New facility puts food on the menu for Multipack

Contract packager, Multipack, is celebrating the opening of its new accredited food facility, allowing the company to expand its offering to include primary and secondary packaging for FMCG food brands.

Extending its footprint at Sydney's Moorebank, Multipack now has a fully commissioned, fully functioning food facility to complement its non-food packaging lines.

The facility comprises a washroom and three clean rooms, each independently air-conditioned with positive air pressure to ensure contaminants are kept out. The three separate areas mean Multipack can also run different food products with different packaging requirements at the same time.

Brad Devine, sales and marketing manager at Multipack, told Food magazine, "This new facility represents the future for our business. It’s the culmination of several years of investigation and testing of our strategy in the FMCG food area."

It means Multipack is now accredited for secondary and primary food packaging, and further down the track the brand also plans to expand into liquid filling and wet fill products.

Multipack's key clients in the food space include multinational brands such as Unilever, Nestle, Wrigleys (the Mars Group) and Lion Dairy and Drinks.

The new facility is expected to inject new life into Sydney's contract packaging industry, which historically has been overshadowed by Melbourne.

"It's been a long time since we've seen any significant investment in food contract packaging in the Sydney market," Devine said.

"We'd like to think that this now gives those guys – the FMCG brand owners – an opportunity to package their product in Sydney without having to do it in Melbourne, which is what they seem to have done for a long time."

It's also a good news story for Australia's manufacturing industry in general, which hasn't been short of struggles in recent times. Devine hopes Multipack will now be able to capitalise on Australia's food-producing potential.

"We've been in business for more than two decades and we've seen in that time vast amounts of business go offshore, particularly to China. We recognise that Australia is still a large food producer, and we figured that food that's grown and processed in Australia is very, very likely to be packaged in Australia, and very unlikely to be lost offshore to China.

"That's not to say that Australia isn't under pressure from imports, it certainly is, but Australia produces some of the best food in the world and it gets processed and packaged right here in Australia, so we figured that one of the least at-risk categories for us to invest in would be Australian grown and processed foods," he said.

Promoting Australia's top quality food products and partnering with leading food manufacturers is a top priority for the brand moving forward, Devine added.

"We're in it for the long haul. We wouldn't have gone and invested like we have if we thought it [food manufacturing] was a fleeting opportunity or a fad. We've seen a long term trend and we want to provide a long term, viable, low cost solution to FMCG food companies."

Food magazine visited Multipack's new facility in Moorebank. Click here to see the pics on our Facebook page.

 

Food Manufacturing Industry Guide to Safety released

The 2013/14 Food Manufacturing Industry Guide to Safety has been released by Pro-Visual Publishing.

The guide is designed to improve safety and hygiene awareness throughout the food manufacturing and processing industries with a strong emphasis on the importance of effective microbe management.

The guide focuses on how to prevent the entry of microbes, dirt and dust in the production facility, and provides industry members and managers with valuable advice and information on how to manage these events within the workplace.

The guide also supplies information and advice on dealing with ambient temperature and humidity, surface water and airborne dust.

An outline of how Australia’s food recall process works is also included, along with the key points that manufacturers need to address when conducting successful food recalls.

John Hutchings, CEO, Pro-Visual Publishing said that the guide would not have been made possible without support from key stakeholders.

 “I would like to thank all of the sponsors of the Food Manufacturing Industry Guide to Safety 2013/14. Their support has made it possible for the guide to be distributed free of charge,” he said.

 

Junk food linked to behavioural problems in children, study finds

New research from Deakin University in Victoria has found links between the consumption of highly processed junk food while pregnant to behavioural problems in children.

The findings demonstrate that young children who consume a diet high in salt, sugar and fat are more likely to experience anxiety, depression and mood swings than children who eat healthy foods.

The study, which was part of the ongoing Norwegian Mother and Child Cohort Study, gathered dietary information from 23,000 mothers during pregnancy, followed by detailed information on their children’s diets at 18 months and three years.

The results revealed that diet during pregnancy played a role in a child’s mental health development and also that young children who ate unhealthy foods, or did not consume enough nutrient rich foods, displayed concerning behaviours.

Lead researcher, Professor Felice Jacka said that the study is the first of its kind show a clear link between diet during pregnancy, early childhood and mental health.

"We've known for quite some time that very early life nutrition, including the nutrition received while the child is in utero, is related to physical health outcomes in children – their risk for later heart disease or diabetes for example," said Jacka.

"But this is the first study indicating that diet is also important to mental health outcomes in children."

Jacka also said that additional factors such as socioeconomic circumstances and the metal health of parents – which remained independent of the study – could also explain the link between consumption of junk food and behavioural issues.

“It is becoming even more clear that diet matters to mental health right across the age spectrum,” she said.

“These new findings suggest that unhealthy and ‘junk’ foods may have an impact on the risk for mental health problems in children and they add to the growing body of evidence on the impact of unhealthy diets on the risk for depression, anxiety and even dementia.

"There is an urgent need for governments everywhere to take note of the evidence and amend food policy to restrict the marketing and availability of unhealthy food products to the community," she said.

 

ReCoila’s reel trial proving positive for Tassie salmon industry

Salmon fishing company, Tassal is currently testing ReCoila’s heavy duty reels at two of its 11 Tasmanian ports.

Positioned on custom built skids, the reels are being used for refuelling salmon fishing vessels and ReCoila believes that the harsh Tasmanian environment his the ideal testing ground.

Michael Pawson, managing director of ReCoila says that high quality, durable options are essential for such volatile environments.

“ReCoila has been around for more than 20 years, but in recent times, with the influx of much cheaper options, companies are tempted to sacrifice durability and quality in some instances, so it is pleasing that Tassal is thinking long term performance,” said Pawson.

“This industry is very time sensitive because fish spawn at certain times of the year, so having top notch equipment at its refuelling stations means Tassal is highly unlikely to suffer any downtime at this point of its operations, which would otherwise prove costly.”

The trails are currently performing well and if successful, similar solutions will be customised and manufactured for the other nine ports around the state.

“We believe the quality of our hose reels is second to none,” said Pawson.

“Ours have a serious level of strength and longevity that is expected by the fishing industry and other operators in the marine and offshore sectors.

