Industry update: variety fuels ready meal growth

The ready meal segment in Australia experienced growth during 2006-07, having developed healthier, fresher products, a greater number of which were gourmet.

Over the last three years there has been a dramatic shift from frozen to chilled ready meals, which are stored in retailers’ chiller cabinets.

Frozen meals such as Nestlé’s Lean Cuisine range have been superseded by fresh chilled meals including lasagnes and soups, which are precooked and packed in modified atmosphere packaging (MAP).

Packaging

Indeed, technological advances in packaging formats, including MAP, vacuum shrink bags and flexible stand-up pouches have fuelled an increase in the ready meal segment, making it possible for manufacturers to extend shelf life without freezing and offer consumers a visually appealing product on the shelf.

Changes in packaging from a sachet-in-box format to a cup and tray have had many benefits for the ready meals sector including increased portability, portion control and cost reductions.

According to Woolworths, people are more comfortable consuming meat-based products in cup style packaging.

Factors fuelling growth

Ready meals have become more in demand as the quality of the products, in terms of taste, nutritional value and variety has increased, and the appearance of the packaging has improved.

As consumers lead ever-busier lives and become more time-poor, the demand for ready meals has increased.

However, the ready meal industry faces competition from other affordable convenience food sectors such as restaurants and take-away outlets.

Meal substitutes such as liquid breakfasts and snack bars are also competitors as people assume busier lifestyles and eat on the run.

Premium, restaurant-quality ready meals, including ready-to-eat salads, pastas and curries, have experienced growth in line with consumers’ willingness to spend more on higher quality healthier pre-prepared meals, and in line with competition from other convenience foods.

Euromonitor reported that 2005 and 2006 saw manufacturers launch healthy alternatives to existing product ranges, including reduced salt and reduced fat items, appealing to health conscious consumers.

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Industry update: future looks bright for bottled water

As one of the fastest growing sectors within Australia’s beverage industry, the bottled water segment experienced a 12% revenue growth during 2006-07 totalling $627 million, approximately 5% of Australia’s total beverage manufacturing revenue.

Natural spring water and purified water have been the fastest growing segments in Australia.

Among factors contributing to the rising demand for bottled water are: consumers’ greater disposable incomes; lifestyle changes and a shift towards convenience purchasing; health concerns and a move away from high-sugar drinks; concerns about the quality of tap water (particularly in New South Wales); and the rise of the hospitality and entertainment industries, with some venues providing only bottled water, not tap water.

Product innovation has also impacted positively on industry growth.

The rapid introduction of new products such as functional waters and new packaging formats, including the increased availability of multipacks, has driven up demand from convenience stores and supermarkets.

The development and marketing of sports water and flavoured water has allowed the bottled water segment to obtain market share from high-sugar soft drinks, energy drinks and sports drinks, by appealing to consumers’ health concerns.

Manufacturers are increasingly realising the importance of bottle design as a basis of competition, with bottle size, shape and functionality not only fostering product differentiation, but allowing different brands to target certain demographics.

Coca-Cola Amatil’s introduction of the sparkling Mount Franklin glass bottle is an example of innovative packaging tailored to style-conscious consumers and the increasing number of people dining at restaurants as opposed to eating at home.

Niche and premium

While dominated by three major industry players, the bottled water segment has sought, and will continue to seek, growth through niche markets, making way for smaller producers to supply relatively small segments with specialist and/or premium products.

In particular, increased concern about the use of artificial colourings, flavourings and preservatives is expected to broaden the range of premium, health-focussed waters entering the market from small-scale, specialist operators.

IBISWorld has predicted that more organically certified waters will enter the premium end of the market in the future, resulting from improved consumer awareness of water quality.

In fact, the bottled water manufacturing industry is expected to double its revenue over the next five years, increasing at an average annual rate of 11%, fuelled by continued industry innovation and promotional spending.

This is despite rising PET resin costs and more intense price competition in the supermarket channel.

In response to a trend towards consuming bottled water based on functionality rather than brand loyalty, and as the market becomes more price competitive with a rise in supermarket house brands, manufacturers will need to increasingly focus on value-added products.

Industry at a glance

Industry revenue: $627 million (12% growth)

Export revenue: $35 million*

Import revenue: $40 million*

Major players: Coca-Cola Amatil, Cadbury Schweppes Australia, Frucor Beverages (Australia)

* Estimated figures source: IBISWorld

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Industry update: sweets sector looks to export for growth

With the confectionery market in Australia reaching saturation, growth is, and will continue to be, dependent on product innovation, differentiation and export.

