“We’ll Just Have To Find Ways To Lower Costs And Stay Competitive”
At the recent food exhibition – Malaysia International Food & Beverage (MIFB) – held in Kuala Lumpur, its World Food Shortage Conference took centre stage. Literature introducing the conference read: “On international commodity markets, food prices have gone up 54 percent over the last year, with cereal prices soaring to 92 percent. Meanwhile, food reserves are at their lowest for 25 years and commodity markets are extremely volatile, subject to sudden spikes and speculation”.
Due to the recent price hikes, reports have shown mixed responses as to whether consumers are tightening their belts, especially when it comes to food purchases. Over in Taiwan, visitors at Food Taipei exhibition were not as optimistic (page 34). And as Eduardo C Escano, CEO of Lucky Fortune Foods Corporation in the Philippines said succinctly, “We’ll just have to find ways to lower costs and stay competitive”. In this issue, Food Export International’s exclusive interviews attempt to suggest how.
Sunny Koh, Group Managing Director of Singapore-based Chinatown Food Corporation, and a veteran and leadership figure involved in many food-related industry and governmentsupported bodies, shared with us that it is not so difficult to make money. “What you save can be your profits,” he said (pages 30-33). In view of the onslaught of rising oil prices, and of vital raw materials like flour, rice and even plastic, he advised that the effective use of automation and packaging could turn production costs into profit margins.
For award-winning bottled drinks makers hailing from Wales, there are tips that small- to medium-scale enterprises can profit from (pages 35-38). Even though it is hardly a manufacturing or export giant, by focusing on the niche and premium markets, there is enough pie to go around. What’s more, this is the market stratum that is least price sensitive.
Patrick Gee, Director of the multi-award winning Welsh Llanllyr Water Company said: “We’re not looking to blanket the market … We have no interests in supermarkets. Our target is the hotels and restaurants. And we’re very selective about it, due to our product differentiation … Five-star hotels portray a high-end image and our water’s quality matches their food’s quality”.
That says something about the roles that distribution strategy and market positioning play, for exporters to stay competitive. In addition, both Chinatown Food’s Koh and Llanllyr’s Gee spoke of one thing in common: innovation. Be it in terms of product development or packaging, a distinct and recognisable differentiation is the key to survival.
A fundamental concerning differentiation, says brand innovation specialist Chandran Dharmarajan, is the need to “innovate or evaporate”(pages 46-48). He added, “So we have to stay ahead. To do that, we don’t just innovate for growth. We have to innovate while growing too. Innovate with everything from product to processes to services. Very importantly, innovate now, and do it yourself.”
Singapore: In just a decade, Fish & Co. has expanded from a single outlet to 12 in Singapore, two in West Malaysia, and 15 other stores owned by franchisees in East Malaysia, the Philippines, Indonesia, Middle East and Hong Kong. Founded in December 1998 by Managing Director Ricky Chew and Senior Director Lambert Yeo, the company outlines its corporate mission with the aim “To provide good value seafood, coupled with excellent service and outstanding quality, in a relaxed and entertaining environment”.
To fulfil this mission and to cope with intense competition, rising cost of raw materials and rental and the tight labour market, Fish & Co. embarked on the Customer-Centric Initiative (CCI) – introduced by the Singapore government in 2005 - to ride through these key challenges in order to stay competitive and profitable. Chaired by the SPRING Singapore (SPRING) and the National Trades Union Congress (NTUC) with representatives from the Singapore Workforce Development Agency (WDA), and the Singapore National Employers Federation (SNEF), the CCI encourages companies to be committed to service excellence and take the lead in raising service standards in their industry to transform Singapore’s service quality.
At the launch of Fish & Co.’s CCI Project: “Cultivating the F.I.S.H. Service Culture” , the company states that it aims to align every individual in Fish & Co. to its corporate mission, values and service culture. The acronym F.I.S.H. stands for: (F) Fulfilling Beyond Customer Expectation, (I) Initiating Service with Great Passion, (S) Sustaining Passionate Service Moments and (H) Harvesting Memorable Dining Experience. Since embarking on the programme in May last year Ricky Chew, CEO said, positive results have emerged showing improved overall service level at an average of 8.7 percent. “Most importantly, we have also experienced a corresponding increase in sales,” he added.
The CCI, also supported by the Singapore Tourism Board, the Singapore Retailers Association and the Restaurant Association of Singapore has developed a total assistance package to assist companies in their service quality transformation. Beginning with the retail sector in 2005, the CCI has been extended to include the food & beverage sector in 2007. For 2008, the CCI will also include the transport and healthcare sectors.
Singapore: Singapore Food Industries Limited, a fully integrated food logistics and catering supplier in Singapore with operations in the UK and Ireland, records strong earnings growth of 29 percent in the second quarter of this year.
Group turnover was up 3.4 percent to S$342.7 million (US$250.4 million) due to strong sales growth in Singapore which boosted profits as sales climbed 17.5 percent during the first half of the year. Sales in the UK and Ireland dipped 4.9 percent to S$190.1 million (US$138.9 million), due to the impact of a weak pound against the Singapore dollar. Excluding currency fluctuations, however, sales in the UK and Ireland recorded a rise of 4.7 percent. Operations in these two countries contribute more than 50 percent to Group turnover. Its UK-based Daniels Group business grew by 1.5 percent in pound sterling. The Daniels Group is a leading supplier of fresh cut fruit and ready meals to the UK and Ireland and distributes fresh chilled soups and porridge under the brand ‘New Covent Garden Food Company’.
“Both the Singapore and UK operations have continued to improve in their underlying business performance in 2Q2008 with strong profit growth. The SFI Board is pleased to declare an earlier interim dividend of 1.8 cents per share,” said Roger Yeo, CEO of Singapore Food Industries.
Batu Pahat, Malaysia: Malaysia’s Federal Agricultural Marketing Authority (FAMA) has signed a memorandum of Understanding (MoU) with Purecane Manufacturing Sdn Bhd, to market sugarcane produced by 79 farmers on contract farms in Johor, Melaka and Negri Sembilan.
FAMA chairman, Datuk Paduka Badruddin Amiruldin, said, “This is a government initiative through its agency to ensure a sustained supply of sugar cane as well as a guaranteed market and at mutually-agreed prices.”
In Malaysia, sugarcane production has continued to decline from an estimated yield of 845,560 metric tonnes in 2004 which dropped by 10.5 percent in 2006. A year later, production was forecast at just 755,770 metric tonnes. In 2004, the total acreage for planting sugarcane was 14,725ha. In 2007, it was reduced to 13,880ha.
Badrudin said, “Under the circumstances, the contract farming being undertaken by Fama plays an important role in ensuring continued supply and a permanent market.” The government, he added, had devised several measures including building a sugar cane collection centre (PPT) in Semerah, Batu Pahat at a cost of RM4.5 million (US$13.8 million), to improve the quality of sugar cane produced, especially for the export market. The one-stop centre, he explained, would be a catalyst to develop and expand the strategy for the marketing of Malaysia’s sugarcane. The centre will be equipped with facilities to test and maintain the quality of sugarcane, for both local and overseas market.
Nilai, Malaysia: Danone Dumex (M) Sdn Bhd plans to invest RM65 million (USS19.9 million) to upgrade its children’s nutrition production line at its plant in Nilai, Negri Sembilan. The new EaZyPack production line is one of five lines in parent Groupe Danone global network. With a production capacity of up to 2.6 million units, it is the first EaZyPack line to receive halal certification.
In a Business Times Online report, Danone Asia Pacific regional marketing director Greg McCullough said the Nilai plant provides Danone Dumex with the ideal springboard to further expand its children’s nutrition business into the growing halal market.
EaZyPack is an innovative packaging format developed by Danone Dumex with a lid that can open and close with a light push and click using just one hand. At the opening ceremony officiated by Deputy Minister of Trade and Industry Datuk Liew Vui Keong, Managing Director (Malaysia, Singapore and Brunei) Gerald Geraets said the lid comes with a spoon stored underneath for easy storage and avoids the need to dip one’s fingers into the milk powder.
Gerald Geraets believes their state-of the-art facility in Nilai will enable the group to pack a wide range of milk powder based products in different formats from cans and pouches to the innovative Eazypack. Currently, 70 percent of the Easypack line is distributed throughout Malaysia, Singapore and Brunei while the rest are exported to Southeast Asian countries, the Middle East and Africa.
Klang, Malaysia: In his paper,
“Opportunities for Snack Foods in the Healthy Eating Era”, Dr Suku Bhaskaran, Director of the Food Marketing Research Unit at Australia’s Victoria University suggested that growth in income contributes to a higher consumption of snack food. In developed countries, snacking has become a major food consumption trend as more people lead busy lives and do not have time to partake in a formal sit-down meal three times a day.
Munchy’s has introduced its bite-sized biscuits – the first of its kind in Southeast Asia – as a handy snack which can be consumed just about anywhere, at any time. Munchy’s Mini with its three variants, Cheese Cream, Chocolate Cream and Peanut Butter Cream, is the company’s latest offering to stave off those hunger pangs in between meals. If one is stuck in the evening rush hour traffic, in need of a quick nibble at home until lunchtime or hanging out with friends, there’s a Munchy’s Mini to the rescue. Small in size and big on fun, these tiny biscuits remain true to the award-winning brand’s hallmark of world-class quality and value.
At the ‘Mini Bite Me’ preview in April, Chief Executive Officer of Munchworld Marketing Sdn Bhd, CK Tan, said, “We believe Munchy’s Mini will appeal to a wide variety of people because it offers a great new way of consuming munchies. Not only is it innovative, it truly is a reflection of our brand philosophy which is ‘Life’s more fun with Munchy’s’.”
Vietnam: In an unprecedented move, Vietnam, the world’s second biggest exporter of rice, will introduce its first tax on rice exports to ensure sufficient domestic supplies. Rice export contracts priced from US$600 – 700 per tonne, free on board (FOB) will be taxed at VND500,000 (US$30) per tonne. Prime Minister Nguyen Tan Dung states on the government’s website that the amount of tax for rice costing US$1300 a tonne may reach up to VND2.9 million (US$173).
