Up&Go to enter UK breakfast market

Life Health Foods UK, a 50/50 joint venture set up between the owners of Sanitarium and finance and investment house Wingate, is set to take on the UK breakfast market.

Life Health Foods UK will launch Australia’s number one breakfast cereal brand, Up&Go, to UK consumers next month, ahead of assessing additional markets and opportunities in Europe and elsewhere.

Up&Go was launched by Sanitarium in Australia 15 years ago, and has capitalised on growing demand for convenient, nutritional breakfast choices. In addition to being the category leader, Up&Go has achieved 25 percent annual growth on average in the past five years, and it is now found in 22.3 percent of Australian households.

In the UK, where the liquid breakfast market is in its infancy, thirty-eight million Britons skip breakfast at least once a week, and research has identified significant demand for on-the-go breakfast options that are tailored to the local market.

Following extensive market research and planning, Up&Go’s launch into the UK will be supported by a new look brand, new packaging, a reformulated product and a detailed marketing strategy to encourage trial among target consumers.

Interest from supermarkets is strong, with national distribution agreements already secured and negotiations with additional supermarkets proceeding well.

Kevin Jackson, Sanitarium CEO and LHF (UK) director said: “It’s our owners’ strategic objective to see our major brands like Up & Go expand beyond Australia and New Zealand and this objective is made much easier with high quality strategic partners.

“The UK’s population is three times that of Australia’s and we project that the liquid breakfast market will reach £300m within five to ten years.

“Wingate has strong financial credentials and a culture and values that align closely with ours.  I’m excited to be working with them to ensure Up&Go becomes an international success”, Jackson said.

Farrel Meltzer, group managing director for Wingate said: “Increasing demand for on-the-go breakfast products is part of a massive trend towards healthy food options sweeping through consumer markets in many countries, driving retailers around the world to look for nutritious innovations that reinvigorate spending in the breakfast aisle.

“We’ve been impressed by Sanitarium’s success, professionalism and commercial nous and we share a belief that providing nutritious foods is good for consumers, good for business and good for the society.

“It’s a tremendous opportunity, and we look forward to bringing key Sanitarium brands to the global market”, Meltzer said.

The joint venture company, Life Health Foods UK, is based in London and has completed a number of key appointments including James McMaster as CEO (previously of Ella’s Kitchen and Gü) and Rosie Foster-Carter as marketing director (previously of PepsiCo and Innocent Drinks).

In addition to providing funding, Wingate will provide strategic expertise via three positions on a six-person Board created to support the success and expansion of Life Health Foods UK.

 

Ex-Pernod Ricard regional sales manager moves over to Coopers

Ian Bradshaw, who had been working as a Regional Sales Manager for Pernod Ricard has been appointed as the new marketing and SA/NT Sales Manager for Coopers Brewery.

A former hop grower from Tasmania, Bradshaw commenced work at Coopers on 1 December.

He began his working life on his family’s hop farm in the Derwent Valley, north west of Hobart before working in sales and marketing roles nationally and internationally with beverage companies including Cascade, Boag’s, Two Dogs and Pernod Ricard.

Coopers national sales and marketing director, Cam Pearce, said Bradshaw’s extensive sales and marketing background, covering many areas of the liquor industry, made him ideally suited to the role at Coopers.

“Ian will be part of the executive management team. He will lead the South Australian and Northern Territory sales teams, and will continue to develop and grow our business. He will also manage the co-ordination and execution of Coopers’ marketing activities,” he said.

Bradshaw said the opportunity to work with a growing, family-owned company with a strong and respected brand, and more than 150 years history, had been a key decision in his move to Coopers.

“Part of my job will be to ensure that Coopers continues to grow in a challenging market, with ongoing pressures faced by the beer industry as a whole, and competition from other brewers and beverages,” he said.

 

Results for Mondelēz’ Mobile Futures program released

Mondelēz International has announced the results of its Mobile Futures program, as the brand and startup partners conclude the final pilot stage.

The program saw some of Australia’s most innovative technology startups partner with iconic brands, Cadbury Dairy Milk, Favourites, BelVita, Marvellous Creations and Philadelphia cream cheese.

