added electrolytes and vitamins. The inclusion of naturally energizing ingredients such as guarana and ginseng extract has also started to become popular. Kerry predicts that just as in Europe and in other developed markets, reinvented energy drinks are breathing new life into the market and present greatest opportunity for growth. EXPLOITING THE RELATIVELY UNTAPPED MARKET OF FEMALE CONSUMERS Males aged between 18 and 35 have typically been the target market for energy drinks, with brands aggressively marketing “go-to-fuels” to students across university campuses. Females have therefore been traditionally left out of any marketing strategy of energy drink producers. Kerry however notes that female consumers are an emerging group in the energy drinks that can be tapped into for further market growth. Women are nowadays engaged in demanding physical jobs just like their male counterparts, and a huge number of them spend a good amount of time exercising in the gym. They thus need an energy boost from time to time and thus their growing

FOODS OF THE

WORLD EXPO

DECEMBER 2-4, 2021

SARIT EXPO CENTRE, NAIROBI, KENYA

interest in energy drinks. According to Kerry, to capture the interest of consumers, manufacturers have to formulate their drinks to match their preference, which leans towards a drink that is lighter with more flavour depth.

THE RISE OF SMALLER BRANDS SUCH AS REBOOST FROM SOFTBEV (PTY) LTD, DRAGON FROM KINGSLEY BEVERAGES PTY LTD, AND AZAM ENERGY DRINK FROM BAKHRESA GROUP HAS PLAYED A BIG ROLE IN THE EXPANSION OF THE ENERGY DRINKS MARKET. A ROBUST ENERGY DRINKS MARKET Energy drinks are now mainstream. They are no longer confined to the premium aisles of retail chains but are available to the common man in the street corner at a price friendly to his pocket. This shows the robustness that is the African energy drinks market and with a rising interest from consumers, the energy drinks market in the region can only look forward to capturing a wider, growing consumer base in the years to come.

Afmass FOOD EXPO

A SPECIAL PAVILLION AT:

9+

SPECIALTY & COUNTRY PAVILLIONS

0+ 500NDEES

E CA ATT AFRI D L M R O FR E WO H T &

The Future of Food in Africa

1000

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PROD U SOLU CTS & T FROM IONS AF & BEY RICA OND

WWW.AFMASS.COM The Foods of the World Expo is the country and specialty pavilion with imported food, beverage & milled products from around the World The Food of the World Expo section will showcase a broad range of food products from out of Africa to a local, regional and international audience. These products include grains, flours; fruits and vegetables, nuts, and spices; milk products; meat, poultry and fish products; beverages, coffee and tea; chocolates, confectionery and snacks; bakery products etc.

ENTRY IS FREE


AFRICA Inc. W W W. A F R I C A I N C M A G . C O M

INSPIRING AFRICA'S BUSINESS LEADERS & ENTREPRENEURS

Health Care & Personal Care

Agribusiness & Biotech

Aviation, Transport & Logistics

Manufacturing & Retail

Construction & Real Estate

Government/NGO Services

Energy, Oil & Gas

Telecom, ICT & Media

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Finance & Insurance

Mining

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Hospitality & Tourism

Education & Training

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TRENDS IN FORMULATING, PROCESSING, PACKAGING & CONSUMPTION OF MILLED & BAKED GOODS AND ANIMAL FEED

Sub-Saharan Africa’s food security has turned out better than feared. But risks remain Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz), and also a member of the South African President's Economic Advisory Council (PEAC).

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hen the COVID-19 pandemic hit, concern immediately arose that sub-Saharan Africa faced a potential worsening in food insecurity. The concerns were due to the anticipated slowdown in economic activity, job losses accompanied by loss of income, and a ban on grain exports by major exporting countries, including India, Russia, Cambodia, and Vietnam. Sub-Saharan Africa is a net importer of food. The bans, along with other pandemic-related disruptions to food supply chains, were expected to add to food security challenges in the region. The World Bank was among the first multilateral institutions to sound the

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alarm. The bank estimated that an additional 26 million people would fall into extreme poverty, defined as those living under US$1.90 per day, in 2020. The slowdown in economic activity played out as expected, with sub-Saharan Africa’s economy contracting by 1.9% in 2020, according to International Monetary Fund estimates. The economic slowdown resulted in job losses. The widespread job losses in the region subsequently led to a rise in food insecurity. This was most pronounced in Nigeria, Kenya, South Africa, Ethiopia, Uganda and Malawi, the countries for which data is available. More than a year since the onset of the pandemic, a great many uncertainties about the economic future of

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MILLING & BAKING AFRICA: FOOD SECURITY

the region linger on. However, sub-Saharan Africa’s food security situation appears to have, thus far, turned out better than some of the more pessimistic expectations. The increase in staple grain imports in various African countries, by both governments and private sector players, combined with slightly better domestic grain production conditions in some, such as Zambia, South Africa and Tanzania, to name a few, has slightly shielded the region. SPECIFIC INTERVENTIONS One positive development was that the G20 discouraged major grain-exporting countries from banning exports. Domestic evaluations of supplies by food-exporting countries also provided comfort for sufficient food supplies in the world market. As a result, India, Russia, Cambodia and Vietnam lifted the ban on exports, enabling a smooth flow of grain to the sub-Saharan Africa region. Various governments also took action. This was primarily through increasing grain imports. The major importers have been Zimbabwe, Zambia, Rwanda, Tanzania, Kenya, Nigeria and Malawi. Some of these countries also rolled out farmer input support schemes to assist farmers ahead of the 2020/21 production season, which began in October 2020 for most countries. Only South Africa responded with direct income support to vulnerable households, but still household food insecurity rose.

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Governments also supported farmers with inputs. This could pay off during the 2021 harvest. There remain concerns though that some of support might have been late in getting to some farmers because of corruption, poor farmer targeting and bureaucratic inefficiencies. This has been the experience with previous farm input subsidies programmes. THE INCREASE IN STAPLE GRAIN IMPORTS IN VARIOUS AFRICAN COUNTRIES, BY BOTH GOVERNMENTS AND PRIVATE SECTOR PLAYERS, COMBINED WITH SLIGHTLY BETTER DOMESTIC GRAIN PRODUCTION CONDITIONS IN SOME, SUCH AS ZAMBIA, SOUTH AFRICA AND TANZANIA, TO NAME A FEW, HAS SLIGHTLY SHIELDED THE REGION. That said, another important positive development was that most of the African continent, specifically southern and eastern regions, received higher rainfall during the 2020-21 summer. This allowed for increased plantings and improved crop production conditions. The United States Department of Agriculture estimates already point to prospects of increased maize production in several southern and east Africa countries. For example:

