Production lines for still beverages utilising nitrogen dosing can now also take advantage of the Sidel StarLite PET bottle base with the launch of the Sidel StarLite Nitro version.
The new base ensures bottle resistance and stability, even under extremely high temperature conditions, while also providing benefits in terms of both lightweighting and energy saving.
The new non-petaloid StarLite Nitro base utilises a unique shape that significantly increases base resistance and stability.
This means the new base design can simultaneously increase PET bottle rigidity by enhancing resistance to the internal pressure created by nitrogen dosing, even in harsh conditions, while lowering package weight and energy consumption.
It also offers packaging design differentiation and optimised aesthetics, importantly without compromising product safety. The StarLite Nitro base takes all the benefits of the StarLite base, introduced in 2013 for the production of still and carbonated beverages bottled in PET, which has been recognised as the ‘Best Environmental Sustainability Initiative’ at the 2013 Global Bottled Water Awards.
The Sidel StarLite Nitro base ensures improved PET bottle quality without compromising strength and increases stability throughout the entire supply chain. It enables producers to increase bottle resistance to deformation in any production environment.
“The large and stable surface upon which the bottle stands, combined with other structural elements within the bottle design, enables the formed PET bottle to better withstand the internal pressure caused by the addition of nitrogen and improves bottle stability during conveying, depending on the wall thickness of the base,” says Vincent Le Guen, Vice President, Packaging & Tooling at Sidel.
PepsiCo Australia has been awarded the Workplace Gender Equality Agency ‘Employer of Choice for Gender Equality’ citation for the third year in a row.
The Employer of Choice for Gender Equality (EOCGE) citation has been given to the top 100 organisations in Australia that meet the stringent criteria for best practice in promoting gender equality. PepsiCo Australia is leading the way for the food and drink industry – and the only FMCG company on the 2016 citation list.
This accolade is in recognition of PepsiCo’s ongoing commitment and effort to workplace gender equality through encouraging work life quality and flexibility in the workplace; supporting women at all levels of the organisation to progress into more senior positions; and ensuring pay equity within the business.
CEO of PepsiCo Australia & New Zealand, Robbert Rietbroek said: “We are delighted to have received this recognition for the third year in a row – and the only FMCG to do so. We recognise the importance of creating a diverse and inclusive workforce where both men and woman can thrive.
“When it comes to supporting female talent we have a strong track record, with over 40% of senior roles across the business filled by women and almost half of our ANZ executive leadership team are female. We value and actively promote flexibility and work life quality across the organisation.”
To signify PepsiCo Australia’s ongoing commitment to gender equity, CEO Robbert Rietbroek became a Pay Equity Ambassador earlier this year, to signify his personal commitment to ensuring that PepsiCo people processes are free of bias to achieve equity and pro-actively manage pay equity.
WGEA Director Libby Lyons said: “WGEA data shows there is progress towards gender equality in Australian workplaces, but it is too slow. It is only through more employers adopting leading practices to promote gender equality in the workplace that we will see the pace of change pick up.
“That’s why it is so encouraging to see more than 100 organisations meet the very high standard required to receive the WGEA Employer of Choice for Gender Equality citation this year.
“I congratulate all the 2016 citation holders for their commitment and recognition of the strong business case for gender equality. I hope to see continued growth in this community of leading practice employers.”
Annies Fruit Bars, a subsidiary of Kono NZ, has been named as the Best Kids Food Product in the 2016 Munch Foods Awards.
The awards, now in their fourth year, are run by Munch, an eco-friendly New Zealand company that makes and markets products and offers ideas and recipes online to feed the family.
The Munch Food Awards raise awareness about kid’s food marketing and products and allow parents to give players in this industry some feedback.
Nominations for finalists are made by the public and then both public vote and a judging panel choose the category and supreme winners.
“We are thrilled to be recognised in the industry as a product that parents trust to give to their children. Our fruit bars are made from 100 per cent fruit, and nothing else. They have no added sugar, and are free from additives, concentrates, gluten, dairy, and nuts,” said Mel Chambers, GM Food, Kono NZ.
Australia’s newest distillery, Cape Byron Distillery has launched its first spirit, Brookie’s Byron Dry Gin via Australian crowdfunding platform Pozible.
Created by Eddie Brook and acclaimed Scottish distiller Jim McEwan, Brookie’s captures the unique tastes and flavours of sub-tropical New South Wales.
