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IN THIS ISSUE: LESSONS FROM SA’s LISTERIOSIS OUTBREAK • STEAM INFUSION

SPECIAL REPORT

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HOW FOOD MAJORS ARE EMBRACING START-UPS INDUSTRY FOCUS

ANIMAL FEED INDUSTRY IN TANZANIA

MY FACTORY, MY STORY

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A FOODWORLD PUBLICATION FOOD BUSINESS AFRICA | MEDIA MAY/JUNE 2018 1


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

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CONTENTS

COUNTRY FOCUS:

ANIMAL FEED INDUSTRY IN TANZANIA ARTICLES

24 FOOD SAFETY: LISTERIA OUTBREAK Linda Jackson from Food Focus SA lists some of the lessons the industry and Govt have learnt from the recent Listeriosis disease outbreak in South Africa.

DIGITAL MAGAZINES IN THIS ISSUE: LESSONS FROM SA’s LISTERIOSIS OUTBREAK • STEAM INFUSION

SPECIAL REPORT: OPEN INNOVATION

Brookside Dairy Ltd: 25-Year Anniversary

SPECIAL REPORT

OPEN INNOVATION:

INDUSTRY FOCUS

ANIMAL FEED INDUSTRY IN TANZANIA

Industry Focus: Breakfast Cereals Industry in Africa

MY FACTORY MY STORY

PROCTOR & ALLAN E.A. LTD

TECHNICAL ARTICLES: WWW.FOODBUSINESSAFRICA.COM

A FOODWORLD MEDIA PUBLICATION

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

Big food companies are using open innovation platforms to discover the next wave of new products and to find acquisition targets as the industry faces consumers with new requirments 4

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

My Factory, My Story

HOW FOOD MAJORS ARE EMBRACING START-UPS

MAY/JUNE. 2018 NO. 30

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IN THE NEXT ISSUE (JULY/AUGUST 2018)

DAIRY BUSINESS AFRICA: Ingredients: Texture modification | Cultures in cheese BEVERAGE TECH AFRICA: Beverage Trends: Tea Ingredients Application: Stevia FOOD SAFETY: Biofilms management

ADVERTS DEADLINE: July 15, 2018 FOODBUSINESSAFRICA.COM


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10. Most Outstanding Package 11. Most Innovative Use of Ingredients

INITIATIVE OF THE YEAR

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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 DESIGN & LAYOUT Frank Bett

EDITORIAL 6

Grain boards need urgent restructuring to function in Africa

EVENTS CALENDAR 10

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

NEWS 11

Expanded Africa Food Industry Excellence Awards ceremony set for September 2018

12

Kellogg’s to invest US$420m for a stake in the Nigerian Tolaram Africa Foods

12

China’s dairy market to grow driven by yoghurt and cheese

16

MANE opens Kenyan office to serve Eaatern Africa region

18

CDC and Standard Chartered unveil funding for Zimbabwe businesses

20

Campbell Soup’s CEO Denise Morrison retires abruptly, company to review portfolio

21

FrieslandCampina invests in Ethiopia’s Holland Dairy

22

Nestle closes Kenyan regional office, restructures operations in Africa

23

IFF acquires Israeli flavours company Frutarom

FOOD SAFETY 37

Key lessons from South Africa’s Listeriosis outbreak

SPECIAL REPORT 38

Open Innovation: Why companies are seeking out start-ups

PROCESSING 41

Steam Infusion: Unleash the power of steam

INDUSTRY FOCUS 43

Animal Feeds Industry in Tanzania

MY FACTORY, MY STORY 50

Proctor & Allan East Africa Ltd

SUPPLIER INNOVATIONS & NEWS 23

6

Chr. Hansen debuts probiotic strain with Aspirin protection | Buhler introduces purer semolina system | Ishida debuts water-free weighing system MAY/JUNE 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 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


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EDITORIAL

Govt. inefficiencies throttling Africa’s agric potential

A

frica’s fragile food security systems face many threats and challenges. Low levels of farm productivity, high costs of production, wanton waste at the farm, distribution and storage place a huge strain on the ability of the continent to feed its rapidly growing and urbanizing population. However, beyond these strains, the role of government in the regulation of agriculture, from the types of seeds to allow to be planted, to more insidious price to pay for grain delivered to the many grain boards that dot the continent, the role of the government may appear a facilitator of the ‘farmer’, but which o close inspection, opens the eyes of the observer to the many ways government can actually be the main hindrance to the development of agriculture and related industries in Africa. And Kenya provides fertile ground where the role of government continues to put a strain on the agriculture sector. The country has been in the news recently over cases of funds misappropriated by government officials through the grains agency, National Cereals & Cereals Board (NCPB) which has a mandate to maintain strategic grain reserves in the country. The theft at NCPB follows the government’s failed, ill-advised attempt to eliminate Kenya’s food deficit by initiating a farming venture in Tana River that has failed miserably. We would like to urge African governments to seek ways to work with the private sector not only in the investments in agriculture but also in food security strategies that can utilize the key strength of the private sector: efficient utilization of resources. This way, the dream of having a continent free of hunger will be sorted with the concerted effort of private enterprise. It is high time governments in Africa give the private sector the opportunity to thrive . . . and build a more food secure Africa. Have a good read. Francis Juma Publisher

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QUOTABLE QUOTES

“The clinical trial identified that participants taking the probiotic experienced a significant defence against gastro intestinal damage caused by a widely used household painkiller compared to those who took the placebo. This indicates a clear protective effect from the strain both in terms of the reduction of intestinal damage and the number of ulcers caused.” Johan van Hylckama Vlieg, Vice President of Microbiome & Human Health Innovation at Chr. Hansen about the probiotic strain clinical trial that protects against a common painkiller aspirin

“We are delighted to partner CDC in providing access to finance in a responsible way; enabling people, businesses and communities in Africa to progress and prosper. ” Sunil Kaushal, Regional CEO of Standard Chartered Bank, commenting on the agreement with CDC, to provide funding to Zimbabwe’s agriculture and food businesses.

“The bottom line here is that this beginning of the end for industrially produced trans fats. If the world replaces trans fats, people won’t taste the difference, food won’t cost more, but your heart will know the difference.” Tom Frieden, head of the ‘Resolve to Save Lives’ advocacy group commenting on the partnership with the WHO on the push to eliminate trans fat in food products around the World.

“This was our company’s first AFMASS participation. The event is professional and the quality of the visitors was very high; with most visitors to our stand at management level. We were glad that half of those who visited us are already millers, with the rest planning to set up milling plants soon.” Major Zhao, Marketing Manager at Pingle Group, on his company’s participation at the AFMASS Eastern Africa edition, which was held in Nairobi, Kenya

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

“Our long-term strategy is to focus on juice and what I would call alternative beverages in these new segments where consumers are asking for more nutritive sort of range of products. We have positioned ourselves for health and wellness type of products and that is the focus for the new facility.” Duncan Kimani, Manufacturing Director of Coca-Cola Beverages Africa, at the commissioning of the new juice plant in Nairobi.

“We will continue to make the case that straws attached to our packages serve a vital functional purpose, and that bans are not the best way to tackle this issue, given the consequences of doing so.” Charles Brand, Tetra Pak’s executive vice president for product management and commercial operations commenting on recent plans by government to ban plastic straws in the UK

“This allows Walmart to jump into a high-growth market, and results in two global players focusing on the growth of the Indian e-commerce market. The ecommerce fight ahead should be less about market share than about growing the market manifold.” Prasanto Roy, vice-president of NASSCOM’s Internet council commenting on Walmart’s acquisition of Flipkart, India’s ecommerce company.

“This transaction is a big win and a fantastic outcome for shareholders, customers and employees of both companies. Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses.” IFF Chairman and CEO, Andreas Fibig, while commenting on the acquisition of Israel’s largest flavours company, Frutarom

FOODBUSINESSAFRICA.COM


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S Photographer Didier D. Daarwin Getty Images/Image Source - Thinkstock/Anatoli Styf.

Photographer D. Daarwin Getty Images/Image Source Didier - Thinkstock/Anatoli Styf.


WORLD IN NUMBERS

UK

US$479M

Amount in savings to be realized by 2020 from Arla’s new transformation program ‘Calcium’

USA

2.5M

UK

Tonnes of total coffee exported in March by the world’s leading producer, Brazil

US$122.69B

Expected loss to USA’s pork industry per year if China imposes 25% tariff on imports

US$113.5M

UK

USA

36%

Decrease in operating income for Seaboard Corp’s Commodity Trading and Milling (CT&M) segment in the first quarter.

4 USA

Amount invested by Britishowned dairy company, Dairy Crest in growing the capacity of its cheese business USA

US$122.69B

FRANCE

Amount in revenue for Walmart supported by growth in US online sales

567M

Amount for the acquisition of Mövenpick Hotels by AccorHotels in an expansion drive into Africa

US$7.1B USA

Approximate sum tabled by International Flavors & Fragrances to acquire Frutarom

USA

US$89M

Amount in profits reported by Kraft Heinz in the first quarter ended March

9.77B

Value in sales reported by Tyson Foods for the period ended 31 March 2018

USA

US$500M

Estimated amount to be paid by Mondelez International for acquisition of Tate’s Bake Shop

NIGERIA

NIGERIA

US$402M

US$81.02M

Value of exports in agricultural products including cashew nuts, cocoa butter between January and March 2018

Value of Nigeria’s cashew production at the end of the year 2017

NIGERIA

US$2.14M

Value of Dufil Prima Foods’ acquisition of three noodles

production lines of May & Baker

NIGERIA

ZAMBIA ARGENTINA

US1.2 BILLION Coca-Cola’s announcement for investment in Argentina to increase its operational capacity till 2021

US$654M

Amount the country spends on imported food products such as starch, sweeteners and flour

32%

Drop in maize production for 2017/18 impacted by drought and fall of farmland under maize

SOUTH AFRICA

15%

Growth in revenue for Astral Foods despite Avian Influenza problems in the last year

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MAY/JUNE 2018 | FOOD BUSINESS AFRICA

FOODBUSINESSAFRICA.COM


UK

US$10B

Value of the merger between Sainsbury’s and Walmart’s Asda UKRAINE

14%

CHINA

Projected decline in soybean production despite higher expected yields than the five-year average.

FRANCE

US$2B

Approximate value of US food and agric exports to be impacted if China imposes tariffs

10.8%

INDIA

Increase in sales by Danone in the first quarter 2018

CHINA

7.4M

Amount in metric tonnes of China’s 2018 beef production

US$7M

Value in funding raised by startup Milkbasket to be invested in talent, technology and territory development INDIA

US$4.53M

INDIA

Amount paid by Parag MilkFoods for the acquisition of Danone’s Indian dairy manufacturing facility

SINGAPORE

US$16B

Value of Walmart’s acquisition for 77% stake in India’s ecommerce company, Flipkart

9.8%

Year-on-year increase in profits reported by Olam International on reduced net finance costs and lower taxation in Q1 2018.

NIGERIA

US$420M

Amount of Kellogg’s investment for an unknown stake in the packaged foods manufacturer, Tolaram Africa Foods

KENYA

54%

Decrease in sugar imports in the first quarter of the year after period for duty-free imports lapsed

ZIMBABWE

18%

Increase in revenue for Delta Corp in the year ending March 2018

SOUTH AFRICA

US$784.2M

Amount in group turnover for the maker for Pioneer Foods in 2017 half year results

SOUTH AFRICA

US$9.21M

Amount in operating loss reported by Famous Brands from Gourmet Burger acquisition

FOODBUSINESSAFRICA.COM

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CALENDAR OF EVENTS

June 4-6, 2018

June 28 – 30, 2018

September 27 – 29, 2018

Dietary Fibre Conference Rotterdam, Netherlands Focus: Dietary fibre www.dietaryfibre.org

IFE China International Food Exhibition Guangzhou, China Focus: Food & Beverage www.ifechina.com

World of Food India Mumbai, India Focus: Food Industry www.worldfoodindia.com

July 15 -18, 2018

October 3-5, 2018

IFT18 Food Expo Chicago Illinois Focus: Food & Beverage www.iftevent.org

Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo – Southern Africa edition Lusaka, Zambia Focus: Food, Beverage and Milling Contact: FoodWorld Media Ltd Tel: +254 725 34 39 32 Email: info@foodworldmedia.net www.afmass.com

June 7-8, 2018 Sustainable Foods Summit – European edition Focus: Sustainability Movenpick Hotel, Amsterdam, Netherlands www.sustainablefoodssummit.com/europe

June 12-15, 2018 FOOMA Japan Tokyo, Japan Focus: Food Industry www.foomajapan.jp

June 19-20, 2018 International Grains Council Grains Conference Queen Elizabeth II Centre, Westminister, UK Focus: Grains www.igc.int/en/conference/confhome

June 20-21, 2018 European Halal Expo Utrecht, Netherlands Focus: Halal products www.europeanhalalexpo.com

June 24-26, 2018 Africa’s Big 7 Gallagher Convention Centre, Johannesburg, South Africa Focus: Food, Hospitality www.africabig7.com

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

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

October 20 – 23, 2018 National Frozen & Refrigerated Food Convention San Diego, CA Focus: Frozen & Refrigerated Foods www.nfraconvention.org

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

May 8-10, 2019 Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo Eastern Africa edition Visa Oshwal Centre ,Nairobi, Kenya Focus: Food, Beverage and Milling Contact: FoodWorld Media Ltd Tel: +254 725 34 39 32 Email: info@foodworldmedia.net www.afmass.com

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

AFMASS SOUTHERN AFRICA ONLY FEW MONTHS AWAY!! The fast growing industry-focused trade show Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Exhibition is expanding in 2018 with a new edition in. 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 - while providing a platform to identify technologies required by the industry to do value addition, store and trade food and agro produce. AFMASS Southern Africa edition will bring together the stakeholders from Zambia, Zimbabwe, Malawi, Botswana, Mozambique, Angola, DRC, Tanzania and other African countries, plus visitors from over 40 countries into Lusaka for three days of technical conferences, exhibitions and field vists to leading companies to share the future of the industry in the region. More information can be found at www.afmass.com 12

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

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NEWS AWARDS

Expanded Africa Food Industry Excellence Awards ceremony set for September 2018 Awards ceremony celebrates innovations, projects and initiatives from Africa’s food and beverage industry

– A revamped Africa Food Industry Excellence Awards ceremony has been announced, with a more diversified variety of awards to be won by some of the leading companies in Africa. Set for the evening of September 14, 2018 at the new Movenpick Hotel in Nairobi, Kenya, the awards ceremony is set to reveal some of the most outstanding individuals, new products, plants and initiatives that have been introduced by food, beverage and milling companies in Eastern, Central and Southern Africa. “We are excited to expand the scope of the Awards this year. Having debuted the Awards last year, we got overwhelming

KENYA

FOODBUSINESSAFRICA.COM

response from the industry, with many asking us to relook at the Awards with a view to improve it. We have just done that,” says Francis Juma, the Founder of FoodWorld Media, the publishers of the Food Business Africa magazine, that is the organiser of the ceremony. “The food industry has undergone tremendous transformation in the region over the last 5 years since we started our magazine. These Awards are meant to celebrate the achievements by individuals and companies from this growing industry who have made it all possible,” he added. The organisers have expanded the scope of the Awards with the addition of the New Plant of the Year, New Products of the Year and the Company Initiatives of the Year, which have been added to the Individual Achievement Awards that were part of last year’s process. The New Plant of the Year and the New Products of the Year are arranged as per the various sectors of the industry to provide a level-playing field for all the entrants for

the various categories, says Juma. “In the Company Initiatives of the Year, we have introduced two categories: Sustainability Initiative and Training Initiative enabling us to celebrate outstanding sustainability and capacity building initiatives by the industry,” Juma explains. Nominations are also open for the Africa Food Industry Champion Award and the Most Influential Food Industry Manager, a new category. This year’s Awards will focus on companies in 7 countries in Africa: Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Ethiopia and Zambia, with plans to receive entries from more countries in future. The call for entries, which has officially kicked off, ends on July 6, 2018. More information about the Awards is availbale on www.awards. foodbusinessafrica.com

FOOD BUSINESS AFRICA | MAY/JUNE 2018

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NEWS M&A

Kellogg’s to invest US$420m for a stake in the Nigerian Tolaram Africa Foods

NIGERIA – American multinational foodmanufacturing company Kellogg’s has announced it will invest US$420 million for a stake in the Tolaram Africa Foods (TAF) in Nigeria, as it strengthens its presence in Africa’s most populous country. The US food and cereals company seeks to strengthen itself in the continent, as it plans on acquiring TAF, a packaged foods manufacturer for the Nigerian and Ghanaian

market. The company has highlighted expansion into emerging markets as an important element of its growth strategy. In 2016, Kellogg’s and Tolaram formed a joint venture, Kellogg Tolaram Nigeria Limited, a company that markets and distributes breakfast and snacks brands in West Africa, and noodles across Africa. “We have been delighted with our partnership with Tolaram. Multipro is an unrivalled distributor in West Africa, with best-in-class logistics and consumer activation capabilities. Our investment in TAF links us to a leading packaged foods company in that market, with key brand building capabilities and share leadership in the noodles category,”

said Amit Banati, president of Kellogg AsiaPacific. Amit revealed that the partnership recently launched Kellogg cereals products in Nigeria, which are also produced locally as it looks forward to expanding its cereals and snacks business in West Africa and noodles across Africa. In September 2015, the company acquired Egypt’s largest cereals company, Mass Food Group, the makers of Temmy’s and Nutrifit cereals, advancing its emerging market growth strategy for US$50 million. This followed its deal to take Bisco Misr, the country’s leading producer of biscuits, adding to its portfolio of biscuits and snack products.

