Food Industry News

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Industry dissatisfied about GCA decision

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The government decision not to extend the remit of the Groceries Code Adjudicator (GCA) has provoked mixed views from suppliers, with some dissatisfied with the outcome.

Earlier today, the government rejected calls to extend the remit of the GCA, but decided to take action, as a number of those submitting to its consultation highlighted the “unfair pressures”​ placed on primary producers.

The government pledged to bring in a number of measures to help protect the rights of farmers and small producers, including a £10M collaboration fund, compulsory dairy contracts and sheep carcase classification.

Weak response

Traidcraft Exchange claimed it left farmers exposed to unfair buying practices such as last-minute cancellation of orders.

Traidcraft Exchange policy advisor Tom Wills, said: “The GCA made a great start in dealing with these abuses by supermarkets. But this announcement means it won’t be able to tackle these very same practices if carried out by a big food brand or manufacturer. Brexit is creating huge uncertainty in the food sector and this offers no comfort to farmers or food businesses.”

This view was backed by Sustain which said it was a “utterly weak response”

Vicki Hird, Sustainable Farming Campaign Coordinator at Sustain, said:  It means farmers and growers, here and overseas, will not be protected from abusive practices from buyers. This makes it harder for them to invest, or to ensure that the environment, animals and workers are protected.”

While, George Dunn, chief executive of the Tenant Farmers’ Association, said: “This list of offerings is very much second-best in comparison to the comprehensive regulatory framework needed.  They will scratch the surface of the unfair trading practices that exist upstream of the direct relationships already covered by the GCA.”

‘Not gone far enough’

The National Farmers’ Union (NFU) said the measures showed a positive direction of travel to protect the rights of farmers, but did not think they went far enough.

“The evidence within the GCA’s consultation shows that we have an imbalance of power within our UK supply chains,” ​said NFU president Meurig Raymond. “But the measures that have been announced to address this do not go far enough and it’s an opportunity missed. This, for us, is the beginning of a journey to improve the supply chain for our members.

“Dairy farmers already have contracts. What we’d like to see is minimum standards in those milk contracts to ensure that farmers are protected against unfair clauses, such as those requiring exclusivity, unbalanced variation of terms and short-notice price changes.

“And while we praise the step towards standardising sheep carcase classification, we still have multiple concerns as to transparency within the sheepmeat sector that will need addressing.” 

The Fairtrade Foundation said it was concerned about there being no action to cover farmers in developing nations.

Tim Aldred, head of policy and research, said: “While it is welcome that the government has acknowledged the unsatisfactory nature of many trading relationships, it is disappointing they have chosen not to take more decisive action, and seem to be overlooking the needs of vulnerable overseas farmers in developing supply chains.

“As a result, many of the people who make the products we love to eat, drink and wear will continue to be undermined by late cancellations and delayed payments from unscrupulous buyers.”

Retailers

However, Dairy UK welcomed the news that there would be an opportunity to extend the remit of the GCA to other retailers. It also said it was supportive of the £10M fund to help farmers and producers.

“We are pleased that the government has decided not to extend the remit of the GCA down the supply chain,” ​a spokesman said. “Dairy UK has long pointed out that doing so would be impractical in terms of implementation, would lack an available funding model and would seriously detract from successfully focusing on the relations between suppliers and retailers.”

It issued a warning on plans to introduce milk contracts, as any legislation would have to meet the requirements of the EU dairy package and could also cause “competitive distortions” ​within the UK milk market.

Andrew Kuyk CBE, director general of the Provision Trade Federation said he believed that the GCA has had a positive impact in promoting the principles of fair trading and changing behaviours in the market.

“There is room for further improvement, but we believe the Government response recognises this, in particular in respect of the possible inclusion of other large retailers. We also broadly welcome the additional measures announced to help protect the rights of farmers and small producers – though in normal circumstances it is preferable for contractual terms between buyers and sellers to be reached by mutual agreement without recourse to statutory measures,”​ he said.

