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Captain of Industry: Indra Thanacody Curepipe Dairy, Mauritius

Traditional Cultured

Company Feature:

Milk Renaissance?

Laki Laki Limited

Executive Interview: Charity Magwenzi DairiBord, Zimbabwe

Inside

VOLUME 4 • ISSUE 1, NO. 17 • ISSN 2307-3535

A FOODWORLD MEDIA PUBLICATION


CONTENTS IN THE NEWS www.foodbusinessafrica.com Volume 4 Issue 1, No.17 • ISSN 2307-3535

FOUNDER & PUBLISHER Francis Juma

p.12

UK to introduce sugar tax

CAPTAIN OF INDUSTRY 29

Indra Thanacody, CEO Curepipe Dairy, Mauritius

CONTRIBUTORS: Loretta Mugo ADVERTISING & SUBSCRIPTION: Dorothy Akoth • Elly Okutoyi

p.14 Coca-Cola invests in Nigeria’s largest dairy company

COMPANY FEATURE 30

Laki Laki Ltd

p.20 Starbucks to open in Africa in April

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

RELATED PUBLICATIONS

www.agribusinessafrica.net p.27 Danone boosts African investments in Africa

EXECUTIVE INTERVIEW 32

EDITORIAL 2

Charity Magwenzi, Dairibord Zimbabwe

Africa’s Great Lakes region must be peaceful and prosperous for Africa to fly

www.dairybusinessafrica.com

www.healthcareafrica.info

EVENT PREVIEW 6

AFMASS 2016

www.industrybusinessafrica.com

DAIRY TRENDS 21

Is it time to take African fermented milk products more seriously?

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SUPPLIER NEWS AND INNOVATIONS 36

Ishida appoints Africa Head, Tetra Pak highest capacity homogenizer, Firmenich opens plant in Argentina

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.

REGULARS 4

Quotable Quotes

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African News

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Calendar of Events

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International Dairy News

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International News

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African Dairy News

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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.

MARCH 2016 | FOOD BUSINESS AFRICA

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EDITORIAL

Africa’s Great Lakes region must be peaceful and prosperous for Africa to fly Green, lush and waiting . . .

Those three words describe the Great Lakes region of Africa. “I have never seen maize do so well in Kenya as I saw in Congo,” my former college mate and currently CEO of the East African Farmers Federation, Steven Muchiri tells me, reminiscing of a visit he and a team from the UN’s Food and Agriculture Organisation (FAO) made to see a number of projects in the Democratic Republic of Congo (DRC) some time in 2015. “The maize were tall and each of them had more than 3 or 4 cobs,” he adds as we descended on the short flight down south from Kigali, Rwanda to Bujumbura, the capital city of Burundi. Lying on the shores of Lake Tanganyika, Bujumbura is a teeming small city with sandy beaches and wonderful people that shares a lot with the better known Kigali, where we had been attending a workshop on agricultural transformation in Africa. We were in Bujumbura, not because we wanted to, but because the Kenya Airways flight takes a detour through Bujumbura on its way back to Kenya through the city – and after more than six months of instability and 2

MARCH 2016 | FOOD BUSINESS AFRICA

violence where hundreds were reported to have been killed, we were a bit apprehensive flying into Burundi. However, having been a regular visitor to Kigali and Bujumbura numerous times over the past 10 years, I was in a way contented to “fly over” Bujumbura to see for myself the status of the capital city after all the news. I was pleasantly surprised that the airport was actually working and life seemed normal as I peered out through the window, looking out for some landmarks that I knew from my last trip there in 2014. I could still see the milling plant not far from the airport while the streets and the town centre had some life as we flew out, into the lake on our way out of the airport. And the rice farms near the airport (to me this is the most lasting impression of Bujumbura’s airport, since during my first trip to the country, what I remember was seeing rice farmers really close to the plane. The airport has since been fenced, though) were teeming with farmers tilling their smallholder farms. Green, lush and tropical is the way to describe the Great Lakes region of Africa. Covering North Western Tanzania, Ugan-

da, Rwanda, Burundi, DRC and by extension, the Republic of the Congo and Central African Republic, this region has been on the wrong side of history for more than 20 years, during which millions of people have died or been displaced – the most famous of which is the 1994 Rwanda genocide that killed more than a million people in 100 days. However beyond the news headlines of violence and leaders refusing to relinquish power, this region provides Africa with the last opportunity to prosper and be the Africa we all aspire to have in future. High population, one of the highest proportions of young people, rising urbanisation and economies and excellent soils and weather are pointers that the region could be a major source of agricultural produce to feed the continent; while at the same time becoming a huge market for manufactured agro-produce and other food and beverage products. I believe that Africa shall not prosper if this vital part of the continent remains behind, left to continue fighting wars, while the rest of the continent pretends to be moving forward. There is an urgent need for the regional players and the international community to place more priority in not only bringing peace to this critical region, but to also build the necessary infrastructure to open up the region to agriculture, trade and manufacturing, to tap into the region’s potential. A visit to Rwanda’s dairy producer Inyange Industries, beverage producers Bralirwa and Skol breweries and into the Special Economic Zones provide a good example of what peace and investments in infrastructure can achieve in a relatively short time. Investments in extra capacity, a slew of new products and a vibrant work force is what a visitor comes across in these companies. As Uganda and Tanzania strive to rival Kenya in their manufacturing sectors and Rwanda builds its capacity, we must see more of these kinds of investments in Burundi, DRC, Republic of Congo and Central African Republic and other countries in the region for Africa to be truly in the 21st Century. Have a good read Publisher FOODBUSINESSAFRICA.COM


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EVENTS CALENDAR

June 8-10: Kenya School of Monetary Studies, Nairobi, Kenya African Food Manufacturing & Safety Summit Conference & Expo (AFMASS) 2016 www.afmass.com April 12-14: Milwaukee, Wisconsin, USA Cheese Technology Expo www.cheeseexpo.org April 26-28: Lagos Nigeria Nigeria Agro-Food www.agrofood-nigeria.com April 17-21: Istanbul Turkey 15th ICC Cereals & Bread Congress www.icbc2016.org/en/ April 30-May 2: Stellenbosch, South Africa South Africa Cheese Festival www.cheesefestival.co.za May 3-6: Philadelphia, Pennsylvania Craft Brewers Conference & Brew Expo America www.craftbrewersconference.com May 17-19: Dubai, UAE Global Grain Middle East & North Africa www.globalmilling.com/event/global-grain-middle-east-andnorth-africa-2016/ May 24-26: Washington DC, USA Sweets & Snacks Expo www.sweetsandsnacks.com June 13-17: Las Vegas, Nevada, USA World Tea Expo www.worldteaexpo.com June 19-21: Johannesburg, South Africa Africa’s Big Seven www.exhibitionsafrica.com/ems/africa-s-big-seven.html

QUOTABLE QUOTES

“The proposed project is a U$13.8 million refinancing and growth programme to help Insta expand its RUTF production capacity on the back of an increased supply to the East African region.” The International Finance Corporation on its investment in Insta Products, a manufacturer of cereals for the malnourished population “This phase of the timetable is not entirely in the commission’s control, as we’re required to get input from all stakeholders affected by the transaction, but I expect our team will be able to finish by the April 5 deadline” Tembinkosi Bonakele, South African Competition commissioner on the progress his country has made in approving the SABMiller-AB Inbev deal “We planned to build a plant with a production capacity of 400,000 hectolitres with sufficient capacity for five years. Now we will track this back to a 100,000-hectolitre plant with capacity for 18 months, and use the proceeds to reinvest back into the plant. It’s essentially a ‘pay-as-you-go model’.” Distell CEO Richard Rushton announces that the spirits and wine group are going slow with their expansion in Angola due to low oil prices “Take notice that the suit herein by ex-parte applicant Transitional Authority is hereby wholly withdrawn for all purposes.” A notice from Musyoki Mogaka and Co advocates, the lawyers for the TA, which paves way for Kenya to privatize its ailing sugar factories. “The current financial crisis experienced in Nigeria, which is fuelled by the low oil price, is a further cause of concern, thus the group has decided to withdraw from future investments in Nigeria.” Dairy producer Clover pulls the plug on further investments in Nigeria and Africa as low oil prices take its toll on the continent’s consumer demand. “The risks are slightly higher, but the rewards are better. It’s a good bet to make.” Olam International Chief Executive Officer Sunny Verghese on why his company has committed to invest more into sourcing of commodities and processing of food products in Africa.

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June 8-10, 2016

Kenya school of monetary studies (Ksms), nairobi, Kenya

one industry one region one event Africa’s industry converges at the only event that covers trends, opportunities, innovations and technologies of the future in the processing, packaging and safety of foods and beverages in Africa. Don’t be left out. Register today to Speak, Exhibit or be a Delegate at the African Food Manufacturing & Safety Summit Conference & Expo. More info:

www.afmass.com FOODBUSINESSAFRICA.COM

MARCH 2016 | FOOD BUSINESS AFRICA

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EVENTS PREVIEW

AFMASS 2016 - June 8-10, 2016, Nairobi, Kenya Meet, interact and trade with top business leaders from the region at AFMASS 2016

T

he African Food Manufacturing & Safety Summit (AFMASS) Conference & Expo 2016 is set to be the most critical event for the food and beverage industry in Eastern and Central Africa. AFMASS brings together the biggest names in Africa’s food and beverage industry to define a new era in processing, packaging, distribution, storage and retailing. According to the organisers, the industry in the region has always been in need of a high-level meeting of minds to network, learn and trade that AFMASS offers. Located in the tranquil environment of the Kenya School of Monetary Studies, Nairobi, Kenya, AFMASS provides the best to both exhibitor and delegate – a well-organised conference that covers the most critical issues to the industry, and an exhibition next door where exhibitors can show case their innovations to conference delegates and other visitors. “The industry was quite excited with last year’s event that we hosted – and which focused solely on food safety. From the feedback we got, the profile of delegates

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and the questions we received at the event, we decided to expand the scope of the event to include the entire food processing, packaging and of course food safety topics into the event,” says Francis Juma, the lead organiser of the event. “The delegates last year were concerned about food safety, but also questions arose about nutrition and health, innovations, process optimisation and the like. By expanding the scope of AFMASS to cover the entire sector, we shall meet the needs of all concerned,” adds Juma AFMASS is poised to be the ultimate event for the food and beverage industry in sub-Sahara Africa, considering the support that the organisers have received so far from within and outside the region. A critical aspect of AFMASS is the focus to incorporate the food and beverage industry business leaders into the discussion of the challenges, opportunities and future trends in the industry. “We believe that we have largely delivered on this goal, with a number of industry leaders confirming to be speakers

and delegates at the conference. We planned to change the game quite significantly, bringing the industry leaders to the forefront of the discussions at AFMASS, be it through presentations or Panel Discussions. We are glad to report that the industry has come out to participate actively at AFMASS,” Juma says.

GMOs, dairy industry in Uganda and regulation of alcohol in Kenya take centre stage

The role of GMOs in the food security situation in Africa, the investment potential of the Dairy Industry in Uganda and the Regulatory environment of the Alcohol industry in Kenya are the three key Panel Discussions at the upcoming African Food Manufacturing & Safety Summit conference & expo 2016. The current El Nino phenomenon (and drought brought by it) in Southern Africa has shown how vulnerable Africa is to food insecurity. Can GMOs be part of the solution to Africa’s food security in future, with climate change knocking on the door? The GMO regulatory space is set to undergo new realignment in the US, with questions around labelling coming into focus. How can Africa’s food industry learn from this realignment? Further, how competitive will Africa’s food and beverage sector be in future, if the current non-GMO stance is maintained or changed? How can Africa remove the barriers to GMO adoption? The milk industry in Uganda has been one of the leading lights in Africa. Investments continue to pour into the sector, but what are the challenges, opportunities, trends and future prospects of the milk sector in Uganda in terms of on farm production, processing and marketing? The year 2015 was a critical one for the alcohol industry in Kenya, with the Government flexing its muscles to control the brewing/distilling of illicit alcohol in the country. The industry further continues to grapple with counterfeit products in FOODBUSINESSAFRICA.COM


the market place. Public health and safety and lost incomes by Government and industry players are at stake. What is the future prospect of the regulation of the alcohol industry in Kenya? Join Government regulators, industry leaders and other stakeholders in these vital, incisive discussions. We continue to line up a host of industry leading speakers and visitors from the region to ensure that you have the best networking and trading platform at the Summit.

Business Leaders’ Forum adds more spice to AFMASS

The Food & Beverage Industry Business Leaders’ Forum is the apex of the proceedings at the African Food Manufacturing & Safety Summit (AFMASS 2016) Conference & Expo. The Forum brings together Boardroom level executives from the industry to discuss the challenges, opportunities and future prospects of the food and beverage processing, retail and marketing in the region. The forum provides business leaders with a high-level platform to discuss the operational, regulatory, fiscal, supply chain, and human resource challenges and achievements in the last year, and provides them with an opportunity to discuss future prospects of their companies and the industry. The Forum will consist of two sessions: 1. Industry Status Report Discussion In this session, food and beverage industry leaders from the various sectors (dairy; milling; bakery; meat, fish and poultry; fruits and vegetables; soft beverages; hard beverages; sugar and confectionery; other processed foods) discuss the challenges, opportunities and future prospects of their companies and industries

2. Hot Topic Discussion Food and beverage industry leaders from the various sectors, suppliers and Government regulators discuss a particular topic that is relevant to the industry. The topic this year will be on “Practical solutions to removing the bottle-necks to technology adoption in the food and beverage industry in Africa.”

