Off the back of winning Gold at the Australian Tourism Awards earlier in 2020, Bundaberg Rum has done it again, scooping not only gold, but the double gold medal and trophy for Best Distillery Visitor Centre, in the Spirits Tourism Awards component of the International Spirits Challenge 2020. This adds to a list of accomplishments by the company.
The Bundaberg Rum Distillery faced off against international competition to take the main prize for the Distillery Visitor Centre category, being recognised as a Double Gold and trophy winner. The Blend Your Own Rum Experience was also highly commended with a Gold medal in the Distillery Tour category, behind Irish Distillery, Roe & Co. Judges applauded the Bundaberg team on their dedication to promoting local tourism and boosting the economy, as well as providing a superb experience steeped in brand heritage.
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These awards for the Bundaberg Rum Visitor Experience are the latest additions to Bundy’s trophy cabinet, which is already home to more than 200 domestic and international awards for its rum and tourism experiences. It also re-affirms the Bundaberg Rum Distillery as not only Australia’s best and most awarded rum distillery and a must-see tourist attraction, but also the best distillery visitor centre in the world.
“To take home an international award of this calibre is an incredible feeling, especially so soon after our last recognition,” said Duncan Littler, who is Bundaberg Rum D2C’s marketing and experience manager.
“The team are also riding high off the back of our multiple award wins, especially following a year in which we had to pause our Visitor Experience operations for a short time. It is down to their never-ending drive and passion to create an unforgettable customer experience that we take home these coveted accolades. We’re now open again and excited to welcome back visitors as we look ahead to the future.”
insignia coding solution eliminates rejections
By utilising an innovative thermal inkjet coding technology from insignia , Koorelah Farms prints high-resolution date and batch codes on every carton without fail.
Koorelah Farms is one of Australia’s largest growers of outdoor vine-ripened gourmet tomatoes. Situated in the Whitsundays region, the family farm was established in the 1950’s and is an integral part of North Queensland’s farming community.
The tomato farmers pack up to 500,000 kilograms of produce each week for 24 weeks of the year to supply the East coast of Australia through the winter period, servicing supermarkets, wholesalers, and resellers.
The staff at Koorelah work hard to uphold their reputation as a market leader and use innovative technologies to elevate their operations and stay a step ahead of their competitors.
In 2018 Koorelah sought to improve the quality of the batch and date codes applied to their cartons, in response to new traceability standards requested by their distributors. At the time, they were using a legacy large character coding system – the combination of both the older technology and the age of the machine itself resulted in a poor, low-resolution print which meant that one out of ten of the date and batch codes printed on the cartons were illegible. This in turn caused NCR’s (Non-Conformance Rejections) from their distributors, resulting in downtime and significant costs for both parties.
“If a carton was sent to a state that had a certain protocol around produce acceptance, there would be a major non-conformance issued and we would be suspended from supplying that site until we had audited and were able to prove that we would meet the requirements of that protocol,” said Robert Lee from Koorelah Farms.
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Partnering with our sister company Signet’s North Queensland branch, insignia helped to supply Koorelah Farms with the Domino G130i Thermal Inkjet Coder for high-quality coding directly onto their tomato cartons.
Domino’s G130i Thermal Inkjet Coder is a simple to use, low maintenance solution that delivers high-resolution coding at the highest speed. This means Koorelah Farms did not have to sacrifice efficiency for quality and would be ensured a high-quality, legible print every time. It has a compact, modular, and robust design that allows it to be implemented into almost any production environment and easily adapt to increases in production output.
Since the implementation of the Domino Thermal Inkjet solution Koorelah Farms has received zero NCR’s and improved the traceability of their pallets by 10%.
“The quality of print we get with the Domino coder means we have improved traceability of our cartons by 100 per cent. The G130i is also very user-friendly which has made it easy for our staff to use and to integrate into our existing process.”
insignia is proud to be the sole Australian distributor for Domino, bringing their range of inkjet, laser, thermal transfer, print and apply labelling, and thermal overprint products to the Australian market, and delivering high-quality traceability solutions to Australian businesses like Koorelah Farms.
If you would like to learn more about how insignia’s thermal inkjet solutions can improve traceability and reliability in your production line, click here.
Australian PMI: Food & Bev lead way in manufacturing
The Australian Industry Group Australian Performance of Manufacturing Index (PMI) increased by 9.6 points to 56.3 in October, indicating expanding conditions for the first time since July (readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion).
Australia’s manufacturing industries grew solidly in October with production, employment, sales and exports all moving convincingly into growth territory. Once again, the large food and beverages sector led the way with strong contributions from machinery & equipment manufacturers and with support from firmer growth in the textiles, clothing, footwear, paper & printing group. The chemicals sector stabilised in October while the pace of contraction eased in both the metal products and building materials sectors.
Respondents across all sectors noted a jump in sales and new orders as a result of pent up demand from the initial activity restrictions. The jump into expansion was driven by large improvements in New South Wales, which rose into expansion, and Victoria, which remained in contraction but improved from a deep contraction in September.
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“With the quantity of fiscal support easing in October and with the tax cuts only just starting to flow through, the lift in sales and the strong growth of new orders are particularly encouraging signs of improving household and business confidence. The solid national performance was achieved despite another month of contraction in Victoria. With restrictions in Victoria being lifted there are very good prospects of further strength in the closing months of 2020,” Ai group chief executive Innes Willox said.
Australian PMI: Key Findings for October
- All seven activity indices in the Australian PMI were in expansion in October (see table below), with supplier deliveries (up 16.0 points to 58.8) and new orders (up 13.3 points to 58.4) experiencing large increases – possibly because some manufacturers anticipate higher production in the coming months as activity restrictions are eased. Sales also climbed significantly (up 14.9 points to 56.4) in October, while the employment index returned to positive territory (up 7.6 points to 55.3).
- Among the six manufacturing sectors in the Australian PMI the large food & beverages (up 2.0 points to 61.6) and machinery and equipment (up 0.4 points to 53.9) manufacturing sectors expanded, as did the smaller, diverse TCF, paper & printing sector (up 2.1 points to 53.7). Contraction was evident in the metal products (up 0.6 points to 47.4) and building materials (up 2.6 points to 46.1) sectors, while the chemicals sector was broadly stable (up 2.3 points to 50.9).
- The input price index increased to its highest result since April (up 8.7 points to 66.6), with some respondents noting difficulty transporting goods across state borders was increasing costs. Selling prices, on average, increased for the first time since April (up 4.3 points to 53.6).
- The average wages index improved into expansion (up 5.0 points to 57.3), recording its highest result since March.
