Food reformulations and lifestyle change: China's plan to cut meat consumption by 50% , McDonald's swaps margarine to butter, Nestle reduces sodium, sugars, trans-fat, total fat, calories or artificial colourings

25 June 2016: China's plan to cut meat consumption by 50% 

China's plan to cut meat consumption by 50% cheered by climate campaigners - New dietary guidelines could reduce greenhouse gas emissions by 1bn tonnes by 2030, and could lessen country’s problems with obesity and diabetes by Oliver Milman and Stuart Leavenworth in Beijing Monday 20 June 2016 21.08 BST  https://www.theguardian.com/world/2016/jun/20/chinas-meat-consumption-climate-change?

Infographic - Less Meat, Less Heat from WildAid https://vimeo.com/170833983

Eat less meat to avoid dangerous global warming, scientists say - Research led by Oxford Martin School finds widespread adoption of vegetarian diet would cut food-related emissions by 63% and make people healthier too. Livestock-rearing is a major cause of greenhouse gases, in part because of the methane produced by the animals. Photograph: Jeff J Mitchell/Getty Images. BY Fiona Harvey 21 March 2016 https://www.theguardian.com/environment/2016/mar/21/eat-less-meat-vegetarianism-dangerous-global-warming

23 June 2016: McDonald's swaps margarine to butter, Nestle reduces sodium, sugars, trans-fat, total fat, calories or artificial colourings 

It Took McDonald's 6 Months to Swap From Margarine to Butter—and That Was Fast by   Leslie Patton June 22, 2016 -- The switch back to the original recipe (with butter) for the Egg McMuffin occurred in September, just before the national introduction of all-day breakfast... McDonald’s also recently changed its English muffins, now baked with unbleached flour instead of the bleached version....  “The change to butter was extremely fast. That’s probably the quickest change that we’ve made.”.... In late August, Grassland Dairy Products Inc. found out it needed about 2.4 million pounds of butter for the swap. The family-run operation started working overtime. The company’s three facilities went to seven days a week, up from six. And the dairy also had to push its cardboard-box supplier to make the McDonald’s packaging in just four weeks instead of the usual eight.... 

http://www.bloomberg.com/news/articles/2016-06-22/tweaking-mcmuffins-speeds-mcdonald-s-ahead-of-breakfast-rivals?



Big brands are pushing up on reformulations - Nestle reports for 2014 6,973 products with reduced sodium, sugars, trans-fat, total fat, calories or artificial colourings (up from 3,317 and 4,221 number of products changed in 2012 and 2013). Reducing sugar and fat in ready-to-drink products (product example: 54% total sugar reduction, 45% total fat reduction, 25% more protein), substitute partially hydrogenated oil with high oleic soybean oil (product example, 45% SFA reduced, 25,800 tonnes oil substituted and 9,900 tonnes trans fat removed), full fat ice cream case study (new mix recipe: -28% fat, increased protein content, no starch), instant noodle case study (15% sodium reduction whilst improving taste, 50% SFA reduction through pre-drying and oil blend optimization), micronutrients (example, biofortification of maize, cassava, what etc).

source: Nestle presentation, December 2015

Food sector news (update 7): European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

We've been keeping an eye on the food and processed foods sector, and shall try to post up some on some interesting trends or shifts here. Note the billion dollar snacks! Some reckon Hot Pockets and its spin-offs are a $2 billion business. By comparison, Unilever's Magnum is over EUR 1 billion in annual sales.

Also check, Khor Reports' Food Watch http://khorreports-palmoil.blogspot.my/p/khor-reports-food-watch.html

31 Jan 2017: EU food safety body to look again at palm oil health risks

EU food safety body to look again at palm oil health risks, Jan 27, 2017 -- Barilla, Italy's largest producer of baked goods, eliminated palm oil after EFSA's opinion, but Nutella maker Ferrero mounted an advertising campaign to defend its use. EFSA scientists will take into account a report the World Health Organization (WHO) and the U.N. Food and Agriculture Organization (FAO) published in November....http://www.reuters.com/article/us-health-palmoil-eu-idUSKBN15B1YP

24 May 2016: European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

Editor's notes: 

• The measure against palm oil shown in the EFSA report is much higher than any I've seen on the same issue from the industry. At a recent talk on food safety at MPOB several weeks ago, the differential was shown was much closer, about 3x (also having improved over time). There is a clear need to reconcile such a wide range of indicated measures on the 3MCPD issue. It would also be good to find out what the real story is on trace contaminants in processed oils and fats. Are there also other trace contaminants arising form the chemical (including hexane) processing of soybean and other oils? Palm oil is different in being physically (rather than chemically) processed, and it clearly needs to address the EFSA position.
• Russia has removed the palm oil tax idea on concerns about raising prices.