MARKET TRENDS

China’s dairy market to reach US$54.9b, as yoghurt, cheese continue rise in the country

CHINA – China’s dairy market will grow at

a compounded annual growth rate (CAGR) of 6.6% in value to reach US$54.91billion in 2022, led by yogurt and cheese, which are experiencing steady high value retail sales growth. A report by Mintel has revealed that yoghurt maintains an annual retail sales growth of over 20% since 2014 while the cheese category has recorded a growth rate of between 15% and 25% from 2015-17. “Mintel research indicates that China’s dairy market growth will be driven by increased consumption, resulting from the

14

expansion of consumption occasion, value increase due to the rising price of raw milk, and consumers trading up to more premium options,” said Summer Chen, senior food and drink analyst at Mintel. The consumption of dairy products in China is influenced by health-related factors with milk and yogurt being highly regarded for improving immunity, good for kids and the elderly, the report said. It adds that consumers would pay more for milk and yogurt, closely related with being high in protein and easily digestible and while cheese is regarded as being high in protein, calories

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

as well as nutritious. Butter is however, likely to be associated with high calories, fat and cholesterol. It reveals that claims such as additional nutrients, healthy ingredients, low fat or fat free and no-additives claims can lead to the probability with consumers to pay more in China also increases as a result of increased awareness of dairy intake. For premium options, buying power by consumers is influenced by packaging and taste-related factors such as convenient packaging and limited seasonal flavours. Further, products designed for a special group of people, such as those who are getting fit, are also among the top features consumers are willing to pay a premium for. The report notes that urban Chinese consumers prefer dairy products from big and nationwide dairy brands and more consumers prefer imported dairy products than domestic ones. Chen said that for domestic brands to regain consumers’ confidence in their products they needed to position with a premium brand image, showcasing additional health benefits, and spotlighting innovative flavours in order to compete with imported brands. USDA reports indicate that according to projections in the China Ministry of Agriculture’s National Dairy Industry Development Plan for 2016-2020, 75% of all dairy consumed in China will continue to be produced domestically. The European Union (EU) is the leading dairy exporter to China, with close to 50% of the market value, having surpassed former leader New Zealand in 2015. FOODBUSINESSAFRICA.COM


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NEWS INVESTMENTS

Coca-Cola officially opens new hot-fill juice line in Nairobi, Kenya

KENYA – The Kenyan soft drinks bottling company Nairobi Bottlers under the newly formed Coca-Cola Beverages Africa (CCBA) has launched a new processing line at its

recently opened juice plant. The line with a production capacity of 28,000 bottles per hour processs fresh juices, iced teas and sports drinks and according to

the company, created 24 jobs at the plant. The new line was the first to utilize hot-fill technology in Kenya and the second in East Africa after another one, which CCBA owns in Uganda. A number of new innovations have been introduced from the new plant, including a range of juices infused with fruit pieces. “The Public Procurement and Disposal Act will give close attention to the requirement of the 40% local content policy which Coca-Cola is already exceeding,” said President Uhuru Kenyatta who presided over the launch. Nairobi Bottlers is on a journey to a total beverage company under CCBA as it works to deliver on Coca-Cola’s ambitious goal to invest S$17 billion over the years to 2020, says Duncan Kimani, the Manufacturing Director for CCBA’s operations in Kenya.

NUTRITION

Nestle sets new sugar, salt and fat targets to enhance healthy living in children

– Food and beverage company Nestle has launched a global initiative ‘Nestlé for Healthier Kids’ that will see it develop healthier and nutritious products by 2020. According to the maker of Nescafe and Kit Kat, the engagement also includes advising families on nutrition and health while accelerating Nestle’s transformation of

SWITZERLAND

its food and beverage portfolio worldwide. “Childhood is a time where life-long habits are formed. We want to help parents make healthier choices for their children. This is why we are accelerating our efforts to support families in raising healthier kids and we call on others to join us in this endeavour,” said Mark Schneider, Nestlé CEO. The company says that it is engaged in product reformulations with one-third of its products being reformulated every year through sugar, salt and saturated fats reduction efforts, with the aim to include larger portions of vegetables, fiber-rich grains, pulses, nuts and seeds and micronutrients into its products using its industry-leading innovation capability. It will also reduce sugars by 5%, salt by over 10% and to reduce saturated fats in all relevant products that do not meet WHO

recommendations. With ‘Nestlé for Healthier Kids’, the company pledges has set new immediate goals that will by 2020 add at least 750 million portions (80g) of vegetables to its products and at least 300 million portions (16g) of fiber-rich grains, pulses, nuts and seeds. Further, it will reduce sugars by 5%, on top of the 34% it has achieved since 2000 and reduce salt by a further 10% above the 20% it has reduced since 2015. To reduce the impact of saturated fats on its consumers, it will reduce saturated fats by 10% in all relevant products that do not meet WHO recommendations to complete the commitment it took in 2014, while also enhancing programs and online services designed to provide parents and caregivers with more nutritional knowledge, healthy recipes and practical tips.

INNOVATIONS

Arla Foods butter brand expands with launch of Lurpak Softest UK – Global dairy company and co-operative Arla Foods has expanded its butter brand with Lurpak Softest, a new soft blend butter that is spreadable straight from the fridge, that it says is the softest, most spreadable butter ever. According to the company, spreadability is the most important factor for shoppers when choosing which butter or spread to buy, closely followed by taste. 16

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

“Research shows that 92% of consumers spread butter straight from the fridge so we really wanted to address the issue of spreadability which we know is a barrier to purchase. With the new recipe we have created for Lurpak Softest, we can tap in to the increasing consumer demand for convenience, but with the taste and naturalness of butter,” said Lucy Hurrell-Morgan, Brand Manager for Lurpak FOODBUSINESSAFRICA.COM


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NEWS INVESTMENTS

Flavours and fragrances major MANE opens its doors to Eastern Africa

KENYA – Leading flavours and fragrances company MANE has opened an office in

Kenya to tap into tehrising demand for its products in the region Located in the suburb of Karen, Nairobi, MANE Kenya Ltd is a regional head office for the East African market. The office will boast a technical laboratory, soon to be completed and supported with technical staff. The completion of the laboratory will be the first flavour application centre for the region. “An onsite laboratory is of vital importance to the region. We are now in the position to locally support our customer’s development needs, by working with our customer’s base to fast and effectively deliver finished products,” Marvin Murphy, General Manager of MANE Kenya Ltd.

New Product Development will also be in line with regional profiles as we invest a great amount of time in consumer research to better understand local tastes and preferences. For the first time we can offer technical support within the region at a fast pace.” The company has a local warehouse for storage of customers products, thus minimising lead times for product delivery, and reducing the customer’s working capital and storage facilities, Murphy added. Other MANE flavour offices in Africa include offices in Maghreb (Algeria), Cape Town (South Africa), and Accra (Ghana) covering North, South, East, & West of the continent.

AGRIBUSINESS

Flour Mills Nigeria enters partnership with DowDuPont for maize hybrid development

NIGERIA – One of Nigeria’s leading food

and agro-allied companies Flour Mills of Nigeria (FMN) and Corteva Agriscience, the Agriculture Division of DowDuPont, have entered into a partnership for maize hybrid seed development in Nigeria. The collaboration will see FMN and

Corteva Agriscience work together on key aspects of the maize value chain in Nigeria, with a focus on promoting modern farming techniques and practices. “We are excited at the prospects of this partnership, and what we can achieve. Corteva Agriscience is a globally renowned

company with a wealth of experience in crop protection and biotechnology solutions, and will introduce new and exciting seed production techniques that will help develop the maize hybrid seed market in Nigeria,” said John Coumantaros, Chairman, FMN. FMN and Corteva Agriscience have already started work on demonstration farm plots in Nigeria to showcase high-performing hybrid maize varieties with additional test sites expected to commence soon. Nigeria currently has a national average maize yield of about 1.5 metric tonnes per hectare, which is significantly below the average 2 tons per hectare of maize yields in Africa and 10 tonnes per hectare in the U.S. Early projections indicate that the adoption of hybrid seed and use of improved farming inputs and techniques will increase maize yields by about 100% in the next five years.

PEOPLE

2 Sisters appoints Ronald Kers as CEO to guide it beyond recent food safety troubles UK – UK’s leading chicken producer, which

has recently gone through troubling times due to concerns with its food safety systems, the 2 Sisters Food Group has appointed former global CEO of Muller, Ronald Kers as its new Chief Executive Officer, effective 1 June 2018. Ker announced in March 2017 that he was to leave Muller, to be replaced by Uwe Sommer, the head of international

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marketing, sales and global retail at chocolate manufacturer Lindt and Sprungli. 2 Sisters believe Kers would take the business performance to the next level given his wide experience in the food industry. “I am pleased that Ronald is joining 2 Sisters as CEO and we will benefit from his tremendous experience working in many of the world’s leading global food businesses,” said Ranjit Singh, President of parent

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

company Boparan Holdings Ltd. Singh said that after 25 years as CEO, he was taking on a broader leadership role as President of the BHL group. “Under Ranjit’s leadership this business has grown from scratch to over 3.7 billion pounds turnover and has 23,000 employees working across 48 sites in various countries. It will be a privilege to work with such a successful entrepreneur,” said Kers. FOODBUSINESSAFRICA.COM


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NEWS PEOPLE

Campbell Soup’s CEO Denise Morrison retires abruptly, company to review portfolio USA – Shares in US soup maker Campbell

Soup plunged sharply as the company’s CEO Denise Morrison abruptly decided to step down, as the company announced weak financial ‘results, which were below expectations,’ triggering a review of the company’s portfolio. Keith McLoughlin, who joined the company’s board in 2016, has replaced Morrison as CEO on an interim basis, bringing an end to the company’s recent foray into other sectors of the industry, in a bid to move beyond its legacy soup business into the fresh and snacks categories that are growing faster. Campbell Soup gave the announcement while reporting its full-year earnings reports, which showed earnings before interest and taxes loss of US$475 million, which included an impairment of charges

of US$619 million related to its Campbell Fresh business. Campbell, just like many big food industry giants, has been hit by changing consumer needs, rising freight costs and a squeeze by retailers that are scrambling to hang onto consumers in the increasingly competitive US retail space, as Amazon and other e-commerce retailers grow their influence. Under Morrison’s leadership, Campbell had embarked on diversification into snacks where in March it completed the acquisition of the second largest salty snack maker in the US, Snyder’s-Lance for US$4.87 billion. “Denise chose to retire as CEO and as a board member, and the board and she mutually agreed that it would become effective today,” the company said. In the announcement, the company said the

recently elevated Chief Operating Officer Luca Mignini would focus on the core soup business and integrating the newly acquired Snyder’s Lance and Pacific Foods companies, with Keith taking the CEO role on an interim basis, as the company embarks on a strategic review of its business. “Looking ahead, we will be reviewing all aspects of our strategic plans and portfolio composition. We anticipate that our review, which will take several months to complete, will lead to changes designed to improve our operating performance and create longterm shareholder value. We plan to discuss the outcome of this review when we report fourth-quarter and full-year results in late August,” said Anthony DiSilvestro, the Chief Financial Officer.

TRENDS

Global pasta consumption continues to rise as wellness drives uptake UKRAINE – Global pasta consumption is on the rise from the positive trends in global pasta sales which rose 0.6% in 2017 attributable to increased awareness on healthy diets and wellness, according to Nielsen. Based on a report by the International Pasta Organization (IPO), this trend is expected to continue influenced by changing consumer attitudes coupled with a sustainable approach to eating. The most dynamic growth markets are in Asia (up 8.6%) and Africa (up 2.6%) but pasta trends

also are also positive in Europe. Per capita pasta consumption in France is at 8.1 kg, Germany’s stands at 7.7kg while British eat less pasta (3.5 kg per capita) where pasta consumption in Britain has almost tripled since 1974. The US is the largest pasta market, with 2.7 million tons of pasta consumed. Italians are by far the heaviest pasta consumers, with a per capita consumption of 23.5 kg IPO said demand for pasta could by consumers be driven by the fact that it is a plant-based food with extremely low

environmental impact while manufacturers are attracted to it being energy dense, easy to store and distribute. “Consumers are rediscovering the modern benefits of traditional pasta,” said Paolo Barilla, president of the IPO. “Pasta is increasingly appreciated and valued around the world as the center of a delicious meal with good nutrition. It is also accessible, respectful of the planet, and brings people together joyfully.”

FUNDING

CDC and StanChart announce investments in Zim’s food and agric businesses ZIMBABWE – The UK’s development

finance institution, CDC Group Llc (CDC) and Standard Chartered Bank have announced an investment facility that will lend up to US$100 million to growing businesses in Zimbabwe. According to CDC, this risk-sharing agreement provides foreign currency capital for local businesses, allowing them to grow, create jobs and improve the country’s economic future. The five-year facility will see CDC and Standard Chartered share the default risk on up to US$100 million of new loans originated by Standard Chartered Bank Zimbabwe in the southern

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African state. The funding will also be used for capital expenditure and for helping businesses meet their day-to-day financing needs as the likely recipients will include firms in the food processing, manufacturing and agriculture sectors. “Zimbabwe’s economy has been shattered over the last two decades, yet holds real potential for future growth. CDC is taking a lead within the investment community in showing its support for economic development. What the country needs is patient capital, and it needs it now,” said CDC’s Chief Executive, Nick

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

O’Donohoe. He added that the agreement with Standard Chartered will enable them to provide vital foreign currency lending to some of Zimbabwe’s most dynamic businesses, creating jobs and opportunity. Commenting on the agreement, Sunil Kaushal, Regional CEO, Standard Chartered Bank said, “We are delighted to partner CDC in providing access to finance in a responsible way; enabling people, businesses and communities in Africa to progress and prosper.”

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FOOD SAFETY

Researchers develop patch that shows whether food is safe to consume – Researchers at McMaster University in Canada have developed a transparent paper patch printed with harmless molecules that has the ability to detect harmful bacteria while food is still packaged. The pouch called ‘Sentinel Wrap’ can be incorporated directly into food packaging with the potential to replace the traditional “best before” date on food and drinks since it indicates whether food is safe to consume or not.

CANADA

The new development, which awaits regulatory approval, can monitor contents for harmful pathogens such as E. coli and Salmonella, signalling contamination as it happens. According to the research published in the journal ACS Nano, presence of a pathogen in the food and drink inside the package triggers a signal in the packaging which in turn can be read on a device such as a smartphone. “In the future, if you go to a store and you

want to be sure the meat you’re buying is safe at any point before you use it, you’ll have a much more reliable way than the expiration date,” said Hanie Yousefi, research assistant at McMaster University Faculty of Engineering. Tohid Didar, an assistant professor of mechanical engineering and member of the McMaster Institute for Infectious Disease Research said a food manufacturer could easily incorporate this into its production process.