However, Kerry McCarthy, Labour MP for Bristol East and a member of the Environment, Food and Rural Affairs Select Committee, which pushed for an extension of the GCA’s remut said: “There is clearly more that needs to be done to address imbalances in the relationship between suppliers and supermarkets, to ensure that farmers can get a decent price for their produce and are treated fairly and consistently by buyers. It’s particularly disappointing that the Government is not prepared to extend protection to indirect suppliers. Our big supermarkets and manufacturers should not be passing market risk onto farmers either here or in developing countries, placing their livelihoods in jeopardy. We need a GCA with extended powers to ensure that everyone in the supply chain, direct or indirect, in the UK or overseas, is treated with respect.”

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Ultimate Food Company placed into administration

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The Ultimate Food Company, based in Kendal, which made puddings, including some under the Famous Grouse brand under licence, has gone into administration due to a “number of issues”.

The company, which also traded as The Ultimate Plum Pudding Company, was placed into administration on February 5 2018.

Insolvency practioners Begbies Traynor have been appointed with joint administrators being Ian McCulloch and Dean Watson.

Ultimate had been trading for over 30 years, producing not just puddings but also rum and brandy butters, dessert sauces, and Sri Lankan chutneys under the Demels brand.

Number of issues

McCulloch said: “Ultimate was an established, well recognised and highly regarded food manufacturer which has unfortunately ceased to trade due to a number of issues. 

“We are currently in the process of marketing the business and assets for sale and should there be any interested parties then please get in touch.”

Minimise impact

Watson added: “Action has been taken to minimise the impact of the administration on customers and to seek interested parties that may want to continue with this highly respected business. This course of action should assist in maximising the returns to creditors by allowing increased asset realisations.”

As well as producing Christmas and sponge puddings the business also specialised in private labelling and producing bespoke recipes.

Ultimate supplied products to the foodservice and wholesale industries. It also produced Famous Grouse Sticky Toffee pudding, Famous Grouse Christmas puddings and Famous Grouse Whisky butter.

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Chipotle Takes on Taco Bell’s Brian Niccol as CEO

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Early on, Chipotle Mexican Grill positioned itself as a restaurant industry innovator. But it has spent the past few years struggling to recover from a string of food safety crises, as well as abandonment by its customers and a plunging stock price. For help, the chain is turning to quick-serve Taco Bell for CEO Brian Niccol, 43, to replace Chipotle’s founder, Steve Ells, as CEO on March 5. Niccol is tasked with replicating his success transforming Taco Bell from a fast-food afterthought to a social media-savvy company with sleek new stores, clever new creations and the hugely popular Doritos Locos Tacos.

“His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant,” said Ells in a statement.

Ells started Chipotle in Denver in 1993, and helped position it at the forefront of fast-casual restaurants. Chains like Panera Bread and Five Guys grew popular as consumers sought the convenience of fast food but the quality of sit-down establishments.

Chipotle is at a “pivotal time in its history,” Niccol stated. Hr used gutsy marketing and unusual food creations, such as the Doritos tacos and Nacho Fries, to excite customers. He also took aim at Chipotle’s customers, starting a higher-end Cantina chain and launching a healthier Cantina menu at Taco Bell.

In 18 of the past 20 quarters, Taco Bell has reported flourishing sales at established U.S. restaurants − better than many of its rivals, including McDonald’s Corp. and Chipotle, said Maxim Group analyst Stephen Anderson. It also outpaced Yum Brands’ chains Pizza Hut and KFC in same-store sales for 2016 and 2017.

Having more than 2,400 restaurants, Chipotle was hobbled in 2015 by case after case of food contamination involving E. coli, salmonella and norovirus. Last year, the company was the target of hackers, excoriated on social media after a video of rodents in one of its restaurants went viral and saw its stock pummeled 63 percent. Ells’s co-chief executive, Montgomery F. Moran, gave up his position in 2016, and Ells has been criticized for his hefty compensation.

Ells said in November he would step aside after failing for two years to rescue the burrito chain’s sales and reputation, and told investors recently he would not get in the way of a new CEO.

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Food groups attack ‘ultra-processed’ food criticism

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Food industry groups have challenged claims that ‘ultra-processed’ foods cause higher rates of obesity and are inherently bad for consumers.

A report issued last week, Household availability of ultra-processed foods and obesity in 19 European countries​, found that more than half the food UK consumers bought (50.7%) was ‘ultra-processed’. The term was used to mean made in a factory with industrially processed ingredients and additives.

