Kit Katâ€™s 75th birthday
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Coca-Cola Hellenic opens new €130m Irish facility.
Business news from the UK and international markets.
- 6 B REWING & D ISTILLING Developments in the global alcoholic drinks sector.
Robert Watson, ce, Hilton Food Group.
- 6 M ERGERS & A CQUISITIONS
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P AGE 19
Sales leap at rebranded Scottish Salmon Company.
Christian Porta, chairman & ce, Chivas Brothers.
- 39 M ILLING & B AKING Allied Mills – Maintaining a competitive edge.
Coverage of British and international deals.
- 9 C OVER S TORY
Processing & Manufacturing . . . . . 12 & 32
Nestle celebrates Kit Kat brand’s 75th birthday.
Materials & Ingredients . . . . . . . . 27 & 44
Cees ’t Hart, ce, Royal FrieslandCampina
- 15 B EVERAGES
Paul Polman, ce, Uniliver.
Stronger second half performance drives growth at Diageo.
Energy & Environment . . . 16, 29, 33 & 40 Information Technology. . . . . . . . . . . . . 41 Bottling & Packaging . . . . . . . . . . . . 42-44
- 17 S COTCH W HISKY
Quality & Hygiene . . . . . . . . . . . . . . . . . 44
Mike Corbett, ce, Scottish Salmon Company.
Diageo opens first Scotch malt whisky distillery of scale in over 30 years. Managing Director: Colin Murphy Editor: Mike Rohan Sales Director: Ronan McGlade Advertising: Susan Doyle, Stuart Atkinson. Senior Sales Executive: Paul Lees
- 19 & 21 S PIRITS
Chivas Brothers meeting the growing thirst for premium Scotch.
Paul Bulcke, ce, Nestle.
Production Manager: Susan Doyle
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William Grant adds Irish whiskey to Scotch.
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FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
N N E E W W S S Strong Interim Results From Hilton Food Group UK-based Hilton Food Group, the leading specialist retail meat packing business supplying major international food retailers in Europe, has reported a strong underlying trading performance for the 28 weeks to July 18th 2010, with sales and profits up despite the difficult, pervading economic conditions across the continent. Volumes grew overall by 11% and turnover increased by 5% to £449.9m, compared to the corresponding period the previous year. The turnover increase is below the level of volume gains, reflecting some reductions in average unit selling prices based on a decrease in raw material costs and product mix changes, together with the fact that the largest volume growth was achieved in Central Europe, where selling prices are much lower than in more mature European economies. The impact from currency translation was less than in previous years, accounting for only 1% of the turnover increase. The operating profit margin was 2.7% (2.7% in the first 28 weeks of 2009) compared with 2.6% for the 53 weeks to January 3rd 2010. Operating profit for the first half of 2010, at £12.2m, was 5% ahead of the corresponding period in 2009. Operating profit benefited from the higher volumes, but was moderated by the effect of the lower raw material prices and product mix changes. Profit
before taxation was £11.5m, reflecting the increase in operating profit and a reduction in finance charges.
chief executive at the beginning of fiscal 2012.
Own Stores Decline Hits Thorntons Reported pre-tax profit before exceptionals fell 2.4% to £6.1m on flat revenue of £214.6m for the year ended June 26th 2010 at Thorntons, the UK confectionery manufacturer and retailer, as sales through it own stores declined, particularly in the second half. Underlying profit before tax improved by 14.2% to £7.5m In spite of the difficult trading environment, sales of Thorntons branded products grew by 4.7% on the previous year and both the commercial and Thorntons Direct channels showed strong sales growth. Indeed, the Thorntons brand continued to gain market share in the UK chocolate market.
Grupo Siro Opens €6m R&D Centre Spanish food group Grupo Siro has opened a new Eur6m research and development facility at El Espinar in northern Spain. The 3,000 sq m facility, which will house a team of 30 researchers, will focus on new product development. It will also undertake contracts for other food manufacturers. Grupo Siro operates across five food categories – pasta, biscuits, snacks, bakery/cakes, bread and patisserie.
Change of Leadership at Campbell
Robert Watson, chief executive of Hilton Food Group.
B B R R II E E F F
Douglas Conant, will step down as chief executive of Campbell Soup Company next July, at the end of the company’s financial year. Denise Morrison, president of Campbell's North American soup, sauces and beverages business, has been appointed executive vice president and chief operating Officer in anticipation of her election to succeed Douglas Conant as
Nestle Continues Expansion in Central and Eastern Europe With New Service Centre in Ukraine Nestle is creating a new service centre in Ukraine to facilitate its continued expansion in the emerging markets of Central and Eastern Europe. The world’s biggest food group will invest SFr25m (Eur19m ) over three years to establish the Shared Service Centre in the Ukrainian city of L’viv. The new facility will support more than 20 countries in the region such as Russia, Poland, Romania, Hungary and Bulgaria. The L’viv centre is set to become the third internal Shared Service Centre worldwide led by Nestle Business Services (NBS) – an international unit under the Nestle umbrella that performs a standardised and cost-effective way of running financial and HR services.
Barry Callebaut to Expand Production Capacity After Global Supply Agreement With Kraft Barry Callebaut, the world’s largest manufacturer of cocoa and chocolate products, and Kraft Foods, the world’s second largest food company and a global leader in confectionery, have signed a long-term global product agreement. Under the terms of the agreement, Barry Callebaut will deliver the majority of Kraft Foods cocoa prod-
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
ucts and industrial chocolate requirements around the world. The agreement, which also includes some of the Cadbury liquid chocolate deliveries under the current outsourcing agreement, is expected to more than double Barry Callebaut’s existing business with Kraft Foods. As a result of this agreement, Barry Callebaut will increase its production capacities primarily in the US, Canada, Cote d’Ivoire, Malaysia as well as in Europe and invest approximately $65m (SFr66m, Eur51m) over the next two years. The additional volumes will be built up gradually over a period of three years, starting immediately.
Juergen Steinemann, chief executive of Barry Callebaut.
Nestle to Expand French Food Service Operation Davigel Davifrais, Nestle’s French frozen and fresh food products distribution company, is reported to be planning to invest Eur6m to construct a new 7,000 sq m warehouse at its site in Metz. Employing 1,500 people and with annual sales of Eur438m, Davigel Davifrais is part of Nestle Professional and specialises in the serving the food service market.
Ed Haas Opens Hungarian Confectionery Plant Ed Haas, the Austrian confectionery manufacturer, has commenced production in a 6,000 sq m plant at Janossomorja in Hungary. Employing 100 people, the new Eur3.5m facility will produce the group’s PEZ candy brand. Annual produc3
N N E E W W S S tion is expected to be 2,000 tonnes.
Eckes-Granini Continues International Expansion German beverages producer Eckes-Granini Group is planning a fruit juices joint venture with Turkish firm Yildiz Holding. Eckes-Granini is one of the leading fruit juice producers in Europe and generated a turnover of Eur827m last year, selling over 1b litres of juice. In August, Eckes-Granini formed a strategic partnership with KMV (Karlovarske Mineralni Vody), the leading bottled water supplier in the Czech market. The deals are in line with EckesGranini’s international expansion policy.
Sudzucker Projects Higher Sales and Profits German-based Sudzucker, which is Europe’s largest sugar group, has reported a 57% increase in operating profit to Eur282m on sales up by around 5% to Eur3.07b for the first half ending August 31st 2010. All business segments - sugar, special products, cropenergies and fruit – contributed to the earnings improvement. For the full year, Sudzucker now expects a slight increase in group revenues to around Eur5.8b, up from Eur5.7b in the previous year, and a rise in operating profit to a level of more than Eur450m, against Eur403m in the previous year.
Interim Loss at The Real Good Food Company The Real Good Food Company, the UK sugar, ingredients and bakery group, has reported a loss before tax of £1.298m, including significant items of £189,000, for the first six months ended June 30th 2010, against a loss of £1.194m in the corresponding period last year. Overall group sales in the half year decreased by 11% to £90.7m, primarily due to lower prices at the group’s Napier Brown sugar business together with withdrawal from some
lower margin business at the end of last year. However, strong sales growth was achieved in both the baking ingredients business, Renshaw, and in the cakes and desserts manufacturing business, Hayden’s Bakeries. “I am delighted by the progress which the group has made during the first half, with a turning point finally reached in our sugar business after several difficult years. The outlook for sugar is very encouraging, with expectations of increased volumes across all sectors rising further in 2011 as Napier Brown's competitive advantages in terms of product range, service to customers, supply security and ability to manage complexity all come to the fore,” says Pieter Totte, chairman of The Real Good Food Company
B B R R II E E F F facility will store raw materials and prepared products for the new factory, and for other Roshen factories in Russia.
Nestle to Invest in R&D Centre in India Nestle is investing SFr50m (Eur38m) to establish its first R&D Centre in India. The facility will be built in Manesar, close to Nestle India’s headquarters in Gurgaon, and will be operational in 2012. The investment will help to further strengthen Nestle’s R&D capabilities in emerging markets. Nestle has a strategic focus and leadership in emerging markets where the company expects sales to reach 45% of the group’s total by 2020.
Positive First Half Performance by AG Barr Pieter Totte, chairman of The Real Good Food Company.
Roshen Plans New $250 Million Russian Factory Roshen, the Ukrainian confectionery manufacturer, plans to invest $250m in building a new production complex near by Cosyrevka town in the Lipetsk region of Russia. It will be Roshen’s third factory in Russia. Construction of the 230,000 sq m complex, which will incorporate a factory and depot, will start in 2011 and will be finished in 2016. The factory will specialise in the production of high-quality chocolate goods. The planned 63,000 sq m five-storey factory building will house around 40 production lines. The production capacity will be 253,000 tonnes per year. The new 70,000 sq m depot
volatility of raw material costs has become increasingly challenging.
British soft drinks group AG Barr has increased turnover by 13.9% to £119.2m in the first half ended July 31st last, as its core brands Irn-Bru, Rubicon and Barr all performed significantly ahead of the total soft drinks market. Profit before tax, excluding exceptional items, increased by 18.8% to £16.0m. The UK soft drinks market grew by 7% in value terms and 3% in volume terms during the period, benefiting from good weather in the early summer months. Carbonated drinks increased volume by 2% and still drinks grew volume by 4%. AG Barr’s operating margins were resilient in the period. A combination of operational gearing due to strong volume performance and continued strong cost control underpinned margins. However, the
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Roger White, chief executive of AG Barr.
Finsbury Food Group Shows Resilience Despite a declining turnover as customers moved away from the premium products that had been its traditional area of strength, Finsbury Food Group managed to deliver growth in key areas, increase profitability and restructure the business to achieve operational efficiencies during the year ended July 3rd 2010. Revenue at the UK cakes, bread and morning goods manufacturer declined by 5.9% year on year to £168.3 million. Gross margin for the financial year was 28.0% representing an increase of 0.8% year on year, reflecting production improvement initiatives and a decision to exit specific low margin business. EBITDA was £10.97m and pre-tax profit before tax was £5.39m, both slightly ahead of the previous year. Capital investment to support growth amounted to £3.5m including £2.0m in a new ‘free from’ production facility. Total net bank debt was reduced by 11% to £36.5m at year end within established banking facilities of £50.2m.
Lotus Bakeries to Invest Eur27m to Expand Belgian Production Capacity Due to rising export sales of its biscuits and cakes in France, Netherlands, UK, US and Asia, Lotus Bakeries is investing Eur27m to expand production 5
N N E E W W S S capacity at its Belgian operations over the next three years. The group’s site at Lembeke will be extended and all caramelized biscuit production will be centred there. Lotus will also consolidate all cake production at its plant at Oostakker. Both projects are expected to be operational in 2013. Some 20 jobs will be created in the medium term.
Aryzta Well Placed to Benefit From Economic Recovery Swiss and international speciality bakery group Aryzta has reported a 2.2% increase in operating profit (including associates and joint ventures) to Eur305m from underlying revenue up 8.6% to Eur3.01b. The core Food Group – Aryzta also owns 71% of Origin Enterprises, the Irish agri-nutrition business – increased operating profit by 4% to Eur227m on underlying revenue ahead by 6.7% to Eur1.68b. The Food Group’s customer
Owen Killian, chief executive of Aryzta.
base is an evenly balanced mix of convenience and independent retail, large retail, quick service restaurants and other food service categories. Revenues declined during the period across most channels and markets. Convenience retail and food service on the island of Ireland and the UK were the most severely impacted channels and markets. Continued pressure on the consumer in Europe and North America made for a challenging year. Operating profit remained stable, helped 6
by Aryzta’s cost curtailment and operating efficiency initiatives. “The operating environment is likely to remain difficult in many key markets. Aryzta’s business model is therefore focused on operational resilience, while remaining well positioned to benefit from any economic recovery,” comments Owen Killian, chief executive of Aryzta.
BREWING & DISTILLING
Strong Performance by William Grant & Sons Independent Scotch whisky and spirits distiller William Grant & Sons has increased operating profit by 8.8% to £103.6m on turnover up 40.1% to £838.3m for its 2009 financial year. Pretax profit dropped from £129m to £114m but this was chiefly due to one-off gains in the previous year resulting from the restructuring of the Maxxium spirits distribution joint venture. William Grant & Sons’ Scotch whisky brands include Glenfiddich, The Balvenie and Grant’s, while its non-Scotch brands include Sailor Jerry, Hendrick’s Gin and the newly acquired Tullamore Dew Irish whiskey. “2009 was a good year for the company, thanks to the continued investment behind our core brands, new distribution agreements and our improved route to market,” says Stella David, chief executive of William Grant. “Thanks to our continued success, we have recently been able to acquire Tullamore Dew Irish Whiskey, allowing us to enter the dynamic Irish whiskey category and build another truly iconic brand.” Tullamore Dew was acquired as part of William Grant’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July. The Scottish group subsequently sold the liqueurs business to Campari of Italy for Eur128m.
B B R R II E E F F Foster’s Turns Down Offer For Wine Business Foster’s, the Australian brewer and wine maker, is reported to have rejected a cash offer of up to A$2.7b (£1.6b) from an unidentified international private equity firm for its troubled, global wine business, which it plans to demerge. The offer was spurned as undervaluing the wine business, which analysts have valued at more than A$3b. However, the move could well spark the start of a bidding war for the wine arm or for the entire Foster’s business, which has a market capitalisation of almost A$12b. Foster’s has renamed its wine business as Treasury Wine Estates in advance of the planned demerger next year. Treasury Wine Estates is the second largest wine producer in the world. SABMiller, the world’s second biggest brewer, is reported to be considering launching a £7b bid for Carlton & United Brewers, Foster’s beer operation. A successful bid by SABMiller would make it the biggest brewer in Australia and strengthen its standing in the Pacific region. Japanese brewer Asahi is also believed to be interested in Foster’s beer business.