INNOVATIONS

Carlsberg launches new alcohol-free beer brand to meet demand DENMARK – The European global brewer Carlsberg has unveiled a new alcohol-free beer brand called Birell, in a bid to meet the strong growing consumer demand in the beverage market. According to Carlsberg, although the brand has no alcohol, it portrays the same characteristics desired by consumers including body, mouth-feel, foam and great tasting properties. Carlsberg said the brand was positioned as a positive and aspirational choice for

consumers who live an active lifestyle and no longer want to be limited in their drinks options. Increasing consumer insights pertaining long term effects of liquor coupled with demand for more fulfilling drinks choices, is driving the non-alcoholic beer market projected to be worth over US$25 billion by 2024, according to Global Market Insights, Inc. “2017 was a very good year for our alcoholfree brands, and this year, without revealing

the numbers, looks even more promising. Bringing the Birell launch to the Carlsberg portfolio further adds to our focus on brewing for a better today and tomorrow. With Birell, it’s a positive approach on living more. By giving consumers the opportunity to enjoy a great tasting alcohol-free beer, we aim to inspire consumers to fulfil their active lifestyles,” said Shawn Gallegly, VP Alcohol Free Brews for Carlsberg.

MARKETS

Beyond Meat to target sales in Europe, Asia and Africa this year USA – US plant-based meat substitute producer, Beyond Meat is seeking to go beyond the US in a global expansion as it targets to enter over 50 new markets around the globe. Beyond Burger was formed by the vegan company in May 2016, with its first plantbased non-GMO, non-soy and non-gluten burger, to be sold alongside beef, poultry and pork in the meat section of the grocery store. Since the launch, the brand says it has sold more than 13 million of its protein-packed patties which can be found in nearly 15,000

restaurants and grocery stores across the US. “The company has found extensive success in the US market, doubling sales in 2017 and increasing distribution of its portfolio to more than 27,000 grocery stores and restaurants,” said founder & CEO of Beyond Meat, Ethan Brown, said in a statement. It now intends to replicate the success it has had in the US into more than 50 countries. In February, Beyond Meat announced the construction of a new 26,000 square foot research and development centre at their headquarters in El Segundo, expanding on

its research footprint. It recently finished two rounds of capital raising of US$55 million, led by Tyson Foods, the US’s largest producer of meat, pork, and poultry products. Movie star Leonardo DiCaprio, among other renowned individuals, has also invested in the firm recently. Founded in 2009, the company’s product portfolio includes Beyond Chicken and Beyond Beef ranging from vegetarian meat substitutes, vegan and soy-free burger patties.

INVESTMENTS

IFC finances Ukraine pork producer to build capacity, improve safety UKRAINE - IFC, a member of the World

Bank Group, is investing up to US$12.5 million in Nyva Pereyaslavshchyny, a leading Ukrainian pork producer. According to the company, the investment will support its expansion and help create jobs, modernize Ukraine’s meat production sector, and boost sustainable agriculture. The company will also build a new pig farm and a rendering plant capable of recycling up to 50 tons of waste every day, helping to reduce its environmental footprint.

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This is IFC’s second investment in Nyva, one of the country’s leading pork producers. It is expected to create about 300 jobs. It is providing long-term debt financing to support Nyva’s investment program, which includes constructing a new meat-processing facility that will become one of the country’s first to comply with European Union standards for food safety and animal welfare. “IFC has been instrumental in helping us grow over the past several years by providing long-term financing when loans with such

tenors were not available from Ukrainian banks and economic situation in the country was challenging,” said Oleksander Mostipan, Chairman of Nyva Group. “This partnership also helps us improve operational efficiencies, increase production and market share, and, ultimately, benefit consumers.” Pork production in Ukraine remains inefficient and highly fragmented, with many smaller producers lacking sufficient quality controls. FOOD BUSINESS AFRICA | MAY/JUNE 2018

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NEWS M&A

Royal FrieslandCampina, equity fund invest in Ethiopia’s leading dairy company NIGERIA - Royal FrieslandCampina, the Netherlands based multinational dairy cooperative has joined forces with Hollandbased Veris Investments to invest in Holland Dairy Ethiopia in an undisclosed cash injection. Friesland Campina said they were investing in supply chain, production and market development as it seeks to expand its already existing presence in the Ethiopian dairy market, particularly in yogurt products. The minority investment also means to

enhance and extend their market presence with the help of Holland Dairy, which has a strong presence in yogurt, pasteurized milk and other dairy products in Ethiopia. It operates a plant located in Debre Zeit, situated south of the capital Addis Ababa, has an integrated milk supply chain and sources its milk locally. Established in 2009, Holland Dairy is a strong contributor to Ethiopia’s GDP all through increased availability of quality dairy products and improvement of the supply

chain. Veris Investments and Friesland Campina will provide growth capital and will assist Holland Dairy with determining the strategy for expansion and further improving the company. FrieslandCampina already exports UHT under Dutch Lady brand and milk powder under Coast brand to Ethiopia and the investment strengthens its current export position, said the company in a statement.

M&A

UberEats enters Kenya, acquires South African food delivery technology start up

KENYA – UberEats, the American online food ordering and delivery platform has launched its food delivery app in Kenya, allowing customers order food from their

favourite restaurants and get delivered at their convenience, at home or offices. It has partnered with over 100 restaurants to provide food service in select parts of the capital Nairobi through hundreds of couriers who will deliver food at the customer’s doorstep. According to Uber Eats Kenya General Manager, Amal Devani, the new service is expected to revolutionise food delivery by making it easier and more convenient while ensuring safety, reliability and affordability. Nairobi joins three other cities in subSaharan Africa including Johannesburg, Durban and Cape Town where UberEats is available. Meanwhile, UberEats has announced that it has acquired the South African

restaurant technology start up orderTalk at an undisclosed sum. orderTalk Inc. owned by venture capital firm Knife Capital, offers online ordering software and call center solutions for the restaurant, takeout, and hospitality industry. According to Business Report, the sale marks a major step for UberEats giving it ability to streamline workflows by directly integrating with leading point of sale (POS) systems. UberEats business reported it was having challenges integrating the POS system on a large scale. orderTalk provides online ordering systems for restaurants worldwide by utilizing proprietary remote ordering software including mobile and social media applications.

M&A

Walmart acquires Flipkart for US$16b in one of the largest-ever ecommerce deals Deal jolts India’s e-commerce industry, but provides insights into an industry set to grow to US$200b by 2026 INDIA – Walmart Inc. has announced its

biggest ever acquisition with its 77% deal for the shares of India’s No. 1 e-commerce company Flipkart for US$16 billion, valuing the once small company started in Bengaluru in 2007, at a whopping US$20 billion. “This allows Walmart to jump into a highgrowth market, and results in two global players focusing on the growth of the Indian ecommerce market,” said Prasanto Roy, vicepresident of NASSCOM’s Internet council, referring to the battle to control India’s emerging e-commerce retail industry, where the other US conglomerate Amazon is also present. With the 77% stake, the remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart cofounder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp. 22

“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” said Doug McMillon, Walmart’s President and CEO in a statement. The deal is the second for the world’s biggest retailer, as it tries to adjust to diversify its portfolio beyond brick and mortar stores, after it bought a stake in JD.com last year. Amazon India also nearly doubled its authorized capital to US$5 billion in June last year in a bid to buy Flipkart. “Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs. With the investment, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe,” added McMillon. India’s e-commerce industry is expected to grow to US$200 billion by 2026 from US$15 billion in 2016, with interest and investments from foreign companies soaring. Amazon has invested US$5.5 billion in its operations in India, becoming the first foreign retailer to sell food products since the authorities opened up e-commerce to non-Indian operators. It has plans to use its weight to improve the infrastructure in India to tap into the abundant fruits and vegetable supplies. Alibaba, the Chinese behemoth recently closed a US$300 million in BigBasket, an online grocery seller. Japanese private equity fund Softbank also invested US$60 million in Grofers, another online grocery retailer. FOODBUSINESSAFRICA.COM


M&A

Nestle closes Kenya regional office as restructuring continues to make company more agile World’s largest food company rejigs its operations worldwide to streamline operations, cut costs KENYA – Nestle SA, the Swiss transnational food and drink company is closing its headquarters of its Equatorial Africa unit in Nairobi, Kenya by the end of July as part of its strategy to restructure its business in SubSaharan Africa. Nestle said the Nairobi office, which employs over 100 people has been weighed down by high operation costs over the past decade given the size of the business, reported Bloomberg. The re-organisation at the global food producer may see layoffs in Kenya as it plans to redistribute the responsibilities between the head offices of the two other regions on the continent in Accra and Johannesburg. The company said it will expand the Southern African Region (ZAR) to include the Horn of Africa, Southern, Eastern and Island clusters of EAR to form an enlarged region to be headquartered in Johannesburg. The new region will be renamed the Eastern and Southern African Region (ESAR). “Our team in EAR has done a tremendous job, but after trying for nearly ten years we can no longer sustain the cost of the regional head office with the size of the business there. “So, we plan to close the office at the end of July, redistributing the responsibilities between the head offices of the two other regions on the continent in Accra and Johannesburg,” said Nestle in a statement. Despite of the changes in the continent, Nestle said the positions of those who work in the country/cluster offices across EAR are not affected by this closure of the regional head office. With the re-organization, the Central West Africa Region (CWAR) will become

a key market for the Nestle Group,says the company, with Angola and the Democratic Republic of Congo, currently part of the Equatorial Africa Region (EAR), joining the Central West Africa Region. Global realignment picks pace The closure of the Kenyan regional office comes as the company’s new CEO Mark Schneider reigns in to realign the operations of the business with a focus on its coffee, pet food and baby food as it faces pressure to improve the bottomline after missing to hit its profit targets over the years. In a far reaching move, the company has also announced plans to bring together its two scientific discovery units, the Nestle Institute of Health Sciences and Nestle Research Center to build one organization, Nestle Research to strengthen its research and development operations. According to the company, the combined unit will be based in Lausanne, Switzerland and will employ approximately 800 people. It will consist of three major research institutes: Health Sciences, Material Sciences and Food Safety & Analytical Sciences. According to Nestle, the company will address wider issues through science and technology, such as non-communicable diseases, micronutrient deficiencies and sustainability. “Nestlé’s success is built on meeting fastchanging consumer demand around the world. In this dynamic environment innovation leadership is key to winning in the marketplace,” said Nestlé CEO Mark Schneider. The company also plans to cut 500

computer-service jobs in Switzerland Partners Starbucks in coffee venture Meanwhile, the company has announced an agreement granting it perpetual rights to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. Starbucks will receive an up-front cash payment of US$7.15 billion for a business, which generated annual sales of US$2 billion last year, as part of the transaction agreement. According to Nestle, the transaction provides it with a strong platform for continued growth in North America with leadership positions in the premium roast and ground and portioned coffee businesses. “This transaction is a significant step for our coffee business, Nestlé’s largest highgrowth category,” said Mark Schneider, CEO, Nestlé. “With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee. Both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing.” The two companies will work closely together on innovation and go-to-market strategies to bring the best coffee to customers around the world. “This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestlé,” said Kevin Johnson, president and CEO, Starbucks. Approximately 500 Starbucks employees will join Nestlé to drive performance of the existing business and global expansion.

RESEARCH

Study shows no effect of low-calorie sweeteners on appetite BELGIUM – A new study by the International Sweeteners Association (ISA) has shown that the use of low-calorie sweeteners in beverages or food does not increase or suppress one’s appetite. According to the research, use of lowcalorie sweeteners by consumers can help reduce overall energy and sugar intake, and thus be helpful tools in calorie control and weight management, in a calorie-controlled diet. The finding goes counter to that Canadian Medical Association Journal claims that FOODBUSINESSAFRICA.COM

people who regularly consume low-calorie sweeteners such as aspartame, sucralose and stevioside tend to have a higher risk of longterm weight gain, obesity, type 2 diabetes, hypertension and heart disease than those who don’t. “Our study clearly demonstrates that consumption of low calorie sweetened beverages has no negative impact on dietary behaviour compared to water, neither in the short nor in the long term,” said Professor Marc Fantino, key investigator in this research in an interview with ISA.

According to ISA, the controlled trial was vital since it provides evidence in response to the questions raised around the use of low-calorie sweeteners. “Contrary to what is frequently claimed, with regards to the effects of intense sweeteners on eating behaviour, ‘sweet does not necessarily call for sweetness’,” said Fantino. The analysis says the ISA, supports previous studies which have shown that consumption of diet drinks, when substituted for caloric beverages, is associated with lower calorie and lower added sugar intake overall. FOOD BUSINESS AFRICA | MAY/JUNE 2018

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NEWS SAFETY

Tanzania Breweries launches mobile safety app for employees

TANZANIA – Tanzania Breweries Limited (TBL) has launched a mobile app that allows employees to report concerns and information

relating to safety from their mobile phones. The application, dubbed ‘Safety App’ is part of the brewer’s initiatives aimed at creating and maintaining ideal work environments free from occupational hazards that may cause injuries or illness to all employees. “Safety is one of our top priorities. Without safety there will be no efficiency. We are keen on safety issues and that is why we have a good record for recognitions,” said Khery Gunzarethy, TBL Group Safety and Health Manager. Gunzarethy lauded the occupational health and safety programme saying it has helped reduce the number of accidents

reported at several of its plants since its adoption. The Occupational Health and safety policy in Tanzania lays emphasis on the protection of workers’ health and in factories and applies to all establishments in the private and public sector, local government services and public authorities. “To support the government’s vision to make Tanzania an industrial base economy, it is important to have strong and better systems of running industries and we are well prepared to have systems that meet international standards,” noted Gunzarethy

M&A

IFF enters a definitive agreement to acquire Frutarom for US$7.1 billion The Israeli flavours and fragrances company has been on a wild M&A binge of late, only to be bought out as well

USA – International Flavors & Fragrances Inc. (IFF) has announced that they have entered into a definitive agreement under which it will acquire Israeli flavours and fragrances company Frutarom in a cash and stock transaction valued at US$7.1 billion, including the assumption of Frutarom’s net debt. According to the company, the terms of the agreement, which had been unanimously approved by the Boards of Directors of both companies, Frutarom’s shareholders will receive for each Frutarom share US$71.19 in cash and 0.249 of a share of IFF common

stock. By combining with Frutarom, IFF is accelerating its Vision 2020 strategy to create a global leader in taste, scent and nutrition. The deal comes on the back of Frutarom’s recent accelerated binge of acquisitions around the world, as the company raced to meet its target to achieve a target of US$2.25 billion in sales by 2020, from US$1.6 billion expected in 2018. “This transaction is a big win and a fantastic outcome for shareholders, customers and employees of both companies. Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses. We believe this combination will lead to faster and more profitable growth, enhanced free cash flow and generate greater returns for our shareholders,”

said IFF Chairman and CEO, Andreas Fibig. “Frutarom has had a fascinating journey of accelerated growth, far above our industry benchmarks through our investment in unique technologies and focus on natural products in the growing world of health and taste. We are extremely excited to combine Frutarom with IFF and together create global leadership in natural taste, scent and nutrition,” said Ori Yehudai, President and CEO of Frutarom. According to Reuters, the deal between the two will be the second largest of an Israeli company. Advances in the flavors and fragrances industry for a market size valued at US$18.6 billion in 2015 has seen bids for acquisition in the industry dominated by Givaudan, Firmenich, Symrise, IFF, Frutarom and Takasago among many others, noted Reuters.