About AFMASS 2016

The African Food Manufacturing & Safety Summit (AFMASS) Conference & Expo is the region’s food processing, packaging and food safety conference and exhibition. AFMASS is slated for June 8-10, 2016 at the Kenya School of Monetary Studies in Nairobi, Kenya, and is the must attend food and beverage industry conference and expo this year. AFMASS provides a great and unique platform – with the focus of bringing the entire food and beverage processing sector; suppliers of equipment, packaging, ingredients and services; retail and foodservice providers; Government regulatory authorities; NGOs and development partners and other stakeholders from Africa and the World to learn, network and trade. AFMASS is the only such show in Eastern and Central Africa. With visitors and delegates from a number of African countries, AFMASS is the ultimate food industry trade show in the region. For more info, reach out to the organisers, FoodWorld Media. Email: info@foodworldmedia.net; Tel: +254 20 8155022/+254 725 343932 Website: www.afmass.com

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Africa’s Big Seven

Packaging Bonanza at Africa’s Big Seven Packaging in the food and beverage sector is one of the world’s fastest growing industries as it tries to keep up with the massive growth and diversity of new products sweeping through consumer markets. This is most evident in Africa where a growing middle class population shows an ever-increasing taste for packaged food and beverage products, says Christine Davidson, vice-president of dmg EMS events in Africa, organiser of Africa’s Big Seven (AB7). “The number of exhibitors and visitors attending AB7 has grown steadily over the 14-year history of the show, along with thousands of brand new products on display every year,” adds Davidson. “The impact of product packaging plays a major role in attracting the attention of AB7 visitors, just as it does with retail consumers. AB7 is the ideal event for discovering world food packaging trends and technologies. The expo takes place from 19 to 21 June at Gallagher Convention Centre, Midrand, South Africa.”

AB7 Gateway to African Markets Over 260 companies from 49 countries used AB7 as their springboard into Africa last year, to explore business opportunities in 27 countries across the continent. Over 13 000 visitors from 72 countries attended the show. “Our post show data reveals about one

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third of visitors specifically targeted the FoodTech and DrinkTech components of AB7, in which the latest packaging trends are showcased by manufacturers,” adds Davidson.

Packaging Technologies Showcase

Last year, packaging companies from Bahrain, France, Italy, Saudi Arabia, South Africa, Turkey and South Korea exhibited at the show. Dinga Moyo, Chairman of the Food Processing Technology Department at the Harare Institute of Technology, Zimbabwe, visited AB7 to explore new ideas in food technology. “It’s always rewarding to discover new packaging designs and styles from other countries at AB7,” says Moyo. “It enables us to improve our competitiveness and forge relationships with potential suppliers from around the world.” One of the UAE’s fastest growing snack producers, Signature Snacks, is now supplying more than 60 countries with its unique line of stylishly packaged biscuits, cookies, crackers, chocolate-coated biscuits, cream-filled biscuits, chocolatecoated wafers and baked chips. “We will be showcasing our premium snack products at Africa’s Big Seven for the first time this year,” says General Manager Mazen Nabulsi. “In addition to high quality, we offer different formats of packaging, including premium and trendy styled sharing bags

for our bite sized products. I’m certain our packaging plays a large part in our success so far.” The global consumer packaging market was valued at US$431-billion in 2013 and is expected to reach US$519-billion by 2018, adds Davidson. “Food represented the largest end-use sector at 33.8% market share, with the beverage sector at 25.2%. This is a massive industry opportunity that many packaging manufacturers are under-exploiting, especially in African markets, and that is where AB7 plays a major role as the trade gateway to the continent.” For more information on AB7 contact Lineke van der Brugghen, Exhibition Management Services. Tel: +27 11 783 7250. Fax: +27 11 783 7269. E-mail: lineke@exhibitionsafrica.com Website: www.exhibitionsafrica.com

About Africa’s Big Seven (AB7) AB7 comprises seven sector-focused shows covering all aspects of the food and beverage industry; these include the Pan Africa Retail Trade Exhibition, AgriFood, FoodTech Africa, DrinkTech Africa, Interbake Africa, Retail Solutions Africa and FoodBiz Africa. The Halaal Pavilion is also a major component of the AB7 Expo for companies interested in the latest Halaal products and trends. AB7 is co-located with the Southern African International Trade Exhibition (SAITEX); both shows offer free visitor entry and dual access.

FOODBUSINESSAFRICA.COM


NEWS | INTERNATIONAL

The latest news headlines from the world and Africa brought to you by

foodbusinessafrica.com ABInBev to sell Chinese joint venture business, Peroni and Grolsch brands AB InBev forced to sell key SABMiller brands in Europe and exit key China joint venture to appease regulators concerned with market dominance

UK - Anheuser-Busch InBev (AB InBev) has commenced the process to sell SABMiller’s stake in Chinese joint venture China Resources Snow Breweries Limited (CR Snow) back to China Resources Beer (Holdings) Co. Ltd (CRB) as the company seeks to remove any anticipated regulatory bottle-necks as their merger process continues. Meanwhile, the company will be offloading SABMiller’s Peroni, Grolsch and Meantime brands and their associated businesses in Italy, the Netherlands and the UK to the Asahi Group Holdings Ltd for EUR 2,550 million (US$2,870 million) for the same reason. CRB, which currently owns 51% of

the Chinese joint venture, will purchase SABMiller’s 49% interest in CR Snow for US$1.6 billion, taking 100% ownership for the business that brews Snow, the World’s largest beer brand by volume, selling more than 100 million hectolitres (10 billion litres) in 2015. SABMiller was one of the first major international brewers to enter China. “Our CR Snow joint venture was established in 1994 and the Snow brand was developed in the same year. Since then, Snow has grown to become the world’s largest beer brand by volume. Since forming the joint venture we have enjoyed a mutually beneficial partnership with CRB and together we have achieved great things in the Chinese beer

market over the last 22 years,” notes Alan Clark, Chief Executive of SABMiller. In the second deal meant to clear regulatory hurdles in Europe, AB InBev plans to sell the brands and operations of Royal Dutch Grolsch NV, Birra Peroni, Miller Brands UK, the Meantime Brewing Company, and SABMiller’s sales and marketing office in France to the Japanese brewer Asahi group. The completion of AB InBev’s acquisition of SABMiller, worth some US$108 billion, and the landmark transaction of 2015, is currently expected to occur in the second half of 2016.

Turkish group Yildiz merges its brands under Paldis, to enter East Africa

TURKEY – Turkish conglomerate Yildiz Holdings has merged its worldwide chocolate and biscuit brands De Met’s, Godiva, United Biscuits and Ülker into 10

MARCH 2016 | FOOD BUSINESS AFRICA

Paldis, creating a group with revenues over US$5.2 billion and 26,000 employees. Yildiz Holdings became the third biggest biscuit maker in 2014 when it acquired United Biscuits, the leading manufacturer and marketer of biscuits in the UK and second largest in the Netherlands, France, Belgium and Ireland, acquiring such historic and popular brands such as McVitie’s, Penguin, Jaffa Cakes, Jacob’s, Jacob’s Cream Crackers, Twiglets and Mini Cheddars. “It is of great importance to be innovative, consumer wise and open to new ideas in order to become a global company. As a pioneering company, we have now combined all of our brands under

one ceiling,” Yıldız Holding Chairman Murat Ülker told a press conference. The company has plans to increase its investment in 2016 to beyond the US$530 million spent in 2015, with East Africa, United States, UK and Turkey its main focus areas. “In the snacks segment particularly, we want to expand our business by 17 percent each year in sterling (GBP) terms. To achieve this we need to invest in our capacity,” Cem Karakas, deputy chairman of Yildiz Holding told Reuters. “In East Africa - Kenya, Uganda and Tanzania - we are planning to enter with a new investment soon,” he added. FOODBUSINESSAFRICA.COM


General Mills to label all its GM-content products With mandatory GM labelling in Vermont state due July 1, some food companies adopt voluntary national labelling, call for national law

US – General Mills, the makers of Cheerios cereal and Yoplait yogurt, has announced that it is set to begin voluntarily labelling its products that contain genetically modified (GM) ingredients even as it called for “a national solution for GMO labelling.” The company’s announcement came just a few days after the US Senate failed to adopt legislation that would have removed

the ability of states to enforce mandatory labelling of GM foods – and which would have set up a federal level, voluntary labelling system. The state of Vermont is set to enforce mandatory GM labelling beginning July 2016. “Vermont state law requires us to start labeling certain grocery store food packages that contain GMO ingredients or face significant fines. We can’t label our products for only one state without significantly driving up costs for our consumers and we simply will not do that. Consumers all over the U.S. will soon begin seeing words legislated by the state of Vermont on the labels of many of their favorite General Mills products,” Jeff Harmening, the company’s chief operating officer of U.S. retail, said in a blog post. “All sides of this debate, 20 years of research, and every major health and safety agency in the world agree that GMOs are not a health or safety concern. At the same time, we know that some consumers are interested in knowing which products contain GMO ingredients,” Harmening continued. General Mills joins another big food company ConAgra, which also voluntarily decided to label its food products that contain GM ingredients last year. ConAgra supports mandatory labelling of GM

products, while most of the food companies would prefer voluntary labelling. The debate of whether or not to label GM containing products remains a polarising matter, with proponents arguing that since GM products have the same chemical and organoleptic profile, there is no need to specifically state on the label, as they are similar to non-GM products. Opponents point to the fact that consumers are increasingly concerned about GM products, and have a right to know when the foods they consume GM products. “We need to be careful about making things mandatory on packaging when it’s not a health or safety concern,” Mr. Harmening said, confirming General Mills’ position that GM products should not be specifically labeled, even as the company will amend its labels to comply with the Vermont legislation. The Grocery Manufacturers Association, a trade body for the major food and beverage manufacturers, contends that between 70-80% of all foods in the US contain GM products, with more than 90% of all soy and maize plantings being GM. As we went to press, Mars Inc and Kelloggs joined the companies that have joined the GM labeling initiative, with both of them seeking the Senate’s action to voluntarily label GM products.

Thirty-three years later, Starbucks and its CEO return to Italy ITALY – The world’s largest coffee retailer Starbucks Coffee Company has announced a partnership to open the first Starbucks store in Italy in partnership with Percassi, an Italian retail and real estate developer. Percassi will own and operate Starbucks stores, with the first store opening in Milan in early 2017. This announcement is especially significant for Starbucks Coffee Company Chairman and CEO Howard Schultz since 33 years ago, Schultz took his first business trip to Milan and Verona, a journey from which Schultz’s vision for Starbucks began to take root. “Starbucks history is directly linked to the way the Italians created and executed the perfect shot of espresso. Everything that we’ve done sits on the foundation of those wonderful experiences that many of us have had in Italy, and we’ve aspired to be a respectful steward of that legacy for 45 years,” said Schultz. “Now we’re going to try, with great humility and respect, to share what we’ve been doing and what we’ve learned through our first retail presence in FOODBUSINESSAFRICA.COM

Starbucks CEO Howard Schultz

Italy. Our first store will be designed with painstaking detail and great respect for the Italian people and coffee culture. And, my hope is that we will create a sense of pride for our partners – so much so that every partner who sees our store or walks through the doors will say: ‘We got it right.’” Working together with Percassi the company’s retail stores will be developed in

cities across the country, beginning with the first store in Milan. “We know that we are going to face a unique challenge with the opening of the first Starbucks store in Italy, the country of coffee, and we are confident that Italian people are ready to live the Starbucks experience, as already occurs in many other markets,” said Antonio Percassi, President of the company Percassi. MARCH 2016 | FOOD BUSINESS AFRICA

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NEWS | INTERNATIONAL INTERNATIONAL BRIEFS

Bayer CEO to join Unilever as Chairman

UK - Unilever has announced that Dr. Marijn Dekkers will succeed Michael Treschow as Chairman of Unilever N.V. and Unilever PLC. He will be nominated for election to the Boards at the Annual General Meetings in April 2016. Dr. Dekkers is currently CEO of Bayer AG. Michael Treschow will retire from Unilever at the 2016 AGMs after having served Unilever’s usual maximum tenure of nine years as Chairman.

Cargill inaugurates US$100m wet corn milling plant in India

INDIA – American grain conglomerate Cargill has inaugurated a new wet corn milling plant in Davangere, Karnataka State, India as it seeks to expand local capacity in the sub continent to meet rising demand in South East Asian and African markets. The US$100 million investment has capacity to mill 800 metric tonnes of maize daily to produce glucose and other derivatives used in the food and healthcare industry. While the output from the new mill will be largely used for the local market, it will also serve our customers in. The newly built facility meets stringent global quality and food safety requirements and will have zero wastewater discharge, notes the company.

Mars initiates massive recall over plastic in chocolate bars

NETHERLANDS – Confectionery manufacturer Mars Inc has been hit by a massive recall of its chocolate products after a customer in Germany found a piece of plastic in one of its products, with fears of consumers getting choked with the foreign matter. The recall, one of the largest by a food company, forced the company to recall products from over 55 countries, after its plant in the southern Dutch town of Veghel was found to have been the source of the contamination. The piece was determined to have broken from a cover used in the manufacturing process. A number of key brands were affected including Mars, Snickers, Milky Way and Celebrations in a number of formats.