In the period 2007-08 the confectionery manufacturing industry is expected to grow 2.8%, equivalent to a total sales revenue of $2312 million.

In a segment where over 70% of sales are the result of impulse, an increase in low-fat chocolate varieties, sugarless sweets and functional confectionery in particular is fuelling this growth, while line extensions have proven to be a popular method of igniting new interest in existing products.

Packaging innovation has also contributed to industry growth, including the reconfiguration of packaging sizes and formats, for example the economical multipacks available in supermarkets.

Comprising 62% of total confectionery sales, chocolate continues to be the confectionery sector’s major product category, followed by sugar confectionery comprising 29% of total sales volume.

IbisWorld reveal that approximately 40% of total chocolate sold is chocolate bars, with the top three sellers being Mars Bar, Kit Kat and Cherry Ripe.

While gum is currently the smallest product segment, generating approximately 9% of total industry sales, consumers spend approximately $162 million each year on sugar-free gum, highlighting increasing health concerns tied to sugar intake.

Focus on health

Increased health concerns have been countered in recent years by evidence that antioxidant-rich chocolate, particularly dark chocolate, has some health benefits.

Manufacturers have also responded to consumers’ health concerns by extending product lines to include reduced-fat or sugar-free products.

Despite increased health awareness, and continued growth in the organic and sugar-free confectionery segments, an increasing number of consumers are turning to premium chocolate brands as the quality of the raw ingredients takes precedence and an increase in disposable income makes specialty, imported chocolates more attractive than mainstream products.

Impact of globalisation

Globalisation is of particular interest to the confectionery segment, with imports comprising approximately 20% of the domestic market and being valued at $548 million.

Retailers are also increasingly looking to foreign suppliers in an effort to obtain cheaper products, placing pressure on Australian manufacturers as they compete with cheaper imports from countries like China.

However, Australian manufacturers are also seeking growth through export opportunities in Asia, with close geographic proximity and Asians’ rising disposable incomes making them attractive export targets.

One of the biggest factors threatening the industry’s future growth is the current push by Australian supermarkets to expand their range of private-label products.

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Industry update: growth predicted for bread and biscuits

While the bread manufacturing industry is a consolidated and mature domestic market, which has experienced a revenue decrease of approximately 0.1% per annum over the past five years, future growth is expected as a result of increased export opportunities, innovations in ingredients and processing, and new product development.

In fact, IBISWorld predicts that growth in industry revenue is expected to average 3% between 2007-08 and 2011-12, bringing annual revenue to $2276.2 million by June 2012.

While bread manufacturers have historically focused on supplying the domestic market — the highly perishable nature of bread products and the low unit value of bread making export unattractive — exports in the past five years have risen by an average of 14.7% per annum and are expected to increase in the future.

Rising incomes in Africa and Asia will lead to diversity in their diet, resulting in greater consumption of products like bread.

Australian manufacturers will be able to take greater advantage of their reputation as safe food producers, with international health and safety standards becoming more stringent.

The supply of longer lasting bread products such as breadcrumbs to export markets will allow the industry to be competitive with foreign bakeries that provide bread daily.

Innovation and product development are also tipped as growth opportunities although there is insufficient funding of research and development for new functional bread products in Australia, making commercialisation of high-technology products difficult.

Manufacturers have benefited from responding to consumer demand for healthier bread products by offering greater variety, a trend that will continue.

According to IBISWorld, one of the greatest growth areas has been functional breads, particularly enriched or fortified breads, which are growing at a rate of 10% to 15% annually.

The production of organic bread using organically grown cereals and avoiding artificial additives is also gaining momentum.

While growth in the industry is also expected to lie in product development, particularly products in a premium price range as consumers show an increasing willingness to buy higher quality specialty products, demand for generic goods is also growing as consumers on low incomes become less brand conscious.

Mixed bag for biscuits

Dominated by foreign ownership, the profitability of Australia’s biscuit market is threatened by the ongoing consolidation of the retail food-client base.

The continuing reduction in the number of retail buyers and growth of the giant supermarket chains will pose a similar threat to all food manufacturing industries.

While the biscuit industry experienced a 0.5% decline in revenue in 2006-07 from the previous year, it is expected to grow at an average rate of 0.6% over the next five years.