After a competitive pitch process, five local startups, Issue, Proximiti, Snaploader, SkyFii and MyShout were chosen to partner with some of Australia’s biggest and most popular brands to address a brand challenge in just 90 days.

During the three month program, the teams unlocked significant market and customer insights, using the startups’ respective technologies to create new mobile concepts. Initial results indicate the program has gone beyond its goals to deliver ongoing innovation for the global business and future opportunities for the startups.

Anthony Ho, head of marketing services, Mondelēz International said, “The results from each of the pilots have already surpassed our expectations and we’re looking forward to seeing how these startups can help us create new experiences for Australian consumers with our brands.

“Working with these incredibly innovative startups to challenge ourselves and embrace new thinking, we have been able to foster a culture of ‘intrapreneurship’ within Mondelēz. The project has started the shift to make us more agile and change our thinking across all levels of the business. We've seen our brand managers start to embrace some of the startup qualities, which is making real difference in their day-to-day jobs in how they approach tasks, problem solving and collaboration with other teams."

Pilot Results

Cadbury Daily Milk and Snaploader

Cadbury Dairy Milk partnered with Snaploader, an image recognition and augmented reality app, to unlock the joy within consumers through a campaign that brings to life the range of Cadbury Dairy Milk flavours.

The pilot launched in early November supported by in store activation in 20 Victorian Woolworths stores and a high reach Facebook campaign. The pilot featured a competition to “win your height in chocolate” to encourage consumers to download Snaploader and unlock joyful branded content within the app. Consumers entered the competition using the Snaploader app to “snap” an image of a Cadbury Dairy Milk pack. Once in the app, consumers discovered an augmented reality feature to bring the Cadbury Dairy Milk flavour personalities to life and could access a variety of different recipes.

Snaploader has had a successful start to the pilot with 1,100+ app downloads in the first week of launch driven by the targeted advertising campaign on Facebook. The point of sale executed in Woolworths also assisted with the path to purchase for Cadbury Dairy Milk in store – a key pilot objective.

Cadbury Favourites and SkyFii

Cadbury Favourites is leveraging startup partner SkyFii’s Wi-Fi technology to help understand their consumers and engage with them via mobile, in real time. The pilot focused on the understanding that consumers were more likely to purchase Favourites as a last minute item, using SkyFii’s platform to better understand shopping behaviour.

The first pilot test in November centred on a promotion for Favourites Christmas large pack. It measures shopping patterns to identify the right time to connect with consumers and drive them in store and measure the conversion rate. Later phases are in development and will expand the scale of tracking to provide deeper shopper insights and measure purchase conversion. SkyFii are currently in discussion with Cadbury teams in South East Asia to explore potential applications for international Cadbury brands.

Philly and Issue

Philadelphia cream cheese and Issue, a platform to create beautiful mini-magazines for mobile and tablet readers, were the first to launch their pilot in market in September, just 23 days after partnering. The pilot created a mobile magazine with shoppable stories, sharing Philly food inspiration through mobile content to inspire and engage consumers. The first phase of the pilot was created in partnership with Smudge Publishing. The first branded Issue reached more than 75,000 consumers in three weeks. The team is currently exploring retail partnerships to bring the mobile magazine experience directly in-store to engage with consumers at the point of purchase.

belVita Breakfast Biscuits and Proximiti

belVita Breakfast Biscuits and location-based services platform, Proximiti, collaborated to personalise content and use geo-analytics to learn more about the behaviour of belVita consumers.

belVita also used the startup’s technology to geo-target consumers on mobile to amplify its “morning wins” campaign by connecting with consumers and sending geo-targeted offers to direct the path to purchase, resulting in click-through rates of 32 percent. The team launched the first phase of their pilot on October 14th near Flinders Street train station in Melbourne, with a geo-targeted offer for a free coffee and sample of belVita to nearby commuters, recording 43 percent redemption rates.

The partners are currently assessing new opportunities to scale location-based consumer engagement through retailer partnerships and amplify the campaign through major publishers.