Head of the research team Professor Carlos Monteiro from the University of São Paulo claimed there was a link between these types of food and obesity and poor health.

However, the Institute of Food Science & Technology (IFST) refuted these claims, saying processing was a normal part of food preparation that was often necessary for safety and palatability of products.

A spokesman told FoodManufacture.co.uk: “The fact that the finished dish has been through processing in an industrial environment – or indeed that other ingredients or additives have been used in the process – does not make the finished products less nutritious or inherently ‘bad for you’.

‘Little relevance to nutrition’

“Ultra-processing is a concept; at best a suggested means of categorising foods produced in an industrial setting. The relevance of consumption of such food and beverage products to health outcomes is not validated by science and has little relevance to nutrition.”

The British Nutrition Foundation (BNF) echoed the IFST’s sentiments. It also claimed the report did not take into consideration the different types of processed foods consumers ate or the foods’ nutrient content.

“Many of the foods classed as ‘ultra-processed’ – such as confectionery or fried snacks – would be considered as foods to limit, according to UK healthy eating advice,” ​the BNF stated.

However, it continued: “It also includes foods considered part of a healthy diet, such as breads, breakfast cereals and unsaturated spreads.

“Conversely, some of the foods that are in the less processed categories are those that should be limited in the diet, such as salt, sugar, honey and butter. Therefore, it’s difficult to draw conclusions about the effects suggested in this study.”

‘Safe, affordable food’

The Food and Drink Federation (FDF) urged people to stop demonising processed foods, as they provided all sectors of society “access to safe, affordable food”.

It also claimed processed foods had become healthier in the past 10 years, due to reformulations by manufacturers.

An FDF spokesman said: “In the last decade food and drink manufacturers have reduced the sugar, salt, fat and calories in their product ranges, and there is now a greater variety of healthier products available to shoppers than ever before.”

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Another meat recall related to date labels

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The mislabelling of use-by dates on meat products has led to yet another recall.

Foodservice supplier Fairfax Meadow has issued a voluntary recall on meat products following an unannounced inspection by the Food Standards Agency (FSA) and Food Standards Scotland (FSS) on February 8.

According to a joint FSA and FSS statement, the unannounced inspections revealed “concerns about the procedures and processes the company had been using to apply use-by dates on some of its products”​.

“Our review is ongoing but the company has acted properly and proportionately in swiftly withdrawing potentially affected products from the market,”​ the FSA/FSS statement added.

Changing procedures

“Fairfax Meadow responded immediately to our concerns and are now changing their procedures. We are satisfied with the changes that are being made and at present we are not anticipating the need for enforcement action.”

Fairfax Meadow issued a statement from md Penny Tomlinson on the situation.

“Fairfax Meadow is initiating a voluntary product withdrawal for certain batches of meat products with pack codes from 29 to 37 due to a product labelling concern raised by the FSA,”​ she said.

“This voluntary withdrawal reflects our desire to ensure our practices remain industry-leading and follows a dialogue with the FSA. It is being undertaken as a precautionary measure and has been promptly implemented. We have liaised with the FSA throughout and they have provided helpful guidance to us.”

Tomlinson added that no other customers were affected. “Fairfax Meadow continues to operate as normal during this withdrawal period and no other products or deliveries are affected.”

Muscle Food

Last week online retailer Muscle Food issued a voluntary recall on meat products​, following a labelling error, which led to incorrect dates being placed on produce. In January, production at Russell Hume was halted by the FSA over concerns about procedures and processes around use-by dates. Production at Russell Hume’s Liverpool site has since been given approval to recommence.

Earlier this month the FSA and FSS announced a review of meat cutting premises and cold stores​. The review, which will be established later this month, comes in the wake of “serious non-compliance issues identified at cutting plants operated by 2 Sisters Food Group and Russell Hume and will be industry-wide”​.

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Pamela Bailey to Retire From GMA

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After nearly 10 years as president and CEO of the Grocery Manufacturers Association (GMA), Washington, Pamela G. Bailey, announced Feb. 12 she will retire later this year. Bailey will remain with the group until a replacement is found.

