|
"Money sometimes makes fools of important persons, but it may also make important persons of fools."
Walter Winchell
Food bites . . . Retailer power in food marketing
 "Anyone who wants to continue to make branded food and drink products and sell them via the major retailers is increasingly aware that those retailers have become the early 21st century equivalent of the mid-20th century mass communications channels, including TV, radio and national newspapers. The big supermarkets are now effectively media owners, and control one of the few remaining communications channels that have any mass impact with consumers."
Tom Spickett, writing in Innova Magazine, June 2009
 Editor's Stuff - Whisper who dares?
The big news of the week has to be the decision by the Competition Commission to investigate major retailers and two wholesalers. As Business Day put it: "Nearly two years after slapping a record fine of R98m on food group, Tiger Brands, for being part of a price cartel, the Competition Commission has in its sights supermarket chains whose perceived market dominance is being compared to the wind that you can feel but can’t see."
After it recently commissioned a report into retail practices, some loud lobbying by the National Agricultural Marketing Council (NAMC) as to the power and market concentration of retailers has generated much press coverage. This has surely swayed the hands of the agriculture minister to ask the Commission to investigate the matter, albeit the NAMC is coy about whether its report triggered the planned investigation of Pick n Pay, Shoprite/Checkers, Woolworths, Spar, Massmart and Metcash. But the author of the report, Prof Johann Kirsten, is convinced retailers have a case to answer. You can read more here.
 Retailers' power and practices have long been a bone of bitter contention, and every food manufacturer I've ever interviewed in a decade of reporting on the food industry never fails to cry foul over the alleged demands of listing fees, confidential rebates, returns policies, long payment terms, profiteering, squeezed margins, inability to secure price increases, the battle by small producers to secure shelf space and the intransigence and bad manners of buyers etc etc. All will whisper, all will rail, but none dare put light nor their names to these complaints for fear of reprisal.
All the retail players in question have been quick to welcome the investigation and, denying any left-field play, have offered their full co-operation. They say they want clarity on the matter and are confident of vindication, as are many analysts who are not convinced they have a case to answer given their low margins and the competitive nature of the retail game.
So this news is surely sweet to the ears of many, if not all, in the supply chain, from farmer to consumer, as an opportunity to expose any uncompetitive practices. At the very least, it's time to officially uncover those "everyone-knows-but-no-one-will-tell" aspects of getting product to market that no doubt add layers of cost born by us all at the supermarket till. Amidst all the finger-pointing, obfuscation and hidden complexities, as consumers we all deserve a better understanding of what's behind the recent rampant nature of food inflation. And hopefully it may pull the brakes on it.
Enjoy this week's read! Email Brenda:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
SA Food Industry News
 SAB’s R6bn BEE deal
SABMiller this week announced a R6-billion black economic empowerment deal that will place about 10 percent of shares in its local subsidiary under black ownership. The broad-based deal, which will cost R1.8-billion to implement, sees at least 60 000 new shareholders benefiting and has been described as a new benchmark for BEE. Read more
SAB's BEE deal: A smart move
 SAB has always been one of the smarter and more farsighted of SA’s large corporations. Its record on what now would be called black economic empowerment goes back as far as the 1980s, when it was one of the few companies promoting black managers and setting up black truckers in business to get its beer and soft drinks into township shebeens.
 So when the group, now SABMiller, finally came out with an empowerment equity deal, it could have been expected to be smart. And so it is... But it’s the retailer piece of the deal that is not only smart but even cynical, in the way it is expected to encourage loyalty among shebeen owners at just the time when rival Heineken is poised to enter SA’s beer market. Read more
Pioneer bakes piping hot, cross buns Pioneer Foods’ erratic testimony to the Competition Commission has pushed the bread-maker into a corner. The company had spent last week denying being a member of a price-fixing cartel, comprising it, Premier Foods, Foodcorp and Tiger Brands, between 1999 and 2007.
Pioneer’s directors believed so much in the company’s integrity that they did not make any provision for a fine in the company’s latest annual budget. The trial was scheduled to run until this Tuesday, but when Pioneer Foods closed its case prematurely on Wednesday, the damage had already been done by Premier Foods, the main source of evidence. Read more
 COMMENT: He’s a little Hitler, born and bread!