MERGERS & ACQUISITIONS
Unilever Strengthens Personal Care Business With $3.7b Acquisition Unilever is strengthening its personal care business by acquiring US-based Alberto Culver Company for $3.7b in cash. Alberto Culver generated sales approaching $1.6b and EBITDA of over $250m for the year ending June 30th 2010. The acquisition makes Unilever the world’s leading company in hair conditioning, the second largest
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
in shampoo and the third largest in styling, and significantly enhances its hair care presence in the US, Canada, the UK, Mexico and Australasia. “Personal Care is a strategic category for Unilever and growing rapidly. Ten years ago it represented 20% of our turnover; strong organic growth has driven it to now reach over 30%, with strong positions in many of the emerging markets,” explains Paul Polman, chief executive of Unilever. “Organic growth remains the cornerstone of our energising ambition to double the size of Unilever whilst reducing our overall environmental impact. Bolt-on acquisitions such as Alberto Culver supplement organic growth and add powerful new brands to our portfolio.”
Paul Polman, chief executive of Unilever.
Morpol Expands UK Salmon Business Poland-based Morpol, which is one of the world’s leading salmon processors, has expanded its UK operations with the acquisition of Brookside Products for less than £1m. Based in Cumbria, Brookside produces about 1,500 tonnes of smoked salmon a year and is projecting a turnover of £12m for 2010. Brookside currently has an estimated 10% of the UK smoked salmon market. Morpol entered the UK salmon farming sector in August with the acquisitions of Mainstream Scotland and Westray Scotland. The Morpol Group had revenue of approximately Eur340m in 2009. Founded in 1996 in Ustka on the Baltic coast of Poland, the company employs over 3,000 people in eight countries. Morpol Group is the world leader in smoked salmon. Morpol serves customers across Europe, in Japan and the US.
N N E E W W S S French Miller Strengthens Position With Acquisition French milling group Moulins Soufflet has acquired Grands Moulins d’Ozon to strengthen its national coverage. Based at Chatellerault, and with annual sales of over Eur20m, Grands Moulins d’Ozon mills 300 tonnes of wheat a day, with a production capacity of 75,000 tonnes of flour a year. It currently sells its production to mainly local customers, consisting of craft bakers, in-store bakeries and plant bakeries.
German Bakery Sale German retail baker Kamps is selling a production unit and a chain of 100 stores in Hamburg to Nur Hier (formerly called Allworden) for an undisclosed price. Nur Hier is a local family run company that already operates a number of bakery stores in Hamburg. Headquartered in Dusseldorf, Kamps is now focusing on its larger bakery outlets. The group was recently sold by Italian food company Barilla to Frankfurt-based private equity firm ECM Equity Capital.
Ter Beke and Stefano Toselli to Create Joint Venure in Central and Eastern Europe Ter Beke, the Belgium-based processed meats and ready meals company, and French pasta manufacturer Stefano Toselli are considering forming a joint venture for supplying pasta and ready meals to Central and Eastern Europe. The two companies have agreed to investigate the opportunity to develop a chilled lasagne and pasta meals business in Central and Eastern Europe. The business plan may also involve the construction of a local, automated production plant exclusively dedicated to the Central and East European markets.
Unilever Acquires Greek Ice Cream Brands Unilever is acquiring EVGA’s Greek ice cream brands (including Scandal, Variete and Karabola) and distribution network for an undisclosed amount. EVGA, which helped pioneer the Greek ice cream industry, will retain its existing production and warehousing facilities and will manufacture both the cur-
B B R R II E E F F rent EVGA and some of Unilever ice cream branded products for the Greek market and for export. EVGA’s ice cream turnover in 2009 was Eur32m. The deal will strengthen Unilever’s Greek ice cream portfolio and will increase availability of its products to consumers through the expansion of the distribution network and enhanced innovation.
ed to contribute about 1 million ninelitre cases and net sales of Eur50m on an annual basis. The Carolans, Frangelico and Irish Mist brands only recently became part of the William Grant portfolio following the company’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July 2010.
Campari Acquires Liqueur Brands From William Grant For €128 Million Italian drinks producer Gruppo Campari is acquiring the Carolans, Frangelico and Irish Mist brands from William Grant & Sons, the Scotch whisky distiller. The acquisition reinforces Campari’s position as a fast growing company in the US and key international premium spirits markets. The enterprise value of the acquired business is Eur128.2m, corresponding to 7.5 times the pro forma EBIDTA 2009 (inclusive of the distribution margins of the Frangelico brand in the US). Overall the acquired business is expect-
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Bob Kunze-Concewitz, executive of Campari.
Nestle Celebrates Kit Kat Brand’s 75th Birthday Developed 75 years ago in Britain, the iconic Kit Kat brand is now sold in more than 70 countries across all five continents and is a vital contributor to Nestle’s global confectionery business.
art of Kit Kat’s success is that it successfully competes in both the confectionery bar and biscuit categories, attracting sales in the multiple retail sector and impulse purchase channels. The biscuit bar comprises several layers of praline-filled wafer covered in smooth milk chocolate. Each finger of the traditional two-finger or four-finger bar can be snapped off and consumed one at a time. This gave rise to the famous ‘Have a break, have a Kit Kat’ advertising slogan, which was first introduced in 1958 and used in the brand’s first television advertisement. Kit Kat has been part of Nestle since 1988 when the Swiss food giant acquired UK confectionery manufacturer Rowntree. Indeed, ownership of the Kit Kat brand was the major influencing factor behind Nestle’s decision to purchase Rowntree. Origins Kit Kat was conceived as a chocolate bar that a man could take to work in his packed lunch by a Rowntree’s employee. The new product, a four-fingered wafer, was first introduced in London and south east England as Rowntree’s Chocolate Crisp in 1935. Within 18 months, it was rebranded Kit Kat Chocolate Crisp and the word ‘break’ was first used in the product’s advertising. The Kit Kat name originates from the late 17th century in London, where a literary club met at a pie shop owned by pastry chef Christopher Catling. The group was called the Kit Kat club, taking its name from an abbreviated version of the owner’s name. In 1911, Rowntree registered the brand names Kit Cat and Kit Kat, with the former used for a range of boxed chocolates. During the Second World War due to a shortage of ingredients including milk, Rowntree altered the recipe Kit Kat has consistently been a star of Kit Kat Chocolate Crisp, performer within Nestle’s global and the colour of the wrapconfectionery business and is also one of per was changed to blue. In the Swiss group’s 28 billionaire brands – 1949, Kit Kat returned to its brands with annual sales of over SFr1 original milk recipe and its billion. red wrapper.
International Expansion International expansion in Australia, New Zealand, South Africa and Canada followed during the 1950s. The first two-finger multi-pack was introduced in the 1960s, helping to drives sales in the new supermarkets that were emerging, leading to increased home stocking by consumers. Kit Kat’s overseas expansion continued throughout the 1970s with manufacturing commencing in Hamburg, Germany, and agreements with Hershey, to sell the brand under licence in the US, and with Fujiya in Japan. The acquisition of Rowntree by Nestle resulted in accelerated expansion of the Kit Kat brand into Central and Eastern Europe, emerging Asian markets and Latin America. A year after the acquisition, Kit Kat production was extended to a new Nestle facility in Kasumigaura in Japan. In the following decade Nestle also set up operations in Malaysia, India and China. Humble Beginnings The launch of Kit Kat entailed investment of just £1,750. From its humble beginnings in York, Kit Kat has evolved into one of the world’s best known confectionery brands. More than one billion Kit Kat products are eaten each year in the UK. The former Rowntree factory in York produces three million Kit Kats every day. Sold in over 70 territories around the world from Algeria to Japan, Kit Kat is now manufactured in 14 countries. In the US Kit Kat is still manufactured under license by Hershey. Nestle will shortly open a new factory in Dubai to cater for the growing demand for Kit Kat in the Middle East. Indeed, the largest single retail outlet for Kit Kat is Dubai Duty Free, which sells over one tonne per day. Billionaire Brand Kit Kat has consistently been a star performer within Nes-tle’s global confectionery business and is also one of the Swiss group’s 28
Marcelo Melchior, head of the Confectionery Strategic Business Unit at Nestle.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Congra to Nes tulations 75th A tle on the nniver of Kit sar y Kat!
billionaire brands – brands with annual sales of over SFr1 billion (Eur744 million). In 2009, Kit Kat had another strong year with organic sales growth of 7.1%, well ahead of the 4.3% achieved by Nestle’s SFr11.billion turnover confectionery business and above the 5.8% average of Nestle’s 28 billionaire brands. Fundamental Appeal The fundamental appeal of the brand has been maintained and the same qualities which have made it so popular in Britain have been successfully exploited in overseas markets. “With a brand that’s 75 years young it’s important to celebrate reaching this milestone, but actually the most important thing is to plan for the future. This is a brand that started life in York and started an important trend in Britain at that time. It is a great product with a great taste, as well as consistent brand qualities; all ingredients that have allowed a British invention to grow to become a muchloved global brand with a special place in consumers’ hearts far and wide,” says David Rennie, managing director of Nestle Confectionery in the UK. “Kit Kat has stayed close to its traditions and they will remain a guiding light for the brand in the future.” Brand Extensions For its first 64 years Kit Kat was only available in two-finger and four-finger formats, and the first flavour variant, Kit Kat Orange, was only introduced in the UK in 1996. However, the successful launch of Kit Kat Chunky in 1999 took the brand into the hunger-satisfying segment of confectionery market, and further brand innovations have followed, the most recent being the introduction of a more indulgent Kit Kat Senses, featuring a hazelnut praline centre, in 2008. The launch of Fairtrade certified four-finger Kit Kat in the UK and Ireland earlier this year by Nestle UK marked the latest milestone in the development of the chocolate biscuit bar. The move followed the commencement of the Nestle global Cocoa Plan, which committed £65 million investment over the next ten years
in programmes to address the key economic, social and environmental issues facing cocoa farming communities. David Rennie explains “We know that consumers want to know that the brands that they love behave responsibly. That’s why Nestle launched the global Cocoa Plan in 2009 which led to the introduction of Fairtrade certified four-finger The successful launch of Kit Kat Chunky Kit Kat, a significant in 1999 took the brand into the hungermoment in the brand’s histo- satisfying segment of confectionery ry. The Cocoa Plan is market. Nestle’s way of supporting cocoa farmers, their families and communities to secure a better future. Our vision is to help cocoa farmers run profitable farms, respect the environment, have a good quality of life and for their children to benefit from an education and see cocoa farming as a respectable profession.” Continuing Success The endearing qualities that have made Kit Kat such a favourite with consumers, initially in Britain and now throughout the world, during the past 75 years will be at the heart of the brand’s continuing longevity. “Today, we sell Kit Kat directly in 72 countries. Consumers will not find exactly the same recipe in each country, but Kit Kat has the same fundamentals; the perfect balance of chocolate and wafer with a recipe tailored to the consumers’ needs. This is then combined with consistent branding and great communication to the customer with our famous ‘Have a break, have a Kit Kat.’ advertising line,” says Marcelo Melchior, head of the Confectionery Strategic Business Unit at Nestle. “These are the ingredients for its on-going success.” J
Nestle to Target New Opportunity in Personalised Health Science Nutrition Nestle is creating Nestle Health Science and the Nestle Institute of Health Sciences to pioneer a new industry between food and pharma. These two separate organisations will allow Nestle to develop the innovative area of personalised health science nutrition to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer’s disease, which are placing an unsustainable burden on the world’s healthcare systems. Nestle Health Science, a wholly-owned subsidiary of Nestle, will become operational on 1st January 2011. The new company will be run at arm’s length from Nestle’s main food, beverages and nutrition activities, and incorporate the existing global Nestle HealthCare Nutrition business, which had a turnover of SFr1.6 billion in 2009. Nestle Health Science will also have access to external scientific and technological know-how through Nestle’s innovation network as well as a number of venture capital funds in which the group has interests. The Nestle Institute of Health Paul Bulcke, chief executive of Nestle. Sciences will be part of Nestle’s
global R&D network. Nestle plans to invest hundreds of millions of Swiss francs over the next decade to build a worldclass Institute of Health Sciences, which will conduct research in relevant areas of biomedical science to translate this knowledge into nutritional strategies to improve health and longevity. The Institute will be based in the multi-disciplinary scientific environment of the Swiss Federal Institute of Technology (EPFL) in Lausanne, where Nestle is already involved in two life science initiatives. “Personalised health science nutrition is about finding efficient and cost effective ways to prevent and treat acute and chronic diseases in the 21st century,” explains Peter Brabeck-Letmathe, chairman of Nestle. “The creation of Nestle Health Science and the Nestle Institute of Health Sciences is the best way to focus our attention and organise our unique capabilities and competencies to seize this promising business opportunity. The new set-up will give us a pioneering and leading role in this entirely new industry, while at the same time allowing us to keep the necessary focus on Nestle’s extremely important food, beverages and nutrition business,” says Paul Bulcke, chief executive of Nestle. Nestle first entered healthcare nutrition in 1986. Over the last three years, it has made a number of strategic acquisitions in this area such as Novartis Medical Nutrition and Vitaflo.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Developments at The Ladco Group he Ladco Group, incorporating T MacIntyre Chocolate Systems, Beetz Mixing Techology and Petzholdt
MacIntyre/Petzholdt are implementing a small scale laboratory, which will be located in Scotland, for bean processing including roasting, alkalising and a small scale press to extract the cocoa butter. This is an ongoing investment
Heidenauer, have been involved in a major upgrade and redevelopment of their product range. Petzholdt Heidenauer have been increasing the outputs of their bean processing equipment, 5 Roll Refiners and Conching Systems, using the same foot-
5 Roll Refiner (Petzholdt Heidenauer).
Chocolate Drop/Chip Plant ( MacIntyre).
print. They have been developing in Germany a new 5 Roll Refiner, a new range of Horizontal Conches as well as their Continuous Chocolate Conches. Beetz Mixers have increased their mix-
45Kg Laboratory Refiner/Conche (MacIntyre).
ing capability on single shaft machines up to 12 tonne capacity and twin shaft machines up to 6 tonne capacity (at present) including vacuum mixers for dry and wet processing. MacIntyre are redesigning their chocolate moulding systems to increase the output of their existing Moulding Plants and are reviewing their Cooling Tunnels to get maximum output from the smallest footprint possible. They are also looking at their Chocolate Drop Plants, Chocolate Chip Plants and Tempering Machines. Whilst the group have invested heavily in new design and development work and has now started manufacturing and supplying their customers with larger output capacity machinery, going to the other end of the market MacIntyre/Petzholdt have developed a range of small scale production equipment for cocoa bean processing. These laboratory scale plants can be supplied either 50kg per hour or 250kg per hour capacity. These lines are also in demand by the niche market, for which they are most suitable. Full scale production plants, of course, can be offered by Petzholdt Heidenauer within their product range, which is available from 500kg per hour capacity upwards. FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Twin Shaft Mixer (Beetz Mixing Technology).
within the group to allow them to bring their customers to Scotland to carry out bean processing trials right through to producing the finished liquid chocolate. The group hopes to have the bean processing side up and running before Christmas. MacIntyre are planning to include in their laboratory in the future their new Mark 2 One Shot Moudling Plant (which is also suitable for the production of centre filled ball products). In addition, they intend to include a Lentil Plant, Chocolate Drop & Chip Plant and other items. This laboratory will be available to all their customers worldwide. J
Cocoa Butter Press (Petzholdt Heidenauer).