The GMA represents the world’s leading food, beverage and consumer products companies that sustain and enhance the quality of life for hundreds and millions of people in the U.S. and around the globe.

“GMA’s members are dedicated to improving the quality of life for their consumers and they are fortunate to be led by a dedicated board of industry leaders, committed to ensuring the association can help its members continuously improve the health, safety, affordability and sustainability of their products,” Bailey said. “As GMA’s board continues to engage in the reinvention process to build the association of the future to meet the consumer needs of the future, it is best that they do so in concert with their leader of the future. I look forward to continuing to work with the GMA board as they engage in that process to identify that leader.”

During Bailey’s tenure, the association supported modernizing the nation’s food and product safety laws and regulations, resulting in the passage of the Food Safety Modernization Act, reforms to the Generally Recognized as Safe (GRAS) review process and passage of the Toxic Substances Control Act, which made important improvements to the nation’s chemicals management laws.

“We want to thank Pam for all her hard work during her nearly 10 years at GMA,” said Chris Policinski, chairman of the GMA board of directors. Her leadership was valuable during an evolving time in the industry. As the industry evolution continues, GMA’s board is committed to building an association that is the leading voice for a major sector of our nation’s economy and that works collaboratively with industry and consumer partners to address our challenges ahead.”

Bailey’s departure comes at a time when the GMA has seen several member companies leave from the group, such as Nestle, Tyson Foods, Campbell Soup Co., Dean Foods, Unilever, Mars. In early February, Kraft Heinz Co. and DowDuPont were the latest to announce they’d part ways with the group. The exits began when the association and companies disagreed on GMO labeling.

Prior to joining GMA, Bailey served as founding president and CEO of the Healthcare Leadership Council; was president and CEO of AdvaMed, the Advanced Medical Technology Association, and was president and CEO of the Personal Care Products Council. Earlier in her career, she served in the White House for three presidents.

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Fresh Del Monte Produce To Acquire Mann Packing

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Fresh Del Monte Produce, Coral Gables, Fla., announced on Feb. 5 that its North America subsidiary, Del Monte Fresh Produce N.A., Inc., has agreed to purchase vegetable grower/processor/supplier Mann Packing Co. Mann deals with a wide variety of fresh and value-added vegetable products in North America, including washed and ready-to-eat, fresh-cut vegetables, snack packs and party trays and lettuce products for foodservice and retail markets. Mann Packing’s annual sales were approximately $535 million in 2017.

Del Monte will make the acquisition for an aggregate consideration of approximately $361 million in cash, financed with cash on hand and the company’s existing credit facility. The company expects the purchase to be accretive to earnings in the first year. The transaction is subject to regulatory approvals and other conditions customary for such transactions, and should close during the first quarter of 2018.

“We are extremely pleased about our acquisition of Mann Packing, a leader in the fresh and value-added vegetable category,” said Mohammad Abu-Ghazaleh, chairman and CEO of Fresh Del Monte.

“Mann Packing’s strength in the vegetable category, one of the fastest growing fresh food segments, will allow us to diversify our business, leverage our distribution network and infrastructure and increase our market reach,” Abu-Ghazaleh said. “In addition, this transaction will provide us with synergies, enhancing our ability to better serve our combined customers and address consumers’ needs for healthier products. This acquisition is a significant step toward our goal to be the world’s leading supplier of healthful, wholesome and nutritious fresh and prepared food and beverages for consumers.”

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How retail changes are affecting packaging

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Mike Kresbach, Bemis North America says food and beverage companies need to create packaging that works for C-stores, dollar stores and club.

 

The cool new trend in packaging these days seems to be eCommerce. But Mike Kresbach, V.P. of marketing at Bemis North America, says that’s just one part of the changing landscape.

Kresbach recently spoke about the changes happening at brick and mortar stores during The Packaging Conference in Orlando, Fla., and he offered insight into how food and beverage companies can respond with better packaging options.

“Retail is still critically important to get right,” he says. “In terms of grocery, [eCommerce] is only 2 or 3 percent of total sales. Physical retail still really does demand our attention. And we see opportunities in aligning packaging behind these emerging channels.”

Kresbach says the rising income gap, shrinking household sizes, and the rise of snacking all are shifting how and where consumers shop for food and beverage.