Digital transformation being new normal
Business leaders within APAC and global manufacturing and distribution sectors have shown urgency in embracing digital transformation to overcome the disruption caused by the pandemic. This is according to new research that has been released by SYSPRO, a provider of ERP software.
In order to understand the impact of the pandemic on manufacturers and distributors as well as emerging trends, a survey was completed by 144 industry professionals of different managerial levels within the United States, Canada, EMEA and APAC. The survey was conducted in August 2020 and focused on the rise of the remote workforce and the need for increased collaboration, the impact of supply chain disruptions, and emerging trends that will shape the manufacturing and distribution sectors moving forward.
The rise of the remote workforce
As social distancing became the new normal, entire workforces needed to connect as well as collaborate remotely. Based on the survey findings, nearly half of businesses were unable to function effectively due to a reliance on their operational staff only being able to function from the work premise. In a shift towards remote work and increased collaboration, 73 per cent of businesses stated they would need to invest in technology to facilitate remote working capabilities in the future.
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“COVID has had a ripple effect in many areas but remote work is here to stay and will need to be supported by systems that allow for easy communication, collaboration and performance management,” said Paulo De Matos, chief product officer at SYSPRO.
Supply Chain disruptions and resulting trends
Unsurprisingly, the survey showed that 60 per cent of businesses were impacted by supply chain disruptions during the pandemic. When looking specifically at distribution, 45 per cent agreed that they were unable to operate at the same levels of distribution efficiency enjoyed before the pandemic.
“Supply chains have been heavily integrated and increasingly reliant on foreign raw material, in particular from Asia,” said De Matos. “Companies looked to offshoring with the knowledge of the potential risk of quality control, but with the benefit of lower labor costs. With the increasing shortages of parts, manufacturers and distributors started looking to find alternative supply sources and establish more resilient supply chains. This shift in strategic sourcing and procurement as well as a high percentage considering re-shoring, is now being considered as a viable option worldwide.”
This was echoed in the study, where 42 per cent of businesses stated that they will re-shore manufacturing operations. “Near or re-shoring is the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated. Here, industry-built technology solutions will deliver industry specific functionality for manufacturers and distributors to optimise and simplify operations, stay current and in control,” said De Matos.
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AUSPACK 2021 postponed, relocating to Melbourne May 2022
After careful consideration, the APPMA Board has made the difficult decision to postpone AUSPACK 2021 in Sydney, and re-schedule the next event for Melbourne 2022.
Australian Packaging and Processing Machinery Association (APPMA) chairman Mark Dingley said, “With an event of this scale and significance, the most important factors in our decision were if we held the event in 2021, the uncertainty around protecting the health and safety of our industry community when it comes together, and preserving the experience and value that exhibitors and visitors alike receive from attending an event the calibre of AUSPACK.
“This exhibition is known for the depth of products and services on the show floor, and the unique networking opportunities available from the many events held around the show. With the continuing uncertainty around domestic state-border openings, and the very likely reality that international flights will not be allowed until the second half of 2021, we felt we could not deliver this experience to the same high standards as previously. Moving the event to 2022 was, therefore, the right thing to do from the perspective of human health and the financial and marketing value that exhibiting businesses would receive.”
Dingley said the APPMA Board did not want to add to the congestion created by other commercially focused exhibitions moving dates from 2020 to mid-2021.
“It’s not really ideal for the industry to have a slew of shows held so closely together, and we believe the value to exhibitors and visitors will be vastly reduced. As an industry-based association, the APPMA believes moving AUSPACK to a later ‘quieter’ date provides the best outcome for industry, including the best financial ROI for exhibitors and visitors.”
“The last edition of AUSPACK in 2019 at the Melbourne Convention & Exhibition Centre was a record show. It surpassed all expectations. Melbourne 2022 is ideally placed to provide the scale and breadth of event that this industry needs as it gears up for the post-COVID recovery,” Jon Perry, event director with organiser Exhibitions & Trade Fairs, said.
Perry said exhibitor bookings for 2022 will be managed in a phased approach, focusing firstly on exhibitors who are currently booked into 2021 and those who regularly exhibit in Melbourne. He said exhibitors will be contacted directly by November 17th about their options, while new bookings for the 2022 show will be open in late January 2021.
Conference and awards
“The APPMA introduced the Business and Industry Conference as part of Packaging and Processing Week 2019 and it was very well received. The conference provided an excellent platform for the packaging industry to drive collaboration and conversation on key issues facing the sector,” said Dingley.
“At AUSPACK 2019, the APPMA reinstated its Awards of Excellence as a high-value way to seek out and recognise industry innovation and outstanding performers. This is the only dedicated processing and packaging machinery awards program of its type in Australasia, and recognises those who make a significant difference in the industry.”
The APPMA Board are currently exploring Packaging and Processing Week events with the intention to run them in 2021, as we believe it is important to connect as a community and that visitors will be able to receive great value from these activities. We will be in a position to announce dates and further information later.
For more information, please visit https://www.auspack.com.au.
Farmer-led traceability platform to eliminate food fraud
Food fraud is having a devastating impact on Australian farmers, costing up to $2 billion each year. An independent report conducted by Meat & Livestock Australia (MLA) recognised product integrity as a major purchase driver for consumers and cited the need to enhance product integrity systems of the Australian red meat industry.
The COVID-19 pandemic has had an impact on the economy and intensified the need for traceability and provenance of Australian red meat products sold in Australia and in new export markets.
Aglive, an Australian-based product traceability platform, is working alongside the MLA, Australian farmers, producers and agricultural industry bodies to provide food provenance to Australian produce and brands.
“If there is one positive to come out of this pandemic, it’s a vital recognition that our supply chain systems are outdated. Australians deserve the right to purchase high-quality, premium products and know that’s exactly what they’re getting. Farmers deserve to know that their premium products are not compromised along their journey. This is where Aglive steps in,” said Paul Ryan, managing director of Aglive.
Aglive’s platform was developed in collaboration with the MLA and has received support from leaders in the agricultural sector, including the NSW Department of Primary Industries, Macquarie University, AusTrade, ShineWing and the National Party.
The technology delivers solutions to supply-chain disruptions while protecting job security, as well as bringing vital income opportunities into the Australian economy.
Fourth-generation Australian Black Angus Beef farmer, Robert Mackenzie, has used Aglive’s traceability platform to successfully open new export channels to China, Singapore, Japan, Taiwan, Saudi Arabia, the United Arab Emirates and Palestine.
“There is huge demand for premium Australian products in international markets but fraudulent and mislabelled products are threatening Australia’s reputation for high quality produce,” said Robert Mackenzie, of Macka’s Australian Black Angus Beef.
