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IN THIS ISSUE: BIOFILMS

MANAGEMENT IN FOOD & BEVERAGE INDUSTRY

BEVERAGE TECH TEA: OLD BEVERAGE GETS ITS MOJO BACK STEVIA: NATURAL SWEETENER OF CHOICE

BROOKSIDE DAIRY

CELEBRATING 25 YEARS OF GROWTH, INNOVATIONS & COMMUNITY IMPACT

INVESTMENTS RISE IN FLUID MILK PROCESSING IN AFRICA INDUSTRY FOCUS

BREAKFAST CEREALS IN AFRICA SPECIAL REPORT

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Africa’s Largest Food, Beverage & Milling Industry Conferences & Exhibitions DISCOVER • NETWORK • BE INSPIRED Africa’s food, beverage and milling industry leaders and executives meet at the only series of events that reflect the heart beat of Africa’s industry: AFMASS Conferences & Exhibitions. AFMASS Conferences & Exhibitions bring world class technologies and ideas to Africa’s growing manufacturing, retail and food-service industry, better than any other trade event in the Continent.

Seeking to discover the pulse of Africa? Come on. Discover the Continent’s industry, its people and market trends at an AFMASS event near you.

UPCOMING AFMASS EDITIONS IN AFRICA • AFMASS SOUTHERN AFRICA EDITION: OCTOBER 3-5, 2018, LUSAKA, ZAMBIA • AFMASS EASTERN AFRICA EDITION: MAY 8-10, 2019, NAIROBI, KENYA • AFMASS WESTERN AFRICA EDITION: FEBRUARY 26-28, 2020, LAGOS, NIGERIA

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EASTERN AFRICA WESTERN AFRICA

AFRICA FOOD

MANUFACTURING

& SAFETY SUMMIT

CONFERENCE & EXHIBITION

AFRICA FOOD

MANUFACTURING

& SAFETY SUMMIT

CONFERENCE & EXHIBITION NAIROBI, KENYA • MAY 8-10, 2019

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SAVE THE DATES.

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REGISTRATION OPEN.

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& SAFETY SUMMIT

FOR REGISTRATION & SPONSORSHIP/ EXHIBITION OPPORTUNITIES, LOG ONTO THE WEBSITE OR CONTACT INFO@FOODWORLDMEDIA.NET.

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CONTENTS

INDUSTRY FOCUS:

BREAKFAST CEREALS IN TAKE HOLD IN AFRICA

ARTICLES

DIGITAL MAGAZINES

44

IN THIS ISSUE: BIOFILMS MANAGEMENT IN FOOD & BEVERAGE INDUSTRY

FOOD SAFETY: BIOFILMS MANAGEMENT

BEVERAGE TECH TEA: OLD BEVERAGE GETS ITS MOJO BACK

Why the food & beverage industry must beware of biofilms contamination and proven ways to control biofilms in your plant or facility

SPECIAL REPORT: LAB-GROWN MEAT Laboratory grown meat is on the horizon. And the race is on for the first start-up company to deliver the first commercially viable and meat grown from animal cells. But who will be the regulators of the new technology? 4

(SEPTEMBER/OCTOBER 2018) SPECIAL REPORT: Official

AFMASS Southern Africa Conference & Expo Preview / IAOM Middle East & Africa Meeting

STEVIA: NATURAL SWEETENER OF CHOICE

BROOKSIDE DAIRY

CELEBRATING 25 YEARS OF GROWTH, INNOVATIONS & COMMUNITY IMPACT

INVESTMENTS RISE IN FLUID MILK PROCESSING IN AFRICA BREAKFAST CEREALS IN AFRICA LAB-GROWN MEAT

JULY/AUGUST. 2018 NO. 31

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Zambeef Products

INDUSTRY FOCUS: Wheat Milling Industry in Kenya

A FOODWORLD MEDIA PUBLICATION

You can read this and past issues of this magazine for free on the website www.foodbusinessafrica.com

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COMPANY FOCUS

INDUSTRY FOCUS

SPECIAL REPORT

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IN THE NEXT ISSUE

TECHNICAL ARTICLES: MILLING & BAKING AFRICA:

Ingredients: Flour fortification | Grains sorting FOOD SAFETY: Water quality

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CONTENTS

www.foodbusinessafrica.com Volume 4 Issue 6, No.30 • ISSN 2307-3535 FOUNDER & PUBLISHER Francis Juma EDITORIAL LEADER Maureen Onyango ADVERTISING & SUBSCRIPTION: Jonah Sambai | Lavender Atieno

EDITORIAL 6

It’s time to take a keen look at Zambia

DESIGN & LAYOUT Frank Bett

EVENTS CALENDAR 10

Calender of events - A run down on the key industry events in Africa and the World

EVENT PREVIEW 19

AFMASS Southern Africa edition in Lusaka, Zambia - October 3-5, 2018

NEWS 11

Finalists announced for the Africa Food Industry Excellence Awards

14

Zambia’s food agency increases maize purchasing price after intervention

18

French private equity fund buys stake in Mozambican miller Merec

18

Bosch plans to sell packaging business to focus on other units

32

Fonterra opts for interim CEO after Chairman falls ill

33

Walmart Supermarkets opens its own daiery plant in the US

34

UAE issues new daiey and beverage labelling regulations

37

Coca-Cola launches new clear cola beverage in Japan

37

AB InBev to construct new brewery in Mozambique

SUPPLIER INNOVATIONS & NEWS 25

Chr. Hansen launches new cheese starter culture |

DAIRY BUSINESS AFRICA 29

Investments in Liquid Milk processing rise in Africa

BEVERAGE TECH AFRICA 35

Tea - Old beverage gets a remake

40

Stevia use in beverages increase with growth in global launches

INDUSTRY FOCUS 42

Breakfast Cereals in take hold in Africa

FOOD SAFETY 44 Biofilms: Why the food & beverage industry must beware SPECIAL REPORT 46

Cultured meat products on the horizon

MY FACTORY • MY STORY 50 6

Brookside Dairy Ltd - 25 Years of Growth, Innovations and Community Impact JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

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

SUBSCRIPTION

Email: info@foodworldmedia.net Food Business Africa (ISSN 23073535) is published 6 times a year by FoodWorld Media Ltd. The magazine is distributed for free to food, beverage, milling and foodservice companies and Government regulatory agencies in Africa. The magazine is available through paid subscription for the other stakeholders in the food chain, including suppliers to the sector. Postage is paid at Nairobi, Kenya. Send address changes to FoodWorld Media Ltd by phone or email. Copyright 2018. Reproduction of the whole or any part of the contents without written permission from the editor is prohibited. All information is published in good faith. While care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of any action taken on the basis of information published. FOODBUSINESSAFRICA.COM


PROTECT YOUR PRODUCTS. PROTECT YOUR PROFITS.

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EDITORIAL

It is time to take a closer look at Zambia Zambia and Central-Southern Africa countries economies are on the up; offer huge investment opportunities

T

his October, we shall be hosting the Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Exhibition in Lusaka, Zambia, the first food industry focused event of its type in Zambia and surrounding countries. The choice of Zambia as the next country to host AFMASS events, after Kenya, where we have held the event for the last four years, has been intriguing to some, crazy to others. “Why Zambia?” they ask? Zambia is a unique country. Situated at the centre of 8 countries – Malawi, Angola, Mozambique, Zimbabwe, Botswana, Tanzania, Namibia and the DRC – Zambia is easy to ignore, especially if one throws in South Africa and the other regional giant, Kenya, into the mix. Long ignored by many who have long considered South Africa, Kenya, Nigeria and a few emerging countries, Ethiopia and Ghana as the most potential countries for investment or business in Africa, the stars are shining bright for Zambia and the surrounding countries in the Southern Africa Development Community (SADC) countries. The country’s agriculture, agro-processing and retail industry are on the rise, riding on a wave of increased agricultural production, urbanization and rising incomes, enabling the country to reduce its reliance on mining of copper, which has been the bedrock of the economy for decades. Take maize production for example. Zambia produced a paltry average of 1.1 million tonnes of maize per year between the two decades of 1990 and 2009, a miserly figure considering the country’s abundant water resources, fertile soils and good weather. However, in 2010, the country produced 2.8 million tonnes and has never looked back, producing 3.6 million tonnes in 2017. Agro-processing of maize and other grains including soya is on the up in the country, while new investments in beverages, meat, dairy, oilseeds and other food products continues to rise. Of note is that two companies, Zambeef Products Plc and Trade Kings Group, which have their roots in Zambia have gone regional, not only supplying their products into surrounding countries, but have also set up new business units and plants in other countries in Africa. And many more Zambia-based companies are major players in the regional market, supplying vital grains and food products to neighbouring countries, including into countries in Eastern Africa, Kenya included. Further, from the days when the only mall of note was the still standing Manda Hill, Lusaka and other towns have seen the proliferation of scores of malls to serve the growing population. New investments in hospitality and foodservice industry are also notable. But Zambia is not alone in these aspects. Zimbabwe, to the south of Zambia, is making its return to the international community, after two decades of economic challenges, with vast potential to recover its lost agricultural and manufacturing glory. It will be interesting to see how the country unravels and how investors will react to a new

8

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

JOIN US AT AFMASS SOUTHERN AFRICA EDITION IN LUSAKA, ZAMBIA ON OCTOBER 3-5, 2018 TO DISCOVER THE UNIQUE CHARM OF THE SADC REGION ON AFRICA Zimbabwe as it gets back on its feet. Malawi, to the east, retains its charm, leading the way in agricultural production of tea and cereals, despite its small size. Mozambique’s economy is rising, with new investments by local, regional and international giants, including beer giant AB InBev, which recently announced its plans to build a new brewery there. Angola, peaceful after many decades of war, continues to rebuild, with new investors coming into the food processing space to meet local demand. And the DRC, famous for its never-ending wars, is actually open for business, with many Zambian companies supplying anything from milled maize, soda, water and processed meat products to the country. Botswana retains its cool, with its livestock and other agricultural sectors striving to provide a balance to its rich minerals industry. So, why Zambia? We do think that Zambia and the surrounding SADC countries offer unique business and investment opportunities in Africa. Whether you are a trader, distributor, supplier or manufacturer, if your business is focused on Africa and you have not yet looked keenly at Zambia and the centralsouthern Africa region as one of the places to set your foot in the near future, you are doing your business a great disservice. You can join us at AFMASS Conference & Expo Southern Africa edition in Lusaka, Zambia on October 3-5, 2018, which takes place at the New Government Complex in the middle of Lusaka, to discover the unique charm of this region. In this issue, we have introduced a new insert within the magazine. Focused on the beverage industry, Beverage Tech Africa will appear within the March/April, July/August and November/December issues of the magazine and will bring new insights into the latest trends, technologies and ingredients applications in the soft and alcoholic beverages industry in Africa and beyond. This insert joins our regular inserts Dairy Business Africa and Milling & Baking Africa, which have been running for the last two years and have been well received by the industry. Wish you a good read Francis Juma Founder & Publisher

FOODBUSINESSAFRICA.COM


WORLD IN NUMBERS

CANADA:

Growth in organic revenue reported by the global bioscience company, Chr. Hansen in the first nine months of 2017/18.

Amount offered by Nestle SA for a majority stake in the maker of dog and pet food, Champion Petfoods LP.

US58.2M

UK USA

Investments announced by Heineken in upgrading struggling UK pubs and funding 140 projects

10.9B

Value in cash and stock agreed by Conagra Brands board of directors to acquire all outstanding shares of Pinnacle Foods USA

US$242M

Amount provided by Archer Daniels Midland Company (ADM) for the acquisition of UK based Probiotics International Limited (PIL).

4

USA

US$28.6M

Expansion cost for Kerry’s facility in Rochester, Minnesota meant to increase capacity USA

250.7M

72%

UK

USA

US$3.2B

Value in adjusted operating earnings reported by Cargill for the 2018 fiscal year

US$375M

USA

USA USA

US$12M

Amount invested by General Mills’ venture arm, 301 Inc in GoodBelly’s probiotic manufacturer, NextFoods

US$50M

Second round of funding secured Califia Farms to invest in plant-based, sustainable, innovative, health and wellness brands

Recycling rate for aluminium drink cans in Europe and British Isles in 2017

Transaction value reached to sell J. M. Smucker’s US baking business to Brynwood Partners

Percentage that Roquette has acquired in Sethness Products Company, a global leader in caramel color

US$50M

USA

100%

FRANCE

Second round of funding secured Califia Farms to invest in plant-based, sustainable, innovative, health and wellness brands

50%

Percentage of shares acquired by Royal DSM in personalized nutrition company Mixfit Inc to become the largest shareholder

Value offered by CocaCola Femsa to acquire Montevideo Refrescos (Monresa) from The CocaCola Company USA

9%

EUROPE

US$2B

USA

US$229.3M

Amount in profit realized by US’s leading farmer-owned cooperative, CHS Inc for the third quarter 2018

50%

NIGERIA

Average percentage of recycled content to be used in bottled drinks packaging by the Nigerian Bottling Company by 2030

NIGERIA

US$29M

Amount allocated by the federal government to purchase 10 large integrated rice milling machines by December 20 BOTSWANA

170,000MT

Amount of maize imported annually as a result of low production SOUTH AFRICA

US$44.9B

Amount in South Africa’s food retail sales in 2017 attributed to demand for organic products SOUTH AFRICA

51%

Stake in Nikos Coalgrill Greek chain acquired by steakhouse franchise Spur Corporation

10

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

FOODBUSINESSAFRICA.COM


GERMANY

RUSSIA

100

US$2B

Approximated highest value of investment planned by Cargill in upgrading its grain terminal in Rostov 19

Number of jobs to be lost with the closure of Nestle’s production facility in Ludwigsburg by the end of 2018

25%

SWITZERLAND

Percentage targeted by the Swiss milk processor Emmi Group to reduce its global CO2 emissions by 2020 FRANCE

40%

CHINA

Percentage decrease in sugar content in a new yoghurt variant, YQ launched by Yoplait

NIGERIA

KAZAKHSTAN

US$25M

Investment made by International Finance Corporation (IFC) in increasing capacity in KazFoodProducts LLP

US$34B

Worth of US products including soybeans facing tariffs imposed by China in response to US’s 25% tariff on Chinese goods

500%

Increase in excise duty rates on alcohol announced by government but opposed by stakeholders in the industry RWANDA

US$3.14M

KENYA

Investment made in launching the fourth Agriculture Transformation Strategy (PST4) designed to increase farm productivity

US$3M

Amount invested in Twiga Foods Ltd by International Finance Corporation (IFC) in a series of funding aimed at raising about US$7m TANZANIA

65%

Percentage of the crop export levy remitted to farmers that the government is mulling to scrap ZIMBABWE

40%

Growth in revenue recorded by Delta Corp on increased lager beer sales in the first quarter

SOUTH AFRICA

US$264M

Approximated value of Shoprite shares sold by investor Christo Wiese, reducing his stake from 17% to 11%

FOODBUSINESSAFRICA.COM

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

11


CALENDAR OF EVENTS

August 15 – 17, 2018 China International Organic & Green Food Expo Shanghai, China Focus: Food & Beverage www.organicfood-greenfoodexpo.com

August 20 – 24, 2018 African Dairy Conference & Exhibition Nairobi, Kenya Focus: Dairy www.dairyafrica.com

September 5-8, 2018 WorldFood Istanbul Istanbul, Turkey Focus: Food and beverage products www.worldfood-istanbul.com

September 12-15, 2018 Asia Food Expo Manila, Philippines Focus: Food & Beverage www.afex.com.ph

September 14, 2018 Africa Food Industry Excellence Awards Nairobi, Kenya Focus: Awards www.awards.foodbusinessafrica.com

September 15-20, 2018 Iba Munich Munich, Germany Focus: Bakery, Confectionery & Snacks www.iba.de/en

September 26 – 27, 2018 Food Technology Summit & Expo Mexico City, Mexico Focus: Ingredients & Additives www.foodtechnologysummit.com

September 27 – 29, 2018 World of Food India Mumbai, India Focus: Food Industry www.worldfoodindia.com

October 1-3, 2018 WOP Dubai Dubai, UAE Focus: Perishables www.wop-dubai.com

October 3-5, 2018 Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo – Southern Africa edition Lusaka, Zambia Focus: Food, Beverage and Milling Email: info@foodworldmedia.net www.afmass.com

AFMASS SOUTHERN AFRICA, LUSAKA, ZAMBIA EVENT HIGHLIGHT:

The Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Exhibition Southern Africa edition is here with us. Set to be held at the New Government Complex in Lusaka, Zambia on October 3-5, 2018 it is the first processing, packaging and food safety focused event of its type in the SADC region out of South Africa. It brings together industry leaders, Government regulators, NGOs and suppliers to the industry to discuss the future of the food and agro industry in the region . More information can be found at www.afmass.com

October 14-17, 2018

November 6-8, 2018

PackExpo International Chicago, USA Focus: Packaging www.packexpointernational.com

Gulfood Manufacturing Dubai, UAE Focus: Food & Beverage www.gulfoodmanufacturing.com

October 20 – 23, 2018

November 13-15, 2018

National Frozen & Refrigerated Food Convention San Diego, CA Focus: Frozen & Refrigerated Foods www.nfraconvention.org

BrauBeviale Nuremberg, Germany Focus: Beer www.braubeviale.de/en

October 22 – 25, 2018 29th Annual IAOM MidEast & African conference & Expo Nairobi, Kenya Focus:Grain & Milling www.iaom-mea.com

November 16-18, 2018 China International Fruit & Vegetable Trade Fair Focus: Horticulture www.en.chinafvf.com

November 18-20, 2018

SIAL Paris Focus: Food & Beverage www.sialparis.com

Middle East Organic & Natural Products Expo Dubai, UAE Focus: Organic and natural food products www.naturalproductme.com

October 24-26, 2018

November 28-30, 2018

October 21-25, 2018

Drink Technology India Mumbai, India Focus: Beverages www.drinktechnology-india.com

October 30- November 1 Yummex Middle East Dubai, UAE Focus: Sweets & Snacks www.yummex-me.com

November 5-8, 2018 Aquatech Amsterdam Focus: Water technology www.aquatechtrade.com/amsterdam

Food Ingredients Europe Focus: Food & Beverage www.figlobal.com/fieurope

December 5-7, 2018 Dubai International Coffee & Tea Festival Focus: Coffee & Tea www.coffeeteafest.com

May 8-10, 2019 AFMASS Conference & Expo Eastern Africa edition Visa Oshwal Centre, Nairobi, Kenya Focus: Food, Beverage and Milling Email: info@foodworldmedia.net www.afmass.com

For event listings, contact us at info@foodworldmedia.net for consideration. Terms and conditions apply 12

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

FOODBUSINESSAFRICA.COM


NEWS

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AWARDS

Winners and contestants announced for Africa Food Industry Excellence Awards Some of Eastern & Southern African companies submitted entries for upportunity to be declared the very best

KENYA – The winners of the individual

honorary awards and the contestants for the competitive categories at the Africa Food Industry Excellence Awards 2018 have been announced. The individual winners of the honorary Awards categories are some of the most outstanding investors and industry managers from 6 countries in Eastern and Southern Africa. Almost 60 entries were received from companies in the region.