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MARCH 2016 | FOOD BUSINESS AFRICA

UK to introduce sugar tax to fight childhood obesity Concerns raised by industry who feel targeted by Government, plus concerns if the measure will actually work. Companies consider legal action to forestall Govt action

UK – The United Kingdom is set to introduce a tax on sugary drinks in the country to help tackle rising cases of obesity in children, with the measure planned to take effect in 2018. In a surprising move during the reading of the Budget by the Chancellor of the Exchequer George Osborne, whose party had opposed the introduction of the tax just last year; the Government intends to collect a massive £520 million (US$750 million) from taxing sugar-added drinks. Equivalent to about 18-24 pence (US 2634 cents), the Government plans to use the tax to fund primary school sports, expand breakfast clubs and fund longer school days in England “I can announce that we will introduce a new sugar levy on the soft drinks industry. We all know one of the biggest contributors to childhood obesity is sugary drinks,” said Chancellor Osborne in his speech. Diet sodas, fruit juices and milk drinks are spared from the legislation which seeks to reduce the demand for sugary drinks, and hopefully increase consumer demand for lower and no-sugar equivalents. The proposal seeks to tax sugary drinks based on two bands – those whose total sugar content is above 5 grams per 100 millilitres; and a second, higher band for the most sugary drinks with more than 8 grams per 100 millilitres. The levels of tax for each have yet to be set by the Government. The UK joins a growing list of countries that have tinkered with sugar taxation, including several Scandinavian countries,

France, and Hungary. Mexico – the World’s highest per capita consumer of soda - introduced a sugar tax in 2014, and has reported a notable decline in soda consumption. According to a 2015 study by the Health & Social Care Information Centre, the proportions of overweight including obese was 67.1% in men and 57.2% in women, making the UK one of the most overweight nations. Proponents of the sugar tax say that a sugar tax will reduce consumption and lower this high level of obesity, the same way higher tobacco taxes have reduced smoking. However, opponents including Ian Wright CBE, Director General of the Food and Drink Federation, a grouping of beverage and non-alcoholic manufacturers, have opposed the move. “The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity,” he said in a statement after the announcement. “Many of those (companies) singled out by the Chancellor have been at the forefront of efforts to provide consumers with healthy choices,” noting that 57% of the soft drinks in the UK are zero or low calorie, 5% midcalorie, with only 38% of the soft drinks market served in full calorie versions. The industry has threatened legal action, probably at the EU level citing unfair competition that will be faced by British foirms, to make the Government back down from its proposal.

Researchers develop testing method to assure wheat flour purity US - Kansas State University researchers have developed a new testing method to help millers assure wheat flour purity that will meet baking industry standards and consumers’ expectations. The test introduces sophisticated molecular methods that focus on high, endosperm purity in flour extracted from wheat kernels. “We are helping the miller by measuring the endosperm purity for flour streams coming from each stage of the milling process. This will allow the miller to optimize settings on equipment and make decisions to meet the baker’s specifications for quality flour,” said Mark Boatwright, a Kansas State University doctoral candidate in biochemistry and molecular biophysics.

When completed, the work being done at the university will allow the miller to exclude inferior flour streams from the final product. “We are enabling the miller to meet purity specifications by giving him a selective analytical test,” said David Wetzel, professor of grain science and industry. “The result is an endosperm purity profile that enables the miller to determine the point at which a cut-off is required to maintain purity for the baker and, ultimately, the consumer,” Boatwright said. “We have shown that by using recently developed technology, the efficiency in a mill can be improved without reducing the flour yield,” added Wetzel. FOODBUSINESSAFRICA.COM


Peanut allergy resistance lasts longer - research

UK - The effects of eating peanut products as a baby to avoid the risk of allergy have been backed up by new research, reports the BBC. In 2015, a study claimed early exposure to peanut products could cut the risk of allergy by 80%. Now researchers say “long-lasting” allergy protection can be sustained - even when the snacks are later avoided for a year. The new study suggests that if a child has consumed peanut snacks within the first 11 months of life, then at the age of five they can afford to stop eating the food entirely for a year, and maintain no allergy. Lead author Prof Gideon Lack said: “[The research] clearly demonstrates that the majority of infants did in fact remain protected and that the protection was long-lasting.” He said that part of the problem was that people lived in a “culture of food fear”. “I believe that this fear of food allergy has become a self-fulfilling prophecy, because the food is excluded from the diet and, as a result, the child fails to develop tolerance,” he told BBC.

Nestlé to invest US$70m in a new factory in Vietnam

VIETNAM - Nestlé Vietnam has began construction of a new US$70 million factory at Thang Long II Industrial Park located in Hung Yen province, North of Vietnam.The new factory will help bring Nestlé products closer to the North consumers and will enable the company to further strengthen its supply chain to ensure freshness of its products to local consumers. The factory is expected to create 300 new job opportunities for the local people by May 2017. “This factory will be the sixth factory of the Nestlé Vietnam Group of Companies in Vietnam and the second one in Hung Yen province. The investment reflects our strong confidence in the rapid development of Vietnam economy,” Ganesan Ampalavanar Managing Director of Nestlé Vietnam said.

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Diageo takes over control of United Spirits as Mallya quits

Vijay Mallya, former chairman United Spirits

INDIA – Spirits maker Diageo has ended its relationship with flamboyant Indian entrepreneur Vijay Mallya as their short stint together unravelled under governance concerns. Diageo, which bought a 55% shareholding in United Spirits, the makers of the famous McDowell’s brand, in 2012, have agreed to pay Mallya US$75 million over five years after he agreed to resign from his position as Chairman and non-executive director of United Spirits Limited (USL) and from the boards of other group companies. The deal brings to an end reported squabbles between Mallya and the Board, with Diageo contending that it will “bring to an end the uncertainty relating to the

governance of USL.” The two parties have also signed a global non-compete deal for five years. The board has appointed Mahendra Kumar Sharma, currently independent nonexecutive director and Chairman of the Audit Committee of USL, as Chairman. Meanwhile, a report by DealStreet Asia, and which quoted a report from Reuters reveals that Heineken is likely to ask Vijay Mallya to step down from the board of United Breweries, India’s largest brewer. The sources said such a move would likely be a prelude to the Dutch drinks firm raising its stake in the maker of Kingfisher beer to above 50% from the current 42.4%.

Walmart to close 269 stores worldwide, exits small stores format after only 5 years USA – The world’s largest retailer Wal-Mart Stores is closing 269 stores of its stores in the U.S. and globally, and exiting its small store formats Walmart Express, following a review of the company’s portfolio to align it with its strategy. The company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Additionally, the company is closing 115 stores outside the US, including 60 in Brazil. With nearly 11,600 worldwide stores the impacted stores represent less than 1 percent of both global square footage and revenue, according to the company. “Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it,” he added.

The closure of all the 102 Walmart Express stores after only 5 years is significant, considering that the company was betting on these smaller outlets to be a growth driver for the business. Analysts contend that the smaller stores couldn’t create a distinct identity and that the retailer struggled to get merchandising right in these smaller stores. “The large majority of U.S. stores closing are Walmart Express stores. While we have learned a lot from this pilot, including a deeper understanding of the everyday needs of our customers, we have decided not to proceed with this offering,” said McMillon. Walmart instead will focus on strengthening its Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers. It will also continue to invest in its future, with plans to open stores worldwide in the coming fiscal year. Internationally, Walmart intends to open between 200 and 240 stores during the coming year. MARCH 2016 | FOOD BUSINESS AFRICA

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Coca-Cola invests in Nigeria’s largest dairy company Chi Limited investment gives Coca-Cola direct entry into dairy industry in Nigeria and boosts juice business

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NIGERIA – Coca-Cola, the world’s leader in soft beverages, has bought an initial 40% shareholding in Nigeria’s Chi Limited, the leading dairy and beverages producer in the country and the West Africa region. Chi Limited is majority owned by the holding company TGI Group and produces such household brands as Hollandia and Chivita and employs a team of over 1,400 people in Nigeria. The deal’s value has not been disclosed. Chi Ltd, incorporated in 1982, is the producer of popular value-added dairy and juice beverages, ice tea and snacks. “Coca-Cola and Chi share the same commitment to Africa, to investing in our operations and to continuous innovation and our relationship will allow us to continue to provide Nigerian consumers the number one beverage in each of the categories we serve. We’re extremely excited by the opportunity to work together and to continue serving Nigeria’s growing population by offering more choice and availability,” said Nathan

Kalumbu, President of Coca-Cola Eurasia and Africa, said during the announcement. The dairy and beverage product lines are some of the fastest growing categories not just in Nigeria but also throughout Africa, notes Coca-Cola in a statement. The initial deal will see Coca-Cola making a minority equity investment in Chi Limited and both companies plan to expand their relationship over coming years as they learn from each other’s experience and expertise with their complementary beverage portfolios. Sources note that CocaCola has an opportunity to take a 100% shareholding after a few years, subject to regulatory approval. “The agreement will allow both companies to leverage their respective investments and expertise to further drive innovation as well as increasing the availability of their products and the choice they can offer consumers,” says Coca-Cola. Both parties have agreed to jointly discuss and explore other opportunities

in the region to further develop their new relationship, opening the opportunity for Coca-Cola to grow its footprint in the important African market, where the company announced in 2014 that it plans to spend an expanded US$17 billion in the 10 years to 2020. Nigeria is home to more than 170 million people, the largest population in Africa, more than 60 per cent of whom are under the age of 25. The country also boasts the African continent’s largest economy that continues to show strong economic growth potential, despite recent setbacks brought to the economy due to the fall in oil prices, on which Nigeria relies to drive its economy. Coca-Cola’s foray into the dairy aisle has seen it buy into companies in US, Brazil and launch flavoured milk in India. These countries and Nigeria are critical high population nodes, and will provide CocaCola with scale as it boosts its strategy to be a total beverage company, beyond carbonated beverages, juices and water.

Africa to drive confectionery packaging into the future AFRICA – Africa will be “the Asia of the next century” in terms of investments into confectionery processing and packaging, states Andreas Leitze, Sales Director at equipment supplier Bosch According to an interview by ConfectioneryNews, the emerging markets including Africa provide good incentives for investors into the confectionery products, which shall continue to entice investors. “We see globalisation as a big trend. Looking at the geographies, Africa will be Asia of the next century; we see a lot of investment in that area. It is a very interesting growth driver,” said Leitze Sugar confectionery continues to be the big driver in emerging markets. “In poorer regions you see more sugar confectionery and cheaper products being consumed because this is what they can afford, but in mature countries you see more chocolate,” he added. 14

MARCH 2016 | FOOD BUSINESS AFRICA

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Senator bounce lifts EABL profits, company freezes South Sudan investments

KENYA – Buoyed by changes in regulatory environment mid last year, East African Breweries Limited reported a massive 16% growth in profit after tax for the 6 months period ended 31st December 2015 In what vindicates the company’s insistence that a lower duty is what the country needs to boost consumption of legal beer due to Kenyans’ high sensitivity to price, the company upped net sales by 8%, driven by recovery of Senator keg post the review in duty remission in July 2015, and double digit growth in five out of eight product segments of its portfolio. “We have delivered solid performance despite the challenging economic environment in East Africa,” said EABL Group Managing Director, Charles Ireland. We have seen in the business volatility and foreign currency challenges across the region, however we have a clear strategy and will continue to build on new opportunities to drive our business growth,” added Mr. Ireland. According to the report, Kenya delivered 22% net sales growth, mainly driven by a good performance from Senator keg and spirits. New product innovations including Chrome Vodka, Kenya Cane Coconut and Allsopps Stout also contributed to the growth. Net sales in Uganda and Tanzania remained flat. Export volumes and incomes dropped mainly due to the volatile environment in South Sudan, where the company has also announced a freeze on its ambitions. The company reported a US$8.8 million in foreign exchange losses in the country where net sales fell by 74%. The company has announced that it has scaled down its investments and operations in South Sudan, following announcements by SABMiller that it is also pulling out of the country.

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Dunkin’ Donuts to enter South Africa

SOUTH AFRICA - Grand Parade Investments (GPI), which brought Burger King to South Africa in 2013, has announced it has signed a franchise agreement with Dunkin’ Brands to open as many as 250 Dunkin’ Donuts and 70 Baskin Robbins stores in South Africa. “At GPI, we work with world-class partners to develop brands that will resonate with South African consumers, which is why we’re thrilled to bring Dunkin’ Donuts and Baskin Robbins to the market,” Hassen Adams, executive chairman at GPI. The agreement will see the introduction of Baskin Robbins ice cream products in supermarket chains and convenience stores in SA – BD Live

Innscor to acquire biscuits and snacks maker

ZIMBABWE – Innscor Africa is set to acquire a biscuits and snacks maker Breathaway Food Caterers and bundle it into its light manufacturing unit, reports The Herald The Herald quotes several people with the information who have confirmed that the business, which makes Zapnax snacks and Iris biscuits will be added into the National Foods business, further improving the capability of the light manufacturing unit. Innscor Africa last year unbundled its Quick Service Restaurants unit to a new business called Simbisa and also exited Spar retail stores, to provide extra value to its shareholders.

Guinness Ghana appoints Agbonlahor as new MD

GHANA - Guinness Ghana Breweries Limited (GGBL), Ghana’s leading beverage business and a Diageo affilliate has appointed Francis Agbonlahor as the new Managing Director. He has taken over from Peter Ndegwa who is now the Managing Director of Guinness Nigeria PLC. Prior to this role he was General Manager of Meta Abo Brewery, Diageo’s business in Addis Ababa, Ethiopia for four years. He has extensive executive and board level experience, notes the company in a statement.

