Keeping spirits high: brewing in a niche market

The 2019 Australian Craft Beer Survey results backed up what a lot of anecdotal evidence has shown over the past five years – Australian consumers like their craft beer. The survey showed that the attitude of 68 per cent of those surveyed towards the regular release of new/limited beers was ‘exciting and shows the creativity of breweries’, while only 5 per cent thought it ‘reduces the quality of beer’.

Craft brewing has been around since beer was invented, however as a brand becomes more popular and moves into the mainstream, it loses the moniker. In modern times, Western Australia’s Matilda Bay is considered the first in the renaissance of craft beer when it was launched in 1984.

The average craft beer drinker is aged between 30 and 49, while unsurprisingly the Eastern states make up 86 per cent of all craft beer drinkers. It is a business that is not only flourishing but attracting new start-ups at a fast rate.

Peter Philip is chairman of the Independent Brewing Association (IBA), and founder of the Wayward Brewing Co. The IBA has more than 500 members and is a fierce advocate of the industry, which is currently growing at the rate of one new brewery opening every six days.

“The craft movement started because people were looking for something different,” he said. “I don’t particularly think that is a new trend. It has been a trend for the past 50 years that craft brewers tapped into and that is what created the whole craft industry.

“It is a segment that is a major growth area and really resonates with rural and regional Australians. They are bringing a whole new beverage to country towns. Country towns are thirsty places so people are really getting behind those small breweries.”

Acquisitions
Some have been so successful, they have been bought by some of the bigger players. Carlton & United Breweries’ (CUB) acquisitions over the past couple of years include 4 Pines, Pirate Life, the award-winning, Mick Fanning-backed Balter and its initial purchase of the aforementioned Matilda Bay Brewing in 1990, which has closed and opened on different sides of the continent.

“We opened the Matilda Bay microbrewery in Healesville, Victoria late last year, with the father of craft beer in Australia, Phil Sexton,” said Julian Sheezel, vice-president of corporate affairs for CUB.

Another major brewer, Lion bought Little Creatures but tends to start up its own craft beer brands from its Malt Shovel subsidiary, including its James Squire range.
For some younger consumers, they will be hard-pressed to know that such a well-known brand as Hahn’s started out a boutique beer. And while founder, Chuck Hahn might not be the father of craft beer, he could claim the title of grandfather. Approaching his 50th year in the business, starting out at Coors in the US, Hahn is now the Brew Master at Lion and shows no signs of slowing down. He has some nostalgic memories of those days gone by.

He even helped revive one of the original craft brands that was established on the east coast in the 1980s.

“We’ve been developing authentic brands rather than going out and buying,” he said. “The Hahn brewery was one of the first craft breweries on the east coast, along with Power Burning Company, which was born in 1988 along with the Eumundi Brewery started by John Lynch up on the Sunshine Coast.

“Ten years ago, Lion was able to buy the trademark for Eumundi and about a year ago we put a small brewery back in to the same motel – the Imperial Hotel just across the way from the Eumundi markets – and we rebirthed that brand. We eventually convinced our marketing department to develop the brand and that is what we have done.”

While some brewers are happy to rest on their laurels and find a niche in their local country town, shire or even city, a lot of companies – Balter being the latest example – are looking for the big pay day when one of the bigger brewers can no longer ignore their presence.

What does a multi-national brewer look for when buying up a smaller player?

“Businesses we’ve purchased have all had great people, great products and enormous potential,” said Sheezel. “We look for businesses whose owners are passionate about making great beverages and are committed to creating value not only for both parties but also for our customers across the country.”

There have been many ups and downs in the industry. According to a report in the Sydney Morning Herald, data showed that just over 250,000 businesses were deregistered from the Australian Securities and Investments Commission between July 2017 and June 30 2018. In other words a lot of businesses fail. The specialty beverage space is no different. Many players believe that the state and federal governments could do more to help.

A taxing time
If you talk to Philip and Hahn, they believe that the craft brewers in particular have it a little harder as they are treated differently from the big players.

“Australia is one of the highest taxed countries for beer and alcohol,” said Philip. “We’re contributing more than our fair share to the tax coffers. Over half the production cost of the beer is tax – more than we are paying for the malt; more than we are paying for the hops; more than we are paying our staff. It is our single biggest ‘supplier’ that we are having to pay. We’re overweight in terms of what we are paying compared to other countries.”

Hahn concurs.

“Australian alcohol is taxed almost more than most other places in the world. Excise is based on your alcohol level,” he said. “We’re paying over $2 a litre in tax, even more so if it is more than 5 per cent alcohol. In the US it is a about one tenth of that – about $0.20 a litre. Excise tax is the biggest single cost to making beer. It’s crazy. You might use $1 a litre or $1.5 a litre for all your malted barley and hops and processing, but not $2 a litre. People don’t realise that and the excise just went up again. It goes up every six months.”

There has been some relief thanks to lobbying of the IBA and its predecessor the Craft Brewers Industry Association (CBIA), according to Hahn.

“This is something we fought for in the CBIA and finally got the government to allow the smaller breweries to claim back $30,000 a year on excise,” he said. “Further lobbying by the IBA got it up to $100,000. That has helped smaller brewers exist. It doesn’t hide the fact that Australia pays more money to the government than almost any other country in the world.”