An open letter to Andries Goosen, general manager of Sasko Bakeries
Dear Andries, Condolences on your spot of bother with the Competition Commission. It can’t be pleasant coming face to face with a juristic Rottweiler like David Unterhalter. Maybe you should have him checked out. He doesn’t sound particularly South African. Your best bet right now is to get him deported before he makes an even bigger fool of you.
You are being accused of participating in a national bread cartel. This is bread we are talking about, for heaven’s sake. Unterhalter is interrogating you as if you were the head of the Cali cocaine cartel . . . Read more [Some fabulous satire from SA's scurrilous columnist, Ben Trovato. Ed]
 Woolies ousts aspartame in own foods
Woolworths has announced it has become the first South African retailer to remove aspartame from its foods. Read more
SMARTIES launches in non-artificial colours Nestlé South Africa has announced that it has introduced its popular confectionery brand, SMARTIES, in non-artificial colours. South Africa is the fourth country to introduce the non-artificially coloured variants following successes in the United Kingdom, Europe and Australasia. Read more Crest Chemicals expands with CH Chemicals acquisition Brenntag, the global leader in chemical distribution, has announced that its South African joint venture, Crest Chemicals, has acquired the chemical distribution assets of CH Chemicals.
Formed in 1987 CH Chemicals markets a broad spectrum of commodity and specialty chemicals to an extensive range of industries such as coatings, industrial formulators, cosmetics, food & beverages and mining.
Michiel Vijverberg, MD Crest Chemicals Ltd.: “This promising acquisition will strengthen our presence in the South African chemical distribution market. CH Chemicals has excellent and long-lasting relationships to world class suppliers, together with its broad range of products the company is an ideal complement to Crest Chemicals. We will expand our existing business units Food, Pharma & Personal Care, Paints & Coatings as well as the Industrial Division and will add the business unit Detergents & Chemical Formulators to our portfolio.“ Read more
 Passing of a wine and food industry icon and pioneer
The Columbit group is one of the oldest and best-known packaging and processing suppliers to South Africa's wine, food and beverage industries. Its founder, Ernest Zeh, passed away two weeks ago after a brief illness, and extraordinarily, at the time was still at the helm as chairman at the age of 98. Read this 2007 profile of a pioneer who greatly advanced wine and food production in South Africa.
Food Industry News
 Coke test-markets new dairy drink in New York
Coca-Cola is reportedly test-marketing a new carbonated milk drink in New York called ‘Vio’. It’s available in four flavours: very berry, peach mango, tropical colada and citrus burst, and is positioned as a refreshment drink rather than a milk nutritional product. Read more
 EU: EFSA deems GMO maize safe
The European Food Safety Authority declared this week that a genetically modified strain of maize banned in some EU countries poses no risk to health or the environment.
This means the European Commission, which supports use of the maize, will be battling the member states, most of which are against it. After studying the strain, the independent risk assessor said the Monsanto MON810 maize was as safe as its conventional counterpart with respect to potential effects on human and animal health. Read more
UK: Knobbles and curves are back for fruit and veg Curvy cucumbers and knobbly carrots have returned to supermarket shelves thanks to the abolition of EU rules on the size and shape of 36 types of fruit and veg. Ugly fruit and vegetables that have grown just as nature intended will be back — and could be up to 40% cheaper than their perfectly formed cousins.
For 20 years EU-wide marketing standards have ensured that only the finest-looking produce reaches the shops. But to reduce red tape and bureaucracy - and make cheaper fruit and veg available as household bills rise - Eurocrats are lifting unnecessary restrictions. Read more
 Food safety drive tough on smaller companies
Food safety checks designed to prevent dangerous contamination are making it difficult for smaller businesses to compete against larger rivals, two UN agencies have said. The Food and Agriculture Organization (FAO) and World Health Organization (WHO) study said producers, processors and exporters in developing states were struggling to cope with new and overlapping requirements. Read more
Ajinomoto takes the UK's FSA to task on aspartame study Aspartame-maker Ajinomoto has challenged the Food Standards Agency's (FSA's) decision to conduct new research on the sweetener, which has been exhaustively tested in recent years and repeatedly given a clean bill of health. The FSA's proposed pilot study - designed to inform a larger study by the European Food Safety Authority (EFSA) - was "not to test the safety of aspartame, which has already been established", said the FSA, but to address "anecdotal reports" from consumers claiming to have had adverse reactions to it such as stomach aches and headaches.