 “ReCoila units, however, 10 years down the track, even in this salt water environment, are likely to still look and perform as if they were brand new.”

 

Union obstruction endangers Australian manufacturing: Teys CEO

Brad Teys, the CEO of beef processor Teys Australia, has called for workplace reform, detailing a need to do so to protect local manufacturing and offer more than “platitudes” about the sector’s difficulties.

Writing in today’s Australian Financial Review, Teys said that consideration had been given to closing down the company’s plant at Beenleigh, which employs 800 people and which Teys estimates has a flow-on effect for 4,000 local jobs.

“Protecting what remains of Australian manufacturing – and developing new possibilities – is of course a wider issue than labour costs,” the CEO conceded in his AFR opinion piece, but took aim at the Australasian Meat Industry Employees Union.

Teys stated that the union rejected an Enterprise Bargaining Agreement for workers six times, and – despite the wishes of a majority of workers – had referred the agreement to the Fair Work Commission.

To read Teys’s side of the disagreement, click here.

 

Food manufacturing gets its own reality TV show

Move over Masterchef, food manufacturing now has its own reality TV show, giving everyday cooks the chance to have their favourite recipes available on supermarket shelves across the country.

Carolyn Creswell, founder of popular museli brand, Carman's, has signed up as one of the show's three mentors, alongside Darren Robertson, chef at Bronte's Three Blue Ducks restaurant, and advertising expert David Nobay.

Coming soon to Channel 10, Recipe to Riches gives enthusiastic home cooks the chance to get their favourite recipe on the shelf at Woolworth's 890 stores.

"I'm so excited to find the next supermarket success story," Creswell said.

The show will follow contestants as they work to prove their recipe can be cooked on a commercial scale, while also create a brand for the product and creating strategies to market it to the public.

The day after each episode is aired, the winning product will be available at Woolworths outlets across the country.

Watch the Recipe to Riches promo here.

 

PepsiCo pays US$9m for misleading labelling claims

Global beverage giant PepsiCo has announced that it will no longer be labelling its Naked Juice range as “all natural” after the products were found to contain artificial ingredients.

A lawsuit was launched against the against company amidst allegations that synthetic ingredients were added to the Naked Juice range and labelled as an ‘added boost of vitamins,’ as reported by Sustainable Brands.

PespiCo did not confirm or deny that the juices contained synthetic ingredients, but have decided to drop the use of the term ‘natural’ until more transparent regulatory guidelines are available, and settle the lawsuit by paying US$9 m.

The American Food and Drug Administration (FDA) currently does not have a clear definition of the term ‘natural’ as it claims that it's difficult to define a product as natural since it has most likely been processed and therefore no longer represent a “product of the earth.”

The FDA states that is does not object to the word ‘natural’ being used as long as the product is free from ‘added colour, artificial flavours or synthetic substances.”

Accurate labelling is proving to be a very topical issue in the Australian food industry with GM labelling, free range eggs and country of origin claims at the height of the debate.

A recent government initiative, the Health Food Star rating system has received criticism from members of the food manufacturing industry who believe that the system will cost in excess of $200m to implement as well as lead to potential job losses.

The star rating system is designed to provide a more transparent method for consumers to identify a healthy food choices and will be required to be displayed 'front of pack' on food products.

 

Oils ain’t oils – why extra virgin olive oil is so important to Australia

Australia’s finest extra virgin olive oils were on display at the inaugural Fresh Extra Virgin Olive Oil festival (FEVOO) located at The Sydney Mint earlier this month.

Featuring the likes of well established brands such as Cobram Estate and Pukara Estate, as well as smaller boutique olive growers such as Cradle Coast Olives in Tasmania, there was no shortage of quality offerings at the event.

The festival celebrated the high quality olive oil which has become synonymous with the Australian industry, and educated the audience on the value of quality extra virgin olive oil.

An expert panel consisting of Dr Richard Gawel, Dr Leandro Ravetti, Dr Johanna McMillan, Stephanie Alexander and Professor Rod Mailer discussed the importance of supporting the Australian olive oil industry, associated health benefits and the issue of adulterated oils.

At a tasting masterclass conducted by Dr Richard Gawel – an Australian extra virgin olive oil tasting panel leader, the audience learned how to identify and appreciate a wide selection of oils and indentify the tones that distinguish quality oil from adulterated and rancid oils.

The impact of imported and adulterated oils

Gawel explained that Australian consumers in general are more likely to choose an imported brand of olive oil over a quality Australian brand, despite no significant price difference.

A major challenge for the industry is to effectively communicate to the public that Australian olive growers produce some of the best olive oil in the world.

“Sometimes I go to the supermarket and pull the stuff off the shelf and taste them and think this is just garbage and wonder what the hell policymakers around the world are doing,” said Gawel.

“If they think these olive oils are good they’ve got rocks in their heads.”

Gawel explained that Australian growers use a mechanised process to collect the olives which increases production capacities and minimises errors in processing, where as in Europe most of the work is completed by hand and as such is far more labour intensive.

According to Gawel, a percentage of the olive matter in many European operations tends to not get separated from the oil during production and subsequently, settles to produce a sludge which starts to ferment and consequently produces a less than perfect product.

Extra virgin olive oil by definition is the highest quality and most expensive olive oil classification. It should not contain any defects and has to pass an official chemical test as well as a sensory evaluation by an experienced tasting panel.

Gawel also explained that many imported oils have been found to be adulterated with seed oils, yet still hold an “extra virgin” claim.

Recently Malaysian based MOI Foods were issued with two infringement notices by the ACCC totalling $20,400 for misleading claims on the company’s Mediterranean blend oil. The oil was labelled as 100 percent extra virgin olive oil, but was found to contain 93 percent canola oil.

One of the main challenges for the Australian olive oil industry surrounds production standards.

The Australian Standard for Olive Oils and Olive Pomace Oil, AS 5264-2011 were published in July 2011 following a rigorous standard development process involving a significant number of industry stakeholders and over 800 public submissions.

The standards were created to protect the integrity of the entire olive oil supply chain with an emphasis on the consumer.

