World News

• The baking sector in Colombia has shown less growth that analysts had expected. Recent sales show no change, though retail value growth was much higher (5%). This could be accounted for by the rising cost of ingredients resulting in higher unit prices. The price pressure is forcing manufacturers to seek greater efficiency and product diversification. The fastest growing category was packaged cakes (retail value increased 15% on volume growth of 3%). Productos Ramo’s Ramo brand is the most-popular, usually purchased by housewives and singles. Number two is Mexico’s Grupo Bimbo’s Bimbo brand. Health & wellness is a growing concern, especially in the bread category. White bread is still the #1 category accounting for 37% of packaged sales last year, but “healthier” products like whole grain are surging (34%), followed by multi-grain bread and light bread (10% each). The main concern among consumers with white bread is a mistaken impression other breads are lower in calories.

• The global halal food industry is currently worth around $632bn per year.

• Efforts to control waste and the impact on landfills are focusing on supermarkets and their packaging. In the UK, the consumer magazine Which? asked readers what they thought, and 94% said there is too much food packaging with 30% saying they had refused to purchase something because it had too much packaging. The study compared 27 everyday items bought from six major supermarkets: Asda, Marks & Spencer, Morrisons, Tesco, Sainsbury’s and Waitrose.

The average total yielded 636g of plastic or paper packaging with 14 of the items weighing the same as their container (392g average). Upscale retailer Marks and Spencer had the most packaging (415g). The company has tried to implement a “green packaging” blitz known as its “Eco Plan,” and explained its products often contain more than the competition. It also insisted the study does not take into account recyclability, a key issue now that some plastics are no longer accepted by municipalities and recycling firms, nor its efforts to use more recycled plastic in its packaging. A heavy ice cream carton singled out by the magazine is made from polypropylene which the company claims has a “greater potential to be easily recyclable.” Additionally, M&S says other “green” efforts will include cutting plastic bag usage from 464MM to 77MM within one year. Among the other retailers surveyed, Asda said it had removed 40K tons of packaging, and Sainsbury’s insisted most of its packing was now recyclable. Waitrose claims it has cut packaging by 1/3 since 2001. Tesco says it has 3,500 “packaging reduction projects” underway.

• Lianhua Supermarket, a subsidiary of China’s Bailian Group, is acquiring a 100% stake in Hualian Supermarket from the parent group. With this purchase, Hualian will become a subsidiary of Lianhua, increasing the latter’s total outlets to over 5,200.

• The Evil Empire just got larger: PepsiCo (parent of Frito-Lay) has acquired a 20 % share of Calbee Foods Company, Japan’s largest snack maker. PepsicCo will transfer ownership of its Frito-Lay Japan equity to Calbee in return for a seat on Calbee’s board. The plan is to produce jointly a wide range of food products in Japan, including (surprise!) potato chips, vegetable snacks, breakfast cereals and the ever-popular prawn crackers. The two companies currently generate combined annual revenues of $1.4bn. In a related development, PepsiCo and The Pepsi Bottling Group are investing $1bn in Russia during the next three years, raising its stake there to $4bn, aimed at expanding manufacturing and distribution capacity. A new beverage facility has opened in Domodedovo with a snacks manufacturing plant expected later this year in Azov. Investment in the Lebedyansky juice business will include warehousing and distribution upgrades. The new plant will be PepsiCo’s biggest, and will churn out Pepsi-Cola, Aqua Minerale water and ready-to-drink Lipton iced tea.

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