Cadbury Marvellous Creations and MyShout

Cadbury Marvellous Creations partnered with MyShout, an app that allows consumers to ‘shout’ vouchers to their friends at participating outlets that can be redeemed via their mobile device.

Using the MyShout platform for redemption, Marvellous Creations set out to reach their target demographic and explored a new, potentially more cost efficient sampling method via mobile coupon redemption. The small scale pilot trial in Sydney CBD achieved an above target click through and overall 11.7% claim rate. Marvellous Creations is also looking to understand how the brand could transition the established behaviour of buying drinks/meals for friends and colleagues into the chocolate category.

 

WBC reworks its management following takeover

Warrnambool Cheese and Butter Factory Company (WBC) has announced a number of changes to its management and board, following Saputo’s takeover.

WBC has announced that Kai Bockmann, will assume the role of WCB's President and Chief Operating Officer.

Bockmann is currently the President and Chief Operating Officer of Saputo Inc.'s Dairy Division (International), will assume the new role on 1 April 2015.

The company announced months ago that WCB's Chief Executive Officer, David Lord, would be stepping down from his current position as of 1 April.

Bockmann has been with Saputo Inc. in his current function since January 2012.

He will take on his new role with WCB as part of his current responsibilities as President and Chief Operating Officer of Saputo Inc.'s Dairy Division (International). As such, Bockmann will continue to be employed by Saputo Inc.

Furthermore, WCB's Chief Financial Officer, William Hannah, will be stepping down on 1 July 2015, when Paul Moloney, currently Company Secretary, will be appointed as Vice President, Finance and Administration, Chief Financial Officer and Company Secretary and will report to Bockmann.

Finally, Richard Wallace, currently General Manager – Operations, has been appointed to the position of Senior Vice President and General Manager of WCB, effective as of 5 January 2015. In his new role, Wallace will oversee operations, milk supply, domestic sales, human resources and corporate development.

In April, as a result of its 87.92 percent stake in Warrnambool Cheese and Butter Factory, Saputo requested a number of changes to the company’s constitution, including the restructure of the WCB Board.

These changes were considered at the General Meeting on 9 May and it was decided that all current directors and associate directors will resign from their positions, with Terry Richardson, Bruce Vallance and Neville Fielke standing for re-election.

In August, Lino Saputo Jr, the chief executive of Saputo, said he is hoping to see 10 percent more milk every year.

 

GWF appoints new chief financial officer

George Weston Foods (GWF), one of the largest food manufacturers in Australia and New Zealand, has announced the appointment of Lorna Raine as chief financial officer.

Raine is now charged with leading George Weston Foods’ financial strategy and managing performance measures and will preside over the four GWF business units – Tip Top Bakeries, Don, Mauri ANZ and Jasol.

Raine was most recently a senior finance executive at Fairfax Media, and prior to this held senior management roles with Yum! Restaurants International including general manager operations – KFC.

Before relocating to Australia, Raine was Chief Financial Officer for McDonald’s South Africa where she was instrumental in the creation and execution of the organisation’s strategic plan through a period of rapid expansion. Lorna Raine is also currently a Non-Executive Director on the board of Dick Smith.

“I’m delighted to formally join the George Weston Foods team as Chief Financial Officer. GWF is an impressive organisation and a strong constituent of Associated British Foods (ABF) – a hugely successful international food, ingredients and retail group in 46 countries. The local subsidiary is led by very talented individuals doing great things in their respective categories and I look forward to assisting them on their journeys,” Raine said.

GWF Chief Executive Andrew Reeves said “Lorna’s impressive track record in senior executive finance roles makes her an ideal leader to contribute to the growth and next iteration of GWF. In addition, her long history and passion for consumer and quick service businesses, both in Australia and overseas, further emphasises that Lorna is a great fit for us.”

 

Coca-Cola plans to cut costs

The Coca Cola Company have increased their cost-cutting measures in attempt to “restore momentum” and “reinvigorate growth.”

The company published its third quarter and year to date results, reporting even net revenues in the quarter and a two percent decline year to date.

“We are taking decisive action to position The Coca-Cola Company to continue delivering long-term value for our shareowners,” said Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company.