The new Australian Standard for Olive and Olive-Pomace Oils

  • Clearly outline different grades of oil – whether fresh or refined
  • Unambiguously define what constitutes extra virgin olive oil
  • Include the most current and effective testing methods for quality and authenticity
  • Provide a technical basis for ‘best before’ claims
  • Provide labelling requirements to minimise consumer confusion
  • Crackdown on misuse of the words: premium, super, pure, light/lite, extra light/lite
  • Require substantiation of words describing country/region of origin
  • Require substantiation of processing methods (e.g. cold pressed, first extraction)
  • Accommodate the natural variations that occur in different countries, olive varieties and regions, without compromising the ability to test and verify quality

While the standards are very comprehensive and have been widely adopted throughout the Australian industry, they are voluntary, meaning that they are not applicable to every olive oil on supermarket shelves.

Gawel stated that the Australian olive oil industry has been fighting an uphill battle so to speak when it comes to differentiating genuine extra virgin olive oil with cheap imitations.

Gawel believes that education is at the forefront of the issue, and it is only through increased public awareness that the Australian extra virgin olive oil industry will continue to thrive for years to come.

 

Food manufacturers question effectiveness of star rating system

The Health Star food rating system which has been designed to help consumers make informed and more healthful decisions at the checkout is being rejected by major food manufacturers

Simplot, Nestle and Unilever along with peak lobby group, the Australian Food and Grocery Council (AFGC), have questioned the effectiveness of the new government imposed system sighting a hike in labelling costs and potential job losses as the primary reasons.

Terry O’Brien, managing director of food processing giant Simplot believes that the new system could cost up to $3m for the company to implement across its entire food portfolio.

O’Brien who is also chairman of the AFGC, told ABC News that the star rating system would not tackle food related issues such as diabetes and obesity.

"At Simplot, we've run our products through the suggested system and we've got anomalies all over the place, where things like products with no salt are not getting a better rating than the same product with salt.

"So if these sort of anomalies in our hands, then how the heck are they going to help the consumer?"

 AFGC CEO, Gary Dawson estimates that the repacking could cost the food industry up to $14,000 per product equating to more than $200m across the industry.

However, health industry expert Michael Moore from the Public Health Association of Australia, who was involved in the design process of the rating system, believes that it is a small price to pay considering the burden of diabetes and cardiovascular disease on the nation’s health system.

“It’s peanuts compared with the cost of diabetes, cardiovascular, all the diseases associated with obesity and what it’s going to cost to treat them,” Moore told Financial Review Sunday

The Heath Star Rating system is a product of two years of negotiation between the health sectors, government and the food industry.

NZ research group aims to triple foods exports

A new research collaboration will see six key players in the global food community unite in their effort to triple New Zealand's food exports to $60bn by 2025.

Launching yesterday, FoodHQ will aim to deliver on the government's Business Growth Agenda, which calls for a trebling of the real value of food exports in the next 12 years.

AgResearch, Fonterra, Massey University, Plant & Food Research, the Riddet Institute and the BCC will work together at the Palmerston North-based campus forming part of a food "super-campus."

Project manager, Mark Ward, said "This is an enormously significant step forward. By working together as FoodHQ, our innovative organisations will enable a new economic platform for New Zealand, with higher levels of revenue and the creation of jobs."

The super-campus will be home to more than 4,000 researchers and educators involved in the agri-food value chain. Designed to meet – or surpass – world benchmarks, it will compare with other industry- centred innovation hubs in Denmark, the Netherlands, Singapore and the United States.

The site will encompass the Fitzherbert Science Park on one side of Tennent Drive on the outskirts of Palmerston North, and Massey University's Manawatu campus Turitea site across the road.

"The six food partners are already within a kilometre of each other," Ward said. "The super-campus will reflect a modernisation of the facilities in the Fitzherbert Science Park and Massey University, and the partners will upgrade current facilities and build new ones in consultation with each other.

"Most importantly, the super-campus will give current and future global customers one-door access to the very best in New Zealand food innovation. The collaborative approach creates a faster, easier way for food companies to work with the partners."

An estimated $230m in annual economic value will be added to the region from the creation of new research and development jobs.

Ward said bringing the six industry leaders together will be of great benefit to New Zealand's food industry, and will also help to attract international food manufacturers to the country.

"Because our value chains are fragmented, we’re not as competitive on the world stage as we could be. While the six main FoodHQ partners are all strong organisations in their own right, bringing them together as FoodHQ opens the way for a collective vision, greater accomplishments and a defragmentation of the industry. This will attract major food producers from around the world to undertake their research and development here," he said.

"FoodHQ will also champion the idea of food innovation and promote New Zealand’s shift to being a value-added food nation, building on its strength as a commodity producer."

 

Retail growth slow but due to rise: Index

The latest edition of the AFGC CHEP Retail Index shows that retail growth remains sluggish, but predicts the rate of year-on-year growth will increase by the September quarter.

The Index is a collaborative project between the Australian Food and Grocery Council (AFGC) and CHEP Australia, using CHEP's transactional data based on pallet movements to predict performance in the retail market.

The latest Index findings indicate an increase of 2.8 percent for the three months ending 30 September 2013, up from 2.6 percent year-on-year growth in the three months ending 30 June, which was the third consecutive quarter of decline in the rate of growth.

For the month of June, the Index indicates that the Australian Bureau of Statistics (ABS) will report year-on-year retail trade growth of 2.5 percent and turnover of $21.9 billion. The Index forecasts August year-on-year growth will be 2.7 percent, with turnover increasing to $22 billion.

AFGC CEO, Gary Dawson, said the situation is expected to improve towards to end of 2013.

"The retail environment remains challenging, reflecting subdued consumer confidence. Indications of growth improving later in the year once the federal election is out of the way are encouraging and would see improved consumer spending supporting retail sales growth," he said.

Overall, food is faring better than other retail sectors. Recent ABS statistics have shown improving year-on-year growth in food and grocery retail compared with overall retail sales growth. Results published by the ABS for May show food and grocery retail sales grew by 4.2 percent over the past year. In contrast, sales at clothing retailers were flat, sales at department stores contracted, and household goods retailers posted growth of about one percent.

The next AFGC CHEP Retail Index will be released in late October 2013.

 

Food magazine award winners announced

After months of preparation by the Food mag team and weeks of anticipation for the finalists, the 2013 Food magazine awards was held at Sydney's Luna Park last Friday night, celebrating innovation and thought-leadership in the food and beverage manufacturing industry.