Signing of new rice-export contracts between April and June has been barred, contributing to the surge in prices. Spurred by rising food and energy costs, Vietnam’s 85 million people are battling to cope with the fastest inflation in more than 16 years.
Talking to the Shanghai Daily, David Cohen, director of asian economic forecasting at Action Economics, said that tax on rice shipments “would tighten the supplies available from the world market.” He adds, “Soaring prices of rice from Vietnam had been a key contributor to inflation accelerating in the region.”
Bangkok: Vietnam’s decision to impose taxes on rice exports has indirectly benefited Thailand. The Bangkok Post reports Iran is looking to buy at least 100,000 tonnes of Thai rice and Bahrain will purchase 40,000 tonnes of Hom Mali rice under government to government deals. Libya, which has never bought Thai rice, is rumoured to be interested, according to Chookiat Ophaswongse, president of the Thai Rice Exporters Association. Although purchase orders have yet to be confirmed, he projects the Thai export market will grow in the second half of the year, especially with news of the Vietnam’s government directive to curb rice exports.
He added that states which have traditionally imported rice from Vietnam such as Africa, Iraq and Iran would most likely source their rice supply from Thailand as Vietnam rice is expected to be costlier. Thailand, which exported a record 10.13 million tonnes of rice in 2004 is expected to ship more than 10 million tonnes this year.
Jakarta, Indonesia: Strong demand for Indonesian tea is expected to boost exports to eight percent this year, an industry player informs The Jakarta Post. As the world’s sixth largest tea producer holding six percent of the global tea market, Indonesia’s shipment of green and black tea is set to increase to 102,600 tonnes this year from 95,000 in 2007. Citing these figures, Abdul Halik, chairman of the national tea counci l said “International demand for our tea will likely increase as demand for tea from Kenya and Sri Lanka – the world’s largest tea exporters – is predicted to increase this year.”
Domestic consumption, however, is expected to remain constant as most Indonesians view tea as merely a refreshment, unlike other countries which tout its medicinal properties. Abdul Halik added, “Despite the (world wide) boom in green tea, domestic consumption in Indonesia is still low at around 300 grammes per capita per year, as compared with, for instance, the 2.5 kilogramme per capita annually in the UK.”
Abdul Halik said maintaining product quality is a problem due to low maintenance, especially at public plantations which produced 23 percent of Indonesia’s tea in 2007. This year, production is expected to decline from 167,000 tonnes last year to 160,000 tonnes in 2008 due to the lack of fertilizer, he added. Indonesia’s tea comes mainly from West Java, Central Java and North Sumatra.
The average price of Indonesian tea is US$1.34 per kilogramme, while Sri Lankan tea is priced higher at US$1.8 per kilogramme. Kenyan tea, however, is priced at US$2 per kilogramme.
Indonesia exports tea to the EU, the US, the Middle East and Eastern Europe.
Manila, Philippines: Philippines’ Department of Agriculture (DA) order to allow buffalo meat imports is facing stiff opposition from local associations - National Federation of Hog Farmers Inc. (NFHFI) and the Philippine Association of Meat Processing Inc. (PAMPI) – fearing threats of disease that may have adverse impact on the price of livestock.
The order allows food operators, hotel and restaurants to import their own tablegrade buffalo meat. The Manila Bulletin records NFHFI chairman Gabriel Uy voicing his fears on buffalo meat imports from India: “We’re just done with our battle against FMD (foot and mouth disease), and here is an order contradictory to it. The OIE (Office International des Epizooties) has not yet certified India as foot and mouth disease-free.”
Monitoring, according to a PAMPI officer, will not be easy as buffalo meat can find its way to the local wet market and dampening hog prices from the former P100 (US$2.26) to P115 (US$2.60) per kilogramme to the much reduced price of P80 (US$1.81) per kilogramme at present.
The Philippines import buffalo meat at around 40,000-50,000 metric tonnes annually. At present, only meat processors (PAMPI members like San Miguel Foods) are allowed to import buffalo meat at manufacturing grade. Uy added, “For sure, buffalo meat importation will have (a negative) impact on the local industry. We’re now even encouraging export of pork to China. That means we’re self-sufficient.”
New Delhi, India: The Indian government’s decision to free up sugar exports is good news for sugar companies, with mills enjoying the rise in prices. In India, the government has complete control over sugar prices through a monthly release mechanism.
“We might completely abolish the release-order mechanism or make it quarterly, half-yearly or even annually,” a senior government official said to The Financial Express. Sugar exports were banned in 2006 to stop prices from spiralling out of control.
Holding back supply has led to a double-digit push up to retail prices in July, reports The Economic Times. In the current quarter, the Ministry of Agriculture and Consumer Affairs, has allowed mills to sell 37.50 lakh tonne sugar which is not enough to meet demands. Consumers are paying up to Rs20 (US$0.47) per kilogramme for sugar, a rise from Rs15.60 (US$0.37) per kilogramme in June. In New Delhi, wholesale sugar prices shot up by nearly Rs50 per quintal end July as production is expected to fall ahead of the festival season which will begin around mid-August.
Sugar merchant Deepak Kumar of Uma Traders informs The Hindu Business Line that a fall in the supply of sugar is likely to happen due to falling sugarcane crop production as farmers shift to other crops in the hopes of better returns. Uncertain weather is also a contributing factor in cane-producing states such as Maharashtra, Andhra Pradesh and
Karnataka.
India, the second largest sugar producer in the world after Brazil, is expected to produce over 25 million tonnes of sugar this year with 12 million tonnes in surplus – a reduction from a record 28.4 million tonnes produced last year. India is the world’s largest consumer of sugar at 22 million tonnes per year.
New Delhi, India: Gloria Jean’s, the US-based coffee chain with 850 stores in 30 countries, has been given permission by India’s Foreign Investment Promotion Board (FIPB) to set up a wholly-owned cash-and-carry subsidiary in the country supplying coffee beans, merchandise and equipment to its local franchisees.
In its December 2007 agreement with master franchisee Citymax Hospitality (India) - a part of the Dubai-based Landmark Group - 500 coffee outlets will be launched across the country over the next 10 years. Apart from the local procurement of local coffee, the proposed subsidiary would be able to import incidental products from other countries like China and Australia.
Unlike market leader Starbucks, which had failed twice in its bid to set up a 51:49 joint venture with a local partner for investing in single-brand retail stores in India, Gloria Jean’s took a route similar to that taken by Wal-Mart. The largest retailer in the world opted to invest in a cash-and-carry subsidiary supplying to front-end stores under a franchisee agreement with the Bharti Group.
Australia: The world’s largest coffee chain has decided to shut 73 percent of its stores in Australia due to a clash in coffee culture brought by European immigrants, especially the French and Italians. Starbucks Coffee International, a subsidiary of the Starbucks Coffee Company will close 61 out of 84 stores in Australia. Citing “challenges unique to the Australian market” CEO Howard Schultz, however, stated that other international markets remain strong.
John Roberts, a professor at the Australian Graduate School of Management at the University of New South Wales told Bloomberg: “Quality coffee and a coffee culture were what Starbucks had to compete against in Australia.” Starbucks, which entered the Australian market in 2000 with its first outlet in Sydney, could not compete with neighbourhood cafés serving stronger-tasting coffee at lower prices. “One of the problems Starbucks faced is that you can’t talk to the French or the Italians about their coffee and quality in the same sentence,’’ Roberts added.
This exercise is the first mass closure after Starbucks announced that it would close 600 outlets in the US. The coffee chain is also facing pressure from other operators such as Gloria Jean’s and other small independent outfits. With the rise in petrol prices, consumers’ changing spending habits are also affecting sales.
Port Lincoln, Australia: Allotuna,
a European research consortium, has successfully spawned more than 10 million Atlantic Bluefin Tuna eggs using a method pioneered by Australia’s Clean Seas Tuna Limited. Members of Clean Seas’ advisory panel Dr Dinos Mylanos and Prof Chris Bridges collected the eggs from sea cage broodstock early July after hormone induction trials in Italy. The spawned eggs have been placed in hatcheries in Italy, France, Crete, Israel, Malta and Spain for further rearing and research.
Pro f Bridges stated, “This development represents a major breakthrough in providing commercial quantities of eggs ‘on demand’ for feeding into hatchery systems. Although there is much further work to do, it is clear that this technology can be applied to solve one of the major bottlenecks in the production of sustainable aquaculture for the endangered Bluefin Tuna.” This technological breakthrough is important as Mediterranean Bluefin Tuna wild stocks are heavily threatened by overfishing. On June 16, the European Commission closed the Mediterranean bluefin tuna fishery to EU industrial fleets two weeks before the season ended, fearing a collapse of the species.
In the next few years, Clean Seas hope to duplicate Australia’s Southern Bluefin Tuna annual quota without impacting on wild tuna stock. With its medium flavoured flesh, Southern Bluefin Tuna is in great demand for sashimi and sushi. The development in Europe, says Clean Seas Chairman Hagen Stehr, is an endorsement of the company’s ongoing research. “It proves that Clean Seas Tuna is right on target with its Southern bluefin tuna lifecycle project and that it is a matter of when, not if, commercialization starts,” he added. As these commercially reared fish would not be subjected to strict wild catch quotas, Stehr expects no trade barriers to sales of the fish into major markets like Japan, China, the US and the EU where natural fish stocks are severely depleted.
Tauranga, New Zealand: New
Zealand’s Reunion Food has doubled its turnover after establishing sales in the Australian market. Commenting on the immediate response to their brand Heilala Vanilla, Director Jennifer Boggis credits much of the success of their Australian debut to finding the right distributor. With assistance from a governmental organisation, New Zealand Trade and Enterprise (NTZE), Reunion Food was introduced to Australian company Gershgoods, distributor of quality foods based in New South Wales. Australia’s bigger population translates to bigger volume, which has proved to be a boon for the New Zealand company.