REGULATORY

FDA extends its deadline for Nutrition Facts compliance to 2020 USA – The Food and Drug Administration

will extend the compliance date for the updated Nutrition Facts panel by 18 months to 2020 at the minimum, according to a final rule published in the Federal Register. Manufacturers with at least US$10 million in annual sales will need to have the new label by 2020, and smaller manufacturers will need to have it by 2021. According to the document, the FDA received about 50,000 comments on its proposed rule and deadlines. “After careful consideration, we have determined that extending the compliance dates by

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approximately 1.5 years, until January 1, 2020, or January 1, 2021 (depending on annual sales), would help ensure that all manufacturers covered by the final rules have time to use guidance from FDA to address, for example, certain technical questions we received after publication of the final rules.” FDA noted that both the new and old versions of the Nutrition Facts label are required to display accurate information, and any label will help consumers make informed nutritional choices. “Education is key to helping consumers understand what they’re eating,” said FDA

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

Commissioner Scott Gottlieb. The Federal Register also indicated a new campaign that will partner agencies under the Department of Health and Human Services, as well as health professionals, manufacturers, retailers and non-profits interested in health education to inform the public. “Today’s announcement should be a call to action for companies to provide consumers the information they want now, rather than waiting for the legal deadline,” said Center for Science in the Public Interest President Peter Lurie. FOODBUSINESSAFRICA.COM


SUPPLIER NEWS & INNOVATIONS INVESTMENTS

Chr. Hansen reveals probiotic strain that protects from Aspirin’s effect – The global bioscience company Chr. Hansen has completed a clinical trial using a carefully selected probiotic strain that protects the gut against side effects caused by painkillers. The company said the trial, which used capsule endoscopy to reveal gastrointestinal (GI) damage, has reached both the primary and secondary end-points of trial, indicating ability to combat effects from specifically acetylsalicyclic acid (ASA). “The clinical trial identified that participants taking the probiotic experienced a significant defence against GI damage caused by a widely used household painkiller compared to those who took the placebo. This indicates a clear protective effect

DENMARK

from the strain – both in terms of the reduction of intestinal damage and the number of ulcers caused,” explained Johan van Hylckama Vlieg, Vice President of Microbiome & Human Health Innovation. The household painkiller is an NSAID (non-steroidal anti-inflammatory drugs), which are some of the most widely used pharmaceuticals in the world. It is reported that low-dose use of the NSAID ASA is recommended for its cardiovascular-protecting properties and is today prescribed to 80% of those with an elevated cardiovascular risk profile. Chr. Hansen has identified a trio of trends in the untapped market, combining functional dairy for gut health, a shift seen with the health-conscious consumers.

AWARDS

Ishida unveils new technology to prevent water entry into food weighing applications

EUROPE – Ishida Europe has unveiled

a new technology that prevents water entry into the food weighing production equipment when weighing fresh and frozen food.

The technology together with Ishida’s advanced Sentinel monitoring and reporting system allows producers achieve both high performance and longer term reliability while protecting their critical equipment from moisture damage. “Our multi-head weighers are renowned for their reliability and efficiency, but the downside to this is that the machines can still continue to operate for a long time even in harsh environments where their levels of protection have been compromised,” said Ian Atkinson, Ishida Europe’s Business Manager EMEA – Multihead Weighers. In the new technology, the weighing equipment is incorporated with three dew

and temperatures sensors that monitors humidity within the weigher and signals operators at different levels of humidity. Ishida launched the Sentinel Reporting, Intervention and Service packs that combine immediate alerts to water ingress problems with an in-depth historic analysis of each issue as and when it occurred. “The availability of our moisture sensors, together with the real time reporting capabilities of Sentinel, eliminates this problem so that the weighers are able deliver their highest speeds and accuracy unimpeded, and in this way maintain constant high production throughput and efficiencies,” Ian added.

INNOVATIONS

Buhler introduces Vertical Pearler for ‘purer’ semolina in grain milling – The Uzwil-based technology company Buhler Group has introduced the Vertical Pearler Osiris MTPA equipment, with an innovative and sturdy design used in pearling to produce purer and almost speck-free semolina. Buhler said that the Osiris MTPA will be used in pearling the outermost hull layers from grain result in more efficient pearling compared to other machines to date due to revised drive concept and diamond abrasion medium. As opposed to conventional grain pearling machines usually using abrasion SWITZERLAND

FOODBUSINESSAFRICA.COM

stones as grinders which wear and can break off, the new Vertical Pearler Osiris MTPA uses synthetically produced diamonds as a grinding medium, as diamond is known to be the hardest abrasive. “The new type of construction and new abrasion medium can save up to 20% in energy costs compared to other grain pearlers with the same throughput and pearling performance,” said the company. “The new pearler can achieve an index performance of 8 tons per hour at an 8% pearling degree when processing durum wheat.” FOOD BUSINESS AFRICA | MAY/JUNE 2018

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FOOD SAFETY: LISTERIA

What we have learnt from SA’s Listeriosis outbreak By Linda Jackson,Director Food Focus

T

he last 9 months have not been a highlight in South African food safety history. Although the historic outbreak of Listeriosis has been a dominant theme in the media, this has not been our finest hour. With the current death toll on a staggering 200 with 1024 people affected, this is a situation that can never be repeated.

What lessons have been learned? 1. It took too long. From the time that the first media report aired in August 2017 to 5 December 2017 when listeriosis was declared a reportable disease, over 500 people had been affected by the disease. Hopefully this will not happen again. The importance of rapid reporting by medical practioners and the immediate investigation into the patient have been identified as an area for improvement by the response team. 2. It has taken too long to find the source/s The astounding revelation of 4 March that the outbreak had been traced to the Tiger Brands Enterprise facility in Polokwane rocked the industry. This news however was long overdue. Monitoring of food products for listeria had not been a priority of government and as such there was limited data available. The NICD had requested industry forums 26

to plead with their members to share their testing results. The confidentiality agreements in place between testing labs and their clients has been a further stumbling block. Industry has been reluctant to share date for fear of repercussions. 3. The culprit is Listeria monocytogenes ST6 This is not good news, as research from Europe has shown increasing infections with ST6 (30 years of isolates) and increasing unfavourable disease outcomes. The reason given: increasing resistance to disinfectants. But this is not our only problem – the NICD have confirmed many more samples were positive, just not for ST6. All of these strains of Listeria monocytogenes can cause meningitis and septicemia. Those will have to be investigated too. This is not over by a long shot. 4. There should be effective communication between government and industry We now know the team at the NICD – a dedicated team of doctors and scientists focussed on getting to the bottom of foodborne disease outbreaks. An agency that is marking our score cards for food safety. And now the FOOD SAFETY whole of South Africa knows their number. We can and have done do Whole Genome Sequencing testing as a country, so in some ways we are even more advanced than certain European countries. The lack of information before is

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

not a reflection of how good our food safety systems are – it’s a reflection of the weakness of our reporting systems. Journalists have repeatedly asked the question – where should the consumer go with a complaint about illness or hygiene issues? Will the NICD become the go-to point? How do we address the disconnect between the local contact points at the municipality, hospitals and the food industry? The importance of sufficient resources at local municipality level is critical. The outbreak has highlighted the lack of sufficient competent resources. Plans are underway to ensure additional resources are identified and funded. 5. Food safety can dominate media channels. ALL media channels. Front pages and street posters, twitter trends and Sunday evening prime time TV – all talking about the same thing: Listeriosis and then polony. That level of marketing would cost you an absolute fortune! This level of awareness of food safety is what we wanted, isn’t it? The consumer has previously not been aware but now there is no going back. Companies have been unprepared for this level of exposure and it has been evident that less than adequate crisis response programmes are in place. This should be much more than a tick on an audit checklist. It should be a robust workable and effective plan that can be activated on a Sunday afternoon. 6. The trust is broken. FOODBUSINESSAFRICA.COM


The economic consequences of this outbreak are already noticeable. Industry associations are pleading for calm as the knock-on effect is felt through the supply chain. The lack of trust is infectious. We shouldn’t be surprised – the 1998 outbreak in the USA involving Sara Lee and similar products is on record as having a knock-on effect on the sales of all processed meats. But what about the smaller vendors who now cannot sell a staple menu item either? It’s not just big business. This outbreak has affected all LSM’s – patients have come from both private and government hospitals. It is not wise to discriminate in food safety standards. 7. The consumer is king. Access to safe and sufficient food is protected by the Constitution of South Africa– it is a basic human right. That’s why consumers are so mad. They have blindly trusted and have now had their trust betrayed. We are questioning our own gullibility. There are consumer watchdogs out there and now they are really watching us. 8. Your brand can be impacted and you can be sued for food safety violations – even if you are a national brand. March 4, 2018 has brought a legal precedent and elevated the level of business risk associated with food safety issues. Even consumers are re-evaluating the risk of food

borne illness. This means as an industry, we are going to have to work even harder to ensure that we do get it right and rebuild the fragile threads of consumer confidence and trust. The fact that a JSE listed company with all the resources and controls in place can be implicated in this outbreak has been unbelievable for many. It seems that although we have spent many years and millions of rands building food safety systems, we have overlooked something. It is time for every link in the food chain to closely examine the controls we have implemented to ensure we are not just good at passing audits. 9. Not all pathogens are created equal Understanding the growth requirements of Listeria as a species and more specifically Listeria monocytogenes is key to its control: • The temperature range for growth of L. monocytogenes is between -1.5 and 45°C, with the optimal temperature being 30– 37°C. Temperatures above 50°C are lethal to L. monocytogenes. • L.monocytogenes can grow at temperatures as low as 0°C, it has the potential to grow, albeit slowly, in food during refrigerated storage. • L. monocytogenes will grow in a broad pH range of 4.0–9.6 • Like most bacterial species, L. monocytogenes grows optimally at a water activity (aw) of 0.97. However, L. monocytogenes also has the ability to grow

• • • • • •

at an aw of 0.90 and can even survive for extended periods of time at an aw value of 0.81. L. monocytogenes is reasonably tolerant to salt and has been reported to grow in 13– 14% sodium chloride. Survival has been reported at 20% concentrated salt solutions L. monocytogenes can grow under both aerobic and anaerobic conditions. L. monocytogenes can grow in cool, damp environments such as those found in any processing area. L. monocytogenes have the ability to form biofilms L. monocytogenes have the ability to persist in the processing environment Due to it’s pervasive nature it is almost guaranteed to be found in certain processing environments. L. monocytogenes cells injured during stress mechanisms such as heat may be able to resuscitate and continue growing. This factor should definitely be considered for products with long shelf lives.

10. Don’t under estimate the basics Our approach to testing for the organism in products and the environment is under review. The mandatory application of HACCP in all processed meat facilities is on the cards and probably long overdue.. All the scientists agree – we will conquer Listeria through effective hygiene programmes and control of cross contamination

LOG ONTO AFRICA’S NO. 1 FOOD, BEVERAGE AND MILLING INDUSTRY WEBSITE

www.foodbusinessafrica.com FOODBUSINESSAFRICA.COM

FOOD BUSINESS AFRICA | MAY/JUNE 2018

Looking for the latest happenings in Africa’s food manufacturing, retail

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AFMASS EASTERN AFRICA 2018 REVIEW

AFMASS Eastern Africa Edition records 44% growth, stakeholders impressed with outcome KENYA - The 2018 of AFMASS Eastern Africa edition has been hailed as a milestone event by attendees, sponsors and exhibitors who participated at the event held in Nairobi, Kenya on the last week of April 2018. The event was held on April 25-27, 2018 at the Nairobi Convention & Conference Centre in Nairobi, Kenya. The event recorded a 44% increase in attendance over the 2017 edition, with 1153 industry attendees from over 40 countries in Africa and the World attending the conference and visiting the Expo Hall. Sponsors and exhibitors were also impressed with the quality and breadth of delegates and visitors at this year’s AFMASS Eastern Africa. “This year’s AFMASS Eastern Africa edition was the best event we have ever had. We have always looked at this event to be the most premium food industry trade and networking show in the Eastern Africa region. We are glad that the industry key decision 28

makers have finally come to understand what AFMASS events stand for and how they can gain from the unique opportunities the events offer the industry,” says Francis Juma, the Founder of FoodWorld Media, the organisers of the AFMASS events in Africa. According to the organisers, this year’s event also recorded an increase in exhibitors, with 28 exhibitors from 13 countries showcasing their solutions at the Expo Hall. Out of these, 10 companies sponsored the event, an increase from 6 companies in 2017. These companies were BioMerieux, CocaCola and Buhler, which sponsored the Silver category, while DSM, BASF, DNV GL, Atlas Copco, Pingle Group and Brookside Dairy sponsored various sessions at the event. Kenya Wine Agencies Ltd (KWAL) was the official wines, spirits and cider sponsor. Coca-Cola also separately sponsored the Regulatory, Standards and Trade session “The fact that we have managed to continue to receive support and sponsorship

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

“THIS YEAR’S AFMASS EASTERN AFRICA EDITION WAS THE BEST EVENT WE HAVE EVER HAD. WE BELIEVE THIS IS THE MOST PREMIUM FOOD INDUSTRY TRADE AND NETWORKING SHOW IN THE EASTERN AFRICA REGION.” Francis Juma

from these world- and region-leading brands shows the importance that these brands place on AFMASS, and is a sign of confidence in the AFMASS brand. We shall strive to continue to improve the events every year to continually meet the needs of the sponsors and exhibitors who make the events possible,” explained Juma. Attendees were particularly impressed with the quality and breadth of speakers and FOODBUSINESSAFRICA.COM


panelists - who came from over 10 countries around the World. The conference sessions covered a wide range of industry concerns: from food safety, funding for SMEs, nutrition, sustainability, processing and many other topics. The event, which was held under the theme: Digital Technologies and the Future of Processing, Retailing & Distribution of Food Products in Africa.

Improved conference sessions, Expo Hall add glitz to the event The 2018 edition of AFMASS Eastern Africa broke a number of records, with a total of over 1153 attendees going through the Expo Hall and participating at the conference sessions. With a collection of industry leaders, consultants, Government regulators and managers from the NGO and development organisations space in over 10 countries, the conference sessions were especially praised for the depth and variety of speakers. The Expo Hall, with a wide variety of solutions, from ingredients, processing, food safety, packaging, warehousing and postharvest solutions, enabled the show attendees to interact and trade with suppliers from around the World. “This was our company’s first AFMASS participation. The event is professional and the quality of the visitors was very high; with most visitors to our stand at management level. We were glad that half of those who visited us are already millers, with the rest planning to set up milling plants soon. We are confident that we shall realise business from this event and will be participating at future AFMASS events in the region,” said Major Zhao, the Marketing Manager for Pingle Group, a supplier of milling equipment from China. Another new entrant, BioMerieux, a supplier of food safety solutions from France and a Silver Sponsor of the event, was appreciative of the excellent contacts the company picked at the event. “This was our first event where we launched our products and solutions to the food industry in the region. We have been impressed with the excellent networking opportunities that were so easy and powerful. Thank you for making AFMASS a wonderful experience for BioMerieux. We are so happy we sponsored the event!,” said Loucif Soumeya, the Industry Business Manager, for the Eastern and Central Africa region “AFMASS has undoubtedly made its mark on the industry. The speakers, panelists FOODBUSINESSAFRICA.COM

and the discussions are extremely high quality, with a good mix. Am very happy with the quality of contacts and knowledge that we have received this year. Keep it up,” added another participant.

What was new at AFMASS Eastern Africa 2018 edition? To continuously improve the event and the experience of the show attendees, the organisers introduce new concepts and initiatives to make the events the most engaging for the industry in Africa. The following were some of the new additions to AFMASS Eastern Africa 2018 edition 1) AFMASS Next Leaders & AFMASS Startup Innovators programs launched AFMASS Eastern Africa debuted the newly established AFMASS NEXT LEADERS program that targets students and researchers in local universities, and the AFMASS STARTUP INNOVATORS program, that brings small and medium enterprises to the events across Africa, to network with industry leaders and other stakeholders. During the event, 50 students and 10 lecturers from universities 5 in Kenya and Tanzania participated for the first time, giving them the unique opportunity to network with industry leaders, learn the latest technologies and to gain insights into the workings of the food industry. 2) Women in Business Panel Session introduced – The Women in Business Panel Discussion is an initiative to improve the involvement of women leaders in the manufacturing, retail, foodservice and research/academia sectors, It aims to highlight their career and business paths, while encouraging the next wave of young women and students to join the industry. This year, women leaders from Coca-Cola, Creative Y&R, Cargill, Raka Cheese, EABL (Diageo), Unilever and the Kenya Association of Manufacturers participated in a high impact discussion focused on mentorship, that was hailed as one of the most outstanding at this year’s event. 3) Screening of the Food Evolution movie - The critically acclaimed movie Food Evolution movie, which takes a look at the role of science on food security in the face of lukewarm acceptance of genetic engineering around the World. This was the first screening of the movie in the region.