The Chaser boys once again had us in stitches as MC for the night, and a number of our finalists proved they were worthy of their finalist crown at the product showcase, with Old Time Brewing, Soma, The Right Food Group, CMActive and Gluten Free Grain Free (among others) getting involved with product samples or demonstrations.

Managing director of foods at Mondelez International, Darren O'Brien, was guest speaker, and used Kraft's failed launch of iSnack 2.0 as a case study of why food manufacturers need to listen to their customers. Now that the company has recovered from this PR disaster, which saw the spread renamed as Cheesymite, the focus has shifted focus back to the iconic Vegemite spread, which this year is celebrating its 90th anniversary. Vegemite is already in 96 percent of Australia's pantries, so the name of the game for the brand isn't to try to get consumers to purchase the spread, but rather to use it more.

After entrees were served, the awards presentation kicked off, with winners in the awards' 14 categories praised for continuing to innovative and fill gaps in the market, despite the tough conditions many manufacturers in Australia are enduring at the moment.

The big winner for the night was functional food company, Morlife, winning the Confectionery and Snack Foods category and also being named Best of the Best.

A big thank you goes out to the awards' judges and sponsors – without your support the night, which has become one of the most highly anticipated in the industry, just wouldn't be possible.

Next year will be the 10th anniversary for the Food magazine awards, so please put your thinking caps on and help us come up with some amazing ideas!

2013 Food magazine award winners

  • BEVERAGES – Rebello – Cheeky Rascal Cider (new varietals)
  • DAIRY – Five:am Life – Organic Powerpak and Smoothy Range
  • BAKED GOODS – Bakers Delight – Chia and Fruit Loaf
  • READY MEALS – Passage Foods – Passage to India Pumpkin Curry
  • CONFECTIONERY – Morlife – Morlife Snakes
  • HEALTH AND WELLNESS – Gluten Free Grain Free – Cakes Premixes
  • FOOD SAFETY AND INNOVATION IN NON-FOOD – Dyson – Airblade Tap
  • ORGANICS – The Right Food Group – Organic Noodle Kitchen – Asian Noodle Range
  • MEAT AND SMALLGOODS – Creative Food Solutions – Grab and Go Hot Country Roasts
  • SNACK FOODS – Morlife – Choc-Coated Golden Berries
  • SUSTAINABLE MANUFACTURING – CST Wastewater Solutions – Chok Chai Starch Raptor
  • PREPARED FOODS – Springhill Farm – The Real Bread Mix
  • PACKAGING DESIGN – CMActive – Torus Pak
  • INGREDIENT INNOVATION – Co YO Corporate – Co Yo Coconut Milk Ice Cream Alternative
  • BEST OF THE BEST – Morlife

Lower dollar proving good news for manufacturers

The drop in the Australian dollar and the fact that it seems to have found a new level of around 90 US cents has been welcome news for manufacturers.

As the Australian Financial Review reports, manufacturers are finding that the drop from near parity which was with us for some time has increased business activity.

“With a high Australian dollar, we were finding it hard to win new jobs, our customers were comparing the tooling and pieces cost with low-cost Asian countries and the cost of doing business here in Australia has put immense pressure on our profitability and was inhibiting our ability to win new contracts,” Dolphin Products' Mario Turcarelli said.

“[Since the dollar declined,] we have seen some increases in raw materials from some of our suppliers but we are also seeing more interest from local customers who are finding some bad experiences with quality issues and delivery issues with imported product.

“I believe many of those customers will switch back to buying in Australia.”

However, to put the plight of the manufacturing sector in long term perspective, employment within the industry is 15 per cent below the level in 1984 and the sector's gross value is flat compared to its value in December 2002.

Sumich gets approval for $3.5m Tassie investment

Australia’s largest carrot grower, WA based Sumich, has had its plans to build a $3.5m washing and packing plant at East Devonport approved by the Latrobe Council.

The factory which is expected to employ 60 people, is hoping to be harvesting between 15,000 to 20,000 tonnes of produce by 2016 as reported by The Mercury.

The company has stated that the investment will fill a production gap and provide quality carrots during WA’s off season from January to May, and will not impact on existing carrot markets in the region.

Sumich’s owner, Nick Tana said the quality of WA's carrots have a tendency to drop in the hotter months and the Tasmanian operation will effectively cater for demand during that period.

“That happens to coincide with Tasmania’s best growing season, so we are going to maintain our quality and quantity by growing carrots here in those months,” said Tana.

“Once we are underway in Tasmania, we will draw back our WA summer production.”

As part of the new development, Sumich will gain access to the Sassafras Wesley Vale Irrigation Scheme which provides over 5460 megalitres of water to farms in the region.

Sumich's announcement has come soon after Australia’s last frozen vegetable processor Simplot, advised that two of its manufacturing plants including one in Devonport were under threat of closure due to the competitive landscape and unsustainably high costs.

 

Wiley win contract to expand logistics for Cerebos Australia

Wiley has won a contract to expand and refurbish Cerebos Australia's Seven Hills warehouse.

The group has signed the $8 million contract to provide Cerebos with a larger, optimised warehouse space to address its current logistics, storage, and safety issues.

Andrew Newby, Wiley's business development manager, explained they had worked closely with Cerebos to "design a modern, future focused logistics solution," adding that "a significant considering [in its design] when planning for the delivery of the upgrade and expansion elements was minimising disruption to the existing product flows".

Wiley has now entered the construction and delivery phase of the project, with completion set for late next year.

This contract award comes just a month after Wiley won the AIB Queensland Chapter’s Excellence in Building State Award for ‘Research, Development and Technology’ for its work another food manufacturer, Primo,  and the construction of its $136 million smallgoods factory in Wacol, Queensland.

 

FactCheck: is Australia losing one manufacturing job every 19 minutes?

“Under this [Labor] government we’ve seen one manufacturing job lost every 19 minutes.” – Opposition industry spokeswoman Sophie Mirabella, Q&A, 1 July.