Rising UK Sales of Pies and Pasties K sales of pies and pasties are U thriving and by 2012 will be worth over £1 billion, according to the latest research from Mintel. Valued at £941 million in 2009, sales are forecast to rise to £962 million by the end of the year. In addition, between 2008 and 2009, sales of pies and pasties increased by around 5% as British consumers were faced with rising food prices and sought comfort food items that offered them not only value for money, but a treat they could indulge in. The research also finds pies are now the nation’s favourite snack in the thriving pies and pasties market – overtaking the classic sausage roll during the recession. In 2008 some 68% of British consimers named the sausage roll their favourite pie and pasty product, followed by beef pie (55%) and the Cornish pasty (50%). However, it seems the tables have turned as today, the top three pie and pasty products rank as beef (55%), sausage roll (53%) and Cornish pasties 45%. Indeed, over eight in ten (84%) of UK consumers have eaten a pie or pasty in the past 12 months. “Consumers returned to the familiar as the economic downturn put a dent in their
disposable income, forcing them to reconsider their spending priorities. Today, more and more Brits are continuing to buy pies and pasties as they rediscover their benefits, and they are proving particularly appealing to those on a limited budget. While pies were often previously seen as being old fashioned, they have benefited from being repositioned as a popular gastro pub meal staple – moving them a step beyond the sausage roll in the eyes of the consumer as a versatile snack or viable main meal,”
explains Vivianne Ihekweazu, senior food and drink analyst at Mintel. Consumers appear to have quite fixed taste preferences when it comes to choosing a pie or pasty, so many prefer to stick to traditional tried and tested flavours. However, the recent introduction of new flavours using premium ingredients with a focus on provenance and quality has helped modernise product ranges, giving consumers more choice – and reasons to buy – than ever before. The market for pies and pastie is set to grow by a further 17% over the next 5 years to reach £1.123 billion by 2017. However, the state of the economy will have a significant effect on the future well-being of the market. “While the economic downturn is currently putting pressures on finances, with consumers prioritising their financial situation over health, when the economy does recover consumers are likely to shift their priorities refocusing on health. For future growth to stay strong, manufacturers will also need to reformulate their pie and pasty ranges, making them healthier, with the use of natural ingredients,” Vivianne Ihekweazu concludes. J
Bakery and Retail Expansion Plans on Track at Greggs reggs, the UK’s largest retail baker, has reported that its expansion programme remains firmly on track, with a net 32 new G shops opened in the year to date, giving it a total of 1,451 shops at 2nd October 2010. The group now expects total net new shops for the year as a whole to be at the upper end of its previously indicated range of 50-60. Greggs has also completed 84 shop refurbishments, including 17 of the concept shops trialled in 2009. The group is well on course to meet its target of 120 refurbishments this year including 30 concept shops. Construction of Greggs’ replacement bakery in Newcastle upon Tyne is progressing well, and is scheduled to begin production in midKen McMeikan, chief executive of 2011. Greggs has received Greggs. planning permission for a new
cake and confectionery bakery in Penrith and commences building later this month ready to open in summer 2011. Greggs has also submitted a planning application for a new bakery in Wiltshire to enable it to unlock the significant growth opportunities already identified in the South and South West of England. Greggs is continuing to self-finance its capital expenditure requirements. J
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Achieving Sustainable Improvements in Energy Efficiency at Gilroy, Managing Director of P Dalkia, explains how Irish companies can re-examine how they go about striving for greater & sustainable energy efficiency on their industrial sites. As a nation, Ireland has the opportunity to demonstrate leadership as a solutions provider and research centre in reducing our dependence on fossil fuel imports and improve our competiveness. To do this we need to continue to make efficiencies and better manage our use of Waste, Water & Energy consumption. To achieve a sustainable improvement in energy efficiency on sites, Production
Managers need to tackle the complete Energy Cycle in a building. It does not stop at ensuring that the energy generation method used on site; whether purchased from an alternative energy provider or produced on-site using technologies like CHP, biomass, etc.; is efficient and sustainable. This is merely where it starts. Produc-tion Managers, before studying how their energy is produced should examine their building’s energy usage and apply expertise to reduce this. Next, they should incorporate utilities and maintenance expertise to reduce losses which take place when energy is transformed into utilities like lighting, heating and cooling and also those losses which take place in distributing energy around a site. Sustainable energy efficiency can only be truly achieved through a full energy cycle approach by experts. Pat Gilroy spoke at the “Improving the Energy Efficiency of Irish Buildings: From Policy to Practice” conference, which took place in Croke Park on Friday 24th September. Speaking during Session 2 of the conference “From
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Vision to Action”, Pat’s discussion focused on the topic of “Retrofit: An ESCo view for Industry”, exploring among other aspects, the potential applications of the ESCo model, as well as the savings that can be achieved. To find out more about Dalkia’s offering, visit www.dalkia.ie or contact the team on 01 870 1200. To find out more about the Conference go to http://www.iiea.com/retrofitconference. J
Pat Gilroy, Managing Director of Dalkia
Stronger Second Half Performance Drives Growth at Diageo Diageo’s global diversity combined with the strength and breadth of its brands portfolio are expected to allow the group to continue to rebuild profitability and to reinforce its position as the world’s leading premium, alcoholic drinks business. stronger second half performance helped Diageo to increase reported operating profit by 6.5% to £2.574 billion, aided by exchange rate movement, for the year ended June 30th 2010 as gains in developing international markets offset declines in the mature markets of North America and Europe. On a reported basis, net sales increased by 5% to £9.78 billion during the year. Organic growth in both operating profit and net sales for the year was 2%. Exceptional operating costs amounted to £177 million, up from £170 million in 2009, and included a net charge of £142 million in respect of restructuring programmes. Diageo’s profit before taxation increased by 12.5% to £2.24 billion in the year.
Strong Brands Portfolio While its strong positions in emerging economic regions of the world helped to compensate for weakness in mature markets, the depth of Diageo’s brands portfolio also allowed the group to adapt to changing consumer demands, especially down-trading in the current economic climate. Diageo’s global priority brands, traditionally the powerhouse of growth, faltered with volumes flat, organic sales down 1% and reported net sales up just 3%. Diageo’s other brands, however, increased volumes by 4%, organic sales by 5% and reported net sales by 8%. Of the eight global priority brands, only Johnnie Walker Scotch whisky, Captain Morgan rum and Tanqueray gin achieved volume growth and reported net sales growth. The other five brands – Smirnoff vodka, Baileys liqueur, Jose Cuervo tequila, J&B Scotch whisky and Guinness stout – were either flat or in decline. Challenging Year “As expected this has been a year of challenges and opportunities. Our performance was much stronger in the second half than in
the first - our performance in Tough European Market the developing markets drove Europe remained a challenging overall growth while markets region, impacted by weak conin North America and Europe sumer confidence and economremained weak. However, ic uncertainty. Diageo’s voleven though markets and cateumes rose by 1% but net sales gories have been affected in declined by 2% and operating different ways and to differing profit by 1% as marketing degrees, we have been consisspend was cut by 6%. tent in our focus to deliver Solid results were delivered growth and build a stronger in Great Britain where volbusiness for the future,” says ume and net sales were up 9% Paul Walsh, chief executive of and 5% respectively. Diageo Diageo. also achieved a strong perforHe adds: “Our overarching Paul Walsh, chief executive mance in Russia with doubleaim has been to make the of Diageo. digit growth in both volume business stronger in spite of and net sales. This led to a the prevailing economic situation. We have significant increase in share in Scotch increased marketing behind proven growth whisky as Diageo extended its leadership drivers in categories which have momen- position. tum, and we have invested in markets and However, net sales declined 8% in behind growing brands in categories where Ireland but Diageo gained share and the we are performing well. But, beyond that, rate of decline in the beverage alcohol marwe have also been prepared to reduce ket slowed. Trading in southern European investment in those markets where growth markets remained particularly difficult. The opportunities are currently elusive. This on trade continued to decline in Spain and targeted approach means we have focused increased excise taxes and reduced conour increased marketing spend exactly sumer spending led to a sharp slowdown in where it should be.” Greece in the fourth quarter. Innovation has played a key role in The weaker trade conditions in Southern allowing Diageo to adapt to changing con- Europe and Ireland impacted overall marsumer and customer trends across its global keting spend as campaigns were reduced in marketplace. “One of the most pleasing line with consumer trends. Marketing aspects of the past year has been the speed spend was allocated to proven campaigns with which we have moved to develop and on key brands such as Captain Morgan in launch new products. This is proving to be Northern Europe and Smirnoff in Great a real competitive advantage,” he points Britain. out. Outlook “The impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable. However, as we demonstrated this year, the global diversity of our business, together with the strength and range of our brands and the agility we have demonstrated gives us confidence that in fiscal 2011 we will be able to improve on the organic operating profit growth we have delivered this year,” the Diageo chief predicts. J FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
ENERGY & ENVIRONMENT
Paques – Revitalizing Resources iotechnology that purifies water and gas B is Paques’ specialty. Paques helps companies to contribute to the major challenges
and over 30 years experience in the biological treatment of water and gas, Paques has gained vast experience and has shown to be a reliable partner. For example, Paques has been a supplier on a number of projects in anaerobic water treatment within the Diageo group. One of the recent projects is the cooperation for a bio-energy plant at Diageo’s distillery in Roseisle, on Speyside, Scotland in 2008. Paques’ contribution comprised the installation of a BIOPAQ®IC reactor and a gas buffer of 30 cu m. In the anaerobic methane reactor, bacteria convert organic compounds into biogas. The installation at Roseisle is designed to treat approximately 12,500 kg COD per day (1,300 cu m process water per day), generating about 5,500 cu m biogas per day. The biogas is used in a biogas boiler to produce power. A similar anaerobic treatment plant has been built by Paques for a bio-energy installation at Scotland's largest distillery, Cameronbridge in Leven. J
of today - to reduce carbon and water footprints and reclaim resources. Paques’technologies have proven to be cost-effective and reliable solutions. They produce energy, recover valuable resources or are energy efficient. Paques’ anaerobic water purification systems produce energy from wastewater, whilst purifying the water and facilitating water reuse. The biogas produced in the purifying process is a source of green energy, growing in popular demand. Examples of Paques’ solutions are removal of organics (COD), sulphides and sulphates, nitrates, ammonium, phosphates and metals. Food and Drink Sector Many companies have selected Paques as their partner for meeting their purification and sustainability needs. With more than 600 references in the food and drink sector
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
I SCOTCH WHISKY
Diageo Opens First Scotch Malt Whisky Distillery of Scale in Over 30 Years Diageo has opened the doors of its new £40 million distillery in Speyside, Scotland. he Roseisle distillery is ond to the UK trade balance in the first malt distillery of 2009. Over the same period, scale to be opened in export volumes increased by 4% Scotland in over 30 worldwide, with the equivalent years and has been built in of 1.1 billion 70cl bottles of response to the high demand Scotch whisky shipped. The for Scotch whisky brands such SWA reported that Scotch as Johnnie Walker and whisky enjoyed continuing sucBuchanan’s around the world. cess in Brazil (+44%), Mexico The new distillery combines (+25%) and Taiwan (+14%), centuries of accumulated distilleach a significant developing ing knowledge and expertise market in 2009. with cutting-edge design and Roseisle has been designed to technology, to produce quality build on best practice from spirit for Diageo’s brands. Diageo’s other 27 malt distilThe £40 million investment leries and its grain distilleries to in Roseisle is part of a capital improve efficiency and perforinvestment programme in The stillhouse features 14 copper stills crafted by Diageo’s coppermiths at mance, building on centuries of Scotland which has totalled Abercrombie, Alloa. Mashing takes place in two mash tuns and fermentation in 14 distilling experience and knowl£600 million over the past six stainless steel wash backs. edge. The distillery has already fiscal years and has focused on won two awards in the Royal As well as engineering and technical sup- Institute of Chartered Surveyors (RICS) building high quality capacity to meet growing international demand for Diageo’s port functions, there are extensive warehous- Scotland 2010 Awards - Sustainability ing operations, which store up to 7 million Project of the Year and the overall Project of iconic brands. “Economic growth and consumer demo- casks of maturing spirit, and Diageo’s the Year. It also features 14 copper stills craftgraphics present a great opportunity for the Scottish headquarters in Edinburgh. ed by Diageo’s coppermiths at Abercrombies, Packaging is currently focused at three Alloa and has a production capacity of 10 Scotch whisky industry and for Diageo’s outstanding brands, especially in the devel- plants in Scotland - Leven in Fife handling million litres of spirit per annum. The liquid oping markets. The construction of Roseisle white spirits, ready to drink products and produced at Roseisle will be used in Diageo will allow Diageo to supply the growth in Scotch malt whiskies; Shieldhall near Scotch whisky blends from 2012. demand of its premium international Glasgow, the largest plant of its type in the The 3,000 sq m distillery was constructed Scotch brands as well as spotlights our firm industry, packaging Diageo’s high volume on time and on budget, with work starting commitment to both the growth of the cat- Scotch whisky brands; and Kilmarnock in on site in October 2007 and completed in egory and the Scottish economy,” com- Ayrshire bottling the complete range of Spring 2009. ments Paul Walsh, chief executive of deluxe Scotch whiskies (Kilmarnock will remain in operation until 2012). Diageo. Environmentally Sustainable “The Roseisle malt whisky distillery repre- Roseisle has also been constructed using a sents one of Diageo’s biggest investments combination of modern environmental techScottish Business Scotland is one of Diageo’s largest spirit into the Scotch whisky category and forms nologies and traditional distilling techniques, supply centres responsible for producing part of our £100 million three year invest- making it one of the most environmentally nearly 50 million [9 litre equivalent] cases of ment programme in the development of sustainable Scotch whisky distilleries. The Scotch whisky and white spirits and over Scotch,” points out Bryan Donaghey, man- majority of the by-products will be recycled four million cases of ready to drink brands aging director of Diageo Scotland. on site in a bioenergy facility, helping the disannually. Around 85% of Diageo’s brand tillery to generate most of its own energy and volumes produced in Scotland are sold over- Buoyant Market reduce potential CO2 emissions by seas. In Scotland, Diageo currently employs Roseisle has been built at a time when the approximately 13,000 tonnes (equivalent to around 4,500 people and operates 28 malt global Scotch whisky market remains buoy- 10,000 family cars) through direct savings distilleries and 1.5 grain distilleries (Diageo ant with the Scotch Whisky Association on fuel use for steam raising. The £14 milowns 50% of the North British distillery in (SWA) reporting exports rose by 3% in value lion bioenergy facility was developed in Edinburgh). to £3.13 billion, contributing £99 every sec- conjunction with Dalkia. J
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Chivas Brothers Meeting the Growing Thirst For Premium Scotch In line with its strategy of developing its premium Scotch whisky brands, Chivas Brothers has been upgrading and expanding capacity at its bottling and distilling facilities. hivas Brothers is the Scotch whisky and gin business of Pernod Ricard, the world’s co-leader in wine and spirits (see Panel). The Scottish company is the world leader in luxury Scotch whisky, selling more than 85% of Scotch whiskies aged 21 years old and over globally. Chivas Brothers employs 1,600 people across 32 sites in the UK, with headquarters in Paisley, Scotland. Its operations encompass 12 malt distilleries, a grain distillery, two gin distilleries and over 300 bonded warehouses, containing an extensive aged inventory of more than six million casks.
is also a sympathetic and aesthetically enduring legacy for generations to come to admire.” He continues: “We are already leading from the front in the US, the world’s most valuable Scotch whisky market and number one single malt market, and we are now well-positioned to replicate this success internationally.”