CUB’s Sheezel also believes it is an issue that needs addressing.

“Australians now pays one of the highest beer taxes in the developed world, much higher than the UK, NZ, the US and Germany,” he said. “Beer should not be a luxury – it’s the drink for the everyday Australian. Given the sensible approach shown to alcohol consumption by the vast majority of Australians, the high tax slug on Australians is just not right.”

A matter of choice
One of the key issues that is always on the drawing board is how sustainable is the industry? With a brewery opening up every six days, won’t there become a saturation point somewhere? Depends on who you talk to. Under the right conditions, Sheezel believes it is sustainable.

“Australian beer lovers have more beers to choose from than ever before,” said Sheezel. “We believe any brewery that will brew consistently high-quality, small-batch beers in an environmentally sustainable way can expect to be sustainable.”

The IBA does see a bit of a David and Goliath situation playing out between its members and the bigger brewers. As well as the tax issue, he believes that the government should examine the tap contracts the bigger breweries have with hotels and bars, which he believes are not as fair as they could be towards the smaller brewers. He said that the craft brewers get on well together and back each other up – not just in trying to gain marketshare, but in the more practical aspects of making their favourite tipple.

“There’s an amazing camaraderie in the industry. Small, independent brewers help each other every day,” he said. “We don’t view each other so much as competitors, we view each other as co-partners in building an industry. Most days of the week I’ll get a call from somebody saying, ‘I’m short a bag of grain, can I borrow one off you?’ And they come on over and grab it. That is the kind of industry we are in.”

But with a lot of craft beers now becoming mainstream, isn’t it an industry that will slowly become the norm anyway? There are also aforementioned beers like Hahn and Balter that are now mainstream or about to become so. Philip pulls out an interesting statistics that shows that there is still a gulf – whether it gets bigger or not, only time will tell.

“Large brewers own 94 per cent of the market and have virtually unlimited access to capital and they can use that to automate their processes to a massive extent,” he said. “We are 6 per cent of volume but employ 47 per cent of all the people in the industry. It shows how automated they are, and how much of a craft industry we are. It truly is hand-crafted products and that has a cost implication. Our operating costs and production costs are massively higher than the multi-nationals.”

Distilleries
And it’s not just beer where boutique beverages are making a splash. The spirit space is also making waves and not just in Australia.

Mr Black is a high-end coffee liqueur that is distilled in New South Wales’ Central Coast. It was started by Thomas Baker and Phillip Moore and was borne out of a gap in the market that both men saw.

“Philip was so excited when he met Tom at the distillery. Together, they collaborated, started a company, and after two iterations, released Mr Black,” said the company’s operations manager Rick Roper.

In 2014, Mr Black went on to win a gold medal award at the London Spirit Show as the finest in its category and has consistently won international awards since that time.

“They launched the product in the UK not long after developing it, and in a relatively short period of time it has become the leading coffee liqueur in both of those markets,” said Roper. “In 2017, it was launched in the US and is now the biggest selling Australian spirit in the US. Although it is Australian based, it is expanding globally. It is continued to manufactured at Distillery Botanica. It is highly regarded. It’s blended with a high-quality grain spirit and is crafted into Mr Black. It is sold through on and off premises. It’s now also now being distributed through the Asia Pacific.”

Then there is Bryon Bay Slow Gin (see story page 36 of this issue), that uses the Davidson Plum as its main ingredient.

The plum is a native of Australia, and something that co-founder of the Cape Byron Distillery, Eddie Brook, sees as something that all spirit producers can embrace and make them a point of difference in the world market.

The company also produces a macadamia nut and roasted wattle seed liqueur.
“You get this rich butterscotch, toffee, toasted nut flavour, almost coffee and dark cacao notes coming through as well,” Brook said. “It has been a really great addition. Later this year we will be releasing a few other spirits around the native fruit-infused line in particular.”

The future
Overall the niche beverage industry is expanding and there are a slew of distilleries and breweries popping up all over the country. What is the advice from some of those who have already made the journey to those that are starting out?

“One thing I would say about brewing is that cleanliness is next to godliness,” said Hahn. “Any problems that are associated with brewing are usually housekeeping and in hygiene.
“The next is you have to deliver on consistent, quality favour. If the beer looks flat, then it doesn’t look appealing. If it doesn’t look appealing, then you need to work on presentation.

“Finally, you have to have the brewer out there talking about the beer. That is something that I have always done.

“I used to have three or four beer dinners a month at various hotels to get Australians to taste beer rather than just drink it. It’s more about tasting rather than slamming it down. I say slam it down slowly and savour the flavour, which leads to responsible drinking, which is what the craft element is about.”

Sheezel sees a few trends coming through that are not just about beverages themselves but where they come from.

“Over the past five years we have seen an increase in mid-strength beers sales, the demand for a greater variety of beers and more demand for beer in cans and we expect these trends to continue in coming years,” he said. “Consumers are increasingly consumption-conscious, and interested in what goes in to their products. Consumers are increasingly interested in sustainability, a focus that will only intensify in coming years.

“We also believe drinkers will place a greater premium on convenience, so that they can enjoy drinks in much the same way beer has traditionally been enjoyed.”

The last word is left to Philip, who despite some of the challenges, loves the industry.
“It is enormously satisfying to deal with people who have fun and enjoy the product that they create,” he said.