For palm oil, the moment of truth has arrived written by Marta Strinati May 17, 2016... On May 3, the European Agency for Food Safety (EFSA) published a substantial report warning that the contaminants in palm oil are cancerous and genotoxic, meaning it causes damage to DNA that can be transmitted to children. For one of those toxins, 3-mpcd, the EFSA set a threshold of 0.38 micrograms per kilogram of body weight, a dosage which, today, has been largely exceeded by the population, especially by children, teens and even infants. According to EFSA’s opinion, the food industry made a last attempt to misinform, claiming that the processing contaminants have also been found in other refined vegetable oils. But the report is clear: Palm oil contains six to 10 times more.... Big Food has known for 12 years that the palm oil used in food carries with it toxic and cancerous contaminants. Documents from the authorities and multinational food producers clearly show that the risks connected to consumption of low-quality vegetable fat were known. Those parties discussed possible solutions, but never offered up a remedy....But the rainforests are far away, and saturated fats aren’t very scary. Knowing that a food eaten so much by children contains substances that cause cancer has set, again, the spotlight on the battle against palm oil.... http://ilmanifesto.global/for-palm-oil-the-moment-of-truth-has-arrived/


Big brands are pushing up on reformulations - Nestle reports for 2014 6,973 products with reduced sodium, sugars, trans-fat, total fat, calories or artificial colourings (up from 3,317 and 4,221 number of products changed in 2012 and 2013). Reducing sugar and fat in ready-to-drink products (product example: 54% total sugar reduction, 45% total fat reduction, 25% more protein), substitute partially hydrogenated oil with high oleic soybean oil (product example, 45% SFA reduced, 25,800 tonnes oil substituted and 9,900 tonnes trans fat removed), full fat ice cream case study (new mix recipe: -28% fat, increased protein content, no starch), instant noodle case study (15% sodium reduction whilst improving taste, 50% SFA reduction through pre-drying and oil blend optimization), micronutrients (example, biofortification of maize, cassava, what etc). 

Source: Nestle presentation, December 2015

18 April 2016: Food safety issues in veg oils, Russia mulls tax on sugar and palm oil?

Editor's note: In AmBank news update, "Putin said that Russia should consider labelling palm oil products. As an alternative, Russia may consider an excise duty on palm oil products." A reader who checked with Russia trade specialists said that is not true. At an annual televised call-in, a question on putting cigarette-style health warning on palm oil products, Mr Putin replied that it not clear that palm oil is quite as bad as tobacco.

Vladimir Putin: $2bn linked to Panama Papers was spent on expensive classical instruments - and what else we learnt from Russian President's phone-in by Roland Oliphant, moscow  14 APRIL 2016; .... Intermission II: Cows, sanctions and unhealthy palm oil: Another intermission, this time to a cattle farm. The farmers have two questions: first, what happened if Western sanctions against Russia are cancelled, and consequently Russia's retaliatory embargo on Western food. That measure has been a boon for Russian farmers, allowing them to squeeze into sectors, including cheese, that had been dominated by foreign imports..... The second question is a request to put cigarette-style health warnings on palm oil products. Mr Putin says he doubts sanctions will be cancelled soon, but that "other support" may be considered for farmers when they are. And it is not clear that palm oil is quite as bad as tobacco, he adds. http://www.telegraph.co.uk/news/2016/04/14/vladimir-putins-phone-in-with-russia/

Russian Government to Introduce Tax on Sugar and Palm Oil The Moscow Times Feb. 05 2016; ... The list of goods subject to the new tax include palm oil and sugary drinks. The list may also include electronic cigarettes, potato chips and other products with high levels of fat and sugar, two unidentified federal officials told Vedomosti. The idea was supported by Russian President Vladimir Putin, both officials said..... According to an unidentified representative of the Ministry of Economic Development, the issue is already being developed. “We have the instructions from the government on this subject and in the near future (within a few weeks) will present suggestions and calculations,” he was quoted by the newspaper as saying. The representative pointed out the new measure is aimed not only at bringing money into the federal budget but also at reducing the consumption of products with high levels of sugar and fat.... http://www.themoscowtimes.com/business/article/russian-government-to-introduce-tax-on-sugar-and-palm-oil/558796.html

At MPOB PAC Forum, 14 April 2016, a presentation by Prof Dr Aishah on food safety issues, and a useful slide on edible crud oil risk matrix - pesticids, PAH, mineral oil, dioxins and PCBs and heavy metal (lead):

22 June 2015: India  PepsiCo to cut down salt, sugar content in packaged foods and FSSAI setting up an expert committee to regulate salt, sugar and fat in foods

PepsiCo to cut down salt, sugar content in packaged foods By Ratna Bhushan, ET Bureau | 22 Jun, 2015; NEW DELHI: PepsiCo has stepped up work on reducing salt and sugar in the beverages and snacks it sells in India amid growing public concern over high levels of some ingredients in packaged
foods available in stores.  The US-headquartered food and beverage giant is likely to roll out the refined products ahead of schedule, executives aware of the development said. Last week, the Food Safety & Standards Authority of India (FSSAI) had said that it is setting up an expert committee to regulate salt, sugar and fat in foods ..

http://economictimes.indiatimes.com/articleshow/47762685.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

28 May 2015:  The rising distrust of Big Food (largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014) and the beef-leather consumption divergence