Iconic Brands Chivas Brothers has an internationally recognised portfolio of iconic brands including Chivas Regal, produced at the company’s Strathisla distillery at Keith, The Glenlivet, distilled near Ballindalloch on Speyside, and Ballantine’s, which is made and bottled near Dumbarton. To ensure that Chivas Brothers is equipped to continue to meet the growing global demand for its products, the company has been investing to expand its bottling and distilling capacity. At its Dumbarton site, which is one of Scotland’s largest spirits bottling plants, Chivas Brothers undertook a thee-year phased refurbishment and expansion project. Dunbarton plays a pivotal role in the distribution of the company’s Scotch whiskies as well as Beefeater Gin, all of which are among Pernod Ricard’s strategic brands. Capacity and efficiency has also
Christian Porta, chairman and chief executive of Chivas Brothers.
been increased at the bottling plant at Paisley. Distillery Investment In support of its quest to make The Glenlivet the leading single malt whisky brand in the world, Chivas Brothers recently expanded The Glenlivet Distillery in Speyside at a cost of £10 million. The distillery extension, which houses a new mash tun, eight traditional oregon pine washbacks and six expertly crafted copper stills, represents a 75% increase in production capacity allowing the brand to capitalise on buoyant international markets. According to Christian Porta, chairman and chief executive of Chivas Brothers, the expansion represents the latest milestone in a period of sustained investment and strong growth in The Glenlivet. “Since 2002, we have taken the brand from number three to number two globally with investment in packaging, marketing and new product development,” he remarks. The distillery extension was designed to sit sympathetically alongside other Grade II listed distillery buildings whilst also delivering a first class modern production facility that incorporates the latest heat recovery technology to enhance efficiency. The open plan design will also allow the distillery’s 45,000 annual tourist visitors to see most of the production process. “The stunning new extension not only gives us the production potential to meet the buoyant demands of global markets and, one day take the number one spot, it FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Record Export Levels Despite the global economic downturn, exports of Scotch whisky reached record levels last year, and distillers are continuing to invest for long-term growth. According to the Scotch Whisky Association, exports rose by 3% in value to reach £3.13 billion in 2009 and volumes increased by 4% worldwide, with the equivalent of 1.1 billion 70cl bottles of Scotch whisky shipped. Scotch whisky distillers, including the major players such as Diageo, Chivas Brothers, John Dewar (Bacardi), Glenmorangie and Edrington, have earmarked investment of £600 million during the past two years for extending production capacity – including distilling, bottling and warehousing. The Age Matters As part of its strategy to develop its premium Scotch whisky brands, Chivas Brothers has just launched ‘The Age Matters’ campaign to help consumers understand the importance of Scotch whisky age statements. Of course, the long aging process in wooden casks is crucial in creating the distinctive flavour and appearance that distinguishes Scotch whisky and Irish whiskey from other spirits. It is the chief reason why Scotch whisky and Irish whiskey generally sell at a premium to other spirits categories as large stocks of maturing spirits have to be maintained by distillers for many years, tying up capital. Research by Chivas Brothers found that 94% of consumers believe the age statement serves as an indicator of quality, 93% believe that older whiskies are better quality and 89% actively look for an age statement when making a decision to purchase. However, Chivas Brothers also discovered 19
Dogged Full Year Performance By Pernod Ricard Pernod Ricard, the world’s second largest spirits group, increased net profit by 1% to Eur951 million on net sales down 2% to Eur7.08 billion for the 2009/10 financial year ended June 30th 2010. Organic sales growth was 2%, including a significant 9% upturn in the second half, but the results reflect negative foreign exchange factors and the disposal of the Wild Turkey, Tia Maria and Bisquit brands and the impact of the termination of Stolichnaya vodka distribution. The French drinks group noted a contrasting global economic environment, which improved during the second half, featuring strong growth in most emerging economies, and a very gradual recovery of consumer spending in the US against a continuing uncertain backdrop. The picture was mixed in Europe with some signs of a recovery but also the adverse impact of austerity measures. Pernod Ricard’s top 14 brands, which account
that there is a global lack of knowledge about what the age statement actually means. According to Scotch Whisky Regulations (2009), an age statement refers to the age of the youngest whisky in the bottle. Chivas Brothers’ research indicated that only 10% of consumers understood this, whereas nearly half (48%) believe an age statement refers to the average age and 35% that it
for 55% of group sales, grew by 2% in volume and 4% in value. Martell (+12%) and Jameson (+12%) achieved double digit growth and seven others continued to grow, in particular The Glenlivet (+7%), Absolut (+6%), Chivas (+5%) and Havana Club (+5%). Conversely, Mumm (7%) reported a decline, due to the difficulties in the French champagne market. Within the priority premium wine portfolio, Jacob’s Creek sales declined by 5%, reflecting Pernod Ricard’s premiumisation strategy for the brand. Group profit from recurring operations rose by 4% to Eur1.79 billion but the operating margin slipped to 25.4% of sales, compared to 25.6% in the previous financial year. Europe excluding France was the region most affected by the economic crisis, posting a 3% decline in profit from recurring operations. The situation remained difficult in Western Europe (Spain and the UK) even though a number of
countries achieved growth, such as Germany and Sweden, and Duty Free markets noted a recovery. In Eastern Europe, Russia and Ukraine reported a strong upturn in the second half of the year but the situation was more difficult for local vodka brands in Poland. Despite the economic crisis, Pernod Ricard managed to keep growing in new economies, and continued with its premiumisation strategy.
signifies the oldest whisky present. The Age Matters campaign, which applies across the company’s aged whisky portfolio including Ballantine’s, Chivas Regal, The Glenlivet and Royal Salute brands, is intended to educate consumers to understand fully the age statement and to appreciate the value of the premium product they are purchasing. “The revelation that so many existing
whisky drinkers do not understand that the age statement refers to the youngest age of the whisky shows that there is an opportunity for us to inform them,” says Christian Porta. “In an age when consumers of luxury goods increasingly demand transparency and authenticity from brands, it is vital that we empower consumers with knowledge, so that they fully understand the value of what they are buying.” J
Wehrle - Wastewater Expertise ehrle Environmental, a division of W Wehrle Umwelt, provides turnkey process engineering expertise backed by a renowned international reputation for delivering reliable and cost-effective wastewater treatment solutions. Wehrle’s approach to solving wastewater treatment problems is unique. By understanding site requirements, through undertaking detailed feasibility studies and pilot trials, Wehrle strives to re-use, refurbish and upgrade where possible. The result is an efficient process solution at an affordable whole life cost. Engineered systems can be integrated into containers or designed to fit into available space, bringing the benefits of pre-installed
Wehrle MBR system for Chivas Brothers at Glenallachie.
components and bespoke design to projects. Systems can be operated, maintained and continuously optimised by Wehrle’s engineers, and have been designed for clients including Dairy Crest, Chivas Brothers, Dairy Gold, KP Foods, Cadbury’s and Kellogg’s. Wehrle's BIOMEMBRAT compact membrane bioreactor (MBR) systems use membrane filtration to separate biomass from treated water, providing high standards of treatment. Wehrle's MBRs are modular systems, which can be extended with additional membrane modules allowing future expansion at minimal cost. A variety of configurations and materials are available, allowing the most technically appropriate and economical system to be designed and built for each project. A system for treating distillery wastewater by MBR technology has been installed at Chivas Brothers’ Glenallachie Distillery (see picture and graphic). Wehrle’s BIODIGAT advanced anaerobic digestion system comprises a high-rate bioreactor based on the ‘expanded granular sludge bed’ principle. The bioreactor is distinguished by its patented three-phase system which separates the treated water and the biogas very effi-
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Bespoke MBR membrane system designed to fit into available space at the Glenallachie Distillery.
ciently from the granular sludge ‘pellets.’ This provides stable performance and a very small footprint due to low hydraulic retention. This proven anaerobic technology provides long-term economic efficiency and sustainability. In addition to low operating costs and minimal sludge production, the system delivers an energy profit from the biogas which can be supplied to a boiler or utilised on-site for electrical power generation. Various other technologies are integrated into process solutions, such as dissolved air flotation for pre-treatment, and reverse osmosis, to further process treated water to a higher quality suitable for reuse on site. Visit www.wehrle-env.co.uk for further details. J
William Grant Adds Irish Whiskey to Scotch Scotch whisky and spirits distiller William Grant & Sons produced a strong performance in its last financial year and has improved its future development prospects after entering the fast growing Irish whiskey category following a €300 million acquisition. ounded in 1886 by William Grant, the company has remained independent and today is controlled by the fifth generation of his family. William Grant & Sons has a formidable Scotch whisky portfolio, headed by Glenfiddich, the world’s top selling single malt, along with The Balvenie range of handcrafted single malts, Grant’s, the world’s number four blended Scotch, and blended malt Monkey Shoulder. The company’s non-Scotch brands include Hendrick’s, the world’s fastest growing super premium gin with key markets in the US, UK and Spain, and Sailor Jerry spiced rum, part of a fast growing brand franchise inspired by tattoo artist Norman ‘Sailor Jerry’ Collins.
Entry into Irish Whiskey In recent years, the company has been expanding the non-Scotch whisky element of its business. In July, William Grant & Sons acquired the spirits and liqueurs business of Irish and UK cider maker C&C Group for Eur300 million. The purchase of the business, based at Clonmel in Ireland, gave William Grant & Sons ownership of Tullamore Dew, which with annual sales of 600,000 cases is the
With annual sales of 600,000 cases, Tullamore Dew is the world’s second largest Irish whiskey brand.
world’s second largest Irish whiskey brand. As a result of the deal, Tullamore Dew has become William Grant & Sons’ sixth core brand. The other five are Glenfiddich and The Balvenie single malt Scotch whiskies, Grant’s Scotch whisky, Hendrick’s gin and Sailor Jerry rum. According to Stella David, chief executive of William Grant & Sons, the acquisition
Stella David, chief executive of William Grant & Sons.
Tullamore Dew brand, which as the group’s sixth core brand is poised for significant growth. William Grant & Sons has commissioned an international TV, print and outdoor advertising campaign for Tullamore Dew which will be managed from Dublin. Disposal of Liqueur Brands William Grant & Sons has since sold the Carolans, Frangelico and Irish Mist liqueur brands, bought from C&C Group, to Italian drinks producer Gruppo Campari for Eur128.2 million. As a result of the two deals, William Grant & Sons has gained the Tullamore Dew brand and the operations in Clonmel for Eur172 million.
provides “a unique opportunity to accelerate our growth in non-Scotch and enter the dynamic Irish whiskey category.” She adds: “We shall invest significantly in the Irish operations and are committed to building a strong business in Ireland and to maintaining and developing current operations in Clonmel.” Stella David has been head of William Grant & Sons since August 2009 after replacing Roland van Bommel, who decided to step down after almost five years in the role. She joined from the Bacardi Group where she was global chief marketing officer.
Strong Financial Performance In its 2009 financial year, William Grant & Sons increased operating profit by 8.8% to £103.6 million on turnover up 40.1% to £838.3 million, helped by strong sales in the lucrative North American spirits market. Pretax profit dropped from £129 million to £114 million but this was chiefly due to oneoff gains in the previous year resulting from the restructuring of the Maxxium spirits distribution joint venture. “2009 was a good year for the company, thanks to the continued investment behind our core brands, new distribution agreements and our improved route to market,” says Stella David. “Thanks to our continued success, we have recently been able to acquire Tullamore Dew Irish Whiskey, allowing us to enter the dynamic Irish whiskey category and build another truly iconic brand.”
