Food Business Africa April-May 2015

I n t h i s I s s u e : e m e r g e n c e o f r e a dy m e a l s

may 28 - 29 2015, Nairobi kenya strathmore business school

where the industry meets solutions to Africa’s food safety challenges

brookside-Danone

Grab Sameer Uganda, target Eastern Africa

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www.foodbusinessafrica.com

Volume 3 • ISSUE 2, No. 12 • ISSN 2307-3535

a foodworld media publication

p.18 SPECIAL REPORT:

formulations

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Ready Meals: Emergence of prepared meal in Africa.

Wheat: The important role wheat plays in food manufacture

Nutrition:

Packaging:

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Atmosphere 20 Modified Packaging: The

Soya Nutrition:The health benefits of soya is explored.

advantages of MAP packaging

foodbusinessafrica.com

Industry Focus: Beer Industry in Ethiopia Packaging: Flexible packaging Processing: Extrusion Formulation: Enzymes

dairy business africa

Regulars 2 Editorial 4 International Insights 8 African Insights

in the next issue july 2015

23 Supplier News 24 Quotable Quotes 24 Calendar of Events

Trends: Flavoured Milk Nutrition: Whey Processing: Extended Shelf Life (ESL) packaging Formulation: Super-fruits

Food Business Africa | april - may 2015

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editorial

Introducing Dairy Business Africa magazine

www.foodbusinessafrica.com Volume 3 Issue 2, No.12 • ISSN 2307-3535

The dairy products market is one of the fastest growing segments of the food and beverage industry in Africa

Publishers:

e are pleased to inform our readers that we shall be introducing a new magazine into our stable to cater for a new food and beverage category. Named Daily Business Africa, this will be the region’s only magazine focused on the dairy industry in Africa.

Dairy Business Africa will for a start appear as an insert within the Food Business Africa magazine beginning with the July 2015 issue.

We plan to have this insert in the March, July and November issue of Food Business Africa, after which we shall decide on the need for a stand-alone magazine or a more regular release, at a later date.

Dairy Business Africa joins our highly successful Food Business Africa magazine, which is the region’s food and beverage industry resource and the recently introduced Agri-Business Africa magazine that focuses on agriculture in Africa. The introduction of this magazine is part of our strategy as Food World Media to cover the various facets of the food and nutrition, science and engineering industries in Africa – which fit into our Business Media for Africa tagline.

The dairy industry is one of the fastest growing food and beverage categories in Africa. Driven by increasing urbanisation, higher incomes and changing consumer taste preferences, the demand for milk products is projected to continue growing into the next decades in the continent. Products that appeared too exotic or even never existed in Africa before like cheese and yoghurt have found space in the African palate, with increasing consumption among the urban and even the rural folk. Milk also enjoys a positive consumer sentiment in Africa, looked upon as ‘nature’s perfect food’ by the consuming public, unlike in the developed countries where consumer perception of milk in some countries can range from indifference to completely negative, with falling per capita consumption reported in the US. Looking back 20 years to 1995, it would be difficult to compare the dairy sector in countries like Kenya, Uganda or Zambia, with the current situation where in these countries, a liberalised market and improving economies have brought forth a

founder:

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April - May 2015 | Food Business Africa

vibrant milk processing sector. This situation is no different in other African countries, including in West Africa, where reliance on imported milk powder and poor local infrastructure for local production kept the lid on the growth of the dairy industry, but which is slowly being opened up by a number of dairy companies that are focused on building local milk production and processing.

With increasing focus of the major international dairy companies like Danone, which has invested aggressively in the continent in the last few years, the dairy sector in Africa is set for a major transformation in the next five to ten years, as these dairy giants jostle for space to either put up new greenfield facilities, or better still, buy into or buy out completely, the smaller dairies and grow them. Private equity funds will not be left behind in this quest to control the dairy sector in the continent. This magazine will be there to report and analyse these realignments, as they happen.

The Dairy Business Africa magazine is aimed at improving knowledge about market trends, technology and practices that shall build on Africa’s dairy industry. It shall cover market dynamics, packaging, supply chain, processing, safety, engineering, retail and distribution, nutrition and formulation of milk and milk products be they fresh, UHT, cheese, butter, dairy drinks and blends, milk powders or other milk fractions and constituents.

In this issue, in our processing section, we look at the importance of equipment lubrication; while in our packaging section, we uncover the importance of modified atmosphere packaging (MAP). On food safety, the matter of pesticide residues or as it is commonly referred to, maximum residue limits (MRLs), continues to affect the export of fresh produce into the European Union market, affecting important trade between the Union and African countries. We unravel why consumers are concerned about pesticide residues. And many more.

We wish you a good read.

Editor

Foodworld Media Francis Juma Editor: TJ Kwach Contributors: Liz Wawire • Loretta Mugo Design & Production: Centrepress Media Advertising & Subscription: Selina Wangusi

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

Food Business Africa Magazine Professional Network @Foodbizafrica Food Business Africa Magazine RELATED PUBLICATIONS

industry event

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

Copyright 2015. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited.

All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published.

foodbusinessafrica.com

Introducing Dairy Business Africa magazine!!

Contents

soar in Contents soarMinilk p vestments Milk processing investments roc essing in Africa - R essing investme upta turiMilk proc epContents - Report tentis dolAfrica rt o cti do. Berspic ore nts soar eport vol rem R rio qui tenis maxim elictatem sus tutenis aut plis estisimod modiciaboriorem. Berspic tentis dolupta turi-t enis aut plis in tata Africa aut- plis estisimod moddicmoi-s abo nto ore estisimod tate impos rep ecerum m a mo et aut am, omnis mod mos t enis luptamusa ulpa rcitas dolupt modtates ut am, omnis vidit veocc sed tates et aut ore cum sinvendebis dolore vidit vevolesequi quos non debis dol temporita Ut re, aspitati dia cum sinven illesto taturit asincia reratiunt, nem eos dit laboressi illesto taturit asincia atio. ditis et laboressi qui dolupt ur mos dolorat. uos dit seq cus eos m lac gni nem consedi ad magnim sequos ditis et iass ducgendae t volesecat dae ad ma usa dolo porehen quunti api consedi gen tius ipsae. Rehend nda xim quate excepelnie moluptius ipsae. Rehendusa dolo am simlup Rerror ma m conseque om excepel mo upieniet lam et ips s, uta comnimus volupieniet lam et ipsam simvol , comniss iminvelibu nis doluptatur? comnimus ab il ilitatur nosim nobit les in cusam eatat porerum, nobit ab il ilitatur, comniss t aut fugia sim upti rate ven nec es porerum, rit mo us rpo laceria o mod volorro volo eati odiam Sedit exp edigent mod moles in cusam eatat es atib t edigent vol ren esti um par at ut pori dol i at quam cium, culque pori bitib ustibe net esciusexerias atur? Qu exerias que et dolesti atibeati odiamus lis qui dolupt olorem et iis es eiciet untautem evendis exp aepeliq uidas sunt, tem as autem qui doluptatur? Qui at quam por elit quia ium quodionem t ipictin cid labore nis ipid unlab ovi labore mnisharquia ium sunt, temolorem et nt. i orr nt del liquis et aru dolorepelita qua tat.Lor aut voloru Itatur? Qui dolupt lup eres int autis mo volorunt dellab ipid quodionempor ae.

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modiciore ntotatatenis maxim qui volorecti do- s et aut am, om abo nis cum luptamusam impos repelictatemnem suseosut sinvendebis dol mod mos ore riorem. Berspic ten dit labore ore vid ntotatate tis dolupt volesequi occulpa rcitas doluptacon ecerum sedi gendae ssi illesto taturit it veluptamusa nis maxim qui vol a turiasincia m impo ad orecti doma exc gni epel mo s repelic m seq reratiunt, temporita quos nonsed mod ut luptiu volesequi tatem sus occulpa s ipsae. Re uos ditis et comnimus rcit ut reratiunt, hendusa laccus qui doluptatio. Ut re, aspitati diavolupieni temporita as dolupta ecerum dolo porerum, et lam et laccus qui quo ips sim quunti apit volesecatur mos dolorat. doluptatio s nonsed mod ut edigent vol nobit ab il ilitatu am simquu . Ut re, asp nti apit vol r, comnis Rerror maxim quate porehen duciasso mod moles itati dia esecatur exeria s in cusam s que por mo Rerror ma eatat iminvelibus, utam conseque asomnienda xim quate s dolorat. autem qui i dolesti atibeati im invelib por od necupti rate nis doluptatur? labore nis qui doluptatur? Qui iamus necupti us, utam consequeehen duciass at quam rate nis a ium sun omniend autfugia volorunot, temolo a Sedit explaceriaes vent aut Sedit exp doluptatur? nt dellab rem et laceriaes anda sec bitib ust vent aut ae. Itatur? ipid quodionempor bitib ustibeat ut rent es volorro rporit ibeat ut fugia no iistrum, Qui dolupt ren eve t nd es ven is explis dis mostia i evendis explis net esciuscium, iumculparum net escius volorro rporit e dolor asp orrovit numet eat ipic tin ciu cidelit m, culpar eres int ipictin cidelit aepeliq uiduntiis esmeiciet etiori busdam imusa um liquis et aru aepeliq uiduntiis quundig quo tem es eiciet et nt. enrep liquis et arunt. adic te no Ebit esciis nsequamu udis dolectest lac dolorepel i s vendus, Ebit esciis dolorepelita quam harundae maio ita quam si ut lau quam ari harunt tataturis resci utat dae maio quam aritataturis moluptat.Lor mo que pra id luptat.Lo r ut verepe resci utat que pra id ut vereperun run

We are pleased to announce the release of a new publication focused on milk and milk products in Africa.

Dairy Business Africa magazine comes at a time when the dairy sector is growing in Africa, with investments projected to increase going forward in the Continent.

The magazine will aim at providing analysis of market trends, investments, nutrition, processing, packaging and formulation of various milk products and beverages Dairy Business Africa will originally appear within alternate issues of Food Business Africa magazine. The inaugural issue of the magazine will come out with the July 2015 issue of Food Business Africa magazine, with the second edition appearing in the November issue.