The distillery itself is nestled in the very heart of the Brook family’s macadamia farm and is surrounded by a lush rainforest.
A traditional “dry style” Gin, Brookie’s is a balanced combination of the traditional and local native botanicals, trickle distilled in a custom hand-made copper pot still.
Jim McEwan said, “We’re bringing a new level of excellence to distillation. When you taste this gin, it tastes pure. You’re tasting a bit of nature, you can taste the salt air, you can taste the fruits and flowers of the rainforest, it has the warmth of the personalities associated with family distillers.”
Brookie’s is a gin also has a strong environmental message. Over the past 30 years the Brook family have planted over 35,000 native trees, mostly sub – tropical rainforest trees. Today the farm is thriving eco system.
A percentage of the profits from every bottle sold will support the work of the local Big Scrub Landcare group, whose sole mission is to protect what’s left of a mighty rainforest and to encourage new plantings.
According to reports, UK-based meat processor Hilton Food Group has announced the opening of a new meat processing facility in Queensland.
The facility will be primarily supplying Woolworths and will be capable of supplying Woolworths stores across both Queensland and parts of New South Wales, with beef, lamb, pork and other meat products.
The company is now in the process of acquiring an appropriate site for the facility and securing the relevant government approvals.
“It is proposed that Hilton’s Australian subsidiary, Hilton Foods Australia, will finance the new food packing facility, with current target for the commencement of production of 2020,” a company statement said.
Canadian Club has once again signed on as an official partner, official spirit and exclusive dark spirit, of the Australian Open, one of the nation’s largest annual sporting events.
For the second year in a row, Canadian Club (CC) will be making a ‘racquet’ at the Australian Open Festival with the Canadian Club Racquet Club activation perched hillside at the Birrarung Marr festival.
And for the first time, it will also expand its footprint outside of Melbourne with the Canadian Club Racquet Club popping up at three iconic venues in NSW and QLD – The Bucket List Bondi, Cruise Bar Sydney and Sandstone Point Hotel QLD.
The Canadian Club Racquet Club pop-ups will open in December, serving up refreshing Canadian Club cocktails, along with the classic CC and dry. The locations will be decked out in true CC summer style and for the duration of the AO, each site will also feature a big screen, broadcasting every game live to those wanting to soak up the social tennis vibes in Sydney and Brisbane.
The Australian Open partnership includes exclusive dark spirit pourage within Melbourne Park and throughout the Emirates Australian Open Series, the lead-in events to the first Grand Slam of the year, further unlocking trial amongst tennis goers.
“The Australian Open is one of the most iconic events on the Australian sporting calendar, and after great success during the last couple of years we are very excited to be taking the CC Racquet Club to Sydney and Brisbane,” Kristy Rathborne, Brand Manager, Canadian Club said.
The CC Summer of Tennis will extend nationally, from December through to February.
Asahi Beverages, the Australia New Zealand business of the Japanese beverage giant and Wipro Limited, a leading global information technology business services company, have been jointly recognised for the ‘Best BPO Sourcing’ partnership of 2016 by the ANZ Paragon Awards, presented in Sydney.
Now in their sixth year, the Paragon Awards honour and recognize companies that have demonstrated ground-breaking and innovative approaches to sourcing, resulting in a positive impact on their clients’ businesses.
Wipro and Asahi Beverages entered into a multi-year contract in September 2014 to jointly innovate, improve organizational efficiencies and enhance customer satisfaction for the beverage company.
Wipro developed a Process Migration Solution that enabled Asahi Beverages to make a robust transition of shared services by mitigating the risks. The solution was delivered through a combination of process migration levers, procedures and tool sets.
Peter Dalins, General Manager, Enterprise Solutions, Asahi Beverages, said, “We are proud to have won this award jointly with Wipro. Our partnership with Wipro is of key strategic value to us. Wipro has understood many critical elements of our business, and has also helped us improve services to our internal and external customers.”
Solidifying its position as Australia’s most sustainable tuna brand, Simplot Australia owned John West, was awarded the highest accolade at the 2016 Banksia Sustainability Awards, in Sydney recently.
John West Australia, the only national supermarket brand to be recognised in the awards this year, won the Communication for Change Award, followed by the prestigious 2016 Banksia Gold Award, which reflects the ‘Best of the Best’ across the categories.