Big Food's Big Problem: Consumers Don't Trust Brands - Industry Giants Shift Strategy To Win Back Health-Focused Americans By E.J. Schultz.   Published on May 25, 2015;
This rather unappetizing statement was tucked into a request for proposals recently sent to ad agencies: "Most of our food supply comes from factory farms, is dependent on GMOs and chemicals, and is not sustainably grown or raised." The inflammatory language sounds like the typical musings of a fiery activist ready to take on Big Food. But it actually came from the Kashi brand owned by industry giant Kellogg Co. The brand is seeking ideas to "re-establish our identity in the natural foods movement." The RFP, which was recently obtained by Ad Age, is a small but telling example of how the food industry has been shaken from its core, forced to reinvent itself in the face of shifting consumer demands. Families once reliably heaped their plates with products such as Stove Top stuffing from Kraft Foods, Hamburger Helper from General Mills and Kellogg cereals, along with similar products from other processed food titans. But now those consumers are increasingly migrating to smaller, upstart brands that are often perceived as healthier and more authentic.....The rapidly shifting tastes have forced executives into taking some dramatic steps. They are racing to reformulate iconic products like Kraft's Mac and Cheese, while acquiring smaller brands in hopes of reinventing themselves to appeal to today's finicky consumers. But their search for growth comes amid intense pressure to cut costs as bottom-line focused private equity firms such as 3G Capital lurk.
Some $18 billion in sales have shifted from large to small companies from 2009 to 2014 across all consumer packaged good categories, according to report by Boston Consulting Group and IRI. Credit Suisse recently isolated the changes in market share among food and beverage companies and found that the largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014. Their "dominance of the core U.S. market seems to be slowly eroding," Credit Suisse stated in a report..... http://adage.com/article/cmo-strategy/big-food-falters-marketers-responding/298747/

Your Salad Lunches Are Killing American Leather - Diets and droughts have made cattle hide more expensive, creating a leather shoelace crisis May 27, 2015 by James Tarmy; “Two years ago the hides cost me $50, and that didn’t seem so bad. But now they’re $112,” Howlett sighs. “Twelve bucks starts to feel like a pretty raunchy deal.” As a middleman between cattle ranchers and shoe sellers, Howlett has limited ability to pass along her rising costs. Auburn’s sales have begun to decline, to $19 million in 2014 from $20 million the year before, and net profit has been cut in half.
Leather has always been a byproduct of the meat industry, and as Americans’ beef consumption grew over the 20th century, the leather industry grew with it. The past three decades, though, have seen a decline of about 28 percent in Americans’ appetite for beef, and the supply of hides has dwindled accordingly. At the same time, drought in the Midwest has pushed up feed prices. The result is that America has fewer and more expensive cows. Meanwhile, the world’s consumers still want leather goods.... http://www.bloomberg.com/news/features/2015-05-27/your-salad-lunches-are-killing-american-leather?cmpid=BBD052715

19 April 2015: Fight for $15 minimum wage and unionization may raise fast food prices; zero food price inflation may trigger supermarket price war and more according to Citi Research, Majority of Australia sold packaged foods found to be unhealthy, Coles fined A$2.5 m for 'fresh' bread claims

Burger King Founder Says Higher Wages Could Kill Off ‘Dollar Menus’ by Nolan Feeney @NolanFeeney   April 15, 2015  “I see a lot of $10 hamburgers arriving on the scene,” David Edgerton says. Burger King co-founder David Edgerton says fast food workers pushing for higher wages could spell the end of the “dollar menu,” and usher in an era of higher-quality, more expensive convenience restaurants. Edgerton, 87, spoke to TIME on Wednesday as fast-food workers around the world staged protests and strikes—some at Burger King locations—as a part of the “Fight for $15” campaign, which calls for a $15 per hour minimum wage and the right to unionize. “What’s going to happen, really, is you’re going to see less and less of the quick and dirty kind of places,” said Edgerton, who founded the fast food giant with James McLamore in 1954 and now serves on the board of Avantcare, a company that makes nutritional products to help treat addiction. “You’re not going to be able to run these places [paying workers] $15 an hour or whatever it will be.”... http://time.com/3823384/burger-king-founder-minimum-wage-mcdonalds-protests/?xid=newsletter-brief

Next blow for Woolies, Coles: zero food price inflation Apr 15 2015| BRISBANE TIMES| Stalled prices for goods such as wheat, sugar and dairy are likely to cost Australia's supermarket giants more than a price war, according to Citi Research.... http://www.afr.com/markets/commodities/agriculture/next-blow-for-woolies-coles-zero-food-price-inflation-20150414-1mkh5e

Majority of packaged foods found to be unhealthy Down Under 13 April 2015 http://mobile.foodnavigator-asia.com/Markets/Majority-of-packaged-foods-found-to-be-unhealthy-Down-Under/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYolJTQnOm2tj2KnTMZZv3qc#.VTMgcJ2wqTN
Coles fined A$2.5 m for 'fresh' bread claims 10 April 2015 http://mobile.foodnavigator-asia.com/Policy/Coles-fresh-bread-claims-Fined-A-2.5m/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYoCEJZoZiNQwvxcC%2Bf8IObS#.VTMgbZ2wqTN

14 March 2015: Ferrero plans first factory in China

Ferrero plans first factory in 'strategic' Chinese market 11-Mar-2015; Mars holds a 39% value share of the Chinese chocolate market, but lost some ground in 2014 to Ferrero and Hershey, both of which grew their share to 12%, according to Euromonitor International.... Local news reports claim the Xiaoshan factory will produce 30,000 metric tons of chocolate and candies annually... According to Euromonitor, Ferrero has doubled chocolate sales in China over the past five years ot reach $190m in retail value sales in 2013...the firm currently manufactures toys for its Kinder brand in China, but products are imported from outside the country. Ferrero operates 20 plants worldwide including ones in India, Russia and Australia...Euromonitor expects a further $1bn of sales in chocolate confectionary in the next five years, representing a compound annual growth rate of 7%... Euromonitor recently wrote: ".. seasonal products and a culture of gift giving are prevalent in the Chinese market, which makes it a particularly conducive market for both Lindt and Ferrero.... "
http://mobile.foodnavigator-asia.com/Business/Ferrero-China-factory-plans-revealed/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=12-Mar-2015&c=g5U1F%2FHXoYppeWyjc906DKwECOgNgUCZ#.VQQPJZ2wqrR