In • • • •

foodbusinessafrica.com

the July Issue of Dairy Business Africa Market Trends - Flavoured Milk Nutrition - Whey Packaging - Aseptic Packaging (ESL) Formulations - Super Fruits

***advertising opportunities available*** Food Business Africa | april - may 2015

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INTERNATIONAL Insights FOOD SAFETY

Philippines makes food-tracking mandatory PHILIPPINES - Food business operators in Philippines will be required to establish a mechanism that would track and trace food products from the dinner table to the source to help boost the safety of Filipino consumers, especially in cases of product recalls and contamination.

The establishment of such a system was made mandatory with the signing of the Implementing Rules and Regulations (IRR) of Republic Act No. 10611 or the Food Safety Act of 2013 by the Department of Health (DOH) and the Department of Agriculture (DA).

Acting Health Secretary Janette Garin said that under the IRR, food business operators will be required to establish a traceability system for food, food-producing plants and animals and other inputs in the primary and post-harvest stages of the food chain.

“This system will indicate at the minimum where the item immediately came from and where it will immediately proceed,” said Garin, noting that such mechanism will be based on principles

and guidelines of the Codex and other international bodies.

“The IRR aims to protect the consumer from food-borne and water-borne illnesses and unsanitary, unwholesome, misbranded or adulterated food and enhance industry and consumer confidence in the food regulatory system,” she said.

The IRR also established the Food Safety Regulation Coordination Board, which shall be chaired by the DOH secretary and co-chaired by the DA secretary.

Among the tasks of the board is to assess the overlapping functions of con-

cerned agencies considering consumer health, protection and capability and effectiveness in implementing the rules of the Food Safety Act, said the health official.

Under the IRR, the DA has been designated to oversee all fresh produce or food obtained from primary production while the DOH’s Food and Drug Administration has been tasked to supervise all processed food, whether pre-packaged or not.

The DOH and the DA, in consultation with the Bureau of Customs, shall also develop a manual of procedures for the inspection of and clearance procedures for imported and exported food shipments.

When implemented properly, the Food Safety Act will create and enhance food standards that would facilitate Philippine food exports to other countries, help create a unique Philippine food brand and allow its greater acceptance into new international markets, Garin said.

LABELLING

New labelling rules come into force in EU EU - New rules on the labelling of fresh, chilled and frozen meat from sheep, goats, pigs and poultry have been applied in the European Union beginning 1 April 2015.

The rules, required under the Food Information for Consumers Regulation of 2011, require the label to indicate the country which the animal was “reared

in” and “slaughtered in”.

The new regulations come into force after the European consumer was hit by the 2013 massive food fraud case when horse meat was passed on to consumers as beef or pork hence the heightened consumer interest in ensuring safe and clearly labelled food.

M&A

SABMiller enters craft beer market with acquisition of brewery

UK – SABMiller, the world’s number two brewer is acquiring the London-based modern craft brewer Meantime Brewing Company as the company seeks to tap into the growing craft beer market.

Established by Brew Master, Alastair 4

April - May 2015 | Food Business Africa

Hook, in 1999 with a brewery in Greenwich, London, Meantime is a pioneer in British modern craft beer. The business has since created a successful range of British and international beer styles, taking advantage of a surge in demand for craft beer in the UK, where research by food & drink consultants CGA strategy showed a phenomenal growth of 79% in 2013, even as beer volumes have continued to fall.

The Meantime acquisition provides SABMiller an entry point into the fastest-growing segment of the UK beer market. SABMiller plans to grow sales of Meantime’s beers nationally and explore

export opportunities in its European markets.

While Meantime insists that ‘the beer will very much remain the same’ in its Twitter feed, some consumers and industry watchers are concerned of the influence the big brewers like SABMiller on the emerging craft beer trade around the world, and if these big conglomerates can stick with the ideals that have made craft beer so successful.

The acquisition is expected to complete in early June 2015. The financial terms of the transaction were not disclosed.

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INTERNATIONAL Insights

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Food Business Africa | april - may 2015

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INTERNATIONAL Insights

formulations

investment

Pepsi dumps aspartame as consumer concerns rise

IFC invests US$ 18 m in Al Safi Danone Iraq

US – The US beverage giant PepsiCo has announced that it shall remove aspartame from its Diet Pepsi range starting August 2015, as it aims to tackle consumers’ health concerns Despite science research that indicates that aspartame is indeed safe for consumption Pepsi notes that consumer perception can sometimes beat science in its decision to remove the ingredient from its sodas. Aspartame is considered safe by the American Cancer Institute and the National Institutes of Health.

Even the more discerning European Food Safety Authority (EFSA) last year gave the sweetener the all-clear. But this has failed to dampen consumer concerns over its safety.

“Decades of studies have shown that aspartame is safe, but the reality is that consumer demand in the U.S. has been evolving. The U.S. diet cola consumer

has been asking and asking and asking for an aspartame-free great diet cola.”

Seth Kaufman, senior vice president of Pepsi, told Bloomberg.

The move comes as a struggling US soda industry faces falling volumes, with the diet variants falling by as much as 20 percent since the highs of 2009 according to Euromonitor, with further slide expected. Even the US’s number one Diet Coke has seen not been spared in this slide, with sales coming down to US$ 3.2 billion from the highs of US$ 4.2 billion in 2005 The company intends to substitute the aspartame with sucralose and acesulfame potassium, leaving industry watchers to wonder the role that consumer fears play in the face of good science and what can be relied upon in an increasingly wary consumer mind set.

financials

M&A

Diageo reports drop in sales, aggressive African growth

Coke to acquire Chinese beverage company

IRELAND – Diageo, the beer and spirits group has reported a net sales drop of 0.3% on an organic basis, with volume down 1.7% in the nine month period to 31 March 2015.

In the nine month period reported net sales grew 4.6%. The company reported a slow-down in all the regions except Africa, where sales grew 6.2%, providing a glimpse of the importance of the continent in the Irish brewer’s future, even as the Nigerian business struggled, albeit with an improvement in the third quarter.

The company’s business in North America was flat at 0.2% growth while Europe, Latin America and Carribean and Asia Pacific declined 0.5%, 3.3% and 5.3% respectively.

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April - May 2015 | Food Business Africa

CHINA - The Coca-Cola Company has acquired the beverage business of China Xiamen Culiangwang Beverage Technology Co., Ltd, a producer of plant-based protein drinks sold in China.

Coke, in the deal worth US$400.5m, is looking towards expansion in the multi-grain drinks category. The company is owned by Hong Kong-listed China Culiangwang Beverages Holdings Ltd. The company’s top-selling products include green bean, red bean and walnut variants of plant-based protein drinks sold under the brand China Green Culiangwang.

IRAQ - The International Finance Corporation (IFC) is to invest US$18m in Saudi dairy company’s Al Safi-Danone Iraqi-subsidiary for the construction of a new dairy plant in the Kurdish region of the country.

IFC, a member of the World Bank Group, will help Al Safi Danone Iraq, a pioneer in the Iraqi food production industry, increase production of high-quality dairy products to meet rising demand, improve food distribution standards, and create more than 250 new jobs in the next two years.

The company’s new green-field dairy processing facility in the Kurdistan Region has a target production capacity of around 59,000 tons per year, focusing initially on a range of spoonable and drinkable yogurt products, as well as cheese and UHT milk.

“This investment will help us establish a modern dairy enterprise with the latest processing and packaging equipment and train our employees to international standards,” said George Abi Najem, General Manager GCC, Iraq and Levant, of Al Safi Danone. Al Safi Danone’s new factory in northern Iraq is just the first sign of the group’s commitment to Iraq, one of the most important markets in the region, despite its challenges.”

Al Safi Danone Iraq is a joint venture of the Saudi dairy company Al Safi Danone, Saudi conglomerate Al Faisaliah Group, French-based multinational Danone Group, and Iraq based retailing, sales, and distribution company Al Yasra.

formulations

Nestlé to cut sugar from Nesquik

SWITZERLAND – Nestle has announced plans to reduce the amount of added

sugar in its Nesquik flavoured milk products, as part of the company’s strategy to provide healthier products The overhauled Nesquik powders will contain 10.6 grams of sugar per two tablespoons, marking a 15 percent reduction in the chocolate version and a 27 percent cut in the strawberry flavor. The products will also no longer contain artificial colors or flavors.

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INTERNATIONAL Insights

labelling

EU brewers to provide nutrition info to consumers

EU - Europe’s brewers have announced a voluntary move to list ingredients and nutrition information on their brands.

The move will bring the brewers in line with the legal requirements for all

non-alcoholic drinks, including non-alcoholic beer.

Pierre-Olivier Bergeron, Secretary General of The Brewers of Europe, said: “We want Europe’s consumers to know the ingredients in beer and how these beers can fit within a balanced lifestyle.

Brewers already label the alcohol content on their beer brands but we also agree with consumer groups that citizens would benefit from having access to the ingredients and nutrition information, allowing them to compare like-for-like facts with all the other beverages available to them, both non-alcoholic and alcoholic.”

“When it comes to ingredients and nutrition, our overall aim is that we wish to have well-informed consumers,” continued Mr Bergeron.

All foods and beverages are covered by the EU Regulation on Food Information to Consumers. However, when it comes to ingredients listing and nutrition declarations, there is currently an exemption for alcoholic beverages of more than 1.2% ABV (alcohol by volume).

The European Commission is due to produce a report on the current exemption for alcoholic beverages over 1.2% ABV and the next steps for dealing with the issue.

merger

Heinz grabs Kraft to expand food larder for Buffett, 3G

US - Ketchup maker H.J. Heinz Co, backed by Warren Buffett’s Berkshire Hathaway Inc and Brazilian private equity firm 3G Capital, have combined with Kraft Foods Group Inc in a $46 billion deal to create the third-largest North American food company.

Kraft is known for its namesake macaroni and cheese in a box, as well as Velveeta, Maxwell House coffee and Oscar Mayer processed meats, while Heinz foodbusinessafrica.com

is the producer of the tomato ketchup brand common around the world, Heinz.

The deal gives Buffett more leading U.S. food brands, as well as that of 3G founder Jorge Paulo Lemann, Brazil’s richest man. The two teamed up to buy control of Heinz in 2013 and collaborated on the 2014 merger of fast-food chain Burger King and Tim Hortons Inc, which runs coffee and doughnut shops.

Food industry experts see Kraft benefiting from Heinz’s international presence, which generates more than 60 percent of its sales. Kraft brands are in 98 percent of North American households, the companies said, but would have a greater opportunity to expand overseas.