Earlier this year, alongside the WWF-Australia (WWF) and the Marine Stewardship Council (MSC), a world leading brand commitment was made, to help end unsustainable fishing methods within the canned tuna industry in Australia, thanks to Pacifical, supplied by the world’s largest sustainable tuna purse seine fishery, controlled by the PNA (Parties to the Nauru Agreement).
The alliance with WWF, MSC and Pacifical and Simplot’s supplier network, is the result of years of the entities working together to find a way to overhaul John West’s supply standards within Australia, moving towards a more sustainable future for the world’s oceans.
Simplot Australia Managing Director, Terry O’Brien, said, “We feel privileged to have been awarded such an accolade in Australian sustainability. The category shift has been years of work alongside our partners, to truly lead the industry, consumers and the environment, towards a more positive future. We look forward to continuing the work, as we move into the next phase of ensuring a positive future for our oceans.”
The Banksia Awards is the longest running and most prestigious acknowledgement of commitment to sustainability in Australia. They recognise Australian individuals, communities, businesses and government for their innovation, achievement and commitment to sustainability.
Bolstered by rapid consumption growth and increasing customer needs in the Asia Pacific region, leading food processing and packaging solutions company Tetra Pak today announced their US$110 million investment in a state-of-the-art regional manufacturing facility near Ho Chi Minh City, Vietnam, to serve customers across the region.
The move is prompted by increasing consumption volumes, with the 2016 total packed liquid dairy and fruit-based beverages intake at 70 billion litres across ASEAN, South Asia, Japan, Korea, Australia and New Zealand.
Additionally, over the next three years, these markets are likely to grow at a healthy 5.6 per cent per annum, with products packed in Tetra Pak cartons projected to grow at a much faster rate as compared to other packaging formats such as glass bottles and cans.
“Tetra Pak has been present in the region for decades, with our first factory set up in Gotemba, Japan in 1971,” said Michael Zacka, Regional Vice President, Tetra Pak South Asia, East Asia and Oceania.
“Over the years, we have seen substantial growth of our products, driven by a wide portfolio and a number of innovations that we have introduced in the market. Hence our investment in a new plant, which will be our fourth Packaging Material factory in the region, providing us with expansive coverage and scale.
This decision is a strong reflection of our commitment to the region and our firm belief in its future potential.”
The greenfield factory, expected to begin operations in Q1 2019, will have an expandable production capacity of approximately 20 Billion packs per annum, across a variety of packaging formats, including the popular Tetra Brik Aseptic and Tetra Fino Aseptic.
It will primarily serve customers based in ASEAN, Australia and New Zealand. With a strong focus on sustainability, the site will adopt a host of global best practices to minimise the environmental footprint, including the utilisation of a high proportion of renewable energy sources.
This investment will complement Tetra Pak’s three long-standing production facilities in Singapore, India and Japan, building on the wealth of experience built up throughout the company’s operation in the region.
Together, the factories will enable the company to offer more innovations, efficiency and customer service to meet the rapid growth in Asia.
“We are committed to investing in Australia and New Zealand’s food export business to help our customers tap into the huge opportunities opening up both at home and in the wider region. Our investment in this manufacturing facility means we will be able service our ASEAN markets more efficiently, offering greater innovation, enhanced quality, efficiency and flexibility for producers.” said Craig Salkeld, Managing Director for Oceania, Tetra Pak.
The latest Australian Food and Grocery Council’s (AFGC) annual industry snapshot State of the Industry 2016 shows a 14 per cent increase in Australia’s food and grocery exports in 2015-16 to some extent moderated by the challenging economic conditions confronting Australia’s $125.9 billion food and grocery processing sector.
AFGC CEO Gary Dawson said while the State of the Industry 2016 highlighted export growth and a lift in overall industry turnover, falling capital investment and stalling job growth are clear warning signs for the future of Australia’s largest manufacturing sector.
“This year’s State of the Industry highlights the importance of the food and grocery sector to Australia’s economy, as well as its resilience in the face of the significant challenges it faces to stay competitive,” said Dawson.
“The good news is that industry turnover continues to increase with food and grocery processing now making up 33 per cent of total Australian manufacturing. This growth is largely on the back of strong growth in exports. In 2015-16 food and beverage exports grew by 11 per cent to $26bn, fresh produce exports up 49 per cent to $1.5bn and grocery (non-food) exports up 32 per cent to $4bn.