IN NUMBERS

1153 NUMBER OF ATTENDEES AT 2018 EDITION

44% PERCENT GROWTH IN ATTENDEES FROM 2017 EDITION

13 NUMBER OF COUNTRIES EXHIBITORS CAME FROM

93% NUMBER OF EXHIBITORS IMPRESSED WITH THE EVENT

40+ NUMBER OF COUNTRIES DELEGATES CAME FROM

85% ATTENDEES IMPRESSED WITH THE EVENT

FOOD BUSINESS AFRICA | MAY/JUNE 2018

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AFMASS EASTERN AFRICA 2018 REVIEW: SPONSORS & EXHIBITORS

SPONSORS

SILVER SPONSOR

SILVER SPONSOR

SILVER SPONSOR

SESSION SPONSOR - NUTRITION & HEALTH

SESSION SPONSOR - PROCESSING & FORMULATIONS

SESSION SPONSOR - SUSTAINABILITY

SESSION SPONSOR - FOOD SAFETY, QUALITY & SYSTEMS MANAGEMENT

HOSPITALITY SPONSOR - WINE, SPIRITS & CIDER

SESSION SPONSOR - WOMEN IN BUSINESS

P 2925 C P 376 C

EXHIBITORS

AMOR COCO

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AFMASS EASTERN AFRICA 2018 REVIEW: SPEAKERS & PANELISTS

Jesse Kamau Sales Manager, Atlas Copco

Linda Jackson Director, Food Focus SA

Andrew Sulumet, QSHE Manager, Bidcoro Africa

Grant Little, Station Manager, DNV GL South Africa

Diana Swan, Sales & Partnerships Lead, OKHi

Shreenal Ruparelia Country MD, Jumia Food

Devan Shah, Business Development Executive, Broadway

Alice A. Owambo Senior Brand Maneger, EABL

Charity Magwenzi, R&D Manager, Capwell Industries

Monique Tredoux Marketing Manager, DSM

Greg Garrett, Director, Food Policy & Financing, GAIN

Duncan Kimani, Director, Manufacturing, CCBA

Anton Hanekom Executive Director, Plastics SA

Nishant Garg, Managing Director, Amor Coco Kenya

Neels Poesrstamper, Technical Service Manager, Tate & Lyle

Francia Mbaki Sales Manger, Buhler

Caleb Gekombe, Performance Flooring Manager, BASF

Priv Haria, Business Development, PET Recyclers

Kalpa Padia, MD, Raka Cheese

Hiten Shah Director, Bakex Millers

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AFMASS EASTERN AFRICA 2018 REVIEW: SPEAKERS & PANELISTS

Rachel Muli, Quality Manager, Unilever Ethiopia

Loucif Soumeya, Industry Manager, BioMerieux SA

Beatrice Atieno Manager, KEBS

Brenda Obura, Food Safety Officer, Ministry oHealth

Caroline Mugo Financial Controller, Cargill

Ndopa Banda, Beverage industry Project Consultant

Sarah Ockman, Global Lead, IFC Food Safety Advisory

Grace Ngari Food Safety Consultant

Julien Garcier, Marketing Director, SAGACI Research

Oliver Mary, Marketing Director, Brookside Dairy Ltd

Patrice Mumbo Production Executive, Trufoods

Lois Ndiba, Director, Food Safety International

Shudhan Kohli CEO, Grey Elephant Ventures

Quentin Rukingama Director, JBQ

Geoffrey Gangla CEO Genghis Capital Limited

Marinda Venter Dietitian, GIFSA South Africa

Gervasi Ngati, Quality Assurance Manager, Unilever

Prital Patel MD, Creative Y&R

Joyce Njogu Head of Consulting, KAM

Sammy Lamba, Director, Food Hygiene, Diversey

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Monique Tredoux of DSM gives her presentation at the conference flanked by other presenters

Presenters from BASF, Amor Coco, DST and Tate and Lyle wait to make their presentations at the conference

Conference delegates listen to a presentation at the conference

Panelists at the Future of Digital Technologies in the processing, retal and distribution of food in Africa panel discussion at the conference

Oliver Mary, Marketing Director Brookside Dairy gives his presentation at the conference

Caleb Gekombe of BASF makes a point during his presentation

Conference delegates listen to a presentation at the conference

Conference delegates listen to a presentation at the conference

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FOODBUSINESSAFRICA.COM


Women leaders at the newly introduced Women in Business Forum at the end of their discussion: From left Alice Owambo (EABL), Caroline Mugo (Cargill), Rachel Muli (Unilever Ethiopia), Julia Otaya (Coca-Cola), Prit Patel (Creative Y&R), Joyce Njogu (KAM) and Kalpa Padia (Raka Cheese)

The Industry Business Leaders’ Forum session brought together leaders from financial, manufacturing and agribusiness sectors

Jessie Kamau of Atlas Copco gives his presentation at the conference

Grant Little of DNV GL gives his sustainability presentation at the conference

Panelists at the regulations, standards and regional trade session, sponsored by Coca-Cola, go through the discussions

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Visitors at the booth of BioMerieux SA at the Expo Hall

A visitor has a discussion with a team member from Buhler

Visitors at the BAM Trading booth discuss their requirements

It is all smiles as the KWAL team receive their certificate of sponsorship

The Atlas Copco booth was a beehive of activity, as visitors sought to know about oil free compressors

The Brookside Dairy stand was popular at the Expo Hall. Here, students from universities in the region at the stand

Visitors at the Resulta Engineering booth at the Expo Hall

Visitors at the DST booth at the Expo Hall

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The team from Promaco Ltd have a meeting at their exhibition booth with a preospective client from Capwell Industries Ltd

Visitors take notes at the Pingle Group booth at the Expo Hall

Roff Industries staff discuss the options available

A visitor has a keen look at a juice sample at the Sphere Foods booth

Visitors at theSKF booth at the Expo Hall

The Diversey booth at the Expo Hall with the new logo

Visitors at theDNV GL booth at the Expo Hall

Visitors at the Green Day booth at the Expo Hall

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AFMASS EASTERN AFRICA PREVIEW: 2019 EVENT VENUE

Visa Oshwal Centre to host AFMASS Eastern Africa 2019 edition Visa Oshwal Centre offers more spacious facilities not far from the centre of Nairobi KENYA - Plans are underway for the 2019

edition of AFMASS Eastern Africa edition. The event has been set for May 8-10, 2018 at the Visa Oshwal Centre in Nairobi, Kenya, coming back to the venue where the event was last held at in 2017. This will be the 5th edition of AFMASS Eastern Africa, which has grown by leaps and bounds over the years to be Eastern Africa’s fastest growing and largest food, beverage and milling industry conference and expo. “We are excited that we shall be coming back to Visa Oshwal Centre after having moved to a new venue for the 2018 edition. While the venue for the 2018 edition had a lot of advantages, we have listened to the feedback we received from a good number of attendees who voiced their concerns with the venue’s distance from the centre of Nairobi. “We are also looking at having a permanent location for the event and Visa Oshwal Centre fits perfectly, especially as we plan for further growth of the event in the future. The Centre has bigger, more secure

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facilities that meet the unique needs of AFMASS attendees. Therefore, we have had discussions with the Centre’s management to have the event at the venue for a number of years,” reveals Juma. The event will be held on May 8-10, 2019 in Nairobi, Kenya, with the theme: Sustainability: Building a Sustainable Food and Agriculture Value Chain in Africa. “With sustainability becoming a new focus area for the food, beverage and milling industry, next year’s event’s focus on sustainability as the main theme will provide the platform for industry stakeholders in Africa to engage, discuss and share their plans, strategies and experiences in mainstreaming the sustainability agenda, with a focus on Africa,” Juma explained. The next edition of AFMASS events this year is the AFMASS Southern Africa edition that is set for October 3-5, 2018 in Lusaka, Zambia. AFMASS Southern Africa edition is the first regional conference and expo with a focus

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

“WITH SUSTAINABILITY BECOMING A KEY FOCUS AREA FOR THE INDUSTRY, NEXT YEAR’S FOCUS ON SUSTAINABILITY WILL PROVIDE THE PERFECT PLATFORM TO DISCUSS AND ENGAGE WITH THE SECTOR, WITH A FOCUS ON AFRICA ” Francis Juma, Organiser

on the food, beverage and milling industry. A similar event, AFMASS Western Africa edition, is planned to debut in Lagos, Nigeria in February 2020, enhancing the profile and coverage of the AFMASS events to cover the Eastern Southern and Western regions of Africa. More information about the AFMASS Conferences and Expos can be found at www.afmass.com FOODBUSINESSAFRICA.COM


AFMASS SOUTHERN AFRICA 2018 PREVIEW: REGISTRATION OPEN

Registration starts for AFMASS Southern Africa 2018 edition in Zambia ZAMBIA – The organisers of the Africa Food

Manufacturing (AFMASS) Conference & Expo Southern Africa edition have announced that bookings for the southern Africa edition of the event set for in Lusaka, Zambia in October this year, is underway. 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. “AFMASS Southern Africa being the first food industry focused event in Zambia is a major milestone. The region is rich in agricultural production, with a huge yearning to find ways to improve post-harvest handling, storage, value addition and agro-processing,” says Francis Juma, the head of the organizing committee. “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. According to the organisers, FoodWorld Media, who are the publishers of the African industry-focused Food Business Africa magazine, booking for sponsors, exhibitors, delegates and visitors, has been opened for the event. Juma says that the event is the perfect opportunity for suppliers of processing and milling equipment, packaging solutions, ingredients and chemicals, food safety and laboratory solutions, engineering and industry

solutions; consultancy and compliance; supply chain, warehousing, IT and financial services to showcase their innovations to southern Africa’s food industry players. “AFMASS Southern Africa gives regional and international suppliers the perfect opportunity to not only discover this region but also to shape the future of the growing industry in Zambia and the region,” says Juma. He says that 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 FOOD BUSINESS AFRICA | MAY/JUNE 2018

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SPECIAL REPORT: OPEN INNOVATION

Open Innovation Food companies embrace start-ups to grow the bottom line, find new innovations By Francis Juma

H

uge shifts in consumer attitudes on how food is sold and bought, and changes in the way young consumers look at food, including what food products they buy, is making big food companies worried. Worried about how to continue growing their businesses quarterafter-quarter in an environment where Millenial consumers have shifted their focus to small, novel, local food producers. A number of these food giants have recently turned to these small upstarts to find the next glimmer of growth, and thereby meet their shareholders’ appetite for increased revenues, profitability and dividends. As consumer attitudes change, the rising importance of health and wellness has also driven many big food companies to think differently about the way they formulate and deliver their food products. With concerns around sugar, salt, fat, GMOs, sustainability, transparency, clean label and food safety rising on the consumer’s radar, big food companies have found themselves playing catch up in a number of ways to change to meet the new realities, which are further compounded by the increasing adoption of social media and e-commerce – and their disruptive ways on the industry. 40

Why Open Innovation?

According to a report by Nielsen, in 2017, despite a fall in total sales figures across US retail, some food and beverage manufacturers registered significant growth, most notably small manufacturers (those with at least US$100,000 in annual sales). Nielsen reports that in 2012, the largest food and beverage manufacturers accounted for about 33% of dollar sales in the US, while in 2017 they accounted for 31%, with smaller manufacturers gaining the 2% of market share, equal to about US$2 billion over the five years. The smallest manufacturers accounted for 19% of dollar sales but were driving more than half, or 53% of the total growth, compared to the largest corporations that drove only 2% of the growth, and medium scale companies that accounted for 25% of the growth. Over the last 5-10 years, new thinking around the way food companies bring out new innovations into the marketplace and tap into emerging industry trends remain one of the most important decisions in the industry, as big food companies try to catch up with their smaller, nimbler, more innovative and trendier competitors,

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ABOVE: Chobani, Greek yoghurt producer’s first incubation class is unveiled in 2016. The company provides a 4 month class to unique entrepreneurs to refine their ideas and grow their businesses through open innovation, incubation efforts and direct venture investments. According to Wikipedia, several factors have emerged that paved the way for opportunities to collaborate with outsiders in the innovations and other critical business areas, including the increasing availability and mobility of skilled workers, the growth of the venture capital market, external options for ideas sitting on the shelf out of the company’s reach and the increasing capability of external suppliers. While the food industry of old was more concerned with keeping a lid on their innovation efforts, big food companies of today continue to open the way for outsiders to bring in new perspectives by inviting other food companies, universities, suppliers, research companies and even consumers to share with them new concepts and insights as they seek to deliver the next million-dollar brand. With a realisation that knowledge about products or market FOODBUSINESSAFRICA.COM


trend are no longer proprietary to the company, companies have realised that it is wise to tap into these external sources of information before a competitor does.

Tapping beyond boundaries

General Mills, one of leading US food companies, aptly describes why food companies must embrace outsiders to succeed in the present atmosphere. “Innovation goes beyond new product development. It includes everything from boosting the company’s environmental sustainability efforts to finding new ways to connect our brands with changing demands. Innovators outside our walls might have just the solutions we need to better serve the world by making the food people love. There is a great opportunity for us to enhance and accelerate our innovation by teaming with world-class innovators, start-up accelerators and other entrepreneurial networks to scout for advantaged technologies,” says the company on its website. The company in 2017 created the General Mills Worldwide Innovation Network (G-WIN) to find partners who can help the maker of breakfast cereals and yoghurts to deliver on its purpose. The company, which has used what is calls a “connected innovation approach” says that it has achieved numerous product developments and enhancements since it debuted the program. In its present call for proposals due April 2019, the company has posted on the G-WIN website several need areas it is seeking solutions for, including an egg substitute for egg mixes to enable it formulate egg reduced or egg free cake mixes; a compact mobile platform for rapid on-field fruit quality measurement; a novel method for accelerated microbiological challenge studies in foods; a technology that would enable considerably extending the usage life of frying oils without impacting the product quality and technologies for building thin, uniform liquid films on food materials. Another food major to take General Mills approach is Nestle. Through its HENRi program, launched in 2016 and named after its founder Henri Nestle, the company pursues its big goals in partnership with equally ambitious start-ups. The global platform aims to increase the quality and speed of innovative solutions that respond to social and business challenges, and is open to start-ups worldwide, says the company. Among the many projects the initiative has accomplished include FOODBUSINESSAFRICA.COM

on Nespresso Sustainability which brings its Nespresso AAA Sustainable Quality Program to life, showing how the initiatives benefits farmers, communities and consumers while engaging with consumers to encourage participation. The company has also worked successfully with Blippar, which offers ‘consumers a way to unlock digital content by simply scanning physical objects, including branded products,’ using image recognition and augmented reality (AR), says Nestle. The partnership with its Milo brand allows mums and kids to unlock sports tips, inspiring hero stories and nutritional information, and delivers new levels of engagement in untested AR territory. Through its Innovators Brewhouse program, leading Dutch brewer Heineken aims “to collectively shape the future of beer and cider through invention and shared development”, to give a boost to its goal of doubling its innovation rate by 2020 from 2010, when the goal was set. Focus areas include e-commerce, sustainability, brewing and distribution, products and ingredients, marketing and enterprise technology. The company says that several innovations including the Heineken Popup Lounge that delights consumers with specially designed ‘conversation coccons’ and innovative bar designs; Radler, beer mixed with lemonade and which it says is the company’s largest volume innovation ever; and the SUB, an innovation that delivers quality draft beer at home, have come from its focus on new ways of collaborating with outside players in the industry. The company in early 2018 sent out calls for ideas that could enable it to deliver on its Drop the C sustainability project that aims at reducing CO2 emissions in its supply chain. Coca-Cola Amatil, one of the largest bottlers of the beverages behemoth in the Asia-Pacific region, has launched its first open innovation platform called Amatil X ‘for emerging possibilities to power growth beyond Coca-Cola Amatil’s core business,’ to find new avenues of growth this year. “Our aspiration is for Amatil X to set the benchmark for how to bridge the gap between large established corporations and the agility and innovation of start-up businesses, so that we leverage entrepreneurs to help fuel our growth agenda,” said CocaCola Amatil Group Managing Director, Alison Watkins, adding that Amatil X would support the development of concepts, start-ups and early stage businesses that anticipate and address customer needs.