The combined company, which will be publicly traded under the name Kraft Heinz Co, expects to save about $1.5 billion in annual costs by the end of 2017. 3G has a reputation for introducing aggressive cost cuts and improving efficiencies at other companies it has invested in, including Heinz and Anheuser-Busch InBev NV “Mature businesses look for cost cutting. 3G takes cost cutting to a different level,” said Bob Goldin, executive vice president at food industry consultant Technomic. Goldin noted that neither Kraft nor Heinz are major players in the sector’s growth segments, from organic to fresh foods.

Kraft is 3G Capital’s fifth major deal in the food and beverage industry since 2008, when it engineered the takeover

of Anheuser-Busch by brewer InBev. 3G Capital also controls Restaurant Brands International Inc formed when Burger King business bought Canada’s Tim Hortons. 3G Capital and Berkshire Hathaway acquired Heinz for $23.2 billion in 2013.

Kraft split into two companies in 2012, with Kraft Foods focusing on grocery products in North America and Mondelez International Inc on snack products.

Packaged-food makers in the US are battling sluggish demand as consumers shift to brands that are perceived as healthier, including foods that are organic or less processed.

Heinz shareholders will own 51 percent of the combined company and Kraft shareholders the rest. The transaction is worth about $46 billion for Kraft shareholders - Reuters

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Africa

News Analysis M&A

Why Brookside’s Sameer Uganda buy will change the dairy sector in the region Ugandan entry provides glimpse of Danone appetite for the East & Central Africa region UGANDA/M&A - The recent acquisition of Sameer Agriculture and Livestock’s dairy operations in Uganda is bound to be a game changer in the country’s dairy industry. It should also be a clear indicator of the appetite for Danone, the French dairy and food company, for the African dairy industry following last year’s acquisition of 40% of Brookside Dairy.

According to The Star, the deal was worth KSh 3.5 billion (US$ 36 million). The government of Uganda which owns 49 per cent stake in the firm confirmed that Sameer had finalised transfer of its shares to Brookside on March 25. “I can confirm that the assets of the government of Uganda have remained to the best of my knowledge. But those of Sameer are the ones that have been transferred to Brookside” the Uganda ministry of finance spokesperson, Jim Muguga told the newspaper.

The deal will build on Brookside’s ‘regional expertise and robust supply chain, the partnership will (also) enable Brookside’s growth acceleration by expanding its product portfolio and strengthening its geographical presence in key markets in the East African region, including Uganda and Tanzania’, noted a statement from Danone following the deal. The Ugandan deal is indicative that Danone is intent on grabbing opportunities following this partnership with Brookside to dominate the sector in Eastern Africa.

African focus

The Brookside deal followed quite closely the foray of Danone into West Africa. Africa is increasingly becoming an important market for Danone. In 2013, it completed the acquisition of a 49% stake in Fan Milk West Africa, together with the private equity fund partner Abraaj Group. This gave the company a strong foot print in West African countries of Ghana, Nigeria 8

April - May 2015 | Food Business Africa

and other countries where Fan Milk was already the leading dairy company.

The company also owns dairy operations in South Africa and in the North African countries of Morocco, Algeria and Egypt.

It also distributes its infant nutrition products in several key African countries Already the largest dairy producer in Eastern and Central Africa, Brookside’s regional ambitions got an extra jolt when Danone came calling, and with the combined local markets knowledge of Brookside and Danone’s international and financial muscle, the dairy sector must brace itself for a transformation as the partnership unravel.

Uganda’s dairy sector

The dairy sector in Uganda is characterised by small scale farmers rearing traditional cattle which produce the majority of the country’s milk production. The Ankole cattle, with its long menacing horns is a post-card image of the country’s dairy sector.

National milk production stood at 1.8 billion in July 2012, according to the Dairy Development Authority (DDA). Currently milk volumes stand at about 2.0-2.5 billion litres annually, according to our estimates. While good soils and abundant pasture in Uganda lead to low production costs, the lack of improved breeds and poor agricultural practices and reliance on rainfall for pasture remains the country’s Achilles heel to increase milk production, as local consumption rises and Uganda increasingly becomes a source of milk for the rest of the region – mainly South Sudan and Kenya.

The Brookside effect

The entry of Brookside into Uganda is bound to improve milk foodbusinessafrica.com

Africa Insights

production in the country, as increase in local processing will enable farmers to take a higher risk to produce more milk on the farms. The company has over the years developed an enviable milk procurement and extension service that spans the major milk producing regions in Kenya, an initiative that can be implemented in Uganda to great success, considering the suitability of the country for dairy farming. Uganda can increasingly be a source of milk for the dairy’s Kenyan operation.

What next after Sameer?

While it may appear that Uganda is a done deal, what next for the Brookside-Danone team? Brookside’s earlier acquisitions in Kenya of Spin Knit Dairy, Delamere and Ilara dairies points to the possibility of the dairy scouting for other dairies in Uganda, as it seeks to secure milk sourcing and improve processing volumes in the country.

Several targets come to mind, including Pearl Dairy (a processor of milk powder), Jesa (the second biggest dairy player in Uganda, and which might bring fair competition regulators to block the

bid), and other smaller dairies including the family owned GBK and the specialty cheese maker, Premier Dairy. The concentration of milk production in the western belt of the country, around the town of Mbarara, can be an incentive to buy any of the dairies located in this region.

To the close observer, the Brookside-Danone juggernaut is just warming up in its quest to dominate the dairy sector in the region.

And the greater Eastern Africa region?

It is quite telling that the press release from Danone following the Brookside deal mentioned Uganda and Tanzania.

Tanzania’s dairy sector, though not as developed to the same level as Uganda, has a lot of hidden potential, but which requires a lot more infrastructural investment. The country, blessed with good soils and fair amount of rainfall has a lot of potential in the northern Kilimanjaro region and the Southern Belt of Iringa and Mbeya for dairy production.

In terms of acquisition prospects, Tanga Fresh provides a mouth-watering

possibility, being the biggest dairy in the country. The dairy has driven on its linkage with the Dutch to boost milk production in the Tanga region which Brookside can build upon with a fair amount of success. Other prospects include the small operator, International Dairy based in Arusha and Asas Dairy, based in Iringa – which can open up the Southern region for Brookside.

Further afield, it will be interesting to watch what Brookside has up its sleeve concerning Rwanda and Ethiopia. The only major player in the Rwanda dairy industry, Inyange Industries, could be a good prospect. Rumours last year that Brookside was interested in the dairy faded as slowly as they emerged. The dairy has also had some interest in Ethiopia, with reports in late 2013 that was considering buying a 20% stake in Elemtu Dairy, a new start-up dairy, together with Ethiopian investors, according to the Fortune newspaper.

Looking ahead, the Brookside-Danone has rich pickings to choose from in the region, as they move ahead with their partnership. It remains to be seen where they will land next

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Africa Insights people

Diageo appoints John O’Keeffe President of Diageo Africa AFRICA - John O’Keeffe, currently Managing Director, Guinness Nigeria, is to be appointed President, Diageo Africa, joining the Diageo Executive from 1 July 2015.

The company has also announced that Soren Lauridsen take over as Managing Director, Guinness Nigeria following a transition.

O’Keeffe will be reporting to Nick Blazquez, President Diageo Africa & Asia. Current President, Diageo Africa Diageo Andy Fennell is leaving Diageo at the end of the current fiscal year after 18 years with the company.

Ivan Menezes, Chief Executive Diageo, commented: “John O’Keeffe will bring marketing and general management experience to the Diageo Executive and his experience in innovation will be key as we look to increase our mainstream spirits business in Africa. Soren

Lauridsen has already joined Diageo and will bring strong leadership skills to his new role in Guinness Nigeria.”

O’Keefe has been in charge of Nigeria for only a few months, having joined in November last year. He has been in Diageo for over 20 years.

He has been the Managing Director, Russia and Eastern Europe based in Russia before returning to Ireland, to take up his current role as Global Head of Diageo Innovation and Global Head of Beer & Baileys.

M&A

people

R&R completes the acquisition of Nestlé’s ice cream business

Fonterra appoints new Africa chief

SOUTH AFRICA - R&R Ice Cream Plc has announced the acquisition of Nestlé South Africa’s ice cream business.

The deal, which has been approved by the South African Competition Commission, however didn’t disclose the terms.

R&R notes that the deal will enhance R&R’s reputation as a global player in the ice cream sector following the firm’s acquisition of Peters Food Group in Australia in May 2014.

R&R is the third largest ice cream manufacturer in the world, with annual sales approaching € 1 billion (US$1.12

billion).

The deal hands R&R Nestlé South Africa’s ice cream brands portfolio including Dairymaid, Country Fresh, Eskimo Pie and King Cone.

According to R&R, the South African ice cream sector has enjoyed good historic growth which is forecast to continue. It was worth approximately R2.1 billion (€160 million) in 2013.

Ibrahim Najafi, CEO of R&R, said: “This acquisition is a major milestone towards our goal of becoming a leading global player in ice cream. As a business we have enjoyed a successful partnership with Nestlé for nearly 15 years in the UK. This relationship was extended with the acquisition of Peters in Australia, also a former Nestlé business, and now we are looking forward to working together in South Africa.

“We also believe that African ice cream consumption will continue to increase as consumers become more affluent and we see this acquisition as a springboard to grow sales across much of the African continent.”

AFRICA – The New Zealand dairy company Fonterra has appointed Johan Priem as Managing Director Asia Middle East and Africa (Asia MEA).

Mr Priem who has been President for Greater China, will add the Asia MEA region to his stable effective August 2015.

As President Greater China Johan Priem has directed the development of Fonterra’s business in this priority market. Johan has a strong background in the global dairy industry. His most recent role focused on enhancing Fonterra’s approach to food safety and quality, corporate social responsibility and sustainability.

According to the Chief Executive Theo Spierings Mr Priem is ideally placed to take on this additional role given he has previously held senior leadership positions in Asia, Middle East and Africa for Fonterra and other companies.

M&A

Bakers struggle to produce cassava bread NIGERIA - Bakers across Nigeria’s commercial capital, Lagos, are facing a hard time with the policy of 20 per cent inclusion of cassava in bread production was due to a lot of constraints.

Jacob Adejorin, Chairman, Association of Master Bakers and Caterers of Nigeria, Lagos 10

April - May 2015 | Food Business Africa

Chapter has said that poor awareness, short shelf life, substandard cassava flour, lack of training and equipment for production, among others,

as some of the constraints bakers have faced in their quest to develop the cassava bread.