The Conversation contacted Mirabella’s office to request a source for this claim, and a spokesman quickly responded:

“Sophie’s comment on Q&A was based on ABS data… the Labour Detailed Quarterly collection (cat no. 6291.0.55.003). If you open Table 04 in the series of spreadsheets available in that collection, then the ‘Data 1’ tab, and then column W, you’ll see it contains seasonally adjusted manufacturing employment figures from 1984 to the current day.

“For the ‘1 every 19 minutes’ calculation, Sophie was using the decline from 1,081,700 employees for February 2008 (the first reading after Labor was elected at the end of 2007) through to the most recent number of 938,300 for May 2013. That’s an overall loss of 143,400 jobs over a period of five-and-a-quarter years, or 273 weeks.”

Dividing that jobs figure by the time elapsed, Mirabella’s office came up with the total of around one job lost every 19 minutes. The spokesman added:

“It’s worth pointing out that at no time prior to this period of Labor Government has the total number of jobs in Australian manufacturing ever fallen below the 1 million mark, let alone by so far under that mark. I may be wrong, but I also don’t think there’s ever been such a sustained loss of manufacturing jobs over a five-year period.”

So are those calculations right? Is it true that Australian manufacturing has had a particularly bad five years compared to the past? And to put that in some context, how has manufacturing fared in other industralised countries?

Crunching the numbers

Employment figures by industry are available from the Australian Bureau of Statistics (ABS) on a quarterly basis. That data is also available through the Organisation for Economic Co-operation and Development’s Short Term Labour Market Statistics. The OECD version reports data to the unit, while the ABS version rounds up data to the nearest hundred.

Kevin Rudd was elected prime minister on 24 November 2007, towards the end of the fourth quarter of the year, so I have examined employment data from the first quarter of 2008 to the end of the second quarter of 2013 to cover when Labor has been in power to date.

The ABS data shows that there were 1,081,664 manufacturing jobs at the start of 2008 and 938,280 by the second quarter of 2013 – meaning there was a net decline of 143,384 jobs.

In that time, there were 22 quarters, each averaging 91.25 days. Since there are 24 x 60 = 1440 minutes in a day, the total number of minutes in a quarter is equal to 1440 x 91.25 = 131,400. Hence, in 22 quarters there are 22 x 131,400 = 2,890,800 minutes. Dividing 2,890,800 by 143,384 one obtains 20.16, which means that one manufacturing job was lost every 20 minutes from the first quarter of 2008 up until the second quarter of this year.

Mirabella’s figure is slightly different because instead of counting the duration of the time in government in quarters, she counts it in months, starting from February 2008 and ending in May 2013. This approach is consistent with the fact that ABS collects quarterly data on the second month of each quarter. This way of counting yields a total of 2,759,400 minutes. Dividing this number by 143,384 we obtain 19.24; that is, one job lost every 19 minutes.

Both counts are acceptable and they yield very similar results, so I would consider both to be numerically correct.

But what does it mean that Australia is losing one manufacturing job was lost every 19 (or 20) minutes? It is worth putting that in some historical and international context.

Made in Australia: a recent history

The data series available from the ABS goes back to the mid-1980s. So it is possible to compute “minutes for one manufacturing job loss” for five consecutive periods of 22 quarters, from the first quarter of 1986 through to the second quarter of 2013.

As noted earlier, the last of those periods corresponds to the Rudd/Gillard Labor governments. The results of this exercise are summarised in Chart 1 below:

Chart 1: Minutes between jobs lost or created in Australian manufacturing. Author’s calculation from ABS data

 

The chart suggests that the loss of manufacturing job is not a recent phenomenon: with the exception of the 1991-1996 period, all other 22-month periods since 1986 are characterised by a decline in manufacturing employment.

But it is correct that the pace at which jobs in manufacturing are lost has been faster in the most recent period.

In the 22 quarters preceding the beginning of the first Rudd government, one manufacturing job was lost every 140 minutes.

Before that, from the start of 1997 to mid-2002, one manufacturing job was lost about every two hours.

And in the period from the start of 1986 to the second quarter of 1991, one manufacturing job was lost about every hour.

Rudd vs Gillard

Some recent trends in Australian employment are worth noting, including that manufacturing job losses slowed considerably while Julia Gillard was prime minister.

In the 10 quarters of the first Rudd government, one manufacturing job was lost every 12.5 minutes; during the 12 quarters of the Gillard government, one manufacturing job was lost every 29 minutes.

However, this is not really surprising, given that the early years of the Rudd government corresponded to the most acute phase of the Global Financial Crisis.

Jobs growth in the wider economy

The employment data also shows that the loss of jobs in manufacturing has been matched by a gain of jobs in other sectors.

Seasonally adjusted total employment data for the second quarter of this year are not yet available. So, one can only compute changes in total employment over the period from the first quarter of 2008 to the first quarter of 2013.

Over these 21 quarters, total employment (including manufacturing) in Australia increase by 836,490 units. This is equivalent to one new job being created every 3 minutes.

The global picture

Finally, it is worth looking at a global perspective using OECD Short Term Labour Market Statistics.

Using the same methodology described above, we can determine “minutes for one manufacturing job loss” for each of the 34 OECD member nations, including Australia, over the period from the first quarter of 2008 to the first quarter of 2013.

Chart 2, below, shows how Australia compares with other OECD nations on manufacturing employment. The first column is the main one; I have included the column on the right in order to include countries for which 2013 figures are not yet available.

 

Chart 2: Manufacturing job trends among OECD nations. Author’s computation based on OECD Short Term Labour Market Statistics.

 

Chart 3, below, shows a comparison between Australia and six of the G7 economies (second quarter 2013 data was not yet available for France, so it was excluded from the comparison).

 

Chart 3: Author’s calculations from OECD, Short Term Labour Force Statistics data

 

As it can be seen, the experience of Australia is not unique.

In fact, five out of the six other countries used for this comparison lost manufacturing jobs at a faster rate than Australia (one every 2 minutes in the US and Japan, one every five minutes in the UK and Italy, and one every 12 minutes in Canada).

The loss of manufacturing jobs is a common phenomenon in many industrialised countries and it is partly due to the process of structural transformation of the economy. Furthermore, the Global Financial Crisis hit manufacturing hard worldwide.

Verdict

Sophie Mirabella’s calculations of manufacturing job losses are correct.

Her spokesman’s assertion that manufacturing jobs have been lost at a faster rate in the past five years than other recent five-year periods (going back to 1986) is also correct.