“We are being creative in how we come up with new products and how we engage with customers. And this is why the public respond like they do to independent beers because we’re giving them an experience that they can’t get from some of the mainstream beers.”

Why batching is crucial when it comes to brewing

The art of brewing a fine beer demands time and patience. Equally important, selecting the right processing equipment will ensure that the taste is always as expected.

Although the craft beer market in Australia is still new, the beer brewing industry is expanding rapidly across the country. As reported by The Independent Brewers Association, local brewers are a small but increasingly significant part of the $6.5 billion Australian retail beer market, not to mention that the number of smalls breweries in Australia has remarkably increased in recent years, with a new brewery opening every 6 days. According to Craft Beer Reviewer, a body that provides data about craft beer breweries in Australia, there are more than 690 craft beer breweries in the country; and just since 2017, the Australian beer market has seen the launch of 230 new breweries nationwide. New South Wales, Victoria and Queensland are the biggest contributors with a total number of 494 craft beer breweries shared among them.

For microbreweries who pride themselves with producing unique and personalised flavours of beer, any slight change made to production process whether it is the ingredients used or the cooking time, could have unfortunate consequences for a particular and distinguished taste. To ensure that the taste is always as desired, it is critical to have the right equipment to accurately measure and batch the correct amount of ingredients with perfection.

JSG Industrial Systems has introduced into the Australian beer brewing market the Flomec G2 Stainless Steel Flowmeter. A cost-effective yet reliable fluid meter designed to suit a variety of brewery installations. Breweries report that using the Flomec G2 meter improves the quality of beer by making each batch consistent and highly controlled, which is considered one of the most critical procedures during the brewing process.

This reliable flow meter is highly accurate with an inbuilt display unit that does not require power to operate, which simplifies the production process greatly and enables seamless operation. The Flomec G2 is suitable for a variety of batching applications as it is available in different sizes to suit various process lines. The reasons to why this accurate and reliable meter is finding a perfect fit in breweries across Australia are due to the fact that it is quite a cost-effective solution suitable for any type of brewery, offers excellent fluid compatibility in the brewing process, and it’s easily removed, cleaned and maintained.

JSG Industrial Systems designs, develops, and supplies engineered industrial systems which increase assets lifetime, reduce operational risk and contribute to environmental sustainability. The company provides access to products and services for a variety of global sectors including food & beverage, mining, transportation, agriculture, marine, energy, construction, and manufacturing.

For more information
Contact your JSG Industrial Systems representative on (02) 9914 8720 or visit www.jsgindustrial.com

State government gives $1 Million to Love Food, Hate Waste

In an Australian first, communities throughout NSW, including Sydney, the Central Coast, Mid-North Coast and North Coast, will take part in a program to reduce food waste in homes and businesses.

As part of Love Food Hate Waste NSW’s Love Food Communities grants, City of Sydney, Central Coast Council, Midwaste group and North East Waste group will each receive up to $250,000 to plan and deliver a two-year whole-of-city approach to food waste prevention.

These plans will include the delivery of the Love Food Hate Waste Food Smart and Your Business is Food programs to support local households and businesses to tackle food waste and educate them on how working together as a community can make a difference. As well as household and business, each project will target at least one other sector, including aged care, schools, hospitality or food manufacturers.

The four projects will reach 17,000 households and nearly 500 businesses and will be the first time a whole-of-community approach is taken to prevent food waste in NSW.

“Almost a million tonnes of food is thrown away by household and business in NSW each year, costing the average household an estimated $3,800 a year,” said Amanda Kane, acting director, Waste Programs, Department of Planning, Industry and Environment.

“We want to see less food being wasted across our communities and these grants will help to achieve this by changing behaviour and giving people and businesses the tools they need to make informed decisions.”

READ MORE: Woolworths reaches milestone in fight against food waste

“We’re excited to be able to help these four communities on their food waste reduction journey, while supporting our program goal to make food waste avoidance a social norm in NSW by 2021,” added Ms. Kane.

The Love Food Hate Waste program has awarded almost $1.6 million to 54 grant projects and is an important part of the NSW Government’s commitment to halve food waste by 2030, through the National Food Waste Strategy.

The Love Food Communities grants are funded through the NSW Government’s $105.5 million Organics Infrastructure Fund under Waste Less, Recycle More. This fund diverts food and garden waste from landfill by funding food waste avoidance education, kerbside organics collections, food processing and donations infrastructure and organics market development.

The right brew for beverage and distillery flooring

The craft beer and distillery market in Australia is worth in excess of $4 billion and growing. Although currently dominated by North American brands, more exciting new craft brewers and distilleries are setting up rapidly throughout the country, with up to 600 brands now being available.

The Independent Brewers Association (IBA) estimates that there will be double-digit growth of 24.2 per cent for local craft beer through the liquor stores over the next 12 months, proving Australia has a growing appetite for quality beer and spirits. Wealthy investors and bankers also view the market as a key opportunity with the likes of Gerry Harvey recently investing $20 million to build Australia’s largest whisky company.

Similar to the building and construction of a winery, breweries and distilleries have parallel challenges in getting the floor coating just right.