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• Zambia’s 2020/21 maize production could reach 3.4 million tonnes (up 69% on 2019/20); • Malawi’s maize harvest is estimated at 3.8 million tonnes (up 25% y/y), • Mozambique’s maize crop is estimated at 2.1 million tonnes (up 8% y/y), • Kenya’s maize harvest is forecast at 4.0 million tonnes (up 5% y/y). • Tanzania’s maize harvest is estimated at 6.3 million tonnes (up 8% y/y). There are also prospects of large maize and wheat harvests in Zimbabwe. These numbers suggest a good harvest, not only for grains but also for other crops and improved livestock conditions in the southern and east Africa region. These improved agricultural conditions cannot fully compensate for job losses. Nevertheless they might cushion households from severe and long-term food insecurity that the World Bank’s economists had feared the sub-Saharan Africa region would face from 2020. It is plausible that as the harvest begins from May 2021 in some African countries, rural households could be in a slightly better position than in 2020 in terms of staple grains availability. The big question now is whether insights have been gained to make the agricultural sector more resilient in the future, and if the expected large harvest could be stored in good condition to last for longer or reach the market in good quality. A number of sub-Saharan African countries lag behind in this effort. One idea that’s been around for decades revolves around strengthening rural economies through supporting agriculture and improving infrastructure to help link farmers to markets. Had efficient roads and storage infrastructure existed in many African countries, the windfall of expected large grains harvest would find a market place, and income from sales would improve

ESSENTIALLY, THE RURAL AREAS OF THE SUBSAHARAN AFRICA REGION MIGHT EXPERIENCE AN IMPROVEMENT IN FOOD AVAILABILITY IN 2021 COMPARED TO 2020. HOWEVER, THIS IS TEMPORARY. IT IS AT THE MERCY OF WEATHER CONDITIONS AND GOVERNMENT SUPPORT GOING INTO 2022. household incomes. From a policy perspective, I would argue that as various governments begin to craft and some implement the economic recovery strategies from the COVID-19 slump, the improvement in rural infrastructure should be prioritised. Such an approach would have long term economic and food security benefits.

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CHALLENGES AHEAD Nevertheless, the sub-Saharan Africa region still faces major headwinds. If the pandemic is prolonged it’s plausible that the fear of rising food insecurity could eventually be a reality, especially if the next summers are not as rainy as 2020-21. In addition, the government-led input support to farmers for the 2021-22 planting season will be constrained by reduced fiscal space that most emerging market governments face. And there’s the lurking risk of increasing global bond yields which will make government bonds in developed countries offer more attractive returns for investors, resulting in money being sucked out of emerging and frontier markets. Essentially, the rural areas of the sub-Saharan Africa region might experience an improvement in food availability in 2021 compared to 2020. However, this is temporary. It is at the mercy of weather conditions and government support going into 2022. Both are highly uncertain and largely not within each country’s control. Perhaps, sub-Saharan African governments might want to ensure continued farmer input support again in the 2021-22 summer crop planting period.

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MILLING & BAKING AFRICA: DAMPENING

Purpose and importance of grain dampening in the wheat milling process By Alapala

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ampening is an essential part of the wheat milling process. Affecting the flour quality and extraction, an effective dampening operation helps millers achieving better results. The process of dampening, also referred to as tempering or conditioning, is an important process in grain milling that is used to provide optimum moisture level of the grain before the grinding process. This optimum moisture can be defined as ‘the bran should be hard enough to be separated from the endosperm easily, and the endosperm should be soft enough to be milled properly’. The process plays an important role on the milling yield and bread-making quality of the flour. It ultimately helps to adjust the flour moisture content as well, which has an important role on profitability. IMPACT OF THE DAMPENING PROCESS: HOW DOES IT WORK? The fragile wheat bran tends to crumble during milling, making its separation from the flour harder, ultimately reducing the quality of the flour. The dampening process allows the endosperm to mellow and soften, and the bran to get elasticity so that they can be separated easily from NON-ALCOHOLIC MALT BEVERAGES ARE GAINING POPULARITY AS A SOURCE OF NUTRITION AND AS AN EFFECTIVE ALTERNATIVE TO HIGH-CALORIE SOFT DRINKS. each other. • When the moisture of wheat is above the optimum level, it will be very difficult to separate the bran and endosperm during milling and sifting, due to the increasing cohesion and stickiness of the bran and endosperm. • If the moisture is lower than the optimum level,

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the bran and endosperm both become easily crumbled, obtaining a higher amount of flour but of a lower quality. • In optimal dampening conditions, the bran can be observed in bigger particles like flakes during the milling, and easily separated in sifting operation. THE PROCESS: HOW DAMPENING IS APPLIED? The dampening process includes two main stages. The first one is bringing the moisture content of the wheat to the optimum level by adding water, or extracting water in some cases. The second stage is the resting period in dampening silos for a certain time, to allow the absorption of the water and spreading it along the entire wheat kernel. The water must have enough time to penetrate into the kernel, which is called as "dampening time". FACTORS AFFECTING THE DAMPENING PROCESS Grain dampening can be considered as a hydrothermal process. The three main factors affecting the dampening process are: water amount, temperature, and time. It should be considered that the final moisture of flour should not exceed 14.5%, otherwise the flour quality will be negatively affected during the storage. WATER AMOUNT Water significantly impacts the efficiency in milling and sifting. The optimum level of moisture before the grinding process varies depending on the type of wheat. The ideal moisture levels prior to milling (at the 1st break) is given in Chart 1. In dampening, generally 5-8% water is added to the grain. Especially for hard wheat, since it is not possible to

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add it all at once, the process is completed in two stages. The maximum amount of water that can be absorbed by a grain corresponds to 40% of its weight.

Type of Wheat

Ideal Moisture (%)

Very Hard

16.5 - 17.5%

TEMPERATURE The heat accelerates both the absorption and the spreading of water into the wheat kernel. Thus, the required time for dampening is shortened with the increasing temperatures. When the level of moisture in the grain is higher than desired, hot air is used to reduce the amount of water in the wheat. The use of heat in dampening reduces time as and also contributes to the flour quality, however; it should be also considered that high temperatures may affect the wheat structure negatively. The relation between the temperature and dampening time is shown in the Chart 2.

Hard

16.0 – 17 %

Semi Hard

15.5 - 16.0%

Soft

14.5 - 15.0%

TIME The duration of the process is determined by grain properties and the temperature applied. However, for the even spreading requires a resting period of 12-24 hours for soft wheat and 24-48 hours for hard wheat as detailed in the Chart 3. Along with these factors, others such as the type of wheat, ambient conditions etc. affect the dampening process. For this reason, different dampening procedures can be applied during the summer or winter periods. Nebulisator (TNBM) device can be used when it is difficult to reach desired moisture content due to very hard wheat types, excess ambient temperatures etc. In this process, 0.3 -0.5 % amount of water is sprayed into the wheat to support water absorption. Debimeter (TEDM) is also used for the adjustment of water amount during dampening process. DAMPENING METHODS AND TECHNOLOGY Various methods and technologies are used for dampening of the wheat including cold, warm, and hot dampening, vapor dampening, microwave and ultrasound dampening etc.