“Yet low domestic growth, rising costs for energy and other inputs, and six years of retail price deflation in the ongoing supermarket price war has created relentless pressure back through the supply chain to become more efficient in order to stay competitive.”
“In 2015-16 job growth stalled across the food and grocery sector reflecting the ongoing financial pressure the sector is under which is forcing food and grocery producers and processors to cut costs across every part of their business.”
“A key concern is the continuing decline in capital Investment at a time when a step change upwards in investment is required to fully capitalise on improved market access and growing demand from middle class consumers in the emerging economies of Asia and the Middle East,” said Dawson.
Coca-Cola has announced details of Powerade’s new Australian Summer campaign ‘Smash the Sweat’.
The campaign is designed to encourage consumers to smash the sticky, humid conditions associated with the season through the launch of limited edition Powerade sport-themed ‘shrink packs’ aimed at generating cut-through during the key summer period.
The strategy, said the company, revolves around tapping into the Aussie’s love of sports through collectable summer sports-themed packaging, featuring imagery from a range of sports including rugby, cricket, basketball, tennis, soccer and athletics.
The signature packs are signed by sporting legends and Powerade Ambassadors Greg Inglis, Mitchell Johnson and Andrew Bogut.
Appearing from early November, the limited edition packs will be promoted in-store at point-of-sale and supported on social media channels in the build up to summer.
As the summer sport season kicks off, the campaign will be boosted through outdoor media calling on consumers to ‘Smash the Sweat’.
Sarah Illy, Brand Activation Manager, Powerade, said: “We all love an Aussie summer, but with the hot, sticky conditions it becomes even more important to stay hydrated. So this summer we are challenging people to ‘Smash the Sweat’. Being a sports-obsessed nation, we decided to tap into that trend through our collectable sport-themed packs to encourage people to be active and stay hydrated.”
“The limited edition bottles have been inspired by Australian sporting legends with the objective of keeping Powerade ION4 top of mind for rehydration needs. Powerade ION4… is scientifically formulated to help replace four of the electrolytes lost in sweat and is an ideal way to ‘Smash the Sweat’ this summer,” said Illy.
Norway’s Tomra Systems has agreed to a buyout deal of NZ$70m (A$65m) for Kiwi fruit sorting company Compac Holdings.
The 100 per cent acquisition of the Auckland based packhouse automation systems maker by Tomra will see it expand extend its global operations.
The deal is subject to Overseas Investment Office approval and is expected to close in the first quarter of next year.
“Market forces have driven double-digit growth at Compac over recent years, and we have rapidly become a global business from humble New Zealand roots,” Compac chief executive Mike Riley said.
He also added that the merger will see Compac being able to meet the increasing demands for their products and services in a more “scalable and operationally efficient manner”. Executive vice president and head of Tomra sorting Volker Rehrmann explained,
“Compac serves complimentary food sorting markets, which is a very welcome addition to the Tomra sorting food business. We see our customers’ needs evolving and with our complementary solutions and an increased ability to leverage our combined food sorting technologies, we are ready to meet future customer needs.”
Despite the acquisition, Compac’s leadership will stay in place in the new structure, operating as a standalone entity while Tomra will still continue to offer its existing product portfolio.
Tomra has also said it will continue to invest in Compac’s R&D activities as the Norwegian group’s “centre of excellence for lane sorting” worldwide.
A challenge for many manufacturers is finding flat air blowing nozzles that are durable and appropriate for their application.
Traditionally made of Polyacetalic resin (POM) or nickel-plated aluminium, they are unable to withstand the rigours of caustic cleaning chemicals so need to be replaced regularly.
To solve this problem, Tecpro Australia has just released a Flat Fan Blowing Nozzle in 316L Stainless Steel – ideal for applications requiring strong impact airflows.
Designed and manufactured in Europe, these Flat Fan Blowing Nozzles provide constant, streamlined airflows without turbulence. In fact their superior design induces surrounding air to magnify the air blowing force to create greater efficiency.
When mounted side-by-side, they provide a highly effective air curtain for conveyor belts.
The 316L Stainless Steel Flat Fan Air Nozzle is resistant to corrosive forces in situations where caustic chemical cleaning is required and is suitable for use in hygienic applications. As a result, they are well suited for food, beverage and pharmaceutical manufacturing.