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MARCH 2016 | FOOD BUSINESS AFRICA

Olam buys cereals maker Amber Foods as it grows African processing footprint Company CEO says company is excited about Africa, and is focused on growing its branded products portfolio

AFRICA – Diversified commodity trader Olam International Limited has acquired Amber Foods Limited, a Nigerian miller and pasta producer for US$275 million. Amber Foods, through its 100% owned subsidiary Quintessential Foods Nigeria Limited owns the wheat milling and pasta manufacturing assets of the BUA Group in Nigeria. The BUA Group, a diversified foods and infrastructure business group in Nigeria, is among the top five wheat millers in the country with wheat milling and pasta manufacturing capacities of 3,760 and 700 metric tonnes per day (TPD) respectively. The assets to be acquired include two wheat mills and a pasta manufacturing facility in Lagos, a non-operating mill in Kano in the North of Nigeria, and a wheat mill and a pasta manufacturing plant under construction in Port Harcourt in the Southeast of Nigeria. Olam’s total wheat milling capacity in the country will increase from its current 2,380 TPD to 6,140 TPD once the facilities in Port Harcourt are completed in June 2016, the company noted in a statement. The acquisition will further build on Olam’s capacity in Africa, doubling its total wheat milling capacity in Sub-Saharan Africa to 7,640 tonnes per day, it adds. The company has grown in this platform since 2010 when it acquired Crown Flour Mills (CFM) in Nigeria. Since then, it has expanded its capacity at CFM in 2013 and set up milling operations in Ghana, Senegal and Cameroon. “Nigeria is a high growth milling market with volumes expected to reach 5 million metric tonnes in 2020 as population growth and urbanisation increase the demand for wheat-based products. The size of the Nigerian flour market is in excess of US$2.0

billion, growing at 3.5% per year while the pasta market is growing at the rate of 8.0% per year, the company reveals. Meanwhile, Olam is hunting for more investments in Africa as it looks to benefit from the continent’s increasing appetite for everything from instant noodles to lollipops, reports DealStreet Asia. Long endowed with rich agricultural resources including coffee and cocoa, Africa has a growing middle class that is now demanding more packaged food, according to Olam’s Chief Executive Officer Sunny Verghese. That’s presenting increased opportunities for investment in branded foods, he said. “The risks are slightly higher, but the rewards are better,” Verghese said in an interview in Kuala Lumpur. “It’s a good bet to make.” One of Olam’s key bets in the continent is on branded food, driven by Verghese’s prediction that Africa’s working-age population will overtake China’s in 20 years. Present in 24 countries in sub-Saharan Africa, the agribusiness giant is looking to expand its market share across the continent. Olam’s sales from Africa climbed to US$3 billion in 2014 from US$1.25 billion in 2010. Its packaged food operations in Nigeria, Ghana and South Africa, now have sales of $350 million to $400 million a year from nothing in 2005, when they were started. “Africa in some of these markets is at the cusp of convenience foods,” Verghese said. The rising number of dual-income families where both the husband and wife work is transforming food habits, he said. “Convenience foods for on- the-go consumption (are) increasing. Noodles and pasta are two very good categories where we’ve seen very high growth,” he said. FOODBUSINESSAFRICA.COM


Distell surges, plans to curb Angolan expansion June 8-10, 2016 Kenya school of monetary studies (Ksms), nairobi, Kenya

SOUTH AFRICA - Liquor brands conglomerate Distell reported strong growth in Southern African markets, but the economic hangover from a lower oil price has drastically curtailed expansion plans in Angola. Speaking after the release of its results, Distell CEO Richard Rushton said doubledigit growth for the company’s cider, wine and spirits brands in most Southern African markets had been diluted by challenging trading conditions in Angola. He said business had dropped considerably in Angola in the six months to December. Angola, which has recently faced economic challenges as the crude oil price slipped to close to US$30 per barrel, accounted for 50% of Distell’s African business in the year to end June 2015. Mr Rushton said consequently Distell had decided to scale back plans for a $40m green fields production plant for spirits and ready-to-drink products. The firm would now follow a “more modular” approach to expansion in Angola.

“We planned to build a plant with a production capacity of 400,000 hectolitres with sufficient capacity for five years. Now we will track this back to a 100,000-hectolitre plant with capacity for 18 months, and use the proceeds to reinvest back into the plant. It’s essentially a ‘pay-asyou-go model’.” The rest of Africa, though, remains a key focus for Distell, which generated about 25% of its R12.2bn (US$800 million) interim sales outside SA. The rest of Africa represented about 55% of the total international business. Local revenue was up almost 15% on volume growth of about 13%. The wine segment continued to recover — spurred by a strong performance from 4th Street, which Mr Rushton reckoned was “now by far the country’s biggest-selling wine brand”. He said the spirits division had an improved performance, but there were signs that the brandy market had bottomed – BD Live

Unga Group’s net earnings drop by 21% KENYA - Unga Group’s net profit for the six months to December has dropped 20.6 per cent in the absence of the one-off gain they received in the previous period from the sale of packaging subsidiary BullPak, reports Daily Nation. The flour miller’s half year after-tax earnings stood at Sh327.2 million compared to Sh412.2 million posted in 2015 when it booked a Sh151 million gain from the sale of its 51 per cent stake in Bullpak Limited to UK-based Nampak Holdings. FOODBUSINESSAFRICA.COM

Unga saw its revenue for the period grow nine per cent to Sh10.5 billion, compared to Sh9.65 billion recorded the previous year. The flour miller also announced that it is in the process of incorporating the Ennsvalley Bakery into its business having bought a majority stake from Kenya’s sole inflight caterer NAS Holdings. “Integration of the Ennsvalley Bakery business in the progress with the key focus being to improve production efficiency, to increase plant capacity utilisation and to broaden market presence,” Unga said.

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Ethiopia to import 400,000MT of wheat to cover drought

ETHIOPIA – Drought conditions brought by the El Nino phenomenon have forced Ethiopia to import over 400,000 metric tonnes – in an effort to supply the 10.2 million affected by the drought and in need of immediate food assistance, reports Addis Fortune. However, logistical challenges remain, impacting the country’s ability to deliver adequate grain from the Djibouti port to the main population areas in Addis Ababa. The country has mobilized US$680 million out of the US$1.4 billion to mitigate the impact, with the major share contributed by the government, and the rest by donors.

Dry weather dips Nigeria’s cocoa output by 60%

NIGERIA - Nigeria’s cocoa midcrop output may decline by as much as 60 per cent as prolonged dry weather takes toll on the trees, the Cocoa Association of Nigeria (CAN) has predicted. “The heat wave is so severe now that flowers and buds are falling off cocoa trees in the farms. The 2016 midcrop may drop by about 60 per cent as a result of the ravaging effect of the long harsh Hamattan weather,” President of CAN, Sayina Riman said. Nigeria’s two cocoa harvests include the smaller midcrop from April to June, and the main crop from October to December. The midcrop normally accounts for about 30 per cent of Nigeria’s cocoa output. Nigeria is the world’s fourth largest cocoa producer after Ivory Coast, Ghana and Indonesia, with a governmentestimated output of 350,000 tons in the 2013-14 season. The International Cocoa Organization estimates Nigeria’s output at 240,000 tons for the same period.

IFC funds Insta to boost production

KENYA – Kenyan-based therapeutic foods manufacturer Insta Products is set to receive US13.8 million in funding from the International Finance Corporation (IFC), boosting its production capacity to 25,000 tonnes per year. “The proposed project is a $13.8 million (Sh1.4 billion) refinancing and growth programme to help Insta expand its RUTF production capacity. 18

Emerging Africa will drive beer growth – report Africa’s growth forecast at 5% beats Asia’s 3%, but Asia still dominant in volumes

AFRICA – The African beer market is forecasted to be a major driver for beer volume growth into 2020, with the region anticipated to see an incremental volume increase of over 37,000 hectolitres (3.7m litres) by 2020, a report by research firm Canadean reports. Africa is forecast to register an average growth rate of 5% from 2015 to 2020, higher than Asia’s 3% growth rate, with the region remaining the highest consumer of beer. Latin America and Northern Africa will also be major drivers, growing about 3%, with Western Europe, Australia and North America growing below 1%. “This notable growth will be fostered by the flourishing economic parameters such as increasing GDP growth rates, fast growing urbanization and above all the rising population with a working age demographic set to surpass that of China and India” says Piyumika Jayasena, an analyst at Canadean

South Africa is by far the biggest volume contributor for the region, followed by Nigeria and Angola, while in terms of the per capita consumption Seychelles, Equatorial Guinea and Gabon will take the lead with more than 100 litres by 2020 respectively. The report notes that Zambia is rapidly increasing its consumption volume surpassing Mozambique, Congo (Brazzaville), Ivory Coast, Zimbabwe and Burundi by 2020. Kenya and Ethiopia are also climbing the volume ladder. “The consumption growth in these markets will be stimulated by the consumer migration from home brewed to more commercially brewed beers and consequently towards premium brands. It will further be backed by the booming population in these markets”, adds Jayasena.

Diageo introduces Guinness Africa Special stout NIGERIA – Guinness Nigeria has introduced a new beer into the Nigerian market that brings together Guinness’ roast character that has been blended with African herbs and spices including ginger, lemongrass, vanilla, cola nut and chilli extracts. With an alcohol content of 5% alcohol by volume, Guinness Africa Special Stout is an addition to the company’s Guinness Foreign Extra Stout and Guinness Extra Smooth – introduced in 2005 brands in the country. Nigeria is an important market for Guinness, having been the location for the company’s first

brewery outside the UK and Ireland in the 1960s. “Guinness Africa Special radiates style, smoothness and swag. African through and through, it’s a beer for a new generation, a classic remixed to a different beat. The taste is progressive, created with African herbs and spices in a bid to rethink our bold, bittersweet flavour with dynamism and freshness,” notes the company. Meanwhile, the company has introduced an extension to its Orijin blend line of drinks. Orijin Zero is a non-alcoholic soft drink made from natural herbs and fruit extracts. “Orijin Zero is a brand that is positioned to redefine the experience in the carbonated beverage market to re-awaken consumers to “rethink their soft drink,” the Managing Director, Guinness Nigeria Plc, Peter Ndegwa said at the launch. Orijin Zero is available in bottle and can formats. FOODBUSINESSAFRICA.COM


ADM buys of Moroccan corn wet milling plant

MOROCCO – The Archer Daniels Midland Company (ADM) has announced has acquired from Tate & Lyle a Casablanca, Morocco-based corn wet mill that produces glucose and native starch. “The Morocco plant, which serves both global and regional customers in the food, feed, paper and corrugated board industries, is a great addition to our global sweeteners and starches footprint,” said Chris Cuddy, president of ADM’s Corn Processing business unit.

“The facility is the leading sweetener and starch supplier in a country that should see substantial demand growth in the coming years. It is well positioned to serve Moroccan customers as well as Mediterranean export markets. This also represents an opportunity to help introduce a wider range of ADM food and feed ingredients to the Moroccan market.” The acquisition is subject to regulatory approval and is expected to close within the first half of 2016. The investment adds to ADMs investment in Africa. The company has operations in Johannesburg, South Africa, where it originates and trades grain and oilseeds for the Sub-Saharan region and employs 25 people. It is a leading supplier of domestic and imported wheat, maize, sunflower seed and soybean. Through its subsidiary Golden Peanut & Tree Nuts, the company also is the majority owner of peanut processing plants in Hartswater, Hoopstad and Jan Kempdorp, and is 51 percent owner of pecan processor and marketer GPC Pecan, all in South Africa. In Egypt, ADM operates an office in Cairo where it trades wheat, corn, soy, beet pulp, sunflower and soybean oil, employing nearly 10 people.

June 8-10, 2016 Kenya school of monetary studies (Ksms), nairobi, Kenya

Dangote opens tomato-processing plant, to compete against Chinese imports

NIGERIA – Africa’s richest man, Aliko Dangote, the owner of Nigerian conglomerate, Dangote Group has launched a US$20 million tomato processing facility in Kano state, northern Nigeria, reports Forbes. The new tomato processing plant, which has a daily production capacity of 1,200 metric tones per day, will compete for a share of Nigeria’s lucrative tomato paste market with cheap imports from China. Nigeria imports roughly 300,000 tons of tomato paste from China every year, valued at about $360 million. Dangote’s tomato venture will produce more than 400,000 tons of paste annually, thereby significantly FOODBUSINESSAFRICA.COM

reducing the need for importing the food product. Dangote’s facility will source most of its raw material from farmers in the Kadawa Valley in Kano state and will pay them a guaranteed price of about US$700 per ton of tomatoes compared to an average of less than US$350, which they receive today. Every year Nigerian farmers produce an estimated 1.5 million tons of tomatoes. Of that amount, about 900,000 tons rot, according to information from Nigeria’s Agriculture Ministry. Dangote’s new facility will ensure that very little of the tomatoes farmers produce go to waste.

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Tiger Brands appoints Lawrence Mac Dougall new CEO June 8-10, 2016 Kenya school of monetary studies (Ksms), nairobi, Kenya

SOUTH AFRICA – Diversified manufacturing concern Tiger Brands has appointed a food industry veteran Mr Lawrence Mac Dougall as the new Chief Executive Officer of the company. Mac Dougall joins Tiger Brands from Kraft Foods and Mondelez International where he has been the Regional President. He has extensive FMCG experience of over 25 years in the confectionery, beverages, snacks, groceries and biscuits categories across Africa, the Middle East, Eastern Europe and Russia. He has previously worked as Managing Director of Bromor Foods and Cadbury (Pty) Ltd in South Africa. “I am excited and energised about joining Tiger Brands. Tiger Brands is an

iconic South African business with a strong heritage and great brands that resonate with consumers across many cultures and all income levels. The strength of our brands offers us a distinct competitive advantage that can be leveraged to create value for all stakeholders. I am proud to be leading the Tiger Brands team on this journey as we strengthen our position in the market and contribute positively to the South African economy” said Mac Dougall. Mac Dougall replaces Peter Matlare who left Tiger Brands late last year after the company was forced to withdraw from Nigeria after a short stint in the country’s milling sector, suffering significant losses after the company’s buy out of Dangote Mills went awry. Rising commodity prices brought by the most severe of droughts since 1904 and the South African currency, the Rand’s devaluation of more than 25% in the last year are some of the challenges that Mac Dougall has to contend with when he takes over the helm of the company. He will also be tasked with managing the next phase of Tiger Brands’ expansion into the increasingly important African continent, despite the fiasco from its Nigerian operations.

Starbucks to open in Africa in April

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SOUTH AFRICA - Taste Holdings has announced that the first Starbucks stores in South Africa will be opened in Rosebank and the Mall of Africa in Midrand in late April, reports BD Live The restaurant franchise group in July last year announced that it had signed a licence agreement with the world’s largest coffee chain. SA’s coffee culture has grown as a deluge of artisanal roasteries and niche chains serve up java fixes to a growing market. “In selecting our locations, we received an unprecedented response from landlords and property owners,” Taste Holdings CEO Carlo Gonzaga said. A swathe of global operators including Krispy Kreme, H&M and Forever 21 have set up shop in the country to target brand- and

status-hungry consumers. Taste’s agreement gives it exclusive rights to develop New York Stock Exchangelisted Starbucks outlets across South Africa. It will own and operate the stores directly. The group already holds the licence agreement to develop US brand Domino’s Pizza in the country. The entry of Starbucks into South Africa follows recent heightened entry of fast food companies into Africa, with Krispy Kreme, Dunkin Donuts and Burger King recent entrants into South Africa. With South African entry, the chains have also set their eyes into the rest of Africa, where KFC, Dominos, Subway and Pizza Hut have recently spread their wings in their quest to feed an increasingly affluent continent.