Some of the most outstanding small, medium and large companies sent their applications to be considered for the opportunity to win in various competitive categories, including the New Plants of the Year, New Products of the Year and Company Initiatives of the Year, which covered Sustainability and Training Initiatives of the Year. Now in its second year, the Africa Food Industry Excellence Awards seek to recognise the most outstanding innovations and excellence in Africa’s food, beverage and milling industry. The Awards ceremony is planned for September 14, 2018 at the Safari Park Hotel in Nairobi, Kenya from 14.00 hours, till late. “We expect a full house at the Awards

INDIVIDUAL AWARDS CATEGORIES WINNERS NAME

COMPANY

ceremony, which will be one of the most important networking platforms this year for all the industry stakeholders in the region. We expect Government officials to join the industry and other stakeholders in an evening of fun and celebration that will not be forgotten for a long time,” says Francis Juma of FoodWorld Media, the organisers of the ceremony. Preceding the Awards ceremony will be a number of panel discussions where the finalist companies in the various categories from the region will discuss some of the market trends, opportunities and challenges they face in their path to excellence. More information about the Awards is availbale on www.awards. foodbusinessafrica.com

NEW PLANT OF THE YEAR CATEGORIES CONTESTANTS COMPANY

DETAIL

HONORARY AFRICA FOOD INDUSTRY CHAMPIONS

DAIRY PLANT OF THE YEAR

Kevin Ashley

Founder, Java Restaurants

Sameer Agriculture & Livestock Ltd New dairy plant in Nakuru, Kenya

Said Salim Bakhresa

Founder & Chairman, Bakhresa Group

New KCC Ltd

Khalid Mohammed

Founder & Group Chairman, Trade Kings Group

SOFT BEVERAGES PLANT OF THE YEAR

Dr. Carl Irwin

Former CEO, Zambeef Products PLC

Coca-Cola Beverages Africa, Kenya

Mustafa Awel

Managing Director, Mullege PLC, Ethiopia

New beverage plant in Nairobi, Kenya

Andrew Rugasira

Founder, Good African Coffee, Uganda

Tropikal Brands Ltd

Jane Karuku

Managing Director, Kenya Breweries Ltd

New bverage plant in Nairobi, Kenya

Lucy Karuga

Founder, Eldoville Dairy

Fairy Bottling, Zambia

Dipam Shah

Managing Director, Glacier Products

New beverage plant in Lusaka, Zambia

Dr. Mohammed El Sahili Founder & Chairman, Fairy Bottling, Zambia OP Narang

Former Resident Director, Agrochemical & Food Company

Gavin Bell

Founder, Kengeles Restaurants

HONORARY MOST INFLUENTIAL FOOD INDUSTRY LEADERS

Expanded dairy plant in Eldoret, Kenya

ALCOHOLIC BEVERAGES PLANT OF THE YEAR East African Breweries Ltd (EABL), Kenya

New beer canning line in Nairobi,Kenya

CHILLED AND FRESH PLANT OF THE YEAR Quality Meat Packers Ltd

New chicken nuggets factory in Nairobi, Kenya

Kenchic Ltd

New chicken processing plant in Thika, Kenya

David Heath

Manufacturing Director, Brookside Dairy

Gaudence Mukolwe

Former Brewer, Tanzania Breweries Ltd

Grace Ngari

Former Quality Assurance Manager, Nestle Kenya

Proctor & Allan EA Ltd

Professor S.K Mbugua

Lecturer, Food Science Nutrition & Technology, University of Nairobi

New breakfast cereals plant in Limuru, Kenya

Africa Improved Foods Ltd

Caroline Outa

Head, Kenya Bureau of Standards (KEBS) Certification

New milled products plant in Kigali, Rwanda

SUGAR AND CONFECTIONERY PLANT OF THE YEAR

Lawrence Lusiola

Former Lead Auditor, SGS Kenya

Glacier Products Ltd

Dr. Jan Low

Principal Researcher, International Potato Center

New chocolate factory in Magana, Kenya

Wrigley’s East Africa Ltd

New sweets Factory in Athi River, Kenya

HONORARY YOUNG ENTREPRENEURS OF THE YEAR Elizabeth Gikebe

Mhogo Foods Ltd

Martin Ssali

Smart Foods Ltd, Uganda

Senai Wolderufael

Feed Green Exports Ltd, Ethiopia

Eric Muthomi

Stawi Foods Ltd

14

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

MILLING PLANT OF THE YEAR

FOODBUSINESSAFRICA.COM


NEW PRODUCT OF THE YEAR CATEGORIES CONTESTANTS CATEGORY OF PRODUCT

COMPANY

DAIRY PRODUCT OF THE YEAR

COMPANY INITIATIVES OF THE YEAR CONTESTANTS COMPANY

DETAIL

SUSTAINABILITY INITIATIVE OF THE YEAR

BIO Yoghurt fruit on the bottom

Bio Foods Ltd

BIO Barista Milk

Bio Foods Ltd

Delamere Fruit Yoghurt

Brookside Dairy Ltd

Fresh Dairy Flavored Yoghurt

Brookside Dairy Ltd, Uganda

Dairy Fresh Yoghurt (Disney pack)

Brookside Dairy Ltd

Dairy Fresh Flavored Milk UHT (Disney pack)

Brookside Dairy Ltd

Dairyland Ice Cream

Glacier Products Ltd

Dairyland Extruded Ice Cream

Glacier Products Ltd

SOFT BEVERAGES PRODUCT OF THE YEAR Schweppes C+ soft drink

Coca-Cola Beverages Africa, Kenya

Minute Maid Fruity Boost with Milk and Nutrients

Coca-Cola Beverages Africa, Kenya

Minute Maid Juice with Fruit Bits Coca-Cola Beverages Africa, Kenya (Orange & Mango) Tunda Fruit Juice UHT pack

Tropikal Brands Ltd

Suntop Juice UHT pack

Bidcoro Africa Ltd

Squishy fruit drink

Squishy Drinks

Club and Club Energy Drink

Highland Mineral Water Ltd

Thunderlight Energy Drink can

Fairy Bottling Ltd, Zambia

East African Breweries Ltd (EABL), Kenya

Energy efficiency improvement program in Nairobi, Kenya

Bio Foods Products Ltd

Lighter PET milk bottle introduction and used bottle return program in and energy efficiency program in Nairobi, Kenya

Fairy Bottling Zambia Ltd

Implementation of the Alliance for Water Stewardship International standard in Lusaka, Zambia

New KCC Ltd

Water, energy and waste management initiative in Dandora plant, Kenya

TRAINING/CAPACITY BUILDING INITIATIVE OF THE YEAR Coca-Cola Beverages Africa, Kenya

Apprentice program at the factory in Nairobi, Kenya

East African Breweries Ltd (EABL), Kenya

Training program at the factory in Nairobi, Kenya

Fairy Bottling, Zambia

Training program at the factory in Lusaka, Zambia

SUPPLIER PROJECT/INITIATIVES OF THE YEAR CONTESTANTS COMPANY

DETAIL

HOT BEVERAGES PRODUCT OF THE YEAR

SUPPLIER PROJECT OF THE YEAR

Attitude teas

Gold Crown Beverages Ltd

Capel Food Ingredients Ltd

Minute Maid Fuze Tea

Coca-Cola Beverages Africa, Kenya

New flavors factory in Nairobi, Kenya

Afribon Ltd

New flavors factory in Kiambu, Kenya

ALCOHOLIC BEVERAGES PRODUCT OF THE YEAR Tusker Cider

East African Breweries Ltd (EABL), Kenya

Zinga Beer

East African Breweries Ltd (EABL), Kenya

Orijin AHS (Spirit)

East African Breweries Ltd (EABL), Kenya

Smirnoff Ice Green Apple Flavor

East African Breweries Ltd (EABL), Kenya

CHILLED AND FRESH PRODUCT OF THE YEAR QMP Chicken Nuggets

Quality Meat Packers Ltd

Aunty Betty’s Ready Meal Rice

Caliber Foods Ltd

MILLED, CEREALS & PULSES PRODUCT OF THE YEAR Amaize Premium Sifted Maize Meal

Capwell Industries Ltd

Amana Rice & Pulses

Unga Holdings Ltd

Ndungo Meals Ready-to-use supplementary food

Prosoya Kenya Ltd

Nootri Family of nutritious flours Africa Improved Foods Ltd, Rwanda Noodies Ugali Noodles with Sukuma wiki

Bidco Africa Ltd

Mhogo Cassava Flour

Mhogo Foods

SUGAR AND CONFECTIONERY PRODUCT OF THE YEAR Dairyland Compound Chocolate

Glacier Products Ltd

Dairyland Chocolart bars

Glacier Products Ltd

SUPPLIER TRAINING INITIATIVE OF THE YEAR Buhler Ltd

Millers training program in Ethiopia

Ingredion Holding LLC

University students training program in Kenya and Uganda

RESEARCH & DEVELOPMENT (R&D) TEAM OF THE YEAR CONTESTANTS COMPANY

DETAIL

RESEARCH & DEVELOPMENT TEAM OF THE YEAR Coca-Cola Beverages Africa, Kenya

New product entries above

East African Breweries Ltd (EABL), Kenya

New product entries above

Brookside Dairy Ltd

New product entries above

Bio Food Products Ltd

New product entries above

Glacier Products Ltd

New product entries above


NEWS COMMODITIES

Zambia’s food agency increases maize purchasing price after intervention

ZAMBIA – The Food Reserve Agency (FRA) of Zambia has increased its maize purchasing price to US$7.00 (KW 70) per 50kg bag for the 2018 crop marketing season, from the previously set US$6.50, following a directive from President Edgar Lungu to revise the price that was announced by FRA Board Chairman Joe Simachela. The Board Chair in a statement reiterated the commitment of the agency to provide a suitable market for small scale farmers as a

way to deliver on the National Strategic Food Reserve. According to him, setting market prices adheres to the principle of holistic consultation of the key stakeholders in the agricultural sector in the crop marketing chain from production to consumption. In its strive to ensure consumer satisfaction, the agency pledged to purchase the maize within the confines of the 2018 budget allocation while mitigating possible risks that may rise to dissatisfaction on the price of the final product, mealie meal. Soya will be purchased at US$13.00 while that of a 40kg of paddy rice will stand at US$7.00. He further noted that FRA prices did not reflect government floor prices thus farmers could negotiate for better prices with other market players buying a larger quantity of the commodity. FRA will enter the market on 1st August 2018. The revision of the price by the state agency follows an outcry across the country by farmers that the US$6.50 per bag was inordinately too low to cover their production

costs, and will interfere with the market forces which should be allowed to set prevailing market prices for key commodities in the country. Farmers had asked for a minimum price of US$8.50 per 50-Kg bag of maize.

ZNFU says ‘no’ to price setting

Reacting to move by the FRA, the Zambia National Farmers Union (ZNFU) ZNFU Board led by its President Mr. Jervis Zimba faulted the move to set a minimum price by the agency. “As a Union that represents all farmers in this country, we have been informed that the issue of producer prices has been left to the whims of market forces. “We refuse to be used to legitimize a price that the Union has had no input in determining hence advise farmers to find better markets and employ prudent ways of selling their maize. The ZNFU also calls on the Ministry of Agriculture to expedite the issuance of Export Permits for the surplus crop so that farmers can find alternative markets,” Mr Zimba said.

REGULATORY

Food and beverage companies, farmers clash on GMO ingredients labelling

USA – The world’s top food companies and

farmers of crops such as beet sugar are pitted against each other as they lobby the U.S. government over plans to label genetically engineered ingredients. Many food companies, most of them members of the lobby group Grocery Manufacturers Association, want the government to require manufacturers to include or label all ingredients that have been genetically modified, commonly known as GMO. But farmers want the labels to exclude ingredients that have been so refined and processed that they no longer contain any trace of the transformed genes when they are used for food. Nestle, the world’s largest food maker, and rivals including Hershey Co and Unilever Plc want the U.S. Department of Agriculture to

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include on the label ingredients from crops that were genetically modified such as canola and soybean oils and sugar from beets. “The law has been very clear that the required disclosure is going to be for those crops or ingredients that contain the genetic material,” said Luther Markwart, head of the American Sugar Beets Association in Washington. The entire U.S. sugar-beet crops is genetically engineered. But food and beverage companies disagree. “Our member companies have an unwavering commitment to meeting consumer demands for more information about the food and beverage products they purchase and consume,” said Dr. Leon Bruner, GMA’s Chief Science Officer. “Consumers expect to know if a product contains an ingredient that was sourced from a bioengineered crop, so it is essential that disclosure of this information be required under a final rule for the National Bioengineered Food Disclosure Standard . . . If consumers do not believe that they are getting the transparency and ingredient information they demand, the repercussions will be felt most directly by the companies that make their food and beverage products.” Influential consumer advocacy group the Center for Science in the Public Interest (CSPI) agrees with the farmers

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

that their finished ingredients are no different scientifically from their non-GMO counterparts, but said the products should still require labelling. GMA also stressed in its comments that USDA’s decision on whether to require the disclosure of refined ingredients derived from bioengineered crops will have a significant impact on the number of products that would be disclosed under the eventual final rule, considering about 90% of the U.S. maize, soybean, and beet sugar crops are bioengineered. As a result, a substantial number of food and beverage products contain refined ingredients that come from these products. GMA estimates that excluding refined ingredients from the scope of the mandatory disclosure standard would result in 78% fewer products being disclosed under the federal law. “Our ability to provide consumers with the information they seek – and in a way that they understand – will build trust in brands, industry and government institutions,” GMA said in its comments. “The ease with which the final regulations enable full disclosure of information to consumers will either support or diminish our ability to engage in a dialogue with consumers about technologies that improve lives, society and the environment.” FOODBUSINESSAFRICA.COM


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NEWS FINANCING

Parliament approves COCOBOD’s US$1.3bn trade finance for cocoa buying

GHANA – A US$1.3 billion trade finance facility between Ghana Cocoa Board (COCOBOD) and a consortium of banks and financial institutions for the purchase of cocoa for the 2018/2019 crop season has been

approved by the Ghanaian Parliament. The facility holds the government of Ghana as the guarantor and was granted on merit that cocoa industry significantly contributes to the economic development of the country, according to GNA. It allows COCOBOD to purchase cocoa beans from farmers through licensed buying companies for the 2018/2019 crop season. Presenting a report to the parliament, Dr Mark Assibey Yeboah, Chairman of the Finance Committee said the sector has played a critical role in employment creation as well as earning foreign exchange for the country. COCOBOD, which purchases, markets and exports cocoa and its products produced

in Ghana is assigned a loan facility to finance the purchase of cocoa and for other payments each year under the 1994 Trade Finance arrangement. The committee discussing the issue reiterated on the need to engage local banks on the consortium rather than borrowing from foreign banks and also called on the government to process more cocoa beans rather than exporting them in its raw form, urging it to look for other markets especially in China. Other issues of concern included pests, diseases and ageing cocoa farmers and need to encourage consumption of locally produced cocoa rather than relying on tea and coffee.

M&A

French equity fund acquires minority stake in Mozambican miller, Merec MOZAMBIQUE – Amethis Fund II, Paris-

based private equity fund has acquired a minority equity stake in Mozambique’s largest integrated grains processor, Merec Industries. In partnership with Proparco and Kibo Fund II, a funding arm of Mauritius based Kibo Capital Partners, Amethis seeks to reinforce Merec’s dominant position in Mozambique and expansion into the region. The investment will support the miller’s strategy to become an integrated multinational packaged food company with a strong focus on exports within the region and the continent. With the investment, the company is looking to launch new categories, build brands, structure local partnerships and make new strategic acquisitions both in Mozambique and in Southern African countries. It says that its expansion over the

region will also be accompanied by product diversification into new higher value products based on wheat, something that will not only expand its global market share but also strengthen its position locally. “Merec is a perfect partner for our first investment in Southern Africa. We believe Amethis is investing at a turning point of Merec’s development. The group, with our support, aims to become a regional platform of wheat based food products through the expansion of its distribution network at a local level and regionally. This transformation will also be supported by continuous innovation in order to diversify the product line,” said JeanSebastien Bergasse, Partner at Amethis. Merec plans to reinforce its leadership position in key product categories, expand its value chain and invest in modern industrial bakery for vertical integration in a drive for

growth. “We look forward to leveraging the deep relationships of our new partners in the region and the operational support they bring to achieve our joint vision,” said Mhamud Charania, Chairman of Merec Industries. Merec Industries, a family owned group has developed a strong footprint in the SADC region after it diversified its portfolio from milling to food FMCG including pasta, biscuit and animal feeds. With operations in some of the country’s cities including Maputo, Beira, Nacala, Socimol and Machava, the company has grown from its humble roots in 1998 to be the biggest player in the country. Merec’s investment was the second for Amethis’ new Fund II and the first in Southern Africa even as Amethis plans to gain a foothold in Africa. The fund also invested in Kenya’s Kenafric Industries in Kenya last year.

INNOVATIONS

Greek yogurt maker Chobani launches its first lower-sugar yoghurt range USA – Chobani, America’s number one Greek Yogurt producer, has launched “Hint Of ” line, its first foray into the growing lowersugar segment of the national yogurt market. The company launched the line in December as a test, with limited distribution in the Northeast, Florida and the Pacific Coast and says the sales went well and now it will be selling it throughout the US by the end of August this year. “Hint Of ” is offered in seven flavors: Madagascar Vanilla & Cinnamon, Wild Blueberry, Monterey Strawberry, Gili Cherry, Alphonso Mango, Clingstone Peach and Willamette Raspberry. It is targeted at people 18

looking for a less sugary, but still tasty, Greek yogurt. Each cup contains 9 grams of sugar — 6 grams less than in regular Chobani yogurt and like regular Chobani yogurt, it is high in protein, with 12 grams in each cup. Peter McGuiness, Chobani’s chief marketing and commercial officer says the company has made the fruit in the “Hint Of ” line slightly more concentrated, allowing it to use less sugar while keeping the fruity taste. McGuiness says the lower-sugar segment of the yogurt market accounts for approximately US$1 billion in sales and is growing rapidly, as overall yogurt sales in the U.S. total about US$8 billion last year.

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

“We think the yogurt market in the U.S. is under-penetrated and has a tremendous amount of growth ahead of it. We look forward to championing that growth,” he added. FOODBUSINESSAFRICA.COM


AFMASS SOUTHERN AFRICA 2018 PREVIEW

AFMASS Southern Africa 2018 edition goes down from October 3, 2018 in Lusaka, Zambia The first edition of AFMASS Conference & Expo Southern Africa is set for Lusaka, Zambia on October 3-5, 2018, with plans underway to host a memorable conference and exhibition. The event, which will the first food industry conference and expo focused on the food, beverage and milling industry in the Southern Africa region, out of South Africa, is set to ‘revolutionise the region’s food and agro supply chain, leaving a lasting impact on the industry’s future,’ according to the organisers. “With surplus grains and other commodities; increasing incomes, urbanization and rising population that is demanding more protein and manufactured goods in the region, the countries in the Southern region have a great opportunity to leap into the future, becoming a major contributor to Africa’s future industrial growth. AFMASS is coming in to catalyse FOODBUSINESSAFRICA.COM

this development in the region’s industry,” he added. AFMASS Southern Africa will be hosted at the New Government Complex Conference Centre at the middle of the city of Lusaka, Zambia. The event takes place on October 3-5, 2018, and will bring together key decision makers from Africa’s food manufacturing, retail and foodservice sectors; Government regulators and other stakeholders to discuss the opportunities, challenges and future trends in the industry in the region and beyond. With 3 days of high-impact conference sessions attended by key top management, technical and operational managers from the region’s food, beverage and milling industry, AFMASS Southern Africa is set to be a game changer in the region’s food and agro supply chain, says Juma. The organisers of event say that it is the perfect opportunity for suppliers of industry

services to showcase their innovations to southern Africa’s food industry players. Further, stakeholders from the entire food industry space, including the milling, grains and animal feed; dairy, beverages and horticulture; meat, poultry and fish; nuts and oilseeds; baking and snacks; and other processed foods from the region will find AFMASS Southern Africa a very useful event for them to discover, network and be inspired to achieve more in their daily operations. Over 2000 stakeholders are expected to visit the 3-day conference and expo from more than 20 countries in Africa. According to the organisers, significant number of attendees has already confirmed to attend the event in Zambia from Zimbabwe, Malawi, Botswana, Angola, Mozambique, Tanzania, South Africa DRC and other countries from Africa and the world. More information about the AFMASS Conferences and Expos can be found at www.afmass.com

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

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NEWS M&A

Bosch plans to sell packaging business to focus on other units

GERMANY – German multinational engineering and electronics company Bosch plans to sell its packaging machinery business (PA), especially the pharmaceuticals and food units divisions, to expand growth in other critical areas of its business, exiting an area that is not have significant ‘relevant synergy effects’ with its

other business lines. The company says that it is certain that its packaging technology operations need to be put on a different footing that will allow them to react more flexibly to the specific requirements of the packaging machinery market. The company also says that it operates in a competitive environment in which the players are small and mediumsized enterprises (SMEs), with significant structural advantages over the company. “This decision will allow Bosch to narrow its focus on issues of importance for its future, such as the transformation of the Bosch Group and its future digitalization strategy, including the internet of things, and to pool its resources accordingly,” said Dr. Stefan Hartung, the Bosch board

of management member responsible for the Energy and Building Technology and Industrial Technology business sectors. “My colleagues in PA executive management and I are confident of future business success. Under new ownership as well, our tried and tested team will continue to provide our customers with excellent manufacturing solutions and services,” said Dr. Stefan König, chairman of the managing board of Robert Bosch Packaging Technology GmbH. The company’s special-purpose machinery manufacturer Robert Bosch Manufacturing Solutions GmbH, which is a separate entity, will remain part of the Bosch Group.