“Fraudulent parties mislabelling products as a premium Australian product is a crime, and a major national concern. Supply chain provenance and transparency will bring more revenue back into Australian businesses and generate new job opportunities. We are in full support of this vital initiative,” said the Hon. Dr. David Gillespie, Federal Member for Lyne.
Consumers are demanding more traceability and information on food provenance which is harming brand owners and the industry. The report points to Aglive’s traceability platform as a necessary solution.
“Aglive’s technology gives Australian farmers, producers and processors confidence in the global supply chain. The Department of Primary Industries are committed to innovation for the agricultural industry, especially those that protect and promote the providence of NSW Food and fibre. We are excited to be involved in this supply chain innovation developed by Aglive,” said Chris Celovic, national liaison manager, NSW Department of Primary Industries.
Aglive’s traceability platform can be applied to many packaged products to ensure traceability and provenance from their source right through to the end consumer.
As the global economy recovers from the COVID-19 pandemic, Australian farmers and brands must be able to guarantee the quality of their produce, to grow the industry and keep Australian manufacturing jobs.
Australian wine company growing export sales
While many areas of Australia’s economy are struggling under the weight of COVID, one local business is pushing forward with export growth across Europe and Canada.
Headquartered in McLaren Vale, Leconfield Wines is Australia’s oldest family-owned winemaking business. Owned by Dr Richard Hamilton and his wife, Jette, Hamilton is a fifth generation descendant of Richard Hamilton 1st who planted South Australia’s first wine producing vineyards in 1837. Leconfield Wines takes in Leconfield Wines in Coonawarra and Richard Hamilton Wines in McLaren Vale. Its brands include Leconfield, Richard Hamilton Wines and Syn Sparkling Wines.
Leconfield has a history of producing top-quality, award-winning wines. Its wines are sold across Australia, overseas and also served aboard Jetstar business class and on Great Southern Rail trains including The Ghan, Indian Pacific, Great Southern and The Overland.
“COVID has been challenging for us. As winemakers that sell our products direct to consumers through our membership and into restaurants and other hospitality outlets across the country, sales have been hit through the closure of venues. The latest lock down in Victoria is particularly challenging,” Hamilton said.
“We have also experienced mixed results overseas with some markets including China reducing spend.
“However in the face of this, we have also risen to the challenge. We have restructured to focus on building collaborative partnerships and foster growth in other overseas markets, and these strategies are already starting to yield great results.
“Damian White has been appointed to the newly created role of Sales and Marketing Director. He is firmly focused on expansion of our international market, alongside our valued domestic and online platform partners. Christine Says has been appointed to the role of CFO to help manage the complexities of our burgeoning overseas markets to ensure strong growth and firm cost control.
“The recent decision by Canada to remove tariffs on the import of Australian wines has also opened up new opportunities for us too.”
Leconfield has been approved for distribution and sale in three Canadian provinces: Ontario, New Brunswick and Quebec.
“We are extremely excited about this and are looking to augment our presence to other provinces as well,” Hamilton added.
“In addition to Canada, we have secured new opportunities in Finland and Belgium. In Belgium, we have partnered with Belgian food retailer, Delhaize, to supply a private label Coonawarra Shiraz under the name of Dalebrook Farm. We are already in talks regarding line extensions. This opportunity and various other emerging ones are really proving very positive for us moving forward.
“Our senior winemaker, Paul Gordon is doing an excellent job of creating new and exciting wines from our vineyards. His ability to craft, blend and perfect is delivering superb results for us and really bolstering our ability to continually impress the market with wonderful wines.
“Kate Mooney, our marketing and events manager, who has been with us for nearly seven years, is hard at work refreshing and developing our labels and packaging to ensure we stand out on shelves, catalogues and online sites.
“Despite the challenges we are facing here at home, we are determined to achieve growth. We’ve been through droughts, the Spanish Flu, world wards, the great depression, recessions, the GFC and now COVID. You could say ‘we are battle hardened’ and we are not about to let a virus dampen our prospects. We are all in this together, and certainly at Leconfield Wines, we are determined to get through to the other side.
“We are very lucky. At the end of the day, we can sit back and relax with a good drop. One of the benefits of winemaking.”
Woolworths stocks Fable’s plant-based slow-braised 'meat’ ready meals
Fable Food Co has launched its premium plant-based braised beef ready meals range in Woolworths stores across Australia.
Backed by celebrity chef Heston Blumenthal and developed by resident fine dining chef and mushroom scientist Jim Fuller, Fable’s Plant-Based Braised Beef launched into Woolworths. The addition of three premium ready meals to the Woolworths range includes:
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Chilli Con Carne, a hearty and flavour-filled plant-based braised beef chilli, stewed with tomatoes, kidney beans, chipotle chilli and traditional Mexican spices, served with basmati rice.
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Stroganoff, a heart warming, tomato stewed sauce with plant-based braised beef, served with hearty dollops of creamy potato mash.
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Rogan Josh, an aromatic curry with melt-in-your-mouth chunks of plant-based braised beef seasoned with mouth-watering spices, served with basmati rice.
The Fable range is all natural, vegan friendly, and uses minimally processed shiitake mushrooms together with all natural plant-based ingredients.
Demand for plant-based meat has surged in Australia, with one in three Australians making the conscious decision to reduce their meat consumption, according to independent organisation Food Frontier. As more consumers look for nutritious plant-based options that are delicious and easy to prepare, Fable is making plant-based meal preparation easier than ever. The convenient and delicious single serve plant-based meals feature Fable’s signature premium plant-based braised beef and are ready to heat and eat in 3 minutes.
Woolworths has seen growing demand for plant-based foods and has rapidly expanded their range of meat alternatives and plant-based ready meals to meet consumer demand.
“Plant-based options are becoming increasingly popular with our customers, and we’re expanding our product range to meet the continued growth in demand. We’re excited to offer Fable’s ready meals to give Aussies even more options for delicious plant-based food options,” said Leigh Gallen, Woolworths category manager, ready meals.
Fable’s ready meals launch comes less than 12 months after the launch of its Plant-Based Braised Beef in December 2019, and four months after the brand launched in over 600 Woolworths locations nationwide.
Combatting supply chain talent shortage
A looming capability shortage in supply chain and logistics in Australia has prompted the development of a career mapping tool to encourage a new generation of talent to enter this booming sector.
The digital Supply Chain Career Map developed by Deakin’s Centre for Suppy Chain and Logistics (CSCL) showcases more than 150 supply chain roles in 18 sectors, linking jobs to qualifications (from certificate 4 to Master’s degree), years of experience, and indicative salary.
Dr Hermione Parsons, Director of CSCL and co-chair of Wayfinder: Supply Chain Careers for Women, an industry sponsored initiative established to increase diversity in the supply chain sector, said the Supply Chain Career Map aims to show people the huge range of career opportunities available.