The brewing process is subject to constant wear and tear and spills. This is driven by steam and boiling water creating a large swing in temperatures that the flooring needs to withstand. Following on from the production process, forklifts and pallet jacks are used to transport ingredients and finished brews to delivery trucks. This constant traffic movement can cause the floor to crack and peel and result in dangerous trip hazards, as well as a build-up in bacteria. A seamless heavy-duty, non-slip epoxy floor from a company like Roxset Health and Safety Flooring will protect from accidents and inhibit growth of bacteria and provide ease of cleaning.

READ MORE: Flooring meets strict food code requirements

Another key consideration with the final coating is erosion. Sugar solutions used in wine making and brewing rapidly erode concrete, which can leave the surface pitted and damaged resulting in expensive downtime and repairs. It also creates a hazardous working environment for workers.

Breweries, distilleries and wineries have a lot of rules and regulations they are required to follow, not just in terms of how they run overall, but their set-up, too.

Important requirements they must meet include:
• A brewery floor needs to be made of non-porous material, with no cracks and gaps.
• Flooring must have anti-microbial properties to prevent collection of bacteria and other harmful organisms and meet HACCP Compliance.
• Floor coating must be moisture and chemical resistant and not degrade quickly due to repeated exposure.
• Floor coating must work well in both wet and dry conditions.
• Floor coating should be non-slip and have low environmental impact.

The SE Floor Coating Solution from Roxset is a specialised tailored system to suit high impact wet areas for the food and beverage industry. Key clients over the past 30 years include, Ned’s Whisky, Capital Brewing, Vasse Felix Winery and Voyager Estate.

For consumers, breweries and distilleries are a cool place to hang out and see how the beverage is made and to sample offerings. But what they do not realise is the level of detail, which goes into every choice made. From the brewing of equipment to the flooring, everything needs careful consideration.

Roxset has the expertise and history to make sure all hygienic and safety concerns are met in distilleries, wineries and breweries. It works with clients so it can find a solution that will mean the floor surface meets strict Australian standards and makes for a safe and healthy workplace for employees.

Food & Beverage Industry News goes monthly

Food & Beverage Industry News is very excited to announce from August this year, the industry’s premier magazine will move to from a bi-monthly to a monthly model. What that means for our readers is more content, more insights and more of the latest up-to-date developments both locally and overseas. For our commercial partners, it means even more opportunities to have their message heard by decision makers and trend setters in the Australasian food and beverage market.

If you’re a business looking to get involved, please don’t hesitate to get in touch with the team here at Food & Beverage Industry News.

Advertising Contact:
Luke Ronca
Ph: 0402 718 081
Email luke.ronca@primecreative.com.au

 

Coopers Brewery continues strong growth

Coopers Brewery chalked up its 24th consecutive year of growth in beer volumes in 2016-17, with sales rising 2.9 per cent to a record 83.8 million litres.

In releasing the company’s annual results, Managing Director, Dr Tim Cooper said Coopers now held almost 5 per cent market share in the national beer market where industry figures showed a decline in sales volume of 1.9 per cent during 2016-17.

“This marks 24 consecutive years of growth in beer volumes for a compound annual growth rate of 8.9 per cent,” he said.

“Turnover for 2016-17 rose to $252.4 million compared with $245.9 million from the previous year.

“Profit before tax of $33.4 million was down 3.5 per cent from $34.6 million in 2015-16, a result impacted by the final write-down of the goodwill and brand names of Mr Beer (USA), overhead costs associated with the construction of the new maltings plant and redundancy costs arising from a restructure as we reallocate resources to our growing interstate markets.”

Fully franked dividends totalling $12.50 a share were paid, steady from the previous year.

Dr Cooper said the new $65 million maltings plant, which will be officially opened at Regency Park on November 30, will immediately start to contribute to earnings, with a view to achieving full utilisation of the facility over the next two financial years.

“The maltings will be able to produce about 54,000 tonnes of malt a year, of which Coopers will use a little over 17,000 tonnes,” he said.

“The rest will be available for sale and Coopers already has signed contracts with customers in Australia and Asia.”

Dr Cooper said sales growth during the year had been built on improved packaged beer sales.

New South Wales led this growth with sales up 6.9 per cent, Queensland up 5.5 per cent, Victoria up 3.5 per cent and Western Australia up 1.8 per cent. Sales in South Australia fell slightly.

“NSW is our strongest market, representing 27 per cent of total sales, compared with 22.9 per cent for our home state of South Australia, 18.7 per cent for Victoria and 16.2 per cent for Queensland,” he said.

 

Coopers releases 2017 Vintage Ale

A new combination and hops and enriched malt flavours are the key characteristics of 2017 Coopers Extra Strong Vintage Ale.

The release of Vintage Ale is an annual event in the liquor trade and wider beer industry and is being celebrated this year with special evening launches in Sydney, Melbourne and Adelaide.

While hops remain the cornerstone of the 2017 Coopers Vintage Ale, this year brewers have revised the grist recipe, the first change in a decade.

Coopers Managing Director and Chief Brewer, Dr Tim Cooper, said the new grist recipe included a special blend of caramalt to provide a distinctive crimson red colour and a full bodied taste rich in malty, honey and dry nutty characters.

“The caramalt contributes well to the balance of bold malt flavours and the softness of a fine and creamy head,” he said.

“Vintage Ale is known for its bold and robust selection of hops and this year we have chosen the new bittering and aromatic varieties Denali and Calypso, which deliver a delicate spectrum of fruity aromas, with pineapple and pear characteristics alongside pine and citrus notes.