REGULATORY

EFSA urges tightening of pesticide residues in infant food and drinks EUROPE – The European Food Safety Authority (EFSA) has made recommendations to further protect young infants from potential risks posed by pesticide residues in food targeted at those below 4 months. According to the agency, the proposals are part of a comprehensive evaluation of the safety of pesticide residues in foods intended for infants and young children. It has recommended that the maximum levels of certain types of pesticide residues that can be present in foods intended for infants and young children be reviewed. This would

ensure ample protection for infants under 16 weeks even at the very highest possible exposure levels. Specific safe intake levels of pesticide residues for infants below the age of 16 weeks could be established in accordance with the guidance of EFSA’s Scientific Committee. “Advances in our knowledge of child development plus the availability of EFSA’s guidance enabled us to arrive at the conclusion about the higher levels of protection for certain pesticides that are desirable for infants below 16 weeks,” said Gerrit Wolterink, chair of the working group that drafted the

scientific opinion. “The evidence shows that the current protective measures can continue to be applied to infants older than 16 weeks.” The new evaluation was requested by the Commission in the light of advances in knowledge and updates the advice provided in 1997/1998 by the Scientific Committee for Food, which, prior to the establishment of EFSA in 2002, provided the Commission with advice on food safety. EFSA provides independent scientific advice and communicates on existing and emerging risks associated with the food chain in the trade block.

SUSTAINABILITY

Pick n Pay to eliminate single-use plastics with compostable carrier bags

SOUTH AFRICA – One of the largest supermarket chain stores in South Africa Pick n Pay is piloting use of compostable bag at its V&A Waterfront store, with plans to ditch single-use plastic carrier bags from its entire 20

chain in Africa, becoming the first South African retailer to trial compostable bags as an environmentally friendly alternative to plastic bags. During the trial, plastic carrier bags, barrier bags and fruit and vegetable bags have been replaced by compostable bags which are given to customers for free for now. The retailer has also replaced the plastic packaging by using cardboard boxes, which come at a cost to the customer. Pick n Pay chairperson Gareth Ackerman said much progress had been made since 2003 to encourage customers to move away from single-use plastic carrier bags but more needs to be done. “We still have lots of plastic packaging throughout our store,

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

but it’s these seemingly small changes which make a major difference to our environment. It’s not possible to remove plastic entirely at this point, but we’re moving in the right direction and we hope others follow suit,” said Suzanne Ackerman-Berman, director of transformation. The supermarket chain also revealed five target areas in the short term in a commitment to reduce plastic waste including introduction of 100% recycled plastic bags and the phasing out of plastic straws. According to the company, the biodegradable alternative has a similar production cost though the technology required has only recently become available in South Africa. FOODBUSINESSAFRICA.COM


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NEWS REGULATORY

UK government announces new measures to reduce childhood obesity by 2030 New report shows severe obesity cases in the UK at the highest levels since records began

UK – The UK government has announced

new measures aimed at reducing by half childhood obesity rates in the country by 2030, including efforts to prevent stores from displaying unhealthy food at checkouts and to ban the sale of caffeineladen energy drinks to children. Building on the first chapter of the Childhood Obesity Plan, the new measures will also aim to achieve clear, consistent calorie labelling on menus in restaurants, cafés and takeaways. “It is near impossible to shield children from exposure to unhealthy foods. It’s our job to give power to parents to make healthier choices, and to make their life easier in doing so,” said Jeremy Hunt, British Secretary of State for Health. The UK Department of Health and Social Care announced it would consult on introducing new TV and online advertising restrictions to prevent children from being targeted by unhealthy products, and to incentivize companies to reduce the sugar and calories in the products they sell.

“Advertising and promotions underpin the healthy, vibrant and innovative market for food and drink that UK shoppers love,” said Tim Rycroft, of the Food and Drink Federation (FDF) Director of Corporate Affairs, who welcomed the move. Nestlé also highlighted the industry’s voluntary efforts to support the government’s obesity reduction targets and called for further governmentindustry collaboration. “The food industry has been working with government and health organizations for many years, largely on a voluntary basis, to reduce salt, saturated fat and calories in products and help people make healthier choices,” said Stefano Agostini, CEO of Nestle UK & Ireland. The company also said that new technologies that can help tackle obesity, long-term investment by industry, and collaboration between academia, industry and policymakers are still needed. Meanwhile, a recent report from Public Health England (PHE) reported that levels of severe obesity in children aged 10 to 11 years have reached the highest point since records began. An analysis of the National Child Measurement Programme (NCMP) between 2006 to 2007 and 2016 to 2017 detailed trends in severe obesity for the first time, capturing the height and weight of over one million children in reception class (aged 4 to 5 years) and year 6 (aged 10 to 11 years) in school each year. The analysis showed an upward trend of excess weight, obesity and severe obesity in year 6 children; a downward trend of excess weight, overweight, obesity and severe obesity in reception age boys and a downward trend of underweight in reception age boys and

IN NUMBERS

20% SUGAR REDUCTION TARGETS IN THE UK SET BY PUBLIC HEALTH AUTHORITY girls, and year 6 girls. The findings also show stark health inequalities continue to widen, with the prevalence of excess weight, obesity, overweight and severe obesity higher in the most deprived areas compared to the least deprived ones. “The rise in severe obesity and widening health inequalities highlight why bold measures are needed to tackle this threat to our children’s health. These trends are extremely worrying and have been decades in the making – reversing them will not happen overnight,” Dr Alison Tedstone, chief nutritionist at PHE, said. As part of its work to reduce childhood obesity, PHE is working with the food industry to cut 20% of sugar from everyday products by 2020, and 20% of calories by 2024, measures that were announced in 2017. It also helps millions of families to make healthier choices through its Change4Life campaigns, which include the free Food Scanner app that reveals the sugar, fat, salt and calories in popular foods and drinks.

INVESTMENT

Shoprite opens its 25th grocery and food store in Nigeria NIGERIA – South African food and grocery

retailer Shoprite has opened its twentyfifth store in a newly opened shopping mall in Wuse, Abuja saying the new outlet will offer more choices to customers in the region, reported the Vanguard. Shoprite said it continues to give customers lower prices on grocery items as it strives to become the largest food

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retailer in Africa. The new store features a number of in-store fresh food departments including a Meat Market, Bakery and Fresh Fruit & Vegetables, with a range of quality products present. Shoprite entered Nigeria with the opening of its first store in Lagos in December 2005. The retailer which boasts of a wide range of products, high standards

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

of freshness and quality has a strong presence in Southern Nigeria where it has more than seven stores. In pursuit of the growing middle class, it opened its first store in Northern Nigeria in 2014 in Kano City, despite insecurity concerns brought about by Islamist insurgency led by Boko Haram. FOODBUSINESSAFRICA.COM


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FINANCIALS

Dangote Sugar pays shareholders 192% more in dividends NIGERIA – Nigeria’s refined sugar manufacturer Dangote has increased dividend pay out to shareholders by 192% to US$58.38 million, a move that supports its vision of delivering decent returns on investments. The company also announced US$336.38m pay-out on asset acquisitions for the 2017 financial year, while the sugar refinery achieved a group turnover of US$568.28m, a 20.4% increase compared to the same period in the year 2016. “With Profit Before Tax of US$149m, showing 173% increase over the 2016 and profit after tax of US$110.36m, the board has recommended to shareholders

for approval, at this meeting, the payment of a final dividend of US$41.7m, being 125 kobo for the year ended December 31,2017,” said the Chairman of Dangote Sugar Refinery Plc, Alhaji Aliko Dangote. Despite challenges and unfavourable business environment, Dangote said the firm spent US$336.38m on equipment, land acquisition, compensation to land owners, consultancy and related services. “Our priority in the current year is the achievement of our Sugar for Nigeria Project goals and sustenance of our leadership position by improving efficiency and growing our markets,” said the company’s Acting Managing Director/

Chief Executive Officer Dangote Sugar Refinery Plc, Abdullahi Sule. The company also remains focused on leveraging on its strengths to maximise every opportunity to generate sales, increase its market share and create sustainable value for all stakeholders.

SUSTAINABILITY

UK’s aluminium packaging recycling rate increases to 72%

UK – The United Kingdom’s Aluminium

Packaging Recycling Organisation (Alupro) has said that the recycling rate of aluminium both in the British Isles and upon the European continent continues to make significant strides, achieving

and surpassing goals that were set for the practice last year. According to Alupro, the recycling rate for aluminium drink cans continued its upward trend in 2017, increasing by 2 percent over the previous year to 72 percent. The figures obtained by Alupro stated that the number of Packaging Recovery Notes raised last year increased from 90,095 metric tons the year prior to 94,092 metric tons in 2017. A report by the European Aluminium (EA), said the new percentage has surpassed the recently approved EU 2025 recycling target of 65% for all packaging. “We strongly recommend that local authorities together with the waste management chain invest more in innovative

sorting technologies. Fortunately, these investments will pay off quickly, due to the relatively high scrap value of aluminium,” said EA chairman Any Doran. Alupro added that the data reveals that 92 percent of the aluminium packaging collected for recycling in the United Kingdom is processed in Europe, which they say proves that the region possesses easily enough capacity to recycle the entirety of aluminium produced by the U.K. “Aluminium packaging has an intrinsic value. The issue is encouraging consumers to recognise aluminium packaging as an extremely cost-effective material to recycle, through education and effective communications.”

SUSTAINABILITY

McDonald’s to ditch plastic straws in UK and Ireland by 2019 UK - The American fast food company McDonald is set to eliminate plastic straws in some of its markets in Europe including UK and Ireland by 2019 in a way to reduce plastic waste. The fast food giant has also been carrying out trials on paper alternatives to plastic straws in Belgium while seeking to source more of its packaging from recycled sources. “McDonald’s is committed to using our scale for good and working to find sustainable solutions for plastic straws globally,” said Francesca DeBiase 24

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Executive Vice President, Global Supply Chain and Sustainability. “In addition to the exciting news from the UK today, we are testing straw alternatives in other countries to provide the best experience for our customers. We hope this work will support industry-wide change and bring sustainable solutions to scale.” McDonald’s recently announced goals that by 2025, 100% of its guest packaging will come from renewable, recycled, or certified sources with a preference for Forest Stewardship Council certification. FOODBUSINESSAFRICA.COM


NEWS

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MARKET TRENDS

Kerry says cheese consumer demand shifts towards craft and artisan products IRELAND – Kerry Taste & Nutrition, a

leader in global food ingredients, has reported that its consumer demand in the cheese snack category is shifting towards craft and artisan products that are closely linked to real cheese and simple ingredients. The company said that larger and more established brands are losing market share and shelf space to smaller, more artisanal brands. Consumers perceive these brands to be delivering more authentic, premium and innovative snacks, and as a result, Kerry offers an end-to-end solution for manufacturers to remain competitive in European markets. Addressing this shift in consumer demand is an opportunity, but also a challenge, for snack manufacturers, according to the company. Volatility in the cheese market

is generating new layers of complexity in managing prices and sourcing named and provincial cheeses. In addition, creating a natural snack that captures the organoleptic properties of real cheese in an application, and at scale, can be an obstacle. Speaking to FoodIngredientsFirst, Jeremy Pugh, Director – Savoury Snack End-UseMarket at Kerry Taste & Nutrition, said: “Consumers look to dairy snacks for comfort, emotional warmth and authenticity. They will have more perceived health benefits compared to sweeter snacks but need to be delivered in a convenient format. The research highlighted that consumers want more adult dairy snacks (more sophisticated flavor profiles, formats and branding) that they can easily consume on-the-go, to fit into their busy lifestyles. Kerry research shows that 64 percent of

consumers are looking to ignite their love of snacks through new taste experiences. As the world becomes smaller and consumers have been introduced to new flavors and taste profiles, they often expect a taste of the world at home. They want snacks that deliver strong, bold flavors and new and experiential textures.” “I also believe there is a bigger desire from consumers to be informed about what they are putting into their bodies and how their favorite snacks are made. A desire to eat ‘clean’ and simple foods, as well as a mistrust of big business is driving consumers to buy from smaller producers with stories to tell about their products. With this in mind, artisan brands are better positioned to reassure today’s consumers.”

INNOVATIONS

Ingredion launches nature-based plating agent that transforms liquids into powders ASIA – The US based ingredients maker

Ingredion has launched a high-capacity, nature based plating agent that allows manufacturers transform a variety of both oil and water-soluble liquids into powdered ingredients. Developed by Ingredion scientists in their Idea Labs, N-ZORBIT 2144 is a unique, porous structure that increases the surface area exposed to liquids, facilitating absorption that allows production in an economic and cost-effective way. The ingredient can be used to carry high-flavor concentrations that flow freely through processing equipment and mix evenly into food and beverage recipes.

“Creating today’s on-trend foods and beverages means using a wide assortment of spices, seasonings, flavors and actives,” said Donna Brooks, Director, Global Business Development, Delivery Systems at Ingredion. The new ingredient offers high capacity as well as cost-effective synergies as it delivers the same amount of flavor with less use of a carrier, unlocking new application opportunities for manufacturers. “With the launch of N-ZORBIT 2144 plating agent we can unlock new application opportunities for manufacturers,” said Lilian Tan, Marketing Manager, Texture and Delivery Systems, Asia Pacific.

INNOVATIONS

Tetra Pak and Yili launch the first drinking yoghurt with large fruit and cereal pieces CHINA – The multinational food manufacturing and packaging company Tetra Pak has announced that it has helped Yili, a leading Chinese dairy manufacturer, to produce the world’s first drinking yoghurt with large fruit and cereal pieces. Yili launched the breakthrough product in Tetra Top 200ml with large re-sealable screw caps, gaining immediate popularity in the fast-growing ambient yoghurt category. “The new Tetra Pak TT/3 AD filling system has been designed to allow the particles to pass through seamlessly, and 26

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the new Tetra Top package uses a large re-sealable opening that makes it easy for consumers to drink the yoghurt with large fruit pieces,” said Charles Brand, Executive VP, Product Management and Commercial Operations at Tetra Pak. The global market for ambient drinking yoghurt is around 12.5 billion packages today, with quick expansion from China to South East Asia and the Middle East. The addition of large fruit pieces and cereal grains will further increase consumer interest with more premium products. FOODBUSINESSAFRICA.COM


SUPPLIER NEWS & INNOVATIONS INNOVATIONS

Chr. Hansen launches new cheese starter for soft cheese

DENMARK – Global bioscience company Chr. Hansen has launched a new cheese

starter that helps cheesemakers to produce soft cheese that maintains the desired taste and texture. Chr. Hansen said that the new extension to the DVS SSC series is the latest addition to its soft cheese starter culture range, consisting of four cultures and designed to create soft cheese with a mild flavor and a creamy mouthfeel. Soft cheeses offer wide diversity in visual appearance and taste that can be achieved when starter cultures are combined with surface ripening cultures. “Consumers are becoming increasingly driven by visually appealing products. With soft cheese, there is such potential to boost

and vary the aesthetics,” said Jens Skytte Soerensen, Commercial Development Manager for soft cheese at Chr. Hansen. The system comprises of multiple strains in each culture and four cultures for rotation, which secures the right level of dry matter, stable end-pH and strong phage robustness. “The delicious creamy texture that consumers love is achieved by unique acidification properties and the slight formation of exopolysaccharides,” said Jens Skytte Soerensen. “So, it’s a science as well as true craftmanship that creates the perfect soft cheese.”

INNOVATIONS

DSM launches new cheese ripening enzyme for clean label dairy

NETHERLANDS – The global active health and nutrition company DSM has launched a benzoate-free cheese ripening enzyme, accelerating their clean label strategy through an innovative choice of ingredients. The new ingredient, Accelerzyme CPG, allows cheese makers to respond to growing

consumer demand for dairy products with a clean and clear label. DSM is upgrading its entire cheese enzyme portfolio in response to this need, employing innovative production technology and changing the formulation matrixes of these products to eliminate the need for benzoate-based preservation. Accelerzyme CPG is a unique carboxypeptidase cheese ripening enzyme that accelerates balanced flavor formation in a variety of different cheese types. It causes small peptides and amino acids in milk to release faster during the ripening process, converting these to flavor components

by the added cheese cultures, resulting in a faster ripening time, and a smaller environmental footprint. “Today’s cheese manufacturers face multiple challenges – to continually increase cheese quality, while optimizing whey value and producing their products in an efficient, sustainable way,” said Evandro Oliveira de Souza, Global Business Lead for Cheese at DSM Food Specialties. It is an addition to DSM’s portfolio of benzoate-free cheese enzymes including Maxiren XDS, Fromase, a microbial coagulant (endopeptidase) preparation, and a portfolio of lipases.

INVESTMENT

DuPont to open a new innovation site in Japan to serve region JAPAN – DuPont Nutrition & Health, an

American conglomerate, will open a new innovation site in Japan later this summer to serve customers primarily in the bakery, beverage and dairy industries. Located in the Kanagawa Prefecture, the 700-square-metre facility will provide solutions for the company’s Japan- and Korea-based clients. According to the company, the site’s bakery lab will feature equipment for making various breads and rolls, steamed cakes and doughnuts. The dairy area will have the capability to make various types of yogurts, fermented drinks, beverages and ice creams, while in the micro-testing

FOODBUSINESSAFRICA.COM

lab, stability tests can be conducted on the enumeration of probiotics with prototypes of customers’ products formulated with strains from DuPont Danisco. In the dry blend lab, customised system blends can be created with a granulator, compressed tablet machine and revolving pan. “This innovation centre is designed to give our customers a deeper involvement in the development process, which will help us deliver the exact solutions they’re pursuing in a much shorter time span. The face-to-face interaction will help us improve relationships with our customers and provide them with the full benefits of DuPont’s cross-functional solutions and

our complete range of ingredients,” said Kobus de Klerk, global innovation leader of DuPont Nutrition & Health. DuPont said the facility will allow customers to work directly with its scientists to develop solutions using its product range of customised system blends and dietary supplements to meet the changing needs of their local markets. “While this facility gives us incredible innovation potential, the real focus is on our customers and delivering solutions to solve the market challenges they face,” said Nobuaki Tsukagoshi, Japan sales leader of DuPont Nutrition & Health.