Alapala’s Intensive Dampening Machine (TCTS) is widely and effectively used to increase the moisture level in grains. The inclined helesonic screw it features, the wheat

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Chart 1. Ideal moisture before milling

Temperature (Cº)

Dampening Time

21

2 -3 days 12 hrs

27 40 60

8 hrs

2 hrs

80

40 min

Chart 2. Relation of temperature and dampening period

Type of Wheat 21

Dampering (hours) 2 -3 days

27

12 hrs

40

8 hrs

60

2 hrs

80

40 min

Time

Chart 3. Tempering time for different types of wheat

is homogenously mixed with water. The machine offers a high capacity and efficiency in the dampening process. Compared to inclined models, Alapala’s Horizontal Dampening Machine (TCTI) offers even better efficiency in dampening with more water absorption in shorter periods. The machine consists of two independent sections with different paddle design and rotor diameter. The first section is designed for pre-mixing process, while the intensive mixing and dampening operation is carried out in the following section. Complementing the machines mentioned above, Automatic Dampening Machine (TOCA) measures the moisture content, temperature, flow rate, and specific gravity and calculates the required amount of water automatically. It delivers a very high precision with infrared technology.

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Afmass DIGITAL

S U M M I TS

INTRODUCING AFMASS DIGITAL SUMMITS! The AFMASS Digital Summits are a series of ONE DAY online events that provide the platform to discover the latest investment and innovation opportunities, unravel market trends and find the latest solutions to challenges standing in the way of Africa’s food industry becoming more efficient, sustainable and prosperous.

Visit the website for the specific dates for each of the upcoming Summits

www.afmass.com/digital


South Africa's sugar tax plummets sale of sweetened beverages Source: Changes in beverage purchases following the announcement and implementation of South Africa's Health Promotion Levy published in The Lancent Planetary Health

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ub-Saharan Africa faces increasing issues of diet-related non-communicable diseases with rapidly rising intakes of sugar-sweetened beverages (SSBs) and other ultra-processed foods. South Africa, in particular, faces an increasing burden of these non-communicable diseases such as obesity, diabetes, hypertension, cardiovascular disease and cancers – diseases that can be linked to increased consumption of sugar, particularly from beverages. According to International Diabetes Federation, South Africa has a diabetes prevalence of 12.8% in adults with a total case population of 4,581,200. WHO data indicates that approximately 27.4% of men and 26.1% of women in the country have hypertension, though prevalence of up to 60%

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has been reported. Meanwhile, the South African National Health and Nutrition Examination Survey (NHANES-1) has reported a combined overweight and obesity prevalence of 13.5% in children aged 6–14 years, higher than the 10% global prevalence in schoolchildren. To curb the menace, the government of South Africa implemented an SSB tax of approximately 10%, known as the Health Promotion Levy (HPL). A study by South African Medical Research Council Centre for Health Economics and Decision Science, PRICELESS-SA and partners, published in The Lancent Planetary Health, reviews the impact the sugar tax has had on purchases of taxable beverages in terms of volume, sugar, and calories in the country, before and after the HPL announcement and implementation. It has also

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FOOD NUTRITION & HEALTH: SUGAR TAX

ACCORDING TO INTERNATIONAL DIABETES FEDERATION, SOUTH AFRICA HAS A DIABETES PREVALENCE OF 12.8% IN ADULTS WITH A TOTAL CASE POPULATION OF 4,581,200. WHO DATA INDICATES THAT APPROXIMATELY 27.4% OF MEN AND 26.1% OF WOMEN IN THE COUNTRY HAVE HYPERTENSION, THOUGH PREVALENCE OF UP TO 60% HAS BEEN REPORTED. assessed differential changes in purchasing behaviours of households stratified by household socioeconomic status. The report notes that many jurisdictions across the globe have used fiscal policy, namely taxation, as a major approach to curbing consumption of SSBs. Such taxes have been shown to be impactful when well designed and implemented. For example, in 2014, Mexico introduced a 1-peso (about US$0.05)-per-litre tax on beverages containing added sugar, resulting in a 6% reduction in purchased volume relative to pre-tax trends over the first year of the tax, and 7·6% reduction over the first 2 years of the tax. SSB tax policies implemented in other countries such as the UK and several subnational jurisdictions in the USA have also resulted in statistically significant reductions in SSB purchases. The UK adopted a tiered but also sugarbased design, and a recent study found that between 2015 and 2018, the volume of sales of soft drinks that are subject to the tax fell by 50%, while volume sales of those not subject to the tax increased by 40%. This was equivalent to a net reduction of 4·6 g/capita. TAX TAGGED ON SUGAR LEVEL South Africa’s HPL is based on taxing SSBs according to their sugar content, more precisely targeting the source of these products' harms and implicitly incentivises beverage manufacturers to reduce the sugar content of their products. A process to explore adopting the tax policy began in 2016 following its announcement in the late-February, budget speech. This was followed by a white paper published in June, 2016, reviewing evidence and making recommendations for a sugar-based tax to be levied at R0·028 (US$0.0020) per gram of sugar, a tax burden of approximately 20% of the per-litre price of the most popular soft drink. Proposed legislation containing the HPL was introduced to the South Africa National Assembly in April 2017, with an extensive consultative period involving the sugar industry, beverage manufacturers, civil society groups, and public health advocates. The consequent delay resulted in the HPL being signed into law in December 2017, and formally implemented on April 1, 2018. This process saw substantial concessions

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made to both the sugar and beverage industries, with the effective tax burden being reduced from 20% to approximately 10–11%. The particular rate of the HPL depends on the sugar content of the beverage, at R0·021 (US$0.0014) per gram of sugar, above a threshold of 4 g of sugar per 100 mL. Small producers of taxable beverages using less than 500 kg of sugar per year are exempt from paying the HPL. SUGAR TAX LEADS TO REDUCED INTAKE OF SUGARSWEETENED BEVERAGES The extensive research which examined the nutritional data of over 3,000 households each year from January 2014, to March 2019, found there were reductions in sugar, calories, and volume for taxable beverages in the post-announcement and the post-implementation periods compared with the pre-announcement period.