Specifically when it comes to incomes, he says 100 million Americans live on less than $30,000 a year.

“It’s had a massive impact on how consumers shop and what they buy,” Kresbach explains. “This dynamic is perhaps the most pressing one on our customers.”

Meanwhile, households are shrinking, as the number of married couples with children under 18 decreases. And, snacking is rising. In fact, 95 percent of adults in the U.S. snack at least once a day, and 50 percent snack two to three times a day.

All of this is leading to a decline in the so-called “fill-up” trip, where shoppers would go to a mass retailer and buy groceries for the whole week. And that, in turn, is leading to a growth in other channels outside of traditional grocery.

“Shopping trips are evolving,” Kresbach says. “These changes are impacting CPG consumers.”

But it’s not as though consumers are spending more money on food and beverage, they are just spending that money at different types of stores.

“These additional growth channels came in addition to existing channels, they’re piling on top,” Kresbach says. “So this is not about replacement, it’s really, truly about fragmentation.”

For example, the gap between the middle class and the wealthy is driving growth in the dollar stores channel, which has to cater to different shoppers than a traditional grocery store. But most food and beverage companies seem to ignore this.

“We did a great job optimizing for Walmart,” he says, adding that now they need to optimize for everything else.

Kresbach points to the fact that most shoppers going through a Dollar General or a similar store only plan to spend $11 on their whole trip, which means items need to be sized so that they don’t cost more than $5. And that means that absolute package price matter more than anything else, which in turn means companies should sell smaller sized packages at lower price points than they would at a traditional grocery store.

“The basket price is the limiting factor in this channel,”

On the other extreme, there’s club shoppers.

“This channel is defined by exclusivity and membership and saving customers money in a vastly different way than dollar stores,” he explains, adding that it requires another size for packaging, as customer looks to buy in bulk.

And of course, the C-store is an entirely different experience as well. At those, the typical basket is $6, it’s usually purchased within 2 minutes, and it’s consumed within two hours of purchase.

“It’s a distinct channel and it demands different packaging,” explains Kresbach, who adds that ideally the packaging should enable one-hand consumption.

This is all to say that food and beverage companies need to do more to design channel-specific packaging.

“Imagine the distinction between a Costco and Dollar General and a Walmart,” Kresbach says. “There’s a spreading difference, and yet if you were to peruse these stores, you’d find you’d packages that look similar to what’s being sold in traditional mass market grocery stores.”

Kresbach says companies need to look at packaging innovation the same way they look at new product development and marketing, and apply the same level of resources — especially considering that 70 percent of purchase decisions are made at point-of-sale.

“Packaging drives purchase more than TV ads, online review and the recommendations from friends,” he explains.

And food and beverage companies ignore that reality at their peril.

“This is not stopping, new packaging is going to be more important tomorrow than it is today,” Kresbach says. “Growth depends on it, and I believe packaging is the path for driving growth for CPGs in these emerging channels. Packaging drives consumer choice.”

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Pork scratchings company invests in growth

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Pork scratching manufacturer G Simmons & Sons is to expand its premises with a £334,000 investment, following record demand for the product.

The Walsall-based family-owned manufacturer is planning to expand outside its distribution of the UK and Ireland into Europe. As well as producing its own pork scratchings it repackages them for various customers own label products.

The company has been in operation over 40 years, founded by Graham Simmons and originally trading as a butcher’s shop in Willenhall. Pork scratchings were produced as a way to avoid waste from the pig skin and this became the most successful side of the business, with sales set to hit £2M in 2018.

New contracts

G Simmons is now run by Graham’s sons, Shaun and Mark Simmons, who over the last 24 months have secured six new contracts and hired three new members of staff.

“Our business began as a simple butchers shop and has grown into a national supplier thanks to the dedication of our family and the team,” ​said Shaun Simmons, Joint Owner, G Simmons & Sons. “The expanded premises will allow us to meet the increased demand and help us achieve our long-term aspiration of becoming an international supplier of pork scratchings.”

Chirag Mistry, relationship director, Santander Business Banking, said:​ “From our first contact with G Simmons & Sons it was clear this was a business with huge potential. The business is well placed to capitalise on some fabulous opportunities and Santa​nder is excited to be supporting this ambitious family business as it grows and prospers.”