“THE INVESTMENT COMMUNITY SPENT YEARS FOCUSED ON MID-SIZE BRANDS, BUT THESE HAVE BECOME VERY EXPENSIVE. WHEN YOU ACQUIRE THEM YOUNG, YOU CAN GET THEM FOR A GOOD VALUE” Shelley Balanko, Hartman Group

“Customers’ worlds are changing quickly, with increasing expectations driven by technology. At the same time, beverage trends and drinking occasions are evolving fast,” Watkins said. The company is seeking investment ideas that fall in three categories: “Millions of moments of impact”: concepts for creating a sustainable future; “One step ahead”: concepts for redefining the customer experience; and “Route to me”: concepts for exploring alternative ways of getting customers what they want, when and where they want it. At the end of the program, companies will be reviewed for further investment.

The incubation class route

US leading Greek yoghurt producer is one of the companies to embrace start-ups, working with them to discover the most interesting concepts that they can then work on to scale up. The company says that its incubator class concept, started in 2016, is a program ‘for companies taking on broken food systems to bring better food to more people’. The 4-month program gives investment to start-ups, and access to its ‘network and expertise in order to scale up their operations and achieve significant growth.’ Promising start-ups identified through a competitive process are given an equity free capital with a US$25,000 grant with no strings attached, Chobani says, and then taken through a mentorship program with exposure to Chobani’s operations, finance, marketing and sales processes. The ‘graduates’ are then given exposure to Chobani’s network of experts, retailers and investors to help them grow and scale up. So far 3 classes have been taken through the process, including Banza, whose first product is a high protein, lower carbohydrate pasta made from chick peas. According to Nielsen, Banza pasta is the fastest growing brand of pasta in the US and was named by TIME Magazine as one of the Top 25 inventions of 2015; Misfit FOOD BUSINESS AFRICA | MAY/JUNE 2018

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SPECIAL REPORT: OPEN INNOVATION

juice that makes cold-pressed juice from, you guessed it, not so good looking fruits that would otherwise be discarded; Rumi, made up of former Army officers who had stints in Afghanistan who are working with women in the country to produce and market Afghani saffron into the US; Farmers Willies, that makes craft beer from ginger; to Fresh Bellies, a maker of organic baby food; and Masienda, a cleanlabel tortilla maker that works with 2,000 maize farmers in Mexico. The company has also introduced the concept in Australia in 2018. But Chobani is not alone in this line of thought. One of the most iconic food industry brands, Kraft Heinz in March this year launched Springboard, its incubator program, when it took in its first class of five outstanding companies. With a focus to ‘nurture, scale, and accelerate growth of disruptive brands’, the company seeks ‘authentic propositions and inspired founders within one of the four pillars shaping the future of food: natural and organic, specialty and craft, health and performance, and experiential brands, according to Sergio Elueterio, who manages the program. The companies, include Kumana, a Venezuelan-inspired avocado sauce and original sauces producer; AyobaYo, started by South African brothers who have taken their family recipe to disrupt the beef jerky market; Popillu, an antioxidant laden lemonade maker; Quevos, makers of salty, crunchy egg-white chips and Cleveland Kraut that makes fermented foods. The companies are being taken through a 4-month, which started in May 2018.

Taking the venture capital route

Faced with the challenges of innovating inside their four walls, several food majors have taken the direct route: investing in start-ups outright by establishing venture capital firms that kind of understand the ways these new innovators and investors think and work – away from the main company. So rather than compete with them, just join them, goes the mantra. And critically, instead of waiting for these companies to get big and cost billions of dollars to acquire, big brands from Coca-Cola, Kellogg, General Mills, AB InBev and others are getting into the mix sooner, so that they can buy into these companies earlier, cheaper and can shape the future they see, faster. “The investment community spent years focused on midsize 42

brands that have US$100 million in annual sales or more, but these became really expensive. When you acquire them young, you can get them for a good value,” says Shelley Balanko, senior vice president of the Hartman Group, a consumer foods research firm. AB InBev, the world’s largest beer company, has faced serious challenges, with the beer category showing signs of stagnation in its key markets in the United States and Europe. The rise of craft brewing – which grew 5% in 2017, versus a reduction of 1% in overall US beer volume, and had 6,266 breweries in the country at the end of 2017, and constituted a significant 12.7% of the total beer volume, or 23% of the dollar sales – caught the company by surprise, says the CEO of the company, Carlos Brito in a recent interview. The emergence of home brewing, changing consumer attitudes to beer and the rise of e-commerce have all come together to challenge the company’s plans and strategies that always worked, considering its scale. The company therefore needed to respond to these developments and stop the tide, while seeking to become a disruptor itself. In came ZX Ventures. AB InBev started ZX Ventures in 2015 to develop new products and businesses that address emerging consumer needs, including ‘unique beverages that shape emerging categories, physical bar experiences that offer new ways to consume our beers, at home devices that empower consumers to customize their own beverages, services that step-change convenience via e-commerce and delivery, and more,” says the company. Through this venture, AB InBev identifies start-ups in which the company invests ahead of the curve by seeding, launching, and scaling new products that deliver exceptional consumer experiences and bring people together. Through ZX Ventures, AB InBev has invested in a number of companies, including at least nine breweries, most of them craft brewers, in less than three years including UK’s Camden Town Brewery, Australia’s 4 Pines and Pirate Life, Colombia’s Cervejaria Colorado, Brazil’s Cervejaria Wäls, Mexico’s Cerveza Bocanegra, Spain’s Cervezas La Virgen, Belgium’s Brouwerij Bosteels and Italy’s Birra del Borgo. The company has also invested in other business ventures beyond beer, including spirits, alternative beverages and beer rating sites Beer Hawk, Ratebeer and homebrew supply companies Northern

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Brewer and Midwest Supplies. ZX ventured into the spirits category in 2018 by acquiring Atom Brands, a UK based spirits producer and distributor. General Mills, covered above, has also gone the venture capital route with its 301 Inc. venture that it launched in 2015. The company, maker of the likes of Betty Crocker, Pillsbury and Pregresso, uses the program to ‘elevate’ businesses with great ideas by integrating direct equity investment with the skills and scale of General Mills, enabling start-ups to build scale and grow fast. The company has so far invested in several companies through this program, including Urban Remedy, a company that delivers ready to eat plant based, organic meals, juices and snacks, where it closed a US$17 million investment in 2018. It has also invested in alternative meat company Beyond Meat, which was the venture’s first investment and also invested US$3 million in Pure Elizabeth, an organic breakfast foods company. Kite Hill, a processor of alternative dairy products made from almond milk also received a US$18 million investment in 2016 from 301 Inc. Danone, the French food and dairy group, through its Danone Manifesto Ventures arm, which has a mission to work alongside talented entrepreneurs and create a healthy and sustainable future of food has invested in several start-ups to tap into their agility and innovations focus. The company participated in a US$30 million round investment in coconut water and probiotics maker Harmless Harvest in 2018 and also invested in Yooji, a French frozen organic baby food maker in 2017. Other investments include in Farmers Fridge, a seller of refrigerated salads and snacks and in Kona Deep, a provider of ocean deep water sourced from the waters around Hawaii, ‘3,000 feet beneath the ocean surface, where cold, pressure and natural minerals combine to create an exceptionally high-quality water,” says the company, after which the water is desalinated and packaged.

Future will see more collaborations

While these are just a few examples current trends have shown that from 2015, the pace of these collaborations is picking up, with most of the initiatives by the food majors being launched in the 3 years since. While Africa has been a by-stander to these happenings, its is only a matter of time before the continent starts seeing these developments arriving on its shores FOODBUSINESSAFRICA.COM


PROCESSING: STEAM INFUSION

A schematic drawing of a steam infusion unit. Steam infusion tecchnology is increasingly being adopted by food and beverage companies

Steam infusion: Unleashing the power of steam Steam infusion offers an alternative to companies in the food and beverage industry to reduce costs and improve product quality. By Ndopa Banda

S

team infusion is believed to be the fastest growing processing solution in the UK (and now gaining footage in Africa) with annual sales going up 10 times and already being used in more than 30 sites. The steam infusion process was first conceived in 2000 as a method of marine propulsion. The process has since been developed for other liquid heating operations in the food and beverages industry. Some steam infusion adopters include Diageo, Bakkavor, Larco and Greencore in the UK. More than 20 companies in Africa have also adopted the technology.

Comparison with other direct heating systems

Steam infusion a direct-contact process in which culinary steam condenses on the surface of pumpable food product. Its primary use is for the gentle and rapid heating of a variety of food ingredients and products including milk, cream, ketchup, soups, sauces, fermented/pasteurized porridge, and milk shakes and wort boiling FOODBUSINESSAFRICA.COM

in the brewery industry. It can be compared to other types of direct heating systems, which include steam injection and steam jackated vessels. Steam injection injects steam into the product to be treated and steam infusion adds the product to the steam. The steam must be high-quality culinary steam and not contain any off-flavors that could change the taste of the product. Steam injection is often used to speed up a cooking process, but the steam infusion can cut cooking times further. Steam injectors, further, cannot operate at high steam pressures due to significant losses to atmosphere and exposure to elevated temperatures, while also providing minimal mixing capabilities. For example, heating 1,000 litres of water from 20 degrees Celsius to 70 degrees Celsius will take 26 minutes with steam injectors, whilst a single steam infusion unit will heat the water in 8 minutes. For steam jacketed vessels, burn-on and compromise the end products quality and ability to make consistent batches.

Product perspective and appearance

The application of heat infusion compared to other heating and cooking methods, results in a product with enhanced flavour without burn-on, meaning retention of product color. Further gains have been realized in ingredient costs reductions and shorter cleaning times. Compared to jacketed kettles, where maintaining an excellent colour and balance of flavor can be difficult because of hot spots on kettles causing burn-on flavour taints, steam infusion ensures no burn on, eliminating this problem entirely. Shortened cooking times and prevention of burn-on have an impact on the flavor profiles of a product. For manufacturers’ fresh flavors appeal to consumers seeking high quality products and opportunities are created in ingredient reduction. It heightens flavours and scents which reduces on quantities of ingredients to get the same flavor profiles as a jacketed vessel product. Additionally, steam infusion increases production capacity, reduces down time FOOD BUSINESS AFRICA | MAY/JUNE 2018

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and saves on energy up to 15% as noted by Janet Prescott, Manufacturing Manager, Bakkavor (UK). “It’s a quality piece of equipment that’s definitely ‘cook proof ’,” she adds. The technology offers a more consistent product while maintaining a creamy mouth feel. For creamier products, the technology makes the product appear cleaner and brighter. The shearing-effect of the technology emulsifies fat and is particularly noticeable in a high fat product creating a cleaner color and brighter sheen. All these appearance attributes are a point of differentiation for consumers because of a higher perceived value and quality.

Delivering operational and cost excellence

Burn onto hot surfaces is a major challenge for food manufacturers when cooking creamier ethnic products. Batches are rejected due to dark spots occurring in the product and colours can be distorted. The steam infusion technology cooks from the centre of the cooking kettle with no exposure to elevated temperatures. “Steam infusion has allowed us to clearly double previous throughput rates, furthermore our meat sauce quality has improved dramatically,” Mark Carnaghan, Factory Manager, Greencore, a producer of convenience foods. In the brewing industry, when using steam infusion for wort boiling, compared to the traditional external wort boilers (EWB), 40% savings in energy and 50% reduction in cooking time is realized by the technology. Combining experiences of using steam infusion in a manufacturing environment with research, the following are points of differentiation with traditional cooking technologies from an operational perspective: Double capacity - Cooking capacity can be increased dramatically because of the heating speed of the steam infusion unit. Work by the University of Lincoln calculated steam infusion is up to three times faster than traditional cooking technologies. Clean-downs are dramatically shortened with no burn-on to the surface of the vessel; any residue can be easily washed away with a water spray. Easy cleaning - By eliminating burn on the vessel, cleaning times and use of caustic are dramatically reduced. There are opportunities of running batch after batch of the same product without cleaning. 44

Reduction in energy consumption Steam infusion systems have reported up to 15% reductions in energy consumption over traditional steam jacketed cooking vessels. An annular design of the steam infusion unit allows steam to condense within the unit itself, the heating process does not rely on contact time between the steam and the product and it has the ability to run at comparatively higher steam pressures without compromising on efficiency.

Why the switch is important

With steam infusion, food manufacturers can produce results unachievable on traditional cooking equipment from both a product and operational perspective. Compared to other cooking methods steam infusion unit can be up to three times quicker, gentler on particulates, more controllable, assist with mixing and homogenizing and can be integrated to act as a pump. It’s not necessarily a switch either; steam infusion can be used in conjunction with traditional technologies to deliver great results.

When benefits become clear

An ideal time to integrate steam infusion into a factory is when conducting a range of reformulation or new product launch. During product development, you can maximize the benefits of the steam infusion technology and create a differentiated product for your customers. The ability to create a new, differentiated offering can be a key driver for sales, especially

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if developments overlap with consumer trends on health and taste. Reformulation isn’t a prerequisite though; the technology can be used to match existing product ranges before rolling out changes in your own time. Steam infusion provides the biggest opportunities to manufacturers of rich and creamy sauces or spicy ethnic sauce and other liquid foods. Manufacturers will achieve significant time savings, shorter heating times, and a unique processing environment that preserves flavours, enabling ingredient reduction. The speed of the steam energy that is introduced into the product means that a vacuum is created, which pulls the flavours back down into the food rather than losing them to the atmosphere. This is especially suited to retaining delicate flavours like broccoli. Additionally, the disruptive force of the steam breaks down the starches in a product to create a fat mimetic which helps to create a luxurious, creamy mouthfeel without adding fat, according to Olympus Automation Ltd (UK) (OAL), one of the technology providers. Although steam infusion technology has many benefits, the initial purchase cost is higher compared to the rest of the etchnologies, but low installations costs, ease of incorporation and the long-term savings on ingredients and energy make a strong case for the steam infusion choice

Ndopa Banda is a food and beverage industry consultant FOODBUSINESSAFRICA.COM


C E R E A L S | P U L S E S | T U B E R S | O I L S E E D S | C O F F E E | M I L L I N G | PA S TA | B A K I N G | S N A C K S | F E E D S

Silverland, a vertically inegrated agribusiness player in Tanzania’s southern highlands’ new animal feed plant. Local and multinational companies are expected to invest in Tanzania’s animal sector going forward

Animal feeds industry in Tanzania

Tanzania has the potential to be the leading producer of animal feed in Eastern Africa By Ronald Onsare he agriculture sector contributes significantly to the economy of Tanzania. With about 30% of the total economy reliant on agricluture, agriculture and agro-processing in the country remain largely untapped. The country therefore has huge unexploited potential due to abundant land, fertile soils, abundant water resources, consistent harvests and a young, rising and rapidly urbanising population. According to the Economic Intelligence Unit, Tanzania’s GDP is forecast to average 6.4% per year in 2016-20. The manufacturing is also expected to continue registering steady growth, aided by a more reliable power supply in the country, the availability of domestic gas and Tanzania’s growing integration into regional markets,

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including the East African Community and COMESA. Tanzania is already a siginificant source of agricltural raw materials to the regional economies, notably Kenya. Consistent maize, cotton and sunflower production has been advantageous to the country. The country however has not adequately taken advantage of the abundance in raw materials to grow its animal feed sector due to historical challenges and food consumption trends in the country.