The nickel-plated aluminium model and the POM option are cost effective alternatives suitable for removing moisture, dust, swarf and other waste resulting from machining and woodworking processes or prior to laminating surfaces.
All models of Tecpro’s Flat Fan Blowing Nozzles use compressed air which is blown through 16 orifices to produce a uniform spray of strong impact air jets with low noise. In addition, these Air Blowing Nozzles comply with OSHA Regulations.
In order to monitor differential pressures in clean rooms, defined as a room in which the concentration of airborne particles is maintained within established parameters, ALVI offers a differential pressure transmitter; the DE21.
It is a compact, DIN Rail Mounted measuring instrument in 2-wire technology, serving to cover numerous measuring ranges in the low pressure area. Using capacitive measuring cells specially designed for nominal pressure ranges along with high overpressure safety, monitor ensures high precision, long term stability and drift free operation.
The measurement units, mbar, Pa, kPa and inWC, are selectable via the DIP Switch on the unit. It’s equipped with the 4 digit LCD display clearly indicating the measured differential pressure in selected pressure units.
Differential pressure is simply the measured pressure deviation between two points in different pressure systems.
If the pressure is too low, especially when a door is opened, contaminants can enter. If it is too high, energy is being wasted.
The merger between Kraft and Heinz has created the fifth-largest food and beverage company in the world; The Kraft Heinz Company.
The Kraft Heinz Company has said its immediate focus is on integrating the two businesses and establishing a new organizational structure, while delivering its financial objectives for 2015.
The Heinz brand and business will remain headquartered in Pittsburgh and the Kraft brand and business will remain headquartered in the Chicago area.
Effective as of the close of trading today, July 2, 2015, Kraft Foods Group, Inc. common shares will cease trading on the NASDAQ. The Kraft Heinz Company common shares will begin trading on the NASDAQ under the trading symbol KHC on Monday, July 6, 2015.
On July 31, 2015, The Kraft Heinz Company will pay a cash dividend of $0.55 per share to all stockholders of record at the close of business on July 27, 2015. This dividend will be in lieu of the dividend declared on June 22, 2015, by Kraft to its shareholders of record as of July 27, 2015, the payment of which was conditional on the merger not having closed by that date.
As previously announced, The Kraft Heinz Company’s Board of Directors is comprised of the following 11 directors: Alex Behring (who will serve as Chairman of the Board), Gregory Abel, Tracy Britt Cool, Warren Buffett, John T. Cahill (who will serve as Vice Chairman of the Board), L. Kevin Cox, Jeanne P. Jackson, Jorge Paulo Lemann, Mackey J. McDonald, John C. Pope, and Marcel Telles.
Also as previously announced, Bernardo Hees is Chief Executive Officer of The Kraft Heinz Company. The rest of the Kraft Heinz Company senior leadership team was announced on June 29, 2015.
“I am honored and humbled to be the CEO of The Kraft Heinz Company,” said Mr. Hees. “Kraft and Heinz are both world-class organizations with storied pasts and together, an even brighter future.”
Bonfiglioli Transmission has appointed CBC Australia as a national distribution partner in a major expansion in distribution of its range of industrial motors and drives.
CBC is Australia’s largest distributor of bearings, power transmission and engineered solutions. With more than 450 staff, 60 branches and over 100 channel partners, CBC is more than equipped to partner Bonfiglioli and achieve their expansion objective, said Bonfiglioli’s Managing Director Malcolm Lewis.
For over 60 years, CBC Australia has been servicing mining and heavy industry all over Australia. CBC has continued to grow their product range to meet all facets of industry.
Lewis said CBC adds a new dimension to Bonfiglioli’s established distribution network for the locally engineered and global ranges of Bonfiglioli products.
“Bonfiglioli motors and drives are among the world’s most advanced and reliable for industrial processes, automation, mobile and renewable energy applications in 80 countries on 5 continents. They are extensively supported in Australia by local engineering expertise and excellent inventory, qualities which are ideally complemented by CBC’s similar emphasis on in-depth service and customer satisfaction,” Lewis said.
CBC Sales Director, George Khoury said the Bonfiglioli range complements CBC’s philosophy and resources, which includes inventory of more than $50 million and a strong team of engineers to apply local service and expertise to Bonfiglioli’s outstanding global technology.