Global Marketing Office in Dublin Following the acquisition of C&C Group’s spirits and liqueurs business, William Grant & Sons established a new global marketing office in Dublin for its non-Scotch brands. The Dublin office also leads the group’s global planning and innovation function. William Grant & Sons’ existing global marketing office in London continues to manage the company’s core Scotch whisky brands. A key focus of the Dublin marketing activities will centre on the development of the
New Irish Distillery William Grant & Sons is also believed to be considering establishing a new distillery in Ireland. Such a move would allow the independent Scottish spirits group to bring inhouse the production of Tullamore Dew whiskey, which is currently supplied by Irish Distillers Group, part of Pernod Ricard. A new distillery would cost in the region of £10 million and would likely be built in Clonmel, where William Grant & Sons’ existing Irish operations are based. J
William Grant & Sons’ six core brands.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Route2020 Shows Way Ahead For Royal FrieslandCampina ‘Route2020’ is Royal FrieslandCampina’s new ten years development strategy for improving the Dutch dairy co-operative’s financial performance and the returns paid to farmer members. ormed by the merger of Dutch co-operatives Friesland Foods and Campina in 2008, FrieslandCampina is the world’s fourth largest dairy company behind Nestle, Danone and Lactalis. Owned by 15,300 member dairy farms in the Netherlands, Germany and Belgium, FrieslandCampina is a Eur8.2 billion turnover business and employs 20,000 people in 24 countries. Its products are sold in more than 100 countries worldwide and its key regions are Europe, Asia and Africa.
landCampina expects to be able to fund the costs of implementing route2020 from profits. “After the merger we have looked forward and identified the opportunities for our new company. We have put that into a new strategy, route2020, which means that over the next ten years we have plans to reach what we call the top of the mountain,” he explains Under the route2020 strategy, FrieslandCampina will FrieslandCampina is a Eur8.2 billion turnover business and employs 20,000 focus its investments and people in 24 countries. innovations on a selected number of value drivers. In Improving Performance results, with larger numbers of added- developing and expanding its activities, FrieslandCampina plans to increase sales value products, fewer commodities and a FrieslandCampina will primarily concenvolumes of its differentiated products by strong focus on cost management. trate on growth, profitability and milk an average of 5% a year. According to The resulting gradual improvement in valorisation (adding value to milk). Cees ’t Hart, chief executive of financial results will be reflected in the FrieslandCampina, route2020 will lead performance price paid for all milk sup- Mega Trends and Value Drivers to further improvement in the group’s plied by member farmers. Fries- “With our leadership team we have iden-
Panel One: FrieslandCampina to Supply Green Energy From Dairy Farms
FrieslandCampina has entered into a collaboration agreement with energy supplier Essent for the production and supply of green energy by FrieslandCampina’s member dairy farmers in the Netherlands. Via FrieslandCampina, dairy farmers can receive support from Essent to set up local initiatives for the production of green energy. FrieslandCampina will buy what are referred to as green certificates from its own dairy farmers. This initiative will allow the dairy farmers, Essent and FrieslandCampina to take an important step towards renewable energy and reducing the emission of greenhouse gases in the dairy chain. Dozens of dairy farmers have already expressed an interest in the production and supply of solar, wind or biomass (manure fermentation) energy. Essent specialists will support the dairy farmers with solar energy, wind energy and biogas production projects. If a project is realised, the dairy farmers can supply the energy to the grid via Essent. The dairy farmers are paid the energy price (per kWh or cu m), plus an amount for green certificates (guarantees of origin). Under the rules, dairy farmers receive these green certificates because they produce green energy. Based on its long-term renewable energy planning, FrieslandCampina guarantees the purchase of green certificates from its own members at a competitive price. FrieslandCampina uses the green certificates to achieve more sustainable energy consumption at its own production companies. The collaboration follows on from an earlier contract under which Essent supplies energy to FrieslandCampina. That contract stipulates that FrieslandCampina will, in turn, give energy back to Essent from a combined heat and power station.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
FrieslandCampina production in Vietnam.
tified a few mega trends – things that will influence and impact the route2020, such as further globalisation, the emerging economic power of Asian countries and the different trends with regards to consumers as they move to other kinds of nutritional intake. These mega trends we have translated into opportunities and threats for us in the future.” Cees ’t Hart continues: “To reach our objectives for route2020 we have identified six value drivers, which are the drivers of growth for the future.” The group intends to capitalise on the global growth in dairy-based beverages, infant and toddler nutrition ingredients and in branded cheeses by selling its branded products in more European, Asian and African countries. “We are big in cheese but the percentage of our turnover in brands is limited. We see opportunities to develop further brands and maybe even acquire one or two brands,” he remarks. The Dutch dairy co-operative also intends to generate worldwide growth in the products supplied to the food industry by developing specific ingredients in liaison with clients. This will mean a shift from sales of commodities such as milk powder and whey powder towards sales of more specialised products. Food service is another area of major potential growth for FrieslandCampina. FrieslandCampina aims to achieve growth by offering a wider range of dairy products and by increasing its geographical presence in the food service market. “We see opportunities, especially in Europe,” he adds. “We will also grow outside Europe. We have a very strong base in Asia and Africa and we have identified a few parts of the world where we are not yet strong – mainly southeast Europe, North Africa and the Middle East. These areas we will look at to further develop our business.” FrieslandCampina will continue to invest to consolidate its already strong positions, both in consumer products 24
FrieslandCampina’s products are sold in more than 100 countries worldwide.
and ingredients, in its existing markets. Climate Neutral In seeking to attain its Route2020 objectives, FrieslandCampina is intending to achieve growth that is climate neutral throughout its entire supply chain, from cow to consumer. FrieslandCampina is working with dairy farmers and partners in the supply chain to improve energy efficiency, reduce greenhouse gas emissions and encourage dairy farms to generate energy from sustainable sources. Indeed, FrieslandCampina has just embarked on an innovative venture to harness the green energy potential of its Dutch farmer members. It is teaming up with power company Essent to establish local initiatives for the production and supply of solar, wind and biomass (manure fermentation) energy (see Panel One). The enterprise is likely to provide a blueprint for similar projects by other vertically integrated dairy companies throughout Europe.
Innovation Innovation and enhancing the natural qualities of milk are central to achieving value growth at FrieslandCampina. Cees ’t Hart is convinced that FrieslandCampina can do even more with milk and use even more of the nutrients it contains. Reflecting consumer demands, the group’s innovation is targeted at good, healthy food and nutritional benefits. For its professional and industrial clients FrieslandCampina is concentrating on the functional qualities of its ingredients so that customers, in turn, can improve both the quality and taste of their products (see Panel Two). “Innovation is an essential element of our route2020 strategy. Achieving breakthrough innovations in consumer products, ingredients and processes is vital to help consumers and customers further and to better valorise the milk of our members. Milk offers unparalleled opportunities,” says the FrieslandCampina chief. J
Panel Two: FrieslandCampina to Build New Research & Development Centre Royal FrieslandCampina is to build a new Research & Development Centre on the campus of Wageningen UR (University & Research Centre) in the Netherlands. The Centre will be a completely new building with research facilities, laboratories, pilot plant and offices. The plan is to occupy the new FrieslandCampina Research & Development Centre in the second half of 2012. It had already been announced in May 2010 that FrieslandCampina planned to concentrate most of its Research & Development operations in the Netherlands in Wageningen, making Wageningen FrieslandCampina’s global knowledge and innovation centre. Ultimately, just over 350 people will be employed at FrieslandCampina in Wageningen. They will collaborate with local research centres and marketing departments in various markets in Europe, Asia, Africa and America. “To genuinely innovate, we need an R&D centre where we can develop and share our knowledge, a building that inspires our people and which offers state-of-the-art facilities,” says Cees ’t Hart. “That’s why we’ve opted for a new and inspirational building in Wageningen, in the heart of Food Valley, the international food knowledge centre. Wageningen will be our R&D hub.” The new building will offer 3,300 sq m in laboratory space, a pilot plant of 1,800 sq m, a test bakery and space for general and technical support plus 5.000 sq m of office space. The new centre will also house the Experience Centre, where products can be tasted, smelled and touched. ‘All the goodness of milk’ should be reflected throughout the building. Sustainability plays an important role in the development of the new building. For example, there will be a heat exchanger and the possibility of generating solar energy using solar panels will be investigated.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
N E E W W S S N Arla Foods Reveals Location For New £150 Million UK Dairy Arla Foods has announced that it will establish the world’s first zero carbon milk processing facility at Aston Clinton, Aylesbury, in southern England. The site, which is due to be operational in 2012, will also be the world’s first billion litre liquid milk dairy and will entail investment of over £150 m. When it announced its intention to build the new facility in November 2009, Arla referred to it as being the most ‘environmentally advanced in the world’ and has now confirmed its plans to establish the dairy as a zero carbon operation. “Once again, Arla is taking the lead in setting the future standards of the dairy industry. Being zero carbon will put the new dairy in a class of its own, demonstrating our environmental responsibilities and our ambition of becoming the UK’s number one dairy company,” says Peter Lauritzen, chief executive of Arla Foods UK.
B R R II E E F F B
2010, although the figure remained stable in local currency, and gross profit dropped 18% to £3.2m as price sensitive consumers moved down market. Gross profit from branded dairy products, which account for two-thirds of total revenue, fell 42%. “During the first half of 2010 Ukrproduct has witnessed a further decrease in the purchasing power of the local population, which resulted in a continued switch in consumer preferences from the middle to the mass market segment. At the same time growth in input prices outpaced the rise in consumer prices,” says Sergey Evlanchik, chief executive of Ukrproduct. “Domestic processed cheese prices have declined by 15% on average from January 2010 and have reached July 2009 levels, driven by aggressive pricing by local producers at the low end of the market. Prices for packaged butter were up by 25% yearon-year on average which has partially compensated for the increased cost of raw materials.”
Robert Wiseman Dairies Cautions on Profits
Peter Lauritzen, chief executive of Arla Foods UK.
Changing Consumer Preferences Undermine Profitability at Ukrainian Dairy Group Ukrainian dairy business Ukrproduct Group has reported a 5.3% drop in year-on-year revenue to £20.7m for the first six months ended June 30th
UK liquid milk specialist Robert Wiseman Dairies has cautioned that whilst anticipated sales volumes for the year remain unchanged, operating profits will be impacted by around £7m in the second half of the year to April 2nd 2011 and, assuming no improvement in margins or volume gains, by approximately £16m in the full financial year to March 31st 2012. According to the company, the reduction in anticipated profit is the result of recent intense competitive pressures across all sectors of the market. Wiseman’s financial performance continues to be impacted by volatility in oil related costs, which have remained higher in the current period than in the equivalent period of the previous year. While fuel costs have eased, the cost of plastic has not declined by the same level. The higher oil relat-
D A A II R R Y Y D
ed costs incurred have been mitigated by the contribution from higher cream revenues, which have exceeded those generated in the same period of last year. These higher returns also helped support an increase in the price paid for raw milk supplies from August.
Dairy Crest Extends Milk Contracts UK dairy group Dairy Crest has renewed its fresh liquid milk contract with retailer Morrisons through to 2015. Earlier this year Dairy Crest secured a new contract with Sainsbury, Britain’s thirdlargest supermarket group, and this commences early in October 2010. Dairy Crest is in the process of a £75m capital investment programme spread over three years at its dairies division in order to improve the efficiency and infrastructure of its liquid milk operations.
Muller Increases Stake in Dairy Crest Theo Muller, the privately owned German-based dairy group which is also the leader in the UK yoghurt market, has increased its stake in British dairy group Dairy Crest to 3.04%. The move has sparked speculation that Dairy Crest may become a bid target. Dairy Crest would carry a price tag of about £1b, according to analysts.
Foods and North Milk Co-op to a management buyout also for an undisclosed sum. The acquisition of Claymore will increase Graham’s annual turnover to about £50m and the enlarged business will employ more than 400 people. “Since the buyout, we have had several meetings with Graham’s. During that period, it has become increasingly clear that there would be significant benefits by putting the businesses together,” explains Ian Larg, managing director of Claymore Dairies. “Graham’s’ diversity and greater market position will be a major benefit to Claymore going forward. This will lead to greater security for the dairy, its staff and supplying dairy farmers.”
Emmi Strengthens Domestic Swiss Business Swiss dairy company Emmi has joined forces with MIBA, a group of milk producers in north-western Switzerland, to invest SFr2m to purchase and reopen the former Regio Milch beider Basel plant in Frenkendorf, which was closed in June 2010. Beginning in the spring of 2011, Emmi will produce a line of dairy products in Frenkendorf using local milk. The products will be sold by local retailers, in particular Coop. The acquisition enables Emmi to strengthen its domestic business in Switzerland, particularly in the north-west.
Dairy Consolidation in Scotland Graham’s, Scotland’s leading independent dairy company, is acquiring Claymore Dairies for an undisclosed price. Claymore Dairies was sold earlier this year by Arla
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
GEA Process Engineering Spending money to make a difference to your process is a serious decision at any time. GEA Process Technologies Ireland has been privileged to be the beneficiary of many such decisions over the last 26 years and we’ve been reflecting on the factors that contribute to successful projects and to lasting benefits for our clients.
he first and possibly the most influential factor is the decision about how to implement the project. From our point of view, the best results flow from a close partnership between the client and the engineering company. We find that our repeat business is roughly 75% of annual sales for the last 5 years – that gives us great insight into our clients’ businesses and practices. Working with a well established, financially secure company with a good reputation is important for our customers… GEA Process Technologies Ireland has been in existence for 26 years, providing a local engineering service linked to the engineering giant that is GEA [the Global Engineering alliance]. We are part of a conglomerate with 20,000 employees and annual sales of €5 billion. One of the most satisfactory projects we completed last year was the upgrade of two dairy GEA evaporators, one built in 1973, the other in 1996, where a small investment [under €200,000] resulted in a capacity increase of 10% and a corresponding product yield benefit [due to increased solids]. The project manager on that job had just started school when the first evaporator was commissioned! For the technical side of projects, our customers rely on our process engineering expertise. As part of the GEA group, we have direct access to the world renowned, quality products of our sister companies. In fact the GEA Group is one of the world's market and technology leaders in 90 per cent of its businesses. There is a Korean proverb which translates as “though you have so many pearls, they are no value without a string” – it is the engineering knowledge of our people which is the key ingredient in making the project work. In our Naas office we have over 70 people and a further 8 in Cork; the average age of our employees is 40 years which provides us with a solid
The UHT plant [GEA Dairy systems] in Nutricima, Nigeria.
base of experience. Furthermore, the staff turnover has been very low and we attribute that to the company culture which makes it an enjoyable place to work. In turn, this allows us to continually learn as the experience of those who work on particular projects is passed to others, to the benefit of the whole company and ultimately our customers. We have in recent times completed a number of diverse engineering projects, at home in Ireland and abroad, including several that involve liquid and powder blending processes in the sunnier climes of Nigeria and California. In Nigeria, for the joint venture company Nutricima [Glanbia and PZ Cussons] we provided successive turnkey projects for recombined milk products [Factory 1] and ready to drink dairy products [Factory 2]. In these projects we had the challenge of integrating packages from different suppliers [inside and outside the GEA group] as part of a scope from raw materials intake to delivery to filling machines. The automation was integrated at operator level through an InTouch SCADA system, overlaid on Allan Bradley and Siemens PLCs. For this customer, we designed a system for continuous operation of the vacuum mixer to make batches on the
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
scale of a full milk silo [100,000L] – the same equipment can be designed and operated as a pure batch system based on the size of the mixer itself, as we did for our customer in California. The scope included the requirement to make a large number of different juices and smoothies. Batch control was paramount and each filling of the vacuum mixer was treated as a batch, with strict pro-rata measurement of the ingredients [there were 7 ingredient lines to the tank] and QC after the mixing cycle was complete. The control system was based on WonderWare InTouch and InBatch applications incorporating the ISA S88.01 norm for batch control and is compliant with the FDA 21CFR Part11 requirements for electronic batch records and electronic signatures. We exploited the full potential of the software with the result that the control system was able to determine the number of batches needed to produce the volume required for any particular “campaign”. It also analyzed the availability of bulk ingredients and the availability of processing equipment so that the operator gets an action list of tasks required prior to starting the campaign. As ingredients are added to the batch, the software generates electronic records containing all the required information for the ingredient such as Date, Time, Storage Location, Lot ID, Target and Actual Quantity. These batch records are stored within a Microsoft SQL Server Database and a comprehensive MIS system was developed based on Microsoft SQL Reporting Services to produce detailed reports for the production management team In summary, our close partnership with our customers, our established reputation and our technical expertise have all contributed to the success of our customers, as well as our own company, over the last 26 years. J
DSM - Your Partner in Ingredient Development onsumer trends dictate C and shape the food industry. Manufacturers need to react swiftly to provide products which deliver on a number of levels. Health, for example, may be considered in the context of convenience, sustainability and great taste. DSM works to understand such market trends and, in turn, to develop solutions to the needs of the industry. Innovation is only of true value if it has a clear place in the marketplace. This is why DSM takes an open approach to ingredient development - whether of a new concept or application - where partnerships between all stakeholders are crucial to its success. Co-operating in this way enables DSM to exchange knowledge and test its ideas with those who have genuine experience in their field. So whilst technical expertise, formulation skills and application know-how remain vital to success, the role of market research and the value of early customer interaction are proving increasingly important in ingredient development strategies. Leading Innovator in Dairy DSM Food Specialties is a leading manufacturer of innovative dairy ingredients, in line with market trends and specific customer needs. A full portfolio, covering the different areas of the dairy industry has been specifically developed for cus-
recipe for success. In a perfect world, cheese making would be worry-free. Choose Maxiren® Premium P, a tailor-made solution, for: - Reduced impact of process variations, - Great quality consistency, - Optimal milk coagulation performance, - Flexibility to stretch production parameters and improve yields.
tomers. DSM’s portfolio includes: * Dairy enzymes. - Coagulants for different cheese types, - Ripening enzymes for many cheese varieties, - Enzymes for fermented milk products, yoghurt (drinks) and milk (drinks), - Health solutions (enhanced natural sweetness in yoghurt, lactose free milk products).