In 2014, Dr Akinwunmi Adesina, Minister of Agriculture, said that Nigeria could save up to N200 billion (US$ 1 billion) from the inclusion of cassava flour in bread production.

foodbusinessafrica.com

Africa Insights

M&A

people

Diageo acquires control of United National Breweries

Nestlé Africa gets new VP as Nandu retires

SOUTH AFRICA – Diageo, the brewing company, has taken control of United National Breweries’ traditional sorghum beer business in South Africa.

The company has acquired a 50% interest in the company thereby making it a wholly owned subsidiary of Diageo.

Diageo will acquire the interest held by the Pestello Investments Inc. for an initial payment of $22 million, with a further US$ 14 million potential earnout payment. Diageo entered the UNB in early 2013 through a US$ 36 million deal.

The transaction will give Diageo control of the leading traditional sorghum beer business in South Africa and could be a launching pad for the brewer as into some countries in African, considering that sorghum beer is a growing category in a price sensitive continent The transaction is conditional on consent from the South African competition authority and is expected to complete by mid this year.

M&A

Clover acquisition of Nkunzi Milkyway approved SOUTH AFRICA – Clover dairy group’s acquisition of the Nkunzi Milkway has been approved by the South African Competition Commission.

Clover, which is South Africa’s leading branded consumer goods and beverages group operating in South Africa and other selected African countries will also manufacture the dairy brand Ayrshire.

The company said that in terms of the Competition Commission’s conditional approval, Clover would not undertake any retrenchment of any employees as a result of the acquisition.

This will allow SA’s biggest dairy distributor to manufacture and pack Ayrshire organic milk and dairy products, including lactose-free yoghurt, for Woolworths.The commission had initially expressed concern over the effect of the deal on small farmers and employment.

Clover is launching a number of new products including a so-called smart drink, which it calls an “on-the-go snack with added nutrients” — a joint venture with Futurelife. foodbusinessafrica.com

AFRICA/PEOPLE – Nestle has appointed a new Executive Vice President for its Zone Asia, Oceania and Africa as Nandu Nandkishore took early retirement from the company.

Wan Ling Martello will take over the Executive Vice President role for the Zone starting May 1, 2015 from her pre-

vious role as the Chief Finance Officer (CFO) of the company.

Wan Ling Martello joined Nestlé in November 2011 from Walmart where she spent six years first as the CFO and Chief Strategy Officer for their International business, followed by two years building Walmart’s Global eCommerce business.

Wan Ling Martello’s replacement as CFO will be announced in due course.

The changes come as Nestle reported organic growth of 4.4% in the first quarter of 2015, with sales rising by 0.5% to Swiss Francs 20.9 billion (US$ 22.5 billion) The company grew sales 5.6% in the Americas, 4.5% in Europe, Middle East and North Africa and a slow growth of 2.2% in Asia, Oceania and sub-Saharan Africa (AOA) zones. The AOA zone was impacted by China and slowdown in Nigeria, the company noted in its report.

fast food

Innscor partners Vivo Energy in Namibia and Botswana to open eateries

ZIMBABWE - Innscor Africa, the Zimbabwean pan African quick service restaurants chain has partnered with Vivo Energy, the distributor and marketer of Shell branded fuels and lubricants across Africa to add at a number outlets to the oil dealer’s service stations in Namibia and Botswana.

The deal, which mirrors a relationship in Kenya and Ghana, will see Vivo Energy become the master franchisee for Innscor’s quick service restaurants in the two countries.

Commenting on the announcement David Mockford, Head of Convenience

Retail for Vivo Energy said: “We understand that our customers are looking for more than just a fill-up when they drive onto our forecourts and that, ultimately, it’s not just about the quality fuels and lubricants we sell to our customers, but about delivering a complete service station experience. Across our network we are looking to upgrade our service stations to a modern format and that’s why this partnership with Innscor - with its well-known and high quality quick service restaurant brands - is so important to us.”

The partnership will see Vivo Energy add quick service restaurants - including Chicken Inn, Pizza Inn, Creamy Inn and Galito’s Flame Grilled Chicken to a number of the Shell service stations in these countries. The deal will lead to the opening of ten outlets in Namibia and another six in Botswana Innscor reported a turnover of USD513 million and a profit before tax of USD31.8 million for the six month ended 31 December 2014. The Innscor Group of companies employs around 14,000 employees.

Food Business Africa | april - may 2015

11

Africa Insights imports

retail

Government rethinking ban on private palm oil imports

IFC invests in Burkinabe retailer

ETHIOPIA/IMPORTS - The government is reconsidering its ban on private companies importing palm oil, which has been in place since May 2011.

The embargo was placed after the government failed to control the edible

oil market with a price cap it had introduced between January and May 2011.

The price cap was introduced on 18 items, including sugar and wheat.

The government started taking over all of the oil that traders had at the Port of Djibouti, compensating the traders only for the costs they had incurred. At that time there were six major importers including Al-Sam International and GetAS International, which imported 13 million litres of palm-oil annually.

The government also imported a total of 70,000 tonnes in the year leading to July 2011.

The Ministry is now considering the economic impact of allowing private businesses to import edible oil, and its study will first be shared with the Ministry of Finance and Economic Development (MoFED) and the Council of Ministers before any decisions are made. However, no specific time when decisions would be made were disclosed. - Addis Fortune

people

Tuskys hires new MD as competition looms

KENYA - Kenya’s second-largest supermarket chain, Tuskys, has made changes in its top management, appointing a non-family chief executive for the first time in its 25-year history, reports the Business Daily.

The appointment of Daniel Githua, the chief executive of Speed Capital, removes the Kamau family – which founded the retail chain and has been running it – from operational control in favour of a professional manager.

People familiar with the goings-on at the supermarket said the change of guard is the first step towards its listing on the Nairobi Securities Exchange (NSE) that is expected to happen within 12

April - May 2015 | Food Business Africa

five years.

Outgoing chief executive George Kamau has revealed that the retailer is planning for a stock exchange listing through an initial public offering to raise additional cash for its expansion.

“Tuskys’ shareholders have decided to leave active management to the professionals in order to gain from a wider pool of resources. We intend to prepare this company to be great for generations to come,” Tuskys chairman John Kago has said.

Mr Githua, the incoming chief executive, is already familiar with the retailer’s operations having headed its audit operations for three years before he left in 2012 to take up a position on the retail chain’s board.

“My biggest mandate as chief executive will be to prepare the company for an IPO in the next five years,” said Mr Githua.

In a market that is led by Nakumatt supermarkets, and which is also family owned, the Kenyan retail scene is beginning to stare at the entry of a number of international retail chains including Game, a subsidiary of Walmart through its majority ownership of Massmart

BURKINA FASO/RETAIL – The International Finance Corporation has revealed that it will invest in Marina Market, Burkina Faso’s leading supermarket chain, to support the company’s operations and expansion.

The €880,000 investment will create new jobs and promote modern retail infrastructure in Burkina Faso, where retail facilities of this nature are still novel.

The retail sector is dominated by street vendors.

As Burkina Faso’s economy recovers from recent political instability, the market for consumer goods is growing rapidly. Marina Market will use IFC’s support towards operating and expanding its supermarkets and warehouses in Burkina Faso.

Starting as a small family-owned store in 1989, Marina Market has since grown to operate six supermarkets in Burkina Faso, Ghana and Niger, with four branches in Ouagadougou, the country’s capital.

“The endorsement of our retail business by IFC is a sign of confidence in our company”, said Mr. Georges Restom, CEO of Marina Market. “As we continue to grow, Marina Market will create income opportunities for youth and local farmers and suppliers.”

South Africa, and Carrefour, the French retailer that is already setting up for two outlets in Kenya by the end of quarter one next year.

Apart from Nakumatt, the other three major retailers – Tuskys, Naivas and Uchumi – have faced headwinds with family tussles at the first two retailers, while Uchumi has been facing financial problems. – Business Daily

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Africa Insights

funding

expansion

Abraaj raises $990m for mid-market firms in sub-Sahara Africa

Coca Cola building new Ethiopian plant.

AFRICA - Emerging market-focused private equity firm, Abraaj Group, says it has secured a US$ 990 million for the development of mid-market firms in sub-Saharan Africa.

Dubbed the Abraaj Africa Fund III (“AAF III”), it will focus on mid-market leaders in sectors including consumer goods and services, consumer finance, and resource and infrastructure services in the core geographies of Nigeria, Ghana, Côte d’Ivoire, South Africa and Kenya.

Commenting on the Fund closing, Arif Naqvi, Founder and Group Chief Ex-

ecutive of The Abraaj Group said, “The strong demand for this new fund reflects increasing investor appreciation for the powerful growth story unfolding across Africa. It is a story driven by rapid urbanization and favourable demographics that are fuelling consumption across multiple sectors from an expanding, young middle class.”

AAF III has made a significant cornerstone investment in Liberty Star Consumer Holdings (“Libstar”), one of the leading food and personal care manufacturers in South Africa, with the acquisition of a majority stake.

expansion

Sameer to build new dairy in Kenya

KENYA – Sameer Agriculture & Livestock, Kenya’s leading dairy processor has announced plans to build a Sh2.8 billion (US$ 29 million) milk factory in Nakuru, Kenya The new dairy plant adds to the

dairy’s plant based in Nairobi’s Industrial Area which produces fresh and UHT milk, ice cream, water and other milk products.

The dairy market, with Brookside as the largest player, continues to attract the attention of local and international investors. Danone, the French food company, has already acquired a 40% shareholding in Brookside, as it seeks to cement its reach into Eastern Africa.

Sameer’s investment at the centre of the Rift Valley will provide it with ease of access to one of the key milk producing regions in the country.

food safety

China rejects tea from Kenya over high fluoride levels

KENYA - The Chinese government has rejected most of Kenya’s tea leaves over high fluoride content, erecting yet another road block on Kenya’s bid to grow its earnings from tea exports.

Officials at Kenya’s tea directorate say the rigorous checks introduced by Chinese regulators seeking to curb entry of high fluoride content tea into their market has significantly cut exports to

foodbusinessafrica.com

the Asian nation.

“We have not yet understood why China has introduced this standard, which has never been a quality requirement in all other tea markets including our traditional ones,” said Ms Elizabeth Kimenyi, interim head at the Directorate.

Most Kenyan tea is grown in Rift Valley, a region where soils tend to have high fluoride content.