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

27


NEWS MARKET TRENDS

Plant-based food sales grow 20% in the US as adoption takes hold Food industry majors including Danone, Unilever and Nestle zero in to take advantage of rising demand USA - The plant-based foods industry is seeing tremendous growth, with sales up 20% in dollar value in the last year from 8% the year before, outpacing the total food industry growth, which recorded 2% within the same time, revealing the fast pace consumers are turning these once niche products to the mainstream. According to a report from the Plant-based Foods Association (PBFA) commissioned from Nielsen, a leading retail data company, plant-based food sales topped US$3.3 billion over the past year, with the growth of plant-based foods sales more than doubling in the year. This reflects the major changes in consumer perception of these products in the last few years. According to a recent research by HealthFocus shows 60% of consumers are reducing their meat intake - and a massive 17% of 15-70 year olds follow a 'predominantly' plant-based diet, though these people don't necessarily label themselves as vegan or even vegetarian. Christie Lagally, Senior Scientist at the Good Food Institute, the USbased non-profit organisation, claims that growing awareness of health and nutrition, and increasing concern about the environmental footprint of agriculture and

IN NUMBERS

$3.3B

SALES OF PLANT-BASED FOODS IN THE US IN 2017, UP 20% IN THE YEAR food production, is prompting consumers to look for plant-based proteins rather than traditional animal-based protein sources such as meat and dairy. There is also evidence that once consumers start to eat more plant-based foods, they tend to stick with the new habit. HealthFocus research shows that 55%of people who start eating a more plant-based diet say they plan to stick 28

Growth of plant based alternatives by category* Category

US$

Growth

Milk

$1.6B

9%

Meat

$670M

24%

Other Dairy $697M (combined)

50%

Ice cream

$222M

38%

Yogurt

$222M

55%

Cheese

$162M

43%

Cream

$124M

131%

Butter

$109M

23%

Dressings

$68M

32%

Meals

$12M

28%

Tofu/Temper

$108M

11%

Egg/Mayo

$42M

16%

TOTAL

$3.3B

20%

with it permanently - and an additional 22 per cent say they 'hope the change is a permanent one'. “The plant-based foods industry has gone from being a relatively niche market to fully mainstream,” said Michele Simon, executive director of the PBFA. “Plantbased meat and dairy alternatives are not just for vegetarians or vegans anymore; now even mainstream consumers are enjoying these delicious and innovative options in the market today,” she added. Plant-based dairy alternatives are an explosive-growing category, with 50% growth, with plant-based milk products now representing 15% of the total milk market, according to the report. This category includes plant-based cheeses, creamers, butter, yogurts, and ice creams, but not plant-based milk. PBFA notes that in particular, sales of three plant-based dairy alternatives are growing at particularly very rates: cheeses grew an impressive 43%, with US$124 million in sales, yogurts grew 55% with sales at US$162 million, while

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

SALES OF PLANT-BASED MILK WAS UP 9% TO US$1.6 BILLION. PLANTBASED MILK CONSTITUTES 13% OF TOTAL MILK SALES IN THE COUNTRY. that of creamers grew 131% over the year. Sales of plant-based milk category was up 9%, compared to 3% the previous year, and comprise about half the total dollar volume, at US$1.6 billion, while cow’s milk dollar sales were down 6%. Plant-based milk comprises 13% of total milk sales. Other categories of the industry have also shown resilient growth: plant-based meats grew 24%, compared to 6% the previous year, topping US$670 million in sales; meals rose 28%, tempeh/tofu 11% and egg/mayo went up 16%. “The plant-based food industry is booming. This is exciting news for a growing industry and the millions of consumers who are enjoying the wide-variety of great-tasting plant-based foods. And these foods are not just for vegetarians or vegans anymore; now mainstream consumers are also enjoying these delicious and innovative options,” notes the PBFA. “The new data confirms what we are hearing and seeing every day from our members: sales are up, investment is increasing, and new jobs are being created in the plant-based foods industry,” said Simon. “It is important that regulators and legislators treat our industry fairly and the playing field for plant-based foods is level and fair at the state and national levels.” Some of the food majors have either invested or acquired smaller companies in the plant-based space to take advantage of the rise in popularity of these products. Recent investments include Unilever’s acquisition of Growing Roots brand of snacks, Danone’s buy of the largest American producer of plant-based dairy alternatives producer WhiteWave and Nestle’s acquisition of Sweet Earth, a fastgrowing Californian plant based producer fit into this pattern.

FOODBUSINESSAFRICA.COM


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

Investments in Liquid Milk processing rise in Africa

T

he dairy industry in Africa is at a critical juncture in its development. The dairy industry went through periods of rebirth in the 1990s, when formerly state-owned enterprises gave way to private sector players to join the sector at the advent of privatization. Out of these earlier openings of the sector, a number of countries in Africa saw the arrival of new entrants into the sector, boosting the sector’s fortunes, and thereby creating a vibrant dairy sector that has continued to thrive into the 21st Century. The contribution of liquid milk, be it fresh or long life, has been a major factor in increasing milk processing, and with it milk production, in the continent.

New wind of change in Africa

Liquid milk products are consumed across Africa daily by millions of consumers, be it as a whitener of various beverages including tea and coffee, or as a direct refreshing drink to cool down the scorching sun. A positive perception on milk, regarded as a good source of nutrition in many countries in the region, places liquid milk at a significant advantage. JULY/AUGUST. 2018 NO. 31 FOODBUSINESSAFRICA.COM

Investments in the dairy value chain, be they in milk collection centre infrastructure or processing plants, are tried and tested ways to mop the milk produced by thousands of farmers in the region and enable its conversion into value added fresh and long life products that can then be consumed within the continent and beyond. Recent developments in several African countries are notable for their impact on building the capacity of a milk value chain that will in the long run place Africa at a good position to manage current production while improving milk production at the farming level, which has often been negatively impacted by poor supply chain infrastructure and lack of markets for the little milk produced in many countries. From Nigeria, Uganda, Tanzania, Ethiopia, Kenya and Zambia, investors are voting with their pockets by putting more in the processing of liquid milk products, even in countries that have not been known as milk producing or consuming countries. This is borne by the fact that Africa still imports over US$500 million of milk products every year from outside its borders,

despite having over 10% of the world’s livestock herd, while producing only 3% of the world’s total milk production.

Processors come on board

Zambia, a land blessed with abundant rainfall and tropical climate, but where only 65 million litres of milk is processed a year despite an installed capacity of 180 million litres per year, is one of the countries with the most potential for dairy farming and processing in Africa. The country is probably not on the majority’s radar when it comes to milk production and processing. This has not dampened the interest of local dairy companies to up their processing of milk in the country in the last few years, which for a long time has relied on processed milk imported mainly from South Africa and from the only local processor, Parmalat. A walk through the many malls that dot the capital city Lusaka shows the sprouting of new milk brands in the country, led by Parmalat, which has been present in the country for decades as the only milk processor. Parmalat is no longer sitting pretty, having been joined in the milk business by Varun Beverages, Trade Kings,

WWW.FOODBUSINESSAFRICA.COM JULY/AUGUST A FOODWORLD MEDIA PUBLICATION 2018 | FOOD BUSINESS AFRICA 29


Zammilk (part of Zambeef Products), Finta Farms among other smaller players. Varun Beverages not long ago introduced long life UHT milk products from its Creambell brand into Zambia. Dairy Gold, part of the Trade Kings Group, Zambia’s largest FMCG company, this year added the milk category to its traditional maheu product line by introducing Twin Cows long life milk brand to the country. Made from milk powder, the product is widely available across Zambia, with plans to distribute to neighbouring countries. Finta Farms is also the latest entrant into the liquid milk market in Zambia through its Finta milk brand. Uganda stands out for dairy sector investments in the Eastern Africa region in the past 10 years, and has continued to improve its dairy sector every year. The Dairy Development Authority of Uganda estimates that the value of investments in Uganda reached US$80 million by the end of 2016, with the value of processed milk products hitting US$700 million by the end of 2016, from US$500 million just a year earlier. Since then, more investments have flown into Uganda’s dairy sector. Last year, a new processor joined the fray. Vital Timosi’s Dairy, a joint venture between an Israeli private equity fund and a Ugandan farming enterprise put up a 50,000 litres dairy plant in Western Uganda, producing both fresh and UHT milk, which are the bulk of its production. The company’s Milkman brand has joined the industry leaders including Jesa, Brookside Dairy Uganda (acquired from Sameer Agriculture & Livestock), GBK, Mega, Pearl Dairy (makers of the Lato brand that has gone regional), Rainbow, among others who mainly produce fresh or UHT milk products. The success of Uganda’s investment in the dairy sector is already having an impact on the wider Eastern Africa region, with UHT milk products from the country widely available in many small towns and cities in Kenya, Tanzania, Rwanda, South Sudan, Burundi and the DRC, upsetting local players in those countries with their lower prices. Lato milk, from Pearl Dairy which is located in Mbarara, Western Uganda, stands out for its strong branding, aggressive marketing and wide availability in these countries. Regional giant Kenya, despite stagnant milk output in the last few years, has seen one of the largest investments in liquid milk processing in recent times. Sameer Agriculture & Livestock Ltd (SALL) has 30

invested US$50 million in a new milk processing plant in Nakuru, Kenya with new processing and packaging technology that debuts the first aseptic bottle packaging in the region. With capacity to produce 30,000 bottles per hour according to the company, the new plant has revolutionized the packaging of long life milk in Kenya and the region. New KCC, Kenya’s oldest dairy plant also commissioned its expanded UHT milk plant in its factory in Eldoret in Western Kenya and in Nairobi. The Eldoret plant, put up at KSh 500 million (US$5 million), can process and pack more than 100,000 litres per day, with an automated packaging line. The company says that the expansion is meant to meet rising demand for long life milk products in the country. Despite having some of the highest livestock numbers in Africa, two Eastern Africa countries, Ethiopia and Tanzania have lagged behind in turning their livestock numbers into viable milk production and processing hubs. In Tanzania, milk consumption is on the rise, despite the country’s population preferring the utilization of milk powder to whiten their beverages. Rising urbanization and incomes and investments in liquid milk is increasingly introducing Tanzanians to packaged milk consumption. Diversified group Bakhresa has invested over the last few years in a new 180,000 litres per day UHT milk plant in the island of Zanzibar, utilizing milk powder as the raw material, to meet the local demand for milk, joining Tanga Fresh Dairy that collects milk from its cooperative farmers and had been the only major liquid milk processor in the country, with an installed capacity of 60,000 litres per day. In Ethiopia, this year’s investment by leading Dutch dairy FrieslandCampina in Holland Dairy, the leading fresh and UHT milk producer is planned to improve the capacity of the small scale dairy to produce more liquid milk and fermented products. But Holland Dairy is not alone. The country has a long list of small players including Etete Dairy, Lame Dairy, MB PLC (where American private equity fund Schultze acquired a 45% stake in 2016) and many others which have introduced liquid milk product lines in the country in the last few years. A look at the retail shelves in Ethiopia show the significant change in the availability and variety of liquid milk and other dairy products, offering a glimpse that the future of the dairy sector will be better and more competitive. However, the largest potential for

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

the milk sector remains Nigeria, the country with the largest population in the continent. A recent announcement by FrieslandCampina, the country’s largest milk processor that it will be investing US$12.7 million in a ready-to-drink milk product made from 100% locally-sourced milk, will add new impetus to its goal of sourcing 10% of its milk demand from local sources. The company’s Peak and Three Crowns milk brands provide abundance potential to grow the country’s local milk production away from imports.

Packaging formats diversify

While its is worth noting the contribution of carton UHT packaging to the growth of liquid milk in Africa, new packaging formats are beginning to offer consumer convenience and cost advantages, driving the dairy industry towards providing milk in other formats as well to meet new consumer needs and trends. Plastic bottle packaging has become a new packaging format adopted by dairies in the region. In Kenya, Bio Food Products’ adoption of light PET bottles for its long life milk products and SALL Dairies’ introduction of aseptic plastic bottle packaging for its range of long life milk products indicate the processors’ plan to meet the consumers need for convenient packaging in the country. However, the recent accelerated adoption of the pillow-pack type Tetra Fino and the extended shelf life plastics packaging have not only offered significant relief to consumers for their lower prices, hence enabling the adoption of longer life products by more consumers, but has enabled the dairies to launch new products in the liquid milk space. Achieving shelf life of up to 6 months, same as the carton UHT packaging, these two packaging formats have been adopted by most major dairies in Kenya and Uganda in the recent past. Regional leader revitalized its Brookside liquid milk brand by launching Brookside Dairyfresh in the Tetra Fino, while Pearl Dairy has also launched its Lato brand in the Tetra Fino pack. Other dairies including Githunguri (producer of Fresha) and Uplands Dairies (of the Pascha brand), among others have adopted the Tetra Fino Pack. In the extended shelf life plastics packaging space, most dairies in the region have adopted the pack, with Brookside being the most recent company to launch a new SKU in the packaging format, through its Tuzo brand FOODBUSINESSAFRICA.COM


DAIRY BUSINESS AFRICA NEWS INDUSTRY REPORT

No new entrants in global dairy list as revenues rise 7.2%, Nestle continues dominance Mergers and acquisitions fail to make significant changes to the ranking of the top 20 dairies Global Dairy Top 20, 2018

2018 2017

Company

Country

Turnover 2018 (Billion) USD EUR

1

1

Nestle´

Switzerland

24.2

21.4

2

3

Lactalis

France

19.9

17.7

3

2

Danone

France

17.6

15.5

4

4

Dairy Farmers of America

US

14.7

13.0

5

6

Fonterra

New Zealand

13.7

12.1

6

5

Friesland Campina

Netherlands

13.6

12.0

7

7

ArIa Foods

Denmark/ Sweden

11.7

10.3

8

9

Saputo

Canada

10.8

9.6

9

8

Yili

China

9.9

8.8

10

10

Mengniu

China

8.8

7.8

11

11

Dean Foods

US

7.5

6.7

12

12

Unilever

Netherlands

7.0

6.2

13

15

DMK

Germany

6.5

5.8

14

13

Kraft Heinz

US

6.2

5.5

No.3 spot with sales of US$17.6 billion, after its sale of Stonyfield’s dairy to Lactalis, which also bought US Icelandic skyr yoghurt maker, Siggi’s. Danone, for its part, in 2017 divested in a number of countries: in the US, it sold Stonyfield’s, in Saudi Arabia, it sold its stake in the Al Safi Danone joint venture while also reducing its stake in Japanese dairy Yakult, during the year in which it also completed the acquisition of US plant-based dairy alternative products maker WhiteWave. The only other major acquisition within the Top 20 dairies in 2017 was that of Canada’s Saputo buying Australia’s Murray Goulburn. Dairy Farmers of America held its No.4 spot on the ranking, with New Zealand’s Fonterra overtaking FrieslandCampina, swapping the No.5 and 6 slots, with turnover of US$13.7 billion and US$13.6 billion, respectively. Arla Foods, Saputo and two Chinese giants Yili and Mengniu closed the Top 10 list of the biggest dairies. Others on the Top 20 list include Dean Foods, Unilever, Agropur, Meiji and Muller. According to the report, mergers and acquisitions activities are accelerating in the dairy sector, with 127 deals around the world in 2017 compared to 82 in 2016, but with the total value falling short of that of 2016 due to fewer large deals. The report notes that some of the largest deals were done by dairy companies outside the Top 20, such as Mexican dairy Grupo Lala’s acquisition of Brazil’s Vigor. It notes that 62 deals have already been done by mid 2018, majority of them in Europe, continuing the M&A trend in the sector this year.

15

13

Meiji

Japan

5.8

5.1

Future growth with risks to coops

16

16

Sodiaal

France

5.8

5.1

17

18

Savencia

France

5.5

4.9

18

19

Muller

Germany

5.1

4.5

19

20

Agropur

Canada

5.1

4.5

20

17

Schreiber Foods

US

5.0

4.4

* Note Turnover data is dairy sales only, based on 2017 financials. M&A transactions completed between 1 January and 30 June 2018. Pending merges/acquisitions not incorparated include Lactis’ acquisition of Itambe´ Note: estimate Source: Rabobank 2018 WORLD - The list of the world’s 20 biggest dairy companies has been

released for 2018 with Nestle remaining at the top of the pile, as a year marked by mergers and acquisitions due to the availability of cheap capital failed to let in any new entrant into the list. Released by RaboResearch, the Global Top 20 – A Shuffling of the Deck Chairs report reveals that dairy processors worldwide saw profitability rise in 2017, with the value of the top 20 dairy companies up 7.2% in dollar terms in the year, with only Danone, Kraft Heinz and Meiji showing lower sales than the previous year’s numbers. “For the second consecutive year, there were no new entrants to the Dairy Top 20 list, with the US$5 billion threshold difficult to achieve due to a scarcity of large acquisitions or mergers,” says Peter Paul Coppes, Senior Analyst for Dairy at Rabobank. “However, while the names have remained the same, the order shifted in 2017.” Swiss giant Nestle remained the largest dairy producer, reporting a dairy turnover of US$24.2 billion in the 2017 financial year, with the gap between it and the second producer narrowing. Lactalis, the French dairy player, reported US$19.9 billion, overtaking Danone, despite Lactalis facing a food safety scandal in the year. Danone settled for the FOODBUSINESSAFRICA.COM

The report reveals that the dairy industry will grow by 30 percent in the next few decades in volume and value driven by population and income growth and rise in urbanisation, driven by M&A and organic growth, but with a number of challenges. This is complicated by the very nature of the dairy industry, especially the fact that cooperatives hold a big part of the industry. In the report four dairy companies that are owned by cooperatives, Dairy Farmers of America, Fonterra, FrieslandCampina and Arla Foods, which occupy No.4 to 7 on the list have a total revenue of nearly US$54 billion, more than double that of the biggest dairy company, Nestle. “Dairy cooperatives operate in a challenging economic environment. Dairy farmers struggle with creating ‘farmholder’ vs. ‘shareholder’ value,” says the report. By allocating their capital or investing in their farms instead of in the factory or to acquire other businesses, and also their focus on receiving the best milk price, compounded their structure which makes it difficult to access outside capital, making the domination of the sector by cooperatives a risk to future growth of the industry, notes Rabobank.

Disruptions are here to stay, while Chinese giants have go abroad

The report notes that the recent acquisition of US plant-based dairy alternative products maker WhiteWave by Danone and the possible emergence of biotechnology in the milk value chain, akin to the development of alternative meat products from animal cells, will spark more innovation in the dairy industry in future. It sees an increasing amount of ‘disruption’-based mergers and acquisitions, the volumes of which will increase in future. It also says that the Chinese milk giants Yili and Mengniu have to consider growth in international markets through acquisitions to grow their clout in the dairy market. JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

31


PEOPLE

Fonterra picks interim CEO in the middle of search after Chairman falls ill, leaves

NEW ZEALAND - Fonterra, the dairy co-operative, has decided to appoint an interim CEO with immediate effect after the Chairman fell ill in the middle of its search for a new CEO, as the former CEO Theo Spierings serves his last few months in office. Miles Hurrell, who joined the dairy in 2000 and has been the Co-operative’s COO, Farm Source will take over in the interim, while the company will cease its

search for a susbtantive CEO. His 18 years of experience in Fonterra has spanned four continents, with previous roles as General Manager Middle East, Africa and CIS, Europe and USA. “I have agreed with the Board that we will stop the global CEO search while we review the Co-operative’s current portfolio and direction. It’s important that we give ourselves the time to take stock of where we are as a Co-operative, breathe some fresh air into the business, then determine any changes that are needed. Appointing a new CEO is the most critical decision a Board will make. We will take all the time we need to find the right person,” said Fonterra Chairman John Monaghan. “In the meantime, we need a new leader that can hit the ground running. Miles has great mana. He has a deep understanding of our business and has demonstrated his ability to manage large, complex business units in most of our global markets. Our

CEO role requires intellect, energy and commitment. Miles brings that in spades,” he added. During his stint in the Middle East, Africa and CIS, he changed the African sales strategy and was a director of Fonterra’s joint venture with Africa’s largest dairy company, Clover Industries. From 2006-2008, he oversaw the streamlining of the company’s EU operations before moving to the US to establish new offshore partnerships. In 2014, he was appointed the Co-operative Affairs Group Director and in 2016 he took up the role as Chief Operating Officer of Farm Source. Fonterra Chairman John Monaghan said the Board is clear that it is not best practice to have the Chairman and CEO stand down at the same time, but events have overtaken that decision. Spierings, the outgoing CEO, will work alongside Hurrell to ensure a smooth transition to 1 September 2018, says the company.