Importance of animal feed in Tanzania

The animal feeds industry plays a leading role in the global food industry, enabling economic production of animal proteins

throughout the world. Feed is the largest and most important component to ensuring safe, abundant and affordable animal proteins. International feed tonnage has exceeded one billion metric tonnes for the second consecutive year, with a total of 1.07 billion metric tonnes of feed produced in 2017, according to the 2018 Alltech Global Feed Survey. From the same report, the Tanzanian formal feed tonnage exceeded 290,000 metric tonnes. Various sources of information, including the Tanzania Animal feed Manufacturers Association (TAFMA), the industry lobby association, show that the country produced upto 600,000 metric tonnes, with difference probably made up of small scale unregistered feed millers across FOOD BUSINESS AFRICA | MAY/JUNE 2018

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INDUSTRY FOCUS

TANZANIA’S LIVESTOCK MASTER PLAN HAS SET TARGETS FOR INCREASED ANIMAL PRODUCTION THAT WILL REQUIRE ENHANCED FORAGE AND ANIMAL FEED PRODUCTION & FEEDING SERVICES the vast country. Analytically, the overall growth in the animal feed industry in Tanzania, will be pegged and supported by higher consumption of meat, milk, and eggs that is backed by a 50 million plus population and increase in urbanisation and incomes. This can already reflect in increased feed production for the poultry and pig industry as well as the dairy industry. Nonetheless this has to be backed by sufficient animal feed resources and sound structural and organizational environment from the government and private sector. The main feed resources in Tanzania are in natural grasslands, established pastures, cereals and root crops, and agricultural by-products. Cereals and root crops are produced primarily for human consumption, although the potential exists for increased production to meet both human and livestock needs. The grains and pulses milling by-products provide the bulk of the feed raw materials inputs, with the rest coming from cotton seed and soy meal cakes. Additives and premixes are imported. Improvements in handling, processing, and transportation of the agricultural byproducts, as well as integration between livestock and crop production, could greatly increase the utilization of this feed resource, lwoga and Urio state in a report. The production of maize, wheat, sorghum, millet, milled rice, and cotton seed in Tanzania was, 5,350, 100, 800, 350, 1,848 and 101 (1,000MT) respectively, in 2017, according to Index mundi (see Graph). In 2018, production is estimated at 5,400, 100, 800, 350, 1,947 and 175 (1,000MT) in the same order, indicating a slight growth of 2.6% in the sum total. The yield of cotton seed meal was 37,000 MT in 2017 and is estimated to grow to 60,000 MT in 2018, driven by good rainfall in the country. “Grain (corn) production that is estimated at over 5 million metric tonnes per year versus a consumption of 3.5 million metric tonnes should be able to provide adequate raw material to drive the feed sector,” affirms Sufian Kyarua, 46

Secretary General of TAFMA. Yellow corn production started 3 years ago on a pilot basis and is already at 5,000 metric tonnes per year to add to the raw materials requirements, he adds. Other than the soya meal cake, the others, sunflower, and cotton are adequately available in the country.

Livestock value chain key to sector’s growth

Tanzania has one of the largest livestock populations in Africa, about 11% of African cattle population, third after Ethiopia and Sudan. Livestock-related activities contribute 7.4% or USD 3.5 billion to the GDP of the country. According to the Consultative Group for International Agriculture Research (CGIAR) growth of livestock sector is slow, with 2.6% growth per year. This could be the basis for support of prepared feed manufacture in the country. With an estimated livestock population of 30.5 million cattle (mainly beef, with dairy contributing a small percentage), 78.8 million poultry (38.2m indigenous and 36.6m commercial) and 1.9 million pigs, the animal feed industry looks potentially promising. The Tanzania Livestock Master Plan (LMP) brief, believes that to meet its targets, animal feed availability must be given a high priority. Even with good weather for forage production and other cereals and pulses whose milled byproducts feed the industry, the brief notes that there are currently not enough animal feed resources in the country. The LMP sets out ambitious targets for the year 2022 for several livestock-value chains: dairy (50%), poultry, pork, and red meat (66%); chicken and pig meat (69%); and milk (77%) and egg production by 40% above 2017 totals. This can only be met through secure year-round feed supplies in good quality and quantity. “These targets, as well as the expected rise of cross-breed cattle population to nearly 3 million, will require enhanced forage and feed production and feeding services, including improved pasture productivity practices and training of farmers on livestock feeding and forage use,” the plan said. In addition, the plan said, the supply of animal feed, including concentrate feed and roughage in Tanzania, “is erratic both in terms of quality and quantity. Much of the feed in Tanzania is mineral deficient, in part due to the lack of quality control and standards, and enforcement mechanisms

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IN NUMBERS 40 APPROXIMATE NUMBER OF FORMAL ANIMAL FEED MANUFACTURERS IN TANZANIA in addition to the price of available seed being high.” Consequently, this will be the main pull and driver for investment and improved structures in the Tanzania animal feed production. Sufian agrees.

Poultry drives the animal feed sector

Up to recent years, most feed manufacturing in Tanzania is focused on poultry feed. This could be due to the fact that Tanzanians consumed 15kg per capita of poultry meat and 106 eggs in 2015, according to the World Health Organisation (WHO). They also consume beef (4.1 kg), sheep (1.1 kg) and pig (0.2 kg), according to FAO data in 2017. The current John Magufuli government seems to have gained trust from international partners resulting in substantial investment in the poultry sector. This goodwill has seen the country host many international meetings and gatherings further driving the demand for poultry products due to the rising number of visitors. Thus, poultry has held its position as the leading consumer of animal feed in Tanzania, followed by dairy. The cattle sub-sector has lagged behind largely due to producers overwhelmingly working in traditional systems and are either small scale-mixed farmers, agro-pastoralists with few heads of stock, or pastoralists with a greater number of animals relying on natural pastures. “There are few ‘improved’ or ‘exotic’ animals and virtually no areas of highly planted pastures,’’ says Trevor Wilson in his Read Meat Value Chain in Tanzania, report. “There is little ‘modern’ production. Livestock production is based on indigenous types livestock finding their feed resources on natural rangelands,’’ he adds. This has resulted in a low demand for manufactured feed and a consequent lull in substantial investment and manufacturing of the same. The 2017 LMP report further finds that FOODBUSINESSAFRICA.COM


FEED RESOURCES PRODUCTION 2013 - 2018 (000 MT)

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2015

2016

2017

2018

165 136 106 85 101 175

S OR G HU M

104 167 72 100 100 100

MILLED R ICE

323 262 350 325 350 350

832 883 677 756 800 800

1450 1730 1967 1848 1848 1947

4815 5350 5400

5903

MAIZ E

W HEAT

COTTON OIL S EED

MILLET

Feed Production by Species (MT) 2017 Dairy, 14000, 5%

Pets, 3000, 1%

Animal feed investments increase

Focused programs through the government and private sector have seen steady, albeit slow growth in animal feed manufacturing, both in quantity and quality, and gradually if not importantly focusing on feed safety. There are about 40 animal feed mills in Tanzania with a combined estimated total feed production of between 300,000 metric tonnes – 600,000 metric tonnes, relying on locally obtained data by the time of going to print. However, the 2018 Alltech Global Feed Survey indicates a production of 290,000 metric tonnes, most likely reflective of the industry’s activity before indicated expansions by a number of leading players, and due to the proliferation of small scale unregulated millers across the country. The 10 leading players in the Tanzanian animal feed industry, account for slightly over 40% of the estimated feed production while the rest is taken up by smaller establishments, notably using locally fabricated mixers. The top players are Hill Feeds, Falcon Feeds, Silverlands, Interchic, Energy Feeds, Harsho Feeds, Tan Feeds, Kibo Poultry, Mamwe Feeds and Afya Feeds. Hill Animal Feeds, located in Dar es Salaam opened its first mill at Mwenge in 2006 with a manufacturing capacity of 30 metric tonnes per day. Due to rise in demand, it opened a subsidiary at Boko Area in 2007 to increase its production capacity to 35 metric tonnes per day to make it a formidable force in the market. Silverlands, a new entrant into the Tanzanian market,

2014

6737

2013

5366

approximately 98% of Tanzania’s ruminant population is kept under traditional systems of management using communal grazing practices mostly in natural pastures. Only 4% are raised under semi-intensive and intensive production systems in large-scale ranches, dairy farms, feedlots and under zero-grazing. Traditional poultry system comprises over 50% of the flock while intensive poultry and pig production (a segment that relies on compounded feeds or formula feeds) account for the rest and is mostly practiced in urban and peri-urban areas, the report asserts. Tanzania’s poultry industry is currently benefiting from a four-year US$21.4 million grant from the Bill and Melinda Gates Foundation, aimed at enhancing the country’s poultry production. This will definitely increase the demand for poultry feed in the country

Aqua, 3000 , 1%

Pigs, 6000, 2% Broiler , 120000 , 41%

Layer,

144000, 50%

Aqua

Dairy

Pigs

Layer

Broiler

Pets

Livestock Population in Tanzania, 2017 24.1

GOATS & SHEEP

1.9

PIGS

74.8

POULTRY

30.5

CATTLE 0

10

20

30

40

50

60

70

80 Millions

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COUNTRY FOCUS: ANIMAL FEEDS IN TANZANIA

Tanzania’s livestock sector, number three in Africa is largely driven by traditional varieties that are fed on open fields.

ANIMAL FEED COSTS ARE STILL INORDINATELY HIGH IN TANZANIA DESPITE RECENT VAT EXEMPTION. PRICES ROSE TO THE HIGHEST LEVEL IN 2017 DUE TO DROUGHT CONDITIONS IN THE COUNTRY AND SOUTHERN AFRICA REGION with an estimated production of 22,000 metric ton per year, is believed to be making similar expansions to its operations. Other mills with production of over 10,000 metric tonnes per year are Falcon Animal Feeds (incorporated in 2010) and Interchick Co. Ltd. Operating on manufacturing and distribution animal feed in northern regions of Tanzania, Harsho Milling Company Ltd forms a group of firms producing, each between 5,000 to 10,000 metric tonnes per year. The others are, Energy Feeds, Kijenge Feeds, Tan Feeds Kibo Poultry, Mamwe Feeds and Afya Feeds. More than 70% of the feed mills are located in the commercial capital Dar es Salaam while the rest are in Arusha (15%), Iringa, Morogoro, and Mwanza. Most of these private mills were established at the advent of the privatization of the state-owned economy. A majority are small, focusing mainly on poultry feed, which is over 80% of the total production 48

estimate. The Alltech survey reports nil activity in beef feed sub-sector while the dairy sub-sector had a production of 14,000 metric tonnes, 4.8% of the total estimate. The rest of the activity, about 5%, was on pigs, aquatic and pets feed. In recent times the industry has seen the exit of one major feed manufacturer in CP/CPF (from Thailand), citing high production costs when the government introduced the value-added tax on animal feed and its raw materials. The tax has however been scrapped in the three East Africa countries of Kenya, Uganda, Rwanda, and Tanzania, with an aim to increase access to meat, milk, and eggs and also boost the feed production industry in East Africa. Animal feed costs are still inordinately high in Tanzania despite VAT exemption on locally-produced animal feeds. According to data availed by TAFMA, broiler starter prices rose from TSh 35,000 per bag in 2011 to TSh 42000 per bag in 2012, staying at this price till 2016 when it rose abruptly to TSh 61000 per bag, before hitting TSh 71,000 in 2017, hence almost doubling in six years, mainly due to drought conditions in 2016/17 experienced by the country. The prices have since dropped, and are expected to fall back to near 2011/12 prices sue to improved maize harvest in the Eaatsrn Africa region, notably Kenya, that drives local prices up whenever its harvests fail. According to TAFMA, the removal of

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IN NUMBERS 290,000 MT PRODUCTION VOLUME OF ANIMAL FEED IN TANZANIA IN 2017 ALLTECH

74.8 MILLION NUMBER OF POULTRY IN TANZANIA, WITH MORE THAN 50% FROM TRADITIONAL SYSTEMS

30.5 MILLION NUMBER OF LIVESTOCK IN TANZANIA, WITH ONLY 4% RAISED UNDER INTENSIVE OR SEMI-INTENSIVE SYSTEMS FOODBUSINESSAFRICA.COM


taxes on raw material for the manufacture of animal feeds has encouraged private investment in the industry, thus increasing the variety of feeds available and competition that could result in high-quality products. Manase Mrindwa, Secretary General, the Tanzania Poultry Breeders Association (TPBA), told the East African that the tax waiver on poultry feeds has attracted more investment in production but illegal trade in eggs and newly-hatched chicks from neighboring countries was threatening the growth of the business in Tanzania. However, it should be noted that even with the VAT waiver, soy bean meal, which is mainly imported was not exempted from this taxation, and the energy (electricity) cost remain high driving the operational costs up, TAFMA says.

THE GOVERNMENT, WITH TAFMA, HAVE BEEN REVIEWING INDUSTRY REGULATIONS. HOWEVER, THE GOVT. HAS FAILED TO GIVE THE SECTOR ADEQUATE NOTICE TO IMPLEMENT THE RECOMMENDATIONS. THIS IS ALREADY AFFECTING THE SECTOR Sufian Kyuria, Secretary General, TAFMA

The animal feed manufacturers and relevant stakeholders, since the mid1990s, have organized themselves under the Tanzania Animal Feed Manufacturers Association (TAFMA) whose membership has reached 40 to date. The Association which is headquartered in Dar es Salaam provides a common forum for all animal feed manufacturers in Tanzania. Principally, its objectives are to liaise with the government machinery, provide a link with livestock keepers, ensure members products conform to set standards, act as guarantors whenever needed and inform members on trends in the industry, locally and internationally. Notably, TAFMA, in conjunction with the U.S. Grains Council (USGC), lobbied successfully for the removal of VAT from the locally prepared feed which the East Africa country hopes to increase access to quality animal feed. Poultry Association of Tanzania (PAT) with over eleven associations affiliated to it (including TAFMA) and serving the poultry industry through education, FOODBUSINESSAFRICA.COM

communication, and technical assistance was founded in November 2017 to be part of the organizational structures for the feed and livestock industry in Tanzania.

Challenges and opportunities in the sector

The industry, just like many others in Africa faces many challenges including inadequate regulation and policies, insufficient funding and mandate to the sector institutions, raw material supply challenges, and procurement constraints, feed quality and safety issues and knowledge, education and general technology levels. There is an overreliance on the importation of all feed additives and premixes, contributes Sufian Kyarua, secretary-general, TAFMA. He also notes that soya, an important ingredient in feed formulation is still not adequately available with a production of 5,000-7,000 metric tonnes per year against a bulging demand in both local and export markets. The local animal feed soya demand stands at 23,000 tonnes, meaning most of it is imported. The Tanzania Soybean Development Strategy (TSDS) is designed to stimulate soybean production, with the aim of producing 2 million tonnes by 2020, says Trevor Wilson in The Soybean Value Chain In Tanzania. TAFMA, PAT, National Ranching Company Limited (NARCO), South Agricultural Growth Corridor of Tanzania (SAGCOT), are providing a common forum for all animal feed manufacturers, serving the industry through education and technical assistance and undertaking large-scale commercial ranching, poultry farming and crop production (especially soya). SAGCOT has so far been focusing on building value chains within the Ihemi cluster (in the Southern corridor) with the priority agricultural products being soybeans and animal feed, tomato, potato, tea, and dairy. Silverlands Tanzania, a new development comprising of soy processing, feed-milling, poultry business and a large storage chain, has given the expected impetus to the industry. Its target of reaching 20,000 small-scale farmers to grow soya beans by 2020 will enormously contribute to the provision of feed inputs and needed demand from consumers to propel the sector upwards. “We signed a 4-year US$3.6 million grant agreement with World Poultry Foundation. This locks a strong rural marketing programme for

IN NUMBERS 22,000 MT

ANNUAL PRODUCTION CAPACITY OF SILVERLANDS ANIMAL FEED FACTORY

137 MILLION

PROJECTED TOTAL POPULATION OF TANZANIA IN 2050, FROM 53 M IN 2015

20,000

NUMBER OF FARMERS SILVERLANDS IS WORKING WITH TO BOOST SOY PRODUCTION us allowing us to reach farmers quicker than we had planned,” states Jack Bennie, Managing Director, Silverlands. Smallscale poultry farmers are already benefiting from access to better genetics and highquality feeds. The creation of this new business helps to enable the poultry value chain by encouraging the country’s first significant production of soya beans, the key ingredient for feed. The government, with the involvement of TAFMA, has been reviewing the animal feed industry regulations from December 2017 to around March 2018, Sufian Kyarua from TAFMA tells us. However, the government has gone ahead to implement the recommendations without sufficient notice or getting back to the stakeholders, putting the operations of most manufacturers on a spin. Those not in compliance of the new guidelines are already facing stiff fines and creating a crisis in the sector. The regulations are majorly touching on registration and labelling on finished products. “Nonetheless the Ministry concerned is ready to meet the Association soon to ratify the guidelines and their implementation,” Sufian reassures. FOOD BUSINESS AFRICA | MAY/JUNE 2018

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TRENDS | NEW PRODUCTS ON THE SHELF

Coca-Cola introduces Fuze Tea to Kenya

Lipton Yellow Label Tea

Coca-Cola has introduced its widely successful Fuze Tea, a flavoured black tea drink to the Kenyan market. Already a US$1 billion brand worldwide after just a few years, the Fuze Tea comes in 400 ml plastic packaging and is availed in Apple and Peach flavour options.