Main factors contributing to growth include the development of low-fat product ranges, export opportunities in Asia and innovative packaging formats that increase shelf-life and reduce breakage during transit, making them ideal for export.

While the industry is dominated by two major companies, smaller firms are finding success in the market by appealing to niche groups of consumers with specialty gourmet biscuits, both savoury and sweet.

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Zipper sealed pouches

Zip-Pak has launched a range of innovative press-to-close zippers for commercial shred­ded cheese packs, allowing the packaging to be reused multiple times.

Slider technology and the inclusion of an ergonomically designed clip ensures the cheese is kept fresh for longer while allowing the cheese to remain in its orig­inal package, keeping the brand name, logo and package information in front of the consumer throughout the product’s usage.

According to the company, pouches with double zippers are also available, creating a hermetic seal to enhance food safety and minimise spoilage.

Click here for more information.

Success at home and overseas for NZ company

Four years ago, JMP recognised that if it was to con­tinue its growth in the palletising and packaging mar­ket it would have to change its business model and way of manufacturing.

New Zealand has been hit hard by the cheaper Chinese products being imported into Australia and New Zealand.

JMP did not want to give up manufacturing in New Zealand so took the decision to export, despite the dollar’s value not being favourable, and to increase the work load to streamline its manufacturing and processes.

This was made easier with the support of Kawasaki Robotics and by being able to sell Robotic systems designed and manufactured in New Zealand. To support the number of systems being installed, espe­cially in Australia, JMP Australia was formed under the man­agement of Cameron Traum.

This way JMP New Zealand could manufacture the sys­tems and Traum could sell, install and service the systems locally. JMP Australia is currently installing its largest Robotic Palletising system in Australia for Nestle, which consists of twelve lanes palletising at a rate of over 60 cartons per minute.

Systems have been sold in Australia to Fonterra, Dairy Farmers, Simplot, Nestle, and Goodman Fielder, to name a few, which have all been manufactured in New Zealand. JMP has also designed and developed robotic case packing, which uses Kawasaki robots to pick up the robotic palletising on the end of lines.

Both the up-stream and down-stream lines can be sourced from one supplier. JMP holds complete robots in stock, both in Australia and New Zealand, to guarantee 100% spares and parts are always in-house.

Because the systems are manufactured in New Zealand they are fully set up and run in front of the customer prior to installation. This makes on-site commissioning quick and easy, and gives the operators confidence that the system will work, allowing them to embrace the system quickly and easily.

Investing in dairy

Fonterra has announced the investment of $44 million to increase production capabili­ties across its eleven produc­tion sites in Australia.

The investment initiative comes out of Fonterra’s newly formed ANZ business unit, which brings together a num­ber of Australia and New Zealand food companies to strengthen the company’s abil­ity to develop innovative prod­ucts and drive growth in the dairy sector.

Fonterra’s upgrade of pro­duction technology, equipment and processes will enable it to meet consumer demands for top quality, convenient and nutritious food.

“A main focus of Fonterra Australia and New Zealand is to drive sustainable growth in the dairy sector by developing innovative products and dif­ferentiating ourselves from our competitors,” Fonterra gener­al manager operations and sup­ply chain Bruce Donnison said.

“This involves looking at the entire supply chain and devel­oping ways to maximise our infrastructure, enhance manu­facturing capabilities, logistics and warehousing solutions, packaging formats and shelf presentation.”

Over the next year a num­ber of capital projects will be undertaken to upgrade process control systems tech­nology, maximise plant output, minimise downtime and main­tain dairy food quality and integrity.

A $17 million upgrade of the company’s Darnum Park site in Victoria has extended its production capabilities to include nutritional and infant milk powders. A new milk dryer enables the site to produce up to 6.5 tonnes of milk powder/hour and high-speed product pack­ing lines are able fill 10 tonnes of milk powder/hour.

“This is an example of build­ing production infrastructure that is efficient, flexible and meets consumer needs,” Donnison said.

“The nutritional baby food products will service the South East Asian market.”

A new milk dryer and bag­house system will be installed at Fonterra’s Cobden, Victo­ria, dairy manufacturing site in 2008. The multimillion dollar upgrade will enable the site to manufacture a wider range of high-quality, specialised milk powders.

September PCA dinner meetings

Members of the food industry in New South Wales and Victoria are invited to attend the upcoming Packaging Council of Australia’s dinner seminars.

