Newsletter September Issue 11

Issue 11 - September 2007

Creating links to news that matters for food & drink markets – brought to you by William Reed Events & Exhibitions NEWS

Foot & mouth disease UK meat producers and processors are once again under threat from the latest outbreak of foot and mouth disease. Export markets were just beginning to recover after the previous ban was lifted on August 25. The ban also takes an important source of supplies off the European market at a time when the price of meat is rising to account for the increased cost of feed. As the latest countrywide ban on livestock movements of cattle, sheep, pigs and other ruminants takes effect, UK producers and processors will face a severe reduction in production. The three latest cases were just a few miles away from the Pirbright research complex, the site blamed as the source of the last outbreaks. The new cases are also believed to involve the same strain of the disease found in the outbreaks last month. The meat industry estimates that the previous ban on exports cost industry about €2.7m a day. Visit www.defra.gov.uk/footandmouth for further information or call the Defra Helpline on 0845 9 335577

Supermarket code is “toothless” A new survey conducted by accountants Grant Thornton claims 52 per cent of food suppliers are unfamiliar with the Supermarket Code of Practice, introduced by the OFT in 2002. Even more suppliers, 76 per cent, don’t believe the Code offers any protection from increasing supermarket power. The voluntary code is criticised for being ‘toothless’ and the fear of being de-listed by the supermarket chains is a far greater threat, with their ‘unreasonable behaviour’ putting ‘a huge financial strain’ on food suppliers. One supplier, whose contract worth £40million/year with ASDA was terminated at just 12 weeks notice, is still waiting for the OFT to decide if this was a Only two out of ten global shoppers breach of the Code after 2 years. assess nutritional value when they make purchases. In the survey 22 per cent of suppliers called for the introduction of a legal requirement for supermarkets to confirm key terms of trade in writing. In the early 20th century it was believed that the world market for cars would reach only 4 million because the world would run out of chauffeurs. Forks used to be known as split spoons

TIP is the acronym for To Insure Promptness The banana is a herb

Food production has increased faster than population over the last 40 years In 1994, Chicago artist Dwight Kalb sent David Letterman a statue of Madonna, made of 180lb of HAM!

Sweet success Sales of honey rose 14 per cent in the UK between 2004 and 2006, says Mintel, while marmalade saw a 10 per cent drop over the same period. The total ‘sweet spreads’ market was worth US$253 million last year, reflecting no real growth since 2004. But there would have been a decline without honey sales increasing to £67million, thanks largely to its healthy credentials, Mintel claim. Jam still holds number one spot with 35 per cent of the market, followed by honey 26 per cent; marmalade 21 per cent and peanut butter 10 per cent.

EYE ON INDUSTRY ISSUES

World first in food training QFT (UK) Ltd, which specialises in e-learning courses, has joined forces with UK awarding body ASET to be the first in the world to offer Level 2 Food Safety awards on line to the food manufacturing sector. A second award, in catering, is available from this September. Previously these syllabus awards were only available through classroom training or by visiting dedicated computer centres. Now candidates can visit the five training lessons on line and absorb the fully illustrated learning at their own pace, says QFT. The development of electronic testing and instant certification should be appreciated by busy companies and individuals who can now achieve ‘just in time training’. Details of other ASET certificated training is available on line at www.elearnshop.co.uk

Cheese squeeze…. The price European processors pay for cheese is set to rise ‘significantly’ according to European Dairy Association chief Joop Kleibeuker. Speaking to DairyReporter.com he said companies may well have to reconsider how they use the product to formulate their goods. Concerns now exist that Europe will face a cheese shortage. Dwindling milk supplies and the current high prices commanded by butter and skimmed milk powder add weight to these concerns. Delays in prices rises for cheese products are accounted for by the three to six month contracts often agreed between processors and their suppliers. Once these end, prices will inevitably rise and may be passed on to the consumer, says Kleibeuker, which could have an effect on consumption, as seen already in the USA.