Its decision was puzzling given that EFSA recently concluded there was "no need to further review the safety of aspartame" and no reason to revise acceptable daily intakes, said Ajinomoto. Anecdotal reports apparently sparking the FSA's study included "rumours circulated on the internet by scaremongers and conspiracy-theorists, mostly from the United States", an Ajinomoto spokeswomen claimed.
"Aspartame is made from two amino acids and digested just like any other protein," she added. She expected a preliminary hearing to be held at London's High Court later this year. "The most important thing is to stop the denigration of our product." [No link] Source: Food Manufacture
 US: Slowdown in once-booming organics troubles farmers
A growing number of farmers who went all-natural in the years when organic food sales were growing at a double-digit pace are giving up their organic certifications. Organic farming is costly and labor-intensive, and many consumers are no longer willing to pay the price in a recession.
Sales in the U.S. of organic foods sold mostly at supermarkets are expected to drop 1.1% to $5.07 billion this year, according to Mintel. While the drop is small, it is the first in an industry that has seen annual growth of 12% to 23% since 2003. Read more
 BOB'S BEEF: Food that tastes good? What's up with that?
Former FDA head, David Kessler's new book, The End of Overeating, has been generating huge publicity, and he's been in the UK punting its worth. You can read more here, but this is what Bob Messenger thinks . . .
 Truth is, I always thought former FDA boss David Kessler was a bit touched while in office. And he's proving it over and over again when he goes out on the speech circuit these days to promote his new book — The End of Overeating. Like this mindboggling statement given to The Times of London: "It is time to stop blaming individuals for being overweight or obese. The real problem is we have created a world where food is always available and where that food is designed to make you want to eat more of it. For millions of people, modern food is simply impossible to resist."
..... Huh? Let me see if I understand the gist of what he is saying: If only you evil people in the food industry — especially you sicko food scientists — would just create food products that taste like c**p, we wouldn't have this wretched obesity problem. Well okay then, problem solved! It's the creepy food industry's fault. How dare we make food that is so good, people love to eat it? Have we no shame? Hell, how do you product developers sleep at night knowing that your products taste good? It's time we make products that suck so bad not even dogs will eat it. Which will definitely resolve the obesity issue in this country. Kessler, you are a freaking genius.
Bob Messenger is a foremost observer of the US food industry. He publishes a daily ezine, The Morning Cup.
Food Trends and NPD
 Innova Market Insights: Satiety drawing increased weight management buzz
Solae and Fonterra have joined a growing group of ingredient suppliers to market protein ingredients on the satiety platform of functional weight management, with both claiming to offer more palatable sources of protein. Read more  Innova Market Insights: Adapting to the private label surge
While the rise in supermarket own label sales is good news for the retailers themselves, it is often seen as bad news for branded goods manufacturers. How to respond? Read more  SA: New beverage market trends
BMI Research recently published reports on trends in South Africa's coffee, tea and flavoured milk - and it highlights some interesting new developments for each. Read more The costs and complexities of supply chain complexity Proliferation in the number of products carried by both manufacturers and retailers is probably the largest driver of supply chain complexity, and results in large costs and challenges. Over the last two decades, the numbers of “SKUs” (stock keeping units) has expanded dramatically . . . According to the Food Marketing Institute, the number of SKUs on an average grocery store’s shelves is up more than 50% from 1996, rising to more than 47,000 today and exceeding 100,000 at some larger grocers.
Now, many retailers are saying there is too much micro-segmentation and it doesn’t deliver to the bottom line. Read more
 Confectionery industry forecast is sweet
Experimenting with flavours, flexibility, and variety, confectionery makers are thinking outside the bar to provide consumers with chocolate and candy innovation that will drive consumer purchasing over the next five years, according to the National Confectioners Association's (NCA) Confectionery Industry Trend Report 2009. Read more  Mintel: Taste Test Winners from IFT 2009
The Institute of Food Technologists (IFT) had its annual congress and expo in Anaheim, California, from June 6-9. Leading market research company, Mintel, hosted a stand where visitors tasted and voted on innovative new food and beverage products launched around the globe in three trend categories of sweeteners, purity and functional foods. Here are the winners
Health and Nutrition
Meat-free diet 'could reduce cancer risk' A meat-free diet could reduce the risk of developing cancer, according to a new study. More than 61,000 people were monitored over 12 years by Cancer Research UK scientists from Oxford, who found that vegetarians were 12% less likely to develop cancer than people who ate meat.