Ghana’s first ethanol plant begins production GHANA - Caltech Ventures, a cassava cropping and processing company in the Ho Municipality, Ghana is to begin the production of cassava-derived ethanol by March this year, the first in Ghana, reports GNA Kasapreko Company Limited an indigenous alcoholic beverage producer,

and a large importer of ethanol, holds 40 per cent shares in Caltech Ventures. Ghana currently imports 60 million litres of ethanol yearly. He said Caltech Ventures is going into a partnership to produce 20 tonnes of starch yearly. FOODBUSINESSAFRICA.COM


ISSN NO: 2412-3366

Is it time to take African fermented milk products more seriously? Recent improvements in formulation and trendy packaging may be what cultured dairy products need to become mainstream

T

raditional fermented milk products are a common sight on the supermarkets and tables of Africa. Made by many communities over the centuries within their homes, many a time letting milk ferment in gourds or similar containers over a number of days, the methods and ingredients used in making these products have been passed on through the generations. Over the years, the emergence of cultured milk processed at industrial level with the use of cultures, mainly plain fermented milk, but occasionally with the addition of sugar or other flavours, has become commonplace in the continent. Known as Maziwa lala in Kenya or maas in Southern Africa, these products have a critical role in the continent’s food scene. The standardization of the process, with the use of cultures, especially Lactobacillus spp and Streptococcus spp have made

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the process predictable and fast, enabling dairies to efficiently produce these products commercially.

Value proposition

Priced at about 70% the price of flavoured yoghurt, cultured milk products provide an affordable, nutritious source of protein and essential minerals and vitamins to the population that are in need of fermented products, considering the high cost of yoghurt in many African countries. These products can offer dairies the best opportunity to increase the volume of fermented products, considering the higher value of yoghurt, especially in Africa, serving an increasing number of consumers in urban areas with critically needed protein. MARCH 2016 | DAIRY BUSINESS AFRICA

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DAIRY TRENDS | TRADITIONAL CULTURED MILK

However, it is fair to say that the dairies have over the years neglected the regular cultured dairy products in favour of the more fanciful yoghurt, spending their dollars and research and development budgets on the higher value yoghurt. But this it seems is beginning to change.

Packaging revolution

Recent developments in Kenya have provided unique insights into the way the dairies are beginning to look at African cultured milk. Are we beginning to see dairies taking traditional fermented milk products seriously? “Traditional fermented dairy products, which in my thinking are not really traditional any more, considering that they are now produced in high capacity dairies with modern equipment, have been neglected for too long by the dairies. May be it is high time the dairies placed more focus on this line of products to boost volume and their incomes. The focus on yoghurt has been good for the dairies, but it’s high time other fermented products were given the focus they deserve,” notes a dairy consultant we interviewed for this article. Long used to being packaged in carton packaging (mainly the Tetra Classic supplied by Tetra Pak) or plastic sachets, maziwa lala is undergoing a revolution, with the major dairies changing their product packaging to reflect consumer needs and tastes. Trendy, convenient high density PET packaging have recently been introduced by Brookside Dairy, the region’s biggest dairy company for its Brookside, Tuzo, Molo and Ilara brands. Not to be left behind, New KCC has also debuted new packaging for its Mala brand. Sameer Agriculture & Livestock has been having its Thick Mala in two convenient packs: a 500 ml high density PET and in cups – which is 22

MARCH 2016 | DAIRY BUSINESS AFRICA

ABOUT AFRICAN FERMENTED PRODUCTS Commonly called maziwa lala (mala) in Kenya, lait caille in a number of French speaking countries, raib in Northern African countries, mabisi or sawa in Zambia, and maas or amasi in a number of Southern African countries, these cultured milk products are well appreciated and accepted by the consumers in these countries. Most of the traditional fermented milk products in Africa were made from cow milk, but occasionally sheep or goat milk may be added or used exclusively. In Somalia, in the production of suusac, camel milk is added, according to the FAO. The process involves the addition of fresh or boiled milk into the container, usually a gourd, and letting the milk rest over 2-3 days before consumption, either with the fat separated out (quite common) or the product is consumed with all the constituents. Lactic acid bacteria and occasionally yeasts are critical in fermenting the product to develop characteristic flavor, taste and colour. Each community had its own way of making the product unique, adding specific leaves, roots and other materials including ash from particular trees and shrubs, ending up with textures and tastes that were unique for that particular community. Usually sour, the product is used as usually used as a snack or meal, either with a starch or after a meal as a refreshing drink. usually used for yoghurt packaging in the region. “For New KCC, Mala (the company’s trade mark, but which is regularly used to refer to maziwa lala in general in Kenya) is an important product, considering that we actually produce more Mala than yoghurt. The recent changes in our packaging is reflective of the focus we have placed on this product category, because we believe that the growth prospects are great in our market,” says Emillie Mugeni, the company’s Quality Assurance Manager. “The rising youth market continues to shape the type of packaging that dairy companies must look at and adopt to meet the needs of this important demographic. To the youth, convenience is a key product attribute – you may have the best product in the most inconvenient packaging, which will be reflected in the product’s poor sales to this group,” notes a plastic packaging supplier whose company serves several dairies in Kenya. “The new packaging that has been adopted by the dairies for maziwa lala is very convenient to the user. They also allow the consumer to drink the product, and close it for later consumption. And thirdly, the design fits very well into the hands of the user compared to the older bottles we used to supply to the dairies, for

say the 1kg pack,” he adds The revolution in packaging that has been witnessed in the country is a welcome move for the industry. “Portable packs enable even the smaller dairies to manufacture maziwa lala, considering that before the emergence of these packs, investments were required in processing and packaging machines,” explains Lawrence Mbithi, Technical Sales Manager for Ingredion Kenya. “This will open up the market and increase the number of producers, increasing the amount of the product in the market,” he notes. So will the new package revolution change completely the packaging environment for this product? “Maybe not. It will take some time before the older consumer gets used to the new pack types. I know several people who believe that maziwa lala in the TC pack is actually better and will not be convinced otherwise. But the new pack could dominate the market within the medium term” says Mbithi. Emillie agrees, “The demand for Mala in TC pack is still strong. But with the technology having been overtaken by recent developments and with lack of adequate spare parts and support for this equipment by the supplier, the new pack types help us to broaden our packaging options. However, we shall not discontinue the TC pack as a company, since we would like to continue serving the market with both pack types to meet various customer needs. “But I have to say that since we DAIRYBUSINESSAFRICA.COM


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introduced the new packaging the market has been very excited with the convenience that the bottles bring, especially to the younger consumers. Young people are now proud to be seen carrying Mala, since the new pack is trendy and fits their product profile.”

Improvement beyond the pack

But will the change in packaging be the ultimate move that lifts traditional African fermented products? “Not really. The entire product has to be improved for consumer acceptance to increase for these products. And we have over the years seen real improvement in the quality of fermented products, which for us has been seen the demand increase for various starches that work on the texture, thereby making the product smoother and thicker, meeting customer needs,” notes Mbithi. “What we have actually done with our product is to incorporate a formulation in the new product to ensure the consumer can be assured of the same textural and sensory quality from day to day. The texture of our product is quite a big improvement from the traditional fermented product that people are used to whenever they make at their homes. With the right quality of milk, proper control of the process and the right ingredients, we have a market-leading product that is very well appreciated by the consumers. From the consumer response we have received, we think we are on the right track,” explains Emillie.

Future formulation opportunities

But what else can be done to improve these products? Usually served as full-fat and full protein, is there an opportunity to improve these products, meeting changing health and wellness needs and cost challenges? “In Africa, the cost of dairy products especially yoghurt remains a major hindrance to their universal adoption by the majority of consumers. Therefore, even for maziwa lala, we must continue to innovate to reduce the cost of production and packaging to reduce consumer prices and increase uptake,” says the consultant we interviewed for this story. DAIRYBUSINESSAFRICA.COM

“Some of these opportunities include reducing fat to say 2.5% and incorporating fat replacers to reduce the cost of the final product. Even the protein side can still be an area of improvement,” he continues. For Brookside, in a marketing blitz including billboards in major towns, the company touts its new products to be smoother and thicker, seeking to pass on the message of critical improvement beyond the new packaging to the consumer. And with the expense involved in the campaign, it seems the company has high confidence that the new products shall change consumer perception, and that the company will recoup its expenses used in the campaign, and give it a leadership position in this product category. For Mbithi, the health and wellness trend will continue to exert influence on the dairy industry in Africa, and apart from reducing costs, dairies should also anticipate changing consumer requirements and formulate lower fat dairy products that meet health and wellness trends. “It is quite telling that a number of traditionally produced cultured used to be low in fat, with various communities using various ways to separate out fat, making the end products healthy options for the consumers,” Mbithi notes. The other are of improvement is the addition of sugar and addition of flavours to maziwa lala, which New KCC has been producing for some years now. “We are quite impressed with the sales of our sweetened flavoured Mala in the market, and it continues to be the only such product

in the region,” says Emillie. “To us the sky is the limit in terms of innovation in this area. We are open to ideas as to the possibilities in improving this product category,” she adds. “I think we must place some important efforts in our innovation efforts around these types of products, just as we have done for yoghurt. We stand to radically improve the quality and volumes of these truly African dairy products, which can change the entire sector. The same innovations around yoghurt can be easily adapted to other fermented products, with impressive results,” adds Mbithi

MARCH 2016 | DAIRY BUSINESS AFRICA

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NEWS | INTERNATIONAL

Coca-Cola India launches RTD flavoured milk VIO Is Coca-Cola serious about milk? Recent activities point to that direction

Coca-Cola India launches its Ready-to-drink flavoured milk offering – VIO in Bangalore. Left to Right – Debabrata Mukherjee, VP – Marketing & Commercial, Coca-Cola India, Sumanta Datta, VP CBO Operations and Customer leadership, Coca-Cola India, Damodar Mall, CEO, Reliance Retail and T. Krishnakumar, CEO, Hindustan Coca-Cola Beverages Pvt Ltd, launching vIO at the Reliance Mart in the Park Square Mall, ITPB, Whitefield, Bangalore

INDIA – Recent moves by Coca-Cola into the dairy sector after its entry into the dairy sector in the US seem to be spreading after Coca-Cola India launched its flavoured milk offering VIO in the country. The company’s entry into dairy in India lays the foundation for its business’s next growth pillar after sparkling, water and juices. Its portfolio currently includes Maaza and Minute Maid juice drinks, Kinley packaged water, Schweppes tonics and mixers, Georgia tea and coffee, FUZE iced tea, and a range of sparkling beverages. VIO flavoured milk has been developed specifically for the Indian palate at Coca-

Cola India’s R&D center in Gurgaon with inputs from the R&D centers in Atlanta and Shanghai. “VIO flavored milk, which has been jointly developed in collaboration with our largest bottling partner, BIG India, adds to our ‘Made in India, Made for India’ range of beverage innovations. This product not only promises long-term business growth, but also leverages our system’s value chain in procuring ingredients and raw materials from the dairy farming community,” said Venkatesh Kini, president, Coca-Cola India and South West Asia. Made from milk sourced from dairy

farmers, VIO has been formulated with a blend of saffron, pistachio and almond flavors in the respective ‘Kesar Treat’ and ‘Almond Delight’ variants. The product contains no preservatives and promises to provide the consumers with wholesome goodness of milk in every drop and will be made available in 200 ml aseptic packaging. Speaking at the launch, Mr. T. Krishnakumar, CEO, Hindustan Coca-Cola Beverages Pvt Ltd said, “Dairy is a category, which is firmly rooted in Indian tradition and enjoyed greatly by consumers since time immemorial, as we venture into this important segment, our intent is to make VIO easily accessible to the consumer. As part of the phased pilot launch, VIO flavored milk will first be made available in the top metros across the country, through modern trade outlets and e-commerce platforms and eventually expanded to traditional trade as well,” he added. The product is being manufactured by the company’s co-packer, Schreiber Dynamix Dairies Pvt. Ltd and will be distributed through the system’s strong distribution network - in different parts of the country. As part of the launch, VIO is first being made available exclusively across 500 Reliance Retail outlets across the country. Coca-Cola’s interest in milk has received a lot of focus in the last few months. The company has entered Brazil’s milk sector when its subsidiary bought Laticínios Verde Campo dairy, a manufacturer of yoghurt, cheese and lactose free milk. It has also entered Nigeria, Africa’s most populous country by acquiring 40% in Chi Limited, a milk and fruit juice maker. In the US, the company invested in Fairlife, a lactose free milk producer.