“We want people to see supply chain and logistics as an interesting profession with a great future and not just ‘fall into it’ as has been the case so often in the past,” Parsons said.
“Recent forecasting by DHL revealed that demand for supply chain professionals may soon outstrip supply by six to one.
“Now, more than ever – with the pandemic placing unprecedented stress on a sector already experiencing unprecedented transformation – we need to break down some of the barriers to talent acquisition in the sector and that’s exactly what we hope the Career Map will do.”
Parsons explained that recent research conducted by the Centre – funded by Wayfinder’s national partner Food Innovation Australia Ltd (FIAL) and the Wayfinder sponsor companies – highlighted lack of diversity and poor understanding of the sector as key barriers to talent acquisition.
“The sector currently has an aging and largely male workforce, and its traditionally poor image and lack of visibility presents a major challenge for recruitment,” Parsons said.
“Increasing diversity in the sector is a key focus for Wayfinder, and the Career Map includes embedded videos which showcase inspirational women working across many key roles at all levels in the sector.”
Belinda Flynn, general manager, safety, health and sustainability at QUBE and co-chair of Wayfinder, hopes the Map will help break down the stereotypical image that careers in supply chain are for males only.
“We know that career and education course choices are made on the basis of access to robust internet information, this digital resource provides this access,” Flynn said.
“We believe it will be an important tool to encourage people at all stages of their career to explore the opportunities supply chain can offer and to transfer into the sector.”
The Supply Chain Career Map, which can be accessed via desktop and mobile, was funded by Australia’s Food and Agribusiness Growth Centre (trading as FIAL) and the Wayfinder industry consortium.
Mirjana Prica, managing director at FIAL, said that effective and efficient supply chains require a diverse and talented workforce.
“Australian food and agricultural products depend on supply chains to reach their customers and markets nationally and internationally,” Prica said.
“The Supply Chain Career Map will highlight different roles in the sector. FIAL is delighted to be able to support this project and hopes it encourages people to consider a career in supply chain.”
Hygienic solutions for cleaner food & beverage production
Australian food and beverage manufacturers are held to ever increasing standards of product quality and hygiene. Strict industry regulations are continuously driving businesses to review and adapt their production practices. Consequently, clean and safe operation is a top priority for the food and beverage industry.
Damaged or contaminated products can be detrimental to business reputation along with the financial implications of costly product recalls. This pushes producers to carefully consider every production step to ensure they contribute towards required outcomes.
This is where conveyor solutions can offer a significant help. Well-designed conveyors are engineered to add value at every step of the manufacturing process to improve overall operational efficiency, safety and cleanliness. This also extends to packaging as even the slightest residue can negatively impact product quality.
“The majority of food and beverage manufacturers buy in their packaging. This can create multiple issues from potential contamination to operational inefficiencies. We always recommend integrating package sanitisation into the filling process and not think of it as an isolated task. This is a lot more effective and makes quality control possible.” says Brian Gilmore, sales director of FlexCAM a leading Australian conveyor system specialist.
Air rinsing is a commonly used practice to remove contaminants such as dust from packaging. It works by inverting bottles, plastic containers, glass jars or aluminium containers to allow air to be blown into the interior. “A bottle inverter gently grasps the packaging, turns it upside down for sanitisation, and then lowers the container back onto the conveyor line ready for filling. With the help of standardised bottle inverter solutions this step can be easily incorporated into any production line eliminating the need for additional handling and processing .” says Gilmore.
Bottle inverting has been widely used in milk production. As milk can be very susceptible to contaminants sanitising milk bottles right before filling is a common procedure. “Traditional cleaning methods lack fine product control. As a result, they can damage milk containers and cause production stoppages further down the line negatively impacting production efficiency. They are also limited to handle sturdy containers. On the other hand, positive drive inverters are suitable to handle delicate packaging such as glass bottles, flimsy plastic containers or fragile high grade labeling.” explains Gilmore.
Bottle inverters using wedge technology offer gentle and accurate product handling by positively controlling the package as it is processed. Standardised wedge inverters can be engineered to handle multiple product sizes on the same conveyor line. They can be adjusted to suit different width, height and materials.
Wedge conveyor solutions also allow operation teams to introduce speed controls into the cleaning process without causing any downstream blockages. The sign of a good design is in its ability to consider the whole production process.
“Bottle inverters also have an important role in spacing or metering products in preparation for the next production step. This could include labelling, filling and pressure testing. In addition, they can be used to ionise plastic bottles to remove static or introduce in process inspection to reject any imperfection,” points out Gilmore.
Dept of Agriculture wants input on exports rules
A new legislative framework for agricultural exports commencing from 28 March 2021 will consist of the Export Control Act 2020 and a suite of legislative instruments, the Export Control Rules 2020 (the Rules).
The Rules set out the operational details for regulating the exports of commodities and are based on the existing commodity orders.
This is part of a wider initiative to strengthen Australia’s agricultural exports and market access – and making export processes easier to understand and comply with.
The department is consulting stakeholders on 12 draft Rules over three tranches, with consultations for tranche 2 (animals, rabbit, ratite and wild game) opening today.
Deputy Secretary Agricultural Trade Group, David Hazlehurst, said consultation will meet Australia’s obligations under the WTO Agreement on the Application of Sanitary and Phyto Sanitary measures.
“The refinement of any legislation is an ongoing process and there will be further opportunities to amend our export legislation after it commences, if we need to,” Hazlehurst said.
“Consultation on the draft Rules provides our export industries and our trading partners with an opportunity to provide feedback on them.
“This will help ensure Australia’s agricultural export legislation is clear and fit for purpose – supporting growth and innovation, while maintaining the standards trading partners expect.”
Consultations on the draft Rules for commodities included in tranche 1 (eggs, fish, meat, milk, organic goods, plants and poultry meat) are open until 5 November 2020.
Consultations on the draft Rules in tranche 3 (wood and miscellaneous) will open later this year.
Pepsico introduces flextime for staff
In recent months, Australian organisations have evolved with the onset of the COVID-19 pandemic demonstrating just how adaptive and resilient the Australian workforce is.
PepsiCo has always sought to be ‘people-centric’, implementing policies built around the needs of its people. Its latest policy, flextime, removes official start and finish times – allowing people to choose their work hours and balance personal responsibilities and lifestyle with work.
PepsiCo ANZ CEO Danny Celoni said this new policy allows people to build their work life around their personal needs and encourages everyone to embrace all of the flexible working options that are available to them.
“We completely recognise that a one size fits all work model does not suit everyone in our diverse organisation,” said Celoni. “Our commitment to fostering a culture of flexible working for all ensures we have the best people doing their best work every day.”