“Last year’s Vintage used a combination of Astra, Melba, Northern Brewer, Styrian Goldings and Cascade.”

Dr Cooper said the 2017 Vintage had a bitterness of 50 IBU that was expected to carry well as the beer matures.

The beer retains an alcohol level of 7.5 per cent ABV, which will also help with the maturation process.

Coopers National Sales and Marketing Director, Mr Cam Pearce, said only a limited number of kegs and cartons would be made available and Vintage Ale lovers were encouraged to plan their purchases early.

“This is one of the few beers on the market that is designed to age and is unique in Australia,” he said.

The 2017 Extra Strong Vintage Ale is the 17th in the series that goes back to its launch in 1998. It will be available in key venues in August.

New niche beverage category expands quickly

In mainstream grocery, strong sales performance is critical to hit hurdle rates and avoid deletion. In less than one year since launching in Woolworths, Mojo Crafted kombucha has achieved this, according to the company. Woolworths has also doubled the product range  with new flavours Passionfruit and Turmeric.

Mainstream grocery is not the only retailer expanding probiotic beverages for customers.  Independent grocery is also cashing in on the market in Australia, at a retail level pushing around $70 to $80 million a year.

Metcash Convenience recently selected Mojo Classic as the first kombucha nationally available through the independent network. IGA, Foodland, Super IGA, The Friendly Grocer and Foodworks stores will offer 13 Mojo kombucha flavours under the Classic and Mojo Crafted ranges, all in 330ml bottles.

The product is a fermented, sparkling tea containing active enzymes, organic acids and proven probiotics. According to the company, the certified organic, vegan friendly and gluten free beverage offers a range of health benefits, including gut health, vitamin B12 and immune support.

“Launching our full range of flavours in more channels means consumers win and we do too,” said Andrew Buttery, business development manager for Mojo Crafted.

“It’s a huge investment in refrigerated space in independent stores with a traditionally smaller footprint.”

Coca-Cola reveals $1.7 million spending on health research in Australia

Coca-Cola has released details of its $1.7 million funding on health research in Australia and all the groups it has supported over the past five years.

The SMH reports that the soft drink giant promised to publish this information two weeks ago, following a revelation by Fairfax that the company had failed to reveal it.

The full list of 36 organisations included the University of Sydney, Nutrition Society of Australia, Ted Noffs Foundation, Bicycle Network, Sports Medicine Australia, University of Queensland, police citizen youth clubs, Australian Paralympic Committee and the Exercise is Medicine Project.

American Anti-sugar campaigner Professor Marion Nestle told the ABC that, because of evidence that sugar is a major cause of obesity, organisations which research obesity run the risk of compromising their integrity if they receive funding from soft drink makers.

"If they are doing research on diet and health then the Coca-Cola funding is going to make them look as if they are working for the company. I don't think that's good for their independence or their research," she told the ABC.

"Many of these studies look like they are just there to make it easier for the company to make health claims for its products."

Professor Stephen Simpson, one of Australia's leaders in obesity research, told the ABC industry funding should be made through an industry future fund.

"What that would be, would be a substantial fund to which the industry contributes, but that's the end of their relationship," he said.

Coca-Cola said in its disclosure that it does not "have the right to prevent publication of the research results" or "provide funding conditioned on the outcome of the research".

Coca-Cola defends cans as obesity row rages

Coca-Cola Amatil has said it would prefer to see more Australians drinking less of its products instead of a few people drinking a lot amidst a renewed push against the soft drink industry to tackle obesity.

CCA maintained its high-sugar products, like a 375ml can of Coke are not harmful if one can is consumed a week.

According to CCA managing director Alison Watkins, one can a week is not necessarily considered to be unhealthy.

"We would much rather have lots of people drinking small amounts of our product than to have a small number of people drinking a lot of our product," Ms Watkins said

"We are really wanting to make sure that we are part of solving what is undoubtedly a big problem for society -and that is obesity."

Coca-Cola Amatil was responding to criticisms by leading researcher Professor Marion Nestle from New York University.

Professor Nestle is on sabbatical with the University of Sydney's Charles Perkins Centre and delivered a lecture on Tuesday night to a packed theatre.

She claimed soft drink companies around the world were distorting the truth about their products to keep profits growing.

"There is so much evidence now that drinking sugars in form of liquids is not good for health," she said.

Official figures show that more than half of Australians are overweight or obese. More than a quarter fall into the obese category.

Coca-Cola Amatil told the ABC it will be disclosing details of its funding to research organisations in a couple of months. 

Cocoa Life Sustainability Program reports Strong Progress

Mondelēz International has published the first progress report on its Cocoa Life sustainability program, which highlights the wide-ranging impact and efforts to date across its six cocoa-growing origins. 

Since its inception in 2012 to the end of 2015, Cocoa Life reached over 76,700 farmers in over 795 communities, establishing a strong foundation and framework for the program.

Initial results show Cocoa Life farmers' incomes tripled since 2009, which is 49 percent more than control communities measured. Likewise, cocoa yield increased 37 percent more than the control communities.

The report also includes data from a needs assessment of the five regions where Cocoa Life is in place in Côte d’Ivoire and an Indonesia baseline assessment, which identifies key areas that will be targeted and measured for improvement. 