The risk was almost halved for cancers of the blood including leukaemia, multiple myeloma and non-Hodgkin lymphoma where vegetarians' risk was 45% lower than meat eaters. People who ate fish but no meat also had a "significantly lower" chance of developing many cancers, according to the research which was published in the British Journal of Cancer this week. Read more
Orange juice worse for teeth than whitening agents, study finds With the increasing popularity of whitening one’s teeth, researchers at the Eastman Institute for Oral Health, part of the University of Rochester Medical Center, set out to learn if there are negative effects on the tooth from using whitening products.
Eastman Institute’s YanFang Ren, DDS, PhD, and his team determined that the effects of 6% hydrogen peroxide, the common ingredient in professional and over-the-counter whitening products, are insignificant compared to acidic fruit juices. Orange juice markedly decreased hardness and increased roughness of tooth enamel. Read more
 Study shows celiac disease more prevalent today than 50 years ago
A study published in Gastroenterology shows that celiac disease, an immune system reaction to gluten in the diet, is over four times more common today than it was 50 years ago. Read more
Review finds no effect of soy on testosterone A review of 15 studies into the influence of soy proteins or isoflavones on male hormones has found no evidence of an estrogen-like effect.
Soy has garnered attention as a healthy source of protein, and has been linked to a multitude of health benefits, including protection from breast cancer, prostate cancer, menopausal symptoms and heart disease. But some studies have suggested that soy isoflavones could affect male testosterone levels, due to their similarity in chemical structure to estrogen, which means they bind to estrogen receptors and can exert estrogen-like effects. Read more  Brits still not doing it for their hearts
Despite numerous warnings about the risks posed by cardiovascular diseases, Brits are still not doing enough to improve their heart health, says Datamonitor. Read more
Sustainability
 Africa alone could feed the world?
Doom-mongers have got it wrong - there is enough space in the world to produce the extra food needed to feed a growing population. And contrary to expectation, most of it can be grown in Africa, say two international reports published this week. Read more
 Eat red meat just three times a week, says World Wildlife Fund
Health warning? Red meat should carry advise that it should only be eaten three times a week, says the WWF, which also wants Britons to switch to milk substitutes as part of a radical move away from dairy farming. However, the food industry yesterday slammed the idea as 'dangerous', 'totally unrealistic' and likely to decimate British agriculture. Read more
UK: The marchioness, the pig farmers and the £140,000 film about muck  An aristocratic activist has infuriated the world's biggest pork producer. For the past five years, the English aristocrat has been researching, filming and narrating "Pig Business", a feature-length documentary that examines Smithfield's system of intensive production.
At the core of the Marchioness of Worcester's film is the allegation, denied by Smithfield, that its "lagoon and spray" system, which pumps excreta from its pigs into pools and fields, blights the local environment. Moreover, "Pig Business" claims, such factory farms are viable only because they do not pay the wider social and environmental costs of their operations. Read more
Buying farmland abroad: large, risky and controversial
 Rich food importers are acquiring vast tracts of poor countries' farmland. Is this beneficial foreign investment or neocolonialism? Supporters of such deals argue they provide new seeds, techniques and money for agriculture, the basis of poor countries’ economies, which has suffered from disastrous underinvestment for decades. Opponents call the projects “land grabs”, claim the farms will be insulated from host countries and argue that poor farmers will be pushed off land they have farmed for generations.