KEY NUMBERS

10%

THE RATE OF SOUTH AFRICA'S SUGAR TAX, WHICH ACTS AS A HEALTH PROMOTION LEVY

From the analysis it was found that average sugar from taxable beverage purchases fell from 16·25 g/capita per day to 14·26 g/capita from the pre-HPL announcement to postannouncement period, and then to 10·63 g/capita per day in the year after implementation, while average calories, fell from 70·21 kcal/capita per day to 62·45 kcal/capita per day from pre-announcement to post announcement, and further to 46·45 kcal/capita per day after implementation. Mean volumes of taxable beverage purchases fell from 518·99 mL/capita per day to 492·16 mL/capita per day from pre-announcement to post announcement, and then to 443·39 mL/capita per day after implementation. Meanwhile, there were small changes in the purchase outcomes for non-taxable beverages. Overall, there was a 51% reduction in sugar, a 52% reduction in calories, and a 29% reduction in volume of beverages purchased per person per day in comparison to pre-trend counterfactual purchases, following implementation of the tax. “We also found that the relative reduction in the sugar content of taxable beverages was larger than that for volume, showing that industry reformulated products," said Mr Nicholas Stacey, First Author and Senior Researcher at PRICELESS-SA. One of the leading beverage manufacturers Coca-Cola

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South Africa is reported to have cut the sugar in its drinks by a quarter (26%) since 2016. “In South Africa, over a two-year period (2016-2018), we had reduced average sugar content across our portfolio by 26%, ahead of industry commitments of 15%. We recognise that too much sugar isn’t good for anyone and support the current recommendation by several leading health authorities, including the World Health Organisation (WHO), that people should limit their intake of added sugar to no more than 10% of their total energy/calorie consumption,” said Camilla Osborne, Head of Communications for CocaCola Southern and East Africa. The company has launched a range of no-sugar and low-kilojoules options such as Coke Zero sugar. The results also indicated that changes in purchases in South Africa began after the announcement of the intention THE ANNOUNCEMENT IN JUNE 2016, FROM THE NATIONAL TREASURY SIGNALLING AN INTENTION TO LEVY A SUGAR-BASED TAX, SEEMS TO HAVE TRIGGERED ANTICIPATORY SUGAR-CONTENT REDUCTION BY VOLUME AND OTHER STRATEGIES SUCH AS DOWNSIZING OF PACKAGES IN THE RUN-UP TO, AS WELL AS AFTER, THE IMPLEMENTATION OF THE TAX POLICY. to pursue an SSB tax policy, suggesting that consumption is driven by not only consumers' response to greater awareness of the harms of SSBs as part of the discussions around the HPL, but also by anticipatory response from the

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beverage industry. The announcement in June 2016, from the National Treasury signalling an intention to levy a sugar-based tax, seems to have triggered anticipatory sugar-content reduction by volume and other strategies such as downsizing of packages in the run-up to, as well as after, the implementation of the tax policy. LOWER INCOME HOUSEHOLDS ARE THE BIGGEST BENEFICIARIES OF THE SUGAR TAX The researchers also analysed differences in purchasing behaviour by household socioeconomic status, finding that households with lower socioeconomic status had purchased more taxable beverages prior to the announcement of the tax than higher socioeconomic status households, but experienced larger reductions after the announcement and implementation of the tax. “These results back up the impact we've seen from similar policies in other countries - that beverage taxes based on sugar content can help reduce excessive sugar and energy intake. Importantly, this shows that the lower income households that experience the greater burden of obesity, diabetes, hypertension, and other nutritionrelated non-communicable diseases, benefit greatly from this Health Promotion Levy," said Professor Karen Hofman, Director of PRICELESS-SA. While other countries in sub-Saharan Africa have levied SSB taxes, South Africa is the first country in the region to evaluate such a policy and the study is a useful addition to the body of evidence on SSB taxes.

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FOOD NUTRITION & HEALTH: FOOD DIVERSIFICATION

African countries must embrace the concept of good food as good medicine By Charles Wambebe, Professor Extraordinaire, Tshwane University of Technology

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resh impetus is being directed into identifying and advocating for scientific priorities in the area of food security and nutrition across Africa, with a particular focus on health implications. At the centre of these efforts is a a five-year project initiated by the Alliance for Accelerating Excellence in Africa, a partnership between the African Academy of Sciences and the African Union Development AgencyNEPAD. This project aims to identify the continent’s most urgent research and development questions, and to advocate for investments in these areas. This will go a long way in helping the continent achieve its vision of transforming lives through science. As a professor of pharmacology and having worked in the field of African indigenous medical knowledge for decades, I have been involved in research in this field, and 70

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have been a strong advocate for more research. I also believe the translation of this research into policy is critical. One of the things that has become clear to me is that, while Africa is rich in biological diversity, this reality simply isn’t being used to its full potential. This was emphasised at a consultative round table last year on food security and nutrition priorities for Africa organised as part of the fiveyear project. A survey was designed for this round table to prioritise research and development questions relating to food security and nutrition. This survey attracted comments and engagement from more than 1,000 experts globally. The experts made it clear that what is needed is a prioritisation of the health and medicinal values of the food that’s consumed in African countries. In turn, this will spur more research and development of new supplements FOODBUSINESSAFRICA.COM


THOSE OF US WHO GREW UP IN VILLAGES ARE USED TO CONSUMING EDIBLE INSECTS AT THEIR APPROPRIATE SEASONS. THE YOUNGER GENERATION GENERALLY ABHORS CONSUMPTION OF EDIBLE INSECTS. YET, RECENT SCIENTIFIC EVIDENCE HAS SHOWN THAT EDIBLE INSECTS ARE RICH IN NUTRIENTS, WHICH PROMOTES BETTER HEALTH.

and phytomedicines – that is, plant-based therapies and medicines – across the continent. This approach has been successful elsewhere, most notably in China. The Asian country has invested heavily in training young practitioners of Chinese traditional medicine, who work with, among other things, plant-based therapies and phytomedicines. The Chinese government has also spent a great deal on manufacturing phytomedicines. FOOD AND NUTRITION SECURITY Changes in traditional eating patterns have brought about new health threats on the continent, including an increase in non-communicable diseases. Dietary interventions are also crucial in tackling type 2 diabetes and cardiovascular disease. In many cases, diet can reverse type 2 diabetes. And food is a key component in fighting marasmus and kwashiorkor, both severe forms of malnutrition. Many indigenous crops are underutilised; these include bambara nuts, pigeon peas, cowpeas, sorghum, finger millets, cocoyam, amaranth, and sweet potato. And people are increasingly relying on new types of food products such as fast foods, processed food and genetically modified products. Those of us who grew up in villages are used to consuming edible insects at their appropriate seasons. The younger generation generally abhors consumption of edible insects. Yet, recent scientific evidence has shown that edible insects are rich in nutrients, which promotes better health. MANY INDIGENOUS CROPS ARE UNDERUTILISED; THESE INCLUDE BAMBARA NUTS, PIGEON PEAS, COWPEAS, SORGHUM, FINGER MILLETS, COCOYAM, AMARANTH, AND SWEET POTATO