Topic:

Supermarket Wars – A Global Perspective

What can Australia expect? What should companies be doing?

International guest speaker:

Mr Andrew Seth, co-author of the highly acclaimed book Supermarket Wars and former chairman of Lever Brothers, UK, and Added Value Group.

Seth’s presentation will cover the following:

  • Retailers and brand suppliers – a partnership or a contest?
  • The global market in food retailing – who’s leading it, where and why?
  • The big issues for the consumer today and tomorrow – how are these issues changing the market?
  • How are retailers and suppliers reacting to these issues and how are these changes affecting brands and packaging manufacturers?
  • Winners and losers in the global supermarket game – who are they today and who will they be tomorrow?

Dinner details:

Victoria:

Date: Tuesday 25th September

Time: 6.00pm

Venue: Melbourne Functions, Caulfield Racecourse

Click here for more event and registration details

New South Wales:

Date: Thursday 27th September

Time: 6.00pm

Venue: Parramatta Leagues Club, Wentworth Room

Click here for more event and registration details

Pure water from fruit available now

Ingredients: water from fruit

Brand owner: 018 Pure Water From Fruit

Brand/product manager: Michael Sinclair

Packaging supplier: Fullview Bottle Company

Graphics package designer: Elastic Cie

Grinders’ new grind

Ingredients: coffee

Brand owner: Grinders Coffee (Coca-Cola Amatil)

Brand/product manager: James Hondrakis, Giuseppe Cianchi

Packaging supplier: Goglio, Jet Technologies

Graphics package designer: James Philip Design

Bewitching wine

Brand owner: Jon Heslop

Brand/product manager: Richard Abraham

Packaging supplier: Plasdene Glass-pak (bottles), Quantum Trading (cartons)

Graphics package designer: Kim Heslop

New belgian chocolate range

Ingredients: Belgian Milk: sugar, whole milk powder, cocoa butter, cocoa mass, lactose, emulsifier, flavour

Brand owner: Coles

Brand/product manager: Natalee Chiodo

Packaging supplier: Dender Print, Belgium

Graphics package designer: Elmwood Design

Mount Franklin goes pink for charity

Ingredients: mineral water

Brand owner: Coca-Cola Amatil

Brand/product manager: Joanne Pitsikas

Packaging supplier: Labelmakers, Visy

Graphics package designer: Carpe Diem

Cartons for eco bananas

Eco-Punnet is the latest innovation in banana packaging — a product-specific packaging solution, created by Pacific Coast Eco Bananas (PCEB), an Australian owned family business run by Frank and Dianne Sciacca, and Amcor.

The packaging needed to adequately represent PCEB’s new style of banana (identifiable by its colourful wax tip) that tastes better, is more visually-appealing and is grown with significantly reduced inputs of fertilisers and chemicals.

The banana punnets needed to be as environmentally-friendly as the fruit, as well as have a strong visual appeal.

Eco-Punnet complies with retailers’ guidelines on desired banana sizes and non-clustered fruit.

The patented Eco-Punnet is a family of revolutionary packaging solutions that facilitates the packing of four or six individual premium bananas.

The Eco-Punnet is made from recycled materials and is 100% recyclable.

It offers enhanced ripening, greater protection and presents to the consumer as an attractive and informative retail pack.

The construction eliminates the need for plastic inserts and wraps, as well as waxed corrugated shippers, benefiting both the environment and cost efficiencies.

It accommodates bananas of varying size, features a spring mechanism to hold the fruit in place, has sufficient strength to dramatically reduce the outer transport packaging and provides the marketing platform to promote Eco-Bananas point of difference to consumers.

When the project began it was not certain that single banana packing could be mechanised so completion of this project represents significant innovation.

Call for editorial submissions

Have you got an exciting new product or innovative processing technique that you want to share with others in the food and beverage industry?

FOOD Magazine invites food manufacturers and processors to submit editorial for the magazine and the FOOD website, highlighting the novel developments at your company that are contributing to the growth of both your business and the Australian food and beverage sector at large.

Food scientists and packaging manufacturers are also encouraged to contribute editorial that will be of benefit to others in the industry, including new trends and technological advances.

November FOOD Magazine

The November issue will focus on the New Zealand food industry and food safety issues.

NZ manufacturers or companies implementing novel, or efficient food safety practises are invited to submit editorial.

New products

FOOD Magazine also invites machinery suppliers to send in new product information for each of the magazine’s sections including Ingredients, Packaging, Processing and Safety.