One employee who has already reaped the benefits of PepsiCo ANZ’s new flextime policy is CIO Brian Green. Being part of the IT department, Brian is often required to be online 24/7 to accommodate the broad range of time zones PepsiCo ANZ operates in meaning much of his workload begins after 5:00pm.
With the new flextime policy, Brian can stagger these hours to assist with later start and finish times, meaning his daily schedule now involves bug catching with his son around midday, and taking his daughter to soccer practice right after school.
“I am really fortunate to be working for a company that is able to acknowledge the needs of not just my role in IT but also my personal life,” Green said. “Time with your kids is something you are never able to get back so I’m enjoying my new weekday routine and taking full advantage of the flextime policy.”
PepsiCo ANZ’s leadership team believe that offering flexibility in the workplace is critical to attract and retain good talent. The flextime policy is just the latest in a string of well established diversity and inclusion initiatives designed to help people find a work-life balance that suits them.
Coke uses recycled plastic for drink cups and lids
Coca-Cola in Australia is continuing to reduce its plastic footprint with the introduction of frozen drink cups and lids made entirely from recycled plastic from 2021.
The latest innovation removes problematic polystyrene – plastic that is unable to be recycled and reused – from Coca-Cola’s cold drink portfolio. By the end of 2021, this will reduce the amount of new or “virgin” plastic it uses by 40,000 tonnes since 2017.
“Last year we made some big changes in Australia, including moving all our plastic bottles under one litre to 100 per cent recycled plastic and removing plastic drinking straws and stirrers.” Russell Mahoney, public affairs, communications and sustainability director, Coca-Cola South Pacific said.
“We have a responsibility to reduce our environmental footprint through innovation to help solve the plastic waste issue. Moving our frozen drinks lids and cups to recycled plastic is the next step towards meeting Coca-Cola’s global commitment to reduce plastic waste.”
Coca-Cola Australia also continues this year as the major sponsor of Planet Ark’s National Recycling Week- ‘Recovery – a future beyond the bin’which is taking place from 9 to 15 November.
“It’s encouraging to see big companies like Coca-Cola really step up and take responsibility for the full life cycle of their packaging and committing to using more recycled content.” Rebecca Gilling, Deputy CEO, Planet Ark said. “Replacing virgin plastic with 40,000 tonnes of recycled plastic is not only a huge market signal, it prevents another 40,000 tonnes of virgin material entering our world.”
“This year’s National Recycling Week theme is all about recovery and how we can all recycle and reuse materials – it’s a great fit to Coca-Cola’s commitment to reducing its plastic footprint, and we’re thrilled to be working together again this year,” Gilling said.
Under its World Without Waste vision, Coca-Cola has a global goal to collect and recycle a bottle or can for every one it sells by 2030 and ensuring none of its containers end up in landfill or oceans. Its bottler Coca-Cola Amatil plays a key role in co-ordinating all six operating container deposit schemes (CDS) around Australia.
Coca-Cola also has a global goal to use at least 50 per cent recycled material across its packaging by 2030, with Australia already achieving this goal in plastic bottles.
The new frozen cups and lids made of recycled plastic will be available from early 2021.
Woolworths appoint chief risk officer
To reflect the increasing importance of risk governance and management across Woolworths Group, a chief risk officer role has been created reporting to the Group CEO. David Walker, currently Managing Director, BIG W has been appointed to this role. Walker will have leadership of Woolworths Group’s critical Line Two risk and compliance functions within its Three Lines of accountability framework. This includes primary responsibility for the Group’s risk and compliance strategy, the evolution of risk management frameworks and oversight of risk across the Group.
“There are an ever increasing number of influences changing the way that we work and the role that we play in the communities in which we operate, Woolworths Group CEO,” Brad Banducci said. “Whilst this creates many new exciting opportunities for us, it also increases the importance of good risk management. To best reflect these needs, we have created a new Chief Risk Officer role within the Woolworths Group senior leadership team.
“I am pleased that someone of David’s calibre will be stepping into this new role. For the last four years, David and his leadership team have led the successful turnaround of BIG W by building a strong purpose-led culture that has culminated in the business’s return to profitability this year.
“David’s Customer 1st Team 1st mindset, his knowledge and experience leading our various businesses and operations and his background in finance and audit give him the ideal skills to step into this important new role for the Group.”
To replace Walker, Pejman Okhovat will join Woolworths Group as managing director, BIG W to continue the BIG W transformation journey together with the BIG W leadership team. Pejman joins from New Zealand where he was chief operating officer, The Warehouse Group with an extensive background in non-food retail both in New Zealand and the UK.
Okhovat will join BIG W in Q4 F21 and report to Claire Peters in her new Group role as managing director, B2B and Everyday Needs. In the interim, Teresa Rendo, who is currently general manager of Commercial at BIG W and has played a fundamental role in BIG W’s turnaround journey, will step in as acting managing director of BIG W.
SMC help RPM modernise Sydney facility
RPM International Tool and Die is New Zealand’s largest privately owned and operated tool and die manufacturer. RPM started out as a traditional tool and die manufacturer but has expanded to provide full automation solutions, some eight years ago.
Aaron Dwight, director of production at RPM, believes that this was the company’s natural evolution. “Customers were enquiring about automated systems that could effectively handle the moulds that we were producing.”
A Kiwi success story, RPM is now one of New Zealand’s largest engineering operations. Residing in a purpose-built 30,000 square ft premises on Auckland’s North Shore, RPM delivers a turnkey automation solution.
Dwight said that RPM’s differentiator is its unique project approach, thus according to customer feedback. “We always feel we could do better, and we learn from every project. Each job becomes a project of continuous improvement.”
In it for the long haul
The preparation period for a project involves various phases. Dwight said that once a customer has a concept in mind, it is their job to understand the bigger picture. “We look at what they currently have, possible future requirements and how to produce something that is scalable.”
From this process a scope is then created, and this is where RPM engages their trusted partners. “Partners have been hand-selected. These are companies who walk the long journey with us and who share our sentiment about quality,” he said.
“They become trusted advisors and play a vital role in the project group in terms of scoping the job and coming up with innovative ways to bring the customer’s brief to life.”
One of these partners is SMC Corporation New Zealand. Dwight said that they deal with SMC on multiple levels – from product selection through to special engineering. The team includes SMC team members from New Zealand and Australia who meet with RPM on a weekly basis to discuss the project.
“This is a long-term commitment; it can take up to two years for a project to start rolling out. During this time, we require ongoing communication and a transparent relationship. We are open with one another about budgets, targets that need to be achieved and key deliverables. Trust is an essential part of this relationship,” said Dwight.
Meeting stringent automation requirements
One of their latest projects focused on the modernisation of a Sydney-based facility.