“We have taken a hard look at our progress to date and realize that while the strategies we laid out at the beginning of the year are on the right track, the scope and pace of our actions must increase.”

Kent said Coca-Cola expects the macroeconomic environment will remain challenging through 2015, but is confident the company can return to sustainable growth over the long term.

Key changes:

  • Streamlining and simplifying its operating model to speed decision making and enhance local market focus.
  • Expanding its current productivity program by targeting annualized savings of $3 billion per year by 2019. This productivity program will focus on four key areas:

    • Restructuring the Company’s global supply chain, including manufacturing in North America;
    • Implementing zero-based budgeting across the organization;
    • Streamlining and simplifying its operating model; and
    • Driving increased discipline and efficiency in direct marketing investments.
  • Refocus on its core business model, which will include refranchising the majority of Company-owned North American bottling territories by the end of 2017 and a substantial portion of the remaining territories no later than 2020.
  • Strategically targeting brand and growth investments that leverage its global strengths. This includes previously announced plans to improve the quantity and quality of marketing, as well as making future investments that will target markets and categories where brands remain underfunded relative to the opportunity.
  • Beginning in 2015, revenue growth will be added as a metric in the Company’s incentive plans. The Company will adjust the relative importance of volume and price/mix in each market in order to drive the right behaviour for each market type.

 

Waste management online marketplace launched

Waste Choices, Australia’s first waste management and recycling online marketplace where providers bid for posted projects has launched.

Through Waste Choices, businesses of any size can post a one-off project or an ongoing contract for the management of over 30 waste streams.

A range of reputable waste management providers across Australia including URM, 1300 Rubbish, Action Waste, Waste 2 Resources, State Waste Services, Bingo and smaller providers will bid for posted projects and businesses can select whom they wish to work with.

Joel Harrison, Co-Founder of Waste Choices said, “Waste Choices simplifies the management of waste by providing businesses the choice and flexibility of working with different service providers to manage various waste streams in a compliant manner.  The cost of managing and disposing waste has increased over the years. Waste Choices offers businesses a better way to manage their waste streams by providing more options and access to a wider range of service providers.”

Businesses can post a waste project in three simple steps: entering the pick-up location, type of waste to be collected from general waste, liquid waste, recycling to hazardous materials and selecting a bin size to represent the volume of waste. They will be able to select from a range of competitive bids from 14 national and state-based waste management providers and can award a project based on price or reputation of the provider.

Waste Choices offers an automatic alert feature that notifies businesses that are on annual contracts with service providers when they are about to expire. This avoids businesses getting automatically rolled into new contracts with their existing providers which would generally attract price increases of between 10-25 percent on average annually.

Harrison added, “Many businesses get stuck with their existing service providers because their annual contracts are automatically rolled over. Australia has over 2 million business waste generators and Waste Choices will free them from long term fixed contracts, help drive down the cost of waste management and increase the transparency through a system of bidding.”

For more information, click here.

 

Peanut industry looks to NT

The peanut industry wants to work with local growers to re-establish itself in the Northern Territory.

Peanut Company of Australia CEO, John Howard, said the industry is looking to expand in Queensland and the Northern Territory to help keep up with local demand, ABC Rural reports.

Howard said the company would like to work with local growers to re-establish the peanut industry in the Northern Territory’s Katherine.

"I don't know that we would be reinvesting [there] in our own right, as far as owning country and farming," he said.

"Our focus is investing in the market and creating a demand for Australian peanuts,  that we work with growers to actually grow for us.

"Part of that investment is working with research facilities, to make sure that we're identifying the varieties that are appropriate for different geographies, and improving the chances of success for those growers that are going to work with us.

"It has been shown that peanuts can work in that environment, and we want to keep making sure that this option is put in front of growers, with the aim of potentially contracting and working with them down the track.

"It doesn't have to be massive. We would like to see 1,000 hectares in the first instance. That would work in very well with us."

In 2007, the Peanut Company of Australia invested millions of dollars to establish a commercial peanut crop at Taylor's Park, just outside Katherine, but abandoned the plan and sold the 11,700 hectare property sold to a sandalwood producer in 2012.