“Bonfiglioli has the range, quality, customer-responsiveness and local skills to contribute to a powerful partnership that aligns with CBC’s values, to secure our customer’s productivity through exceptional service, technical support, superior range of international brands and assurance of stock availability.”
PepsiCo, Kellogg Company and The Hershey Company have been named some of the "World's Most Ethical Companies" by the Ethisphere Institute.
Others in the food and beverage industry who made the list include Rockwell Automation, Schneider Electric SE, ABB Group, Ingredion Incorporated and illycaffé spa.
The Ethisphere Institute’s World’s Most Ethical Companies designation recognises companies that go beyond making statements about doing business “ethically” and translate those words into action. Honorees promote ethical business standards and practices internally, exceed legal compliance minimums and shape future industry standards by introducing best practices today.
In 2015, 132 honorees were named spanning 21 countries and five continents and representing over 50 industries.
"As a seven-time honoree, Rockwell Automation adopts leading ethical standards and practices that ensure long-term value to customers, employees, suppliers, and investors," said Timothy Erblich, Ethisphere's chief executive officer. "Rockwell Automation uses ethics as a means to further define its industry leadership."
“Ethics and integrity are deeply rooted and ingrained in our culture," said Keith D. Nosbusch, Rockwell Automation chairman and CEO. "I'm proud of our employees who consistently do the right things, the right way, every day. They differentiate our company, giving us a competitive advantage.”
Nestlé reported global organic sales growth of 4.5 percent for the 2014 financial year, with sales exceeding CHF91.6 billion.
When questioned during its financial results presentation, Nestlé’s CEO Paul Bulcke highlighted that “this year’s performance wasn’t great or outstanding, but we achieved solid growth given the market conditions”.
Whilst Nestlé grew in line with market performance, is it enough for the world’s biggest food company? Euromonitor examines if “solid growth” can be turned into “great growth” in two of its largest markets, China and the US. With growth for Nestlé lagging behind its key competitors, we look at what they are doing differently to outperform the market.
“There is fundamental work to be done” in North America’s frozen food market
As acknowledged by Nestlé’s CEO, North America’s frozen food arm has been underperforming. Since 2010 the company’s market share in frozen processed food has dropped 0.7 percentage points to 15.1 percent in 2014. For ice cream, the erosion of market share was even more pronounced falling from 30.7 percent in 2010 to 29.5 percent in 2014.
It is fair to say that conditions are tough for Nestlé. American consumers already spend the highest proportion of their packaged food budget (10 percent) on frozen processed food; and it is this high level of maturity that is proving to be an obstacle to future growth for the category. At the same time, consumers’ perception that frozen food is unhealthy and the opposite of fresh, does not help. Therefore Nestlé needs to focus on value driven products. “People buy value and not prices” – a point that was reiterated by its CEO at the results presentation. For a product such as frozen pizza this translates into more premium gourmet pizza with a thinner crust, such as the brand Dr Oetker which overtook Nestlé’s number 1 position in Canada after it acquired McCain’s frozen pizza business. Value can also sit in more unique and healthier toppings and snack size offerings as consumers move away from the typical three meals a day and snack instead.
Its Lean cuisine brand continues to face perception issues. Consumers do not want to associate food with diets anymore and have instead moved towards eating healthier. The brand name itself runs counter to this trend and Nestlé should consider repositioning this line.
Perhaps the most noteworthy result is the company’s relatively slow growth in its Asia, Oceania and Africa region with only 2.6 percent organic growth being reported. As pointed out by Nestlé’s CEO, this was mainly due to China, the company’s third largest packaged food market which has accounted for 20 percent of its global growth alone over 2009-2014. In fact, when taking a closer look at chocolate confectionery which is its largest sector in China after baby food, its competitive positioning has weakened compared to the top 5 players.
Top 5 players chocolate confectionery China 2011-2014
Source: Euromonitor International
In China, Nestlé admits that “they lost touch with the market and they need to reconnect”. Some of the reasons given for these disappointing sales were failing to come up with a product offer that is adapted to a changing consumer that sits between the traditional and the new generation. An example of this was gift giving, which is strongly rooted in Chinese culture, slowly fading away as the Chinese consumer becomes more modern. Therefore one can assume that typical foods that would be given as a gift, such as boxed assortments, would be on the decline. However, the opposite holds true. Boxed assortments in China has shown a double digit growth of 13 percent in retail value over 2013-2014. Ferrero, which is famed for its boxed assortments and relies heavily on gift giving with its premium assortments, outperformed Nestlé with 19 percent growth in 2014. It is its premium chocolate status that gives Ferrero its added value, something Nestlé says it wants to aim for too.