ETHIOPIA - East African Bottling S.C. Coca Cola’s bottler in Ethiopia has started the construction of a new bottling plant in Bahir Dar, in the Amhara Regional State of the country.

The plant is a part of a 500 million-dollar investment, which the company launched in April 2012. The plan includes three new plants by 2020, including one in Hawassa and another one in western Ethiopia.

The beverages market in Ethiopia is considered as one of the largest and fastest growing markets in Africa, Herbert Nuwamanya, country sales and marketing manager at EABSC told Fortune.

Coca Cola has invested US$ 200 million in Ethiopia the last two years to increase capacity. It plans to invest more than 350 million dollars in the coming three years, according to the statement

by Nuwamanya.

The plant is expected to be ready in by end 2016.

“We are pursuing the matter with the relevant authorities so that we can sort out the issue soon since China provides a huge market for our tea,” Ms Kimenyi told the Senate committee on Agriculture, Livestock and Fisheries that visited the Mombasa tea auction.

China is regarded as a potential high-volumes market for Kenya’s tea.

In 2009, Kenya exported 918,140 kilogrammes to the populous Asian market, rising over the years to 1,305,781 kgs by 2012.

These exports have since plunged to 922,828 kgs in 2013 and 935,600 kgs in 2014, following the introduction of the new standards, said Ms Kimenyi – Business Daily

Food Business Africa | april - may 2015

13

Africa Insights expansion

Pizza Hut to grow Zambia footprint ZAMBIA/EXPANSION - Pizza Hut will open about eight outlets across the country this year following a positive performance of its first outlet at Lusaka’s East Park Mall.

The Dagon Zambia Limited Sub Saharan region managing director Stefano Benedikter whose firm operates as a franchisee of Pizza Hut in the region says the launch of Pizza Hut in Lusaka has received overwhelming response.

He said the Lusaka launch which took place last year would be followed by expansion to other regions in Zambia

with the food chain set to roll out eight outlets across the country in 2015.

“Our launch in Zambia has given us the flexibility to respond to local tastes, to engage more and provide a product and service that is international in culture but suited to local needs,” he said.

“The new business plan for Zambia is based around targeting the takeaway and delivery service. Drop-off distances will also be limited to a few kilometres and this means eventually it will have smaller stores in a number of neighbourhoods.

expansion

expansion

Global giant expands gum factory in Kenya

Keroche expands production, targets higher market share

KENYA – The Wrigley Company, a global chewing gum manufacturing firm has kicked off the construction of a Sh5.

8billion ($63million) plant in Machakos County, reports Capital FM. The multi-billion shilling factory is expected to serve the company’s growing business in Africa.

“As we break ground today on this new world-class factory, we demonstrate our long-term commitment to driving sustainable growth here in East Africa, as well as in South Africa and in our

newly launched business in West Africa,” Wrigley’s Global President Martin Radvan during the ground breaking ceremony.

The factory is expected to go into production in the first quarter of 2017 and will replace an existing plant located in Nairobi’s Industrial Area.

“This new investment is an important early step in realizing the strategic commitment of Mars, Incorporated to build a lasting business in Africa, which generates a mutuality of benefits for all,” Radvan said.

The chewing gum market has been dominated by Wrigley’s for a number of decades, with a 75% share of the total market in 2013 according to Euromonitor. However, imported gum Lotte commanded a 14% share of the market at the time of the survey. The sector has faced a number of new entrants into the gum market including Kenafric Industries which introduced its Fresh gum two years ago.

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April - May 2015 | Food Business Africa

info@foodworldmedia.net

KENYA - Keroche Breweries, Kenya’s second biggest local brewer has upped the stakes in the country’s beer market by opening an expanded brew house as it seeks to claw market share from the EABL group in the region.

Keroche, seeks to control more than 20 per cent share of the beer market in Kenya, and move its products into the East African region with the commissioning of the KSh5 billion (US$ 52 million), 100 million litre per year, brewing plant in the Rift Valley town of Naivasha.

“With a production capacity of 600,000 bottles a day, we are good to go and the market looks promising,” said Mrs Karanja told the Daily Nation. “We have positioned ourselves strategically to expand the local market share and also to venture into the East African market,” she added.

The Kenyan beer market, faced with regulatory and consumer spending challenges is led and controlled by Diageo owned East African Breweries Ltd (EABL) with its leading Tusker and Guinness brands. Other players include the specialty beer maker Ozzbeco, which brews the Sierra brand, and other inhouse brewing companies Big Five Brewereis and Sirville Brewing. foodbusinessafrica.com

Africa Insights

m&a

investment

PZ Cussons takes Glanbia’s stake in Nutricima

Heineken to build US$ 164 m brewery in Ivory Coast

NIGERIA - PZ Cussons Plc, a leading international consumer products group, has bought-out Glanbia Ireland’s 50% stake in Nutricima, the dairy company based in Lagos, Nigeria.

The deal worth £21 million (US$ 32 million) gives PZ Cussons full ownership and control of the maker of milk powder and UHT milk products. Glanbia, which an Irish origin company is selling the business after the Nigerian joint venture failed to fit in its future strategic priorities. However, it has entered into a new long-term agreement with PZ Cussons for the supply of milk-based products to Nutricima.

The Nutricima joint venture with Glanbia was formed in 2003 to build a facility in Nigeria to supply evaporated milk and milk powder to the local Nigerian market. A second facility for the manufacture of UHT products was opened in 2009.

Nutricima has market leading consumer brands including powdered and evaporated milk brand Nunu. Other brands include Coast and Olympic milk, Powerfist energy drink, and Yo! Prebiotic yoghurt drink.

PZ Cussons Plc, a leading international consumer products group, was started in 1884 in Sierra Leone before getting into Nigeria where it grew into an international company with operations in Asia, Europe and the Americas.

Known more for its personal care products, PZ Cussons has in the last few years expanded into the food and beverage space, recently acquiring Australian company Five AM Life Pty Ltd, the maker of organic yoghurt brand, Five:am. foodbusinessafrica.com

IVORY COAST - Heineken, the world’s third largest brewer, and Africa-focused trading firm CFAO will invest 100 billion CFA francs (US$ 163.52 million) to build a brewery in Ivory Coast, a Heineken company official told Reuters.

The brewery will have the capacity to produce 1.6 million hectolitres of beer annually and will enter production towards the end of next year, said Siep Hiemstra, Heineken’s president for Africa and the Middle East.

“We’ll be operational in a year and a half and I hope that we’ll be able to taste a good beer around Christmas, in December 2016,” he told journalists in the commercial capital Abidjan following a meeting with Prime Minister Daniel Kablan Duncan.

Hiemstra said the brewery would primarily produce beer for the domestic market in Ivory Coast and Heineken would try to source ingredients within the country.

Following a brief 2011 civil war, Ivory Coast has emerged from a decade-long political crisis as one of Africa’s fastest

growing economies.

“We estimate that Ivory Coast offers great potential for the development of beer consumption,” Hiemstra said.

Heinken has been aggressively growing its footprint in Africa, opening a new brewery in Ethiopia early this year.

In its trading update released for the first quarter this year the group’s beer volume increased 1.8% in its Africa and Middle East market, led by particularly strong volume growth in Ethiopia and South Africa. Burundi, Rwanda and Tunisia also saw volume growth in the quarter.

closure

Mumias to close water bottling plant

KENYA – Mumias Sugar’s Sprinkles brand is set to be axed as the sugar miller struggles to get out of the reds following poor performance in the market “The product has not been doing well since it was launched three years ago making it one of the loss making ventures of Mumias Sugar,” the company’s marketing and communication director Margaret Makhungu has been quoted.

Mrs Makhungu said Mumias is also reviewing other products with the intention of winding up the poor performers.

Mumias Sugar Company chairman Dan Ameyo has said the decision to close the water bottling plant was in line

with the restructuring plan that is aimed at reducing the company’s wage bill and returning it to profitability.

Mumias established the water bottling operation three years ago at a cost of Sh200 million, but it was immediately impossible to establish the size of losses it made.

Mumias Sugar’s Sprinkle Water product has been competing for the market share with popular brands such as Coca-Cola’s Dasani, Crown Beverages’ Keringet, Aquamist and Kevian’s Mt Kenya water.

Mumias went into water bottling as part of the effort to diversify the company’s product portfolio in readiness for the long pending opening up of Kenya’s sugar market to competition from the Common Market for Eastern and Southern Africa (COMESA).

The diversification drive also saw Mumias enter the ethanol and electricity co-generation markets to reduce its traditional reliance on sugar revenue. – Business Daily

Food Business Africa | april - may 2015

15

briefs African

Ready Meals

A deli outlet inside the Tusky’s Supermarket at Buffalo Mall in Naivasha, Kenya

With increasing urbanisation and changing lifestyles, the future of food preparation and selling is bound to change drastically in Africa. While the majority of Africans still have their main meals at home, the emergence of readyto eat food in supermarket outlets has recently picked up in Kenya and other African countries. There is also an emerging ready-made food produced by food companies on the supermarket shelves. How will this pan out and what is the future in Africa, Loretta Mugo explores.

I

t all started in the 1950’s when a family in America had too much leftover turkey, peas and sweet potatoes after Thanksgiving dinner which they decided to package for sale. Over and above the food being ready to eat, it was packaged in an aluminum tray that proved suitable as it could be used to reheat the food in the oven and one could eat directly from it without any extra dishes. With this, the ready meals convenience was born. It was dabbed ‘TV dinner’ owing to the theory that the tray had a big compartment on one side for the main entree and smaller compartments lined on the other side for the vegetables and sauces hence resembling the 1950’s TV set.

Ready meals, as interpretable from the term, are convenience foods that offer a quick alternative to cooking meals from scratch. They can be simply heated and consumed, often in the same container they are packaged in. This is especially attractive to consumers, largely young professionals putting in long hours at work, single person households and students who have neither the time nor the inclination to whip up a meal from scratch.

Since the 1950’s, ready meals have been a widely available retail offering, and is worth some €2.5 billion (US$ 3.9 billion) in the UK alone. Prominent vendors such as Nestle, Kraft Heinz, Unilever, Woolworths in South Africa, and most recently NAS Cuisine in Kenya offer ready meals that can be found in the refrigerated aisles of supermarkets, grocery stores and even drug stores in some countries.

Supermarkets lead the way Aside from these food multinationals that often produce the frozen, chilled and canned ready meals, major supermarkets have adopted the concept and are offering fresh

16

April - May 2015 | Food Business Africa

prepared meals, often sold by weight, within the supermarkets in the region. For several years now this has been a common practice in major retail chains such as Naivas, Tusky’s and Nakumatt in Kenya and other parts of East Africa.