The company grows its vanilla crop using organic methods in partnership with a local village in Tonga. It also grows vanilla commercially in Tauranga, New Zealand. Their brand is fast gaining popularity, especially with local establishments that require high quality products such as Somerset Cottage restaurant in Tauranga, Blanket Bay Lodge in Glenorchy, Taupo’s Plateau restaurant, Edgewater Resort in Wanaka and Amisfield Winery in Queenstown, as well as top restaurants in Auckland. Heilala Vanilla is also sold to specialty retail stores, chefs and gourmet food manufacturers. Through Gershgoods, Heilala had its first sales in Malaysia andSingapore.
Tokyo, Japan: In Japan, a bag of wheat flour weighing one kilogramme is cheaper at about 300 yen (US$2.78) compared to a similar bag of rice flour which is priced around 1,000 yen (US$9.25). Although rice has become increasingly expensive, more Japanese are opting for rice flour to make bread, noodles and pasta, to cope with rising wheat prices which have doubled worldwide in the past two years. Japan does not export its rice, as domestic consumption is high but has to import 90 percent of its wheat.
To meet its obligations under world trade agreements, Japan has to import 770,000 tonnes of rice annually, keeping a million tonnes in storage to make up for a possible poor harvest on the domestic end. Imported rice, however, is used as an ingredient in other food products and not sold in shops. To reduce imports of wheat and corn, Japan plans to increase rice production for feed and flour. Imports of feed grains amounted to 14.5 million tonnes last year.
Although self-sufficient in rice, Japan only grows about 39 percent of all the food that it consumes. “Rice holds the key to self-sufficiency as the grain is the best crop to grow under the country’s natural conditions,’’ Nobukazu Taniguchi, professor for agricultural and resource economics at the University of Tokyo said in a Bloomberg report.
Japan has set aside 40 million yen (US$370,318) to drive a rice-eating campaign nationwide. The Ministry of Agriculture is hoping to replace 20 percent of the annual consumption of wheat with rice flour and cut down on its rice surplus. In 2007, 115,000 tonnes of rice flour was produced which is only two percent of the amount of wheat consumed locally. Compared to 45 years ago, the Japanese consumes about half the amount of rice in 2007 at 58kg per person.
Although still a rarity, bread from rice flour is fast gaining acceptance in light of the global hike in food and fuel prices. In specialty stores, products made from rice are bestsellers although costing more than regular wheat products. Singapore’s leading daily, The Straits Times, reported that Lawson’s Inc., Japan’s second largest convenience store chain will begin to stock rice bread from July 29. Rice bread is touted to be healthier and possesses a chewy texture, described as ‘mochi mochi’, generally loved by the Japanese.
Beijing, China: China is growing vegetable at special bases and breeding ‘Olympic pork’ to feed athletes at the Olympic Games. Apart from specially certified Chinese enterprises, food is being supplied by international companies such as US meat producer Tyson Foods Inc and Philadelphia-based Aramark.
Wang Daning, head of import and export food safety at China’s quality administration told Reuters, “We are doing this to ensure a safe food environment for international visitors, as currently, the most essential thing for China is the Olympic Games.” China is banking on a successful Beijing Olympics which it hopes will increase global confidence on the quality of its food.
Amidst international criticism of the quality of its drug components, food and goods export last year, Wang, a chemist and former head of a food safety research institute, was called to duty at the General Administration of Quality Supervision, Inspection and Quarantine. Since then, the State Council has approved a draft law on food safety, which still needs ratification. He added, “I think the Olympics food inspection experience will improve the overall food inspection level in China.”
However, Wang added that problems of food contamination and pesticide residue are not unique to China. “According to statistics from the Ministry of Health, the number of food safety cases in America, the EU, Japan or China every year is almost the same. So it is a universal problem to solve,” he said. In the US, a salmonella outbreak had affected more than 1,000 people who had consumed raw tomatoes, fresh peppers and cilantro, especially in restaurants.
If China’s food passes the ‘Olympics test’ with flying colours, the country hopes that increased exports will curb rural to urban migration as higher demand for its food will allow it to employ more workers in the food manufacturing sector. Currently, almost all the food grown in Southern China is bound for Hong Kong while farms and processors in Shandong province produce food for South Korea and Japan.
In the short-term, Wang hopes athletes and visitors will gain a positive experience this August from the variety of local food available in Beijing.
Beijing, China: Before its takeover of Anheuser-Busch, InBev was the largest brewer in the world but placed fifth among breweries in China. The Belgian-Brazilian brewer first entered China in 1984, providing technology transfers to Zhujiang Brewery in the southern city of Guangzhou. Although it has accumulated 33 breweries since then, and acquired 100 percent stake in Fujian Sedrin Brewery, InBev has not really been successful in its northern or western expansion.
Anheuser-Busch’s operations, however, are spread more broadly across China with breweries in central China and the eastern and northeastern parts of the country. Anheuser-Busch was also chosen to be one of Beijing Olympics three official beer sponsors with Beijing Yanjing Brewery and Tsingtao Brewery. These three beer companies with China Resources Snow Breweries form the top four brewers in China with InBev only coming in at fifth.
With the US$52 billion takeover, the combined company – called Anheuser- Busch InBev – will build up economies of scale by mass producing and mass distributing their beer, earning them a much higher profit margin. Heading the merged company, InBev CEO Carlos Brito said in a statement, “Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own. We have been successful business partners for quite some time, and this is the natural next step for us in an increasingly competitive global environment. This combination will create a stronger, more competitive global company with an unrivalled worldwide brand portfolio and distribution network, with great potential for growth all over the world.”
With the merger, InBev gains Anheuser-Busch’s stake in Tsingtao Brewery at 27 percent and Harbin Brewery at 100 percent, as well as its breweries in China.
Although fragmented, China is the world’s biggest beer market with 1.3 billion Chinese drinking 39 kilolitres of beer last year. Among its 400 or so breweries, only a few including Tsingtao, have managed to garner a nationwide presence. Budweiser, a growing brand in China, with Stella Artois and Beck’s will become Anheuser-Busch InBev’s leading brands.
Shanghai, China: Baskin Robbins, a market leader in specialty ice cream with more than 5800 stores worldwide, has signed with a local partner to open 100 stores in the next decade. With Shaanxi Stellerich Food & Restaurant Co. – a Taiwan-owned company based in north-central Shaanxi province – the ice cream chain is set to open its first outlet in Shanghai by the end of the year and will expand into eastern and northwestern China. Shaanxi Stellerich is no newcomer in the food service business. It operates several other concepts, including KFC, in the Shaanxi and Jiangsu provinces and plans to invest “hundreds of millions of yuan” or tens of millions of dollars expanding Baskin-Robbins.
The ice cream chain entered China in 1993 and had opened 40 stores with its original partner, mostly in Beijing. In order to reach its target of 100 new stores, Baskin-Robbins needs to take on more partners. In a report by the Associated Press, Chief Brand Officer Srinivas Kumar said at a news conference in Shanghai, “It takes time to understand the local market. Once we feel comfortable, we’ll expand fast.”
In China, Baskin Robbins faces stiff competition from Dairy Queen, Haagen-Dazs and Cold Stone Creamery. Kumar said, “We’ve been successful in Japan, South Korea and Southeast Asia, but we did not know if we would be successful in China.” However, he added, “China is the next growth engine outside the United States for Baskin-Robbins. We look forward to building the brand’s dominant position in the Asia Pacific region.” Research firm Euromonitor International reports ice cream sales in China had risen by 10 percent in 2007 to US$5.1 billion due to a growing taste for dairy products and sweets.
Shanghai, China: New Hope Agribusiness Co, controlled by billionaire chairman Liu Yonghao, has acquired a dairy producer in Inner Mongolia in a deal that was worth an estimated US$14.7 million, claimed local newspaper 21st Century Business Herald. Li Jiahong, a spokesman for the company’s parent firm, New Hope Group, however declined to disclose the exact amount it paid for the dairy company but said to Reuters, “China’s dairy industry is undergoing a new wave of consolidation. A company has to be big or it will be eliminated.”
New Hope’s 51 percent stake in Inner Mongolia Feichangniu Dairy
Co will help the Sichuan-based company to expand into northern China. Its nationwide expansion will bring New Hope – which also owns feed and meat processing businesses – into direct competition with China Mengniu Dairy and Yili Industrial Group to claim a slice of Asia’s second largest dairy market. Total sales for the company amounted to RMB 4.79 billion (US$698.9 million) compared to higher sales posted by Mengniu and Yi l i at RMB 21.3 billion (US$310.7 million) and RMB 19.36 billion ( US$282.5 million) respectively.
New Hope has made 12 acquisitions in the dairy industry but Li said, “ … once we’ve established footholds nationwide, we’ll expand very rapidly.” Last month, China imposed new rules to restrict investment in its dairy industry, weeding out small players and encouraging consolidation. New Hope’s dairy sales had risen six percent from a year earlier up RMB 1.1 billion (US$160.5 million) while sales volume had gone down to three percent at 230,500 tonnes.
Hong Kong, China: Coco-Cola
believes in working with its errant suppliers than cutting them off. In its 2007 Sustainability Report, the soft drink giant outlined training and other remediation targets to bring these suppliers up to its stringent standards. Wage violations and poor working conditions are common in a country where government monitoring is weak, it stated.
Coca-Cola, which built its first bottling plant in China after World War 1 was the first US company to distribute its products locally after Deng Xiaoping invited foreign visitors into the country in 1979. Its long-term strategies of localizing production and building infrastructure through partnerships with the government and local companies have proved successful in this country of over a billion people. In the early 1980s, the beverage giant provided technical assistance to several state-owned glass factories to improve the quality of their bottles. The company also employs locals to fill the vast majority of its positions.
However, out of 371 companies
it uses for services including packaging, ingredients and premiums, 255 failed to comply with a set of rules or principles which the At lanta-based company had implemented in 2003 to observe and promote labour rights. Experts say close cooperation with its partners and maintaining transparency would help improve social and environmental standards.