Howard says while its business model was ultimately unviable, the company proved peanuts could be successfully grown in the Top End.

"The issue we had with our experience in the Territory was the business model and how we went about it, not whether peanuts could be grown there or not," he said.

"One of the great outcomes of what we went through was essentially a big research and development operation, which did identify that peanuts could be grown successfully in the Territory.

"However, given the harshness of the environment, you need to be able to minimise the impacts of nature. Therefore, you need to put in a cropping system that supports it.

"Where you do that, we found that peanuts are able to stack up as a commercial enterprise."

 

Will the hazelnut shortage hurt Nutella supplies?

Turkey, the world’s largest producer of hazelnuts is facing a major shortage of the nuts due to bad weather.

The country, which is responsible for 70 percent of the world’s hazelnuts may produce 30 percent less nuts hazelnuts than expected, Good Food reports

The shortage has caused over a 60 percent spike in price for the nuts this year.

The news is getting Nutella fans worried, since Ferrero buys as much as a quarter of the world’s hazelnuts, and relies heavily on Turkey for supply.

But Nutella is able to somewhat protect itself from market pressures, since it acquired a Turkish hazelnut manufacturer Oltan Group earlier this year.

The Ferrero Group may also look to Australia for supply in years to come, as a subsidiary of the group, Agri Australis, established of a $70 million hazelnut production facility in Riverina, in December last year.

However harvest is not expected until March 2018, with hazelnuts hoping to be in full production by 2022.

 

Perfection Fresh Australia and D’VineRipe to merge

Fresh fruit and vegetable marketer Perfection Fresh Australia and D’VineRipe will merge on 1 July and continue to operate under the name Perfection Fresh.

The integration of Perfection Fresh, and its subsidiary Picasso Foods, with D’VineRipe aligns the two company strategies to control 70 per cent of total sales through production, licensed varieties and fresh value added processing by 2018. This includes a 50 per cent increase in protected cropping to 150 hectares.

The companies currently employ more than 500 staff at 12 sites across Australia, and plan to create 150 additional jobs over the next year by expanding operations across Australia and into additional categories.

Michael Simonetta, Chairman of Perfection Fresh said, “We are excited to continue to bring high quality fresh produce, new and fresh processed products to the Australian market place – while creating job opportunities across the country.”

Victor Smorgon Group Joint Managing Director and D’VineRipe CEO, James Orloff said, “Our family business has a long history in food production and manufacturing, this is the next step in that evolution. Our new partnership with Michael and John, and their great team, gives us the ability to expand using innovative farming and growing methods to take advantage of Australia’s changing place in the world food chain.”

 

Peters expected to sell for over $400 million

Peters Ice Cream private equity owners have entered into exclusive negotiations with French ice-cream giant R&R, and are expected to sell for over $400 million.

The sale price equates to a valuation of about eight times next year's forecast earnings before interest, tax, depreciation and amortisation, the Sydney Morning Herald reports.

Over the past month, Pacific Equity Partners (PEP), and joint lead advisers Macquarie and Morgan Stanley to a mooted initial public offer, have met fund managers in Australia and Asia to gauge the level of appetite for Peters Ice Cream.

PEP stepped up the pressure this week, asking institutional investors to cough up for the business or risk being frozen out in favour of a trade sale.

PEP bought Peters in August 2012 for about $250 million, and hopes to secure a deal by June 30.

A marketing presentation shown to fund managers showed that Peters is the market leader in the grocery division of the nation's $2.3 billion ice cream industry.

The company's pro forma revenue is projected to rise from $269.3 million in 2014 to $290.3 million in 2015.

In March, there was speculation that Murray Goulburn had made a $400m takeover bid for Peters. MG looked to purchase Peters two years ago before it was bought by PEP for from the former owner, Nestle.

 

TWE announces job cuts

Treasury Wine Estates has announced it will cut 175 jobs in a move to invest more heavily in marketing and promoting its brands.

The job losses come as part of efforts to reduce costs by $35 million in 2014-15, ABC Rural reports.

In April, chief executive of TWE, Michael Clarke admitted that “there is a lot that needs to be fixed” at TWE, and confirmed that the company needed to address its costs structure in order to improve shareholder value.