Whether the aim is to leverage an emerging consumer trend, improve production efficiency or tackle sustainability, DSM Food Specialties has in-depth application experts and technical teams dedicated to working with manufacturers. Value-added Ingredient Solution DSM Food Specialties is a leading producer of value-added ingredient solutions for the international food and beverage
* Starter cultures for yoghurts and cheese. * Food protection. - Preservation concepts, - Milk antibiotic residue tests. DSM’s leading enzyme technology and the company’s strong cultures portfolio inspire the creation of innovative dairy products, without losing sight of the operational and commercial concerns of the dairy manufacturer. For instance, the unique, synergistic effects of Maxilact® and DELVO®-YOG put together achieve premium yoghurt concepts. Maxilact®, the world standard for pure lactase, when used with a specifically selected DELVO®-YOG culture, can deliver exceptional yoghurt with enhanced natural sweetness – a FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
industries. Its products contribute to the success of the world’s favourite dairy, processed food, soft drink, fruit juice, alcoholic beverage and functional food brands. With 1,400 employees active in 32 locations worldwide, DSM Food Specialties is a truly global player. For further information visit www.dsm-foodspecialties.com. J 27
I SOFT DRINKS
Coca-Cola Hellenic Opens New €130 Million Irish Facility Coca-Cola Hellenic Bottling Company’s Irish business has officially opened a new energy efficient bottling plant, computerised warehouse and community-focused visitors centre at Knockmore Hill, County Antrim in Northern Ireland. he €130 million (£93.5 million) factory employs 600 people and has the capacity to produce 1.5 million litres of Coca-Cola beverages each day for delivery throughout the entire island of Ireland. The facility operates seven filling lines - four for PET bottles, one for glass, one for cans, and one for post-mix. It also houses a PET moulding unit with six blow moulders capable of handling 750,000 bottles per day. In addition, the complex features a fully automated warehouse which not only provides efficient storage and retrieval, but also gives better protection to containers and pallets, improves handling times and ultimately is designed to deliver a ‘perfect’ pallet to customers, and a high quality beverage into the hands of the end consumer. The 50,000 square metre facility also incorporates a visitors’ centre, which will open for public tours from November.
Pictured at the opening of facility at Knockmore Hill are (left to right): Northern Ireland Enterprise Minister
Investment in Irish Business “This plant represents a significant investment by Coca-Cola Hellenic in our business in Ireland and underlines our commitment to this market and to our 1,100 employees on the island,” says Doros Constantinou, chief executive of Coca-Cola Hellenic, who attended the official opening at Knockmore. Marcel Martin, general manager for
Arlene Foster; First Minister Peter Robinson; Marcel Martin, general manager of Coca-Cola Hellenic for the island of Ireland; Deputy First Minister Martin McGuinness; and Doras Constantinou, chief executive of Coca Cola Hellenic Bottling Company.
Coca-Cola Hellenic on the island of Ireland, adds: “With the opening of this state-of-the-art production and bottling plant we are celebrating a new chapter in the rich history of Coca-Cola on this island, which dates back to 1939 when
Tom Robinson of Belfast introduced the brand to these shores. It is remarkable that what began as a one-man enterprise has grown into one of Northern Ireland leading companies, a thriving business, providing significant local employment and making a
Coca-Cola Hellenic Maintains Position as a Global Sustainability Leader Coca-Cola Hellenic has been recognised for its continuing commitment to embedding Corporate Social Responsibility into its operations across 28 countries by achieving listings on the Dow Jones Sustainability Index (DJSI) and the DJSI Europe Index for the third consecutive year. The company is one of only four beverage producers worldwide to be included in the 2010 DJSI World Index, and one of two represented in the DJSI Europe listing. It is the only Greece-based company to be included. The DJSI indices, updated annually, assess corporate sustainability leadership globally in 57 industry sectors as defined by the Industry Classification Benchmark (ICB). In 2010 more than 2,000 companies worldwide were subjected to a thorough analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk man-
agement, branding, climate change mitigation, supply chain standards and labour practices. “We are building a company for the future. Sustainable development in every area of our operations is vital,” says Doros Constantinou, chief executive of Coca-Cola Hellenic. “However, we are only too aware that there is no room for complacency, and this being our third consecutive annual listing, generates excitement and a feeling of ‘being’ in our employees which I trust will further strengthen our focus.” In the DJSI review of the beverage sector, Coca-Cola Hellenic received the top scores in Health & Nutrition, Codes of Conduct/Compliance/Corruption & Bribery, Water-related Risks, Corporate Citizenship and Talent Attraction/Retention.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
substantial contribution to the local economy.” Energy Efficiency A key component of the new bottling plant is a combined heat and power (CHP) system, which has been constructed in partnership with ContourGlobal, a leading international company specialising in the development of efficient energy installations. It supplies the highly efficient, clean
electricity, heat, CO2 and chilled water needed for the soft drink production facilities and is currently the only ‘quad-generation’ plant in the UK and Ireland. The CHP plant at Knockmore Hill will cut CO2 emissions at the plant by up to 66% while supplying excess clean electricity to the local power grid. The plant is the fourth to be officially opened and another 11 are under development by ContourGlobal, as part of Coca-Cola Hellenic’s commitment to combating cli-
mate change. “Our aim is to cut CO2 emissions by an average of 20% across all 80 of our bottling plants,” points out Doros Constantinou. Coca-Cola Hellenic is one of the world’s largest bottlers of products of The CocaCola Company with sales of more than 2 billion unit cases. It has broad geographic reach with operations in 28 countries serving a population of approximately 560 million people. J
I BRAND BUILDING
Coca-Cola Retains Position as World’s Most Valuable Brand oca-Cola has retained its leadership of Interbrand’s 11th C annual ranking of the ‘Best 100 Global Brands’ beating off competition from the likes of IBM, Microsoft and Google. This is the eleventh consecutive year that Coca-Cola has earned the distinction of being the world’s most valuable brand. Coca-Cola was valued by Interbrand at $70.45 billion, up 2% on the previous year. A total of 16 food and drink brands featured in the top 100. Ranked 23rd overall with a value of $14.6 billion, a rise of 3%, Pepsi was the second ranked food and beverage brand. Nescafe, with brand value down 4% to $12.8 billion, was the next highest, followed closely by Budweiser, up 4% to $12.3 billion. Other food and beverage brands to make Interbrand’s top 100 league table in descending order were: Kellogg’s (+6% to $11.0 billion), Heinz (+4% to $7.5 billion), Nestle Coca-Cola was valued by (+4% to $6.5 billion), Danone Interbrand at $70.45 billion, up (+7% to $6.4 billion), Sprite (no 2% on the previous year. change at $5.8 billion), Jack Daniels
(flat at $4.0 billion), Moet & Chandon (up 7% to $4.0 billion), Corona (static at $3.8 billion), Smirnoff (down 2% to $3.6 billion), Johnnie Walker (no change at $3.6 billion), Heineken (flat at $3.5 billion) and Campbell’s (up 5% to $3.2 billion), which was ranked 99th overall. Only Nescafe and Smirnoff actually declined in brand value. Interbrand, the leading brand consultancy, publishes the ranking of the top 100 brands based on a unique methodology analysing the many ways a brand touches and benefits an organisa- Campbell’s was ranked 99th tion, from attracting top talent to in Interbrand’s annual ranking delivering on customer expecta- of the ‘Best 100 Global t i o n . T h r e e k e y a s p e c t s c o n - Brands’. tribute to a brand’s value - the financial performance of the branded products or services, the role of brand in the purchase decision process and the strength of the brand to continue to secure earnings for the company. J
Innovative Seamer Technology From Ferrum errum is one of the preferred seamer F suppliers to Coca-Cola worldwide. Just as Coca-Cola is the most recognisable brand name in the world, Ferrum is one of the most recognised seamer manufacturers today. A large part of Ferrum’s success is the fact that the company maintains a very close relationship with the container and end manufacturers as well as the filler suppliers. This relationship, and the information gathered because of this co-operation, is one of the main reasons Ferrum always seems to be one-step ahead in technology. Today’s new generation seamers are the direct result of this co-operation. Standard
features like stainless steel seamer design and Ferrum’s well known and unique lossfree oil lubrication system allow customers to easily comply with today's required hygienic standards and 24/7 operation. To demonstrate its innovation, Ferrum has built a concept seamer, which allows the company to continue to meet customers’ present and future needs. Features include: • Quick container diameter change exeFOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
cution • New machine guarding package with integrated CO2 control unit • Specialised CO2 exhaust system • Redesigned can transfer that complies with all existing wash-down and cleaning standards • Automated foam cleaning system. Discussions on how to handle lightweight cans have now started between can makers and Ferrum. All these are just a few factors behind the high efficiency of Ferrum’s can seamers. This might be one of the reasons that Ferrum seamers are found at Coca Cola plants all over the world and last but not least very soon in the US. J 31
Control Product Quality and Protect Your Brand All production industries need to define the quality of their products and control their production processes. Uncontrolled deviations in the production process have a negative effect on the quality of the product and potentially on the good reputation of your company and products. A practical and easy to use "deviation management system" can help stabilise production processes and bring considerable cost savings. Download Mettler Toledo’s technical paper and learn more about:• CAPA – Corrective Actions and Preventive Actions • Deviation management in production • Regulatory compliance and consumer safety • Cost savings potential Download Whitepaper “Deviation Management in Practice” www.mt.com/uk-deviation-whitepaper For further information on Industrial Mettler Toledo contact Helen Hemmings on 0116 234 5069 or email helen.hemmings @mt.com J
New White Paper Shatters Misconceptions About X-ray Inspection of Food Mettler Toledo tackles some of the most common misconceptions about x-ray inspection of food in a new white paper - How Safe is X-ray Inspection of Food? The paper answers important questions for food manufacturers, including: • Why use x-ray inspection? • What are the effects of x-rays to flavours, textures and nutritional value of food? • What is the difference between xray inspection and food irradiation? • What is the difference between xray radiation and radioactivity? • How safe are x-ray systems used in the food industry? The eight-page paper explains that, with production lines getting 32
faster and consumer expectations rising, manufacturers are under pressure to adopt high-speed and reliable methods of food inspection to ensure their products are safe. X-ray systems do just that. The paper uses layman's terms to explain the principles behind x-ray inspection and how it can help food manufacturers comply with national and international regulations. Yes, people are right to be wary of radiation, but this white paper dispels a few myths and delivers some surprising facts. The paper is available to download free at www.mt. com/xray-safety. J
Avoid Non Compliance while Maximising the Efficiency of your Production Mettler Toledo, the world leader in weighing technology, presents a cost effective software solution for Statistical Quality Control and Statistical Process Control. FreeWeigh.Net enables you to prove compliance with Average Weight and other industry legislation while enjoying the financial benefits of reduced giveaway and an efficient sampling process. FreeWeigh.Net offers numerous benefits, allowing you to: • Integrate third party measuring equipment with the Device Integration Module • Undertake visual quality checks with
the Attributes & Test Plans Module • Track the performance of your individual filling heads with the Multihead Analysis Module For further information visit www.mt.com/freeweighnet J Bag Dump System Has Integral Compactor, Dust Collector and Flexible Screw Conveyor A new Bag Dump System from Flexicon (Europe) Ltd. collects dust generated during manual dumping, compaction of bags and conveys bulk material downstream. The unit is intended to reduce material waste and eliminate the need to clean a remote dust collection site, while protecting workers and preventing plant contamination. The bag-dump-station portion of the system collects dust generated during manual dumping and compaction of bags by means of a high velocity vacuum fan that draws dust away from the operator onto two cartridge filters. An automatic reversepulse filter cleaning system releases short blasts of compressed air inside the filters at timed intervals causing dust build-up on the outer surfaces to fall into the hopper. Filters are readily accessed by removing the interior baffle and are replaced rapidly using quick-disconnect fittings. Vacuum created by the dust collector also serves to contain dust generated when the operator pushes empty bags from the dust hood, through an integral chute, into the bag compactor. It also recovers dust created during bag compaction, conserving useable product while reducing the frequency and cost of trash disposal. The fully enclosed, flexible screw conveyor handles free- and non-freeflowing bulk materials ranging from large pellets to sub-micron powders, including products that pack, cake, seize, smear, fluidize, break-apart or separate, with no separation of blended products. The entire system, including the flexible screw conveyor, is available mounted on frames with boom and casters for in-plant mobility. It is constructed from stainless steel, finished to food, dairy, pharmaceutical or industrial standards or in carbon steel units with durable industrial coatings. Hoppers are also available, configured for connection to pneumatic conveyors or process equipment.
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
For further information contact: Flexicon (Europe) Ltd on Tel: +44 (0) 1227 374710 or visit www.flexicon.co.uk J
I LOGISTICS Sainsbury's Spar and IGD Amongst VIP Speakers at Irish Retail Seminar Irish producers and manufacturers attending the first in a series of retail seminars entitled 'Breaking into UK Retail' on Thursday 9th September at the Marriott Hotel in Ashbourne County Meath, have hailed it a complete success. Speakers at the event included: David McMahon from Sainsbury's buying team, Blanche Armstrong from Sainsbury's supply chain, Steve Blackmore SPAR UK's logistics and information director and Liam Gilbert an IGD analyst. Hosted by Oakland Inter-national and focusing on the UK retail market and the intricacies of supply chain integration, speakers discussed with potential Irish exporters how to overcome perceived barriers when dealing with UK retailers. Oakland International has a depot based in Ashbourne, 30 minutes north of Dublin. Already well established as a supply chain provider of choice, Oakland provides day 1 for day 2 deliveries throughout the Republic of Ireland and Northern Ireland. J
Bernard Coyle from Mr Crumb with Steve Blackmore, Spar UK.