Coca-Cola’s network in China involves more than 10,000 distributors, 65,000 wholesalers and 1.5 million customers who sell its products, which includes well-known brands Coca-Cola, Fanta and Sprite, to consumers.
Costa Rica: On July 28, the EU and Latin America agreed to lower EU import tariffs to EUR114 per tonne (US$179 per tonne) by 2016 from EUR176 per tonne (US$179 per tonne) currently, AFP reported. The agreement will be signed by the US and 11 countries from Latin America: Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela. Although the US is not an exporter of bananas to the EU, three of the largest producers with plantations in Latin America – Chiquita, Del Monte and Dole – are US-based multi-nationals. Fearing threats to their agricultural industry, the deal has not been received well by African, Caribbean and Pacific countries which have zero tariff agreements with the EU.
Eduardo Gomez, owner of Bananera El Esfuerzo, a farm in Costa Rica that exports bananas exclusively to Europe, told Reuters, “Without tariffs, all the workers would benefit, we could pay better salaries, improve cultivation. We have a great advantage in quality and productivity that we are not able to develop.”
While the talks are hoped to increase cooperation between food industries and hopefully end 25 years of ‘banana wars’, Costa Rica is set to ‘go green’ to give its food products added value in the eyes of environmentally conscious European consumers. Their export platform will focus on major trends like organics and social values, which are close to the heart of Europeans. Costa Rican, however, companies would have to obtain certification to convince consumers that their products are organic and pesticide-free. One of the efforts made by Costa Rica’s banana firms and its association Corbana, has been to jointly invest in two research centres which will investigate ways to reduce the amount of chemicals used in the production of bananas, including the use of a natural fungus to prevent diseases and pests spoiling the harvest.
In an interview with FoodNavigator. com, Zacarías Ayub, commercial director of Procomer Europe (the Ministry of Foreign Trade’s official trade and promotion office) said, “We used to sell products with no added value. If you provide added value, the product becomes stronger.” Sustainability is also important to European consumers. Costa Rica’s banana industry claims to have replanted 6305 hectares of forests or 14.4 percent of plantation land as a part of their conversation and reforestation project.
Alexandria, US: The Global Probiotics Council (GPC) – established in 2004 by Groupe Danone and Yakult Honsha – has announced that it will award two new grants for probiotics research worth US$50,000 to Ajay Gulati, MD and Matthew Ciorba, MD. Both researchers will receive the inaugural Young Investigator Grant for Probiotics Research (YIGPRO) which will allow them to contribute development in the fields of gastroenterology, immunology, genetics, molecular biology, cell biology, microbiology, and infectious disease to foster innovative ideas, sustain independence, and advance science.
The US Probiotics Scientific Board Selection Committee, which evaluated all applications, selected Ajay Gulati, MD, an assistant professor of paediatrics in the department of Pediatric Gastroenterology at the University of North Carolina at Chapel Hill for his research proposal: ‘Antimicrobial Peptide Mediated Alterations of the Gut Microbiome in Nod 2/IL-10 Deficient Mice.’ The council said, “This research will focus on a very important mechanistic process that could help researchers understand how host immune responses control the bacterial population that lives in the gut.”
Matthew Ciorba, MD, an instructor in medicine in the Division of Gastroenterology at Washington University in Saint Louis was chosen for his proposal: ‘Probiotic Bacteria Protect from Radiation Induced Intestinal Injury :Mechanisms of Action’. His study, said the council, “could make an important contribution in understanding the mechanisms by which a probiotic may protect the intestine from cell destruction caused by radiation”.
Marketing efforts by Yakult and Danone’s Actimel, has made ‘probiotics’ into a household name. Found naturally in the human gut, this beneficial bacteria is crucial for good gut health. Diarheoa and constipation are just some of the problems caused by an imbalance between probiotic and pathogenic bacteria in the gut. With regular consumption, probiotics can also ward off various diseases.
The concept of friendly bacteria gained popularity in Europe before it was widely accepted in the US. According to Frost & Sullivan, the European probiotics market will more than double from US$61.7m in 2006 to $163.5m in 2013 while Euromonitor reports that the US probiotic spoonable yoghurt market has recorded positive growth with a rise from US$112 million in 2001 to US$249 million in 2006.
Northfield, US: Private label cereal maker Ralcorp Holdings’ purchase of Kraft Foods’ Post Cereals business will make it into a big player in the branded food business with well-known brands such as Grape Nuts, Honey Bunches of Oats, Spoon Size Shredded Wheat and Post Raisin Bran. The merger costing approximately US$2.6 billion, will include the issuance of Ralcorp common shares and the assumption of debts.
In announcing the closing of the merger of its Post cereals business into a subsidiary of Ralcorp, Kraft has accepted 46,119,899 common shares of Kraft for 30,466,805 shares of Cable Holdco. Prior to the merger with a Ralcorp subsidiary, Cable Holdco was a wholly owned subsidiary of Kraft that owned certain assets and liabilities of the Post cereals business.
Under the deal, St. Louis-based Ralcorp will assume US$950 million in debt and increase its sales by 50 percent to about US$3.3 billion per annum. In terms of sales, Post cereals is number three behind Kellogg Co and General Mills Inc. Having sold off its Post unit, Kraft can focus on faster growing brands such as DiGiorno Pizza. In 2006, Post had sales of approximately US$1.1 billion. Sales, however, have been rather stagnant since then due to concerns of obesity among children, attributed in part to consumptions of sugary cereals.
Kraft pursued the deal with Ralcorp in earnest after it was spun off from parent company Altria Group Inc last year. Replying to criticisms by certain quarters that it should have gotten rid off underperforming units earlier, Nancy Daigler, a Kraft spokesperson said last year that the sale would not have made any sense before Altria’s exit as the tobacco company would have owned both shares of Kraft and Ralcorp.
London, UK: Lion Capital LLP, a UK-based private equity group focusing on the consumer sector, has bought The FoodVest Group for GBP 1.1 billion (US$2.14 billion). FoodVest is the owner of Young’s Seafood and frozen food firm Findus from funds advised by Capvest Limited.
Founded in 2004 by Lyndon Lea, Neil Richardson and Robert Darwent, Lion Capital has led the investment of EUR 4.5 billion (US$6.97 billion) of equity in companies representing EUR 17 billion (US$26.3 billion) of enterprise value. CapVest, which bought Young’s in 2002 and Findus in 2006, had combined the companies under Foodvest in the face of rising commodity costs.
With 6000 employees in five countries, FoodVest generated over EUR 1 billion (US$1.55 billion) last year. Seamus Fitzpatrick, chairman of FoodVest and co-founder of CapVest said: “We have driven a six-fold increase in earnings at FoodVest over our six and a half year period of ownership by investing in both organic and acquisition led growth. The company today is one of the major food groups in Europe with market leading positions in the UK, Sweden, Norway, Finland and France.”
Per Harkjaer, FoodVest CEO said the change in ownership is a “logical next step” in the development of the business. He added, “We have a strong track record and a solid strategy with robust forward plans, but more importantly we have great products and super people. This has made us an attractive food group – despite the current difficult economic climate.”
With a heritage spanning 200 years, Young’s is the leading producer and distributor of frozen foods in the UK, selling a vast range of high quality seafood products, including Young’s Chip Shop range and Young’s Admiral Pie, in both retail and foodservice channels. Findus, meanwhile, is a leading frozen food manufacturer in Scandinavia – with market leadership in Sweden, Norway and Finland – and France where it is a well-known brand.
London, UK: In the past month,
Unilever, the international manufacturer of leading brands in foods, home care and personal care, has decided to sell two of its olive oil brands – Komili and Bertolli. Komili, the market-leading olive oil brand in Turkey, will be sold to Ana Gida, part of the Anadolu Group for an undisclosed amount. Komili, which the company considers a non-strategic brand, generated approximately EUR 26 million (US$40.25 million) in turnover for Unilever last year. The Anadolu Group, founded by Kamil Yazıcı and Izzet Özilhan almost half a century ago, is the Turkey-wide licensor of McDonald’s and produces Efes Pilsen, Turkey’s most consumed beer.
In a statement, Unilever said its disposal of Bertolli’s olive oil and vinegar products to Grupo SOS “will further strengthen the business.” The transaction includes the sale of the Italian Maya, Dante, and San Giorgio olive oil and seed oil businesses, as well as the factory at Inveruno, Italy. Unilever will retain the Bertolli brand for all other categories including margarine, pasta sauces, and frozen meals. Last year, the combined turnover of Bertolli olive oil and vinegar and the Maya, Dante and San Giorgio businesses amounted to approximately EUR 380 million (US$588.3 million).
Grupo SOS, the second largest Spanish food company with leading brands such as Carapelli, Sasso and Blue Ribbon considers the EUR 630 million (US$975.3 million) transaction to be “absolutely strategic”. Its chairman, Jesus Salazar said, “We share our focus on the Mediterranean diet with Unilever, and benefits will accrue to both our groups and to the consumer”.
Washington, US: Consumer advocacy group Center for Science in the Public Interest (CSPI) has withdrawn its intent to sue Sara Lee over its whole grain claim on white bread, which it says is misleading consumers. According to CPSI, the company’s statement that its Soft & Smooth Made with Whole Grain White Bread combines “the taste and texture of white bread with the goodness of whole grain” confuses consumers into thinking that the product is healthier than it really is.
CPSI had threatened to sue Sara Lee over the labelling, which it said suggested that its product contains as much fibre as 100 percent whole wheat bread. Following a settlement agreement recently, the packaged goods company will now make it clear that its “Soft & Smooth Made with Whole Grain White Bread” only contains 30 percent whole grain and it will also state that two slices of its bread contains 10 grammes of whole grain, which equals to just under a fifth of the USDA recommended amount.