PEOPLE

China dairy company Beingmate appoints new GM to bolster its future CHINA – Chinese milk powder manufacturer Beingmate has appointed a new general manager, Bao Xiufei, as it aims to re-focus its business for growth. Bao Xiufei joins Beingmate from the Chinese business of Dutch dairy company Royal FrieslandCampina, where he most recently held the titles of Friso chief sales officer and consumer dairy managing director. The appointment has been welcomed by Fonterra, the New Zealand dairy company that owns an 18% stake in Beingmate but had been forced to write down more than US$400 million from the value of its

investment made in 2014 as a result of the Chinese company’s disappointing financial performance. The company had finally accepted that it lost US$405 million of its US$750m investment in Chinese company Beingmate in March 2018. When the deal was announced at the end of 2014, the price was set at US$615m, but a decline in the value of the New Zealand dollar against the yuan meant that by the time the money was paid over in March 2015, it cost US$750m. Fonterra CEO Theo Spierings claimed the appointment signals an important step

in the transformation of Beingmate. “The appointment of a new and independent GM is the first of three key steps we communicated earlier this year in the Beingmate transformation plan. Now this appointment is made, the next priorities will be for Mr Bao to unlock Beingmate’s distribution network and take the right actions to meet Chinese customers’ preferences for e-commerce,” he said. “There are a number of opportunities to reverse Beingmate’s current performance and we look forward to working with Mr Bao and seeing Beingmate fulfil its potential.”

INNOVATIONS

Yoplait introduces a new yoghurt brand with 40% less sugar FRANCE – France’s largest franchise brand of yogurt Yoplait has introduced a new yoghurt brand with 40% less sugar than its previous yoghurt flavours. The flavoured varieties deliver 9 grams of sugar - 40 percent less than the leading Greek low-fat yogurt - and are lightly sweetened with just the right amount of cane sugar, real fruit and natural flavors. “We talked to thousands of people to 32

really understand what they were missing from the yogurt aisle. We heard loud and clear the need for a smart snack option – something made with simple ingredients, less sugar and higher protein,” said Doug Martin, vice president of marketing for Yoplait USA. YQ by Yoplait is made from ultrafiltered milk, which is milk that has been filtered to concentrate the amount of

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

protein while removing much of the milk’s sugar, or lactose. The product is gluten-free, 99 percent lactose free and contains no artificial preservatives, no artificial flavors and no colours from artificial sources. It can be eaten alone as a snack, blended with fruit in a smoothie or as an ingredient in many recipes.

FOODBUSINESSAFRICA.COM


DAIRY BUSINESS AFRICA NEWS PARTNERSHIP

Arla Foods signs EMEA strategic partnership with Starbucks UK – A global dairy company Arla Foods

has signed a strategic partnership with Starbucks, a successful business partnership that allows Arla Foods to manufacture, distribute and market Starbucks premium milk-based ready-to-drink (RTD) coffee beverages for the EMEA region (Europe, Middle East and Africa.) According to the company, the two companies have signed a long-term 21-year strategic agreement after seven years of successful partnership. “The strength of our relationship

with Arla Foods over the past seven years has seen our RTD business grow by an average of 40% per year across EMEA. This new licensing agreement signals our commitment to continue to work together to grow the business within the ready-todrink sector, and we are proud to be working alongside Arla Foods,” said Duncan Moir, Vice President of Channel Development and Foodservice, Starbucks EMEA. Ever since Starbucks chose Arla Foods as its licensed partner in 2010 the business has grown by an average of 40% each

year. With the new deal, Arla expects to continue to further extend its reach to meet consumer needs. “It is our ambition to be a leading provider of milk-based beverages in Northern Europe, Asia, the Middle East and Northern Africa in 2020 and the new strategic licensing agreement makes the Starbucks partnership a vital part of delivering on this target and we believe that innovation is the key to future success,” said Hanne Søndergaard.

INVESTMENT

Walmart starts dairy production with own milk plant in Indiana, USA

USA – The American multinational retail corporation Walmart has inaugurated a new dairy processing plant in Fort Wayne, Indiana, its first food production facility in the United States. The facility will produce liquid milk sourced from 30 dairy farms in Indiana

and Michigan, serving some 500 Walmart stores in Illinois, Indiana, Ohio, Michigan and Northern Kentucky. Walmart spokeswoman Molly Blakeman said the plant once fully operational, will be the largest for fluid milk or drinking milk in the country.

This comes even as dairy companies in the US face an uncertain future due to a decline in consumption of fluid milk in America in addition to a surging demand for dairy alternatives in the market. Even though the sector has a declining market share, the sector remains prospective with annual refrigerated fluid whole milk and skim/low fat milk sales of US$8 billion in 2016, according to Forbes. Big retailers such as Aldi, Lidl and Kroger have embarked on various strategies including ramping up price wars on milk to gain a better part of the declining market share. Kroger and Albertsons have both opened such facilities to enhance efficiencies, offer flexibility depending on demand and prices for liquid milk products as well as more control over supply.

STRATEGY

India to lease out state-owned dairy firm Delhi Milk Scheme for 30 years

INDIA – The government of India has invited milk cooperatives to run the state-owned dairy firm, Delhi Milk Scheme (DMS) on lease for thirty years after reporting heavy FOODBUSINESSAFRICA.COM

losses since 2010. The proposal to lease DMS has been pending since the time of the previous government and with the new decision, it means it will no longer provide milk in Delhi as a subordinate office of Department of Animal Husbandry, Dairying and Fisheries. “The agriculture ministry intends to hand over the operations and management of DMS to a profitable and professionally run cooperative dairy federation or other semigovernment organisation with a proven track record in dairy processing and marketing for an initial period of 30 years and renewable

thereafter,” said a document from the ministry. Some quoted officials indicated that the deal could be picked up by Amul brand owner Gujarat Cooperative Milk Marketing Federation (GCMMF) or other prominent milk cooperatives that have shown interest in it in the past. “It is expected that with the viable operation of DMS, through the appointment of a concessionaire, the financial burden on the government on account of funding losses incurred by DMS would reduce and there shall also be a net gain by way of realised lease rentals,” the government bid document said.

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DAIRY BUSINESS AFRICA NEWS REGULATORY

UAE issues new labelling and licence regulations for dairy and beverages UAE - The United Arab Emirates (UAE)

cabinet has issued new regulations for the dairy, beverages and juice categories, requiring licencing of companies as well as proper labelling of the products to ensure conformity to standards. In the two regulations that cover the UAE’s regulatory system for the monitoring of milk and dairy products, and on the monitoring of juice and beverages, food suppliers are required to only deal with

registered and licensed companies or enterprises and a certificate of conformity for products shall be granted before putting them on the market, in accordance with the Emirates Conformity Assessment System (ECAS). This is in addition to obtaining the Emirates Quality Mark and ensuring that products continue to comply with applicable rules. According to the resolution, juice and beverage products must meet the approved

standards, product information on labels have to match the specifications and images and phrases used on the packaging should not contradict public morals and Islamic values. Further, the quantity in the package must meet stated requirements, and products shall be packaged in suitable containers that maintain food safety and protect its properties from deterioration.

M&A

Fonterra re-enters India’s dairy through a joint venture with Future Group INDIA – New Zealand dairy giant Fonterra has partnered with fast moving consumer goods arm of Future Group, Future Consumer Ltd, to form a joint venture that will see the dairy co-operative launch dairy products in India. Fonterra Future Dairy Partners, a 50:50 joint venture will enable Fonterra to tap a significant portion of India’s dairy market expected to grow in the near future, with plans to produce a range of consumer and food service dairy products domestically. This is not the first time in India for the New Zealand dairy major. Fonterra had entered India in 2002 through a venture with Britannia Industries, but it exited the market in 2009.

According to the company, initial stages of the partnership will focus on product development, and marketing with the right capital investment made during this period. This time will also be used to settle in the partnership infrastructure, learn the market and prioritise geographies. The partners plan to launch the first consumer products by the middle of 2019, using both locally sourced milk and dairy products from New Zealand. Fonterra’s future stronghold in India will be helped by Future Consumer’s deep understanding of the Indian consumer, the experience of working with international partners, and a nationwide supply chain and retail network while Future Consumer will

benefit from Fonterra’s retail experience, said Lukas Paravicini, Fonterra’s Chief Operating Officer Global Consumer and Foodservice, adding that the partnership was timely given an evolving Indian dairy industry marked by limited product and brand differentiation, value addition and innovation. “(This partnership) will allow us to prepare the groundwork and make the most of our expertise as we enter the world’s largest and fastest growing dairy industry. Consumer demand for dairy in India over the next seven years is set to increase by 82 billion litres – seven times the forecasted growth for China,” said Paravicini.

M&A

China dairy firm Yili to acquire Pakistani dairy, Fauji Foods CHINA – A China-based dairy firm, Yili, has

expressed its intention to acquire a majority stake with management control in Fauji Foods Limited (FFL), known for its Nurpur brand, according to a notice to the Pakistan Stock Exchange. According to Express Tribune, Inner Mongolia Yili Industrial Group Company Limited, will hold talks to acquire 51% voting share in FFL from its parent firm, Fauji Fertilizer Bin Qasim Limited (FFBL),

and other shareholders. Inner Mongolia Yili Industrial Group Co. Ltd. is a Chinabased company, principally engaged in the processing, production and distribution of dairy products and mixed feedstuffs, according to Reuters. Foreign interest in Pakistan’s dairy industry has grown. Dutch company, Vopak LNG Holding B.V., recently executed an agreement with Engro Corporation to acquire 29% stake in Elengy Terminal Pakistan Limited (ETPL)

at a price of US$38 million. Earlier, another Dutch firm, FrieslandCampina Pakistan B.V., acquired a 51% stake in Engro Foods at a price of US$446.81 million in December 2016. A recent report by Rabobank noted that Chinese dairy companies have to seek opportunities abroad to be among the top five dairy producers in the World, considering faster dairy consumption growth in countries like India and Pakistan.

M&A

Danone to increase stake in New Zealand’s dairy company NEW ZEALAND – Danone, a French

multinational food-products corporation, has signed a non-binding agreement to acquire a 49.9% stake in Yashili New Zealand Dairy Company, after its Danone Asia Pacific Holdings (DAPH) subsidiary agreed a memorandum of understanding with Yashili International, for an undisclosed sum. Yashili New Zealand produces a range of dairy products such as infant formulas

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for consumers in China and New Zealand. “The consideration, the payment method and the payment schedule shall be determined after arm’s length negotiations and mutual agreement between the parties. The deal is subject to approval from the New Zealand DAPH currently owns a 25% stake in Yashili International, and this deal further strengthens its position in the infant formula market. Yashili has a strong presence in

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

New Zealand, and inaugurated an infant formula factory in Pokeno in 2015, which is capable of producing 50,000 tonnes of infant formula annually, one of China’s three largest producers of infant formula milk. The facility is one of the largest infant formula plants in the world which places special focus on innovation and on the hygienic design of the process plant and buildings. FOODBUSINESSAFRICA.COM


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

Tea – Old beverage gets a remake

Health and wellness, new flavors and convenience drive tea consumption worldwide

T

ea, the world’s favourite beverage is having a re-birth. Drunk by more people everyday, and second only to water, tea’s re-birth that not only seeks to place this old drink as the top-most beverage around the world, but also strives to place tea next to its cousin, coffee, that came and conquered a market that had been dominated by tea for centuries. Compared to the widely successful Starbucks coffee chain and hundreds, probably thousands, of coffee chains around the world, which took coffee and made it into an aspirational, premium drink, the grand old tea has for long been associated with home consumption or dirty road side eateries in the likes of Kenya, China and India, some of the world’s largest producers of tea. This is beginning to change. While tea is a regular side offer in a number of coffee chains in places like Kenya, recent developments in the tea industry has seen the emergence of tea only or tea-first café JULY/AUGUST. 2018 NO. 31 FOODBUSINESSAFRICA.COM

chains, especially in India, where these new outlets have upped their game to offer young Millenials the same look and feel of the famous coffee chains, offering comfortable seating, free Wi-Fi and other goodies, with impressive results. In its move to get more mileage out of its tea products and lessen its reliance on its fleet of cafés, Starbucks launched its premium tea brand, Teavana in grocery stores in the US in a bid to get a slice of the global market for tea at retail, which is expected to grow by US$7.9 billion to 2022, according to Euromonitor. Tata, the well-known Indian conglomerate, is one of the latest investors in the tea business, opening four outlets of its new Tata Cha tea restaurants in Bengaluru, with plans to roll them countrywide. Tata joins other players who have already made their mark on the industry including Chaayos and Chai Point. This is being replicated around the world. In Kenya, tea producer Melvins

Tea runs a tea café in Nairobi.

New tastes drive innovation

The massive expansion in tea consumption is underpinned by increased awareness about the beverage's anti-inflammatory, antioxidant and weight loss effects. A willingness to try newer beverages by Millenials is also behind this increase in consumption. In the US, 87% of Millenials take tea, higher than any other demographic. The tea industry has seen massive changes in the way tea its perceived and served. Whether green, dark, white, oolong; ready-to-drink or loose/packaged; ice or hot; herbal, fruit infused, or flavoured; purple or not, tea has become trendier and versatile, easily meeting the needs of young people around the World. According to the FAO, Ceylon Tea is preferred by Russia and the Commonwealth of Independent States (CIS) countries for its best benefits including weight loss,

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protection against chronic illness, boosting heart health, increasing energy levels. In North America, light-liquoring teas are in demand but cut-tear-curl (CTC) tea is favored largely by the UK, Pakistan and Egypt. The sector is bombarded with emerging flavor trends such as “brown, fruity, honey-like” for green teas with less liked ones targeting specific, smaller consumer groups in the market. The US

two years ago launched its line of Attitude Teas. Made up of fruit infused, herbal and flavoured teas, the varieties, including the likes of Love Tea (a fusion of seductive vanilla, rose and berry top notes), Chocolate Tea (a smooth union of chocolate and black tea,) and Hangover Tea (a mix black tea, ginger and calming mint), that clearly resonate with young consumers.

Global production of black tea is forecast to rise by 2.2% on an annual basis over the next decade to reach 4.4 million tonnes in 2027 but output of green tea is foreseen to increase at an even faster rate of 7.5% annually to reach 3.6 million tonnes in 2027, largely driven by China. Kenya, the largest black tea exporter in the world, together with China and India are projected to witness major output increases, becoming paramount contributors to world production of black tea, says the FAO. Production in Kenya increased by 18% over the last decade, with exports reaching a record level of 436, 924 tonnes in 2016, a 16% increase from 2015, as well as a strong annual growth of 3.4% in green tea exports. Kenya is by far Africa’s largest tea producer, and the third largest globally.

Emerging economies driving consumption

Coca-Cola’s Fuze tea has hit the US$1 billion sales mark, after only a few years of sales remains largely an iced tea market, with Steady increase in global production a majority (60%) drinking the widely and demand available ready-to-drink packaged teas, Global tea production and consumption will compared to 49% taking tea in bag/loose continue to increase over the next decade, packaging. driven by rising demand in developing and Recent launches in the market point emerging countries, especially India and to the fact that producers are targeting China, which have seen accelerated growth, wellness segments. In addition to its range according to a report by the UN’s Food & of green, herbal varieties, caffeinated/ Agriculture Organisation (FAO). decaffeinated, sweet, instant, ready to drink The report suggests the upward trend and iced teas, Coca-Cola recently rolled out is attributable to a combination of higher one of its fastest growing brands Fuze Tea, incomes and a diversification, especially in low-calorie premium iced tea in Europe. China where rather than green or instant Already one of its billion-dollar brands, the tea, there’s been emphasis on specialty product has also been debuted into Kenya items such as herbal teas, fruit fusions and and Uganda. flavoured gourmet teas. Unilever led its way to sustainable tea World tea production increased by 4.4% with the launch of a five-variant wellness annually over the last decade to reach 5.73 range for its Lipton tea brand in the US as million tonnes in 2016. China accounted a way of incorporating wellness routines for 42.6% of world tea production, having among consumers. Recently, the European more than doubled from 1.17 million Food Safety Authority (EFSA) awarded tonnes in 2007 to 2.44 million tonnes Unilever a positive opinion on its heath in 2016. Production in India, the second claim that black tea improves people’s largest producer, increased to a record high attention span. of 1.27 million tonnes, due to favourable Local Kenyan brands Kericho Gold, weather conditions. owned by Global Tea & Commodities, 36

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As international tea prices remained firm over the last decade, world tea consumption increased annually by 4.5% to 5.5 million tonnes over the decade to 2016. In most of tea producing countries such as Asia, Africa and Latin America, growth in demand expanded significantly. Consumption in China expanded at an annual rate of 10.1% reaching 2.1 million tonnes in 2016 while India with consumption reaching 1.05 million tonnes, was the second largest tea consumer in the year, accounting for 19% of the global total. Black tea consumption is projected to grow at 2.5% annually to reach 4.17 million tonnes in 2027 with the largest expansion in China. African countries are expected to show higher growth in their consumption with Rwanda leading the trend with 9%, followed by Uganda (5%), Kenya (4.4%), Libya (4.4%), Morocco (4.2%) and Malawi (4.2%). Other tea producing countries such as Bangladesh, India, Sri Lanka, Tanzania and Vietnam are expected to record moderate growth rates. However, consumption in Western countries, UK included, is projected to be negative as black tea is receiving stiff competition from other drinks such as coffee. Traditional importing countries of Europe and the Russian Federation have recorded a decline in consumption given the fact that European tea market is mature and per capita consumption has been declining due to competition from other beverages, particularly bottled water and carbonated drinks FOODBUSINESSAFRICA.COM


NEWS INNOVATIONS

Coca-Cola launches clear, calorie-free beverage in Japan

JAPAN – The world’s soft drinks and beverages company Coca-Cola has released a clear, zero-calorie beverage in Japan, “Coca-Cola Clear”, to appeal to Japanese consumers who desire new, innovative

beverages during summer. The company said the drink does not feature the caramel flavourings which create the iconic black/brown colour of traditional Coca-Cola beverages, as the ingredient

could not be used for a transparent drink. Coca-Cola said that over 50 different recipes were trialled before the final CocaCola Clear recipe was formulated, while the addition of lemon juice allowed the creation of a zero-calorie drink that was able to balance sweetness and sourness to create the ideal taste. This new launch is the latest innovation introduced to the country by Coca-Cola, following the recent introduction of the company’s first-ever alcoholic drink, as well as the release of Coca-Cola Frozen pouches and Coca-Cola Peach earlier this year. The new zero-calorie lemon-flavoured version of Coca-Cola looks more like water than the recognizable dark-brown liquid that has been synonymous with the carbonated soft drink for decades.