Clarke told analysts and media yesterday that he'll allocate the extra marketing funds to the global and international brands, rather than the commercial ones.

"We're prioritising about 20 of our 83 brands, that we're allocating the bulk of the step-up in [marketing] in," he said.

Yesterday, TWE rejected a preliminary bid for to acquire all shares in TWE at a price of $4.70 cash per share from private equity firm, Kohlberg Kravis Roberts & Co. (KKR).

Since the KKR takeover proposal was made public, shares in the wine group have jumped nearly 25 per cent to a 10-month high, the Sydney Morning Herald reports.

Earlier this month, TWE Treasury Wine Estates announced it is making a play for the estimated $360 million in revenue in impulse purchases by freshening up its ‘everyday’ Rosemount range label for the UK convenience store market. TWE hopes a better quality of labelling will give the Rosemount range a premium look, helping the brand stand out on UK convenience store shelves.

 

New chairman for Warrnambool

Warrnambool Cheese and butter Factory has a new chairman, Lino Saputo Jr, and five new directors.

The changes were approved by shareholders at a company general meeting on Friday 9 May, News.com reports.

Former Warrnambool chairman Terry Richardson was re-elected to the board, and a requirement under Warrnambool's constitution requiring that the board consist of nine directors was removed.

Canadian dairy giant Saputo owns 87.92 percent of Warrnambool shares, after a takeover bid which concluded in February.

Warrnambool had been the subject of a three way bidding war between Bega Cheese, Murray Goulburn and Saputo for six months.

Richardson said “although the takeover process was lengthy and well publicised, the bids for WCB have realised an excellent premium for WCB shareholders. The WCB Board believes Saputo’s final offer has been in the best interest of shareholders and other business stakeholders.”

The Factory has since posted a 104.7 percent increase in half year net statutory operating profit after tax, equating to an additional $16 million on the same period last year to $31.3 million.

 

Supermarket supply agreements played major role in Rosella’s collapse: Sarantinos

The receiver of Rosella has said supply agreements with Coles and Woolworths played a major role in the company’s collapse.

The Gourmet Food Group fell into receivership in 2012, less than a year after the ACCC alleges Coles began its ‘Active Retail Collaboration’ program, The Sydney Morning Herald reports.

The ACCC alleges that in relation to 200 of its smaller ‘tier three’ suppliers, Coles required agreement by the supplier to the rebate within a matter of days.  If these suppliers declined to agree to pay the rebate, Coles’ personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.

The campaign is now part of federal court proceedings against Coles over alleged unconscionable behaviour.

Jim Sarantinos, a partner at Ferrier Hodgson, said the demand of both supermarket chains through rebates greatly contributed to Gourmet Food Group’s financial state.

''Coles and Woolworths had a target they wanted to reach in regards to private label products, which are obviously sold at a significant discount to branded products like Rosella,'' Sarantinos said.

''The problem that Rosella had was that it didn't necessarily have the financial resources to make the changes that were required to counter that move.''

Waterwheel, which was operated by the Gourmet Food Group, is one of the suppliers who were targeted for payments, according to the ACCC’s statement of claim.

A creditor’s report from 2012 says sales from Rosella's branded products fell 16 percent in 2012 ''due to retailer focus on private label products.'' The report also says that sales to major food chains were ''substantially less than budgeted'' due to major retailers ''deleting various product lines in store and delays in launching of new products and focusing on private label products.”

Sarantinos said ''The push from the supermarkets towards private labels and the negotiating power they are able to exert on suppliers certainly had an impact on Rosella's performance.''

''There were still issues in Rosella's business, and it may have been that receivership was inevitable, but [the push by the supermarkets] was certainly a big factor.''

Parts of the Gourmet Food Group’s business have since been sold off. In February last year, Waterwheel Industries was sold to Australian food manufacturer, Green's General Foods. In March 2013, Pitango was purchased by Sydney-based Beak and Johnston.

Rosella was then acquired in April 2013 by Sabrands, with manufacturing at Sabrands’ Yarra Ranges plant. Rosella’s tomato sauce is back in Coles, Woolworths and IGA supermarkets.