16 February 2015: Ferrero patriarch - "the richest candy man on the planet" - dies at age 89; Milka-Cola premium milk beverage

World’s Richest Candy Maker and Nutella Founder Died on Valentine’s Day by Maya Rhodan @m_rhodan   1:15 PM ET; Owner of Italian chocolate company Ferrero dies at age 89. Michele Ferrero was the patriarch of the Ferrero family, whose company spawned Ferrero Rocher chocolates
Ferrero’s father created what would later be widely known as Nutella during World War II when cocoa was in short supply. He used hazelnuts to stretch the little chocolate he had. Years later, Nutella is among one of the most beloved treats in Italy and across the world. Forbes described Michele as the “richest candy man on the planet.”.... http://time.com/3710479/michele-ferrero/

Got Coke? Soda maker starts selling 'premium milk' by Associated Press February 3, 2015, 4:02 PM
Coca-Cola is coming out with premium milk that has more protein and less sugar than regular milk. And it's betting people will pay twice as much for it..... The national rollout of Fairlife over the next several weeks marks Coke's entry into the milk case in the U.S. and is one way that the world's biggest beverage maker is diversifying its offerings as Americans continue turning away from soft drinks.... It also comes as people increasingly seek out some type of functional boost from their foods and drinks, whether it's more fiber, antioxidants or protein. That has left the door open for Coke to step into the milk category, where the differences between options remain relatively minimal and consumption has been declining for decades.... "It's basically the premiumization of milk," Sandy Douglas, president of Coca-Cola North America, said at an analyst conference in November. If developed properly, Douglas said, it is the type of product that "rains money.".... Fairlife, which Coca-Cola formed in partnership with dairy cooperative Select Milk Producers in 2012, says its milk goes through a filtration process that's akin to the way that skim milk is made. Filters are used to separate the various components in milk. Then more of the favorable components are added, while the less desirable ones are kept out. The result is a drink that Fairlife says is lactose free and has 50% more protein, 30% more calcium and 50% less sugar than regular milk.... The same process is used make Fairlife's Core Power, a drink marketed to athletes that has even more protein and calcium than Fairlife milk..... http://www.latimes.com/business/la-fi-coke-milk-20150203-story.html

11 February 2015: PepsiCo and Coca-Cola show North Am growth to offset ROW slowdown; news links on food sector giants - Coke, Pepsi, McD, Unilever, General Mills, Mondelez/Kraft, Nestle... headlines on USD impact, earnings drag on demand in recent months

 PepsiCo’s Fourth-Quarter Profit Tops Analysts’ Estimates 'By' Duane Stanford 8:11 PM AWST  February 11, 2015 (Bloomberg) -- PepsiCo Inc., whose stable of brands includes beverages and the Frito-Lay snack division, posted fourth-quarter profit that topped analysts’ estimates even as currency headwinds eroded sales.... PepsiCo generated organic sales growth of 5 percent last quarter, helped by gains at its snack and beverage businesses. While currency fluctuations turned that increase into a 1 percent drop, the results showed overlying strength at the company. It also pledged to return $8.5 billion to $9 billion to shareholders through dividends and share buybacks in 2015..... PepsiCo right now has a lot of momentum,” Chief Financial Officer Hugh Johnston said in an interview. The company has increased U.S. sales by $1 billion, lifted by new products such as Naked Juice Kale Blazer and Mountain Dew Kickstart, Johnston said..... New products now account for 9 percent of sales, compared with 7 percent earlier years ago, a sign the company’s innovation push is paying off.
Chief Executive Officer Indra Nooyi also has forged a truce with activist investor Nelson Peltz’s Trian Fund Management LP, who had insisted she split the company’s snack and beverage businesses.....  Coca-Cola also beat estimates with its fourth-quarter results on Tuesday, saying that North American growth was helping offset a slowdown in the rest of the world..... That’s the case with PepsiCo too, Johnston said..... Overall, currency will reduce earnings growth by 7 percent this year, PepsiCo said. The company expects organic sales growth in the mid-single digits.... http://www.bloomberg.com/news/articles/2015-02-11/pepsico-profit-tops-estimates-after-growth-offsets-currency-woes

Unilever Profit Rises Despite China Sales Slump - Consumer-Goods Group Reports 6.8% Rise in Full-Year Net Profit on a 2.7% Fall in Revenue, By  Peter Evans; LONDON—Unilever PLC said weakening demand in emerging markets, especially China, has showed no sign of firming up this year even as the consumer-goods group reported a rise in profit in 2014... “There are still huge amounts of uncertainty in the world,” Jean-Marc Huët, Unilever’s chief financial officer, said Tuesday. “We’re not going to be too bullish at this time.”... http://www.wsj.com/articles/unilever-profit-rises-despite-china-sales-slump-1421739275

Coke Says 2015 Will Be a ‘Challening Year’ - WSJ
http://www.wsj.com/articles/coke-says-2015-will-be-a-transition-year-1423572751?mobile=y

55% - The decline in Coca-Cola’s fourth-quarter profit, which was pulled down by weakening foreign currencies and one-time charges. The company warned that overseas business conditions could worsen this year. .. http://tk.wsjemail.com/track?type=click&enid=ZWFzPTEmbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01NjkyNDMxJm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTE2OTY1MzQ1JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&1012011142&&&http://www.wsj.com/articles/coke-says-2015-will-be-a-transition-year-1423572751?mod=djem10point