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CRANSWICK PLC. LAUNCH CAMPAIGN TO BECOME THE FIRST BRITISH FOOD MANUFACTURER TO CUT OUT AVOIDABLE PLASTIC WASTE BY 2025

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Cranswick plc, one of Britain’s leading suppliers of premium food, has today vowed a significant drive to reduce plastic waste within the UK starting with their own pledge that all packaging used by the food group will be 100% recyclable and sustainably sourced and in addition, to also reduce their plastic use by 50% by 2025.

Cranswick believe that big change is only possible through industry and peer collaboration and so have launched a call to action with an invitation to their food peers, not just their key customers and suppliers, to collaborate with them as a joined-up industry to take responsibility for the environmental impact of plastics as a matter of urgency.

Cranswick believe a key step is to lobby the Government to look at the full life cycle of products and not simply collecting materials for recycling, but getting our waste packaging back in the system to replace virgin materials for manufacturing new products.

Adam Couch, CEO of Cranswick plc. “The environmental impact of plastics, with regards to the damage they cause to the world’s oceans and landfill, has become a major global issue and one that we seek to address as a matter of urgency. While we commend the Government for putting this issue on the political agenda through the new 25 Year Environmental Plan, we believe as a major UK manufacturer we have a responsibility to help drive systemic change to end global plastic pollution.

More importantly, nor do we need to wait that long (2042) to achieve our goals. Ensuring a sustainable future for our planet should be a priority for every retailer, manufacturer, local authority and individual globally – and it is our collective responsibility to ensure there is the opportunity to be able to reduce, re- use and recycle as much as is possible to minimise the impact on our environment.”

As documented in a report published in the journal Science Advances, it is calculated that the total volume of all plastic ever produced is approximately 8.3 billion tonnes.  Of which, 6.3 billion tonnes is now waste and 79% is now in landfill or the natural environment. The Ellen McArthur Foundation believe that on the current track, there could be more plastics than fish in the ocean (by weight) by 2050.

It is Cranswick’s commitment that by 2025 they will:

  1. REDUCE – the weight of their plastic packaging from farm to fork by 50%.
  2. RE-USE – all of their internal materials in a closed loop system across their business
  3. RECYCLE – ensure that all packaging they use is not only 100% recyclable but easily recyclable supporting circular waste solutions

Jim Brisby, Group Commercial Director at Cranswick plc. says “Our consumers are constantly demanding convenient food solutions, and the packaging solutions currently available can make the problem worse.  Much of this packaging is not easily recyclable and we have a responsibility to address this issue”.

He continued “The results of an internal sustainability review in 2017 illustrated how important waste and recycling is to our staff and stakeholders. This strategy will now form a major part of Cranswick’s new group sustainability initiative “Second Nature”, which seeks to address key issues from farm to fork. Our ambition is to lead sustainability across agriculture and food production on a global scale by integrating sustainability as second nature to what we do, how we work, and why we do it.”

–ENDS–

To deliver their 2025 commitments, Cranswick pledge that:
  • All packaging used by their food group will be 100% recyclable and sustainably sourced
  • Where dual materials are required to maintain product quality and minimise food waste, these will only be from materials that are also 100% recyclable and sustainably sourced
  • All packaging will be designed to be intuitively recycled by the consumer and easily recovered through household recycling collections
  • They will be forming a new industry stakeholder group to openly collaborate on developing circularity in the UK to ensure we have a workable closed-loop system. This is not simply about collecting materials for recycling but using waste packaging to replace virgin materials for manufacturing our new products
  • They will test new initiatives to help drive positive consumer behaviour around recycling food packaging to make this as simple as possible and publically share their findings
Cranswick plc. Cranswick plc. is a leading and innovative British supplier of premium, fresh and added value food products with annual revenues in excess of £1.2 billion. Their core market is the United Kingdom where they produce a range of high quality, predominantly fresh products ranging from fresh pork, gourmet sausage and bacon to premium cooked meats, charcuterie meats and gourmet pastry. Most recently, they have started to produce fresh chicken and manage the whole supply chain from farm to fork.

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