“This particular customer packs pharmaceutical products and requires stringent hygiene and clean room standards,” said Dwight. Previously, the customer had been doing most of the packing by hand into plastic lined cardboard boxes. This was not an ideal situation, considering the types of products being handled.”
The customer wanted to automate the production line and removing as many “hands” from the process as possible. “The key focus was on speed of output, volume, and quality control”.
The machine had to pack vitamins into viles with closure (packed into layers), or bulk pack the vitamins into vacuum sealed bags. “The project involved seven systems,” said Dwight.
The packaging was formed by injection and blow moulding. The product was then taken from the moulding machine through a vision checking system to ensure quality was met, after which it moved through to a conveyor and into a different packing area.
“In this area, products could be bulk packed from a carousel bin which is filled to a level and then ejected from the packing machine onto an AIV which takes it back to a central point. From here, it is vacuum sealed in a ‘brick product’ which is then sent off for final packing,” said Dwight.
Finally, the vacuum packed, and labelled product is conveyed from the clean room into a white room where it is packed and palletised. The whole process does not involve any human handling.
One of the challenges in this application was the vacuum head. “We needed a fail-safe and hygienic option,” said Dwight.
Foam vacuum by SMC Head meets the brief
Together with SMC’s engineering team, a foam vacuum head was developed. One of the concerns when working with a substance like foam is that it may crumble or break over time and this would be detrimental in a cleanroom environment.
After development, the SMC vacuum head was tested in a working environment for a period of four months. Testing proved that the product would be suitable, and the SMC vacuum head could be included with confidence. “It felt good to validate the thinking and mitigate the risk by testing in this way. This small idea developed together with the SMC team turned into something big with real competitive advantages,” said Dwight.
The new system outshines its predecessor which previously delivered low volumes and came with numerous quality issues relating to manual inspections carried out by workers. “The new system has one operator (as opposed to 14) and delivers 15 426 parts per hour and 54 vacuum packs per hour – all quality tested and hygienically handled”.
According to Peter Wilson, branch manager at SMC New Zealand these joint projects challenges the SMC team and helps them to develop and grow on an engineering level too. “The projects we do with companies like RPM will see us dig deep into the product portfolio to find the best fit. If we don’t have the right fit, often a new product is developed and this in turn grows our product offering and variety of applications we can compete in even further.”
Products are designed to be inherently energy efficient, safe, and smart but it is up to SMC to ensure the right fit and combination of products to make the whole machine work at its optimum level.
Often these projects require SMC to work with other component suppliers to deliver a ‘plug and play’ solution for certain parts of the build. “In a recent project, SMC and the drives supplier had to work together to deliver a linear drive connected to a motor. There will always be pneumatic and mechanical challenges, but we work together to ensure the customers gets a good solution,” said Wilson.
Some of the products used in this project which really made a standout performance include the VB Series Vacuum Ejectors for the pick and place operation. These were chosen for their quick response time, coupled in with their energy saving abilities, making them a great choice for this project.
One of unsung heroes that forms a key part of the machine build is the SMC Minitec. Proven to be cost effective, functional, and quick and easy to assemble, Dwight likens it to a mechano-set. “It is fun to work with and can be easily configured in many different configurations”.
RPM have also been impressed by SMC’s range of safety products. “Safety is a key factor in our design. We are always looking to improve safety and allow the customer to make a quick recovery,” said Dwight.
According to Dwight, growing a business takes a very long time and SMC has been a partner who is in it for the long haul. “It is not just about the product but the team’s knowledge and their willingness to overcome challenges.”
SMC carries a large local stock holding and has an attitude that is based on “making it happen”. This is something that Aaron believes makes them the ideal partner.
“We think alike, RPM and SMC both seek to continuously improve and deliver designs to exact customer requirements. We look forward to many more challenging (and not so challenging) projects with RPM,” concludes Wilson.
Mintel research reveals the ‘new normal’ for China’s economy
Mintel, the experts in what consumers want and why, today launched Chinese Consumer 2020 , an in-depth analysis of the Chinese consumer market, and sixth-annual flagship report from Mintel Reports China. In this latest report, Mintel research and analysis provides a firm understanding of Chinese consumers’ shifting behaviours and attitudes during and post-COVID-19, with insight into China’s economic environment, consumer expenditure, as well as the food and drink, beauty and personal care, OTC and pharmaceuticals, clothing and accessories, technology and communication, home, transport, leisure and entertainment, and personal finance and housing markets.
Earlier today, Mintel welcomed a number of distinguished guests to participate in a panel discussion at The Chinese Consumer 2020 press conference in Shanghai, including Elan Shou, regional director, Ruder Finn Asia; Kiran Patel, senior director, business development, China-Britain Business Council (CBBC); and Ms. Ruyi Xu, head of Mintel reports, North Asia. Each shared their views on the impact of the COVID-19 outbreak on the Chinese consumer market, including consumer attitude and behaviour changes.
As discussed during the panel, the Chinese consumer market is facing more challenges than ever before; nevertheless, as the coronavirus situation improves, Mintel research indicates that most consumer goods categories are gradually recovering, including some discretionary categories such as dining out, clothing, beauty and personal care, and leisure and entertainment. However, this does not indicate that consumer spending will immediately return to pre-COVID-19 levels.
Key findings from Mintel’s Chinese Consumer 2020 report include:
Chinese economy recovers quickly, showing it remains resilient
The COVID-19 outbreak has had an unprecedented impact on both society and the economy, but effective anti-epidemic measures have laid a foundation for economic recovery. In mid-July, China’s National Bureau of Statistics (NBS) released preliminary accounting results for China’s GDP in Q2 2020 which showed the economy is on track to recovery. This recovery will be quicker than many other major global economies which have gone into lockdown at different stages in Q1/Q2 2020. This is another encouraging sign, showing the fundamentals of China’s economy are not only unshaken but also resilient.
Beauty and personal care sector stands out despite slowed growth in consumer spending
China’s top five sectors with the highest growth rates remained unchanged 2010-2019, including holidays at CAGR of 18 per cent, transport at CAGR of 16.4 per cent, OTC and pharmaceuticals at CAGR of 13.6 per cent, foodservice at CAGR of 13.1 per cent, and personal finance and housing at CAGR of 12.9%. However, while growth in most categories has tapered off due to slowed growth in overall consumer spending, since 2017, the beauty and personal care sector has seen similar compound annual growth rates (CARG) 2010-19, including a 9.2 per cent increase in 2019.