The centre’s executive director Michael Jacobson said, “Consumers who want the health benefits of whole grains should look for bread that is labelled ‘100 percent whole wheat,’ or failing that, a bread where whole wheat flour, not just ‘wheat flour,’ is the first ingredient.” The claim, said CPSI in its letter to Sara Lee’s Chief Executive Officer Brenda C. Barnes last December, is particularly misleading because some breads are now made with “white whole wheat,” which really is whole wheat. Jacobson added “This settlement will help consumers comparison shop among breads: plain white bread, breads like Sara Lee’s with 30 percent whole grains, and 100 percent whole wheat bread.”
CSPI litigation director Steve Gardner said: “It’s time to take the whole grain halo off of foods made primarily with white flour. Companies that use the phrase ‘whole grain’ absolutely have the legal responsibility under state consumer protection laws to disclose exactly how much whole grain is there.” The consumer advocacy group states that a distinction between white flour and whole wheat flour must be made as “most of the fibre and key nutrients are lost” when whole wheat is refined into white flour.
In its press release, CPSI reports that Sara Lee meant its “Soft & Smooth Made With Whole Grain White Bread” to be a transitional product, designed to get consumers who are used to the taste and texture of white bread to consume more whole grains.
Tastiota, Mexico: A Tucson-based atmospheric physicist has discovered a ‘wonder-crop’ called ‘salicornia’, which has the potential to “feed the world, fuel our vehicles and slow global warming”, Marla Dickerson reported in the Los Angeles Times. Carl Hodges, the 71-year old founding director of the University of Arizona’s Environmental Research Lab who is passionate about this salt-loving plant, has spent most of his lifetime figuring out how man can cultivate food in areas where good soil and fresh water are scarce.
Also known as ‘sea asparagus’, salicornia thrives on ocean water and it can be eaten in a variety of ways – fresh, steamed or even ground into a highprotein meal. Hodges touts salicornia as the plant to end world hunger and dependence on fossil fuel. Forming Global Seawater Inc., his company produces salicornia biofuel in liquid and solid versions. Unlike grain-based ethanol, salicornia does not need rain or acres of farmland. All it needs is seawater.
Hodges farms his crop on desert soil – not far from the Pacific Ocean – nourished by seawater from a manmade canal. The scientist hopes to green desert coastlines and transform exhausted freshwater aquifers into huge storage tanks for ocean water. This effort, he claims, could neutralize the rise in sea-level. Seawater agriculture, according to Dennis Bushnell, chief scientist at the National Aeronautics and Space Administration’s Langley Research Center, could actually help combat climate change.
Hodges dream of using seawater to nourish commercial aquaculture operations, as well as mangrove forests and other saltwater crops, will require US$35 million in funding.
Geneva, Switzerland: Egypt has decided to end its rice export ban by September. Speaking to Reuters, Rachid Mohamed Rachid, Egypt’s Trade Minister said, “We were a bit concerned huge increases in price would suck most of the production quantities out of Egypt and that is why we did something we were not very happy to do for a period of time.”
Egypt had previously imposed a ban on rice exports until April 2009 to prevent a rise in prices on the local market. In June, inflation hit 20 percent, badly affecting consumers. Other countries like India and Vietnam, took a similar course in banning rice exports to curb inflation.
Egypt produces 4.6 million tonnes of white rice annually, with a domestic surplus of 1.4 million tonnes set aside for export. Rachid added, exports could reach 1 million tonnes in the 2008-2009 crop year. The rise in food prices have contributed to dissent, resulting in street demonstrations. Egypt is the most populous Arab country in the Middle East.
London, UK: AgroFair UK, the Fairtrade fruit specialist, will sell and market fruit juices and purées from Fairtrade fruit growers. The fruit will be puréed and juiced in the countries of origin.
The company, founded in 1996 by Dutch development organisation Solidaridad, hopes to support and encourage the growing market for Fairtrade ingredients carrying the FAIRTRADE Mark. AgroFair sources its ingredients from smallholder farmers such as banana purée from Ecuador, organic mango pulp from Peru, pineapple juice from Costa Rica, guava pulp from Brazil and orange juice from Brazil and Costa Rica.
A pioneer in introducing the first Fairtrade bananas, mangoes, pineapples and other fruit to market, the company has also provided fruit purees and juices for baby food, smoothies and the new Ben & Jerry’s Fairtrade Chunky Monkey ice cream. In a Freshplaza.com report, Managing Director of AgroFair UK John Bowes explains: “We are now adding extra focus to this area of our work because of the huge demand for Fairtrade ingredients. This will give the farming groups which co-own AgroFair another market for their fruit which in turn helps farmers build a better future for their families.”
London, UK: Britvic, whose brands include Robinsons, Tango and the UK franchise for Pepsi, recorded a sales rise of 29.9 percent to £690 million (US$1.35 billion) – including £147.2 million (US$287.5 million) from Britvic Ireland – for the nine months to June 30. The beverage company, however, remains cautious as pub sales of its products may be affected as consumers choose to be thrifty and stay at home. It said “... we anticipate that conditions in the licensed on-premise market will remain challenging.”
The situation in Ireland – a land of great drinkers – is hardly any different. Revenue is down by 5.2 percent. Britvic said: “Economic conditions in Ireland have become markedly more challenging in the last three months, driving a low to mid single digit decline in both the take home and licensed on-premise markets.” Last year, Britvic acquired the soft drinks division of C&C Group – an Irish cidermaker – for EUR 249.2 million (US$ 385.8 million).
London, UK: Unilever CEO Patrick Cescau’s decision to step down next May will open the way for an internal race within the Anglo-Dutch conglomerate. An analyst informs The Sunday Times online edition: “This is a group with huge bench strength and it is one that normally always promotes from within.” Two directors from the US and two from India are vying for the post, the paper reports. While the company has appointed headhunter Egon Zehnder to search for a new chief executive, the successful candidate is assumed to be chosen from among four top-tier directors: Jim Lawrence, Mike Polk, Harish Manwani and Vindi Banga.
Jim Lawrence, finance director, was a co-founder of corporate-strategy consultancy LEK. Mike Polk runs the North American division while Harish Manwani is chairman of Hindustan Unilever. The last candidate, Vindi Banga is Unilever’s president for foods, home and personal care. Unilever’s nominations committee will be overseen by Lord Simon and Jeroen van der Veer. Patrick Cescau, it seems, is a hard act to follow. Since his appointment as CEO, Cescau has overseen a revolution which earned him GBP 3.1 million (US$6 million) last year. Although he had been with the company for 35 years, Cescau said he would take on the job as CEO only if Unilever’s dual board structure – headed by two chairmen and three executive committees – was abolished. Prior to his appointment, Unilever had separate bosses in London and Rotterdam.
Cescau, who kept a low profile, took huge costs out of the business, rebuilding the company round Unilever’s personal care products and focused on emerging markets. He will also be remembered for reducing layers of middle management by cutting 20,000 jobs over four years. With a market value of £41 billion (US$80.1 billion), managing Unilever is only for the fit, as Cescau demonstrated, starting a fitness regime with a personal trainer in the London office, when he took over five years ago. To further expand, Unilever needs to conquer India and China, says analysts.
London, UK: After selling its stake in Pret A Manger, McDonald’s records a gain of 10 percent in this year’s second quarter. Giving customers convenience and value, the burger chain attributes its return to profitability in part to strong sales of breakfast items, chicken sandwiches and beverages. In its press release, Chief Executive Officer Jim Skinner said, “Our strategic focus on putting the customer first in everything we do continues to yield outstanding operating results.”
McDonald’s earned US$1.19 billion this year compared to a loss of US$711.7 million in the same quarter a year ago, which was mainly due to hefty charges from the sale of its Latin America and Caribbean businesses to a licensee. Revenue had risen four percent to US$6.08 billion from US$5.84 billion a year ago.
McDonald’s had reported its first monthly decline in US same-store sales in the first quarter, which could be due to consumers cutting back on unnecessary spending. Its return to profit in the second quarter, however, shows investors that the Golden Arches can weather the current economic climate by providing new products on its menu such as the chicken biscuit sandwich for breakfast, chicken sandwiches for lunch and espresso-based drinks in various locations. In Europe, same-store sales rose 7.4 percent while the Asia-Pacific, Middle-East and Africa reported a rise of 8.8 percent.
London, UK: While tightening their belts, consumers, it seems, cannot resist a bit of chocolate to reward themselves, especially if it’s the dark premium variety. Although global cocoa and chocolate consumption shows signs of waning in the current difficult economic conditions, premium chocolate (costing US$16 per pound or more) has become the market’s major driving force.
Marcia Mogelonsky, senior research analyst with Mintel International, a market research company, told Reuters that the US chocolate market is growing, but slowly. She added, apart from premium chocolate, other categories have seen varied fortunes. It seems premium products and dark chocolate are proof that Americans like to reward themselves. Mogelonsky said, “Self-gifting and selfrewarding are habits Americans got into, especially during the more exuberant economic times that seem to be on the way out. And self-rewarding with a piece of premium chocolate is still ‘do-able’.”
In the US and Europe, demand for key chocolate ingredients, according to the latest cocoa grindings data, have been disappointing. While Europe’s grind was up by 1.7 percent, US grindings fell by 15.89 percent in the second quarter. A surge in US cocoa futures by 40 percent and a slowdown in global economic growth have contributed to subdued grindings.
According to Frans Remmers, senior cocoa products trader at Dutch trade house Theo Broma, global cocoa demand was likely flat. He added, “It’s difficult to estimate whether chocolate consumption really is down or whether it is just stagnating a bit, and I think the latter is the case.” Mogelonsky, however, believes that China and Russia will drive demand for cocoa and chocolate products. She said, “The demand for chocolate is strong – and increasing – in areas in which a developed “chocolate culture” is not well established (e.g.China), or where there is an established chocolate culture that is getting more sophisticated (e.g. Russia, Turkey).”
In mature markets such as the UK, health matters and consumers seem to favour healthier snacks such cereal bars over chocolate. Globally, however, analysts predict a shift towards dark chocolate which is deemed to be healthier.