crops, such as cotton, tobacco, sunflower, cashews and sugar cane. In this way, farmers can spread the risk of crop failure and productivity loss due to weather events. Studies have shown that some neglected and underutilised crops are adapted to a range of agroecologies. They are dense in nutrients and also offer better prospects in areas where crops don’t often grow well. Such crops, among them finger millet, bambara nut and cassava, are often drought and heat stress tolerant, resistant to pests and diseases, and adapted to semi-arid and arid environments. Governments should also promote algae (like seaweed), fungi (mushrooms) and edible insects like crickets and caterpillars. The nutrient density of these crops, as well as algae and edible insects, can be used to diversify diets and to address micro-nutrient deficiencies in poor rural communities. Promoting these foods in rural areas could also create opportunities for rural economic development through the development of new value chains. China, Malaysia, India and Vietnam are good examples of countries that derive socio-economic benefits from investment in their traditional food and medical practices. THE WAY FORWARD One of the priorities emerging from our work at the Academy involves commercialising the production of indigenous foods. This will mean, among other things, pushing for governments to invest in researching the safety and efficacy of foods as medicine, as well as advocating for basic sciences research on indigenous crops. More investment in research of neglected and underutilised species could also yield new food products that will enhance people’s health and nutrition across Africa. We also hope to promote the development of germplasm of nutrient-dense indigenous crops and underutilised species. Germplasm are living genetic resources like seeds and tissues, stored at low temperatures so they can be researched, preserved or bred. All this work rests on a central premise: it’s long past time for Africa to embrace the concept of good food as good medicine. This article is published from The Conversation under a Creative Commons licence

There are solutions. One is greater diversification of rural cropping systems. In Malawi, Mozambique and Zambia, crop diversification combines the planting of maize; legumes such as beans, soybeans, pigeon peas, groundnuts and green beans, non-maize staples such as cassava, sweet potato, rice, millet and sorghum; and cash

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MARKET TRENDS: REVIEW OF 2020

Key market trends that shaped the food industry in 2020 By Paul Ongeto

The pandemic has made significant changes in consumer consumption patterns that may change the industry forever 2020 was a year punctuated by the Covid-19 pandemic, disrupting life as we knew it while bringing major changes in how we produce, market, and eat our food. With the cases in China reaching their fever peak, consumers quicklyrealized they needed to be healthy to survive the pandemic. This led to a rise in demand for healthy and functional food products. Many other trends arose as people tried to adjust to the new normal. At Food Business Africa, we go back in time, to bring you the top trends that shaped the food industry in 2020. AT HOME CONSUMPTION BECOMES A NORM Prior to the pandemic, at home consumption was

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diminishing in nearly every corner of the world. Many people shunned eating at home in favour of the convenience of fast-food restaurants and other food joints. The pandemic, however, restricted people’s movement and restaurants were either closed or operating on a takeaway basis. Left with no option, the modern-day consumer found himself rediscovering the kitchen and the art of cooking. In UK - one of the country’s worst affected by Covid-19 - a research conducted by Consultancy UK found out that the likelihood of people making their own dinner had increased by almost 10% since the outbreak. In the United States, a study by Hunter revealed that more than half of Americans (56%) were cooking more and 46% were baking more during the pandemic.

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In West and Central Africa, Nestlé took the opportunity to offer consumers cooking ideas, recipes, and tips to live a healthy life. Through its MAGGI brand, the company launched a dedicated African cuisine website providing over 40 African recipes along with nutrition information to help consumers adopt a healthier diet. Having been a major trend in 2020, at home consumption is expected to become a new norm even in a world without the virus. A study by Bloomberg News and Morning Consult reported that almost a third of those surveyed said they plan to cook at home even more once the world returned to normalcy. The survey of 2,200 US consumers found that the intention to keep up with home cooking is especially strong among younger demographics. When asked about their post-pandemic plans, 43% of Gen Z respondents said they intend to cook at home more after the pandemic is over. E-COMMERCE AND FOOD DELIVERY EXPANDS RAPIDLY E-commerce and Food Delivery was on a growth trajectory even before the pandemic struck. Consumers used it alongside old fashioned physical store buying. With covid-19, free movement became highly restricted, forcing a majority of consumers - even those who had never considered online purchases - to make online purchase at a higher frequency than before. This gave e-commerce and food delivery a new impetus for growth. Six months into 2020, e-commerce in the United States had grown tangentially and was now accounting for 16% of the sales in the US, up from the 10% recorded in the last quarter of 2019, according to data from Smart Insights. Food delivery also was experienced explosive growth during the pandemic. In the US for instance, the four largest food delivery companies raked in roughly US$5.5 billion in combined revenue from April through September, more than twice as much as their combined US$2.5 billion in revenue during the same period in 2019, according to MarketWatch. NUTRITION, HEALTH, AND WELLNESS RECEIVES NEW ATTENTION FROM CONSUMERS As the pandemic ravaged nations globally and claimed millions of lives, people became increasingly aware of the importance of diet to their general wellbeing. Consequently, food perceived to impart healthy benefits to consumers became increasingly popular while those perceived as unhealthy lost favour among a majority of consumers. According to the Functional Food & Beverage 2020 Report from the Hartman Group, because of the pandemic, 31% of consumers are taking more supplements and 29% are consuming more functional foods/beverages. Another research by L.E.K Consulting found that 93% of consumers want to eat healthy at least some of the time, with 63% trying to eat healthy most or all of the time.

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NOSTALGIA GIVES LIFELINE TO LEGACY FOOD BRANDS Seeking a semblance of normalcy during a period of uncertainty, many consumers opted to revisit favourite joys from the past, including the favourite foods they enjoyed growing up. Benefitting from this trend were large food businesses such as Campbell Soup Co., General Mills, and Kraft Heinz, whose legacy brands had experienced steady declines over the past years. These companies increased production as demand soared. Sales of Campbell's soup soared 59% from a year earlier, Prego pasta sauce increased 52%, and sales of Pepperidge Farm Goldfish crackers climbed nearly 23%. Kraft Heinz, whose products were less popular with consumers pre-pandemic, reported increased demand for products like macaroni and cheese, resulting in a 6% increase in full year revenues. General Mills even went a step further to reintroduce Dunkaroos, the cookies-dippedinto-icing combo snack, to take advantage of the rising trend of consumers craving for nostalgic food brands. ACCELERATED TRANSITION TO LOW ALCOHOL DRINKS 2020 saw an accelerated transition to low alcohol drinks as consumers, conscious of their health, avoided high alcoholic drinks. Beer sales plummeted across the globe while low alcohol alternatives became increasingly popular. Hard seltzer, a drink first brewed in 2013, was one alternative that was readily embraced by drinkers seeking a healthier alternative to alcohol. For the period ending June 2020, hard seltzer sales had jumped to US$2.7 billion in the US, with the MARCH/APRIL 2021 | FOOD BUSINESS AFRICA