SUSTAINABILITY

PepsiCo to launch 100% compostable plant-based packaging in India INDIA – The food and beverage company Pepsico has announced it will be launching 100% compostable, plant-based packaging for its Lay’s and Kurkure snacks products in the fourth quarter this year to address rising concerns around plastic pollution. PepsiCo has been exploring ways in commitment to environmental protection through collaboration with the government of India to enhance plastic waste management and increase recycling in India. “As a responsible leader in the food

and beverage industry, our Performance with Purpose 2025 goal is to design all packaging to be recoverable or recyclable, and support increased recycling of plastic waste,” said Ahmed ElSheikh, President & CEO, PepsiCo India. PepsiCo is following the steps already taken by other international conglomerates including its rival Coca-Cola who launched plant-based, recyclable bottles in some of its markets. Nestle on the other hand, aims at 100% reusable and recyclable packaging by 2025.

As part of its sustainability strategy, PepsiCo launched the PlantBottle, a fully recyclable PET plastic beverage bottle made partially from plants in North America but its debut into other countries like India is limited by its high manufacturing costs. The company also said it has successfully piloted a ‘Film to Fuel’ project at the Pune plant to convert all the packaging film waste from the plant, into fuel, ensuring 100% recycling of packaging waste at the plant.

INVESTMENTS

AB InBev to build new brewery in Mozambique as Nigerian brewery set to open MOZAMBIQUE - AB InBev, the world’s largest brewing company, has said it is investing in a new brewery in Maputo, Mozambique whose construction is set to start in the second half of 2019. While the sum of the transaction was not disclosed, the Belgian based brewer said the new facility will have a capacity of 2 million hectoliters (200 million litres) of beer a year, with further expansion of the facility in future. AB InBev produces 2M and Laurentina lager brands in another facility it owns in FOODBUSINESSAFRICA.COM

Mozambique, and the new brewery will help meet market demand in a country that saw 20% growth in the first half of 2018. “It’s a reflection of how much we have been adding on the continent, constantly aiming for growth and putting the money where our mouth is. We’re very excited about Africa because we have experience in Latin America and Asia. Some people look at Africa and see a lot of volatility, uncertainty, we see opportunity,” said Ricardo Tadeu, AB InBev’s Zone President for Africa.

The company said that its new Nigerian brewery which will open later this month will see the firm become the second largest producer of beer in the country, behind Heineken controlled Nigerian Breweries, but ahead of Diageo’s Guinness Nigeria. Further, the company announced in March that it will construct a new US$100mn brewery in Dodoma, Tanzania, with production slated to start in the second half of 2020.

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

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FINANCIALS

EABL revenues rise 4% on higher spirits as testing begins at new Kisumu plant

IN NUMBERS 50% SHARE OF EABL’S TOTAL REVENUE IT EXPECTS FROM SPIRITS BY 2013

KENYA – East African Breweries Limited (EABL), a subsidiary of the British multinational Diageo Plc, has reported 4.57% increase in revenue to US$731.8 million attributed to strong sales in its spirits segment and bottled beer in Kenya and Tanzania. The brewer is now banking on increased sales of its spirits in the region and a significant recovery in bottled beer sales to boost its yearly revenues following the inauguration of a new US$8.96 million spirits line at its Nairobi plant. “Spirits will be a big part of sales this year,” said EABL managing director Andrew Cowan in a press briefing. The regional beer giant saw its total beer volumes up 7% and net sales revenue up 5%, while gross profit rose 4%. However, net profit after tax for the year declined 15% blamed on higher costs tied to its investments in the new Kisumu brewery and tax expenses following revisions in the alcohol segment. At the regional level, Tanzania’s net sales revenue rose an impressive 41% after several years of poor performance, buoyed by aggressive growth in the newly introduced Serengeti Lite while Uganda saw a 4% growth. The second half of the year was particularly impressive for the brewer, seeing an 18% growth in spirits sales from a flat figure at the end of the first half, 38

recording 8% growth for the total year; bottled beer grew 12% compared to 7%, with a 9% growth in the year; while Senator recovered somewhat from 22% fall in sales in H1 to a 3% fall in H2, falling 13%, the first time has seen the lower value brand fall in volume a number of years. In Kenya, the company saw a recovery in bottled beer volumes in the year, rising 5% in the year, after struggling to grow the line in the last few years, while mainstream spirits like Kenya Cane and Chrome grew 22% versus 7% for the total spirits line. Uganda saw premium beers Tusker Lite and Guinness rise 11%, while mainstream spirits saw strong growth. In Tanzania, the brewer successfully introduced Serengeti Lite while Serengeti Premium beer grew well during the year, while the spirits line recorded a 5% growth after the introduction of Smirnoff X1. New product innovations were especially strong in their contributions this year, recording a 22% growth in sales figures, especially in Tanzania where they grew 38% and Kenya, with 21% growth. Smirnoff X1, Serengeti Lite, new Kenya Cane and Uganda Waragi flavours, Black & White, Tusker Cider, among others performed well. During the year, the company started producing some international spirits such as Captain Morgan rum locally in a strategy to cut prices and offer a more diverse portfolio

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favoured by consumers. EABL has seen its capital expenditure rise in the year to US$130 million in the year, with the new brewery costing the brewer US$78 million in the new Kisumu plant. It also spent US$6 million in a new water treatment plant, US$9 million in a new spirits line while it also spent US$14 million in new fermentation vessels in Kenya. Speaking to Reuters, the company said it was investing US$13.88 million earmarked for the spirits division and it was expecting spirits to contribute half of its annual revenue in the next five years. This division is favoured by the growing middle class, and according to Euromonitor, spirits are one of Kenya’s fastest growing alcoholic beverages category compared to beer, whisky and wines. “The growing young population in Kenya has been providing an opportunity for strong growth,” a report by the London based research firm affirmed. Priorities going forward, the brewer looks to strengthen re-recruitment of bottled beer consumers, sustain spirits growth momentum, win in premium leading with Scotch and Vodka as well as enhance productivity initiatives. To further growth in the year, the Kisumu brewery which is ready for commissioning and is at the taste-testing stage will be commercialized in addition to speeding innovations for its model brands like Serengeti Lite, Tusker Cider, Black & White, Uganda Waragi flavours. The brewer has targeted the new Kisumu brewery to brew mainly its Senator keg beer, with a focus on the western Kenya region. It has already recruited over 15,000 farmers from Kisumu county to grow sorghum which is the main raw material at the brewery. The company plans to officially open the brewery later in the year. FOODBUSINESSAFRICA.COM


BEVERAGE TECH AFRICA NEWS FINANCIALS

PepsiCo’s Varun Beverages profit rises 25% in second quarter INDIA – Varun Beverages Ltd (VBL),

PepsiCo’s largest franchise bottler of soft drinks in India, has reported that its consolidated net profit in the second quarter increased by 24.92% to US$44.14 million while revenue matched estimates, reported Indiainfoline. Profit margin contracted by 1.5% year-on-year due to sub-optimal volumes/ margins in acquired sub-territories, impacted by its supply and distribution arrangement for the Tropicana juice portfolio, and not manufacturing the product, which restricted profitability.

For the period ended 30 June 2018, total income was US$301 million compared to US$278.91 million posted in the corresponding period last fiscal. The strong jump in revenue was led by robust volume growth of 21.3% to 136.4 million cases, as the second quarter is usually the peak season for the company. Domestic organic volume grew by 12.6% during the quarter while gross margin for the company improved by 1.3%. During the quarter, the company set up a new plant for Pepsi range of products at Nepal with commercial operation starting

on May 02, 2018. Earlier in the year, a new unit for manufacturing plant was also set up at Harare, Zimbabwe with operation having started with effect from February 19, 2018. In the period, VBL also expanded its juice portfolio with the launch of fizzy drinks in seven different flavours, leveraging the ‘Slice’ brand with wider recognition and strong brand value. The company said the introduction of the new product categories was part of its long term growth prospects in a bid to enhance profitability and augment return ratios.

INVESTMENTS

AB InBev to build new brewery in Mozambique as Nigerian brewery set to open

MOZAMBIQUE - AB InBev, the world’s

largest brewing company, has said it is investing in a new brewery in Maputo, Mozambique whose construction is set to start in the second half of 2019.

While the sum of the transaction was not disclosed, the Belgian based brewer said the new facility will have a capacity of 2 million hectoliters (200 million litres) of beer a year, with further expansion of the facility in future. AB InBev produces 2M and Laurentina lager brands in another facility it owns in Mozambique, and the new brewery will help meet market demand in a country that saw 20% growth in the first half of 2018. “It’s a reflection of how much we have been adding on the continent, constantly aiming for growth and putting the money where our mouth is. We’re very excited about Africa because we have experience

in Latin America and Asia. Some people look at Africa and see a lot of volatility, uncertainty, we see opportunity,” said Ricardo Tadeu, AB InBev’s Zone President for Africa. The company said that its new Nigerian brewery which will open later this month will see the firm become the second largest producer of beer in the country, behind Heineken controlled Nigerian Breweries, but ahead of Diageo’s Guinness Nigeria. Further, the company announced in March that it will construct a new US$100mn brewery in Dodoma, Tanzania, with production slated to start in the second half of 2020.

INNOVATIONS

Heineken launches new brew infused with marijuana instead of alcohol USA – Dutch beer maker Heineken has

introduced a new brew, Hi-Fi Hops, from its craft beer California beer producer Lagunitas, made with marijuana instead of alcohol. The product is labelled as “hoppy sparkling water.” The company said the new brew is part of a growing trend of established companies diving into the marijuana industry and could give a boost to the struggling beer industry. The beverage contains no alcohol and instead, the beer-like beverage is made with THC, the primary psychoactive ingredient in marijuana. In addition to a brew made with THC, the ingredient in marijuana that causes a high, Lagunitas’ new “beer” is also available with CBD, the non-psychoactive cannabis component that’s thought to be responsible

FOODBUSINESSAFRICA.COM

for many of its therapeutic effects. The brew is available in two varieties, one is purely THC, with 10mg per can, the other is a hybrid variety with 5mg of THC and 5mg of CBD. The hybrid version is designed to have more subdued and relaxing effects, according to the company. Hi-Fi Hops is currently only available in a select number of dispensaries in California, where marijuana is legal. Consumer demand for marijuana products is growing fast as state-based legalization campaigns spread in the US and scientific awareness about the drug increases. There is also an emerging interest in CBD, the compound thought to be responsible for many of the drug’s therapeutic effects, including pain relief. JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

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Stevia use in beverages continues to increase with growth in global launches

C

hanges in consumer attitudes towards nutrition and health plus recent regulator focus on sugar has thrust alternative no/low calorie and other sweeteners into the limelight. Sugar, or sucrose, long perceived as a natural sweetener has taken a beating in recent times, as consumers seek to lower their sugar consumption and governments around the world devise new regulations to limit its consumption through sugar-tax legislations. “Not since the days of “low-fat” over 25 years ago has the food and beverage industry witnessed such a major shift in consumer attitudes as the recent demand for reducing sugar in their diet,” says Cargill, the USbased provider or agricultural products and ingredients, including stevia products. Use of stevia as a substitute sweetener in food and beverages such as snacks, confectionery, juices, soft drinks and dairy continues to expand with more than 10% 40

increase in launches of products containing the sweetener in 2017 alone. Stevia is gaining goodwill from manufacturers by becoming an important ingredient in various products as consumers move away from sugar and artificial food additives, data from Mintel Group, a market intelligence agency has revealed. European market for stevia was estimated at 100-150 tonnes in 2014, and is expected to grow driven by concerns for diabetes and obesity concerns for a healthier population. Marketsandmarkets, a research company reveals that the stevia market was worth US$490 million in 2017 and will rise to US$772 million by 2022. Aspartame, another major zero-calorie and high intensity sweetener is becoming less widely used in the food industry losing traction to stevia which was used in 16% of product launches with high intensity or diet sweeteners in 2012, and the percentage rose to 28% in 2017.

JULY/AUGUST 2018 | FOOD BUSINESS AFRICA

IN NUMBERS 11% GROWTH IN BEVERAGE PRODUCTS CONTAINING STEVIA BETWEEN 2012-17 Where product formulations require no or reduced calories, producers of products especially those designed for kids (age 5-12) have preferred use of stevia, which is also a plant-based sweetener. In launches featuring high intensity sweeteners in 2017, plant-based stevia was used more than aspartame. Such launches gained caption in Asia/Pacific (40%) and Europe (22%), followed by Latin America, North America and Middle East/Africa. Between 2012 FOODBUSINESSAFRICA.COM


INGREDIENTS APPLICATION – STEVIA

CONSUMERS WANT THE SAME TASTE AS THE DRINKS THEY GREW UP WITH BUT DON’T WANT THE CALORIES. THERE HAS ALWAYS BEEN SOME SORT OF TRADE OFF. George Droumev, Technical Director, Coca-Cola South Pacific

and 2017, launches of beverage products containing stevia grew 11% while those of food products containing stevia grew 10%.

Healthier choice

Stevia offers beverage and food companies a zero-calorie, plant-based sweetener that has a taste profile similar to sugar, helping drive sales for manufacturers that have seen a decline in market share for sugar categories. The fact that stevia is derived from a natural source makes it stand out from its competitors that are artificially derived from chemical reactions. To address the growing demand for healthier food and beverage choices by consumers, manufacturers are embracing product innovations with reduced sugar and calorie intake without compromising on the taste, and stevia has offered a viable alternative with a health halo to the formulators. Coca-Cola earlier this year released its first stevia-sweetened Coca-Cola drink containing only 0.3 calories per 100ml to replace its Coca-Cola Life products in New Zealand and according to them, this was part of a strategy to encourage consumers to take less sugar. Dubbed Coca-Cola Stevia No Sugar, it was a product of 10 years of continuous innovation seeking to develop different drinks that suit every lifestyle and occasion. In 2018 second quarter results it released FOODBUSINESSAFRICA.COM

recently, the soft drinks giant said organic sales grew 5% given consumer preference for healthier drink options such as its Zero Sugar and Diet Coke products. This could be the reason the company is embarking on the low or non-sugar categories to drive growth. The other soda giant, PepsiCo, debuted stevia and sugar sweetened Pepsi True on Amazon in October 2014 before later rolling it out to selected markets in the United States. Nestle was the latest food and beverage company to launch steviasweetened brand fruit beverage line of its Sanpellegrino brand in the UK, containing 40% less sugar and 60 fewer calories. The reformulation in addition to a 10% reduction in sugar for the brand was part of Nestle UK and Ireland’s ongoing sugar reduction plan. Other major companies launching products with stevia leaf sweetener last year included Royal Crown, Calbee Foods, Grupo Bimbo, Kraft Heinz and Unilever.

Suppliers get innovative and increase capacity

As consumer health and wellness goals become complicated, PureCircle, the world’s largest producer and innovator of stevia sweeteners is embracing recent advances, launching its plant based stevia sweetener containing variants Reb A, Reb D and Reb M, the components that

enhance production of low and zero calorie beverages. The company announced that it has increased its capacity to supply Reb M to the beverage industry. Cargill started production of its EverSweet sweetener that finds use in various applications, that is preparation of many energy-reduced foods, beverages, dairy products or nutritional bars and those free of added sugar. Recently, Tate & Lyle launched a new, label-friendly, premium stevia sweetener TASTEVA M, opening additional possibilities for great-tasting, reduced-sugar products for food and beverage customers and consumers.

Challenge with taste

The challenge with stevia, just like for all the other alternative sweeteners remains taste. Steviol glycosides, or stevia’s sweetening compounds, can impart bitter flavor off-notes. Consumers are familiar with how sugar (sucrose) tastes like, so product developers and suppliers are always seeking ways to improve the taste of the final product. Coca-Cola seems to have succeeded in this endeavour, replacing its former CocaCola Life, which used a blend of sucrose and stevia, with Coca-Cola Stevia No Sugar, which is 100% stevia sweetened. George Droumev, technical director, Coca-Cola South Pacific, says that while consumers want the familiar Coca-Cola taste, they are also looking for ways to cut sugar from their diets. “They want the same taste as the drinks they grew up with, but don’t want the [calories],” he said. “There has always been some sort of trade-off. Our task was to solve all of these challenges.” Droumev said that the new product, sidesteps the potential flavor pitfalls by using stevia that is extracted from “a very specific part of the stevia leaf as a sweetener,” which he said results in a great tasting beverage with a clean aftertaste

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Breakfast cereals grab attention of investors in Africa Ronald Onsare

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reakfast is normally designated as the most vital meal of the day, and cereal a common breakfast food within the world. Breakfast on the African Continent varies greatly from region to region. In Africa, from hot porridge used in a range of African meals and eaten throughout the day, the industry is slowly catching up with the remainder of the globe, both in selection and new investments. Breakfast cereals, which originated within the US, have become a staple food in virtually each part of the globe, because of economic process of converging markets. The market for breakfast cereals has been boosted by several factors. Other than the ever-growing middle class and improved incomes, they're problem-free to make. The mushrooming supermarkets, hypermarkets, and convenience stores worldwide are additionally seen to catalyze growth within all breakfast cereals markets. The segment remains dominated by children, the youth and working-class professionals by consumption in Africa.

Giants turn eyes on Africa

In order to outgun their competitors, key players within the African marketplace, and in deed internationally, for breakfast cereals are developing unique varieties to cater to the various tastes and necessities of shoppers. According to Euromonitor, a market 42

intelligence company, the Middle East and Africa cereals Market was valued at US$2.59 billion in 2017 and estimated to be growing at a CAGR of 4.36%, to top US$3.2 billion by 2022. The breakfast cereals market growth in Africa is a result of factors such as new product launches, recent investments, increase in product innovation and customization. The market is anticipated to continue growing, as there are several attention-grabbing product innovations scheduled in the African Market. Manufacturers are tweaking their product formulations and availing a range of breakfast cereals that match with native preferences. The innovations in packaging conjointly are contributing towards the expansion of the market.