Leading brands that are gaining market share in the Chinese chocolate confectionery market are Ferrero Rocher, Hershey’s Kisses and M&M – so what is it that these brands have in common? Not much in terms of product formulation yet continued investment in the Chinese market is paying off. Mars is trying to build iconic brands by opening up its first M&M World flagship store in Shanghai and Hershey is investing heavily to expand distribution through its latest acquisition Shanghai Golden Monkey Food Company in 2014.
Outlook for 2015
In 2015, Nestlé is aiming for organic growth of “around 5 percent”, expecting similar conditions to 2014. However, with world GDP expected to be lower this year than in 2014 according to the IMF, it’s more likely Nestle will hit the lower end of its 5 percent aim as the nature of its business is quite GDP-linked. Moving forward, whilst Nestlé is shifting its reliance on food towards health care, it does generate one third of its business from confectionery and frozen processed food. Therefore it is unlikely it will disinvest these categories just yet.
Having said that quite a lot of “loose” sales come from smaller categories such as spreads, pasta, meal replacement and sweet and savoury snacks where sales have been underperforming over the last five years, and have contributed little to overall 2014 growth. Perhaps Nestlé should rebalance its portfolio away from these categories and instead focus on strategically chosen iconic food brands if it wishes to shift its reliance to health care in the longer term.
Nestlé is facing the same headwinds as in 2014 but the group as a whole has still managed to deliver steady growth given the market conditions and will continue to lead global packaged food with a strong 3.4 percent share in 2014. It will take serious investment and competitive edge for the number two player Mondelez to close the gap with Nestlé. A gap which is roughly equivalent to the combined sales of a handful of Nestlé’s iconic brands: Stouffer's, Kit Kat and Häagen-Dazs. Yet with the company refocusing its investment on nutrition and healthcare, who is to say that it won’t?
Kellogg’s has reported a loss, with Q4 comparable net sales decreasing by 2.2 percent and full-year 2014 net sales by 1.4 percent to $14.6 billion.
The company’s quarterly operating loss was $422 million; including a significant non-cash mark-to-market adjustment of $822 million, which was primarily driven by the impact that changes in interest rates had on pension plans; comparable operating profit decreased by 0.1 percent in the fourth quarter.
Comparable results for operating profit exclude the effects of foreign currency translation, acquisitions, dispositions, Project K costs, mark-to-market accounting, differences in the number of shipping days, integration costs, and other factors that affect comparability.
Full-year operating profit decreased by 63.9 percent; including significant impacts from the effect of mark-to-market adjustments and costs associated with Project K. Full-year comparable operating profit decreased by 3.9 percent.
John Bryant, chief executive officer, Kellogg’s, said “after a disappointing 2014, we are building a platform for growth over the coming year.”
Bryant said the company expects the full year comparable net sales to be approximately flat, but this would be a significant improvement from the trends in 2014.
“One of the key drivers of success is targeting realistic goals, which can be achieved over the long-term.”
The company reduced its expectations for this year, setting the goal of “low-single-digit top-line growth for the total business.”
According to Business Day, the company has been cutting jobs and boosting efficiency – part of a program called "Project K." In November 2013, Kellogg announced plans to eliminate 7 per cent of its global workforce, or about 2,000 positions.
"We're not relying on Project K to drive bottom-line results," Bryant said. "We're investing Project K back into the business – we've got to get this business back to growth."
Bryant said sales of Special K brand products have weakened because consumers shifted away from foods promoted as "diet" in favour of what the industry is calling "functional" foods – products with fewer ingredients, added protein and other features that are perceived as healthy rather than simply lower in calories.
"Simple food, clearly less refined, if you like – that's what I think consumers are looking for, as well as satiation," he said.
"We have been addressing the challenges we have faced in some of the company's developed businesses," Mr Bryant said. "We expect that 2015 will be a rebuilding year for us and that our investment will provide a strong platform for future growth."