These retailers have even gone ahead and opened delis within their shops, giving restaurants a run for their money in the competition of a share of the stomach.

Nearly four billion purchases of prepared foods and beverages happen at food retail establishments each year in the US. Half are consumed at home, reducing restaurant visits. Restaurants used to think the competition is just other restaurants, but it’s not that simple anymore.

Sometimes also known as prepared meals, they consist of what everyone could ask for in a hearty meal. A starch, a protein, a helping of vegetables and sometimes a dessert. Consumers believe they provide a healthier alternative to fast foods (junk), the other most economical option. This goes to show that other than the rapidly changing lifestyles of the consumers, cost and health concerns are some of major drivers in the foodbusinessafrica.com

ready meals industry globally.

Classification of Ready Meals The ready meals market is highly fragmented with these meals falling into the 4 major categories, namely: fresh, frozen, chilled and canned ready meals. As well as dehydrated meals which is a less common category.

In 2013, frozen and chilled ready meals formed the largest market segments of the total European ready meals market, together taking almost three quarters of the market in value terms. Frozen pizza accounted for almost another 14% share of the market, with canned ready meals taking a further 9% and dehydrated ready meals the remaining 4%. Over the five year period to 2013, chilled ready meals showed the fastest rate of growth.

Fresh prepared foods (FPF) on the other hand have proved to be the favorite for consumers seeking a quick serve but don’t want to visit a fast food joint or restaurant.

In Canada for instance, between 2007 and 2012, fresh prepared foods grew 5 to 6 percent annually, nearly doubling retail grocery growth and far surpassing the growth of the foodservice industry. The projections through 2017 indicate that FPF will continue to outperform the rest of the food industry.

Global ready meals market The UK tops ready meal consumption in the world according to a report on prepared meals by Food Navigator. The European ready meals market is dominated by France and Germany which by 2014 had taken up 16% of the total market share.

A report by Food For Thought forecasts that by 2016 the total European chilled ready meals sector alone will be worth €12.7 billion (US$ 20 billion), an increase of 3.7% in between 2013 and 2016. Frozen pizza will be worth an estimated €4.93 billion (US$ 7.73 billion) by 2016 showing a 3.4% growth.

When it comes to frozen ready meals sector, a growth rate of 2.6% between 2013 and 2016 is anticipated to reach €12.5 billion (US$ 19.6 billion). In contrast, canned and dehydrated ready meals will show much lower rates of growth estimated at 1.9% and 1.3% respectively over the three year forecast period.

The leading supplier of ready meals in the UK in 2013 was Nestle with an estimated 10.3% value share, followed by Permira with a 6.2% share and Dr Oetker with a 5.5 % share.

With the Americans though, the growth in the retail prepared foods market is part of a broader trend which is to consume foodbusinessafrica.com

more meals at home. A recent National Purchase Diary (NPD) forecast through to 2022 finds that the instances of prepared food purchased at retailers for at-home consumption will increase by 10% over the next decade compared to a 4% increase forecast for restaurant traffic. The component of the retail prepared food market that is supporting growth is the portion that is purchased and eaten at home or at work for lunch and supper.

Africa is not waiting on the sidelines either In Africa as well, the same problems arise.

Time constraints, smaller households (singles), lack of cooking skills, changes in eating habits whereby people prefer to eat alone or while doing other activities and high cost of living which is reducing restaurant visits. Lifestyle changes in general.

Local supermarkets and grocery stores have taken advantage of this by offering a wide range of hot meals that are driving massive traffic towards the store and recording unimaginable margins for them.

Naivas Supermarket, the biggest retailer of ready meals in Kenya started selling ready meals in 2010 and now have 30 delis spread across the country, according to Willy Kimani the Marketing and Business Development Manager. This has completely revolutionized retail offerings. For the shopper, a supermarket is no longer a place where people go to buy groceries to take home and make dinner. They now buy the actual food. Most times hot and ready to eat.

In South Africa, increasingly hectic lifestyles of consumers have drove up demand for ready meals in the recent years to 2014. Woolworths, one of the biggest sellers of ready meals boasts an 18% market share that is boosted by their strength in private label within the ready meals as well.

Another of their strengths is a wide breadth of offering ranging from chilled pizza, chilled ready meals and prepared salads. Foods that have a longer shelf life have generally contributed to their success in the industry.

The future of Ready Meals in Africa A critical assessment of the situation shows that the fresh prepared meals sector is generally well covered with many retailers both small and large scale capitalizing on the opportunity in the continent. However, there is still a lot of untapped potential in the chilled and frozen ready foods in Africa. It is only this year in Kenya that NAS cuisine commercialized ready chilled food in the country that is still yet to make a big break in the market.

Also, despite the growth of the hot ready meals, fresh prepared foods have a very short shelf life and a high level of unsellable products when spoilage is not controlled. Numerous opportunity therefore lies in this sector for food producers with the capacity to mass produce ready food, package it appropriately and give ‘fresh’ a longer shelf life to serve the increasing time starved consumers. Lucky for us, significant advances in food technology have enabled the food industry to do this with minimal processing because the other big concern among consumers is heavy processing of ready meals offered by food manufacturers.

Food manufacturers need to fight to keep their share of the stomach before it is fully taken by retail ready meals. A good balance between attractive packaging (preferably see through), merchandising, an optimized assortment of meals, target pricing and evidence of frequent rotation and replenishment to depict freshness, is a sure recipe for success for the frozen and chilled ready meals category here in Africa

Food Business Africa | april - may 2015

17

NUTRITION SoyA

Soya The soya bean is the most widely cultivated legume in the world. Healthy, cheap and versatile, soya should be all the rage! Liz Wawire

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he soya bean is a legume originally from East Asia, but now mainly cultivated in the US, Brazil and Argentina. The edible bean is high in fibre, protein (about 40%), minerals, omega-3 and omega-6 fatty acids, isoflavones and antioxidants such as phytic acid. In addition, it contains zero cholesterol. In fact, consumption of soya significantly decreases levels of bad cholesterol. It may also reduce blood pressure which lowers the risk of heart disease and stroke. Based on the available research, the Food and Drugs Administration (FDA) has long approved a food-labelling health claim stating that soya protein may reduce the risk of coronary heart disease.

Soya consumption can also have a positive effect on menopausal symptoms and bone health, and may reduce the risk of breast cancer and prostate cancer. On the other hand, it is a known allergen and should be included in food allergen labelling.

Allergy to soya is quite common, but very rarely has severe consequences.

Over the last two decades, worldwide production of soya beans has more than doubled (over 275 million tonnes in 2013).

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Africa’s production represents less than 1% of the global production, with South Africa, Nigeria and Zambia taking up the largest shares. The vast majority of the world’s soya beans are genetically modified, and are used in animal feeds.

Raw soya beans are not safe for human

Soya Milk

consumption due to the trypsin inhibitors.

They have to be sprouted or cooked. The beans are sold dried or ready-cooked, fresh or frozen. Fresh immature beans still in their pods and soya sprouts are also common in Asian cuisine. But it doesn’t stop there. Soya beans are used to produce a wide variety of foods, including a good number of dairy and meat substitutes. The beans are a source of complete protein (which is mostly heatstable), containing all 8 essential amino acids, which makes them an excellent choice for vegetarians and vegans.

All sorts of soya The market for soy products was worth US was US$ 4.5 billion in 2013, from US$ 1 billion before the approval of the soy health claim, indicating the boost the approval of the health claim by the FDA had on consumer confidence in soy products. This increase can be attributed to new soyfoods categories being introduced, soyfoods being repositioned in the market place, and new customers selecting soy for health and philosophical reasons, according to Soyfoods.org. The number and variety of soy products available to the consumer has foodbusinessafrica.com

Soya Tempeh grown over the years.

Soya bean oil is a vegetable oil extracted from the seeds. It can be liquid or partially hydrogenated. Soybean meal is made from what remains after the extraction of oil from soya bean flakes. It contains up to 50% protein and is largely used in animal feed.

Soya flour is made from dry beans that are ground into a fine powder. The flour is widely used in baked goods to improve quality and improve yield. Anothr variant of soy flour is extruded soy flour that goes through an extrusion process to improve the soy’s digestibility and taste. It is widely used in meat products and porridges to improve protein content and quality. The beans are also roasted and is widely used in foods, including bakery, although there is a risk of not adequately destroying the trypsin inhibitors, hence the preference for extruded soy flour.

Textured soya protein is generally made from defatted soya flour or concentrate. It is used as a meat extender or as a very cheap meat substitute (with a long shelf life), called ‘soya meat’ or ‘soya chunks’.

Soya sauce is an age-old and indispensable ingredient for seasoning in Asian cooking. It is the pressed and pasteurized liquid from the fermented paste of boiled soya beans, roasted grain, brine and mould cultures. The natural free glutamates in this salty, brown liquid give it that distinct taste of umami (a savoury taste). While this traditional fermentation process takes several months, soya sauce can also be made artificially by acid hydrolysis of soya protein, taking only a few days. It is not identical in flavour but has a longer shelf-life.

Soya milk’s protein content is similar to cow’s milk but it has more fibre and less fat, and of course no cholesterol and no lactose.

It is generally enriched with calcium and is a basis for several soya dairy alternatives such as yoghurt, ice cream and cheese.

Miso is a paste made by fermenting soya beans with grains. It can be sweet or taste rather like meat and can be used (sparingly) in soups, stews and sauces.

Tofu or bean curd is produced from soya milk. It is low in calories and high in protein. foodbusinessafrica.com

Soya Bread It can be soft (silken) or firm and has very little flavour on its own.

Tempeh is made by fermenting the beans into a solid cake form. It has a higher nutritional value, especially in terms of protein, fibre and vitamins, than tofu.

The soy alternative Soy products are commonly consumed as alternatives to common foods. For people with dairy or lactose allergies, soya provides a superior alternative, and is available in a number of options: soy milk, soy yoghurt, soy desserts and soy cheese.

Soy nut (roasted soy beans) and soy butter offer alternative to those allergic to peanuts, with soy nuts available in plain, coated or even flavoured options. Soy bars are also available.