African regional markets

From the North, West, East, Central and to the South of the continent, the leading players within the trade are nearly identical mirroring similar presence throughout the globe. There are recent new investments from region to region together with mergers and acquisitions resulting in an extremely competitive market thanks to the presence of a number of international, regional, and native vendors who compete in terms of price, quality, ingredients, and taste. The vendors’ performance within the market is wedged by the dynamic tastes and

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preferences of the shoppers. The growing importance of healthy food and therefore the market’s growth potential attracts new players to enter the market and this will successively, intensify the amount of competition among the players in this breakfast food segment. In South Africa, consumers have more and more busy lifestyles that is resulting in rising demand for convenient on-the-go meals and snacks. This led cereal makers to branch into cereal bars and launch new products to fulfill consumer demand. Case in point, Tiger Consumer Brands, the producer of leading cereal brand, Jungle Oats, launched Jungle Oatso Easy in a very convenient cup to cater to the present trend providing its liked brand with an additional convenient format. According to Euromonitor, Pioneer Foods led the breakfast cereals market with a 30% share in 2017 because of its wide brand portfolio together with WeetBix, that leads in family breakfast cereals, as well as its Nature’s Source brand that leads muesli and granola. Tiger Consumer Brands ranked second in the overall category with a 23% share because of the recognition of its leading brand in breakfast cereals, Jungle Oats. In Nigeria, breakfast cereals recorded 11% growth in 2017, as demand multiplied among the growing urban population that desires convenient breakfasts. A robust FOODBUSINESSAFRICA.COM


child population contributes to the rise as youngsters are a significant shopper cluster of breakfast cereals in the country. Kellogg’s Nigeria, in partnership with Tolaram, commissioned the development of a KSh.6 billion (US$16.7 million) new breakfast cereal manufacturing plant at the Lekki Free Trade Zone in Lagos. The plant will manufacture more than 10,000 metric tonnes of breakfast cereals annually. The deal conjointly enclosed the longer term right to acquire a stake in Tolaram Africa Foods, that owns 49% of Dufil Prima – the Nigerian consumer goods manufacturer best far-famed for its popular Indomie noodles. The deal comes as multinationals like Unilever and Diageo are increasing their investment footage in their Nigerian units in an effort to capture the country’s price-conscious consumers and facilitate a boost at their profits. McKinsey estimates that Nigerian households with incomes of over $5,000 a year could increase from 20% of the population to 27% by 2020, setting them inside the target client base of formal retail chains. “The size of the economy, its growth rate and dynamic demographics” were the rationale Nigeria was the proper first move into the rest of Africa, said Kellogg, of its investment in the manufacturing facility. In Cameroon, breakfast cereals saw retail sales go up by 7% in current worth terms and 3% in volume terms in 2017 to peak at XAF4 billion and 600 tonnes, reports Euromonitor. While some middleincome shoppers were willing to trade-up to higher-priced products, significantly healthier and convenient variants, breakfast cereals’ growth was restricted by a small consumption base and high consumer price FOODBUSINESSAFRICA.COM

sensitivity. In Kenya, Eastern Africa’s giant, Euromonitor reported that Weetabix East Africa stayed ahead in the breakfast cereals market in Kenya with a value share of 46%, followed by Proctor & Allan EA Ltd at 14%. Nestlé and Kellogg positioned third and fourth with their respective Cerevita and Kellogg’s cereal brands, holding 11% and 10% in share value in 2017. The fight for control of the breakfast menu has increased with Proctor & Allan having completed and commissioned a US$20 million (KSh. 2 billion) factory, away from its long-time base in Nairobi’s Industrial area to Limuru town and British multinational Weetabix Food Company buying a controlling stake in Weetabix East Africa from Kenyan businessman Ahsan Manji. South Africa’s Pioneer Foods Group – producers of Bokomo, Ceres, Safari, Spekko, ProNutro and among others had initial bought into Weetabix East Africa and now holds 49.89% stake while the UK firm has 50.11% dominant stake. This means the firm (Weetabix) now has the financial muscle to scale the backing of two large fast-moving consumer goods (FMCG) businesses. Proctor & Allan’s Managing Director David Kamau says that the new plant has adequate capacity and versatility to enable the firm to meet current and emerging consumer needs for breakfast cereals in the region. The Egyptian breakfast cereals market has witnessed a robust demand from middle- and high-income shoppers. Adults and youngsters are currently awake to the products obtainable, though primarily in urban areas. Temmy’s, one of the leading players has the newest state of the art

technologies in production lines. The company has expanded in products such as cereal bars, biscuits, instant noodles and additional cereals. Kellogg led the market in 2017 after it acquired Temmy’s maker, Mass Food Co in 2015, and Biscomisr in 2016, with a retail value share of 48%. The breakfast cereals sector in Egypt is expected to register a retail value CAGR of 3% at constant 2017 prices over time to reach EGP427 million in 2022, reveals Euromonitor. Breakfast cereals is still a young category in Algeria. Nonetheless, the category is witnessing increasing popularity for consumption at breakfast in Algeria, which is being reflected by strong growth rates. However, the popularity of breakfast cereals is limited to urban areas where consumers tend to follow some Western lifestyles. Nestlé topped the overall rankings with a value share of 31% in 2016 with this rising to 32% in 2017, followed by local player Cérégal which held a value share of 26% in 2017 thanks to its affordable prices and growing availability and product variety. Kellogg Co. was ranked third in breakfast cereals with a value share of 16% in 2017 thanks to the success of its Kellogg’s Corn Flakes brand. In Morocco, breakfast cereal companies continued to appeal to children as they are the main consumers of their products. These companies used popular cartoon characters on their packaging in order to attract the attention of children and encourage parents to buy their products. In addition, they label their products as containing good ingredients. Manufacturers also target fitness enthusiasts and weight-conscious consumers with brands like Fitness (Nestlé Maroc), which contain 0% fat. Products are also sold in different sizes to attract consumers from all income groups. Nestlé Maroc was the leading player in breakfast cereals in 2017, with a 52% share of retail value sales. The company has been operating for a long time in the country and it has a wide range of products under its umbrella across breakfast cereals. Additionally, it advertises through various media platforms and benefits from a strong distribution strategy. Breakfast cereals is projected to record a 9% retail value CAGR at constant 2017 prices and a 6% retail volume CAGR over the forecast period. This growth is expected to be driven mainly by children’s breakfast cereals

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Why the food & beverage industry must beware of biofilms By Tania Garcia Warner & Linda Jackson

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icrobiological text books and references usually describe microorganisms as single cell organisms that can only be seen under a microscope. While this is true, this simple description gives no inkling to the sinister ability of these single cells to band together in what is often known as a biofilm.

Biofilm – the definition

Lindsay and Von Holy (2006) defined a biofilm as a community of microorganisms attached to a surface, producing extracellular polymeric substances (EPS) and interacting with each other. Bacteria are the best studied micro-organisms with respect to colonisation of surfaces and the formation of biofilms. From historical evidence, it is known that biofilms have existed since prehistoric times, e.g. 3.2 to 3.4 billion-year old biofilms have been discovered in geological formations of South Africa and Australia.

How does the biofilm form?

Research indicates that biofilms develop in a number of stages: 44

Surface conditioning

Surfaces of attachment are conditioned by adsorption of organic and inorganic nutrients.

Reversible attachment

During the movement of liquids such as beverages or other liquid food products, the reversible attachment of bacterial cells to a surface can occur by sedimentation and convection currents within the bulk liquid transporting bacteria to the surface or the active movement by motile bacteria such as Listeria monocytogenes. These bacterial cells reversibly attached to surfaces produce exopolymer or exopolysaccharide materials (EPS) due to stimulation of membranebound sensory proteins of the bacterial cell which allow for cell-to-cell bridges and cement the cells to the surface

Colonisation

The final stage in biofilm establishment is called colonisation where the attached bacteria grow and divide, forming microcolonies. It appears that bacteria types may influence the attachment of other types

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to the same surface. For example, Sasahara and Zottola (1993) found that biofilm formation by Listeria monocytogenes was enhanced in the presence of Pseudomonas fragi. Scientists studying the completed biofilm have identified that this is a complex architecture, consisting of biofilm bacteria in EPS-enclosed microcolonies interspersed with highly permeable water channels carrying nutrients and waste products in and out of the community.

Dispersion

The natural life cycle of a biofilm also includes dispersion into the liquid product and this is the greatest risk for the food industry. Biofilm cells located at the periphery of the biofilm may be released into the surrounding environment, returning to the planktonic state and finding new surfaces for biofilm development. These biofilms might be many years old, during which time the microorganisms will have multiplied significantly and many cells can thus be introduced into products causing significant levels of contamination in products with food safety and quality implications. FOODBUSINESSAFRICA.COM


FOOD SAFETY - BIOFILMS

Why are biofilms a concern?

Biofilms pose a significant potential risk for food factories as they harbour all microorganisms and specifically pathogens. Under stress, the creation of extracellular polymeric substances (EPS) provides the microorganisms protection from standard cleaning and disinfection chemistry. In their review article, Lindsay and Von Holy (2006) identified research that clearly showed the advantages of the biofilm lifestyle as this offers defense and protection or response to stress. Bacteria in biofilms appear to have evolved the ability to cope with the harsh environmental extremes such as fluctuating pH, temperature, low nutrient concentrations and exposure to UV light. Biofilms are known to be more resistant to treatment with antimicrobial compounds than their free-standing cell partners. Furthermore, biofilm cells have been found to be highly resistant to metal toxicity, acid exposure and dehydration stresses. Due to this ability to survive under diverse environmental conditions, biofilm formation may also convey a selective advantage to certain pathogens such as Vibrio cholerae and Listeria monocytogenes. The consequences of biofilms in the food industry Bacterial biofilms are ubiquitous in many natural ecosystems such as in the gut where biofilms form a formidable barrier against foodborne pathogens. Dental plaque on teeth is composed of diverse bacterial biofilms which form in both healthy and diseased mouths. Biofilms attached to implanted medical devices are of concern medically as the antibiotic resistance of such attached bacterial cells can result in chronic infections and may necessitate the frequent replacement of expensive devices. Biofilms have been studied in various food processing industries, such as processors of cheese, raw and cooked/ fermented meats, raw and smoked fish, mussels, shrimps, chicken and turkey, milk products, and yeast. Once a biofilm “takes hold”, it becomes extremely difficult to get rid of and companies will experience unexplained spikes in their microbial counts. These spikes will vary in both time and space. Biofilms are very difficult to detect or eliminate, and there is evidence that suggests that standard swabbing and ATP cannot be relied on to detect their presence. It is also not practically feasible to clean and sanitise FOODBUSINESSAFRICA.COM

AS PART OF A ZEROTOLERANCE STRATEGY TO LISTERIA, THERE MUST BE A TOTAL ABSENCE OF BIOFILMS. BIOFILMS ARE A PRIMARY SOURCE OF CONTAMINATION frequently enough to prevent attachment of cells to surfaces. It has been suggested that removal of biofilms is significantly enhanced by applying mechanical force to a surface, such as high pressure sprayers and scrubbers but this is often not possible in pipelines. Antimicrobial coatings on metal such as bacteriocins and silver ions may ultimately aid in inhibition of biofilm development, but this can be expensive. Even with these cleaning practices in place, bacterial resistance to antimicrobial compounds is another challenge to food industries. Biofilms may allow for the horizontal transfer of genetic material, such as plasmids coding for antibiotic resistance, to occur inter and possibly even intraspecies within biofilms.

Top ten tips for managing biofilms

The growing importance of biofilms was emphasized at the Biofilm Summit held recently in Barcelona. Top scientists from around the world shared the latest developments in relation to combatting biofilms in your facility. Tania GarciaWarner was there and she shared these top learnings to help you. 1. Prevention of the biofilm is the key. 2. Normal cleaning will not remove biofilms. 3. Detection is the first step. Proprietary formulated products are available to detect biofilms and highlight their presence. Once you know where they are, you can do something about them. 4. Finding biofilms should be seen as a positive step – rather know they are there than not! 5. Removal is then achieved by applying a specially developed cocktail of enzymes that matches the substrate the EPS, breaking down the biofilms and leaving the microorganisms exposed to the disinfectants. 6. Preventing the buildup of biofilms or rather the thickening of the EPS is the key to reducing the risk posed by biofilms and the enzymatic treatments

should be applied at intervals relative to each company’s biofilm profile. 7. Cleaning equipment may be a vector for cross contamination and thus the possibility of floor biofilms should not be ignored. 8. Hygienic design is key to ensure the surface will not allow for adhesion. Declare war on any rust! 9. Sodium hypochlorite appears to be the most effective removal agent for biofilms 10. Chlorine dioxide appears to have the least effect on biofilms

Conclusion

Detection of biofilms is key because we are training cells to become more and more resistant. It is also clear from many studies that biofilms are resistant to standard chemical disinfectants and are able to recover from biocidal treatments. Cells in biofilms have a memory and can re-attach much faster than a cell that has never been a biofilm cell. As part of a zero-tolerance strategy towards Listeria monocytogenes, there must be a total absence of biofilms. Biofilms are a primary source of contamination. Having biofilm in your plant is like riding a rollercoaster while playing Russian roulette.

References 1. What food safety professionals should know about bacterial biofilms - Denise Lindsay and Alex von Holy, 2006, British Food Journal, Vol. 108 No. 1, 2006, pp. 27-37, Emerald Group Publishing Limited. 2. Evaluation of the effects of selected phytochemicals on quorum sensing inhibition and in vitro cytotoxicity Anabela Borges, Sofia Serra, Ana Cristina Abreu, Maria J. Saavedra, António Salgado & Manuel Simões (2014) 3. Biofouling: The Journal of Bioadhesion and Biofilm Research, 30:2, pp 183-195 - Taylor & Francis Tania Garcia Warner is Managing Director, Innogiene and Linda Jackson is Director, Food Focus

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Coutesy: www.new-harvest.org

MARKET TRENDS – CULTURED MEAT

Laboratory grown meat on the horizon The race is on for the first start-up company to deliver the first commercially viable meat grown from animal cells.

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ultured meat or clean meat, an alternative to industrial animal farming is one of the most outstanding trends that are seeking to disrupt the meat industry. Though no single gram of these products have hit the shelf yet, there are hints on the horizon that by as early as the end of 2018, or by some estimates, 2021, the sale of meat made from cells that are grown in a laboratory will be economically feasible. When Bill Gates invests, the world takes notice. Not only is Gates one of the foremost technologists the world over, he is also an early investor in one of the newest food production technologies: meat production in the laboratory. Concerned that the world may never be able to feed the 9 billion or so people on it by 2050, Gates believes that technology can offer the solution to this and many other problems the world faces, and with it the ‘future of food.’ Bill Gates is not alone in this venture. Richard Branson, another well-known investor, has joined the band wagon. And so has some of the largest meat companies in the World: Cargill and Tyson Foods.

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The global cultured meat market is poised to reach US$15.5 million by 2025 according to research company MarketsandMarkets, but commercialization for public consumption has been hampered by high costs of commercialisation, regulatory read tape and hesitation by governments to dip their toes onto the new technology, and for which they have no existing regulatory framework.

What is meat anyway?

Depending on whoever you talk to cultured meat, also known as clean meat, synthetic or in vitro meat, are grown from in vitro animals cell culture instead of slaughtered animals. Proponents say that these products will be a suitable replacement for animal meat in future, replacing animal protein that is reared on farm land that shrinks by the day and is fraught with environmental and ethical issues. They say that the fact that the meat can be created without the raising of and slaughter of environment harming animals and cruelty to the animals make them a solution to meeting the food needs of the world’s population in future.

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IN NUMBERS US$300,000

COST OF A PORTION OF LAB-GROWN MEAT IN 2013. THE COST HAS COME DOWN OVER THE YEARS In making the products cells are extracted from an animal, the cells are fed with nutrients to enable them multiply into a product that can be cooked and eaten by consumers. They also say that the end product will be virtually free of contamination, hence the ‘clean meat’ name. However, opponents contend that the meat is artificially made and should not be allowed to see the light of day. They also say the product should not be called meat.

Investors zero in

Manufacturers are not taking their chances to get clarity on regulations from FOODBUSINESSAFRICA.COM


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MARKET TRENDS – CULTURED MEAT

MEAT DEMAND IS SOARING AND IN FUTURE WE WON’T BE FED BY AGRICULTURE ALONE. WE BELIEVE THAT THIS TECHNOLOGY CAN BECOME A TRUE ALTERNATIVE FOR ENVIRONMENT CONSCIOUS CONSUMERS Lorenz Wyss, CEO Bell Group the regulators. From the US, Israel, Netherlands and Australia, new companies have sprung up to take advantage of this new technology. US company Just Meat, formerly called Hampton Creek, has raised US$310m in funding over the years, with part of this funding going into its research in cultured meat technology. Mosa Meat, the Dutch cell-grown meat producer was the latest to invest in this segment by raising US$8.8m in funding from Swiss meat manufacturer Bell Food Group. The company is famous for its live transmission of the tasting of the first labgrown burger back in 2013, has in June this year received a Euro 7.5 million (US$9 million) funding from the Bell Food Group, the Swiss leading meat processor, M Ventures the venture capital arm of science and technology company Merck and a donation from Google co-founder, Sergey Brin, who has invested in the company before. "Meat demand is soaring and in future won't be met by livestock agriculture alone," said Lorenz Wyss, CEO of Bell Food Group, at the time of the deal. “We believe this technology can become a true alternative for environment-conscious consumers, and we are delighted to bring our know-how and expertise of the meat business into this strategic partnership with Mosa Meat." Another meat company that has backed the technology is European largest poultry producer PHW Group, which has backed Israeli clean chicken company Supermeat, investing in a round of investments that raised US$3 million for the start-up to develop chicken meat products. In addition to other start-ups racing to bring lab-grown meat into the market, Tyson Foods, the American processor of proteincentric brands acquired a minority stake in Memphis Meats, which also counts Cargill, Bill Gates and Richard Branson amongst its investors, exploring additional opportunities for growth away from its traditional meat business. The US-based firm has also funded Future Meat, another start-up. In 2016, Tyson also bought a 5% stake in Beyond Meat, a company that makes plant-based burgers, chicken, and sausage products. Finless Foods, another US company, which is focused on delivering tasty fish products, received a US$3 million funding this year. Such companies are looking for support from deep pocketed individual investors and knowledgeable industry leaders from the meat technology space and culture technology to deliver on their promise to have tasty, affordable meat products in future. High production cost still stand on the way though. Since the first lab-grown burger had a production cost of north of US$300,000, researchers and developers have been working to reduce such high costs to make it commercially viable through advancements in technology. The other hurdle is finding a substitute for the blood serum that is very expensive and happens to be the source of protein for the technology 48

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Regulatory battle over who to control new technology begins

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ith the technology staring to appear to make major strides, the US Food & Drug Administration (FDA) has stepped into the plate to be the lead agency to regulate this new technology, citing its “extensive experience applying its existing authority . . . to rapidly evolving areas of technological innovation such as plant biotechnology.” It puts forward its “experiences in evaluating and ensuring the safety of novel technologies in the food sector,” as reason to provide guidance to the sector. n a first-ever meeting, the FDA held a meeting in June this year to provide a platform for stakeholders for input, relevant data and information, which was primarily focused on food safety, the agency also shared its initial thinking for how it intends to appropriately apply its existing regulatory tools and policies to this novel area of technology. However, traditional meat producers and farmers are battling lab-grown and other alternative meat products by looking to the federal government to fight the proliferation of these new meat products. They are also seeking the regulation of this nascent technology by the US Department of Agriculture (USDA), where they have significant influence, as opposed to the FDA. In February, the National Cattlemen’s Beef Association filed a petition to the USDA asking for them to strictly define “meat” and “beef ” as animals raised and slaughtered. According to the Association, start-ups should not call their products meat since they do not come from slaughtered animals, and that labeling them as meat will only confuse consumers. In June, the the NCBA and other associations representing chicken, pork, turkey and sheep farmers and producers appealed directly to President Trump, urging him to take action to preserve a fair and competitive marketplace for all meat and poultry products, regardless of the method in which these products are produced, calling the FDA’s actions a ‘power grab.’ They have also called for the USDA to have regulatory oversight over the new technologies, to create a level playing field with the traditional meat industry, saying the agency is ‘uniquelly equipped’ through its comprehensive inspection and enforcement of labelling and marketing protocols. “Having cell-cultured protein products regulated by FDA is not only inconsistent with the meat and poultry inspection statutes, but also with the White House’s reorganization plan,” that plans to move the federal primary food safety functions into a single agency housed at the USDA, the petition said. “Meat and poultry processing companies have been meeting the challenge of USDA inspection for decades. Cell-cultured meat and poultry companies can and should meet the same requirements,” the petition added

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MY FACTORY, MY STORY

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My Factory, My Story is an excellent platform to celebrate new factory or factory expansion; new products and services; new markets; new people; recent award or major achievement by sub-Saharan Africa’s leading companies in the food, beverages, milling, animal feed, retail and foodservice industry. These FREE high quality editorials provide your brand with unrivalled reach that could unlock crucial business networks and opportunities for FOODBUSINESSAFRICA.COM

your company to our readers in 17 African countries and around the World, who read our digital magazines and website online.

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25 YEARS OF GROWTH, INNOVATIONS & COMMUNITY IMPACT

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Brookside Dairy, the largest dairy in Eastern Africa, celebrates 25 years of aggressive growth and impact on the dairy industry and the economy in the region this year. Food Business Africa magazine had a conversation with the company’s Marketing Director, Oliver Mary, on the company’s past, present and future, with a focus on its innovations and marketing strategy.

COMPANY PROFILE AT A GLANCE YEAR COMMENCED OPERATIONS: 2003 NUMBER OF EMPLOYEES: 2,500

NUMBER OF PLANTS: 2 PRODUCT CATEGORIES: Fresh

milk, UHT milk, fruit and flavoured yoghurt, fermented milk, cream, butter, milk powder, flavoured milk, ghee

TOTAL INSTALLED CAPACITY: 1.5 million litres per day LOCATION: Ruiru, Kenya. WEBSITE: www.brookside.co.ke VISION:

Brookside Dairy Limited is firmly committed to be the market leader in East and Central Africa for milk and milk products, and to be the benchmark company in the industry and customer service.