According to Cocoa Life Program Director Cathy Pieters, Cocoa Life integrates the work of stakeholders to achieve common goals in ways that can assist Cocoa Life farming communities around the world.

"This progress report brings together the voices of people in cocoa communities across all our origins and demonstrates how the program is working together with local governments, our suppliers and partners to build lasting change on the ground," Pieters said. 

As the world’s largest chocolate company and buyer of cocoa, Mondelēz International is committed to ensuring a sustainable cocoa supply chain. Today, 21 percent of the company’s cocoa is sustainably sourced and brands such as Côte d'Or and Marabou are now displaying the Cocoa Life logo. Cocoa Life is a long-term $400 million investment to empower 200,000 cocoa farmers and reach over one million community members by 2022. 

Cocoa Life is a part of Mondelēz International's Call For Well-being, a call to action focused on four areas that are critical to the well-being of the world and where the company can make the greatest impact: Sustainability, Well-being, Communities, and Safety.

Coca-Cola shakes up the Beverage market with 2015 financial results

Increased efficiency, improved execution and a diversified product base: that was the message Coca-Cola Amatil (CCA) pushed for its investors and consumers at its full year result briefing. 

Promises of profit growth by the company had been delivered for the first time in three years, with $100 million in cost savings potentially becoming invested to ensure long-term gains.

After a 33 per cent slump in profits during the previous two years, CCA’s underlying net profit rose 4.8 per cent to $393.4 million in 2015, assisted by a lower interest bill after selling 30 per cent of its Indonesian business to its US parent, the Coca-Cola Company.

One of the major themes of the result briefing was a shift towards meeting consumer expectations; with a new version of the reduced-kilojoule Coke Life hitting the shelves at a 50 per cent price gap with its rival Schweppes-Pepsi.

The Coca-Cola Life launch was the biggest beverage launch within the last eight years, with 60 per cent of households having some Coca-Cola trademarked product within their walls.

In an interview with Food & Beverage Magazine, CCA Group Chief Financial Officer Martyn Roberts says a personal highlight of the 2015 full year results was the amount of leverage gained in their large-scale, low-cost manufacturing sales capabilities.

“Our major focus in 2016 should be on the maintaining momentum in all of our respective markets in the face of changing consumer preferences and a challenging global market,” Roberts said.

Earnings before interest and tax rose a more modest 1.4 per cent to $660.6 million. CCA stabilised its Australian operations, earnings growth in Papua New Guinea, New Zealand and Fiji offset declines in Indonesia, and profits grew strongly in alcoholic beverages and coffee, countering a sharp drop in food and services.

According to CCA managing director Alison Watkins, CCA was aiming to be on track to return to mid-single-digit earnings per share growth "over the next few years".

"We don't want to achieve earnings-per-share growth only through doing clever things on our finance or tax line – we want to achieve it throughout our business," the former GrainCorp and Berri chief said.

""When you're relying on investing as we are in our brands, in innovation, in our sales capabilities, you'd expect those investments would pay, but it's impossible to be too scientific about when."

In Australia, non-alcoholic beverage volumes returned to growth for the first time since 2012, although volumes fell 1.5 per cent in the second half, in line with broker reports of tough trading in October and November.

CCA facing flat reception from Indonesia

Despite the consistent results between the 2014-15 financial years and placing itself ahead of the market through its reshaping and reinvention of costs for production, CCA faced some resistance from the Indonesian market.

This was largely due to a challenging environment in which economic growth was at its lowest level in five years, which placed a significant impact on which the speed of volume increased.

Although he would not comment specifically on the Indonesian government and their level of mandate, Roberts says strong revenue management and cost initiatives offset lower growth volume.

“There’s been a significant depreciation of the rupiah against the US dollar, which resulted in the increased cost of goods sold,” Roberts said.

“The entire beverage industry in Indonesia has had a bit of a set back over the past year or so. We’ve been sticking to implementing our strategies to include TCCC’s 29.4 per cent shareholding in the Indonesian business in addition to injecting equity.”

Since capital expenditure had been reduced by $29M to $256M due to deferral of spending on projects, Indonesia saw the installation of three new production lines in addition to the continued rollout of coolers.

If there was one positive note left from the Indonesian market, net debt had decreased by $725M to $1,146M reflecting the receipt of the equity injection by TCCC in CCA’s Indonesian business which equated to $647M in Australian dollars.

As 2016 continues to present opportunities for CCA to reinforce their strategy, the Indonesian market may still persist as a challenging area for profitability and growth due to the tough economic conditions. 

Boag’s Brewery sheds Launceston about third of workforce as brands move interstate

The shedding of 39 jobs at Launceston's Boag's Brewery has come as a shock, the United Voice union says.

Parent company Lion said it was making the changes to improve efficiency in its brewing network.

The Boag's brands will still be fully brewed in Launceston but various national brands will move interstate.

According to Company spokeswoman Leela Gantman, the market had faced a challenging time and added brewing costs in Tasmania had also been a factor.

"We've done this off the back of some very challenging years in the beer market and the need to ensure our operations both nationally and in Tasmania are sustainable," Gantman said.

"Certainly the rate of decline of beer production has been sharper than originally anticipated, so this has put our entire brewery network under pressure."