What is unquestionable is that the projects are large, risky and controversial. In Madagascar they contributed to the overthrow of a government. Read more
 US: Keeping poultry in cities
Chicken-keeping is on the up across the US and there are several financial and health reasons behind a new craze... For Americans who are concerned about eating locally or organically, hens can help. They produce fresh, free-range eggs. They eat table scraps, and their waste goes in the compost pile. Read more
Food Science & Technology Stuff
New technologies can create unsaturated functional semi-solid fats from liquid oils  New 'nanostructuring' techniques that turn liquid oils into more functional solid fats could replace controversial methods including partial hydrogenation or inter-esterification (using acids or enzymes to harden oils), say US scientists. Read more
 New acoustics keep staff safe from sound firms install sound-absorbing ceilings Two major manufacturers are installing suspended acoustic ceilings this summer in a bid to keep noise down to more manageable levels. Read more
Packaging Stuff
 Clive's Column: New Packs on SA's shelves
Check out what's caught Clive Glover's eye recently, accompanied by his beautiful digital photography. Featured this month: the Absolut Masquerade-themed bottle, Butler's generic cocktail liqueur box, Mageu Number 1 in Elopak Mini Diamond Curve cartons, Burchell's Premium Cider and Simba Sunbites. Read more
Tetra Pak launches easy-to-use Tetra Brik Edge Tetra Pak has announced the global launch of Tetra Brik Edge, a packaging solution for chilled liquid dairy products that it says is cost effective, facilitates stackability and boasts user-friendly features for consumers
The 34 mm diameter SimplyTwist screw cap on Tetra Brik Edge requires a low opening force, designed to be easy to open, pour and reseal for everyone. The large diameter of the closure is also ideal for smooth pouring of thicker dairy products such as cultured milks and drinking yoghurts as well as milks and flavoured milks. The angled top makes it easier to grip the cap, there is more space for the hand and fingers and, when pouring, the latest addition to the best selling Tetra Brik range doesn't need to be lifted high. Read more
 Is lightweighting shaping the bottled water industry?
It will come as no surprise that lightweighting looks set to dominate PET water bottle design projects throughout 2009. This article looks at some of the latest developments from manufacturers and brand owners hoping to reduce the amount of packaging they use. Read more
Miscellany
 Over the moon about honey
In baking, on roasts, slathered on toast — even on cuts and burns; there aren’t many things raw honey isn’t good for, writes Penny Haw, well-known industrial and consumer food journalist. Do read her splendid essay on honey published in The Weekender; on Penny's legendary maternal grandfather and his eccentric bee-keeping ie The Beekeeper Who Was Never Stung. An excerpt:
"Jack loved bees. Barefoot as usual — he only wore shoes to weddings and funerals — and dressed in his customary short-sleeved khaki shirt and shorts with a felt hat propped on his bald head, he hunted down wild swarms in the indigenous forest that enveloped a deep gorge near the farm.
"Having located a colony — typically in the branch of a tree or in the old burrow of an ant bear — he carefully folded one of his massive, rough hands around the queen, then stood motionless while the rest of the swarm settled upon his hand and arm in a bustling ball of bodies.
He was never stung: “Bees are very smart,” he told me, whenever I asked him why the bees did not zap him. “They understand, because of my gradual and gentle movements, that I don’t want to harm them.” Read more
UK: Botswana's No1 detective launches cookbook Alexander McCall Smith's heroine, Precious Ramotswe, the plump founder of Botswana’s The No1 Ladies’ Detective Agency, is spilling the secrets of her cakes and snacks in a new, for-charity cookbook. As Africa's most famous “traditionally built” detective, she is as well known for her love of Botswanan vetkoek and other calorie-laden treats as for her sleuthing.
The new cookbook, supposedly written by Ramotswe, is the idea of Stuart Brown, a charity worker and former BBC journalist from Edinburgh, who has collected authentic Botswanan recipes while working for GALVmed, a charity which vaccinates livestock in Africa. Read more
Storing grain predates agriculture, and may have propelled it The period when humans stopped hunting and gathering and settled down to become farmers is one of the most important in history. It ranks with the original human exodus from Africa about 60,000 years ago, which led to Homo sapiens becoming a global species, and the beginning of the industrial revolution, 250 years ago, when many people stopped being farmers and began to earn their livings in other ways. Yet it is not well understood.
A piece of research published recently in the Proceedings of the National Academy of Sciences by Ian Kuijt of the University of Notre Dame, in Indiana, and Bill Finlayson of the Council for British Research in the Levant, may shed more light on the matter. Read more That's it for this week, folks!
|
Current Newsletter 