Chicago: The Wm Wrigley Jr Company, manufacturer of famous brands such as Wrigley’s Spearmint, Juicy Fruit and Altoids, will merge with Mars, Incorporated – one of the world’s leading confectionery and consumer goods companies – in a deal worth US$23 billion. Earlier this month, Wrigley filed a definitive proxy statement for a special meeting. Its stockholders will consider a proposal to adopt the merger agreement, which was originally announced on April 28 this year. If approved, Wrigley will become a separate, stand-alone business unit operating under Mars. Distributed in more than 180 countries, Wrigley’s global sales amounted to US$5.4 billion.
Following the merger, Wrigley will become a private company and an integral part of one of the world’s premier family-owned companies which produces famous brands such as M&M’s, Mars and Snickers. Mars, with total sales of more than US$27 billion is also a market leader in food, beverage and pet care brands. With the transaction, Wrigley’s confectionary section will be expanded to include Mars’ non-chocolate sugar brands such as Starburst and Skittles.
In an e-mail to Wrigley associates worldwide, Bill Wrigley, Jr. wrote: “We must respect the past, but, at all times, do what’s right for the future. Every generation of Wrigley leadership has had to make decisions that are in the best long-term interests of our stockholders and our associates. Being a public company has given us the financial security to grow with the support of our stockholders. Today, however, we have an opportunity to grow as a private company, while preserving our values, our heritage, and the unique culture that has inspired our success.” The merged companies will combine over two centuries of experience, Wrigley was founded in 1891 while Mars was established in 1911, in producing well-loved brands that are recognised worldwide.
Austin, US: Whole Foods Market, a leading retailer of natural and organic foods with more than 270 stores in North America and the UK, has announced that it will suspend quarterly dividend and curb expansion plans. A weak economy, the company states, has restricted sales growth. John Mackey, Chairman and Executive Officer said, “We have not undertaken any of these difficult decisions lightly. We are committed to improving our financial results and believe these proactive steps are necessary to manage through the current challenging environment, enabling us to emerge stronger and better positioned to realize our growth potential and fulfill our long-term mission and core values.”
Profit has declined 30 percent in the third quarter compared to the same period a year ago. Negative impact on net income from Wild Oats (which it had purchased for US$565 million), states the company, amounted to US$4.9 million. Sales, however, has increased by 21.6 percent to approximately US$1.8 billion.
Mackey adds, “Our business model has been highly successful, and we remain very bullish on our growth prospects as the market for natural and organic products continues to grow and as our company continues to evolve; however, the challenging economic environment appears to be negatively impacting our sales.”
Whole Foods source its products mainly from ‘small, uniquely dedicated food artisans’, emphasizing quality and flavour. In the current economic climate, however, a significant number of conscientious consumers have reassessed their priorities by purchasing cheaper products rather than the more expensive organic variety. By recasting its upscale image and offering more store label products which are cheaper, writes Andrew Martin of The New York Times, the company hopes to woo customers who have recently opted to shop at discount stores in order to reduce personal expenditure.
Toronto, Canada: Michael H. McCain, President and CEO of Torontobased Maple Leaf Foods expected the first half of 2008 “to be very difficult” due to “the extreme inflation and volatility in commodity markets”. Late July, the company posted earnings from continuing operations of C$51.9 million (US$49.8 million), against C$102.5 million (US$98.4 million) a year earlier, excluding costs related to its restructuring programme costing C$19.3 million (US$18.5 million) which it had implemented to boost profitability.
The restructuring, which will be completed by the end of next year, involves reducing the size of its hog and fresh pork operations, as well as expanding its value added meat and meals businesses. The company has begun to see positive effects from its strategy of lowering manufacturing overheads by closing three sub-scale processing plants, double-shifting the front-end processing at the Brandon pork plant, and reducing administration expenses. Last year, front-end processing at Brandon was increased from 45,000 to 75,000 hogs a week, enabling the closure of two older facilities in Saskatoon and Winnipeg. Maple Leaf’s Brandon plant supplies raw material to its packaged meat business. It has also commenced marketing its pork facility in Burlington, Ontario, which processes over two million hogs annually.
McCain, who remains optimistic said, “We are focused on persevering through these unprecedented market conditions, maintaining our focus on executing the structural changes we have committed to and passing on price increases to offset the effects of commodity inflation.” He added, “While the first half has been pressured, we believe the second half of 2008 will show a substantial recovery as markets stabilize and the early benefits of restructuring are realised.”
Madrid, Spain: Natra, a listed Spanish food firm, has recorded impressive sales of 23 percent and an increase in net profit of 68 percent in the first half of the year. Specializing in the production and commercialisation of cocoa and chocolate products, Natra acquired Belgian-based All Crump last year for EUR45 million (69.7 million), taking on board all private label products and chocolate spread brands Palinutta, Patillia and Crumpy. The extended portfolio contributed to overall sales of EUR226.1 million (US$350.3 million).
Natra will also incorporate Italian company Nutkao (which it acquired last November) before the end of the year, making it the second largest chocolate spread manufacturer in Europe after Ferraro, which manufactures the popular Nutella. Producing 45,000 tonnes of cocoa and chocolate products annually, the company recorded profits of EUR380 million (588.7 million) in 2007.
Its expansion plans include entering Asia by opening a commercial office in Shanghai in order to supply products to the region. Natra has also opened an office in California due to strong demand for its products in the US. More than 90 percent of its sales are made in the EU.
Boulder, US: NextFoods, formed earlier this year to develop and market world-class, functional foods and products with scientifically proven nutritional benefits, have announced an investment worth US$16 million led by Seattle-based venture capital firm Maveron LLC. Formed by Organic and Natural Products industry pioneer Steve Demos (who is also NextFoods CEO) and seasoned industry and former WhiteWave veteran Todd Beckman, the investment will allow NextFoods to develop a variety of consumer marketing programmes designed to build awareness and drive increased sales and distribution to make the company a market leader in the US$11 billion probiotics market.
Steve Demos said, “Maveron’s stellar reputation and strong branding philosophy made them an ideal investment partner for us.”
Maveron, a leading venture capital firm based in Seattle, was founded by Dan Levitan and Howard Schultz in January 1998 with the goal of building a firm that would be recognized as the premier financial and strategic partner to leading consumer-based businesses.
Licensed from Probi AB, a Swedish biotech company with a high expertise in the field of probiotic research and development of effective and welldocumented probiotics, NextFoods’ new GoodBelly brand of probiotic fruit drinks, is the first of its kind in the US. Currently available in two product lines – GoodBelly Probiotic Fruit Drink and GoodBelly Multi – its new brand is distributed nationwide at 1,500 stores. NextFoods plan to develop more products using Lp299v, the patented and proprietary probiotic which has proven to improve overall digestive regularity and promote immunity.
Athens, US: A new University of Georgia (UGA) study has revealed how herbs and spices can inhibit tissue damage and inflammation caused by high levels of blood sugar. Researchers, testing extracts from 24 common herbs and spices found high levels of antioxidant-rich compounds known as phenols, revealing a direct correlation between phenol content and the ability of the extracts to block the formation of compounds that contribute to damage caused by diabetes and aging.
Study co-author James Hargrove, Associate Professor of foods and nutrition in the UGA College of Family and Consumer Sciences said, “Because herbs and spices have a very low calorie content and are relatively inexpensive they’re a great way to get a lot of antioxidant and anti-inflammatory power into your diet.” He adds that when blood sugar levels are high, a process known as protein glycation occurs in which the sugar bonds with proteins to eventually form what are known as advanced glycation end products, also known as AGE compounds.
Co-author Diane Hartle, associate professor in the College of Pharmacy, said various phenols are absorbed differently by the body and have different mechanisms of action, so it’s likely that a variety of spices will provide maximum benefit. She explained that controlling blood sugar and the formation of AGE compounds can also decrease the risk of cardiovascular damage associated with diabetes and aging. “If you set up a good herb and spice cabinet and season your food liberally, you could double or even triple the medicinal value of your meal without increasing the caloric content,” she added.
Innovate Now
The Best Innovative New F&B Product and Services Award honours the cream of the crop at the annual exhibition, which took place on July 10-12, 2008 in Kuala Lumpur, Malaysia.
Sime Darby Plantation Sdn BhdThe ready-made cooking sauces are manufactured from the mixture of fresh and tasty Nyonya spices (rempah).
Watania AgricultureAll Watania Dates products are produced according to strict organic standards ensuring free from harmful chemical fertilisers and pesticides.
Excellence Food Biochemical Co LtdThe soy-based product from China comes in a variety of flavours including Original, Scallop, Kelp and Bonito. It also has an organic version. Coarsely grinded and finely grinded ones are available in packets.
King Kung Health Food Co LtdThe Taiwanese company presents healthy and vegetarian teas in attractive boxes. Individual family packs are also available. It offers a variety of premixes ranging from roasted tea and ginger teas to vegetable soups and nutrition meals.
Total Recharge Sdn BhdFormulated with 100mg of vitamin C through electrolytes, the drink is an energy booster and re-hydrator. It contains no caffeine.
Pattara Sophon Intertrade Co LtdKonomi is a healthy snack made of high nutrient seaweed. The product also provides dietary fibre, protein, iron, calcium as well as delicious taste.
Erarose Food IndustriesThis is ready to eat by adding water. Made using 100 percent Halal ingredients and natural products, they are high in Vitamin C and contain to artificial colouring or flavouring.
Win Far Trading Sdn BhdImported from Japan, the Shirako brand of seaweed boasts high quality and great texture.
Chia Hui Spices Co LtdThe salted crispy chicken is a pupular Tawainese dish. Its essence lies in its tasty powder sprinkled on the fried chicken. It comes in 50g, 150g and 1kg packages.
Serbka Wangi Sdn BhdFood sustenance has never been more convenient. EcoBrown brown rice powder is ready to eat, instantly – just add warm water. It is distributed by Serbka Wangi in Malaysia.
Asiarice Biotech IncAs an alternative choice to white rice, it is also certified by the Health Promotion Board as a Healthier Choice product.
Mellow Group of CompaniesLeila pure ghee has a natural golden yellow colour and is made from the finest cow’s milk.