Pepsi Traders Brace for Dollar Impact on Overseas Sales: Options  Earnings -  Feb 10, 2015; 
rating on the stock, said by telephone Feb. 5. “Pepsi in particular has large exposure to volatility in Russia.” PepsiCo Earnings Analysts forecast PepsiCo on Wednesday will say fourth-quarter net...
http://www.bloomberg.com/news/articles/2015-02-10/pepsi-traders-brace-for-dollar-impact-on-overseas-sales-options

What McDonald's Problems Say About American Taste  industries -  Jan 30, 2015  
invented the concept of fast food. It promised meals that were inexpensive and convenient, that could be eaten on the go and even with one hand while driving. The food wasn't necessarily healthy...
http://www.bloomberg.com/news/articles/2015-01-30/what-mcdonald-s-problems-say-about-american-taste

Unilever Sees No 2015 Improvement; Sales Miss Estimates  Jan 20, 2015; Unilever, whose detergents and deodorants are used by 2 billion consumers daily, said full-year performance will be similar to last year after posting quarterly sales growth that trailed analysts’...
http://www.bloomberg.com/news/videos/2015-01-20/unilever-sees-no-2015-improvement-sales-miss-estimates

General Mills Falls as Slump Prompts Company to Cut Forecast; General Mills Inc., the maker of Cheerios, Bisquick and Yoplait, fell 3.6 percent after slow growth in emerging markets and a lingering slump at home forced the company to cut its forecast. Earnings...
http://www.bloomberg.com/news/articles/2014-11-07/general-mills-tumbles-as-slump-prompts-company-to-trim-forecast

Mondelez’s Cost Cuts Fuel Profit Gains Amid Sluggish Demand  - Earnings -  Nov 5, 2014  
pressure for cutbacks at the company. Mondelez named Peltz to its board in January after Peltz’s Trian Fund Management LP abandoned a proposal for Mondelez to merge with PepsiCo Inc. to spur growth... http://www.bloomberg.com/news/articles/2014-11-05/mondelez-tops-quarterly-earnings-estimates-increases-forecast


Nestle’s Shocking Miss Puts 5% Growth at Risk: Cox  Asia -  Oct 16, 2014; Jon Cox, head of Swiss equities at Kepler Cheuvreux, examines results from Nestle as nine-month sales failed to meet expectations and looks at the economic factors in Asia and Europe that may...
http://www.bloomberg.com/news/videos/2014-10-16/nestles-shocking-miss-puts-5-growth-at-risk-cox

Nestle Revenue Misses Estimates Amid Price Pressure  Europe -  Oct 16, 2014  
Nestle reported nine-month sales that missed analysts’ estimates as deflationary pressure eroded revenue in Europe, providing a setback for the world’s biggest food company in reaching its full-year... http://www.bloomberg.com/news/videos/2014-10-16/nestle-revenue-misses-estimates-amid-price-pressure

Low Oil Is a Help to Consumers: MacDonald  Oil -  Jan 15, 2015  
Allianz Global Investors CIO Global Equities Lucy MacDonald discusses the consumer goods sector in Asia, India's surprise rate cut, and the strengthening U.S. dollar with Bloomberg's Stephen...

23 October 2014:  MCD regionalism, Hot Pockets  & food stamps

McDonald's Discovers Its Inner Locavore and Learns to Love Regionalism By Venessa Wong, October 22, 2014; "McDonald’s (MCD) is taking a new approach to its menu, and it’s all about you... “Customers want to personalize their meals with locally relevant ingredients,” McDonald’s Chief Executive Don Thompson said on Tuesday, after the fast-food giant again posted disappointing earnings. Starting in January, he said, McDonald’s will simplify the core menu to highlight popular items, cut back on items that don’t sell well, and begin to allow regional groups of franchisees to offer more localized versions of burgers, beverages, and chicken and breakfast items...." http://www.businessweek.com/articles/2014-10-22/mcdonalds-discovers-its-inner-locavore-as-sales-struggles-continue?campaign_id=DN102214

Every Food Trend Goes Against Slumping Hot Pockets, Even Government Spending By Venessa Wong, October 22, 2014; "Just about every major food trend is working against Hot Pockets, and Nestlé (NSN:VX) clearly knows it has a problem brand on its hands.... The company tried to revive its line of microwavable meat pouches last year with a foodie makeover, boasting of “premium cuts of meat” and “real cheese” in the new and improved version. But even these quasi-gourmet touches can’t mask the fact that Hot Pockets are processed food sold at a time when consumers are seeking freshness at the expense of frozen options. A beef recall earlier this year also hit Hot Pockets, putting the product at odds with increasing consumer focus on food safety.... Now executives at Nestlé are pointing to another factor in the long-running Hot Pocket cold streak. A temporary boost in federal food-stamp assistance that was introduced in 2009 was allowed to expire in late 2013. Recipients of the Supplemental Nutrition Assistance Program (SNAP) benefits are ”a big part of the consumption of this particular product,” said Chris Johnson, executive vice president of Nestlé Business Excellence, during a sales call last week.... “For our Hot Pockets brand, it was not surprising to understand the value our products offered to the SNAP consumer,” said Molly Fogarty, Nestlé vice president for government relations, wrote in an e-mail. A two-pack of Hot Pockets costs about $2.50, she said, and the 12-count package, for around $11, is even more economical.... Reductions in the food-stamp program haven’t just affected Hot Pockets. Such large grocers as Wal-Mart Stores (WMT), which gets roughly 4 percent of its revenue from food stamps, have also said the SNAP reductions have hurt their U.S. business...." http://www.businessweek.com/articles/2014-10-22/behind-the-hot-pockets-slump-nestl-battles-every-food-trend#r=lr-sr