MISSION STATEMENT:

Brookside Dairy Limited operations are focused in the manufacture of milk and milk products. It shall lead the market in terms of quality and performance of its products and customer service.

QUALITY POLICY STATEMENT:

Brookside Dairy Limited is committed to maintaining the highest quality standards in milk production through innovation and adaption of world-class quality and safety standards. To guarantee the best product for our customers, investment in efficiency and quality will guide our partnership with farmers, our milk production and distribution process. Through adherence to ISO 9001:2008 and 22000:2005 quality standards, we are confident of fulfilling our quality objectives.

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Oliver Mary (front, second left) with the Marketing team at the dairy located in Ruiru, Kenya. By Francis Juma o other dairy has had an impact on the dairy industry in Kenya and the Eastern Arica region as Brookside Dairy. The company was the first large scale dairy company to come up after the sector was liberalized in the early 1990s, and has since spread its influence into the villages and towns that dot the countryside, to the malls and retail shops that continue to sprout all over the region, to schools and other institutions of learning; contributing to the increase in farmers’ incomes, nutrition and health of the general population and general impact on the economy at large. Brookside Dairy Limited commenced its operations in 1993, at a time when the dairy sector in Kenya faced a dire future after the only dairy company had collapsed and farmers had nowhere to take their milk produce. Started by Mr. Muhoho Kenyatta, who is the Executive Chairman of the company, the dairy has grown from its humble beginnings with a production capacity of 5,000 litres of milk per day, sourced mainly from the company’s own Gicheha Farm and a few large scale farmers, to the present installed capacity in Eastern Africa of 1.5 million litres per day, uplifting the fortunes of thousands of dairy farmers and the broader economy of the region in its wake. The company started with a work

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force of just 30 employees and today has over 2,500 direct employees and another 365,000 indirectly, comprised of farmers, transporters, distributors and retailers within its operations in Eastern Africa. Of all the diaries in the region, Brookside stands out for its focus on the greater East African market more than any other. The company’s products are found in all the main countries in the region, with factory operations in Kenya and Uganda.

Growth through investments and acquisitions

Brookside Dairy has grown through a combined strategy of investments in dairy collection and processing infrastructure and acquisitions over the past 25 years. To facilitate the dairy sector to produce more milk for the company to process, the dairy has spent significantly to construct milk collection centres across the country. The company partners with and collects milk from over 200,000 farmers and cooperatives and through its farmers training program, farmers have upgraded their breeds to enable them profit from dairy farming since 1996. Brookside sets itself apart for the many significant milestones it has delivered in the history of the dairy sector in Kenya. The dairy was the first to go regional, when it

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THE DAIRY HAS GROWN OVER THE YEARS THROUGH ORGANIC GROWTH AND ACQUISITIONS TO BE THE LARGEST DAIRY IN THE REGION. opened its subsidiaries in Uganda in 2000 and in Tanzania in 2001. It is also the first dairy to aggressively grow its market share and brands through acquisitions of other players in the region, including that of Ilara dairies, which it acquired in 2003; Delamere dairy, which joined the Brookside ranks in 2007; Spin Knit dairy, owners of the Tuzo brand, in 2009; and the last ones being that of Molo dairy in Kenya and Sameer Agriculture & Livestock (SALL) dairy in Uganda in 2014. The company has also invested in the largest milk powder plant in Kenya in 2015, tripling its capacity for milk processing to 1.5 million litres in the region. Beyond the above, the dairy has also invested over the years on several expansion capacity projects in milk processing, packaging, storage and distribution. These include recent investments in fresh and long life milk and fermented products to meet rising customer demand for its popular brands. FOODBUSINESSAFRICA.COM


MY FACTORY, MY STORY – BROOKSIDE DAIRY

“The expansion and diversification into milk powder enabled our customers to be assured of a ready constant of milk products throughout the year. Despite the weather dynamics we are be able to receive all the milk that our contracted suppliers deliver during the rainy season or glut period. Our farmers are therefore assured of a ready market for their milk produce unlike before, when during the long rains farmers had milk surplus that exceeded the processing capacities of processors and therefore their intake was rationed,” says the company.

Broad range of products to meet customer needs

With a retinue of leading brands including Brookside, Delamere, Tuzo, Ilara and Molo on its roster of brands, Brookside Dairy has the broadest range of brands and products in the dairy industry in Kenya and the Eastern Africa region. The company has a range of long life products, be they in the UHT or ESL plastic packaging, that enable the dairy to distribute its products to rural areas where there is no electricity/refrigeration, thus enabling consumers countrywide to consume milk from their nearest shop. Its

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fresh milk products, conveniently packaged for individual home consumption are available in 200ml, 500ml, 1000ml, 2000ml and 20 liters for institutions. Brookside has also seen an increase in growing demand for its range of high value products, including yoghurt and traditional fermented milk (also called Maziwa Lala locally), butter, cream and ghee. The company is presently in a major drive to diversify and modify its portfolio of products, reinvigorate its packaging options and enhance its market reach and consumer awareness of its range of products.

Strong focus on quality, safety and environment

Brookside Dairy prides itself for its focus on delivering nutritious, safe and wholesome dairy products to its growing customers. With one factory based in Ruiru, Kenya and another one in Kampala, Uganda, the dairy is a pioneer in the implementation of the latest quality management (QMS), food safety, occupational health and safety (OHS) and environmental (EMS) standards, in line with the latest legislations and market trends. The company has been certified to

IN NUMBERS 1.5 MILLION TOTAL INSTALLED MILK PROCESSING CAPACITY IN KENYS AND UGANDA the ISO 9001 QMS standards from 2002 and OHS and EMS certified since 2007. Through these certifications, the company has improved the efficiency of its internal systems, improved customer focus, reduced costs, boosted the quality of its products and services, improved safety at its facilities, while taking better care of the environment and its employees, business partners and the broader community. The company has also met the stringent International Labour Standards by the International Labour Organisation (ILO), that has enabled it to get the Disney licence that qualifies it to use the Disney cartoon characters on its packaging and marketing platforms.

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IN NUMBERS 53% BROOKSIDE DAIRY’S SHARE OF YOGHURT MARKET IN KENYA, FROM 33% Innovations drive the next phase of growth

While innovations and research and development (R&D) have been been important drivers to the growth of Brookside Dairy over the years, the pace of innovations picked up substantially in the last two years since Oliver Mary joined the company as the Marketing Director for its Eastern Africa operations. “Brookside is the first company in Eastern Africa with such a state-of-theart factory,” says Oliver. “In the past, the company has focused on the liquid milk market, but in the last two years, we have focused on high value products – fermented products especially yoghurt, butter and cream - with the majority of our investments during the time going into these products,” he informed us during an interview at the company’s operational base and head office in Ruiru, Kenya. Oliver has a broad positive view of the dairy industry potential in Kenya, which he says offers outstanding opportunities for innovations compared to many other markets he has been to around the World, mainly in Europe. “The good thing with Kenya is that the market is very new, open and very reactive. People are eager to try out new products. As soon as you sample a product, you find a good response from the consumers. There are very few markets in the world where you can grow as aggressively in Kenya in a short time. For example, if I take the example of our Delamere yoghurt brand, we grew from 11% to 31% market share in three months, he informs us. He adds that despite popular perception that Kenyan consumers of yoghurt are conservative, they are actually willing to try out products if given a chance and can easily adopt them. “When I came here, everybody said that consumers take only vanilla and strawberry flavor variants of yoghurt. That is not the case any more, 54

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MY FACTORY, MY STORY – BROOKSIDE DAIRY

“THE KENYAN MARKET IS VERY NEW, OPEN AND REACTIVE. PEOPLE ARE EAGER TO TRY OUT NEW PRODUCTS.”

as we now have a number of new flavour options, including lemon biscuit and pear caramel that had not been in the market just a two years ago, but which have been widely adopted by consumers. We did a lot over the last two years but believe that there is still a lot to do to grow the market. The yoghurt category is growing globally in Kenya by 15% per annum. Am glad that we grew our market share from 33% to 53% in the two years that we delved deeper into our innovations and are confident that we will continue to grow our foothold in the category into the future,” he reveals.

Continuous research and innovations deliver results

The company has refined its innovations structure and platform to deliver on its goal of delivering more superior products to the market. It also invested a lot in consumer research to understand its brand performance vs competition regularly so that the company could assess when to make changes, including product changes. “It is important for us to understand the consumer needs and preference and also to validate these tastes before we launch new products or improve on them. Through research we were also able to taste and ensure our products are the most preferred in the market through superiority tests. This also enabled us to modify our products in a timely manner to meet consumer expectations. This enabled us to differentiate our products from the competition and to be the best in class in terms of different product ranges with regard to quality, packaging and sensory profile. “Over the last two years we have invested in our R&D and carried out different consumer research that have enabled us to launch new products that have met and surpassed our expected goals, with some products doubling our sales, for example Ilara and Delamere yoghurts, are now market leaders in the flavored and fruit yoghurt categories respectively after our relaunch,” Oliver revealed. He noted that restructuring of the marketing department has been a key pillar to the company registering the fast pace of innovations over the past two years. FOODBUSINESSAFRICA.COM

“Innovation is real team work involving people from sales, logistics, marketing and manufacturing. The whole company must work together to ensure that the product from the farm to the shelf is taken care of well and that the innovation ideas see the light of day,” he advices. “In our strategy, we have put together an innovations team we refer to as Codev, which is our innovations committee. We meet every three weeks to track the progress of all our innovations pipeline. We meet every three weeks here, as opposed to every month meetings at Danone, to go faster on our programs. The innovations team has one person from each department to enable us to take decisions faster,” he says. Part of the changes he instituted was to move the Innovations & R&D Manager role held by Mr. Benjamin Nzile, from manufacturing to marketing. Further, the company brought in new brand managers for each of the brands, a nutrition and wellness manager and a kids brands manager to drive the development of each of the brands and to bring out the company’s focus on nutrition, health and wellness and the kids categories. “R&D is part of marketing because if you put the R&D team in the manufacturing side they act as barriers to innovation, but if they sit on the marketing side, they help the marketing team to find solutions for the customers. The marketing team would then say this is what the consumer needs and this is what we should achieve. On the marketing side, R&D is a facilitator, on the manufacturing side, they can be a constraint to new product innovations,” Oliver counsels. “Today’s R&D is a marketer. By having R&D on our side, we also save time and

“INNOVATION IS REAL TEAM WORK INVOLVING SALES, LOGISTICS, MARKETING & MARKETING. R&D IS PART OF MARKETING, IT IS A FACILITATOR”

remove communication challenges because in all our meetings we are together, we speak the same language. This has been one of the reasons we managed to deliver so fast on our innovations pipeline.” Beyond the internal team, the Oliver also appreciates the key role of suppliers in the team’s delivery of its success. “We have worked with a lot of suppliers especially those supplying fruit preparations, flavours, packaging and fermentation technology providers (culture media) who have have helped us a lot. I would say that one of the strategies to succeed in the industry is to have a good relationship with suppliers, because these suppliers have a lot of knowledge of their industry and technology.”

The journey to product and packaging excellence

“When we started off on our innovations journey we decided to focus on the white mass, which is the base for all yoghurts first, with two objectives: to remove preservatives from our products because usually yoghurt should not have preservatives and second, to have yoghurts that can withstand the lack of adequate cold chain in Africa and can remain alive even if it is to stay out of the fridge for a few hours. “On the preservatives, we managed to achieve our goal of removing the preservatives by using a bio protector. I like

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this because the bio protector is natural. This idea actually came from a supplier who suggested that we should implement this idea. We decided to introduce this system in all our yoghurts, the first in the region and also in some of the Danone plants. On the ferment side, we changed the ferment to a much more resistant one to the local weather and the challenges of the cold chain. This ferment enables us to reduce acidity at the end of the shelf life, giving as a smooth and sweet yoghurt with better body and creaminess.” This white mass is what the company uses for the majority of its yoghurts, which is then fine tuned as per the recipe to the specific customer needs, segmenting each brand to a specific customer group and their specific needs. “Further, we have worked with suppliers of packaging cups and developed a specific mould using the in-mould-packaging (IML) technology that optimizes the part of the package that is visible to the consumer. We developed a unique cup shape that is our own design and then

“THE MORE THE MODERN TRADE WILL GROW IN KENYA, THE MORE THE YOGHURT DEMAND WILL GROW. WE STILL HAVE A NUMBER OF NEW OPPORTUNITIEES WE WOULD WANT TO BRING INTO THE MARKET IN FUTURE.” worked with the supplier to have a label with very high quality printing that brings out the fruits very well on the packaging, making the packages look more appealing than standard yoghurt packaging.” As part of its packaging innovation, the company also debuted the 250ml packaging size for its yoghurt brands – a regional first. “Market research showed us that the size is well appreciate locally as the consumer takes yoghurt as a snack or for meal replacement.” This pack size has delivered resounding success for the dairy. Beyond the yoghurt products, the company has also refreshed its fresh and long life products over the past two years, including a re-launch of Brookside Dairyfresh UHT milk, flavoured milk and new packaging for its cream products. The company has also introduced the Disney range of kiddy packs of its dairy products in the country, including yoghurt and 56

UHT milk. In Uganda, a subsidiary of its Kenyan operations, the company has also reviewed and made significant changes to the packaging and formulations, where applicable, of its fresh, UHT and fermented products.

Brand management and marketing mix enhanced

Oliver says that the company has spent considerable amount of time to understand the market for each of its brands and products and to mapped consumer needs, considering the wide variety of brands under its care. “From this study, we decided to dedicate each brand to one need state of our customers. Out of this study, we assigned the Ilara brand as the whole family brand that brings fun and happiness to the family. This is reflected in its promotion activities including TV advertising. It is the most affordable of our brands. Delamere has been positioned towards the adult consumption category with an indulgent profile. We know that everyone once in a while wants to indulge him/herself and that is where Delamere comes in. The Brookside brand is being positioned on the health side, where we have already launched Brookside Fruitness and Brookside Natural yoghurts. With out coverage of health (Brookside), indulgence (Delamere) and fun (Ilara), we have covered the most critical parts of the market with this portfolio of products,” he explains. The company has also changed its marketing strategy, increasing its usage of bill boards instead of radio and TVs, placing

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bill boards in the major cities, especially in Nairobi. “We know more people are moving more and more. We decided to go big on our advertising to ensure we have the greatest impact over a short period of time. So we put in place an aggressive campaign utilizing bill boards, street poles, TV and in store ads, knowing that at least in the beginning, 75% of the sales are through the supermarket. But over time, other sales channels have picked up to complement the supermarket sales.”

The future opportunity still wide

According to Oliver, the opportunity in the yoghurt category is still wide, considering that the average consumer of yoghurt in Kenya consumes 4 kg of yoghurt a year, compared to France that consumes 28 kg. He believes that some factors will boost the opportunity in the yoghurt category going forward “The modern trade will grow as more of the big retail giants come into the market. Most consumers say that they buy yoghurt at the supermarket because they have a wider choice at these outlets. The more this channel will grow, the more the yoghurt demand will grow. He says that Brookside still has some new opportunities, which may still be too early to bring to Kenya, that it will want to be the first to bring into this market in the future. Going forward, the company will ride on the success achieved so far to grow its market share further in Kenya and the region. “As a company, we say that 2018 was a year of consolidation, when we got a lot of new products onto the market and consolidated our position, ensuring that our FOODBUSINESSAFRICA.COM


MY FACTORY, MY STORY – BROOKSIDE DAIRY

products were well distributed across the country and got some good shelf space. 2019 will be the year to innovate by launching some new more sophisticated products into the market to serve consumer needs. There is still a lot of innovation in the high value products segment, we are only at the beginning. We also have some areas we shall enter in the next year,” he reveals. As the market demand has risen, the company has continued to invested in new processing and filling machines, with plans to add more in the near future in anticipation of continued growth. According to Oliver, the future is very bright and the organization is set to achieve its vision. Changing consumer needs will dictate the direction of the company’s innovation pipeline into the future, he stresses. Top on the list will be the rising awareness of health and wellness and the strong urge for convenience. “Consumers are becoming more health conscious. We have the platform to provide more of the healthier options, considering that dairy products have the right nutritional base on which we can rely. On the other hand, consumers also want convenient products that are easy to consume and fit into their on-the-go lifestyles. Through our R&D, we intend to launch more health conscious products that are convenient to use.”

launch an even more affordable flavoured yoghurt in the future because today, even our most affordable yoghurt Ilara, is still expensive for some people.

Affordability, regional markets key to growth

Affordability is still key to growing the market in the dairy sector in the region, states Oliver. “The success of Delamere yoghurt is centrered on affordability. When we launched the new Delamere yoghurt, the key idea was ‘Let’s make fruit yoghurt affordable for the consumers’, which I think we achieved by coming up with a good fruit yoghurt in line with the competition at a much more affordable price. By extension, the day we shall make cream much more affordable, we shall open up the market; the same case with butter, which is a bit more expensive. So we are working on some solutions to make them more affordable. We are also working to FOODBUSINESSAFRICA.COM

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The dairy has the most extensive milk collection systems in Kenya, reaching thousands everyday who supply it with the milk it processes

“WE SAY THAT THE EAST AFRICAN MARKET IS OPEN BUT FOR DAIRY PRODUCTS IT IS VERY DIFFICULT TO EXPORT. THERE IS NEED TO STREAMLINE THE EAST AFRICAN MARKET ” He also avers that the future of the industry will be better with a broader market for dairy products, which is still not the case. “We say that the East African market is open but for dairy it is very difficult to export to the regional market. We could have exported Delamere yoghurt to many countries in Eastern Africa but today with the barriers, it is a nightmare. There is need to streamline the East African market for the dairy industry,” he states. However, for Kenya to compete in the regional market he notes that that there is an urgent need to reduce the cost of milk to the dairies and to improve milk production overall. “We need to improve the efficiency of milk production to deliver milk at a lower cost because today we are not able to export milk products due to the high cost. 58

We also have to manage the seasonality in milk production which affects our dairy and many others every year. 4-5 months each year, we don’t have enough milk to process,” he says.

Community impact

Apart from the direct impact that emanates from working with farmers across the country, Brookside Dairy has a wider role on the community at large. The company trains our 30,000 farmers annually on better farming methods to enable them profit from their farming ventures, the climax of which is the biannual Brookside Livestock Breeders Show and Sale, where farmers interact and learn from each other while breeders are able to market their breeds to other farmers regionally. With over 2500 employees in its Eastern Africa operations and another 365,000 indirectly the dairy is a significant contributor to the economies of the region, including its contribution as a major tax payer in the countries it operates. The company also has a long history of contributing to academia and sports, including nurturing the sporting talents of

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youth by sponsoring the national secondary schools’ championship for schools in Kenya. The games include, for both boys and girls, basketball, hockey, rugby 15s, handball, athletics and field events. It also has a sports scholarship with Strathmore University whereby the best basketball and hockey players in the country who also score good grades in their national KCSE exams win a university scholarship to pursue a course of their choice while still playing for the university teams. In academics, its Brookside Mathlete program demystifies the perception that students have about sciences and mathematics with the winners rewarded with various prizes and the grand prize of a university scholarship. This contest is currently being held in 15 counties, with plans to host it in each of the 47 counties in Kenya. Lastly, the company educates consumers and the general public on healthy living, through consumption of healthy products like milk and dairy products

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Food Business Africa - July/August 2018  

Africa's Leading Food, Beverage and Milling Industry Magazine

Food Business Africa - July/August 2018  

Africa's Leading Food, Beverage and Milling Industry Magazine

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