I WATER TREATMENT
Amplio Filtration Holdings Purchases Environmental Water Systems (UK) to Further Strengthen Offering mplio Filtration holdings Ltd already A includes Puresep Technologies as part of its offering and is now proud to announce the purchase of Environmental Water Systems (UK) Ltd (EWS), the water treatment specialists. EWS specialises in the design, manufacture, service and supply of water treatment, water purification and waste water recovery systems in the healthcare and industrial sectors, with state of the art products including the EndoTherm and EndoPure. EWS are a major service provider with exceptional service and technical support capabilities. Based in Cheddar, UK, EWS has 34 employee’s and a turnover of more than £4.2m. Formed in 2002, Puresep Technologies, the other member of the Amplio Filtration Holdings Group has over 300 clients, an experienced team of 15 employees and revenues of £3.7m. Puresep provides a comprehensive range of conventional and leading edge water treatment and process filtration systems. Customers include blue
chip organizations; such as Heineken, Diageo, and Britvic. The combination of the two organisations into one group means the technology and service’s business model can be broadened and strengthened to target a wider market and to continue to bring to the market place; flexible, efficient and cost effective solutions in a time of tightening budgets and increasingly stringent environmental regulations. The Amplio Group successfully develops and works with businesses characterised by high growth potential. The Amplio Filtration Holdings Group focuses on water, waste water and industrial filtration. The expertise that Amplio Filtration has in this market is based on market knowledge and its network of global management with a given track
record. Vince Payne, Managing Director of Amplio Filtration Holdings said: “This is a fantastic opportunity for all concerned. We are delighted with the new relationship and look forward to building on already successful product ranges. This partnership allows both Puresep and EWS to continue to innovate and grow as technology leaders and major players in the healthcare and industrial markets. Further investment means both EWS and Puresep can continue to build on current growth with programmed development of innovative products. We will continue to bring to market products and solutions that customers require to achieve the competitive advantage they desire in these particularly challenging times” Enquiries: Jo Collins – firstname.lastname@example.org Vince Payne – email@example.com www.puresep.com www.ampliopartners.com www.reverseosmosis.com J
Kliklok's Best Selling Cartoner at Emballage 2010 n a joint collaboration with its French agent Matequip, Kliklok will be Iforthcoming exhibiting its popular SFR end load cartoner on Stand 5A-F035 at the Emballage Exhibition in Paris from 22nd to 25th November. With over 60 of these machines installed throughout the world, the SFR has proved to be a winning choice for big names like Findus, Heinz, Cadbury and McCain, due to its short footprint, patented rotary carton feeder, interactive colour touch screen and robust stainless steel construction. This versatile cartoner also has the benefit of easy and repeatable size change plus the option to run 5-crease sleeves and conventional cartons on the same machine, at up to 150 cartons per minute. For further information contact Kliklok International on Tel +44 (0)1275 836131 or visit www.kliklok-int.com. J FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Sales Leap at Rebranded Scottish Salmon Company The Scottish Salmon Company, Scotland’s leading independent salmon producer, is continuing to make solid progress after its recent restructuring and rebranding. he Scottish Salmon Company (formerly Lighthouse Caledonia) produces over 20,000 tonnes of Scottish salmon annually, employs more than 300 people and achieved a record turnover of £64 million in 2009. The company currently supplies whole gutted salmon, which accounts for roughly 80% of its business, along with pre-rigour, pin-bone out fillets. All its salmon is farmed, harvested and processed in Scotland. Similarly, all the fillets are farmed, harvested and processed in the Hebrides. SSC supplies chiefly to food companies, which further process the salmon into other value added products such as fresh portions, smoked salmon, ready to eat meals and cooked recipe dishes, which are then distributed to the major supermarket chains and other retail outlets. SSC also sells some of its salmon directly to restaurants and to local fishmongers. Although the majority of customers are in the UK, SSC has developed outlets in other markets including France, Belgium, Ireland, Netherlands, the US, Japan and the Middle East.
Restructuring and Rebranding The company has been extensively restructured and put on a firm financial footing since being rescued from the brink of collapse in 2008. To reflect the transformation, the business was renamed and rebranded The Scottish Salmon Company in July 2010 with the aim of building on the premium reputation of Scottish
Mike Corbett, chief executive of The Scottish Salmon Company.
salmon. The new look enterprise is now listed on the Oslo Axess Stock Exchange. “The Scottish Salmon Company brand fully reflects the ethos and culture of our company. It highlights our respect for the quality of Scottish produce and the fact we are an independent Scottish company, as well as the integral role we play in the rural communities in which we work,” explains Mike Corbett, chief executive of SSC. “The new structure of the company ensures there is a strong base for developing a significant Scottish business. It unites the company’s operations under a strong, sustainable brand which reflects the pride we have in our salmon.” Financial Improvement In the first half of its 2010 financial year, the company achieved a turnover of £42.5 million, compared to £21 million for the same period last year, and a profit of £12.8 million against £1.8 million last time. “The first half of the year has continued to build upon the significant progress that has been made over the past 18
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
months. As we continue to invest in the business, we expect that this solid performance will continue throughout the second half of 2010,” says Mike Corbett. The company has recently refurbished and reopened its Marybank processing plant in Stornoway in the Hebrides. This entailed the installation of new, state-ofthe-art processing equipment, waste disposal systems, water treatment systems and offices for staff. The facility is now ready for the production of high quality fillets to meet the surge in demand from the approaching Christmas season. Increasing Value-added The reopening of Marybank allows SSC to diversify its portfolio to offer more value-added products to customers but also to exploit what the company identifies as a “unique supply chain advantage.” Because both its salmon farms and the new processing facility are based on the Hebrides, SSC can quickly process its high quality, whole salmon into fillets before they go through rigour, resulting in the freshest fillets possible. “Salmon farming is a global industry and we are working closely with our staff,
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suppliers and customers, as well as the local authorities in the Highlands and Islands, to ensure that Hebridean salmon earns a quality reputation on the international markets and that we remain competitive in the long term,” he remarks. “We are committed to the Hebrides and are delighted to be bringing significant employment to the islands. We can produce even fresher quality fillets pin bone out due to our methods of production and speed of processing from harvest.” Indeed, SSC recently strengthened its position in the region with the acquisition of West Minch Salmon, an Outer Hebrides-based salmon farmer, for an undisclosed sum.
Marketing and Branding Programme With the recent rebranding SSC has now developed an extensive marketing and branding programme. It plans to partner with key strategic customers to establish its new corporate logo as an affirmation of quality for premium salmon products in the UK and other key markets. The new logo has been designed to embrace this ethos and incorporates a clan badge with three points encapsulating SSC’s commitment to ‘Pride, Passion and Provenance’. SSC is now well placed to benefit from the continuing consumer trend towards healthy eating, which is boosting demand for seafood both in the UK and internationally, especially for species that are high in Omega 3 oils, such as salmon. Furthermore, consumers are becoming increasingly interested in where their food is produced. “There has been a marked increase in consumer interest in local provenance and regional sourcing – they want to know
where their food has come from. It is now a lot more than simply about good taste and high quality. People want to know the story of their food and about the local communities where it is produced,” Mike Corbett points out. Key to capitalising on the growing demand for seafood is the company’s emphasis on maintaining the highest quality salmon possible. “The Scottish Salmon Company plans to grow both organically and through acquisition, strengthening the reputation of Scottish salmon in the international marketplace,” the SSC chief executive concludes. J
I WASTE WATER TREATMENT
Pollution Must be Treated Where it Originates ANTECH - Danish D Technology Center ApS is a key supplier to The Scottish Salmon Company’s Lewis factory, having delivered its Modular Waste Water Treatment System. Danish Technology Center’s philosophy is that “pollution must be treated where it originates.” This is paramount in reducing the amount of solids within the waste water as early as possible in the production process and at the same time recovering valuable by-products. Danish Technology Center has worked for many years within the production areas of food processing factories and this experience has given the company the knowledge to understand where the problems originate and where its systems will have measurable
benefits to customers. The Scottish Salmon Company has taken this new approach by installing a Greener Waste Water Treatment System, which is not reliant solely on chemicals to treat the waste water. The system incorporates the key modules FiltraCon© A3 and A4 to filter both blood water and waste water from the processing FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
area. Both of these streams are further filtered by a second FiltraCon© A4 module before it is treated with Danish Technology Center’s FiltraFlo© C50 Modular Flotation System. Danish Technology Center is able to supply its modules as single units or combined as a complete solution by building the modules together depending on the level of treatment required. The Dantech Modular Waste Water Treatment Systems have a wide scope of supply within the seafood, vegetable, dairy, meat and poultry and the ready meals industry. For further information contact Danish Technology Center ApS on Tel +45 4576 3636, Fax: +45 4576 1705, Email: firstname.lastname@example.org or visit www.d-tech.dk. J 37
I MILLING & BAKING
Allied Mills - Maintaining a Competitive Edge Part of Associated British Foods, Allied Mills has been focusing on improving its operational performance across its three state-of-the-art milling sites at Manchester and Tilbury in England, and Belfast in Northern Ireland. llied Mills is the UK’s leading flour miller, sourcing wheat from around the world and processing it at its three mills. The Tilbury site also incorporates a semolina mill and Allied Mills’ central office administration function. Allied Mills manufactures high quality flour, semolina and wheat-based products to precise specifications to meet the functionality and product requirements of its customers. As part of ABF’s Allied Milling and Baking business, Allied Mills mainly supplies sister companies Allied Bakeries, Speedibake and Patak’s Breads as well as selected companies outside the ABF group. Allied Milling and Baking has a turnover of over £500 million and employs around 5,500 people. Allied Bakeries is one of Britain’s biggest bakers, producing and selling an extensive range of bread, rolls, crumpets, muffins and other bakery products nationwide. It owns Kingsmill, which is on of the UK’s Top 10 grocery brands, as well as a portfolio of other well-known household names including Allinson, Burgen and Sunblest. Speedibake is based in Wakefield and Bradford and supplies frozen bakery products, such as garlic bread, jam doughnuts, American muffins and artisan-type breads, to the private label, in-store bakery and food service sectors. Based at Cumbernauld in Scotland, Patak’s Breads specialises in ethnic bread production.
Development Allied Mills originated in the 1930s to support the bakery business of Food Investments (subsequently Associated British Foods) and by 1964 had developed into one of the world’s largest millers producing 19,000 tons of flour each week. Throughout the 1970’s, 80’s and 90’s Allied Mills invested in new purpose built mills to supply the ever expanding market
and by the millennium was supplying over 1,000,000 tons of flour per year. In 2003 Allied Mills sold its British third party flour milling business, in order to concentrate on flour milling for group companies and durum semolina. The move provided parent ABF with a very effective,
integrated flour and semolina milling operation. However, in March 2006 Allied Mills re entered the third party flour milling business on a smaller scale than before. Competitive Edge In order to maintain its competitive and technological edge, Allied Mills has invested heavily in state-of-the-art flour and semolina milling equipment, bulk flour outloading systems, silo telemetry , web portal systems and Customer Relation Management. Indeed, Allied Mills is recognised internationally for the efficiency of its milling plants and its use of the latest technology. After divesting its surplus capacity in 2003 to focus the business upon key market sectors, Allied Mills contracted with Satake, the international milling engineering group, to install its Peritek debranning process into the four milling lines. The investment has allowed Allied Mills to optimise the functionality of flour supplied to FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
its sister companies and durum semolina to its nationwide customer base. Like other food and drinks companies, Allied Mills’ continuing success relies on the ability to manufacture consistently high quality products as efficiently as possible. This necessitates the production lines at the three mills being fed continually with high-grade wheat and semolina in order to keep grinding uninterrupted throughout the working day. Any failure in production line equipment can be extremely costly. Consequently, it is essential to keep disruption to a minimum and to plan maintenance effectively. Smarter Asset Management To increase the efficiency of production at its three manufacturing sites, Allied Mills recently implemented a smarter asset management solution to support proactive maintenance of its buildings and equipment. Allied Mills has upgraded to the latest version of the IBM Maximo Asset Management solution to create workflows that manage the full asset lifecycle. With a real-time view of asset data across its business, Allied Mills is now better equipped to diagnose root causes and resolve potential problems before production is affected. Corrective and emergency maintenance, which previously comprised 39% of the total maintenance workload, has been reduced to just 9%. Furthermore, insight into complete asset lifecycle costs supports improved financial planning and control of operational costs. “IBM Maximo gives us the tools we need to gain real-time insight into our maintenance processes and work proactively to address potential problems before they arise, helping our production lines run seamlessly and efficiently – and ultimately delivering greater operational control,” says Steve Barton, managing director of Allied Mills. J 39
I ENERGY EFFICIENCY
New Energy Saving Consulting Service From Buhler tilising energy efficiently is a challenge to which we U should all be committed. The food processing industry uses 50% of the total electrical energy worldwide. 65% of the electrical energy in the industry is needed for drives, which can often be a source of waste. New Possibilities The new Energy Saving consulting service from Buhler offers its customers new possibilities in energy utilisation efficiency in their existing plants. A reduced energy bill can be achieved, without making concessions in terms of performance; with minimal disruption of the daily running of the plant. A reduction in energy can be accomplished by reducing heat loss and air leakages, using the best technology such as high efficient drives and frequency converters and also by optimising the processes through control systems and product passage. Advantages Benefits are seen in the reduction of running costs, due to a more efficient infrastructure. The outcome is environmentally friendly and sustainable production, with less CO2 emissions. It also gives customers a chance to improve their environmental credentials. As a first step, Buhler experts assess a customer’s individual saving potential through a short questionnaire. Once completed, customers are provided with an Energy Check Report, detailing any potential savings available in Kwh and the estimated investment range required to implement any changes. Customers are also given an estimated return on their investment, as well as an estimated CO2 saving range. The next step, should the customer wish to proceed, requires the completion of a more detailed questionnaire and includes an on-site visit. An Energy Saving report is produced which details the exact saving potential, the exact investment required and the return on that investment; as well as exact CO2 savings and a quotation for implementation (both parts and labour) by Buhler’s own expert engineers. Lastly in the final stage, the findings are put into practice through on-site implementation in accordance with the customer’s individual needs. The result is higher profit and more environmentally friendly production.