Path to recovery varies by sector
Sectors like holidays and foodservice, which require consumers to leave the home and potentially gather in small or large groups, saw reduced spending in Q1. Mintel predicts that under the current circumstances (that the outbreak is largely under control despite reported new cases), total consumer expenditure will experience a contraction of 5.6% in 2020. But, in the long term, Mintel predicts that total consumer expenditure will recover to pre-COVID-19 levels in 2021 and continue to rise at CARG of 7.3% 2021-24.
Consumers adapt to changes and balance is restored to daily life
Nearly six out of ten Chinese urban consumers (56 per cent) want to have a happy family life and 46% seek a healthy lifestyle; meanwhile, 39 per cent of Chinese urban consumers say that they want to travel after the outbreak, according to Mintel research.
“Priorities on consumer goods categories represent key areas of consumer spending, and the coronavirus pandemic has made consumers more focused on their family and health,” said Xu. “In particular, the consumer habit of spending within their means and a more cautious attitude towards spending as a result of the coronavirus outbreak will push brands to consider new strategies to cope with the ‘new normal’. This will be mainly reflected in helping people find a balance in life and enjoy the quality and pleasure of life through small indulgence and embracing simple moments.”
At the panel discussion, Shou said, “Consumer mindsets and attitudes are constantly evolving in today’s ever-changing world. Consumer behaviors have shifted remarkably due to the coronavirus in the past ten months. This has also affected some sectors related to offline purchases and in-person consumer experience, such as foodservice, tourism and hotels. Therefore, how to properly understand the client’s growth pain points and innovate on communication strategies is also a manifestation of professionalism and flexibility in the public relations industry. Ruder Finn understands the importance of data analysis and offers meaningful output using data to help clients achieve their communication goals and business results.”
“In the current backdrop of the global outbreak, China-Britain Business Council has followed up with market changes in the United Kingdom and China, and actively innovated on communication platforms and channels in a bid to drive Britain-China trade with more digital solutions and assist companies in our two countries with online communication,” said Patel. “ For example, CBBC recently-launched UK-China Business Matching Digital Platform, which is set to support the offline trade show China International Import Expo (CIIE), allowing companies to highlight their core competencies on this platform and to build a big data trade ecosystem. We always believe innovation will help companies across industries stay ahead of the curve, accelerate development and win the future.”
Australian food and agribusiness set to soar
From drought and bushfires, through to COVID-19 and recession. Australia’s food and agribusiness (F&A) sector has navigated major disruptions over the past 24 months.
Despite these challenges, a report released today reveals that the contribution of Australia’s F&A sector to Australian annual GDP could surpass $200 Billion by 2030, more than 3 times greater than its current value of $61 Billion.
Commissioned by the Food and Agribusines Growth Centre, Capturing the Prize(link to report) takes into account the current impact on the sector of COVID-19 to quantify the 10 Future Trends and 19 Growth Opportunities that – if pursued – will unlock the sector’s untapped potential of over $200 Billion within the decade.
The Growth Centre’s Managing Director, Dr Mirjana Prica said “Capturing the Prize is rich with the insights required to unleash this significant growth potential. However, making it a reality is not a forgone conclusion – if food and agribusinesses are to reap these rewards, business-as-usual will not suffice”.
Capturing the Prize highlights a growing sentiment amongst F&A leaders – food and agribusinesses need to operate differently: adopting a whole-of-value-chain approach that unlocks value on either side of the farm gate. This would facilitate the scaling up necessary to boost competitiveness and ensure supply chain resilience.
In addition to identifying the 19 Growth Opportunities that could see the value of the Australian F&A sector soar beyond $200 Billion, Capturing the Prize also reveals that pursuing these growth opportunities is estimated to create an additional 300,000 jobs by 2030.
“Capturing the Prize has the potential to transform the livelihoods of the sector’s 176,000 businesses, the majority being small-to-medium-sized, family-run businesses. It also has the potential to finally align industry direction, government policy, and commercial investment behind a shared target. This will focus efforts to see the sector’s contribution to Australian annual GDP exceeding $200 Billion by 2030,” said the Food and Agribusiness Growth Centre Chair, Dr Michele Allan
Cloud solution makes collections easy
Overdue invoices, 90-day payments, managing cash flow – keeping the many sides of an enterprise going is key to running a successful food and beverage business.
Keeping financials in order can be a cumbersome task, especially when chasing down late payments, and trying to keep on top of a company’s own outgoings.
Eric Maisonhaute is the director of accounts receivable solutions at Esker Australia, a company that offers cloud solutions to digitise and automate order-to-cash and procure-to-pay processes. He is well aware of the pitfalls and strains that can be put on companies as they try to keep ahead of the game when it comes to balancing the books.
Esker’s portfolio of Cloud accounts receivable solutions can streamline processes to make collections easy to understand and complete. What sort of features does it offer?
“There is a solution that automates the delivery of customer invoices, proof of delivery and so on,” said Maisonhaute. “It automates the delivery of documents out of any ERP system in any format via any channel. This includes the printing of invoices to be delivered via postal mail, thanks to our local printing facility. It can also format a document according to the preferred mode of reception by the end customer i.e. paper, fax, email, e-invoicing, EDI, etc.
“Of course, delivering invoices is critical. Typically invoices need to be processed by the end customer. Esker can assist with this process with its Accounts Payable automation solution. This is followed by the payment process by the customer. On the supplier side, then both cash collection and cash reconciliation are critical. It would make the process straight forward and effective if not for discounts, disputes, and claims. That is why Esker proposes different solutions to address the various aspects of the AR process.”
In terms of the collections process, Esker offers a comprehensive collections management solution. It assists all steps of the collections process and automates the sending accounts statements or statement reminders.
“You can easily segment your customers and have different collections strategies for different groups of customers” said Maisonhaute. “We know you have your good, timely payers, but you might also have slow payers, bad payers and so on. You might want to adopt different collection strategies.
“With this solution you can set up your own rules such as when payment reminders will be emailed to customers with overdue invoices.
Based on these rules, the solution creates a personalised to-do list for each AR officer or collector. So, every day, collectors can focus their activities on engaging with customers and discuss payment issues, reasons for late or overdue payments, negotiate payment plans, etc.
This automation has saved two to three hours per week for the AR team at one of Esker’s customers, Australia’s largest crane hire company based in WA.
“What they love is that they now get all the replies from customers centralised in one place and do not have to set reminders in calendar, it now automatically pops up in their to-do list,” said Maisonhaute.
“The solution also includes internal collaboration tools to create tasks and internally collaborate with other departments. For instance, a customer might request a proof of delivery docket or claim a discount. This means it is speeding up the process of answering and helping customers and, like for our customer Temperature Equipment Corp., resolve dispute 88 per cent faster.”