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MARKET TRENDS: REVIEW OF 2020

segment accounting for over 10% of the total beer/FMB/ cider up from the previous year’s 4.4%. As sales skyrocketed, companies from Molson Coors to Anheuser-Busch InBev SA launched their own hard seltzer brands in 2020 with the hope of tapping into a fastgrowing trend. Market research firms now project that the hard seltzer market is expected to grow at a CAGR of 16.7% between 2020 and 2027 and will be worth US$14.7 billion at the end of the forecast period. The hard seltzer wind continues to blow, with Africa not remaining behind. In South Africa, Distell and AB InBev launched their hard seltzer brands in early 2021 to take advantage of consumer interest in the category. In response to demand for low alcohol drinks, beer manufacturers also refocused their attention to their zero alcohol brands. Heineken accelerated distribution of its Heineken 0.0 while Guinness launched its own zero alcohol variant to keep up with consumer demand. For Heineken, its 0.0 variant grew double digits for the 9 months ending September 2020, at a time when the company’s volume across all products declined by 12.3 per cent. SUSTAINABILITY DRIVES INNOVATIONS IN FOOD PROCESSING AND PACKAGING In 2020, most notable food innovations were around sustainability. Companies, hard pressed to meet their sustainability goals, developed new foods, processing technologies, and embraced new packaging to reduce their carbon footprint. Nestle, for instance, expanded its regenerative agriculture practices to more countries across the globe in line with its 2050 net zero carbon goal, while Coca-Cola committed to collect and recycle a bottle or can for every bottle they sell by 2030. Plant-based proteins as a sustainable alternative to animal protein also became popular with companies such as Impossible Foods, Nestle, and Beyond meat all launching plant-based alternatives to beef, chicken, and pork. Quick service restaurant McDonald also joined the plant-based movement with its McPlant, a plant-based alternative to its chicken and beef burgers. It was later followed by KFC, which also launched its own plant-based chicken substitute. In 2020, Singapore hit the headlines by becoming the first country to approve consumption of labgrown meat. Sustainable packaging as a trend also increased in popularity in 2020. A number of new sustainable packages including paper-based bottles, aluminium cans, bioplastics, and recycled plastics gained prominence, with food manufactures opting to use them as alternatives to plastics. Paper based bottles were arguably the most notable innovation of 2020, with major beverage companies such as Diageo, Coca-Cola, and Pernod Ricard all unveiling prototypes for their flagship brands. Demand for aluminium cans also, for the first time,

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exceeded supply as consumers preferred them as convenient and sustainable option to both glass and plastic. The demand for aluminium cans was so profound that Coca-Cola North America made a decision to distribute its Dasani water in aluminium cans as plastic was no longer popular. EXPANSION OF PET FOOD MARKET Another unprecedented trend in the food industry was the rapid expansion of the pet food market in 2020. This rapid expansion is attributed to an increase in pet ownership in 2020. A report by Market Research revealed that in the U.S., 12% of adults with children under the age of 18 adopted pets because of the pandemic. Additionally, 10% of cat owners and 9% of dog owners in the United States said they adopted a pet because of COVID-19 implications. To address increased demand for pet food, Nestlé invested over US$1 billion in expansion of existing pet facilities and HOME COOKING, DEMAND FOR HEALTHIER PRODUCTS AND INCREASED DEVELOPMENT OF SUSTAINABLE FOODS AND PACKAGES ARE SOME OF THE TRENDS THAT ARE EXPECTED TO CONTINUE STAYING WITH US IN THE FUTURE.

in the build-up of new ones. As pet humanization took hold, quality ingredients also became of utmost importance. Manufacturers, in response, devoted their resources for the development of high protein and low carbohydrate diets. Some of the products were even specially formulated to clean teeth while being consumed. 2020 TRENDS TO STICK 2020 was indeed a year of radical behaviour change. From a spike in at home consumption to demand for nostalgic food products, consumers were on a new journey. As we progress with 2021, analysts believe that some of the trends that gathered momentum in 2020 will slowly fade away. Demand for nostalgic brands is one of the trends projected to fall out of fashion as normalcy returns. In its financial report, Kraft Heinz, which was a major beneficiary of nostalgic brands, said it expected flat to positive organic net sales despite a strong performance in 2020. Other trends which gathered pace in 2020 are definitely going to stick around for some time. Home cooking, demand for healthier products and increased development of sustainable foods and packages are some of the trends that are expected to continue staying with us in the future.

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The evolving nature and use of pallets in modern food storage and distribution infrastructure By Paul Ongeto

Sustainability and transparency in the food and beverage industry drive changes in pallet packaging sector

P

allets are an ever-present feature of the modern food and beverage transportation infrastructure. Also known as a “skid”, the pallet is a flat structure that supports goods in a stable manner during transportation. They are designed to allow access to forklifts, pallet jacks and other lift-transport devices. This provides greater stability and makes the entire loading and offloading process easier. In the food industry, pallets are critical at almost every point of the supply chain. They transport raw materials into the factory, are used in moving products from point A to B in the manufacturing plant and are finally critical in the transport of food and beverage consignment to retailers. Without them, food transport would be one highly inefficient and cumbersome process. As the food industry evolves to become more transparent,

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sustainable and environment friendly, the pallet industry has also been forced to metamorphose to keep up. In this issue, we explore the trends impacting the pallet industry even as it tries to conform to evolving demands of its biggest client - the food and beverage industry. PLASTIC PALLETS THREATEN WOOD’S DOMINANCE For more than a century now, wood has been the dominant material in the pallet industry, and rightly so, for it produces strong, stiff, durable, easy to use, and inexpensive pallets. As late as 2013, wood pallets controlled between 90 to 95% of the market, according to report by the Department of Agricultural and Biological Engineering of Pennsylvania University, USA. Although it remains a dominant material today and is projected to remain so for the foreseeable future, plastic