Buhler is very happy to see that its measures have made it 100% possible to achieve the annual targeted savings. A reduction of approximately 12.7% was achieved in existing fan consumption with comparable resultant CO2 reductions, with an overall calculated impact of around 1.14% in total site electrical consumption. I
Practical Example At Allied Mills in Tilbury, UK, this approach has now been completed to the customer’s full satisfaction. Allied Mills opted for the basic module, which focuses on the pneumatic conveying systems, aspiration systems and the electrical drives. The reduced energy costs, a return on investment in under two years and the environmental aspect motivated Allied Mills to make these changes. 40
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
Energy Saving Report
140, 000310,000 GBP 310, 000690,000 GBP 690, 0001 million GBP 1 million GBP
I PRODUCTION PLANNING & SCHEDULING
Preactor International Offers No Cost, Entry-Level Scheduling Solution reactor International, one of the world’s P leading specialist planning and scheduling software companies, has launched its new entry-level solution, Preactor Express. Aimed specifically at providing smaller companies access to the next generation of industry leading solutions’ flexibility and functionality, Preactor Express is based on the recently released Preactor 11 and will be completely free of charge. “As a family of solutions used by over 3,000 companies worldwide, Preactor has become widely synonymous with production planning and scheduling excellence at every level,” comments Mike Novels, chief executive of Preactor International. “When many mid to top tier manufacturers think scheduling, they think Preactor and our new entry-level solution, Preactor Express, offers our proven technology to smaller companies historically reliant on spreadsheets or out-dated planning applications.”
Mike Novels, chief executive of Preactor International.
He continues: “We took the strategic and innovative decision to make Preactor Express available free of charge to enable manufacturers to gain agility, visibility and
competitive advantage – especially as they deal with the challenges and opportunities presented by emerging from the recent recession. And, because of the excellent scalability of the Preactor family of solutions, there is an assured upgrade path available. Now every company, irrespective of size or budget, can discover for themselves, the widely acknowledged benefits that Preactor can deliver.” Preactor Express will be available later this year from www.preactor.com. Frequently integrated with ERP, MES and Supply Chain Management solutions, Preactor’s production planning and scheduling software is used by more than 3000 small, medium and large multinational companies located in 67 countries. Preactor has established partnerships with more than 400 companies located around the world to provide local expertise to support the implementation of the solution for each company. J
I SUPPLY CHAIN SOFTWARE
Fresh Produce Wholesaler Opts For BCP’s Accord upply chain software specialist BCP S (Business Computer Projects) continues to grow its client portfolio with the addition of new client Oliver Kay, which is investing in a 30 user Accord solution for its expanding multi-depot operation. Oliver Kay is a wholesaler of fresh produce to the catering industry serving customers locally and nationally from its central operation in Bolton, Lancashire, and a growing distribution hub in Birmingham. Customers include pubs, hotels, restaurants, hospitals, educational establishments and contract/industrial caterers who prepare fresh food on site. BCP is one of the UK’s top suppliers of specialist supply chain software to the food and drink wholesale industry. Clients include BWG, Musgrave, SPAR, T Quality and Creed Catering. Oliver Kay has grown steadily since it was founded 20 years ago expanding not only its geographical market, but also its fresh fruit and vegetable range and adding complementary fresh, dairy and ambient items to give customers the complete product range to meet their menu requirements. The company operates a modern, fully temperature controlled warehouse and a current fleet of 45 temperature controlled vehi-
cles to ensure customers get the ‘field fresh’ quality of goods they demand. Making over 650 deliveries every day, the company is highly regarded in its supply chain management. With further growth planned the company reached a decision point concerning the future of its core business systems which it deemed to be of poor functional fit for its expanding business and went out to tender reviewing offerings from key suppliers to this sector. Critical requirements were for a proven, reliable system thoroughly tested in the time critical environment in which it must operate for fresh produce with powerful pricing features because of the price sensitive nature of the market and the ability to scale up as the company grows. The company opted for BCP’s complete Accord software solution, including Purchasing, Sales Order Management, Stock Control, WMS, Telesales and Financial Accounting which will give it a fully integrated system covering all aspects of the business. Financial ledgers are already operating and the full system is due to go live over the course of the next two to three months. “We knew of Accord’s reputation in the FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
food service sector, yet are still surprised by the extent of its functionality and the close degree of fit to our particular requirements without the need for any material bespoke work,” says Philip Dearden, finance director of Oliver Kay. “We believe it can easily handle the time sensitive nature of our business and the wide variation of sku’s for each particular item – from a single item, through a bag, a tray, a box, etc., while its comprehensive pricing features are just what we need in a market that is very competitive and customers are highly price sensitive. We’re looking forward to going live on the system and starting to take advantage of all the features it offers.” For further information visit www.bcpsoftware.com. J
Oliver Kay's modern, fully temperature controlled warehouse.
The Largest Food Store in Turkey Opens at TUYAP he largest food store in Turkey will open T with the FOODist 4th Istanbul Food and Beverage Products Fair to be held between the 9th and 12th of December at TUYAP. The FOODist 4th Istanbul Food and Beverage Products Fair is prepared to bring more than 300 leading companies in the food and beverage industry with foreign and domestic professionals. As the food and beverage industries develop and consumption trends change day by day, FOODist 2010 will become the most important meeting platform of the Eurasian region with its retail concept. To be held between the 9th and 12th of December at the TUYAP Fair and Convention Centre, FOODist 2010 will include the following product groups: milk and dairy products, meat and animal products, refrigerated and frozen products, flour and bakery prod-
ucts, pasta, sweet and chocolate products, biscuits, pulse and grain, vegetable oils and fats, olive and olive oil, alcoholic and soft drinks, tea and coffee, ready-to-eat products, nuts, spices, fresh produce, bee products, baby food, organic-natural produce, functional foods and supplements, and food additives and ingredients. The leading companies within the food and beverage industry will take their places at FOODist 2010. The leading brands of the food and beverage industry in Turkey, with their commitment to high-quality and safe food production, will gather under the roof of FOODist 2010 firm in the belief that the event will be a successful contribution to the industry. For further information on the TuYAP Project Group contact www.foodistfair.com. J
Wraptite Packaging Awarded Guaranteed Irish Accreditation Packaging has achieved its GI accreditation. Founded in 2002, the company has been a success story thanks to the entrepreneurial spirit and determination of its co-owners Paul Smith Wraptite and Jeff Dunne. It has grown into a market leader
Wraptite’s purpose-built production facility.
of effective packaging solutions with its own purpose-built production facilities in Dublin 15, employing 15 staff from the local community. “Irish companies have a reputation for quality. The future of our economy is based on supporting indigenous Irish businesses and locally produced products,” comments Jeff Dunne. “As a 100% Irish owned and managed business, we are proud to carry the GI mark. It signifies our commitment to quality and support for Irish industry.” Wraptite is currently running special packaging offers on its newly developed website www.wraptite.ie. J
Smooth Sleeves For Herberts Ice Coffee erbert’s Fairtrade Iced Coffee has been given a look as smooth as H its contents thanks to leading shrink sleeve manufacturer, Chadwicks. Innovator in shrink sleeves Chadwicks has created a contemporary new sleeve for Metro Drinks’ Herbert’s range of bottled iced coffee. The sleeves are printed using seven colours UV Flexo on a 50 micron film, with a surface printed matt lacquer finish to give the sleeve a premier look and more tactile feel. Herbert’s Iced Coffee is available in two flavours, Latte and Mocha. Chadwicks is part of the Flexible Packaging Division of the Clondalkin Group, which has more than 40 manufacturing sites located across Europe and North America. For further information visit www.chadwicks-lids.com, or call +44 (0)161 763 2100. J 42
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
One Green Tottle easom Freer has added a brand new bottle shape to M its stock bottles range. The ‘Fosse’ range will launch with both 125 and 250ml options and is manufactured in house from natural MDPE, other polythenes and clarified and natural polypropylene with colours to order. The bottles come with their own flip top closure giving them a unique look to help with product identity and shelf prominence. The tottle option, meaning it can stand on its cap, makes this versatile bottle ideal for the food market where every drop counts. Screen printing in one or several colours is also available to complete the product. For further information contact Measom Freer on Tel +44 (0)116 2881588, e-mail email@example.com or visit www.measomfreer.co.uk. J
I PACKAGING DESIGN
Further Innovation from DS Smith Packaging A Robust and Colourful Pack for Calypso Calypso Soft Drinks, based in a purpose built plant in Wrexham, North Wales has been providing iconic, refreshing drinks for over 120 years. A long relationship with DS Smith Packaging’s plant at Featherstone made it the natural partner to help Calypso develop eye-catching packaging for a new range of children's soft drinks for Sainsbury's.
Using five colours, the impressive Eric the Elephant take home consumer pack is post printed and die-cut to contain twelve flavoured mineral waters. The use of strong colourful graphics makes the pack very easy to locate back of store and extremely appealing on shelf to shoppers. The development benefited from the use of DS Smith’s PackRight suite of tools. DesignRight ensured that the pack was engineered to meet the rigours of Calypso's automatic packing lines and its extended supply chain, whilst ImageRight managed colour consistency perfectly for this highly recognisable brand. Apart from relying on the technical skills of the Featherstone design team, a machine crew was specifically designated to work with this pack and deliver line side efficiency as well as high quality print. Both the customer and the retailer attended the initial production run to sign off the print. Cara Lindsey-Jones, Calypso’s brand manager, comments: "We are delighted with the results of this project. DS Smith
Packaging has been instrumental in delivering this new line to market." The new product hit the shelves in March 2010 and is expecting good sales growth. New Case For Mimosa Market Mimosa Market produces and distributes cold pressed rape seed oil. The Lincolnshire company is listed in local Co-op, Tesco, Asda and Waitrose stores but is set to gain a nationwide listing with other supermarket chains. DS Smith Packaging Louth was asked to design a new corrugated case to protect six bottles of oil in a one piece pack using integral dividers. The new pack shows how you can protect a fragile product without using too much material. The structure uses the characteristics of corrugated board with crumple zone areas to absorb energy impact and minimise damage. The pack creates an eye-catching display that looks good onshelf and is easy to find back of store. The product had been previously packed into a 0201 case with 3 dividers and a barcode label on the outer case, a total of five elements. The new 100% recyclable pack is a one piece glued case that allows faster assembly and 'in-line' product packing (no gluing for the customer to do). It is printed in four colours to complement the primary pack. The contents are highly visible to consumers and the pack makes it easier to manage the shelf, as individual bottles do not have to be decanted. By using less materials the need for stock inventory and storage has been reduced and any issues relating to over packaging have been eliminated. Nick Bradley, Mimosa’s managing director, says: "We are delighted with the devel-
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010
opment of this pack. DS Smith Packaging has more than met our initial brief to develop an eye-catching retail ready pack that meets the needs of our brand and ensures we are compliant with retailer requirements." Supporting Organic Growth Through In-store Impact Laverstoke Park Farm, known as the ‘University of Organics’, owned by Jody Scheckter, has won many awards for its tasty range of meats. When the team at Laverstoke wanted to get a better understanding of retail ready packaging to supply its rapidly growing customer base, they came to visit DS Smith Packaging’s unique Impact and Innovation Centre.
Richard Tindall, sales manager of DS Smith Packaging Burwell, takes up the story: “We have seen Laverstoke’s sales go from strength to strength using our standard types of packaging, but we knew that if we developed specific retail ready material for them, they would be able to create a much bigger impact for their brand on shelf.” As a result of the successful IIC visit, Burwell is now managing various projects calling on the skills available from and around the DS Smith Packaging division. This sees DS Smith Launceston, Boon and DS Smith Multigraphics providing a complete package of retail ready, standard boxes and point of sale display material. What’s more, there are now some fantastic new projects under way including packaging with specialist coatings to support Laverstoke’s exciting new product developments. J 43
Gold Glitters for DS Smith Packaging at Starpack 2010 S Smith Packaging, the UK’s leading supplier of corrugated packaging, has D won two gold awards in this year’s Starpack competition. DS Smith Packaging Burwell struck gold in the business to consumer category with its transit pack for shrubs. This is a one-piece pack that holds the shrubs securely when being handled. Clever positioning and angling of handles mean that the pack is comfortable to carry and ergonomically sound. DS Smith Tri-Wall was given a gold award for its Bentley battery pack in the business to business category. The unique shape of this pack, coupled with its sturdy handles, encourages the correct orientation for shipping. The triangular format and the special 'crumple zones' provide excellent
product protection. Silver awards went to DS Smith Packaging Burwell for a pavement sign transit pack and DS Smith Packaging Launceston, working with En-viropak Supplies Ltd, for its Surfseeds display case. The pavement sign transit pack is a one piece die-cut pack that can be assembled around the signs and locked with tabs, creating a rigid unit. The easy to open Surfseeds
display case, with its innovative use of 'E' flute laminated to single faced 'E' flute, creates a high level of in store impact with the pack matching the branding perfectly. DS Smith Packaging Launceston also picked up a bronze award for its Vitacress transit case while DS Smith Packaging Lockerbie received a ‘highly commended’ in the retail ready category for its Nestle ‘My Favourites’ pack. Tony Foster, a director of DS Smith Packaging, comments: “Our customers are coming to us for packaging ideas that will help them sell more products, save money through greater efficiency and take carbon out of their supply chains. DS Smith Packaging’s Starpack wins this year dem-onstrate the innovative use of design and materials in a range of very different types of packaging. When customers work with us, we make ideas happen.” J
Givaudan Creates Unique Salt Same Day Results for Language to Guide Flavour Creation Environmental Listeria ivaudan has developed a unique sensory language called Sense hermo Fisher Scientific, the world leader in serving science, has G It Salt which enables a more accurate description of the comT announced that the DuPont Qualicon BAX System Reverse plex taste effects of salt in foods. Sense It Salt will enhance Transcriptase 8-hour Listeria Assay is now available alongside the Givaudan’s ability to create flavours that restore the taste aspects of salt and drive consumer preference in low sodium applications. Using sensory panels of trained tasters, Givaudan has demonstrated that the taste effects of salt can be broken down into distinct temporal phases which strongly influence the flavour profile of the food product application being developed. This unique sensory knowledge, combined with its expertise in salt enhancement technology will further strengthen Givaudan’s TasteSolutions Salt capabilities to guide product development when collaborating with customers on sodium reduction projects. Through TasteSolutions Salt and the Sense It Salt language, Givaudan is partnering with customers to reduce sodium levels in a range of applications - soups, sauces and snacks, ready-meals, bakery and cereals – without compromising on taste. J 44
Oxoid range in Europe, Canada, Australia and New Zealand. The assay allows food companies to detect environmental Listeria spp. in less than 8 hours – saving more than two days on traditional detection methods and allowing problems to be swiftly identified, ultimately helping companies avoid product recalls and processing line shutdowns. This speed is of particular value to manufacturers of short shelf-life, readyto-eat products including chilled meals, cooked meats, smoked fish, bagged salads and dairy products. For further information about the BAX System and assays available from Oxoid in Europe, Canada, Australia and New Zealand, please contact your local Oxoid representative or visit www.oxoid.com. J
FOOD & DRINK BUSINESS EUROPE, OCTOBER 2010