Health claim provisions Health claims are a hard nut to crack, for example in the US, where the FDA generally requires that all claims have important public health provisos that limit the applicability of the claim. However, soya got a boost in 1999, when the Food and Drugs Administration (FDA) approved the following health claim for soya:

“25 grams of soy protein a day, as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease. A serving of [name of food] supplies _____ grams of soy protein.”

The FDA health claim for soy protein recommends that consumers incorporate four servings of at least 6.25 grams of soy protein into their daily diet, for a total of at least 25 grams of soy protein each day.

This was an important milestone, as the FDA extensively reviewed research to support this health claim and found that soy protein, when included in a low-fat and low-cholesterol diet, could lower blood total cholesterol and low-density lipoprotein (LDL) or “bad” cholesterol levels, without

Soya Sprouts

Soya Meat

adversely effecting high-density lipoprotein or “good” cholesterol levels. These two factors, high total blood cholesterol levels and LDL, are proven risk factors for coronary heart disease.

Ten other countries have also approved the soy health claim in regards to heart health, boosting the legume’s adaptation by consumers around the world Clarity of health claim is important In the application of the health claim, it is critical not to assume that all products with soy in the formulation can lay claim on the health claim.

According to the Soy Connection, in order to carry a labelling claim about the benefits of soy protein, a food must satisfy the following criteria as per FDA’s requirement: • The food must be low in saturated fat and low in cholesterol. This may differ from the product’s labelled serving size.

To be low in saturated fat means 1 g or less of saturated fat per “reference amount customarily consumed (RACC) and no more than 15 percent of calories from saturated fat. Low in cholesterol generally means 20 mg or less of cholesterol per RACC. • The food product must have at least 6.25 g of soy protein per reference amount customarily consumed.

• Although not a concern for soy protein products, a rule known as “the jelly bean rule” states that a product must contain at least 10 percent of a nutrient.

For the soy health claim, the amount of soy protein required to be present (6.25 g) is automatically more than 10 percent of the recommended daily intake (RDI) (50 g).

However, provisions are allowed to also include ‘nutrient content’ claims in the labelling of a product. Statements like ‘excellent source of soy protein’ or ‘high in soy protein’ can be used, even if the product doesnt meet the health clain threshold.

However, these nutrient claims are also regulated by the FDA

Food Business Africa | april - may 2015

19

PACKAGING

Modified Atmosphere Packaging

Modified Atmosphere Packaging Modified Atmosphere Packaging, or MAP, is a technology that has yet to take off in a big way in Africa. But with changing consumer needs and the need for longer shelf life of fresh products, this technology is bound to grow significantly in the next decade, writes our FoodWorld Media team

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he challenge of keeping food fresher for longer without the need of preservatives remains one of the challenges of humanity today. Food spoilage is a multifaceted occurence, but the growth of microorganisms in the presence of air, mailnly oxygen, remains one of the biggest challenges to keeping milk, meat, fruits and vegetables and other food products fresh and acceptable to consumers.

Modified Atmosphere Packaging (MAP) is a technique that involves either actively or passively controlling or modifying the atmosphere surrounding a product within a package made of various types and/or combinations of film.

In the US, McDonalds is quoted as one of the first users of MAP, to distribute lettuce to its stores.

This technology makes use of the abundance of air in the atmosphere to keep products fresher for longer. Air is made up of nitrogen (78%), oxygen (21%), argon 20

April - May 2015 | Food Business Africa

(0.9%), carbon dioxide (0.03%) and other gases (0.17%).

In pursuit of freshness and a longer shelf life, a number of technologies are available, including refrigeration, pickling, application of salt and sugars and the use of preservatives.

The MAP advantage The driving force behind MAP packaging trend is the combination of a strong consumer appeal as consumers increasingly want fresh products. With an increase in retail, the retailers have also found advantages in logistics, product presentation on teh shelves and an extended shelf life that enables the distribution of products to greater geographies.

MAP originated in the United Kingdom and Denmark in the 1970s where it was used to package bacon and meat products to enable them reach supermarket shelves in good condition. In the US, McDonalds is quoted as one of the first users of MAP, to distribute lettuce to its stores.

MAP achieves food preservation by sealing the food product in a package foodbusinessafrica.com

which contains a mixture of gases in carefully controlled ratios that significantly slow down food spoilage by inhibiting oxidation and growth of microorganisms.

The modification of the atmosphere within whcih food is kept is the basis of MAP. The type and proportion of gas package depends on the type of food to be packaged.

Specific machinery is available for flushing out the air form the package and replecing it with a mixture of gases, and is then sealed to ensure the air in the package doesnt escape.

MAP is used widely in the preservation of meat and poultry products, milk, pasta, fresh fruits and vegetables and various types of ready meals.

Oxygen, CO2, and nitrogen are most often used in MAP packaging. Other gases including nitrous and nitric oxides, sulphur dioxide, ethylene, chlorine as well as ozone and propylene oxide have been considered and investigated experimentally.

However, due to safety, regulatory and cost considerations, they have not been applied commercially, according to the FDA. Application in baked goods Baked goods, especially those lower in water content like naan, bagels, baguettes, pita and other types of bread, are excellent users of MAP. Moulds are a particular concern in baked goods as bacteria prefers higher water content. The exclusion of oxygen and an increase in the proportion of carbon dioxide is very effective in increasing shelf life in these products.

The application of MAP increases baked goods shelf life by between five and 20 days at room temperature, saving critical investments in refrigeration. The correct use of the right packaging material and air ratios can increase the shelf life of some baked goods to more than six months. Cakes, including those with icing can also be preserved through MAP, with the right air mixture.

Application in coffee The unique coffee aromas, flavours and taste that consumers love can be quite a challenge to maintain, as the volatile oils in coffe easily get oxidised by oxygen. Keeping out oxygen from the coffee is a key consideration in having not only a good cup of coffee but also in improving shelf life.

Inert nitrogen gas is used to flush out foodbusinessafrica.com

oxygen from coffee packages, providing extended shelf life to the beverage. It can also be used in packaging of tea as well.

Application in fish, meat and poultry products The application of MAP in fish, meat and poultry presents its challenges but with the appropriate air ratios, about 60-80% oxygen, fresh meat can retain its colour and taste for longer. Pork products, because of their paler colour, require lower levels of oxygen, plus a mixture of carbon dioxide to reduce microbial growth. In meat and pork products, the critical requirement to maintain the red colour and freshness is key to the performance of a MAP system.

Typically, a shelf life of 5-8 days for meat and 16-21 days for poultry can be achieved with MAP, improving the shelf life of these products by at least two times the normal shelf life.

Application in cheese products Cheese can be susceptible to attack by moulds and bacteria, depending on the moisture content of the cheese. Fats can also be oxidised affecting the taste of cheese.

Carbon dioxide is used extensively in cheese products, mixtures of nitrogen and carbon dioxide can be used in soft cheeses, where bacterial growth is a major concern.

Nitrogen gas is also included in soft cheeses to reduce packaging collapse MAP is also an excellent way to package grated and sliced cheese as it allows the cheese to remain separated without compaction whcih can affect consumer acceptance, better than a vacumm package.

Cheese shelf life can be improved with upto three weeks of shelf life achieved in soft cheeses, from a few days without MAP. Applications in fish The varied types of fish available around the world provides a challenhe to the application of MAP in fish and sea food. Some fish species are also quite fatty in nature, hence fat oxidation in these products add to the mix of issues to sort out.

The use carbon dioxide in MAP for raw fish is effective in inhibiting the growth of common aerobic bacteria. Seafood such as prawns are packaged in an atmosphere typically containing only carbon dioxide and nitrogen.

Low storage temperatures remain the key to improving fish shelf life. Under the

right temperatures and with the appropriate MAP application, several weeks, from a few days of normal shelf life, can be achieved.

Applications in fruits and vegetables One of the most widely used applications of MAP is in teh packaging of fruits and vegetables.

Fruits and vegatables are living organisms even after harvesting. The key factor to keep these products fresh is to reduce the respiration rate by lowering the temperatures plus the application of MAP. In these products, it is essential to achieve an equilibrium modified atmosphere, or EMA, due to the products high moisture content, acidic nature and susceptibility of attack by enzymes. EMA allows the exchange of air between the inside and outside of the package, hence the need for a permeable material of packaging.

Various configurations of air mixyres can be supplied by suppliers of MAP equipment and packaging Food safety in MAP packaging The success of MAP depends to a large extent to the presence of refrigerated storage.

Not only will products spoil faster at high temperatures, but also package integrity and performance are affected by the temperature of the sorrounding.

An important piece of information on the use of MAP is the need to maintain high levels of hygiene in the storage, packaging and processing of products. According to the FDA, currently, there is concern with psychrotrophic foodborne pathogens such as Listeria monocytogenes, Yersinia entercolitica and Aeromonas hydrophila, as well as non-proteolytic Clostridium botulinum, although clearly a number of other microorganisms, especially Salmonella spp., E. coli O157:H7 and Shigella spp., can be potential health risks when present on MAP produce Food Business Africa | april - may 2015

21

Formulations

Wheat

gluten performance. Gluten strength is different in all varieties of wheat. The differences are caused by the unique number and combination of glutenin and gliadin polypeptides in each wheat variety, resulting in varieties with slightly better gluten strength than others. Bread that is baked using a “better” quality variety may have a higher loaf volume than bread baked with a “lesser” variety, even when both varieties have the same protein content.

Wheat in world commerce For the sake of cpmmerce and application, there are six primary types of wheat that are commonly sold and used around the world.

However, within these primary categories, are many sub-strains that add unique characteristics to the final product.

Wheat Wheat flour is used in the baking industry and in home baking extensively. Used to produce a number of baked goods, wheat quality affects the applicability of the grain in many ways.

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he importance of wheat in the world’s commerce and nutrition is enormous. Wheat is the leading cereal grain in the world, followed by rice and maize. Wheat is available as a source of carbohydrate and protein in a number of products including a whole range of breads, cakes, pasta, buns, tortillas, noodles etc.

Each community around the world has a way to make use of this versatile ingredient to meet its nutritional needs.

Wheat functionality Wheat functionality is dictated by protein content and the quality of the wheat protein, called gluten.

Protein content in wheat ranges from

During mixing, a continuous network of protein forms, giving the dough its strength and elasticity.

10% in some soft wheats to 15% in hard wheats. Protein content is a good indicator of suitability of wheat to a particular application. While pastries and cakes require wheat with lower quantities of protein, pan bread requires wheat with a higher protein content as the development of a gluten network is key to pan bread holding its volume and shape.