The solution includes a self-service capability. This allows a company’s customers to interact with the same solution in a self-service mode. As the customer receives its accounts statement, or a payment reminder, the accounts payable officer can click on a link in the email that takes her/him to the customer portal. This enables customers to become self-sufficient, because they can go and access their invoices, download their statements online as a pdf, and can query any issues with an invoice.
“They have access to all of their invoices and accounts statements online,” said Maisonhaute. “They can then select the invoices and pay online and they can also organise a payment by credit card or bank transfer. This is helping companies collect their cash in different ways and helping your customers pay quicker by offering online payment capabilities. LinPepCo, a Pepsi-Cola franchisee, managed to get 69 per cent of its customers on AutoPay with our solution, where invoices are automatically paid on the due date.”
“For customers who continue to pay you directly from their bank account, their Enterprise Resource Planning (ERP) triggers the process of EFT transfer and so on,” he said. “This is where our Cash Application Solution helps with the reconciliation of those payments. You have the payments coming into your bank account, so we ingest the bank statement first to understand what payments you have received.”
On the other hand, you might have received a remittance advice, so the solution can process it by extracting the data out of the document.
“Usually we have your list of open invoices and credits. Between those three documents – the bank statement, the remittance advice and the open invoices and credits – Esker’s AI logic automatically determines which invoices have been paid, and in what amounts,” said Maisonhaute. “This removes the manual tasks of allocating payments in the ERP. It clearly automates the cash allocation process and your team can focus on exceptions.”
Maisonhaute said the solution is intuitive and provides dashboards. There are several dashboards that provide real time information about the status of customers, divisions or companies, ageing balances, KPIs such as DSO and CEI. These metrics are essential to measure the efficiency of the collections process and the productivity of the collectors.
This helped our customer Wine Warehouse set goals and track easily how they were able to raise the CEI to 80 per cent and increase the amount of money collected by 45 per cent over a single year.
“When you log into our collections management solution you access a dashboard with your to-do list for the day – what calls you have to make, etc,” he said. “Maybe your credit manager decided that, for example, you have to follow the 90-plus day invoices, or invoices that are closed or are critical in terms of receiving a payment. That’ll be organised in the to-do list. You don’t have to waste time prioritising and deciding what they have to do, which is typically the case when you don’t have an automation solution.”
Setting up the solution only takes a few weeks. Esker consultants work with the AR team throughout the process. And once it is up and running, the time savings and ease of use will be noticeable to a company’s bottom line, according to Maisonhaute. Job satisfaction in the AR team also increases as most tedious tasks have been automated.
“We typically start with a kick-off with the team setting up the project and a time line of the tasks,” he said. “Then we run the implementation activities. It is important to note that at the beginning the IT team needs to be involved for the data integration with the ERP. Then the business teams and the operations teams are involved to validate the configurations. Then there is a testing phase, and end user training, and finally the planning for the switch to production and going live.”
Esker proposes a simple subscription pricing model for its solutions. For Collections Management the subscription fee is based on the number of transactions and invoices. For the Cash Application the subscription fee is based on the number of payments. Esker also takes the security of its clients very seriously.
“Also, back-up service is included,” he said. “All our solutions are in the cloud. Every year, Esker needs to renew its various certifications. We have large customers in various industries running our cloud solutions. We have a chief of security and of data privacy – we take it very seriously.”
The subscription fee also includes technical support and it comes with a customer experience program.
“We have a program called First Year @ Esker. This program is like a personal fitness coach for your AR processes and AR teams. From the time our customers go live, we follow them and have regular interactions with them with calls and ad-hoc training sessions throughout the year to make sure users can fully exploit the capability of the solution and that the company achieves the highest ROI,” said Maisonhaute. “We coach end users and provide best practices to drive a long lasting and effective process change. We want the user experience with our solution to be fantastic, and that is why we have such a high level of satisfaction from end users and a very high level of retention of customers.”
Global dairy commodity update
While dairy commodity markets remained relatively steady (except for US cheddar), dairy market fundamentals are mixed across major producing regions and local factors continue to influence prices, creating some diverging trends.
Global trade rebounded strongly in June, with healthy rises across most major product categories as buyers took advantage of low prices in April and May. The trade in the month took overall trade for the first half of 2020 to just 0.7 per cent behind the 2019 comparative, despite COVID-19 disruptions. COVID-19 restrictions will continue to ease but “second wave” surges in infections will cause reversals of reopenings in some regions. This will ensure retail demand remains a stable platform alongside a slow and bumpy recovery in food service channels, while business and tourism travel and events will be limited through much of 2021.
Milk production trends are varied. While the EU-27’s growth may slow a little, and changing climate may stem Latin America’s surge, output in most other regions is improving – with the strongest being in the US, while weather is still a lottery in NZ.
Domestic demand for cheese and butterfat – sustained by strong grocery sales – may be vulnerable to the impacts of recession on household food spending. Shoppers will probably trade down to cheaper products, do less entertaining and opt for low-cost eating out or takeout options. This may weaken overall demand and increase price sensitivity – but this hasn’t shown up just yet.
This risk of stock-build in butterfat remains a moderate risk but is dependent on the sustainability of cheese demand in Europe and the prospects for increased exports, while improved US cheese supplies will weaken prices.
Oceania markets are mixed. While whole milk powder (WMP) fundamentals appear balanced, weak butterfat demand due to the impacts of food service closures is weighing on prices, while the durability of premiums over US and EU skim milk powder (SMP) will be tested.
Skim milk powder
Global SMP trade jumped 21 YOY in June, 43 per cent of which came from Southeast Asia. The rolling annual total of SMP trade has recovered to within 2.6 per cent of peak tonnage (achieved last September).
Whole milk powder
Global WMP trade rebounded 23
per cent in June (with exports to North Africa making up half the gains in the month with the rolling annual total of WMP trade remaining 5.8 per cent behind its peak six years earlier.
Cheese
Global cheese trade increased 14.4 per cent YOY in June, with gains in most regions – strongest being UK, China and Mexico. Once the lure of low prices washed through the trade data, weak food service demand and uncertainty about the ongoing effects of COVID-19 will hang over cheese markets in coming months.
Butter
Global butterfat prices continue to converge, with Oceania values weakening further through August. EU butter prices improved, while US values softened through the month. Butterfat trade lifted 13.1 per cent YOY in June in overall terms, this time aided by a 19 per cent jump in butter trade, half of which came from MENA.
Whey
Whey powder prices continue to steady in the EU, while US prices have firmed in August after dipping in July. WPC prices for higher concentrated products remain weak with the lack of demand from the fitness market and weak growth in infant formula trade. The lack of demand for WPCs is pushing more whey solids into commodity powder production, as cheese output improves – especially in the US. Global trade in whey products lifted 8.5 per cent YOY in August with strong trade into China.