Unilever Tea has unveiled Lipton Yellow Label Tea in the Kenyan market. Available in 200, 450 and 900 gram box packaging, it is the company’s first tea product to be introduced in the region where it has been sourcing tea for its global markets for decades.

Delamere with Chocolate Chips

Brookside Dairy continues with its extension of its popular Delamere fruit yoghurt range with the launch of Delamere with Chocolate Chips, which can be described as an indulgent product with real chocolate chips. The product is available in 150, 250 and 450 ml packs.

Daima milk in ambient bottle packaging

Sameer Agriculture has availed a range of ambient stable extended shelf life low fat and full cream plain milk products into the Kenyan market. Available in 250, 500 and 1L packaging options.

Daima Flavoured Milk range

Amaize Premium Sifted Maize Meal

Sameer Agriculture has introduced a new range of ambient stable flavoured milk products. Available in 250 ml plastic packaging, the product is available in mango, vanilla and chocolate flavour options.

Capwell Industry has added a new line of premium sifted maize meal. Amaize, which is more refined than the standard maize meal, comes in 2kg paper packaging.

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MY FACTORY, MY STORY

Your Company’s History

Your Products & Services

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Your Markets

Your Industry Trends

Your Management

Your Achievements

Your Future Plans

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

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Why not give us a call to tell your story in the next issue? Contact us on info@foodworldmedia.net or +254 20 8155022/ +254 725 343932 FOOD BUSINESS AFRICA | MAY/JUNE 2018

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PROCTOR & ALLAN: CHANGING EAST AFRICA’S BREAKFAST LANDSCAPE, ONE BREAKFAST BOWL AT A TIME

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Proctor & Allan East Africa is the only corn flakes manufacturer and most diversified breakfast cereals producer in Eastern Africa. The company, a leader in the category and also in porridge and bakery mixes, last year moved into a new state-of-the-art plant in Limuru, Kenya. Food Business Africa had a chat with the CEO and MD, Mr. David Kamau to find out what the new plant has in store and to discuss the future of the breakfast cereals industry in the region..

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MY FACTORY, MY STORY – PROCTOR & ALLAN EAST AFRICA

EASTERN AFRICA’S ONLY CORNFLAKES PRODUCER INVESTS IN NEW PLANT, NEW CAPABILITIES By Francis Juma

T

here is a noticeable change in Limuru, located some 40 kilometers from Kenya’s capital city, Nairobi. The town, which dates back to the colonial days, grew as a vital trade link for the colonial period’s commerce, linking the critical tea plantations in the then Kenya Highlands – the high altitude, cooler climate zones where large scale agriculture was the main activity - to the tea auction house in Nairobi. The tea plantations didn’t disappear with the end of colonialism in 1963, but are still part and parcel of Limuru, with thousands of acres dedicated to the production of one of Kenya’s main export earners. The change in Limuru town’s fortunes and visuals has taken a long time to come, with the Bata shoe factory being the most recognizable land mark for many years. But the wind of change seems to have arrived at this small, almost sleepy town, with the arrival of a number of factories including 54

Proctor & Allan’s new plant in 2016, which stands tall above everything else in the town. The factory, visible to anyone passing through the town, is reflective of Limuru’s transition to one of the most promising upcoming industrial hubs around Nairobi and Kenya in general. Proctor & Allan was acquired in April 1999 from Unga Group Ltd, by a group of local investors, and operated at its Nairobi Industrial area site until 2016 when it shifted its operations to the new location in Limuru, with a new US$20 million (KSh. 2 billion) plant. Led by Mr. Kamau, the firm benefits from a highly experienced and competent management team made up of highly qualified individuals who have a good understanding of the industry in which they operate and are well placed to explore the opportunities in the industry to enable the company realize its strategy into the future.

MAY/JUNE 2018 | FOOD BUSINESS AFRICA

ABOVE: Mr. Kamau (second left) with his team of managers who ensure the company meets the needs of its customers across Eastern Africa

Breakfast cereals and more

“Proctor & Allan has been a leading producer of healthy nutritious foods for over 60 years,” reveals Mr. David Kamau, the Chief Executive Officer and Managing Director of the company. He says that the company started out producing oats in Nakuru, in Kenya’s Rift Valley region, in 1945. “We have grown from a single product company to a diversified company with a whole range of products over the years. We pride ourselves as the home of healthy foods,” explains the CEO and MD. “Many Kenyans have grown up consuming our range of breakfast cereals, oats, porridges and culinary products; and these are today FOODBUSINESSAFRICA.COM


The company produces breakfast cereals, porridge flours, cake mixes, doog food and culinary products

“THE COMPANY HAS BEEN A LEADING PRODUCER OF HEALTHY, NUTRITIOUS FOODS FOR OVER 60 YEARS. WE HAVE GROWN FROM A SINGLE PRODUCT COMPANY TO A DIVERSIFIED COMPANY WITH A WHOLE RANGE OF PRODUCTS OVER THE YEARS” David Kamau, MD & CEO

household names across the region.” According to Mr. Kamau, the company currently has six broad product categories with a range of over 10 brands. These include breakfast cereals, which come in the following variants: Cornflakes, Crunchy Cornflakes, Rice Crispies, Wheat Flakes, Natural Cereal and Fruit Muesli. In the oats range, the company variants are White Oats, Quick Porridge Oats and Oat Flakes. FOODBUSINESSAFRICA.COM

Porridge category variants are Kiddos Baby Porridge, Kiddos Champs Porridge, Family Porridge, Family Sour Porridge, Nutri-Rich Porridge and Lishe Pure Wimbi. These three broad categories cover the breakfast category, which encompass both the cold and hot breakfast options. The company is proud that apart from being the only local producer of cornflakes, it was also the first producer of pre-cooked porridge products in the region and hence has been offering convenient and healthy breakfast products to Kenyans over the years. Beyond the breakfast categories, the company has a range of cake mixes in vanilla, chocolate, butterscotch and raspberry variants. Other products include Golden bread crumbs and Gravy mix that make up the company’s culinary line and a range of pet food products, which are available as Besbix Pre-cooked, Besbix uncooked, Besbix Puppy Meal and Besbones. The company in 2011, began the journey of re-branding its products and redefining the core reason for its existence. The company redefined its primary and

secondary target market and its target demographics, with the goal of targeting its market with the various products. It is during this exercise that the company made a promise to its target market that it would be their home of healthier foods, culminating in the current branding and packaging. According to Mr. Kamau, the company’s brands are well loved and distributed across all major retail outlets countrywide, plus into the Eastern Africa region, including Uganda, Tanzania, Rwanda and South Sudan. Supplementary blended foods have been commonly utilised in emergency situations for a number of years in the region. One of the most common foods that are recommended for use are fortified blended foods (FBFs) and Proctor & Allan has been at the forefront in manufacturing and supplying Corn Soya Blends (CSBs) to Non-governmental organizations across the East African Region. Besides these products, the company also manufactures sausage rusk that it sells to sausage manufacturers across Eastern Africa. FOOD BUSINESS AFRICA | MAY/JUNE 2018

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MY FACTORY, MY STORY – PROCTOR & ALLAN EAST AFRICA

Investment in a plant of the future

The plant operates on Buhler’s Wincos system which enables the monitoring and control of the entire plant from one point.

The MD and CEO with the plant’s Technical Manager Raymond at the factory floor..

The company has a raw material laboratory where it analyses grains to ensure they meet its requirements 56

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“Our new plant has been driven by the market opportunity that we saw, driven by a rising demand for our range of products,” says Mr. Kamau. The Board of Directors was supportive and instrumental in the company’s plans to set up a new Greenfield plant, away from its old location along Lusaka Road, in the centre of Nairobi’s Industrial Area. “We got to a point that we could not meet the demand for most of our products at the old site in Nairobi,” he adds, noting that the new site enables the company to get away from the hustle and bustle of Nairobi and be closer to the grain basket of Kenya – the Rift Valley. And a cooler choice Limuru is, not just metaphorically, but his staff has had to adjust to the weather in the town, where temperatures are much cooler than in Nairobi. According to Mr. Kamau, the new plant has led to increased capacity in the production of the company’s wide range of products, from breakfast cereals to oats and porridge categories in order to meet the ever-increasing demand for its products. “With the new plant, we are confident of meeting present and future demand for our products into the broader Eastern Africa region. This plant enables us to up our scale to meet present and future demand.” But beyond the increased capacity, Mr. Kamau says that the new plant has boosted their capability on innovations, enabling the company to enter new emerging categories, enabling it to supply a wider variety of products in line with the changing consumer needs and preferences. It has also enabled the company to produce its products at a lower cost since the new plant is fully automated, which leads to reduced production costs, especially in labour and utilities where energy saving initiatives were incorporated into the design of the plant. The new plant has its own laboratory where raw materials, mainly maize, soya, oats and other grains like sorghum are received and inspected by the quality assurance team. With the laboratory on site, the plant is able to carry out most of the vital testing of raw materials for acceptance into the factory. However, more complicated testing is done at outsourced laboratories in Nairobi. Of particular concern to the company are the challenges in sourcing quality grains from the local market, especially maize that fluctuates in its availability from season to season, FOODBUSINESSAFRICA.COM


“WITH THE NEW PLANT, WE ARE CONFIDENT OF MEETING PRESENT AND FUTURE DEMAND FOR OUR PRODUCTS IN THE EASTERN AFRICA REGION.” David Kamau, MD & CEO

especially in Kenya. The company complements locally sourced maize with imported maize from the region. In choosing the machinery supplier, Proctor & Allan considered several factors, including the reliability of the equipment, the availability of local support and industry recommendation. “We chose the most reliable and efficient manufacturers in the industry and settled for equipment from Buhler; who are global market leaders in the supply and installation of breakfast cereal and flour production plants amongst other food processing lines ,” he says. “From a project planning basis and as with any large project, there were some hitches that usually emanate from project logistics that led to delays in completion of the plant. Within the startup phase, we needed to have technical personnel who have had experience with similar equipment and this was lacking since this new plant is the first of its kind within the region and hence we had to train local personnel in running this equipment during the commissioning stage of the project.” Proctor & Allan has continually emphasized on the need and importance of maintaining consistency in production, traceability and high quality standards throughout its manufacturing process. The plant has attained ISO 9001:2008 and ISO 22000:2005 food safety systems certification. These systems are maintained through regular internal audits, as well as third party audits which are conducted by an international certification body. The company has successfully upgraded the new plant to ISO 22000:2009 Food Safety System Certification (FSSC 2000). “These certifications ensure our products can compete with other products in the local and regional markets and have also enabled us to venture into increased food aid programs in partnership with international NGOs. They have definitely improved our business performance,” he reiterates.

Two multi-head weighing and filling stations ensure adequate capacity

The new plant has capacity to make new types of breakfast cereals

Changing consumer tastes drive the future

As Eastern Africa’s only corn flakes producer, Proctor & Allan is at the centre of growth of the breakfast cereals category. Rapidly growing economies and rising urbanization in the region have made the category grow fast to meet rising demand for the products. Beyond the two aspects of the economy and urbanisation, changing consumer preferences and the need for convenience by younger consumers are shaping the future demand for these products. “Growth in the breakfast cereals category across East Africa is quite phenomenal, driven mainly by consumer’s need of health and nutrition as well as the increasing need for convenience to suit their busy lifestyles. Consumers increasingly lead busy lives and as such they are looking for ways of having healthy convenient meals. At Proctor & Allan, we shall strive to ensure that we continuously innovate and provide our consumers with convenient alternatives that are nutritious and affordable at all times”. He further added that for the Millenials generation aged between 1535, who account for more than 30% of the population, convenience, exposure, curiosity and technology convergence determine their brand choice and they connect with brands, which they relate with, Mr. Kamau reveals. FOODBUSINESSAFRICA.COM

An analyst carries out testing of on-line products at the factory, ensuring that the final products meet quality and safety targets all the time FOOD BUSINESS AFRICA | MAY/JUNE 2018

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MY FACTORY, MY STORY – PROCTOR & ALLAN EAST AFRICA

BEYOND NEW PRODUCTS THAT MEET NEW DEMOGRAPHIC DEMANDS, THE COMPANY IS LOOKING AT WAYS TO INCORPORATE LOCALLY AVAILABLE GRAINS INTO ITS BREAKFAST AND PORRIDGE PRODUCTS. in teens aged 13-18 years, breakfast cereal contributes 10% of total calories, but over 50% of iron, folate and whole grain in the diets of those teens who eat cereal.

Changing retail environment calls for new strategies

ABOVE: The company engages in several community initiatives. Here, a company staff member participates in a blood donation drive. The company also donates products to several initiatives in its locality. Mr. Kamau says that the Gross Domestic Product (GDP) growth across the East African markets has been stellar and this growth has led to increased consumption of breakfast cereals across the region. The decision to invest in the new plant took this increased consumption growth into consideration, with additional capacity invested to enable the company venture into new markets and product categories. “We have seen new products enter this market and consumption is driven by either the younger consumer who is exposed to new products that are globally available or the health conscious consumer who is conscious about what they consume.” The company has a product development team and robust process that is looking at ways to respond to these new market demands. “We have a new product development process that will enable us to deliver what our consumers are looking for, including chocolate and sugar coated products. With the new plant, we have the opportunity to avail a wide variety of innovation brands to the market.” Beyond the new products that meet the demands of this new emerging demographic, the company is also looking at ways to incorporate locally available grains into its wide variety of breakfast and porridge products, thereby having a more holistic approach to its innovations agenda: adopting new emerging trends, while also taking advantage of the nutritious and healthy advantages some of the locally available grains impart on the consumer. He adds that apart from consumers seeking out new taste preferences, there has been an increase in the demand for its products with increased consumer awareness by parents on the need of having a healthy breakfast each morning. He reveals that according to research carried out in Kenya, in children 4-12 years old, breakfast cereal consumption contributes less than 10% of the calories, but over 25% of daily intake of essential nutrients and whole grain in the diets of children who eat cereal. Further to this, 58

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As the Kenyan modern retail scene struggles due to the challenges that some of the major supermarket chains have faced, such as Nakumatt and Uchumi, the company has had to seek new ways to grow its business, away from the modern trade that has been the main channel of distribution of its products. “In the Kenyan market, we now not only sell directly to the supermarkets channel but we are now driving our product availability to the traditional trade and targeting small scale retail traders and kiosks,” the CEO and MD says. The company has expanded its distributor network throughout the country and has started recruiting wholesalers in different regions to enable it increase its products penetration. While Kenya has been the base for the company, it is keen to ensure that its brands are availed and penetrate more markets across the East African and COMESA region. “We are also proactively aiming at expanding our reach to the wider Common Market for Eastern & Southern Africa (COMESA) region,” he reveals.

Priorities into the future

According to Mr. Kamau, the future focus for the company is to have continuity in its business into the near future, with growing presence in the regional market. “Our focus with this new plant now is to enable the company to avail our products into every corner of the region. Further, we shall strive to grow the portfolio of products we are offering to the customers. We shall also be boosting our capacity to work with farmers across the region, giving them access to a market for maize, soya, sorghum, millet and other grains we use at the plant. And importantly, with the increased business we are looking at enriching our interaction with all other stakeholders in our supply chain, including distributors, vendors and suppliers to the factory,” he reveals. The Company is keen on driving full utilization of the new facility to drive market penetration and product improvement, with a wider variety of affordable, healthy and nutritious food stuffs, with a particular focus on quality and product safety. According to Mr. Kamau, the future is bright for Proctor & Allan and the breakfast cereals category in the region. “Great growth is expected within the industry driven by urbanization and the continued growth of GDPs across the East African countries. Consumers are looking for convenience and hence with modernization, we expect continuous growth,” he says. He explains that growth into the future will be driven by innovations in packaging, adding that growth of alternative packaging is a continuous trend that is very relevant across the East African market space. “With the opening up of many new channels of trade, there is an opportunity to develop new packaging that will see the distribution of our range of products to the small retail outlets and eventually to the bottom of the pyramid (BOP). “ FOODBUSINESSAFRICA.COM


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Food Business Africa May/June 2018  

Africa's Food, Beverage & Milling magazine

Food Business Africa May/June 2018  

Africa's Food, Beverage & Milling magazine