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PACKAGING: PALLETS

is quickly gaining popularity and is becoming increasingly sought after by food and beverage companies. According to a Grandview Research, the global plastic pallets market size was valued at US$6.7 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2021 to 2028. Mordor Intelligence notes that logistic and shipment companies are shifting towards plastic pallets owing to its advantage such as high strength, durability, lightweight, and long-term environmental sustainability. Woodwork Network further notes that plastic pallets are becoming increasingly popular in the food and beverage industry as they are resistant to organic and inorganic chemicals at normal temperature. They also do not absorb moisture and can be thus subjected to the standard sanitary conditions required to guarantee food safety. Drawbacks such as high cost of initial investments, risk of pallet theft, and lack of repair options are however, expected to constrain growth of plastic pallets. STANDARDIZATION OF PALLETS FORMATS There are two main structural designs used for manufacturing pallets: block and stringer. They differ in design as the block pallets allows for full four-sided access when using a forklift while stringer pallets can only be fully accessed from two sides. Mordor Intelligence notes that as global trade continues to grow and shipments made across continents, pallet construction will become more standardized. In terms of design, the market research firm notes that more companies are adopting the block design owing to its greater flexibility. When it comes to size, the most prevalent size of wood pallet is 800mm x 1,200mm unit, which was developed by the European Pallet Association. Disposal fees on pallets that are not standardized in Europe is particularly driving the shift towards this size. RECYCLING AND REUSE TAKE CENTRE STAGE OF PALLET HANDLING In the past, very few pallets were reused, mainly because when shipping across continents, the cost of recovery is more than that of the pallet. However, due to increases

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in material cost, environmental concerns and the cost savings that can be achieved, manufacturers have become interested in developing systems to increase reusability of pallets. Subsequently pallet pooling systems which have been popular in Europe for decades now have gained popularity globally due to their ability to economically reuse pallets. Thanks to the pooling system and development of dedicated pallet management systems, companies can rent pallets when transporting goods across continents or for for local shipping. The Commonwealth Handling Equipment Pool (CHEP), the pioneers of the system is currently the largest establishment of its kind across the globe. It has operations in Europe, North America, and Asia. Other companies that have since grown to offer this kind of service include European Pallet Association, Canadian Pallet Council, and Logistic Packaging Return. Apart from reusing pallets, recycling of pallets is also increasingly becoming a significant part of the pallet packaging industry. Used pallets are no longer considered garbage, and every day less of these materials are put into landfills. Instead, most are subjected to recycling processes to produce other materials. In Europe, the law requires at least 60% of the fibrebased packaging waste to be recycled, leaving no room for manufacturers to haphazardly dispose of their used pallets. This trend is expected to continue as more food companies work to achieve a closed loop system and net zero carbon status. EMBEDDED RFID CHIPS GO MAIN STREAM Traceability in the supply chain has become an important factor in the food and beverage industry. Consumers are demanding greater transparency as to how the food they consume is produced and transported. Pressure has thus mounted on companies to prove that they can trace their processed foods back to the farm where they were first produced. To address consumer concerns, companies have implanted embed Radiofrequency Identification (RFID) chips to their pallets to track movement of both raw materials and final products.

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Pallet tracking has also proved useful particularly in managing recalls and expiration dates, minimizing product loss and getting items to their end-users in an efficient and cost-effective manner. Use of RFID chips on plastic pallets has also come with an additional advantage of reducing chances of theft, enabling companies to increase the number of trips per single pallet, which eventually lowers cost per trip and results in a rapid return on investment.

The market in the MEA (the Middle East and Africa) generated a value of US$6.18 billion in the year 2018 and is expected to grow, owing to the rising adoption of plastic pallets, especially in the logistics and transportation industry. For Europe, Research and Markets projects that the pallet industry there is expected to exhibit a modest growth of 4.4% driven by increasing industrial production

MARKET STATUS INTO THE FUTURE The global pallet market was valued at US$79 billion in 2020, according to a report by Allied Market Research. The market is expected to grow at a Compounded Annual Growth Rate (CAGR) of 5.1% from 2020 to 2027 to reach US$110.5 billion at the end of the forecast period. The food and beverage end-use segment led the market in 2020, with over 23.4% of the global revenue. Regionally, North America enjoys the leading position in the market thanks to an advanced food and beverage sector in the USA and Canada, which heavily uses pallets in transport and logistics. The Asia Pacific region however presents the greatest opportunity for growth due to a thriving manufacturing industry, a rapidly expanding population, a continued rise of disposable incomes and consumerism in food and beverage. Countries such as China and India are likely to be the most progressive markets in the forecast years.

MORDOR INTELLIGENCE NOTES THAT LOGISTIC AND SHIPMENT COMPANIES ARE SHIFTING TOWARDS PLASTIC PALLETS OWING TO ITS ADVANTAGES SUCH AS HIGH STRENGTH, DURABILITY, LIGHTWEIGHT, AND LONG-TERM ENVIRONMENTAL SUSTAINABILITY.

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in European industries as well as high applications in shipping and load handling sectors. The rise in e-commerce has also challenged supply chains to develop transportation and logistics to control flow and cost of outgoing and incoming goods. Online orders are generally in smaller quantities and more frequent, thus, requiring more assets for goods management. This creates a demand for pallets for e-commerce-based logistics, which in turn is expected to drive growth in the pallet industry.

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SAINT-FRANCIS TOHLANG

Corporate Communications & Public Affairs Director East & Southern Africa Region, Nestlé

We are focused on delivering nutritious foods and becoming more sustainable in our operations in East & Southern Africa Saint-Francis Tohlang is the Corporate Communication & Public Affairs Director Nestlé East & Southern Africa Region, a region that consists of 23 countries in the Eastern and Southern Africa – from Ethiopia, to Kenya, Zambia and South Africa. The World’s leading food and beverage company has an ambitious sustainability agenda across its operations across the World. In this interview, Tohlang gives us a glimpse into Nestlé’s sustainability agenda in the region. 78

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EXECUTIVE INTERVIEW: SAINT-FRANCIS TOHLANG

Please introduce yourself and Nestlé’s business in the region I am very privileged to be part of executive Leadership in this region, which is fairly new and was established in 2018. The region is a consolidation of the former Equatorial Africa Region, which was headquartered out of Nairobi, Kenya and the Southern Africa Region, which was based out of Johannesburg, South Africa. The two regions were consolidated to form the East and Southern Africa Region consisting of 23 countries, which are organized in 6 clusters, the reason being to allow better focus in each cluster. Each cluster has an office where it is run and operated from; for cluster one we have Addis Ababa, Ethiopia; cluster 2 is based in Nairobi, Kenya; cluster 3 in Port-Louis, Mauritius; cluster 4 in Harare, Zimbabwe; cluster 5 in Maputo, Mozambique and cluster 6 Johannesburg - which also serves as the regional head office. In terms of our business, we have a very balanced product portfolio. We play in different categories from infant formula food, coffee and beverages, plus the Nestle Health Science business - an interesting unit that focuses on nutritional science, and many others. We have very powerful and loved brands across the continent, which is really the heart of our business, providing nutritional and much-loved products to people in Eastern and Southern Africa. Sustainability has become a key focus area for businesses and governments across the World. As the world’s leading food manufacturing company, what do you think your role and responsibility lies in leading the sustainability agenda? When we think about our role and responsibility as the biggest food and beverage Company, we need not look very far. Our purpose statement is the true North of everything we do; it is our reference point. The statement reads; “Unlocking the power of food to enhance the quality of life for everyone today and for generations to come.” When you hear that, the link to sustainability might not be apparent. But, in believing in the power of food to enhance quality of life and particularly that belief fueling us to use the scale that we enjoy and to put resources behind various initiatives and the expertise to contribute towards a healthier future, not only for the people through our products but also for the planet where we source resources from. It is our additional responsibility to protect those resources. This is very much engrained on the business philosophy from Nestle’s perspective, which is creating shared value, a concept that has become very popular over the last decade. The company’s previous CEOs and Chairmen have been the pioneers of embedding this type of thinking in our organization. We have learnt that we cannot be successful as an organization if we are not creating value that is to