 

Goodman Fielder refused $1.27b takeover offer

Goodman Fielder has refused a $1.27 billion takeover offer from Singapore’s Wilmar International and First Pacific Company, arguing the offer is too low.

Goodman Fielder owns food brands including Praise and MeadowLea and has seen a significant drop in shares recently, The West Australian reports.

Wilmar International already owns a 10 percent stake in Goodman Fielder, and together with First Pacific Company offered Goodman Fielder 65 cents per share.

"The board believes that the current proposal materially undervalues Goodman Fielder and is opportunistic," Goodman Fielder said.

"The board has advised Wilmar and First Pacific accordingly."

Goodman Fielder said it would continue to assess other opportunities and that it has appointed financial and legal advisers.

Goodman Fielder recently announced it was bringing forward its plans to cut 300 jobs in response to a weaker than expected financial performance.

The also sold its New Zealand meats business to Heller’s Limited last month as part of a strategy to “optimise its portfolio by refocusing its marketing and capital expenditure on its core categories and brands where it has profitable, market leading positions.”

The changes are following the issuing of a profit downgrade after profits plummeted due to a lower selling price for baked goods, poor performance from its groceries division and higher farmgate milk prices

Earnings have come up to $27 million lower than its previous full-year profit guidance of around $180 million.

 

Continental Patisserie factory opens in Silverwater

Continental Patisserie has launched its new factory in Silverwater, one of the largest custom-built factories of its kind.

At over 3,800sqm, the factory houses a humidified chocolate room, preparation areas, dedicated finishing rooms, temperature controlled spaces for baking and cooling, a packing zone, cool room and expansive freezer.

Continental’s general manager, Jian Yao said “It has been a long road but with the factory now fully operational,  we are ready to commence a new period of expansion and growth.”

The factory is the second for Continental Patisserie, with another in Shanghai.

Another manufacturer which has grown into the Silverwater area is  coffee pod manufacturer, Pod Pack Australia, which more than tripled the capacity of its manufacturing plant in Silverwater recently.

 

Wilmar to establish own marketing company

Australia’s largest sugar miller has announced plans to establish its own selling and marketing company.

Singaporean-owned Wilmar Sugar operates in North Queensland, producing more than two million tonnes of raw sugar a year, ABC Rural reports.

Wilmar Sugar will sever its marketing ties with Queensland Sugar Limited (QSL) and create a jointly-controlled marketing company that is equally owned by growers and Wilmar.

Wilmar’s executive general manager for north Queensland, John Pratt said “We’re very confident that we can create greater value than the current arrangements.”

Growers are still coming to terms with a different marketing landscape, and many are angered by the idea.

The chairman of Canegrowers Burdekin Phil Marano said growers weren't consulted about the move away from QSL. "Until we see what they have to offer or what their proposal is, we're uncertain who this can be transparent, how we can be assured growers are getting the best price for the cane they supply."

Grower and contract harvester, Gary Stockholm is one of the 1,500 growers meeting with Wilmar to find out what exactly will be offered. "We want a guaranteed price for our sugar, how they're going to market it, how they're going to sell it and make sure we do get paid for it, how're they going to do the advances and all that, like QSL looks after us,” Stockholm said. "That's what we grow sugar for, to get paid so we want guarantees that when we put it on the line, we get our share, we get our good price for it."

The announcement is less than a year after Wilmar was forced to abandon an attempt to access a greater share of the production from its mills after it was met with fierce resistance from growers wanting to stay with QSL.

 

Goodman Fielder profits drop

Manufacturer, marketer and distributor Goodman Fielder has issued a profit downgrade and warned the company is expecting write-downs in the second half.

The company said profits have dropped due to a lower selling price for baked goods, poor performance from its groceries division and higher farmgate milk prices, the Sydney Morning Herald reports.

Earnings have come up to $27 million lower than its previous full-year profit guidance of around $180 million.

In February, Goodman Fielder stated it was confident that full-year profits would be broadly in line with last financial year, despite reporting a loss of $64.8 million.