Mahindra enters dairy sector with ‘Saboro’ brand

A Mahindra company official unveils Saboro

INDIA - Mahindra & Mahindra, better known for its cars, has introduced its milk 24

MARCH 2016 | DAIRY BUSINESS AFRICA

brand made by its Agri Business unit as it seeks to tap into India’s growing dairy market. The company has launched the Saboro brand, which will offer an assortment of products, the first of which is the Saboro pouch milk available in 4 variants - Double Toned Milk, Full Cream Milk, Protein Rich Milk and Cream Rich Milk. The brand Saboro is derived from the Spanish word sabor, which means taste. Ashok Sharma, President & Chief Executive – Agri and Africa and South Asia Operations, Mahindra & Mahindra Ltd. said, “With Saboro, through our unique Farm to

Fork model, we have entered the branded dairy segment with an aim to connect the farmers with the discerning Indian customers who look for dairy products that are fresh and of the highest quality. All our milk variants are specially fortified with Vitamin A and D. We are confident that with Mahindra’s inherent farmer connect and robust quality systems, Saboro will soon become a brand of choice for dairy products.” Mahindra expects to launch a range of fresh dairy products in Madhya Pradesh over the next one year. DAIRYBUSINESSAFRICA.COM


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India dairy market to continue aggressive growth Increasing entry of international players, youthful population and health drive the industry

A Comparison of the Performance of Commercially Available ATP Hygiene Monitoring Systems under Real-World Conditions Introduction ATP (adenosine triphosphate) hygiene monitoring systems are used to provide food producers and processors with an immediate and objective determination of cleaning efficacy. Many facilities rely on them to make important decisions on personnel performance, equipment serviceability, equipment selection and modifications to their Sanitation Standard Operating Procedures (SSOP). Neogen recently commissioned NSF International to conduct a battery of tests to objectively measure five major commercial ATP hygiene monitoring systems. In real-world simulations, each system was tested using four differing approaches to determine their accuracy and consistency.

INDIA – India, the largest producer of milk and dairy products in the World will continue to grow aggressively into 2021, a new research has revealed. According to “India Dairy Products Market By Type, Competition Forecast & Opportunities, 2011-2021”, the market for dairy products is expected to grow 7% CAGR from 2016-2021. The growth, mainly driven by the Northern part of the country, is due to increasing per capita expenditure, rising youth population, introduction of value added dairy products, changing consumption patterns, and growing penetration of international players in the country’s dairy sector. The market is witnessing a shift towards healthier products such as probiotic drinks and yogurts, notes the report. The country has experienced tremendous improvement in per capita availability of milk over the last five years, notes the report. Organized dairy products market in the country is witnessing growth, on account of rising demand for functional dairy products, due to their low fat and cholesterol content. The country is also witnessing entry of large number of international players, offering a variety of non-conventional dairy products such as yogurts and probiotic drinks. However, the unorganized sector, which comprises small farmers, accounts for a majority share in the country’s dairy products market. Domestic players are also increasing their focus on offering products for health conscious consumers and introducing packaging innovations to strengthen their market position. Major players in the dairy products market include Gujarat Cooperative Milk Marketing Federation Ltd., National Dairy Development Board, Karnataka Cooperative Milk Producers Federation Ltd., and Tamil Nadu Co-operative Milk Producers’ Federation Limited, among others.

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Methods Reference Test First, ATP standard solutions were pipetted directly onto sample swabs. The mean RLU output was calculated for 25 replicates on each system. The RLU data generated here was used as a reference for calculating ATP recovery in sections two and three. Recovery Test In section two of this study, ATP standards were deposited over a 10 cm x 10 cm stainless steel surfaces, allowed to dry, and then sampled with the monitoring systems, but this time using a crosshatch pattern like that in a real-world situation. The percent of ATP recovered was determined by comparing the mean response from the surface recovery to the mean response observed in section one. However, because residue is not homogeneously distributed across a surface after cleaning, in section three, ATP was recovered from a concentrated spot randomly located on a 10 cm x 10 cm stainless steel surface. This dot was used to determine the extent and consistency of each system’s ability to locate and accurately identify its presence. Commodity (Orange Juice) Test In section four, orange juice was deposited over a 10 cm x 10 cm stainless steel surface representing a real life situation. This time, all five test systems were used with the cross-hatch swabbing approach. Once again, AccuPoint Advanced had the highest observed percentage recovery of all five monitoring systems. For each of the orange juice dilutions evaluated, the percent recovery of ATP by AccuPoint Advanced was significantly higher than that of the other four ATP monitoring systems. Conclusion and Discussion In conclusion, across all real-world test simulations AccuPoint Advanced appeared to be more consistent and accurate in its detection of the amount of ATP on a surface with its patented flat-head samplers. In a production environment, more accurate and consistent results mean more reliable data. This data can be used to make critical decisions such as whether to continue with a subsequent production run or delay that production until a second cleaning can be performed. Reliable information can also result in the prevention of costly product recalls due to undiscovered contamination issues. For more information or for a copy of the NSF Study, please contact Neogen at +44 (0) 1292 526 093 or email info_emea@neogeneurope.com MARCH 2016 | DAIRY BUSINESS AFRICA

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@walmart

Walmart to open dairy in Indiana, facility to be of the nation’s largest.

US - Walmart, the nation’s largest grocer, has announced plans to establish a milk processing plant in Fort Wayne, Indiana in order to lower the costs of serving a number of mid-Western states including Indiana,

Illionois, Michigan and Ohio. Construction of the more than 250,000-square-foot milk processing plant is anticipated to begin this summer. It is expected to be one of the largest in the

industry, claims Walmart. The highly-efficient plant will leverage the latest technologies to produce the company’s Great Value and Member’s Mark brand white and chocolate milk for more than 600 Walmart stores and Sam’s Club locations in Indiana, Illinois, Michigan, Ohio and Northern Kentucky. Walmart estimates that milk processing will begin in the summer of 2017 and create 200 jobs for the local community. “By operating our own plant and working directly with the dairy supply chain in the Midwest, we’ll further reduce operating costs and pass those savings on to our customers so that they can save money,” said Tony Airoso, senior vice president of sourcing strategy for Walmart U.S. “This facility is an example of how we are always finding efficiencies within the supply chain to deliver everyday low prices and high quality groceries.” Indiana is home to 21 dairy processing plants and 14 farmstead operations. The state ranks No. 14 in the nation in milk production and No. 2 in ice cream production. It accounts for nearly 2% of total U.S. milk production.

Fonterra opens dairy farm in Sri Lanka

SRI LANKA – New Zealand dairy cooperative Fonterra has opened a demonstration and training farm in Sri Lanka. The farm is part of the Co-operative’s

Dairy Development programme, which supports the growth of sustainable dairy industries in key markets where Fonterra operates. Sri Lankan dairy farms are typically small holders, producing around 20 litres of milk per farm per day, with international imports filling the supply gap. “Fonterra and Anchor have a long history in Sri Lanka, and we are committed to supporting the development of the country’s dairy industry. Our work to strengthen the Sri Lankan dairy industry not only helps local dairy communities, it allows us to support the growth of local

dairy consumption and continue building our presence in this key market,” Fonterra Chairman John Wilson said at the launch of the farm. The farm will focus on helping Sri Lankan farmers improve milk quality and run their farming businesses more efficiently and profitably. The demonstration and training farm will train around 2,500 small-holder, subsistence farmers every year, sharing the Co-operative’s world-class dairy farming knowledge through farmer visits, field days, short course training and apprenticeship programmes.

Ornua enters China dairy market CHINA – Irish dairy company Ornua has announced it has acquired the Shanghai based dairy manufacturer, Ambrosia Dairy. Ambrosia supplies dairy products including sour cream, yoghurt and speciality cheeses to the high-end retail and food service markets in the Shanghai region. The acquisition provides Ornua with its first manufacturing base in China, one of the most important global dairy growth markets. The acquisition will significantly increase Ornua’s access to the high-end retail 26

MARCH 2016 | DAIRY BUSINESS AFRICA

market and will provide an entry point into supplying dairy ingredients to the rapidly growing Chinese food service industry. The addition of domestically produced premium cheeses to the Ornua product range will complement the existing range of Kerrygold Irish milk products already on sale in China. The Ambrosia facility will also include a New Product Development centre that will focus on developing cheese products that meet the specific tastes of the Chinese consumer. The Ambrosia acquisition is the latest

in a series of significant investments by Ornua, targeting new routes to market for Irish dairy products. The last 18 months has seen Ornua invest in acquisitions and significant capital expenditure in Africa, Germany, Ireland, Saudi Arabia, Spain, the UK and the US. It comes just weeks after the opening of a new powdered milk packaging factory in Nigeria. The acquisition also meets another key objective of building the Group’s capacity to develop premium dairy products for markets in milk deficit regions. DAIRYBUSINESSAFRICA.COM


NEWS | AFRICAN

bassembasha.com

Danone boosts African investments in North and West Africa

AFRICA – French food and dairy group Danone has boosted its investments in Africa, through strategic moves as it looks

for new sources of growth in Morocco, Algeria, Egypt and West Africa. Following two earlier transactions in 2013 and 2014, Danone acquired an additional 5% equity stake in Centrale Danone in Morocco on December 2015, making it to own 95% of the company’s capital. In West Africa, it increased its equity interest in Fan Milk from 49% to 51%, on February 19, 2016, making it the majority shareholder at the region’s largest dairy enterprise. In Egypt, it acquired the 100-year old Egyptian company Halayeb for Dairy

Products and Juice on February 2016. The company is specialized in fresh cheese, one of the most dynamic segments in the dairy category of this country, and owner of the Hayaleb (Katilo) brand. It also processes hard cheese and juice. These new investments follow the company’s aggressive foray into Africa. In Kenya, Danone has a 40% shareholding at Brookside Dairy, East and Central Africa’s largest dairy company. In Algeria, in June 2015, Danone DjurDjura acquired assets from Algerian company Trèfle, the country’s third largest fresh dairy products player.

Arla commits to invest in Nigerian dairy production NIGERIA – European dairy cooperative Arla has committed to invest in local dairy production in Nigeria and to sharing knowledge about agricultural practices and other aspects of dairy production that will improve the local raw milk production and quality. With this commitment, the company plans to contribute to a sustainable dairy sector development and growth in the country. “In order for Arla to have a long-term successful business in Nigeria, it’s important that we engage in the development of the local dairy sector. The Nigerian government looks very positively on the companies that commit to taking a local responsibility and help create a better balance between imported and locally produced dairy products in the market,” says Steen Hadsbjerg, director of Arla’s regional office

in Sub Saharan Africa. In 2015, Arla made a comprehensive investigation in Nigeria to assess how its increasing business activities in Nigeria impact the local dairy sector and if there are any negative effects on human rights of the local dairy farmers. Arla concluded in its report that the dairy sector in Nigeria is suffering from a number of barriers and that Arla’s presence in the market will be linked to a continuous underdevelopment of the Nigerian dairy sector if looked at in a broader perspective. In order to mitigate potential negative impact in the long run, Arla has decided to engage in the development of the local dairy value chain. In Arla’s new Strategy 2020 the company expects to triple its revenue from consumer sales in Sub-Saharan Africa by 2020. Most of this extra value is expected to come from Nigeria and West Africa,

where the company’s revenue in 2015 hit EUR 75 million (US$84 million)

Equity firm invests in Ethiopian dairy firm ETHIOPIA - Schulze Global Investments (SGI) has invested in local milk processing company, MB Plc, for a 45% share of the company, reports Addis Fortune. Greg Metro, managing director of SGI, decline to give an exact figure on the amount of investment, although sources indicate it could range from three to seven million dollars. MB, founded in 2001 with a capital outlay of 36 million Br (US1.7 million), has a plant at Lebu and another at Kera, where it processes 30,000 litres of milk a day. SGI’s investment will triple that production within a year by expanding the Lebu plant, according to the managing director. There is also a plan to triple the number of employees, which now stands at 133. Robert Kariuki, formerly the General Manager at Kenya’s Kinangop Dairy, has

joined the dairy as the CEO to drive the business forward. Ethiopia’s current milk production has reached 4.1 billion litres, according to the state minister of Industry. The government has formed a new Ministry of Livestock & Fisheries with plans to increase milk production to eight billion litres and to double the number of milk processing companies from 17 to 34 by the end of the second Growth & Transformation Plan (GTP II).

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Clover puts plans for Nigeria and Angola on ice NIGERIA - Dairy products and beverages group Clover has become another statistic of South African companies this year to shelve Nigerian expansion plans due to stringent importregulation and foreign exchange controls that have made operating in Africa’s largest economy difficult, reports BD Live Plans to invest in Angola, the continent’s second-largest producer of oil after Nigeria, would also be put on hold until the situation in the African economies improved, Clover CEO Johann Vorster said. Until then, Clover was to export its products to Nigeria on a cash basis only. The continent’s largest dairy producer has for several years sold its milk, cream cheese and butter products across Africa from the tills of grocers including Shoprite and Massmart. Its products are sold in 16 countries outside South Africa, but it only owns distribution centres in Botswana, Lesotho, Swaziland and Namibia. Since listing on the Johannesburg Stock Exchnage in 2010, the company has repeatedly stated its intention to build production and distribution plants in West Africa to better exploit the growth potential those economies offered before they were hit by the downturn in the oil price. “It’s terrible there,” Mr Vorster in reference to the current operating environment in Nigeria. “We were not able to access currency. We could not buy milk. Packaging was difficult.” In December, Resilient iced its plans to build 10 shopping malls in the continent’s most populated economy as the risks outweighed the returns. Other South African companies to withdraw or slow the pace of expansion included Woolworths and Tiger Brands.

Dairibord targets 10% volume uptick ZIMBABWE – The country’s largest dairy enterprise targets a 10% rise in volumes of milk sold this year, mainly due to planned plant expansions, new product flavours and value offerings, reports The Herald. The company reported a 19% growth in sales volumes in the full year to December 31 2015 to 84 million litres, driven by the beverage products line, which include Pkufo maheu, Aqualite water and Cascade, which contribute 45% of the total volumes. Revenue went up only 4% to US$103 million Looking forward into 2016, the company plans to spend US$6 million on its Chimombe milk packaging investment and expand the maheu plant at Chitungwiza, CEO Anthony Mandiwanza said. Revenue is expected to stagnate as the company plans a price reduction this year, but opportunities are available to grow into the informal markets and brand building to defend and grow volumes, Mandiwanza said. According to the CEO, although subsidiary company Dairibord Malawi has shown improvements in performance, it still remains in the loss situation, and the Board will continue to review the business, taking into consideration its performance and business environment. 28

MARCH 2016 | DAIRY BUSINESS AFRICA

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CAPTAIN OF INDUSTRY

Africa’s milk industry is on the rise Indra Thanacody, CEO Curepipe Dairy, Mauritius

I also see a lot of innovation in packaging and product quality by the dairies. The dairies have placed product presentation in the market seriously. These activities will continue to lay a strong foundation for future growth in the industry

What are the main drivers of consumption of dairy products in Mauritius?