In November, there will be a focus on equipment that enhances the health and safety standards of food premises, workers and food products.

Submissions

The deadline for November editorial is Tuesday 2nd October.

All editorial and new product information should include a high resolution, colour image that is at least 118 pixels/cm or 300dpi at postcard size.

Material can be sent to editor of FOOD Magazine.

New vertical form, fill and seal bagger at IBIE

tna, an international supplier of turn-key, integrated packaging and processing solutions for food production companies, will display its robag 3 vertical form, fill and seal (VFFS) bagger, integrated with a tna scale, at the International Baking Industry Exposition in Orlando from October 7 to 10, 2007.

The tna robag 3 tx rotary flat jaw bagger on display operates at speeds in excess of 100 bags/minute and guarantees less than half a percent of waste.

Although the machine on display will be forming Quattro bags, it is capable of producing multiple bags styles and has four servo drive motors to provide increased flexibility and control of operation for the manufacturer.

The robag 3 tx integrates seamlessly with tna’s 514 Delta 1 Scale to enhance its performance, accuracy and reliability.

tna’s turn-key integration structure and unique product transfer system results in higher fill rates, fast and easy changeover and greater film efficiency, resulting in lower cost of ownership.

Investing in dairy growth

Fonterra has announced the investment of $44 million to increase production capabilities across its eleven production sites in Australia.

The investment initiative comes out of Fonterra’s newly formed ANZ business unit, which brings together a number of Australia and New Zealand food companies to strengthen the company’s ability to develop innovative products and drive growth in the dairy sector.

Fonterra’s upgrade of production technology, equipment and processes will enable it to meet consumer demands for top quality, convenient and nutritious food.

“A main focus of Fonterra Australia and New Zealand is to drive sustainable growth in the dairy sector by developing innovative products and differentiating ourselves from our competitors,” Fonterra general manager operations and supply chain Bruce Donnison said.

“This involves looking at the entire supply chain and developing ways to maximise our infrastructure, enhance manufacturing capabilities, logistics and warehousing solutions, packaging formats and shelf presentation.”

Over the next year a number of capital projects will be undertaken to upgrade process control systems technology, maximise plant output, minimise downtime and maintain dairy food quality and integrity.

A $17 million upgrade of the company’s Darnum Park site in Victoria has extended its production capabilities to include nutritional and infant milk powders.

A new milk dryer enables the site to produce up to 6.5 tonnes of milk powder/hour and high-speed product packing lines are able fill 10 tonnes of milk powder/hour.

“This is an example of building production infrastruc-ture that is efficient, flexible and meets consumer needs,” Donnison said.

“The nutritional baby food products will service the South East Asian market.”

A new milk dryer and baghouse system will be installed at Fonterra’s Cobden, Victoria, dairy manufacturing site in 2008.

The multimillion dollar upgrade will enable the site to manufacture a wider range of high-quality, specialised milk powders.

Tastes like honey

Ingredients: Creamy Honey: rolled oats, sugar, milk powder, maize, maltodextrin, corn syrup solids, dried honey

Brand owner: Uncle Tobys

Brand/product manager: Stephen Maidment

Packaging supplier: Amcor

Graphics package supplier: Cowan

Gourmet soups and risottos

Ingredients: Chicken & Corn Soup: water, corn, cream, gelatine (halal), vegetable gum, emulsifier, chicken, potato, onion, carrot, modified tapioca starch, chicken booster (flavour enhancers), canola oil, corn booster (colour), lemon juice, salt, pepper

Gourmet Pumpkin & Pistachio Risotto: arborio rice (water, rice), pumpkin, onion, white wine, parmesan cheese, canola oil, butter (milk), pistachio nuts, vegetable booster (flavour enhancers), modified tapioca starch, herbs and spices, salt, garlic, water, preservative

Brand owner: Mrs Crocket’s

Brand/product manager: Sam Goldstein

Packaging supplier: Tecpak (soup lid and cup), Alto (risotto tray), Amcor (risotto film), Carter Holt Harvey (risotto sleeve)

Graphics Package designer: Tin Factory Creative

Organic pasta

Ingredients: organic wholegrain farro flour, orzo flour, water

Brand owner: Senselle Foods

Brand/product manager: Stuart Smith

Packaging supplier: Giacomo Santoleri, Italy

Graphics package designer: Di Antonio, Italy