The company said it would conduct detailed analysis of the carrying value of its businesses.

The announcement follows yesterday’s confirmation of the sale of Goodman Fielder’s meats business in New Zealand to Hellers Limited.

Winemaker Treasury Wine Estates has also experienced financial struggles recently, with chairman, Paul Rayner attributing its recent write-down of $154.3 million to poor reporting systems.

TWE’s management systems were not set up to assess how much commercial wine – which does not age well – was sitting idle on distributers’ shelves, The Australian reports.

The reporting oversight led the destruction of almost 600,000 cases of old wine costing $34 million, and a further $82.4 million write-down on the value of bulk wine which was sold at fire sale prices.

 

Junk food advertising aimed at children takes another cut

Changes to voluntary industry codes means junk food will not be promoted during television programs that attract a child audience of at least 35 per cent.

The campaign to stop junk food advertising will be widened by some of Australia’s largest food companies in a bid to cut childhood obesity.

The current Australian Food and Grocery Council (AFGC) restrictions apply to programs with a child audience of 50 per cent.

However, critics say the restrictions do not go far enough and warn that children will still be hounded by unhealthy food ads, news.com reported.

"It does not go far enough to reduce exposure because it won't actually pick up programs that are watched by the greatest number of children overall," Obesity Policy Coalition executive manager Jane Martin said.

It is believed shows like Big Brother, The X-Factor and Junior Masterchef , all have a high number of younger audiences.

Company websites will also be affected with those directly marketing to children under 12 only able to promote healthy alternatives.

Nestle, Mars, Campbell Arnott's, Coca-Cola, Kellogg's, McDonald's and Hungry Jack's are all companies who support  the industry's Responsible Children's Marketing Initiative.

However, health experts have slammed the self-regulation of the food industry, saying children are being bombarded with advertisements for junk food.

According to a new study by the University of Sydney and the Cancer Council the number of junk food ads aimed at children has not slowed.

The study looked at all ads on three television channels over five years and found children were exposed to the same number of advertisements for junk food brands now as they were before ''regulation''.

''We know that parents have the most important role to play in terms of what kids eat but it is a bit like road safety,'' Chapman, a nutritionist and director of health policy at the Cancer Council, said.

''Parents can teach their children road safety but it doesn't mean we don't also have speed limits and crosswalks to make their job easier.

“Messages for unhealthy foods on television, the internet … means there are lots of ways messages from parents are being undermined.

''These studies combined show industry codes of practice are not having an impact and we are seeing such big loopholes for the food industry to get away with this.”

Meanwhile, a poll by the Australian National University on attitudes to food security found more than 75% of Australians support a ban on junk food advertising in children’s television, and almost 20% support a total ban.

Earlier this year, Cristel Leemhuis from the AFGC told Food Magazine the industry was part of the solution in improving the rate of childhood obesity.

“Responsible marketing to children is absolutely essential, so we do limit what children see in this area, and the research is very much showing that marketing in those areas decreased dramatically since we implemented that in 2010,” she said.

Peach growers to lose thousands from SPC Ardmona cuts

Australian peach growers say they were only informed of SPC Ardmona’s decision to cut its peach quota by almost 20 per cent after they had begun preparing for season.

The growers say the short notice will leave them out of pocket, with some individual businesses set to lose tens of thousands of dollars.

SPC Ardmona, Australia’s last remaining major Australian-owned fruit processor, says it genuinely believed it had informed all growers in advance, and will work to ensure communication methods improve in future.

The company cut its peach quota by 17 per cent due to “significant fall” in consumer demand.

It said the cut was necessary due as sales have decreased by 14 per cent, despite increased activity and promotion.

SPC Ardmona also pointed to the high Australian dollar as part of the reason for the cut to the quota, as well as the cheap imports flooding the market as a result of the supermarket price wars.

Furthermore, the high Australian dollar has impacted on export opportunities for the products, while increasing competing pressures from cheaper imports.

SPC Ardmona is a subsidiary of Coca Cola Amatil which has announced expansion plans in its drinks business as previously reported in Australian Food News.

Earlier this year the company announced it would be embracing new packaging technology to reduce costs.