United Voice secretary Jannette Armstrong said the decision came as a surprise and was "devastating".

"This is going to have a massive impact, particularly [in] Launceston which is already feeling the hurt of unemployment," she said.

"It is very difficult to find a job at the moment, especially in the Launceston area, so it will be a very, very distressing time for those workers and for their families.

"Last year they laid off a whole heap of casuals and they have been talking about the reduced beer market across Australia, but in terms of any indication they were going to be cutting more jobs [that] was an absolute shock and we're disappointed there wasn't more notice and greater consultation."

Domestic manufacturing sales increase but downturn in dairy prices could begin to bite

The latest New Zealand Manufacturers  and Exporters Association (NZME) survey of business conditions in December showed a 9.02 per cent  increase in domestic sales almost made up for a 10.76 per cent drop in export sales.  

Chief executive Dieter Adam said despite net confidence falling to 18, down from 24 in November, manufacturing had been a "relatively good space" for the last 12 months.

The current performance, change and forecast indexes were all over 100 in December, indicating expansion.

"The forecast index, which indicates investment, sales, profit and staffing expectations, stayed high at 107.33, coming off the back of the most positive result recorded since 2004 in November, so there remains a fair chunk of optimism for the future."

"We find manufacturers are saying they have a bit of breathing room to employ more staff, but also to be able to invest. That's the critical thing because to survive in the medium to long term, manufacturers need to automate more, and to update their machinery."

Adam noted that last week's Overseas Merchandise Trade release by Statistics New Zealand showed even brighter results for exporters. 

"For example, export values for electrical machinery and equipment manufacturing  improved 9 per cent on the previous month and 11.5 per cent year on year, while logs, wood, and wood article manufacturing increased 25.1per cent on last month and 13.8per cent year on year."

The really big influences on manufacturing were the uncertain global economy and the value of the dollar, he said, and uncertainty in world markets tended to push down the New Zealand dollar which benefited exporters.

"Having said that, the underlying causes of the global uncertainty is not good news for exporters because people tend to hold back on purchasing our goods overseas."

Adam said exporters would love the US dollar to be closer to 60 cents but the really big problem was the relatively high value of the Australian dollar. 

"Forty per cent of our manufactured exports go to Australia and anything over 90 (cents) is really eating into our competitiveness. When it was 85 (cents) people were a lot happier. "

However, the strength of the domestic economy was helping make up for the loss of export sales. It was a little surprising that the drop in dairy prices, and the consequent  effect on the rural economy, had not had a bigger impact on manufacturing. 

In some instances sales of  products, such as hoses used to wash down dairy sheds, dropped quite quickly when farmers "shut their pockets."

If farming losses continued into the next milking season, Adam said, the consequences could be much more serious because farmers didn't have any cash reserves left. 

Coca-Cola shakes up the iced tea category as Fuze Tea launches in Australia

Coca-Cola South Pacific has today announced the launch of ice tea brand FUZE TEA in Australia, supported by a multi-million dollar marketing push.

The brand aims to deliver an aspirational iced tea offering to consumers and is positioned as a premium alternative within the category.

Through its dynamic range of flavours, FUZE TEA will celebrate 'surprising fusions that are deliciously good', as part of the brand's strategy to shake up the category for new and existing iced tea drinkers.

The FUZE TEA range includes five different tea types and flavours that will appeal to those who are looking for an unexpected yet delicious drink while they entertain or socialise.

Flavours include Wild Raspberry & Hibiscus, Summer Mango & Chamomile, Juicy Peach, Crisp Apple & Lemongrass and Zesty Lemon, made from a variety of teas including black, green and rooibos. Three of the five variants are low kilojoule and are sweetened with stevia.

FUZE TEA will primarily target the adult social occasion with a focus on capturing the attention of women in the 18-49 age bracket.

The launch of FUZE TEA is backed by a multi-channel marketing strategy. In the coming months, the brand will launch a series of high-impact marketing initiatives including a TVC, out-of-home, PR and digital activity.

A key pillar of the strategy is a partnership with Channel 7's My Kitchen Rules, with full integration across the show's platforms.

This includes FUZE TEA championed as a signature 'welcome drink' for contestants when they host their Instant Restaurants at their homes while there will be further product placement which will appear on the show throughout the season.

Emma Harper, Brand Manager, FUZE TEA, Coca-Cola South Pacific said: "FUZE TEA is an exciting brand that we are delighted to bring to market in Australia.

We see a big opportunity to breathe some new life into the category and offer consumers a genuinely new proposition with new flavours and fusions that will change the way they think about iced tea.

"Watch this space as we continue to evolve FUZE TEA in the coming months. In the mean time, we look forward to seeing consumers embrace the brand and its proposition.

Over time, we'd like to see FUZE TEA at the heart of social occasions, associated with relaxing and good times with friends."

Prolactal makes more out of organic milk at Biofach 2016

Prolactal inspires innovation with organic dairy foods.

Prolactal, part of the ICL Food Specialties business unit of ICL Coproration, is a leader in providing un-paralleled knowledge and expertise in the fractionation of organic milk and whey for use in a variety of dairy products.

Prolactal will display its organic protein expertise at the joint stand of the Austrian Chamber of Commerce at the upcoming Biofach trade show.