However, these job losses should be considered in their wider international context, including the Global Financial Crisis and an even sharper decline in manufacturing jobs in a number of other industralised economies.

While manufacturing jobs have been lost in Australia, over the past 21 quarters total employment (including manufacturing) has increased at a rate of one new job created every 3 minutes.


Review

I have gone through both the Mirabella statement and this author’s comments. These comments confirm that Mirabella’s original statement, with some minor quibbling, was basically correct.

The main point seems to me to be not the factual accuracy but, as the author points out, the phenomenon that manufacturing employment has been on the slide for over 40 years, no matter who has been in power. This is as a result of structural change, whereby manual labour has been replaced by labour requiring knowledge and people skills as we become an advanced, service-based economy.

There is no reason why we would necessarily regret the passing of skills no longer in demand and the stronger growth in demand for different skills, as long as jobs growth overall increases. There are, however, problems for those workers whose skills are no longer in demand who may find it difficult to gain employment in the new growth areas of the economy. – Phil Lewis

 

The Conversation is fact checking political statements in the lead-up to this year’s federal election. Statements are checked by an academic with expertise in the area. A second academic expert reviews an anonymous copy of the article.

Request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.

 

Fabrizio Carmignani receives funding from the Australian Research Council for a project on the econometric estimation of the piecewise linear continuos model and its macroeconomic applications.

Phil Lewis does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

This article was originally published at The Conversation. Read the original article.

 

Don’t let pest management eat away at you

Pest management is a dirty word for some food manufacturers. They don't like to talk about it, and they don't like to admit that it's an integral part of their business. But let's face it – if you're a food brand in Australia worth your name in salt, then you must have a pretty serious pest management plan in place.

Having a strategy for keeping creepy crawlies out of your facility, as well as one for removing them if they find their way in, is indicative of a proactive, responsible business, not a negligent one.

But, like a lot of regulation in the food manufacturing industry, knowing exactly what an effective pest management strategy looks like can be difficult.

There are a wide array of pest management standards that a brand can adhere to, depending on what products it manufactures and where those products will be sold.

Eighteen months ago, the Australian Environmental Pest Managers Association (AEPMA) penned a Code of Practice for pest management in the food industry in Australia and New Zealand.

David Gray, national president of the AEPMA, says "With the industry Code of Practice, we didn't create anything new, really. We just took the benchmarks that were there and, in a nutshell, if someone is setting up a pest management program in a food manufacturing facility and they set it up to the Australia and New Zealand Code of Practice, then they will meet the requirements of all the existing standards or codes that are out there."

The Code, which aims to define best practice in managing pests in food manufacturing, is a go-to guide not only for food brands, but also for auditors and pest management companies.

"We've added some additional value in the sense that auditors usually come from the food industry. Their expertise is in food, some of them have some experience in pest management but most don't. So we've developed this Code equally for their benefit, so they can look at it and then audit the pest management program against the Code. It gives them some KPIs that they can measure against, rather than just going in and approaching it blindly," Gray told Food magazine.

"It also includes the downstream suppliers to the food industry, so the suppliers of raw materials, and things like packaging. Often the packaging plants and packaging materials come under the same stringent requirements because they're supplying into the food industry."

Abiding by the AEPMA's Code of Practice means food manufacturers will not necessarily have less regulatory I's to dot or T's to cross, but will at least know what systems and processes it needs to have in place to ensure everything's kosher, so to speak.

Stephen Ware, national executive director at the AEPMA, says "In the pest management industry, everyone knows they need pest managers, but the food manufacturers haveproblems because auditors turn up and different auditors have different ideas of what should happen as far as, for instance, where to put down rodent baits and traps. The Code of Practice has helped to clarify that.

"That's why [the Code] has been pretty well accepted by both the pest controllers – who don't really want to argue with everybody about where he should put the bait – and the food manufacturer – who doesn't want to have to sit down and have an argument with every auditor that comes in."

A multi-faceted approach
Paul Moreira, service manager for Victoria at Adams Pest Control, says the two fundamental pillars of pest management are hygiene and maintenance.

But this isn't as straight forward as it may sound, he insists.

"In the food industry there's a requirement to integrate a pest management approach which is multi-faceted. So rather than just focusing on applying a pesticide, it's about identifying proofing issues, harbourage issues, alternative food sources. All of those things link into the site's pest management program," he said.

Safety of the end product, obviously, is a high priority in pest control in the food industry. Manufacturers need to be very careful about where and how they fight off pests, and there are a number of options available to them, Moreira says.

While toxic bates are available, which are consumed by rodents and kill them five to 10 days later, Moreira believes that in the coming years the industry will move award from these chemicals.

"Another approach is to have a monitoring block, which allows you to assess activity. So the pest controller goes around and has a look at if the block has been consumed or not,and if it has you obviously have a problem and you have to go down the path of getting rid of the infestation," he says.

This approach means there's no risk of contaminating the product being manufactured, but on the other hand it's purely an information gathering exercise – it doesn't treat the problem at all.

It's for this reason that the American Institute of Baking (AIB), which has an internationally recognised standard, is moving away from the use of non-toxic chemical blocks internally, instead recommending the use of mechanical traps.

"It's all about minimising pests within the site by hitting them outside, and then inside your treatment becomes a non-toxic approach. According to the AIB's standard you have to use a mechanical trap. You can't use a monitoring block … because all that does is feed the rodent. You haven't addressed the issue of having the rodent there."

While Adams Pest Control's latest product, Baitsafe, can be used with toxic baits, it's like nothing else on the market as it allows food manufacturers to use pesticides in cavities in a safe, controllable way, Moreira says.

"What Baitsafe allows us to do is put a device in that cavity and then apply the pesticide in a very secure way. It looks like a fire alarm. It's flush against the ceiling, but it doesn't have to be in the ceiling. It can be in the splashback of the kitchen, it can be in the kickplate of a bench or in a wall, but it sits flush against it.

"We have a key, we place it in the device, open it and the pesticide is on the other side, or we can even apply a monitoring block or a sticky board to allow us to gauge the activity levels of, say, fruit flies or cockroaches, then we close the device.