…and milk surge Dairy co-operatives around the world are having to pay their suppliers regular increases for milk as prices for the raw product continue to surge, says a report from agri-business consultancy Promar International. Commissioned by First Milk the report highlights concerns and patterns in the global dairy market. Richard Greenhalgh, chairman of First Farms said that international demand for skimmed milk powder, particularly from China, Latin America and North Africa ‘will impact on the UK for some years. “Current market rates could be in place for some time….if a sustainable supply of liquid milk and cheese for the home market is to be ensured,” he added. The milk commodities market internationally is set to remain volatile for some time with reduction in exports from Australia and South America and EU reforms on quotas for dairy farmers.

New food training facility at Lincoln University July 2008 will see the opening of a new facility offering training, research and an actual food production factory which can act as a ‘live laboratory’. The 1,400 sq metre unit, costing £3.3m, will have three dedicated areas. Many companies have donated equipment for the training and research sections, including Ishida Europe Ltd. Already more than 3,000 food processing specialists pass through Lincoln University’s Holbeach Site each year taking advantage of the bespoke training on offer for the sector. Mike Dudbridge, senior lecturer at Holbeach, who is head of the project, claims this will enable the industry to tap into the expertise and facilities even more easily and quickly. “Companies often need training at short notice. We can offer this with state-of the-art technology from next July,” he confirmed. The University has undertaken a detailed study of the use of automation in the food processing industry across Europe. The study looked at food manufacturers in Germany, France as well as the UK and included long and short shelf-life products. Mike Dudbridge, senior lecturer, Lincoln was partnered in the project by leading food institutions from Germany and France and the Lincoln University Holbeach study was supported by Ishida Europe.

The end of shake and tap? A new coating for the inside of containers for ketchup, mayo and other sticky products is set to end the problem of what gets left behind in the bottle according to the Fraunhofer Institute of Germany. The 20 nanometer thick coating which made from a plasma already used in neon lamps will be launched later this year at the ‘K’ exhibition in Dusseldorf. Developed by three German research institutes, (Fraunhofer, IGB and Munich University of Technology), the coating will aid recycling and reduce the product residue by half or even more it is claimed. Issue 11 - September 2007

EYE ON INDUSTRY ISSUES

Home help Almost three-quarters of food producers are claiming their order books are above normal thanks to domestic orders, says the latest CBI industrial trends survey. But exporters report a less rosy picture with 23 per cent above and 17 per cent below normal levels. Some 62 per cent of respondents expect average prices for domestic orders to increase over the next three months, but almost half reported stocks of finished goods were less than adequate.

Calls to support UK pig industry At a meeting held at Sainsbury’s Pimlico store BPEX chairman Stewart Houston called for sustainable supply chains as a key element in tackling the economic threats facing the British pig industry. The meeting, attended by Food and Farming Minister Lord Rooker and senior Sainsbury’s representatives, said real improvements in productivity and competitiveness had been made in the last two years, but recovery was now being threatened by economic factors such as the rise in feed costs. “Sainsbury’s already has a well-developed group for beef suppliers and we are discussing extending the concept to the pig industry,” said Houston. The supermarket chain now claims to be 100 per cent British on pork across its core lines. Lord Rooker gave his strong support to partnerships between retailers and the British pig industry to promote home grown pork products.

Classy burgers Up market eateries for burgers, chips and even pie and mash are bringing people back to these ‘old favourites’ according to research by Mintel. Following on from the gastropub they will help the ‘eating out’ market grow by 27 per cent over the next 6 year from its current annual value in the UK of £17.7 billion.

Pensioner power By 2030 over one billion of the world’s population will be over 65, which presents a huge opportunity for food and grocery companies according to research published by IGD. The fastest growth in senior citizens is taking place in emerging markets like China and India. But, worldwide, these will be the first ‘sixty-somethings’ with a long standing exposure to marketing and brands and also with serious purchasing power. Investing effectively in the middle-aged market segments of today will reap “huge benefits” says IGD. The Institute identifies ageing, along with other trends such as urbanisation, immigration and the changing role of women as being “the most important influences on food consumption in the 21st Century”.