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OTHER PARTS OF OUR SUSTAINABILITY FOCUS INCLUDE REDUCING WATER WITHDRAWALS, INCREASING RENEWABLE ENERGY BY 2025 - WE WILL COMPLETELY MOVE ALL OUR OPERATIONS TO RENEWABLE ELECTRICITY FROM SOLAR POWER. RIGHT NOW WE HAVE ACHIEVED OUR GOAL OF ZERO WASTE TO LAND IN OUR OPERATIONS be shared, not only by our shareholders but also by the community - particularly one that we are operating in, while at the same time protecting our environment. From that perspective it is evident that the issue of sustainability is anchored in our purpose statement and that is what keeps on reminding us of our role towards the environment. What is your company’s strategy to deliver on sustainability? Some of the initiatives that we have come up with include the RE Sustainability Initiative that we launched in 2020, which looks at three key pillars: Rethink, Reduce and Repurpose, which will help us in modeling and achieving our goals towards sustainability. In this initiative, we are to Rethink our own business model, our relationship with the environment and our processes, to embed sustainability measures; Reduce our impact on the environment, which highlights our goal of going towards Zero impact by 2030 and Repurpose - we look at how we can reuse waste in the system. Theses 3 pillars help us organize our sustainability measures in a much clearer way. We have also been working on our packaging - we are moving away from plastic packaging now with the global surge of plastics. Infact our very own brand Smarties is the first global confectionery brand to switch to 100% recyclable paper packaging. Other parts of our sustainability focus include reducing water withdrawals, increasing renewable energy by 2025 - we will completely move all our operations to renewable electricity from solar power. Right now we have achieved our goal of zero waste to land in our operations and it is important that we maintain that. What are some of your initiatives towards sourcing raw materials locally and developing local agriculture value chains? We have a global program called Farmer Connect where we have worked with half a million farmers and we are continuing working with them. This is usually embedded in what we called The Responsible Sourcing Standards, which is a Nestle standard that outlines the necessary interventions that we need to have in the sourcing of raw materials. We believe that working with farmers is very important.

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EXECUTIVE PROFILE: SAINT-FRANCIS TOHLANG

In our region we work with 370 farmers, a majority being dairy farmers, but in Kenya we also work with coffee farmers. The focus of this intervention is not only educating farmers but also helping them increase crop yield and making sure that the quality of their yield is better, because that guarantees that we are also sourcing high quality materials. It is basically a mutually beneficial relationship. We recently announced the Pilot of the first carbon neutral Dairy Farm in Africa, which is located in South Africa - a very exciting project. What we are trying to do is displace the greenhouse emissions that a normal dairy farm would emit through things like regenerative agriculture, focusing on the soil, focusing on manure, reducing methane emissions from the cows etc. This is a very complex kind of science but by 2023 we will have achieved this goal. What unique challenges do you face in Africa that limit the achievement of your sustainability goals? The biggest hurdle in Africa has been the lack of technical know-how. We generate very fantastic ideas and make very ambitious plans but now the challenge we encounter in implementing them is mainly the know-how and skills part. For example, we look at how we can use biomimicry in our packaging but then again you find that maybe it is only one supplier who can do it in this part of the World and the cost is exorbitant. Finding the right partners is also a big challenge we encounter in our operations here. Do you run into regulatory hurdles? That has not been a big issue, the thing is the regulatory framework is different in the 23 countries that we operate in. Some are very different, some are not harmonized in terms of understanding, but that has not been a big impediment. How does Nestle collaborate with other companies to enhance its innovations agenda? One key approach we have decided to take as an organization is recognizing that we cannot solve it all on our own. We definitely do have access to the smartest brains in the industry and the best research networks in the world, which means that we have a lot that we can leverage within Nestle’ but we certainly have areas that we are not so strong at. We have learnt to admit that and secondly go out there and look for people that we can work with to enable us to achieve our goals. We scan for partnerships in different ways: sometimes we get direct proposals from companies who think they could add value to something we are doing, and we welcome that. Other times, we solicit directly with partners we think could add value and also through open innovations through the Nestlé Hatcher.

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Tell us more about the Nestlé Hatcher In March 2021, we launched an open Innovations platform known as the Nestlé Hatcher. We realized that we have to build partnership ecosystem in certain streams of the business. Such ecosystems are complimentary and speak to areas that we are not so strong in. On the platform, we invite people and startups with ideas to respond to various challenges that we have posted there, and we have seen incredible uptake and submissions. We look at it as a way of inviting collaborations with other stakeholders in the value chain. How Did Covid-19 affect your business and how did you respond to these challenges Covid 19 has surely affected many businesses in different ways. Our Covid-19 response was based on 3 pillars that is - our people, our business and our community. We offered Covid-19 relief to communities just to ensure that they are able to survive the pandemic and made sure that we safeguarded the health of our people. In terms of the businesses that we work with such as our suppliers, distributors and partners we made sure they were afloat by offering cash flow solutions by re-looking at our payment terms. Our CEO for the region had this interesting analogy that we are as strong as our weakest link and that’s why we tried as best as we could to help the small enterprises that we work with stay afloat. A peek into the future: Tells us about your strategy concerning new product innovation. Are plant-based foods in the horizon? The implications of Covid-19 have contributed massively to the change in consumption patterns of consumers. The first area we are focusing on is consumer insight, which is the foundation of most of the decisions that we make before we move on to addressing the real issues in this region where there is a triple burden of disease, malnutrition and micronutrient deficiency. We are determined on addressing these key issues by availing affordable nutritious foods even before we dive into new product categories such as plant-based foods. It doesn’t mean that we are not looking into plant-based we definitely are on board and in fact, we just launched a new coffee latte series that is completely plant-based in South Africa, but we feel like we should first respond to the real needs in our region. Going into the future, we are excited for this region - it is a region full of opportunities. We have been present for over 100 years and ambitious to not only remain present but also have a positive impact on the people through our products, on the communities that we operate around and on the planet in general through our sustainability initiatives.

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