Hunya Food Co LtdThis crispy pastry is sprinkled with high quality raisins providing a delicately sweet taste.
Figo Food Sdn BhdThese pastry pieces are easy to peel from stack and are non-sticky. They can be used as skins for samosas, spring rolls, wantons and other pastry garnishes.
SwuiShun Food Trading (M) Sdn BhdTapped with lavish crunchy crumbs, Saku-Saku is a must for a party-snack and fun meals. With added DHA Omega-3 fatty acids, it promotes growth and functional development of the brain for both adults and infants.
Affinity Food Co LtdThis soft cake with mango flavoured fruit jam. The manufacturer also makes vegetarian food cereal bar and cookies.
Octhavia Sdn BhdThis popular Malay dish is Halal and made from fresh mackerel fish and other kinds of seafood’s such as squid, prawn and crab. It is ready to eat after 15 minutes of steaming.
Fauji Cereals PakistanMade of Halal ingredients, the product is ready to eat and great when consumed with cold or hot milk. The company was named Best Exporter of Food by the Rawalpindi Chamber of Commerce & Industry.
Mascellent Resources Sdn BhdBlended with the purest grade of Tongkat Ali and Ginseng Extract, this drink is refreshing and energising.
Low Boon Kee Sdn BhdAccording to the manufacturer, the quality of this product is as good as organic products but at a price which everyone can afford.
Sambhi Distributors Sdn BhdBlue Diamond offers a variety of flavoured snacks in conveniently sized cans and packets.
Vision Lee Sdn BhdThe natural and refreshing drink is made using fruits cultivated in a Pahang farm.
Cherry: Visual Flow
For faster transactions and happier customers, keep the queue short with Cherry’s new RC Series keyboards featuring customizable colour keycaps which allow for easy visual recognition of common functions. Apart from reducing transaction time, new employees will find this keyboard easy to use. With a unique programming software, the keyboard is easy to configure incorporating a plug-and-play feature. The product comes with a three-year warranty.
Inscale: Portability
Reduce operator errors with Inscale’s Azextra approved retail scale with 103 product lookup (PLU) memories, colourcoded keys and a large front-and-rear backlit display. With an internal rechargeable battery that lasts up to 90 hours, the scale can be used anywhere without the need for an external power source. Pricing can be programmed using grammes (per 100g) or kilos, increasing flexibility in marketing your products. Maximum capacity is two kilogrammes.
Honeywell: Instant Self-Access
Honeywell’s Image Kiosk 8560 is a mini-kiosk that allows the customer to search for information easily without having to refer to any staff who might be busy entertaining someone else. The 8560 provides services such as price-checking, item information, as well as advertisements for products and loyalty programmes. Although small, it offers the power and performance of larger kiosks, but with a small footprint that allows it to be placed just about anywhere.
Magtek: Data Privacy
Magtek’s Magnasafe readers represent a revolutionary technology breakthrough that provide card data privacy and online security for consumer’s peace of mind as they hand over their Credit/Debit/ATM magstripe cards to the retailer. The reader comes in various models including a portable USB device that can be connected to any PC with internet connection. For POS retail applications, the reader provides device authentication, data security and identity theft prevention.
Motorola: Ruggedly Mobile
The MC3000 is Motorola’s answer to a scan-intensive environment requiring high quality data capture in various locations from the loading dock to the retail store or on a delivery route. Its light ergonomic design reduces user fatigue and is comfortable to use for prolonged periods. Scanning position can also be adjusted for maximum comfort and productivity. This rugged mobile computer reduces maintenance cost as it is able to withstand extreme temperatures and a fall of four feet to concrete.
Vivotech: Easily Adaptable
The multi-functional ViVOpay 5000m is the ideal solution for emerging mobile commerce and promotion applications using NFC (Near Field Communication) mobile phone technology. It supports multiple payment applications such as EMV-Based OneSmart® MasterCard® PayPass™ and Visa® payWave qVSDC. Customers can be guided through the payment process via an LCD screen. Promotional messages and incentives can also be displayed. Merchants can choose to upgrade an existing POS system at only a fraction of the cost of installing new contactless-enabled POS.
EPSON: Speed & Reliability
High-volume retail and hospitality environments can opt for Epson’s TM-T88IV POS thermal printer that offers both wired and wireless interfaces. The TM-T88IV has various features that are easy to use including drop-in paper loading, longlasting auto-cutter and Auto Status Back messages. Twocolour high-speed printing of receipts can include logo and other graphics. The printer has an improved cover design for higher spill resistance.
Verifone: Multimedia Impact
Verifone’s stylish MX870 merges full-motion video, a 65,000 colour display, high quality digital sound and highly secure payments capabilities into a single, easy-to-use system. Going beyond standard PIN pad technology, it is equipped with stringent security requirements while allowing retailers to express their brand, reinforce advertising and deliver cross-promotions at the point-of-sale. Apart from the optional signature capture, customers will be captivated by its high-quality video display.
Apuro: FR8 Single Fryer
With an eight-litre capacity, the Ital Single Fryer from Apuro is an elegant, efficient and practical device for the commercial kitchen. With an easy to clean stainless steel interior and exterior, the deep fryer has a cold-zone tray which allows for the perfect frying of frozen foods. For kitchens that require a dedicated fryer for vegetarian foods, this is the appliance to buy.
Kitchen Aid: Proline Series Wa e Baker
The Proline Series Waffle Baker comprises a durable die-cast metal base and stainless steel baker lids with handles that remain cool to the touch. Capable of making two thick grand Belgian waffle in less than five minutes, the non-stick plates can be wiped clean using a paper towel or damp cloth. It’s a perfect space-saving device that can be stored easily on the worktop or cabinet.
Burco: Multicooker Perfection
Burco’s Multicooker 77000 model is extremely versatile – cooks rice, pasta, vegetables, meat or fish – making it an indispensable item in the professional kitchen. It can keep warm ten litres of soups and sauces as well as 30 portions of rice (which can be cooked in 35 minutes). Easy to clean, the robust stainless steel construction is also equipped with large easy to use controls. There is also a steamer insert for steaming vegetables, fish or chicken.
Bertos: Comprehensive Range
Advertised as ‘the first professional kitchen with a five-year guarantee on all its components’, the S900 Range from Bertos, is easy to install and clean. Designed for heavy-duty use, the S900 includes various components such as a pasta cooker, a chip scuttle, a bain-marie, a multi-function bratt pan, fryers, a high-power solid top, a multi-pan and an induction hob. The S900 is a definite ‘must-have’ for the professional kitchen.
Instanta: Boiling Hot
Switch boiler to energy saving mode when using the Instanta CT200, the latest version of the WB200 introduced in 1972. With a tap clearance of 275mm, it is ideal for filling tall pots and has an initial draw off of ten litres. Ideal for regular and steady flow of servings, it provides easy to read warnings of lime scale build up and a full diagnosis of any component problems via a digital panel.
Moffat: Robust & Versatile
The E27MS convection oven can be mounted on its stainless steel A28 stand which includes runners to hold up to 6 full-sized sheet pans and casters. Moffat convection ovens are designed for commercial use in various environments such as chain restaurants, hotels, independent restaurants and bakeries, among others. Its robust construction includes a stainless steel door with full viewing window. The E27MS is currently in use in more than 50 countries worldwide.
Delonghi: Cool Zone Deep Fryers
This stylish F24512CZ Deep Fryer from Delonghi has a food capacity of one kilogramme and oil capacity of three litres. The convenient front and rear handles, which is made of cool-touch plastic, is used to raise the fryer easily and safely. When the heating element is not in place, the device shuts off automatically. It can be dismantled for easy cleaning.
Cambro: Safe, Hot Food
The H Series Ultra Pan Carrier from Cambro enables HACCP compliance by maintaining an even temperature for keeping hot food warm. With a temperature that ranges from 150° to 165°F, it will not cook the food that is being transported and will maintain food moisture. Its tough polyethylene exterior stays cool to the touch and its thick foam insulation retains the heat for hours even when unplugged.
Sunny Koh:
Laying Cornerstones For The Future
Chinatown Food has grown an average of 38 percent per annum since its inception in 1992. But as Group Managing Director of the company, Sunny Koh has done more than just grow his own business. In many ways, he plays a guiding role in nurturing the industry’s competitiveness on the whole. He also speaks to Food Export International on the ways to turn production costs into profit margins.
By Ong Hong Tat
As Group Managing Director of Chinatown Food Corp, Sunny Koh has garnered many awards, at both individual and enterprise levels. The Singapore-based manufacturer of traditional frozen snacks has won The Certificate of Commendation for achieving Grade ‘A’ status for excellence in food hygiene, sanitation and processing.
Koh is deeply involved in grassroots committees and business associations. In 2005, he was awarded the Public Service Medal by Singapore’s President S R Nathan for his service in the larger community. The Public Service Medal, also known as the Pingat Bakti Masyarakat (PBM) was awarded to Koh for his commendable public service in Singapore and his achievements in business and his profession.
Since 2006, Koh has been the Chairman of the Singapore Manufacturers’ Federation (SMa) Food and Beverage (F&B) Industry Group (IG). This widely recognised association champions the Singapore F&B manufacturing sector. The F&B IG is also active in promoting the Singapore F&B manufacturing and services industries both at home and abroad, through trade missions and fairs, and through organising networking meetings. Also within SMa, Koh is committee member of the Environment, Health, Safety and Security Function Committee.
More recently, Koh took on even more offices, mostly in the arena of improving food standards and regulations. As of last year, he is a committee member of the SPRING Food Standard Committee as well as advisory board member of the FIRC (Food Innovations and Resources Centre, co-run by SPRING and Singapore Polytechnic).
As a veteran and leadership figure involved in such many industry and government-supported bodies related to food standards, innovation and manufacturing, Koh is one who, in his own words, takes ownership of the industry. To Koh, it is almost a one-for-all spirit – the competition is out there on a national level; the real enemy is not one’s peers. Instead of competing within Singapore amongst those in the same line, Koh believes that local manufacturers should band together. As a whole, they should constantly create value and products suitable for international markets. “Singapore is so small, if we can’t work together, we will have substantial problems breaking into markets overseas,” Koh said.