China is top location A new study by Deloitte & Touche reveals two thirds of companies surveyed are planning to expand their operations into China in the next five years. Of these 82 per cent expect to invest in production facilities, 78 per cent in sales and distribution and 44 per cent in R&D. Preference for China remains strong despite product safety concerns, rising labour costs and increases in raw material prices, says the study. Firms with annual revenues in excess of $1 billion are more likely to invest in emerging markets and while China remains the favourite location almost half said they planned to expand production in other developing countries.

Putting the fizz in drinking at home Champagne and cocktails are now the order of the day, or night, in many UK households with sales of wine and champagne for domestic consumption up 26 per cent between 2002 and 2006. Likewise spirit and liqueur sales increased by 16 per cent over the same period. So it’s out with the ‘party eight’ and in with the Bolly darling! Issue 11 - September 2007

EYE ON THE MARKET

The Show Teams: Food & Drink World 2008

www.foodanddrinkworld.com

FOOD & DRINK WORLD NEC 6 - 9 April 2008

Marketing: Clair Bowman + 44(0)1293 867 639 [email protected]

FDE 2008: Jack Halliday or Sarah Thomas +44 (0)1293 867616 [email protected] CRS 2008: Matthew Butler or Rebecca George +44 (0) 1293 867613 [email protected] [email protected] Foodex Meatex 2008 & BIE 2008: Daren Rose-Neale + 44 (0)1293 867 626 [email protected] IFFE 2008: David Inkle +44 (0)1293 867613 [email protected] PR - MAJIC LIMITED: Mary or Audrey +44(0)1424 777783 [email protected]

Please let us have your news and any thoughts about the sort of news headlines and links you would like to see published. E: [email protected] Food & Drink Matters is produced by William Reed Events & Exhibitions as a service to exhibitors and visitors.

Issue 11 - September 2007

Ready meals still in vogue The UK is still the largest market for ready meals in Europe, shows a study published recently by Mintel. Of the five major EU countries in the study UK consumption for 2006 to 2007 stood at €3bn with sales expected to grow a further 25 per cent between now and 2011. The UK is followed by France at €2bn. Twenty three per cent of Brits are likely to eat a ready meal at least once a week, while only 9 per cent of Germans do the same, (source TGI Europa). But Germany will be the biggest growth market over the next 5 years, says the report. In the UK leading retailers of ready meals, such as M&S, are highly responsive to consumer trends, offering a variety of products for many different tastes. Adding to consumer convenience aluminium trays has now been given a clean bill of health for use in the microwave oven following a study by the Fraunhofer Institute, in Germany.

Food & Drink World Showcase Special Features – specialties abound Keep an eye open for regional specialties at Food & Drink Expo 2008 where you will find a host of products within the Regional Areas in Hall 6. Take a look at the best on offer from local food producers in pavilions operated by East Midlands Fine Foods, Heart of England Fine Foods, Invest Northern Ireland, Northumbria Larder, Scottish Development Int, The Regional Food Group of Yorkshire & Humber, Wales the True Taste, Savour the Flavour - Dumfries and Galloway, Pure Produce of the Isle of Man and many more… Also watch out for: Chefs Competition Theatre over 1,000 chefs from across the industry, including three semi-finals of Knorr Chef of the Year. Wine And Cheese Theatre - Discover the award winning cheeses and wines of 2008. Soil Association Organic Village; PLUS: 30 international pavilions from as far a field as Australia, Europe, India and South East Asia.

Weightron weighs in at Classic Cuisine and Foodex Meatex Classic Cuisine, of Northampton, has purchased two ‘low mount’ mobile volumetric depositors from Weightron Bilanciai, which will be exhibiting at Foodex Meatex 2008, to increase production of its range of frozen gourmet meals, due to rapid growth in demand. The company, now supplies its customers, which include restaurants, pubs and motorway services, with more than 100,000 single meal units per week. The two depositors are used for a variety of processes, including sauce deposition, filling boilable sauce pouches and piping mashed potato. The machines are capable of handling delicate or fragile vegetables as well as cooked meats suspended in sauce.