"So as far as anyone on this side of the wall, where people work, are concerned, all they see is a tiny little circular flat planel and they can't access the pesticide that's on the other side," Moreira says.

Money well spent
Food manufacturers need to be proactive with their pest management strategy. It goes without saying that it's much easier – and more cost effective – to prevent an infestation from occurring than it is to have one treated.

So while regular inspections and a detailed pest management strategy might seem like an unneccesary expense, it's money well spent, says Simon Lean, Australian technical manager at Rentokil.

"Pest control isn't free but they [food manufacturers] do get good value for money. It's always something you have to have on your books and something manufacturers often want to get done for as cheap as possible, but generally, if people are chasing cheap pest control they get a cheap job, and if they get a cheap job they end up with pest problems.

"That's the last thing they need because all these food manufacturing companies are very particular about brand protection. The last thing they want is for someone to see a rat in a loaf of bread or something like that," Lean told Food magazine.

"A PR disaster can really hit these companies. But it's not just PR. If they've got a contaminated line in their manufacturing, just imagine if they have to close that line down because it's either riddled with pests or simply broken. The cost of that line being down could be thousands of dollars, sometimes hundreds of thousands a week, in lost production. Whether that be because of pests or an engineering concern, it gets very serious and it really does hit their bottom line."

Regular inspections are critical for any food brand, especially those in older facilities that may not be able to keep pests out as effectively as new buildings can.

Having said that, regular – and thorough – hygiene and maintenance schedules go a long way in pest-proofing your business, and therefore minimise the likelihood and cost of treating infestations, replacing equipment or – heaven forbid – dealing with product recalls.

"If you keep things clean and in good working order, it's going to be easier to inspect for any pest problems, and you're not going to have as many pest problems because it's clean and you don't have any food for the pests or harbourage where they can hide and breed," Lean says.

"That's why inspections are so critical in food manufacturing."

 

Manufacturing nudges growth in June: Australian PMI

The Australian Performance of Manufacturing Index (Australian PMI) shows that the manufacturing sector nudged growth in June.

According to these figures from Australian Industry Group, the June PMI was 49.6 – up 5.8 points from the figure for May (readings below 50 indicate a contraction in activity).

The improvement in the overall reading was largely due to an expansion in production (50.2) from the previous month, and improvements in the new orders index (49.9) and supplier deliveries (49.6).

However, despite falls in the Australian dollar, manufacturing exports continued to struggle.

In three month moving average (3MMA) terms, five of the eight sub-sectors improved in June, but no sub-sectors expanded (i.e. no sub-sectors had readings over 50 points, in 3MMA terms).

Printing & recorded media was the best performing sub-sector in June (48.5 points, 3MMA) while metal products (34.3 points, 3MMA) again recorded the lowest reading.

Sub-indexes for production (50.2) and inventories (52.2) moved above the benchmark 50 point level that indicates expansion and the new orders sub-index (49.9) firmed by 7.6 points.

The exports (30.3) and employment (46.9) sub-indexes continue to indicate contraction.

Ongoing pressure on margins was indicated by the continued expansion in the wages sub-index (53.8) and the input prices sub-index (56.4) and the contraction in the selling prices sub-index (44.8).

Ai Group Chief Executive, Innes Willox, said: “The unexpected lift in the Australian PMI is a welcome, though tentative, sign that manufacturers’ efforts to fight back against the severe pressures facing the industry are beginning to pay off. The Reserve Bank’s reductions in the cash rate appear to be supporting a weak pick-up in local demand and the drop in the exchange rate may be assisting domestic producers in the local market. Export conditions, however, remain extremely challenging.

“This month’s improved reading (just short of the benchmark 50 points indicating growth) comes after two years of continuous decline and after two months of especially weak Australian PMI readings in April and May. However, there is a need to be cautious about a single month’s reading, particularly because the inventory sub-index expanded strongly again in June, suggesting that sales are still lagging behind production.

 

A passion for flavour – a tour inside the new Flavour Makers facility

When I first stepped foot inside the new Flavour Makers Braeside factory on a rainy Melbourne morning, I was immediately hit with the tremendous sense of pride which seemed to be emanating from the walls of the barely three week old facility.

Barbara, Flavour Makers’ receptionist, was brimming from each to ear, and exuded an infectious sense of excitement as she explained the ‘big move’ which involved consolidating four manufacturing facilities under the one roof.

“We are still going through a teething process,” she said. “But we are all very excited.”

Despite construction workers still ironing out the finer details, there is no way you could even attempt to steal the sunshine off any member of the Flavour Makers family.

Every employee I met has a genuine passion for the business, which still remains wholly Australian owned after its 20 years of operation.

Commercial manager, Jodie Hooker, said that it’s the fostering of strong relationships, both internally and externally, coupled with hard work that has made Flavour Makers what it is today.

“Integrity is one of the most important commodities,” she said.

Innovation and traditional values

As the name suggests, Flavour Makers do exactly that, they make flavours, and they do it well. Flavour Makers targets the needs of the customer and creates concepts to match specified requirements.

According to Flavour Makers’ owner, Adrian Cester, the company was born out of an identified need for high quality prepared food. As customers became increasingly time poor, the demand for prepared foods rose, but the quality of products offered remained relatively low.

With family roots in the poultry industry, Cester started working for his brother’s business, John Cester Poultry, shortly after studying, and this is where he identified the increasing trend towards prepared foods.

With an Italian background, Cester has always valued high quality, home cooked meals and subsequently wanted to offer consumers something more than the stock standard readymade sauces and crumbed chicken that they were settling for.

Cester was frustrated by the low quality of prepared foods available on the market, and decided to channel his frustration into a business opportunity.

“Something was telling me to get into developing better food products,” he said.

Today, Flavour Makers hires chefs of world class standard to create the high quality flavour solutions that have become synonymous with the company’s name.

New facility, new ideas

The new Braeside facility showcases Flavour Makers’ wide range of production capabilities, and as such, has been built to world class standards boasting the latest technology sourced both locally and internationally.

The new facility is complete with a liquid plant, retail plant, culinary development centre (which consists of four test kitchens), sensory booths for independent taste testing, and a storage warehouse/packaging facility.

Everything apart from the dry blending facility, (which will remain separate for allergen reasons), is now located under the one roof.