Gluten proteins are the most important protein group in bread making. Gluten forms when water is added to flour and is mixed. During mixing, a continuous network of protein forms, giving the dough its strength and elasticity. By holding gas produced during fermentation, the protein network allows bread to rise. It also allows the dough to maintain its shape. These two functions of the protein network are what give bread its chewy texture.

Gluten performance There are several factors that can affect

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April - May 2015 | Food Business Africa

Hard Red Winter (HRW) Wheat.

HRW is one of the most commonly used and is popular owing to its moderate characteristics. HRW has a protein content averaging 10.5%,and is mainly used to make regular breads, noodles, and hard rolls and in all-purpose for home use.

Hard Red Spring Wheat.

This type of wheat is one of the hardest kinds of wheat used, and also having the highest protein content of about 13.5%. It is used to make soft breads, pizza doughs, and croissant rolls. It is also popular for blending with other wheats to improve protein content.

Soft Red Winter Wheat.

The soft Red Winter variety has low protein content, and is commonly used in making pastries, pan bread, pasta, or cereal.

Hard White Winter Wheat.

This type of wheat has a similar protein content to the hard red wheat, but lacks the distinctive red coloring and has a sweeter, more neutral flavor. It is used in the same applications as the HRW. Soft White Spring Wheat.

This wheat is very similar to soft red winter wheat, and is commonly used to make pastries and cakes that need to have that sweeter flavor and white coloring.

Durum wheat.

Durum wheat is a specialty harde wheat type with the highest protein content. It is used to produce pastas and noodles Durum wheat is quite low in gluten, hence can not be used exclusively to make bread and similar products foodbusinessafrica.com

SUPPLIER NEWS

news from suppliers to the industry

Frutarom acquires Sonarome, Africa in focus

EABL sells Central Glass to South African group

KENYA – East Africa’s biggest brewing group East African Breweries Ltd (EABL) has sold off its glass making enterprise Central Glass Industries to South Africa’s Consol group.

The Consol group, based in South Africa, is a diversified supplier of glass to the wine, food, beverages, cosmetics, and pharmaceuticals to South Africa and the region.

EABL, majority owned by Diageo, sold its entire stake in the Nairobi-based glass manufacturer, subject to approval from regulators in Kenya, for KSh 4.49 billion (about US$ 47 million).

The glass maker has been owned by EABL for about 30 years, during which it supplied EABL’s subsidiaries and other food and beverage manufacturers with glass, especially the soft drinks businesses, in the region.

The glass maker, which has been owned by EABL for about 30 years, has increasingly appeared not to meet Diageo’s strategic direction in the continent, where the company has been growing its beer and spirits businesses aggressively.

The company has invested recently in its Kenyan, Uganda, Tanzanian, Ethiopian and Nigerian operations in its quest to grab market share in an increasingly competitive landscape in Africa.

The acquisition of Central Glass Industries fits into Consol’s African strategy, after it acquired Glassforce, a glass manufacturer in Nigeria.

New bag factory begins production

ETHIOPIA - A new Chinese company, Shaoxing Li Enterprise, is set to inaugufoodbusinessafrica.com

rate a woven polypropylene bag factory, said to be the largest in Ethiopia so far, with a capital of 520 million Birr (US$ 25 million) and a designed production capacity of 27,000tn a year.

The factory is located, in Amhara Regional State in North Shewa, 64Km from Addis Ababa.

The company will initially produce 7,000tn a year using polypropylene and polyethylene as raw materials all fully imported from the Middle East. The products include ordinary sacks, jumbo bags as well as hand-bags and shopping bags. Shaoxing Li has been in production for 10 years in China and Vietnam.

The factory will be the biggest largescale woven bag factory in the country, Yonas Abate (Eng.) Plastic & Rubber Industry Development Institute director at the Ministry of Industry (MOI) told Fortune.

Tate n Lyle to sell plants to ADM

UK/DIVESTITURE - Tate & Lyle, the British sweetener and ingredients company, plans to sell its bulk ingredient-producing plants in Bulgaria, Turkey and Hungary to Archer Daniels Midland (ADM), in a deal worth €240m.

In a move that aims to strengthen its Speciality Food Ingredients business, the company will take full ownership of the more speciality-focused plant in Slovakia while substantially reducing its European Bulk Ingredients footprint by exiting the predominantly plants in Bulgaria, Turkey and Hungary.

Tate & Lyle will substantially exit from bulk sweeteners in Europe before a decision on potential future capital investment is required arising from the reform of the EU Sugar Regime in 2017

ISRAEL/M&A - Frutarom, one of the world’s 10 largest flavors and fine ingredients companies has acquired a controlling 60% of the share capital of the Indian flavors and fragrances company Sonarome for US$ 17.2 million.

Sonarome, which has sales of US$ 12 million in 2014, is based in Bangalore, India but also with a strong presence in about 20 African markets, particularly in Nigeria, South Africa, Ethiopia, Kenya and Mozambique, which also constitute key growing target markets in Frutarom’s growth strategy.

“Frutarom has set itself the goal of expanding its activity in the emerging high-growth markets of India and Africa, both through internal growth and by means of acquisitions. The acquisition of Sonarome is another key step towards attaining this goal’, said Ori Yehudai, President and CEO of Frutarom Group.

Frutarom began independent operations in Africa four years ago, where it also gained a boost with the acquisition of JanDeRee in South Africa about two years ago. The purchase agreement includes an option for Frutarom to acquire the remaining balance of shares in 2017.

New glass factory to open in Ethiopia

ETHIOPIA/NEW PLANT– The Ethiopian beverage industry has got a boost following the building of a new glass manufacturing worth US$ 50 million plant in the country.

The Juniper Glass Industries Plc, set to open in Debre Birhan town, has a production capacity of 150 million bottles per year, targeting domestic and international markets.

“Without the need to make further feasibility studies, there is a growing demand for bottles in the country because with the launching of new beer factories the number of beer factories has doubled, which initiated the company to open its bottle factory,” Yared Mulgeta, special project manager at Juniper Glass Industries Plc told Fortune.

The new plant joins another three glass and bottle factories in the country – Addis Abeba Bottle & Glass Factory, Ethio Hanssam International Plc and Daylight Applied Technologies. – Addis Fortune Food Business Africa | april - may 2015

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EVENTS calendar

May 28-29: Food Safety Summit Africa Conference & Expo, Nairobi, Kenya The Summit brings together Government regulatory agencies and the food, feed and agro industries in Africa to discuss policy, regulation and consumer concerns on food safety www.FoodSafetySummitAfrica.com June 18-22: Ethiopia Print and Pack Expo, Addis Ababa, Ethiopia Trade exhibition for the printing & packaging equipment, printing & packaging machinery, flexible packaging, corrugated packaging, paper & paper products, bottling and PET www.africantradefairs.com/inexpo/ethiopia-print-pack-expo/ June 28-29: Africa’s Big Seven, Midrand, South Africa The continent’s largest food and beverage industry trade expo covering fresh produce and ingredients to manufacturing technologies, processing and packaging equipment, retail ready products, hospitality, retail and international catering and much more www.exhibitionsafrica.com/ems/africa-s-big-seven.html June 9: IGC Grains Conference, London, UK Organised by the International Grain Convention, this is the event for the international grain business industry http://www.igc.int/en/conference/confhome.aspx June 18-19: Food Innovation Asia Conference Asia 2015, Bangkok, Thailand A networking forum for international food scientists and scientists in related fields from academia, government and food industries in Asia http://www.foodtech.eng.su.ac.th/Reg2015/Home/Home.aspx June 25-26: 11th Annual Wine Industry Technology Symposium, Napa, California The Wine Industry Technology Symposium (WITS) was created with the aim to address the unique information technology and services needs of the wine industry. http://wineindustrytechnologysymposium.com/ July 6-8: Probiotics Summit, San Francisco, USA The Probiotics Summit focuses on the current research, development and discovery of probiotics, prebiotics, food technology and nutritional science http://www.unitedscientificgroup.com/conferences/probiotics-summit/ index August 7-8: Central Kenya Agri-Business Africa Trade Fair, Thika, Kenya The Central Kenya Agri-Business Africa Trade Fair is the region’s only forum focused on the crop, livestock and horticulture industry.

Organised by FoodWorld Media www.AgriBusinessAfrica.net/Central August 19-21: Global Sustainability Summit, Colorado, USA The Global Sustainability Summit is designed to help companies with all levels of awareness, expertise and global reach incorporate sustainability into every aspect of their business model. http://www.fmi.org/forms/meetingMicrosite/2015TPASustainability Summit

Have an Event you would like to see here?

Contact us on info@foodworldmedia.net 24

April - May 2015 | Food Business Africa

QUOTES IN THE NEWS

“If the quality of supplies that we need for a particular meal does not meet the standards set by our parent company, we would be forced to import, or to withdraw the meal from our menu for that territory,” KFC’s country general manager

Justin Melvin, commenting on some of the challenges the fast food chain is facing in sourcing ingredients and supplies locally

“The Castle Lite can is distinctive enough for a reasonable consumer to differentiate the products” – A ruling by the Advertising Industry Tribunal on the appeal by Brandhouse concerning trademark wars between South African Breweries and Brandhouse concerning SAB’s Castle Lite and Brandhouse’s Amstel Lite can.

“Before venturing into this business we scanned for various opportunities and settled on this one. You cannot get it wrong with food. There is growing urbanisation which has increased the demand for processed foods.” Jamii Milling’s CEO Joshua Chepkwony on why he chose to invest in a maize milling plant in Kenya

“What remains is to move together to the floor of Parliament and pass this important bill into law,” Ms Ruth Nankabirwa, the

NRM chief whip informs the press that the National Biotechnology and Biosafety Bill had been harmonised by the party’s caucus, paving way for Uganda to allow GM crops.

“The fast-food market has a lot of money and is convenient for most young professionals who lack time to cook but have disposable income,” said Gerson Misumi, Managing Director Tamarind Group, on why the restaurant plans to enter the fast food market in Kenya

“Sustainability can only be achieved through establishing networks outside the country,” Choppies supermarkets CEO

Ramachandran Ottapath on the retailer’s plans for acquisitions in Kenya and Tanzania as it seeks African expansion

“We report a mixed performance across the beverage categories in an environment of a contracting economy,”

Delta Corporation, which is partly owned by SABMiller said in its trading update for the year-ended March, noting that the economy in Zimbabwe had affected its performance

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