Koh is a firm believer in the SMa F&B IG’s main objective to provide relevant information to upgrade members’ knowledge and skills. In view of the onslaught of rising oil prices, and of vital raw materials like flour, rice and even plastic, Koh gave a presentation on the importance of the effective use of automation and packaging to reduce costs. After all, “what you save can be your profits”, he said.
A manufacturer can do very well to work on minimise packaging, benefitting not only the environment but also the bottom line. Even though the 3Rs (Reduce, Reuse and Recycle) have been constantly emphasised, manufacturers are adopting these practices slowly. According to Koh, the savings from a miniscule reduction can result in big savings.
“Snack food manufacturers stand to gain the most from reducing their packaging. For example, bags of potato chips contain a lot of nitrogen gas, which is not only expensive in itself, but also adds weight to the product. If manufacturers could keep this to a bare minimum, it would result in cost savings in areas of raw material and freight.”
In the current climate of climbing costs, every dollar better spent and more efficiently utilised can go towards growing the business or increasing profit margins for the company. For example, by cutting plastic wrapper bags by 10 microns to a 60-micron bag, Koh commented that his company saves S$40,000 (US$29,362) per annum. This may seem like a small amount – it is about the annual salary of an executive in Singapore. But cost saving does not stop here. Other areas are scrutinised for the same purpose.
In its current form, Chinatown Food’s ‘Tang Yuan’ (Chinese style glutinous rice balls with various fillings traditionally eaten with a sweet broth) comes in a printed bag. Within that bag is a tray of 10 rice balls with a plastic tray cover attached. Koh intends to eliminate this tray cover altogether and the change is expected to lessen waste by 40 tonnes, saving the company some S$300,000 annually. In order to not compromise product quality, Koh says that some additional fine-tuning has to be done to ensure that the content do not get crushed in transit.
By cutting down on packaging, transport costs are correspondingly reduced. Though these benefits are there for the taking, Koh says that many manufacturers still adopt a second-mover mentality, often not willing to take the first step. As the Deputy Chairman of the National Environment Agency’s Singapore Packaging Agreement Governing Board, Koh hopes to lead by example. This government-led initiative aims to assist packaging designers and manufacturers, brand owners, retailers and product importers to incorporate environmental considerations into their packaging decisions. One form of this assistance will be development of a packaging code of practice. The Governing Board would also draw up plans to help industries develop the expertise and knowledge in sustainable packaging design, as well as set up community programmes to encourage community participation in minimising packaging waste.
Koh and daughter with PM Lee Hsien Loong at PBM conferment ceremony.
Minimising spoilage is another cost saving aspect, which Koh recommends. According to him, the effective balance between machinery and human labour can help to do this.
“About 18-20 years ago, local food manufacturers only managed to attain about 60 percent of wholesome and saleable goods. The rest are food materials gone to waste. Today, the figure is closer to 90 percent. My company does 92 percent,” Koh said. In addition, Koh now produces 105 cartons of rice balls every eight hours per worker, up from just 45 cartons in the past. This is the result of astutely combining mechanical efficiencies with human flexibility.
“Automation is not about buying more machines just for show. Do it to improve the bottom-line,” Koh continued. “Sometimes, humans are better. Other times, robots perform. Automating the factory is about mixing the two well to maximise each other. Humans can also be very fast, in fact, faster than machines sometimes. We just have to create the right environment for them,” he added. For example, some packing procedures are aided by conveyor belts so that workers can perform the task faster. This final ‘human touch’ is crucial to Chinatown Foods.
Koh said, “There is a curve to everything. Previously, consumers liked manufactured products because it carried some degree of assured quality. As they looked uniform and consistent, people looked to them as safe and clean. However, nowadays people gravitate towards products that are customised and have a handmade feel.” In an era where everything is mass-produced, such foods command a premium. “This is a way to differentiate your product,” he added, quoting an example of a Taiwanese manufacturer of dumplings, who created moulds to imprint hand-marks on their dumplings, even though it is really machine made.
Catering to modern tastes is another area that manufacturers should constantly pay attention to. While traditional foods and flavours will always have their market, new creations can carve wider access. “Walk into the Singapore pavilion at food shows and you can expect to see sauces and traditional foodstuff. Local manufacturers should venture out of ethnic markets and try to enter mainstream markets overseas,”
urged Koh.
Chinatown Food has recently developed a rice-roll pack with cheese sauce. Traditionally consumed with sweet sauce and sesame seeds, rice-rolls are already an established staple food amongst the Chinese. With the addition of a western ingredient, the dish is made more cosmopolitan and suited for mainstream markets. This is Koh’s basic yardstick when it comes to deciding on what to develop – the best taste for what the mass market needs.
The yet-to-be launched frozen product marries two well-known foods to good effect. Koh said, “Rice is neutral and absorbs most flavours well. Since rice-rolls are akin to pasta, we thought that cheese would work well so we gave it a go.” Keeping the other eye on business, Koh added, “Europeans are used to grains, wheat is one of their biggest staple foods. Rice can be readily accepted after adaptation to suit their palates. Moreover, our rice-rolls do not contain gluten: people who are allergic to it can consume my product without worry.”
Such innovations require research and development muscle. Rice-rolls are not easy to freeze properly while maintaining taste and quality. At low temperatures, they tend to break and thaw unevenly when re-heated for
consumption.
Enter facilities such as the Food Innovation Resource Centre (FIRC). The FIRC is a result of collaboration between SPRING Singapore and Singapore Polytechnic. It is a part of SPRING’s Technology Innovation Program initiative to strengthen the innovation capabilities of small and medium enterprises (SMEs). Koh urges SMEs to make use of the readily available expertise at FIRC to create new products to penetrate new markets overseas. “First-movers set the benchmark for other manufacturers to follow. By launching new products, you effectively minimise competition,” Koh said.
With “new” and “innovation” being the operative words, traditional business mindsets must change. Koh shared, “Asians tend to distrust consultants. They have the preconception that their ideas and competitive formulae will be stolen by these consultants”. To this, Koh asserts that “nothing is secret anymore”. A product in the open market is free for scrutiny. “Instead of protecting age-old secret recipes, try to harness the power of technology and new ideas to make your product better,” said Koh.
In today’s hyper-informed world, branding and networking is as important to a product’s success as much as its taste and quality. By keeping a firm eye on the market, a manufacturer can easily know what will sell. Koh explained, “What tastes good to you as an individual might not sell.” Ultimately, building a strong brand and a robust network increases the chance of success, he added.
This explains why Koh seems to be spending more time in public service for the food industry rather than in Chinatown Food itself. It is all about getting the industry going, as a co-progressive unit, rather than individual success. “If every player takes ownership of the industry, there will be a consortium effect which we can leverage on, to fight for better infrastructure and privileges. If not, nobody will bother with us. What we are doing now, is laying the right cornerstones for the industry’s future”.
An initiative by Spring Singapore and Singapore Polytechnic, the Food Innovation Resource Centre (FIRC) is a one-stop centre for food enterprises. FIRC was launched May on 29 2007 by Minister of State for Trade and Industry, Lee Yi Shyan. The FIRC was established a one-stop centre to help small and medium enterprises (SMEs) create and test new products, from concept right up to market testing, using the latest technologies.
FIRC will invest some S$7 million in modern equipment and qualified personnel. It is the first Centre of Innovation (COI) to be launched under SPRING Singapore’s S$150 million Technology Innovation Programme (TIP). TIP encourages SMEs to grow their businesses by adopting technology to create high value products and services and compete effectively in the global market.
Chef Roberto Galetti:
The Staunch Italian
For Chef Roberto Galetti, it is viva Italia all the way. Globalisation may be pushing the world towards fusion food but Galetti is a staunch Italian. With the flagship Garibaldi Restaurant and Bar, the chef-owner carved a name for himself with an unchanging menu and unwavering adherence to pure Italian cuisine. Galetti today is also a true restaurateur-entrepreneur with six restaurants under the Garibaldi Group of Restaurants, and plans to expand overseas.
By Ong Hong Tat
Chef Roberto Galetti is a long way from home but every bit the Italian. Now the Managing Director of the Garibaldi Group of Restaurants (GGR) and Executive Chef at Garibaldi Restaurant and Bar, he looks back on his culinary journey that he started at age 14. His career has seen him in many countries: the UK, Austria, Argentina, Tokyo and Singapore. “Once I started travelling, I saw no reason to stop,” said Galetti. Not that the globetrotting has diluted his love for Italian cuisine. Galetti sees every overseas stint as an opportunity to spread the best of his country’s food abroad.
Galetti walks the talk. A group of financiers once approached him to start a restaurant. He rejected that offer because the owners wanted to offer American-Italian fusion cuisine. “The offer was good but I wanted cook pure Italian food. So I had no choice but to decline their offer,” Galetti said.
It is thus that GGR’s flagship establishment, Garibaldi, was born, as Galetti’s outlet to be Italian, stay Italian, and cook Italian. This is also why it was named in the spirit of Giuseppe Garibaldi, an Italian national hero and historically regarded as the unifier of the nation. Like its namesake, Galetti aspires for the restaurant to be a representation of Italy. Being his, and the GGR’s, first restaurant, Garibaldi is close to Galetti’s heart in many ways. “It is my baby, it has grown with me and it will always be special to me,” Galetti shared.
The menu at Garibaldi is unabashedly Italian in many ways. Not only does it bespeak true Italian cuisine, it also stands for the Italian people’s respect for tradition and longstanding faith. “At Garibaldi, we serve authentic Italian cuisine. Nothing more, nothing less,” Galetti said. The menu also reads like the Bible – unchanging. This is surprising, in a time when many chefs and restaurants pride themselves on seasonal produce, innovation and change. Galetti explained: “The dishes at Garibaldi have their respective l