Nestle: Inside the Hot Pocket Plant; http://www.youtube.com/watch?v=23Tn1kOlyR8

Factoids: Hot Pockets Nutrition, http://caloriecount.about.com/hot-pockets-nutrition-m1493 
Calories in Pepperoni Pizza, 290 calories with 99 calories from fat; http://en.wikipedia.org/wiki/Hot_Pockets cites this: Hot Pockets were invented by Paul Merage and David Merage in the 1970s. They founded the company Chef America Inc. and began producing Hot Pockets in 1983. In 2002 Chef America was sold to Nestlé, and (as of 2012) Hot Pocket products are "now a $4.5 billion category of frozen sandwiches and snacks."

Obesity and the food industry (update 1a): "The men who made us fat" - UK documentary

So what really causes us to be fat? Has the food industry led us into addiction?


7 December 2014: The Truth about Fat in Time

The Truth About Fat by Michael Lester @moikl, June 12, 2014; "When you want to lose weight or get healthy, what is the first thing you would normally cut from your diet? If you said fat, you’re not alone.... For years, the advice from the USDA has been to reduce the level of saturated fat in your diet, in order to lower your overall cholesterol. However, a new meta-analysis published in the Annals of Internal Medicine has thrown that whole approach in to question.... The removal of fats from our diet has led to an increase in consumption of carbohydrates and processed low-fat alternatives, which has contributed to record levels of diabetes and obesity.... When you consider that most low-fat or non-fat products are laden with salts, sugars and preservatives, continuing to seek out fat-free alternatives could be doing you more harm than good...." http://time.com/2861540/fat-and-carbs-diet-guidelines/


7 December 2014: "The men who made us fat" - UK documentary

At a dinner party last night, this documentary was pointed out to me. Another guest noted that she had concluded from reading: 80% of being overweight is due to what we eat and 20% to exercise. Have we been mistakenly led by the food-exercise industry into upping our consumption of highly processed foods, supplements and exercise products? Is it just all about calorie control and getting back to basic food (and less sugar and carbohydrates)?

UK made documentary. The documentary maker says: On the obesity disease. Those responsible for a revolution in our eating habits. Decisions made behind closed doors changed food into an addiction. How business changed the shape of the nation. How the food industry choreographs temptation. Those who turned eating food into an epidemic....  Introduction of dietary guidelines: food industry willing to concede on fat, not sugar. Invention of low fat food, sold as better for you. Turning the attack as a business opportunity. Fat was replaced with sugar. Low fat doesn't mean it's not fattening. Snackwells was a marketing triumph.....The increase in portion size...Overconsumption is killing us...  ; BBC Two - The Men Who Made Us Fat - http://www.bbc.co.uk/programmes/b01k0fs0; youtube vids here: https://www.youtube.com/watch?annotation_id=annotation_810093&feature=iv&index=1&list=PLA0E2B2461B536A26&src_vid=6UaUQ0H8crQ&v=iE-H__aIEFE


Rewind TV: The Men Who Made Us Fat; Britain in a Day; Dead Boss by Phil Hogan, Sunday 17 June 2012 00.05 BST; "Jacques Peretti asked why we have become the size of Fiat Puntos....
Watching Jacques Peretti's interesting The Men Who Made Us Fat, it struck me that filming a documentary about obesity in Britain must be much easier than 40 years ago, when being huge was a rarer novelty than having a wooden leg. Today, with a quarter of the population officially the size of a Fiat Punto, it seems all you have to do is put a camera in the high street and wait for someone – perhaps a grazing couple – to heave into view. But this wasn't about finger-pointing. Under an MRI scanner, it turned out that even Peretti himself – a man of no outlandish width – was carrying four to five litres of internal lard. His kidneys, the doctor said, were "swimming" in it. "Is that normal?" Peretti asked, hopefully. It wasn't. It was twice that of a normal fit person (if a fit person can still be described as normal). It seemed that Peretti is what scientists call a Tofi – thin on the outside, fat on the inside. Was no one safe?.... Historically, Britain's problem (we have put on three stone since the 60s) is down to our genetic heritage as hunter-gatherers. We can't help it. We are cavemen with supermarket loyalty cards. In more recent times, though, it has been possible to blame the Americans (ahead of the game in so many ways) for introducing industrial-scale farming in the 70s. Flooding itself with cheap food seemed a good idea at the time and produced the added bonus (or, as we now see it, unintended consequence) of vast surpluses of corn, which in turn led to the miracle food of high-fructose corn syrup.... It was what the American sweet tooth had been aching for. A third cheaper than sugar, corn syrup was soon in everything on the national menu, from ketchup to burger buns to processed meats to pizza toppings. But most of all it was in fizzy drinks, today the single biggest source of calories in the US. In movie theatres and sports arenas, "cups" grew to the point where it is now thought perfectly unremarkable to stagger to your seat with the equivalent of a window-cleaner's bucket. How did everyone get so thirsty? The answer was that corn syrup was not only cheaper than sugar, it was also sweeter. And food manufacturers give generously..... Other opinions were available, with grinning spokespeople from the food companies telling us that having sugar in everything was a healthy part of a balanced diet, which I believe is what they used to say about cigarettes. As much as anything, this film (the first of three) was the story of corporate chicanery, political surrender and cowed scientists whupped into silence. When New York mayor Michael Bloomberg recently announced plans to restrict sales of supersize beverages, it may have looked as if he'd just woken from a 30-year sleep ("Gosh, where did all these massive people spring from?"). But it highlighted the success of powerful commercial interests down the decades in keeping the lid on the problem with sugar, while diverting concerns over heart disease uncritically towards saturated fats. In the 80s, "healthy" snacks – yoghurts, spreads and biscuits, low in fat but packed with the natural goodness of sugar – were all the rage. It took us a long time to find out why even joggers were getting red in the face for nothing....." http://www.theguardian.com/tv-and-radio/2012/jun/17/men-made-us-fat-review