According to Global Lead of ICL Food Specialties, Rene Krebs, the organic dairy protein market continues to grow rapidly across the globe. There are few manufacturers that can reliabily supply these ingredients with organic quality.

"As a full-service provider using advance membrane filtration technology, Prolactal is getting the best out of organic milk," Krebs said.

Prolactal's core competency is delivering customized ingredient solutions in diverse applications and ever-changing market trends four our customers.

Prolactal leverages the benefits of a unqiue captive milk fractionation process separation organic milk and whey to deliver ground-breaking ingredient and protein solutions.

In 2015 Proactal became part of ICL Food Specialties bringing expanded ingredient systems and application expertise to the food and beverage industry.

The result is superior texture and stability solutions for organic and high-protein applications.

Functional  knowledge of protein behaviour allows for innovative ingredient systems that satisfy currently trending applications such as high protein organic yoghurts and beverages.

In addition, there is also an increasing demand for egg replacement solutions in organic vegetarian baked goods and mayonnaise.

Access to a global network of application specialists allows us to work in partnership with customers to find the right solution for each application.

Prolactal's new line of organic proteins is free from additives or coloring, making it suitable for further processing in certified organic products.

Prolactal holds an FSCC 22000 certificate, among many others, for its production of spray -and roller-dried milk and whey products. 

Australian Grand Dairy Awards winners rise to the top

19 dairy delicacies from around Australia have been crowned awards at the 2016 Australian Grand Dairy Awards.

Now in its 17th year, the prestigious awards, convened by Dairy Australia, recognised and rewarded Australia's top producers at an exclusive ceremony in Melbourne last night.

From small family owned producers to the well-known supermarket brands, the panel of judges delibrated their way across the cheese, yoghurt, ice cream, milk, butter and dip categories to detemine the two Grand Champion dairy products for 2016.

According to the convener of the Australian Grand Dairy Awards Amanda Menegazzo, Bulla scooped up the dairy Grand Champion title for its Creme Fraiche, which the judges deemed a light, delicate and fresh take on the classic cooking favourite.

"The varied range of this year's winning products shows a real shift in Australia's taste buds, and we're extremely impressed with the diversity of this year's Champions. These awards are the highest accolade for a dairy producer in Australia and the grand final of dairy competitions in the country, recognising the best of the best dairy" Menegazzo said.

Established in 1999, the Australian Grand Dairy Awards are Australia’s most prestigious national dairy awards and the highest accolade for Australian dairy producers.

By looking out for the blue and gold medal on packs, Australians can be sure they’re buying a first class product.

Gas Innovations changes landscape of carbon monoxide market

Texas-based Gas Innovations has unveiled eCOs, a new fuel cell technology that will allow the safe and efficient production of carbon monoxide directly at the site of facilities where the gas is needed.

Developed by Denmark-based Haldor Topsoe, the CO-generation device will use feedstock carbon dioxide and electrical power to produce CO in quantities ideal for most operations.

The development is significant to the medical, pharmaceutical, electronics and chemical industries, which require carbon monoxide in their processes.

The technology will also provide higher levels of purity, producing CO at 99.5 percent assay with minimal contaminants, with customization options that can produce gas with 99.999 percent purity.

Gas Innovations will have an eCOs unit in operation at its Texas facility in January 2016, allowing it to fill cylinders.

In the first quarter of 2016, the company will begin leasing out the eCOs modules, making it possible for larger-scale operations to produce their own CO, on-site, on an as-needed basis. Both solutions drastically reduce costs related to transportation, storage, rentals and connections.

Gas Innovations was founded in 2002 with the goal of providing industrial gas producers and distributors a dependable, independent wholesale supply partner.

Since its founding, the company has grown to become a leading supplier of high-purity hydrocarbons, propylene, propane, and specialty gases, along with a complete line of cutting, heating and Kobelco welding consumables. 

Fonterra tops the list of IBISWorld’s Top 100 food and beverage companies

Fonterra has remained to be on the top of the IBIS list of food and beverage companies by revenue generated.

The largest 100 food and beverage companies in Australia generate in excess of $100 billion in revenue (up from over $96 billion in 2014-15) and employ more than 130,000 Australians. 

Strong growth in food processing industries, in addition to milk production in Australia benefitting from joint ventures and expansion of airfreighted fresh milk exports to growing Asian markets has pushed Fonterra into the #1 spot for over two years.

According to IBISWorld senior industry analyst Spencer Little, industry revenue is set to decline in the beer industry as alcohol consumption continues to fall.

"The two newcomers to the list are Green's Foods and a2 Milk. a2 Milk posted revenue growth of 40.2 per cent over the year through June 2015, on the back of fresh milk exports to China and substantial sales growth in a2 Platinum Infant Formula across Australia and New Zealand," Mr Little said.

"After purchasing the remaining 50 per cent interest in the a2 Milk Company Limited joint venture and converting it to a fully owned subsidiary, a2 Milk began exporting fresh milk to China in August 2014. Sales of the company's infant formula skyrocketed in 2014-15."

Top Ten Food and Beverage Companies revealed by IBISWorld

  1. Fonterra Co-Op Group
  2. Lion Nathan National Foods
  3. Coca-Cola Amatil
  4. JBS Australia
  5. Devondale Murray Goulburn
  6. Teys Australia
  7. Bidvest
  8. Inghams
  9. Food Investments
  10. Nestle