With Mauritius having been a French colony, the French influence is a key driver for the consumption of dairy products in Mauritius. Further, the majority of the population in the country are Hindus, who are also high consumers of dairy products. Both French and Hindu cultures have strong dairy products’ consumption habits that have boosted dairy products’ consumption in Mauritius.

Is the country able to meet its total demand of dairy products?

Not in all the product categories, with imports still playing a critical role in meeting demand. Cheese, mainly processed cheddar cheese, comes in from Australia. But yoghurts and ice cream are mainly made locally by a number of dairies.

What is the future of dairy industry in Mauritius and Africa? Indra Thanacody is the CEO of Mauritian dairy company, Laiterie de Curepipe. He is the Eastern & Southern African Dairy Association Board member since 2004.

How does Mauritius dairy industry compare with Eastern Africa?

Mauritius is not a big milk producer like Kenya but Mauritians enjoy and are good consumers of dairy products, especially yoghurts, dairy desserts, cheese and liquid milk. Taking an example of yoghurt, Mauritius is a better consumer of yoghurt than many African countries. With per capita consumption of 12 kg of yoghurt per year, Mauritius is a good place for yoghurt consumption.

What does your company produce?

Our company produces mainly fruit yoghurt, dairy dessert and a product that resembles thick LALA that is common in Africa. We have also recently started making long life flavoured milk and fruit juices. We also make a broad range of drinking yoghurts and lassi, which are well appreciated by the population. Our fruit yoghurt remains our biggest volume mover in the market.

What are the unique characteristics of the Eastern African market that seem interesting to you?

Am quite impressed with the volume of milk being consumed in Eastern Africa. The increasing volumes and evolving importance of yoghurt in the diets is also encouraging. The variety of yoghurt on the shelves, from fruit to drinking to set yoghurts, is impressive as well. DAIRYBUSINESSAFRICA.COM

The future is very bright in Mauritius, though with a smaller population to serve with our products. But the consumption pattern and volumes per capita are very high in Mauritius compared with most African countries. I think a lot new developments in Africa’s dairy industry are on the way. I wish for better quality milk and better cold chain in most African countries so that the end products can be of better quality too. I have seen the yoghurt consumption culture getting into the rest of Africa – and this bodes well for the dairies in the region

5 GOOD REASONS TO ADVERTISE IN THE FOOD BUSINESS AFRICA • The only technical food & beverage industry magazine in sub- Sahara Africa, outside of South Africa. • Available as a hard copy in 10 African Eastern, Central and Southern African countries, getting into Nigeria and Ghana this year. • Provides well researched industry information and analysis written by professionals in the sector. • Read by key decision makers with direct responsibility for purchasing of equipment, ingredients, chemicals, packaging and other services. • Available in both print and as an e-reader that is available online.

Talk to us on how we can partner to enable your company reach into Africa.

info@foodworldmedia.net MARCH 2016 | DAIRY BUSINESS AFRICA

29


COMPANY | FEATURE

Dairy enterprise with a social cause Laki Laki aims at delivering tasty drink yoghurt to restaurants, camps, schools and food service sector while changing consumer perception of drink yoghurt in the process.

I

t is not easy mixing a social cause with a business enterprise that seeks to grow and be profitable – and hopefully to join the growing list of large dairy manufacturers in Africa in future. This is what Laki Laki Ltd, manufacturers of drink yoghurt by the same name Laki Laki intends to do. The company was founded in 2012 in Thika Town, 40 kilometres from Kenya’s capital Nairobi with the aim of meeting Kenya’s rising needs for good quality yoghurt as a result of increasing urbanization and changing consumer tastes.

Drink yoghurt focus

The company is placing its bet on the rising demand of yoghurt in Kenya and the region to flourish. “Research continues to indicate that drink yoghurt is one of the fastest growing categories of yoghurt worldwide. We believe that the Kenyan consumer will in the long run, with the rising consumer requirement for convenience, consume more drink yoghurt,” Joost Timpers, the 30

MARCH 2016 | DAIRY BUSINESS AFRICA

Chief Executive Officer of Laki Laki Ltd tells us. Timpers is a tall Dutch national who believes in the future of Africa’s dairy sector, and its importance in driving out poverty from the continent. Two partners and some private equity funds own Laki Laki. Available in handy 120ml PET bottles, Laki Laki yoghurt is used on breakfast buffets, as a snack during conferences and for lunches, especially when traveling, for example during game drives. It is available in strawberry, vanilla and mango fruit variants. “We found out that it is really nice to have a nice yoghurt drink on the safari when it is hot. Either in the morning for breakfast or at lunch time,” says the company, which is seeking to provide alternative times during the day to serve yoghurt, from its traditional breakfast schedule. “We designed our Laki Laki yoghurt drinks especially to take your meal on the

road, and it is quite handy for a tourist on safari or for a professional on the way to the office. The Laki Laki bottle is exclusively designed and produced for us, with the Laki Laki logo blown onto the bottle,” explains Timpers. The company serves several high-end hotels, lodges and camps around Nairobi and the country from its operation base in Thika. It also serves a growing base of international schools in the country. The company’s strengths lie in its quality focus and flexibility to meet the needs of the many unique customers that they serve with their yoghurt drinks. “We do not compromise on quality of our ingredients and packaging. In our business we believe in three core attributes: quality, quality, quality. This is our passion and drives our business. We source milk from only one farm, ensuring that our quality is maintained at all times. To beat the big brands we have to stand out with unique, premium quality products. We also focus on natural ingredients. DAIRYBUSINESSAFRICA.COM


“We would have preferred to source all our requirements locally but we have so far failed to get a good source of fruit pulp locally. So we get our natural fruit pulp from Europe. The supplier has a leading position in producing jams and fruit preparations for more than hundred years and is ISO 9001 and HACCP certified,” notes Timpers, with this standing on the company’s way to reduce supply chain challenges that importation of ingredients places on the business, and its quest to be sustainable.

Partnerships matter Joost Timpers (second right) and the company’s Sales Manager (second left) with staff from the Fairmont Hotel in Nairobi, Kenya, one of the company’s customers

“Further, we are quite flexible in the supply of our goods to our customers. We are produce customized products that meet our customers unique needs that has endeared us to them – an area where the big brands find quite difficult to make any compromise on,” emphasizes Timpers.

acceptance of our products in the market,” he says. Going forward, the company is already seeing an increasing need by their consumers for sustainably produced dairy products, following rising concerns on the environment and the community.

“One of the most important achievements we have had has been our break through in changing the paradigm of the hospitality industry that people only like thick yoghurt in cups” The company has a number of aspirations and ensures that all its stakeholders must meet. These include ensuring an uninterrupted supply chain for its milk to ensure customers receive the best quality milk; giving its employees an inspiring work place; giving back 10% of its profit to development projects in its area of operation; and a commitment to take care of its environment.

Getting to know customer needs

According to Timpers, researching and understanding customer needs and wants remain key to their success in the last four years of operation. “We continue to strive to deeply understand the needs of our customers and their own customers. Since we sell our products to businesses that finally sell to the end consumer, we have a unique challenge that asks of us to work with our customers closely so that we also get to know the final consumer’s needs. By knowing what the final consumer wants we have managed to develop dairy concepts together, leading to better customer DAIRYBUSINESSAFRICA.COM

“Innovation is crucial for our growth and sustainability. Our research and development efforts are driven by our consumer demand. We see that our customers like to serve unique products that are sustainable for the planet. Our challenge is to meet these rising demands,” he adds. But the journey has not been without pitfalls. The company has faced a number of challenges, including the continued focus by their customers to serve only thick yoghurt at their facilities “One of the most important achievements we have had has been our break through in changing the paradigm of the hospitality industry that people only like thick yoghurt in cups. This took many years of explaining and doing trials with customers,” he explains To meet the sustainability agenda, the company produces the yoghurt only on order to minimize losses. “We envision having packaging that will be reused again. The used PET bottles are recycled after use, and this provides employment and cares for the environment,” says Timpers.

“From the onset of this project we had a very definite goal: build a dairy enterprise that meets the unique nutritional needs of our consumers and also to contribute to the greater society. That is why we teamed up with Macheo Children’s Centre.” Timpers refers to the partnership that Laki Laki formed right from the onset to source their milk from the children’s centre so as to provide the home with a ready market for its milk, Macheo Children’s Centre was started by Dutch nationals Marnix Huis in ‘t Veld and Maureen Kromowirjo in 2005 to take care of 56 orphaned children from Thika, a growing town not far from Nairobi. As part of its self-sufficiency drive, the Centre runs a dairy farm from which Laki Laki sources its milk. One of our key achievements over the years has been the partnership we have with Macheo Children’s Centre. “We have able to give many orphaned and less fortunate children food and education by generating income for the children home from which we buy our milk from for a premium price,” says Timpers.

The future

The company is upbeat about the dairy industry in Kenya and is seeking to grow its production capacity in 2016 to meet rising demand “We will be shifting to another factory this year. This will enable us get better quality milk, produce more volume and to expand our product portfolio. We are looking at developing fresher, healthier, better quality products once we move to this factory,” he elaborates. What about the company’s CSR program? “CSR is at the heart of our business, not a side activity that makes us look good. The goal of our company is to sustain local NGO’s in Kenya that support less fortunate children,” concludes Timpers MARCH 2016 | DAIRY BUSINESS AFRICA

31


EXECUTIVE INTERVIEW | CHARITY MAGWENZI

Please outline your job position and the key duties you do every day.

I am the Group Research and Development Manager for Dairibord Holdings Limited. Our department is responsible for all R&D activities for the group. I manage a team of food technologists whose work is divided into portfolios. We champion projects that are focussed on revenue growth (through new product development), cost-leadership initiatives (mainly reformulations) and product quality and process improvement. All our work is consumer-focussed/led so we work very closely with the Marketing departments of the SBUs. Because the company recognises the strategic importance of our work my office reports directly to the Group Chief Executive, Mr Anthony Mandiwanza.

How would you describe your job? What makes your job unique according to you? What are the critical attributes one must have to succeed in your job?

I would describe R&D as the ultimate ‘game-changer’ in any industry. We champion innovation. When R&D is well executed it can result in phenomenal growth for a company in terms of revenue and profits. To succeed in my job one must be multiskilled. It is not just about technical skills but a wide range of skills such as Marketing, Project Management, Financial Management and People Management skills. At heart one must be an entrepreneur so that they can recognise opportunities. Passion is essential because it gives one imagination and energy to pursue the goals. In R&D big success stories are often few and far between so the role requires someone who preservers, is an optimist and is self-motivated. It is also important to have good people skills so that you can establish good strategic partnerships with other departments. Talent management is a key skill as you need to be able to motivate a team and rally them to a common cause. It is important to be a good communicator. Without this skill many good ideas may never get a chance to be pursued because you have not ‘sold’ the idea well enough.

What are the main challenges you face in your job regularly or have faced in the recent past?

C

harity is the Group Research and Development Manager for Zimbabwe’s Dairibord Holdings Ltd. She has 19 years’ experience in the food industry, most of which has been in R&D and quality assurance roles. She has worked in various sectors namely bakery, sugar, dairy and the fruit processing industries. She has also worked in Mozambique for a few years. Charity is married with two children and enjoys travelling, playing tennis and watching sports such as Formula 1 and soccer. Academic Qualifications: • BSc. Food Science (Hons) from the University of Pretoria • Diploma in Packaging Technology from the Institute of Packaging (UK) • Diploma in Marketing from LCCI (UK) • HACCP systems developer • Currently studying for an MBA from University of Edinburgh

32

MARCH 2016 | FOOD BUSINESS AFRICA

One of the major challenges in my job is the meeting of shrinking turnaround times. The food industry is one of the most competitive industries in the world. The low barrier to entry means competition is always increasing. So instead of having a couple of years to roll out new products/solutions like a decade ago, now we are often required to roll out projects within 6-12 months. Another major challenge facing the food industry in Zimbabwe and Africa as a whole is how to produce food products that are safe, healthy and affordable. Lower cost ingredients are more often than not the least healthy options.

How did you manage these challenges?

As for meeting shorter deadlines strategic partnerships with suppliers has significantly improved the speed at which we complete projects. We choose suppliers carefully and value longterm relationships with suppliers who can offer us assistance in product development, trouble shooting, and training and provide access to pilot plant facilities where necessary. About the challenge of developing low cost, safe and healthy foodstuffs I think the commercialisation of traditional foods has great potential to achieve this. We are seeing exciting increased FOODBUSINESSAFRICA.COM


demand for traditional foodstuffs of late, such as Mahewu, a fermented maize drink. In 2014 Dairibord launched a Mahewu, which has been well accepted by consumers. Just the other day some colleagues and I were discussing about how insects, which are already part of the diet of many people in Africa, can be commercialised into an affordable source of protein that can be manufactured in an environmentally-sustainable manner.

consuming Dairibord products. Another major strength is our wide distribution network and market presence. Our products are found throughout the country. It would be odd to find any shopkeeper, no matter how small, who is not selling at least one Dairibord product.

“The commercialisation of traditional foods has great potential in Africa. We are seeing exciting increased demand for traditional foodstuffs of late, such as Mahewu, a fermented maize drink”

The future for Dairibord Holdings is very bright as we have some exciting projects that we are working on that should excite consumers and increase shareholder value. As for the Zimbabwean food industry although the macro-economic environment remains a challenge there is still great potential for growth in Zimbabwe and within the region if one can produce safe and quality food products.

Can you list some few recent key achievements you have contributed to your company? How difficult were these tasks, and what have you learnt from solving these problem(s)?