One of the most impressive parts of the new facility is the boardroom which comes complete with its own state of the art kitchen that has been designed specifically for the final tastings of a client’s product.

The final tastings consist of a full meal created and served to the client by Flavour Makers’ chefs using the specified flavours that the client requested.

Another notable feature of the new facility is the yet to be completed vegetable and spice garden. Cester’s aim is to create a “sensory experience” which includes fruit trees, vegetables, herbs and spices at the entrance of the facility and continuing throughout the premises.

“My intention is to create a sensory experience. When you first arrive you will see recycled timbers and plants used on the building,” said Cester.

“People see us as a food science business, which we are, but at the root of what we do, is food. And we are passionate about that.”

There is always a solution

Priding themselves on creating unique, fast and functional solutions for clients both big and small, Flavour Makers never turns down a project, no matter how tight the timeframe.

“That may mean sometimes using external consultants,” said Hooker, “But we always find a solution.”

Although Flavour Makers may have grown in size over the years, Hooker says it they will never leave the small guys behind.

“We have an intimate knowledge of the local consumer, which enables us to create unique and adaptable solutions,” she said.

“We work with local butchers which serve as a great test market due to their access to the consumer.”

It is through this intimate knowledge that Flavour Maker is able to connect with smaller businesses and devise viable solutions to sometimes complicated requests.

As well as catering for local needs, Flavour Makers is also serving larger players in the market, supplying Tesco stores in the UK with its Passage Foods range and securing contracts with numerous lines of private label products sold throughout Coles, Woolworths and Aldi.

Challenges in the making of flavours

Clean labelling, or the push towards more natural ingredients, has posed a major challenge for Flavour Makers. Tinkering with recipes to include 100 percent natural ingredients in its ‘Celebrate Health’ range required rigorous testing to ensure that the taste, smell, texture and mouthfeel were just right.

“There continues to be challenges surrounding the line. When we started, some of the products contained a small amount of sugar, and we are now removing all of it and replacing some with Stevia, and in some cases we are not using any sweetners at all,” said Cester.

Along with a change in ingredients, also comes a change in the price tag.

“The bottom line is it often costs a lot more to produce [our products] than a packet of something else that’s on the supermarket shelf,” he said.

“We have to try and be competitive. I would like to turn Celebrate Health into a completely organic brand as well but in order to do that I would probably price it out of the market. So at some point, we will probably split Celebrate Health in two and have Celebrate Health Organic, and the other… [conventional Celebrate Health line].

“We already have a number of products in our range that are organic, we have three stocks: chicken, beef and veg. The goal is for all of it to become organic but we’ve got to remain commercially viable. If I can find a way to make our quinoa and lentil range organic without impacting on price, then that is sort of my goal.”

Challenges aside, Cester says that the Celebrate Health line is experiencing an impressive adoption rate amongst consumers.

“We are growing almost weekly,” said Cester. “We presented 18 new Celebrate Health products to Coles and they accepted 12 of them which is unheard of, unless you are a really big player.

“So it is saying that Celebrate Health is resonating, people are loving it, people are buying it. We have also got a very clean labelling on it. I would put my hand on my heart and say that it is the healthiest stuff available anywhere. And I think that is what’s resonating with the healthy consumer.”

Contrary to the norm, Flavour Makers has made a point of being completely transparent in its ingredient lists by identifying every ingredient used. Cester said that he wanted to create a range that could ‘tick as many health related boxes as possible’.

Along with the Celebrate Health line, which includes ready-made quinoa, Passage Foods – which is one of the company’s wet sauce lines – has also embraced the health concerns of many consumers by being totally gluten-free.

Prospering in a not-so-prosperous marketplace

Unlike many other food manufacturers around the country, Flavour Makers has been able to thrive in an environment that is increasingly giving way to imported foods and cheaper prepared food alternatives.

The emphasis on connecting with both the consumer and the client, as well as remaining true to its initial objective of creating healthy and tasty prepared foods, has given Flavour Makers an unprecedented advantage in its market.

As the demand for local, healthy prepared food products continues to rise, and after seeing how Flavour Makers approaches innovation, product development and meeting its consumers’ demands, I think this is one Aussie brand that’s ahead of the game.

 

Profitability of food suppliers down 28 percent: AFGC report

Results from the most detailed financial analysis of Australia's food and grocery manufacturing industry have been released.

The Australian Food and Grocery Council has released its first Competitiveness and Sustainable Growth Report, which was undertaken by KPMG and considered detailed survey data from Australian food and grocery suppliers between 2009 and 2012.

AFGC CEO, Gary Dawson, said "Previously we have had plenty of anecdotal evidence of how tough the market conditions have become for food and grocery suppliers. This report provides the hard data to assess market trends and chart a way forward for this critical industry."

The report provides data from real companies operating in Australia, and provides comparisons with international benchmarks.

Key findings from the survey include:

  • Profitability of Australian food and grocery suppliers has declined by 28 percent from 2010 to 2012;
  • Profitability of companies operating in Australia is now significantly below international comparators;
  • Supermarket retail turnover has recorded steady growth but Australian food and grocery suppliers are reporting falling turnover, with an upsurge in food and grocery imports;
  • Suppliers are significantly increasing the funding of price discounting by retailers, via their ‘trade spend’, which has increased sharply (6.4 percent growth per annum) over the past four years, impacting on profitability (6 percent decline per annum);
  • Rising trade spend has also been part funded by reductions in marketing and R&D;
  • A strong focus on cost containment has held labour costs and operating costs steady over the survey period;
  • Suppliers continue to invest strongly in their businesses, with a more than 30 percent increase in capital expenditure over the four year survey period.

Dawson said manufacturers are continuing to invest in boosting efficiency and productivity in their production lines.

"The overall picture is one of suppliers having to adjust rapidly to the shift in market conditions by investing in improvements to manufacturing systems to boost productivity and reduce labour and energy costs, and the funding of retail price promotions to try and maintain volume.

"Looking forward the ability of the Australian food and grocery manufacturing industry to increase its competitiveness and win export opportunities will require a continued focus on cost containment and capacity rationalisation, greater collaboration with retailers to drive growth and share the benefits of supply chain efficiencies, and a rebalancing of trade spend to boost brand building and innovation," he said