Forrest pushes Australia-China 100 year agriculture - food partnership (update 1)

3 August 2014:

Khor Reports: Australia to go for uniform marketing for its agribusiness (mostly meat, dairy, grain, and also sugar) competitive strength. Forrest argues for strength in uniformity under a new set of agreed policies on quality, food safety etc . He compares this approach as being more favourable than what he experienced in the iron ore sector where producers competed against each other. He notes that this resulted in Japan taking a view that Australia iron ore was not so reliable and it subsidized Brazil instead, to Australia's disadvantage. Quality is a major issue for this upcoming China-Australia FTA deal; with a goal to "get it right" by the end of 2014. He notes that China wants food security. He wants Australia agribusiness to collectively come together and market under one Australia brand. Some backlash to this idea, including concern of who comes to control the supply-chain i.e. widespread consolidation and fear of foreign ownership of land. New Zealand has done better on dairy - but some say that Fonterra is regarded as New Zealand "picking a winner" and will the same happen in Australia agribusiness? Forrest reckons that his ASA100 will give Australia farm investors confidence to invest, including in water supply. Forrest argues that foreign investors are more interested in the farm-gate to table / wardrobe supply-chain segment and in any case, you cannot take away land. Australia's goal should be the "prettiest girl on the dance floor" and a "friend to all" in terms of international business.

The China-Australia FTA has been long in discussion and a sticking point has been the agricultural sector and China seeking investment in the dairy sector. "Canberra hopes to replicate the dramatic increase in diary exports to China enjoyed by New Zealand since it signed an FTA with China in 2008. NZ exports, of which one third is diary, have more than doubled since the deal was signed..." http://www.theaustralian.com.au/national-affairs/policy/china-to-sign-fta-by-years-end/story-fn59nm2j-1226965619255.

This comes alongside changes under the Abbott administration in Australia that repealed its carbon tax (http://online.wsj.com/articles/australian-repeal-deals-blow-to-global-carbon-emission-plans-1406507851; putting Australia back in the US and Canada camp and further isolating the EU approach) and is going ahead with projects criticized on environmental grounds: The Great Barrier Reef and the coal mine that could kill it, http://gu.com/p/4Gdam.


Australia agribusiness to market a single brand to improve competitiveness

Agribusiness set to drive Australia's economic future By Ticky Fullerton Updated Fri at 3:15pm; "Australia's agricultural soul is stirring in a way it has not done since the end of the great wool years, and the drive is coming from business. Big business.... Forrest and the Business Council of Australia, which brought together an A-list of food power: Federal Agriculture Minister Barnaby Joyce; state agriculture ministers; top bureaucrats; peak body leaders; and industry chiefs including Wesfarmers' Ian McLeod, Anthony Pratt from JBS, AA Co's Jason Strong and, yes, Harold Mitchell.... What emerged was an agreement that Australian governments and producers will form a single brand to broaden the nation's competitive markets in China.... "That brand is going to be synonymous all over Asia and particularly in China with quality, food safety, reliability, friendliness, adequate quantity, with everything you need if you're sitting looking after a billion-plus people and wondering how to feed them and Australia can give you an answer," said Andrew Forrest...." http://www.abc.net.au/news/2014-08-01/agribusiness-set-to-drive-australia27s-economic-future/5641078; Andrew Forrest interview here: http://www.abc.net.au/news/2014-07-31/extended-interview-with-andrew-forrest/5639684. Barnaby Joyce interview here (noting the farmer getting less and less of the value-add share): http://www.abc.net.au/news/2014-07-24/extended-interview-with-barnaby-joyce/5622722.

Herd mentality missing from Australian agribusiness: Forrest, PUBLISHED: 01 Aug 2014 00:05:25  | UPDATED: 01 Aug 2014 04:54:03; "Billionaire Andrew Forrest says Australia’s agricultural businesses need uniform marketing, not increased scale, to be internationally competitive....
Mr Forrest's comments follow the inaugural meeting of his 100-year Australia-China agricultural partnership group (ASA) in Sydney on Thursday, which agreed to market Australian agriculture under one brand.... The meeting was hosted by the BCA and attended by Agriculture Minister Barnaby Joyce and representatives of all state agriculture ministers.... The ASA will comprise 50 members from each country who will initially meet bi­annually and then annually. Members will include state and federal government ministers, business leaders and major food producers and distributors..... Trade and Investment Minister Andrew Robb said he welcomed efforts to promote Australian agriculture and bolster trade ties with China.... "Agriculture is one of our great strengths and we have an enviable and growing reputation for 'clean, green and healthy' produce. We should look to leverage the premium 'brand Australia' at every opportunity," he said....."
http://www.afr.com/p/national/herd_mentality_missing_from_australian_SLQV5lsuk6hJFY8ADTMeuJ