One that deserves mention is the development and launch by Dairibord Holdings of Pfuko Mahewu, a traditional fermented maize beverage. Within 2 years the product has become the market leader in its category and grown the revenue of the group by more than 15%. Another recent success is the fact that we managed to reduce the cost of milk ices (ice-cream sticks) by at least 30% by a combination of reformulation, change in process and backward integration (manufacturing a key ingredient inhouse). With the first project it confirmed that that no matter how good the intrinsic properties of a product are, if the product is not supported with a well-executed marketing campaign it will not achieve its full potential. With this project everything was ‘on point’. With the cost-saving initiative for ice creams it reiterated my belief that for R&D to be successful it requires the active involvement of the whole company.

What would you say are your company’s major strengths in its market?

A key strength of Dairibord is its reputation for being a supplier of safe and healthy food products. Consumers trust Dairibord brands and will not hesitate to buy our yoghurt or beverages, even for their children. We guard this reputation carefully in the choice of ingredients, packaging and processes we use to produce safe and healthy food products. We have endurable brands that have stood the test of time. Many Zimbabweans have grown up

ABOUT DAIRIBORD HOLDINGS • • •

Dairibord Group is a public listed company on the Zimbabwean Stock Exchange. It is the largest dairy company in Zimbabwe. The company manufactures a wide range of food products, a great proportion of which is dairy, and also beverages and non-dairy food products, such as condiments. It is a group of 4 Strategic Business Units, 3 of which are food manufacturers (Dairibord Zimbabwe (Pvt) Ltd, Lyons, and Dairibord Malawi) and the other is a logistics company (NFB Logistics (Pvt) Ltd).

FOODBUSINESSAFRICA.COM

What do you see to be the future of your company and industry?

What do you think are the major drivers of your industry? What makes the industry you are in to be attractive to investors in your country of operation?

I think the major drivers for our industry are cost competitiveness, a wide distribution network and innovation. The volume of imported food products coming into Zimbabwe clearly shows that there is strong demand for food products. The economy is dollarized which presents a very stable operating environment. Some sectors of the local food industry are still dominated by a few players, which presents an opportunity.

What advice would you give younger colleagues who would want to do a job like yours in future?

My advice is that besides having a qualification in Food Science or a related field if you want a successful career in R&D you should pursue qualifications in marketing and business management. You need to have a thirst for knowledge and seize every opportunity to learn about food processing and the food industry because this knowledge will be invaluable for R&D work.

If you were not doing this job, what would you have liked to be?

I could see myself as the Creative Director of an Advertising company. I have great admiration for a well-executed advertising campaign. Like R&D, it is about innovation and creating something unique and consequential

PRESS RELEASES GOT NEWS? We are always on the look-out for news from the food and beverage industry. Send us your latest news and you may just see it on our website or on this magazine:

press@foodworldmedia.net MARCH 2016 | FOOD BUSINESS AFRICA

33


INGREDIENTS APPLICATION | NATURAL COLOURS

Why Natural Colours Matter The use of natural colours in food products continues to make sense

T

he use of colours is as old as food production itself, as consumers tend to identify various foods with a particular colour. Without the right colour, even the best of food will most likely illicit a negative response from the consumer. Chocolate maybe one of the most pleasurable foods, but no one will be satisfied to consume chocolate that is green in colour – which is a colour associated with vegetables and other fresh products. Even chocolate flavoured foods have to be presented in chocolate colour for consumers to accept and consume it without the risk of rejection. The importance of the right colour in the acceptance of food by consumers is a critical attribute to consider by food processors, and with thousands of colours to choose from, and various sources to consider, the most critical attribute these days in the selection of the colour to use is whether to use artificial/synthetic or naturally sourced colours.

Natural colours advantage

Natural colours are extracted from natural sources, including plants, minerals and animals. They include caramel, beet extract, turmeric, grape skin extract, and annatto. From the manufacturers of confectionery, bakery, meat, dairy and beverage products, the use of natural colours adds great benefit to the brand. The use of natural colours can be a good differentiator for food companies in the market place, even where no express legislation exists that prohibits the use of artificial colours, providing manufacturers with the opportunity to have the first mover advantage in the market. “Given the choice, if there are two products on the shelf and one says clearly that it is coloured with a natural colour from a natural fruit or vegetables, and one makes no such claims, the consumer will always go for the more natural product,” Dermot Horan, beverage business development at Chr Hansen told FoodNavigator. Consumer health concerns on the use of artificial colours and the rise of the ‘clean label’ (where consumers want labels with few ingredients that they know) movement has led to a huge change in the type of colours that the food and beverage processor can use. “The results of the Southampton Six study has really accelerated the move toward natural colours in Europe, but other regions are also following suit as the consumer demand for more natural formulations builds and as key producers and retailers look to phase out artificial ingredients,” says Chris Brockman, Senior Global Food and Drink Analyst at research firm Mintel. A Mintel and Leatherhead Food Research report reveals that in 2011, the value of natural colours overtook that of artificial colours globally. Global sales of natural colours amounted to an estimated US$600m, with CAGR of 7%, with a 39% share of t h e total 34

MARCH 2016 | FOOD BUSINESS AFRICA

volume in 2011.New food product launches, a critical path to introduce natural colours by many companies, was 2:1 in favour of natural colours according to the report. It is projected that the food color market is projected to reach US$2.3 billion by 2019

WHAT ARE THE SOUTHAMPTON SIX COLOURS? The debate on the link between food additives and Attention Deficit Hyperactivity Disorder (ADHD) in children has raged on for decades, with some authorities believing that food additives could be the cause of behavioural changes in children. A study by University of Southampton and funded by the Food Standards Agency (FSA) in 2007 suggested that consumption of mixes of certain artificial food colours and the preservative sodium benzoate could be linked to increased hyperactivity in some children. In the study of 300 children aged 3 or 8 years, which was published in the respected journal Lancet, researchers revealed a significant increase in ADHD-type behaviour, including impulsive behaviour and loss of concentration in both age groups. The researchers estimated that 6.6% of children in the UK aged 3 to 12 suffer from ADHD and that figure could be reduced by 30% if additives were banned. While hyperactivity could be caused by other factors including premature birth, genetics and upbringing of the children, the research showed that the mixture of the artificial colours sunset yellow FCF (E110), quinoline yellow (E104), carmoisine (E122), allura red (E129), tartrazine (E102), ponceau 4R (E124) and sodium benzoate could be blamed for the hyperactivity. These colours are common in confectionery, biscuits and soft drinks. According to the FSA, a European Union-wide mandatory warning must be put on any food and drink (except drinks with more than 1.2% alcohol) that contains any of the six colours. The label must carry the warning ‘may have an adverse effect on activity and attention in children’. However the European Food Safety Agency (EFSA) in reviewing the Southampton Six study decided not to change its regulation of the six colours, even as the EU mandated changes in labelling. The Southampton Six study led to significant changes in formulations by major companies, restaurants and food service companies, notes the FSA. However, a number of stakeholders including a number of food companies have continued to question the study and its effects on the consumers.

FOODBUSINESSAFRICA.COM


INGREDIENTS APPLICATION | SOYA

The Powerful, Versatile Soy Soy ingredients lend themselves to thousands of applications in foods and beverages

S

oy products have unique place in the food basket, with associated benefits to heart disease, cancer, diabetes, kidney disease, menopause and osteoporosis, and allergenic reactions. Whether consumed as oils, protein powders or soy milk or other soy products, the utilisation of soy around the World’s kitchens, food factories an restaurants continue to rise due to the unique benefits that soy products provide in direct nutritional, organoleptic and health benefits that are backed by various research projects around the World. In the critical heart health area, the US Food and Drug Administration (FDA) have authorized the use of a health claim about the role of soy protein in reducing the risk of coronary heart disease (CHD) – a very critical determination that has boosted the utilisation of soy, considering the devastating effect that CHD has on the population of developed economies. The soy claim is based on a determination that the consumption of 25 grams of soy a day, as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease by reducing blood cholesterol levels. So, what are the alternatives that can be used to boost soy utilisation at the food processor?

Soy ingredients – a world of versatility

At home, soy is used extensively in making soymilk, edamame, sprouts, miso, natto, okara, soy nuts, tempeh, tofu among other products. Other important products from soy include soy butter, soy cheese, soy yoghurt and soy ice cream. Soy also lends itself to be processed into a number of products that can be used by the food and beverage processor to add value to cereal, dairy, meat, beverage, bakery, confectionary, and other food products.

Soy flour

Soy flour is made from soybeans that are ground into fine flour and is used to boost protein in cereal mixes and baked goods. With about 40% protein, soy flour is a great addition to cereal products FOODBUSINESSAFRICA.COM

not only to boost protein but also to improve the amino acid profile, considering that soy contains all the essential amino acids, including lysine that lacks in cereals. In baked goods, soy flour is used to improve nutritional profile and add critical functionality including improved yield, crust and crumb colour, texture and softness due to the protein and lecithin, an emulsifier that is naturally occurring in soy. Soy flour can also be roasted or extruded and ground into roasted or extruded soy flour for use in cereal products, meat products and some baked goods: these treatments improve the taste and nutritional profile of soy by denaturing the trypsin inhibitors that occur in soy, and are important if the processing of the soy will not undergo further significant heat processing before consumption. Defatted soy flours, in which the fat has been removed almost entirely, has a higher protein of about 50% and can also be used in the same applications above. Another variety, lecithinated soy flour, in which extra lecithin has been added allows the baker to reduce eggs in the formulation, providing cost and nutritional advantages

Soy protein concentrate

Soy protein concentrate is made from defatted soy flakes. With 70% protein and significant presence of dietary fiber, it is bland in flavour and is highly digestible. It is used extensively to boost protein in cereals, meat products and meat alternatives.

Soy protein isolate

Soy protein isolate are the purest source of protein from soy. With 90% protein, the isolates provide a bland, clean source of protein that is used extensively in cereals, meat products, infant food, soy beverages etc. Isolates are highly digestible sources of amino acids that are vital for human growth and maintenance. Recent advances in trait selection and processing of soy isolates have enabled the use of isolated soy protein to fortify clear or acidic beverages with protein, a feat that was quite difficult only a few years back.

Textured soy protein (TSP)

Textured soy protein products are made from soy flour or concentrates through an extrusion process that produces different particle sizes and forms. The products have a chewy texture when consumed, which is usually after a hydration and cooking process. TSP can be flavoured and salted for home consumption or used as meat extenders in the meat industry, where they also contribute to the texture of the meat products.

Soy fibre

Available in three types, okara, soy bran and soy isolate fibre; soy is a good source of high-quality, inexpensive source of dietary fibre. Soy bran is made from the outer cover (bran) of the bean, which are removed during the initial processing. Okara is the pulp fibre product from soymilk processing, while soy isolate fibre is soy protein isolate in a fibrous form

MARCH 2016 | FOOD BUSINESS AFRICA

35


NEWS | SUPPLIER NEWS & INNOVATIONS

Ishida appoints Africa Head to strengthen regional focus

AFRICA – Packaging equipment leader Ishida has appointed a General Manager for Africa as the company seeks to tap into the

increasingly important African market Jeff Say, who has been the General Manager for the Middle East region based in Dubai, will take on extra duties to be in charge of the company’s business in Africa, to support and grow the company’s presence throughout the Middle East and Africa region. Mr Say heads up Ishida’s specialist teams, based in Dubai and Johannesburg, which provide full sales, service and technical back-up for Ishida equipment and installations. Jeff has widespread experience of the packaging industry. Prior to joining Ishida as Sales Manager, Middle East in 2012, he spent 10 years in a number of international

sales roles with Longford International. “Jeff’s promotion is a key part of our strategy to further grow our business throughout the MEA region,” comments Mike Heffernan, Core Business Sales Director. “His experience of both Ishida and the wider machinery market has already been invaluable in the success of our Middle East operations and he will now bring the same expertise to the African countries, supporting our existing customer base, developing bespoke solutions for new installations and identifying opportunities in a number of emerging sectors of the food industry.”

Tetra Pak launches the world’s highest capacity homogenizer SWEDEN - Tetra Pak has announced that the world’s largest capacity food processing homogenizer has gone into operation with its first customer, Chinese food company YinLu. The Tetra Pak Homogenizer 500 can produce up to 63,600 litres per hour, offering outstanding product quality at the lowest operational cost available. The machine features Tetra Pak’s pioneering HD EnergyIQ, a homogenizing device that uses six gaps, rather than one, enabling it to operate at pressures around 20% lower than standard machines, while delivering the same quality end product. The result is a significant reduction in energy consumption, and considerably reduced costs.

In addition, the lower operating pressure means lower wear. C oupled with a design that allows easy service access, the Tetra Pak Homogenizer 500 offers the highest uptime for customers in the market. It also uses 80% less cooling water and 70% less steam compared to many alternative brands, says the company. “Launching the world’s largest capacity homogenizer means that our customers can achieve significant economies of scale, producing more for a lower cost per litre. This is vital for dairy and beverage producers seeking to meet growing consumer demand,” Anders Karlsson, Technical Director, Tetra Pak Group said.

Firmenich inaugurates state-of-the-art plant in Argentina

ARGENTINA – Swiss falvour powerhouse Firmenich has announced the opening of its new, state-of-the-art plant in Buenos Aires, 36

MARCH 2016 | FOOD BUSINESS AFRICA

Argentina The new plant will serve more than 100 customers across 10 markets globally,

significantly increasing Firmenich’s footprint in Argentina and the region. “We have been in Argentina since 1956 and our multi-million dollar investment in this cutting-edge plant, underpins Firmenich’s long-term commitment to our customers in the region to deliver the most innovative, consumer-focused fragrance and flavor solutions in the market,” said Gilbert Ghostine, CEO Firmenich. “Boosting our operating capacity is a fundamental step to helping our customers generate even more value for their consumers, at the right cost and with the right level of service,” said Edson Silva, VP General Services, Finance, Controlling, Latin America.

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Food Business Africa March/April 2016  

Africa's food and beverage industry magazine

Food Business Africa March/April 2016  

Africa's food and beverage industry magazine