List of China FTAs and negotiations: http://fta.mofcom.gov.cn/topic/enaustralia.shtml


1 August 2014:

Three of Asia's leading agribusinesses have joined iron ore magnate Andrew Forrest in what he described Thursday as an "unprecedented" 100-year partnership to position Australia as China's food bowl.... Forrest said China's New Hope Group and COFCO Corp., and Singapore-listed Wilmar International, had joined the Australia-Sino 100-Year Agricultural and Food Safety Partnership, known as ASA 100.... "This is an all-of-country response," Forrest, the founder of Fortescue Metals Group who has more recently turned his attention to agribusiness, told The Australian newspaper.... "I would like Australia to be seen as China's friendliest, largest, most reliable, highest quality, most competitive, most efficient food and agricultural products supplier." https://au.news.yahoo.com/thewest/business/national/a/24598052/asia-agribusiness-giants-tie-up-to-boost-china-australia-trade/

Khor Reports comment: This isn't about palm, but it's worth mentioning this interesting move by Australia, led by Andrew Forrest (the mining magnate and writer of radical welfare reform reports). A very senior Australian academic tells me that "Forrest is becoming very important" - so look out for info on the Australia-Sino 100-year agriculture partnership. I had lunch with a senior regional plantation analyst today and we were wondering if this meant off-take agreements and the like. Wilmar is big in sugar processing in Australia. Starting out mostly in palm oil and expanded in 2007 with a merger with Kuok Oils and Grains, it has large processing facilities in China and Indonesia and it is building itself into a diversified global agro-commodity processor.

Some links to news about Andrew Forrest:

• http://topics.bloomberg.com/andrew-forrest/
• http://www.smh.com.au/federal-politics/political-news/abbott-government-likely-to-reject-andrew-forrest-proposal-to-expand-income-management-20140731-3cvo8.html
• http://www.smh.com.au/federal-politics/political-news/andrew-forrest-calls-for-extensive-reforms-to-ease-crisis-in-indigenous-employment-20140731-3cx9d.html

Background info on Australia-China investment and trade

 

Australia’s mineral investment boom running out of luck 10 January 2014  Author: Luke Hurst, ANU
"The Australian minerals boom appears to have peaked, as commodity prices eased back after 2011 and investment has begun to taper. Currently there are 37 mineral resource projects in Australia, worth around A$33 billion in total, which have funding committed. But there are a further 165 mineral resource projects in the publicly announced and feasibility stages, which are yet to finalise their financing. These projects are worth around A$174.5–202.5 billion in total.... Yet Chinese investors have been seared by their experience in investing in Australia. The failure of the Rio Tinto-Chinalco tie-up and the massive cost over-runs of CITIC Pacific’s Sino Iron project—from around US$2.5 billion to US$8 billion—have sent a cautionary message to Chinese investors. These developments also revealed the complex connection between the economics and politics of international investment in Australia. The spill-over from these two big investment failures has been substantial. The delays and cost blow-outs associated with the CITIC Project precipitated the suspension of all Chinese magnetite investments in Western Australia as of 2011.... When Australian Treasurer, Joe Hockey, decided to block the sale of Grain Corp grain distribution business to American company Archer Daniels Midland, he noted that the Foreign Investment Review Board (FIRB), when considering Australia’s ‘national interest’, should ‘specifically have regard to the impact the decision on this proposal would have on broader Australian support for foreign investment and the foreign investment regime into the future’. This creates a dangerous precedent.... If managed properly, Australia’s minerals investment boom has much life left in it yet; and given that value of trade with China is equivalent to nearly A$15,000 to every Australian household, the continuation of its growth is most clearly in Australia’s national interest...." http://www.eastasiaforum.org/2014/01/10/australias-mineral-investment-boom-running-out-of-luck/

Khor Reports' Palm Oil #3 newsletter: Trade tussles, corporate outlook, prices & more

KHOR REPORTS' PALM OIL JUL/AUG 2013, ISSUE 3: Trade tussles. Corporate: Who’s got the best prices & growth prospects? EU biodiesel: certification, anti‐dumping & ILUC. Nigeria worries about duty evaders. Better info on saturated fats & Vitamin E tocotrienols. Frontier expansion: Nigeria, Mindanao & more. Price outlook muted, eyes on China & crude oil.


View our newsletter here:

http://tinyurl.com/qzeqfgt

(**kindly note this was updated on 10 July 2013, including pg. 7 on average selling prices; earlier version was 2 July 2013).

Contents:
Indonesia’s four land bank issues.
Malaysia’s new minister. 
Saturated fats targeted in standards setting.
Vitamin E tocotrienols.
EU biodiesel certificates.
Indonesia’s new customary forests.
SE Asia’s peat fire season – 20% in OP concessions?
Feature: Trade tussles: EU anti‐dumping duties, new sustainability rules, Argentina’s WTO move, TPPA & GM concerns; Nigeria’s palm protectionism.
Corporate outlook.
Nigeria investors & recent frontier plans. 
Key vegetable oils.
Weather outlook.
CPO technical view.
Price charts - including Oil World's latest price view