Staff Writer

Traditional grocers must act like consumer brands to retain market share

Traditional Australian grocers must respond to customers’ demands or risk losing market share to value-retailers and online grocers, warns The Boston Consulting Group (BCG).

Well-established grocers must re-evaluate their strategy for private-label products, according to the new Why grocers need to start operating like consumer brands report. The report argues traditional grocers should offer products customers truly want rather than products they’ll settle for, and outlines key steps to retain their market share.

Traditional grocers have tried to keep up with competition by launching different tiers and lines of their own private-label products – at low-, mid- and high-level price points – which has led to higher overall sales but makes the supply chain more complicated.

Value retailers, however, are more selective with their products, driving volume through fewer items, reducing operating costs and maintaining quality standards. While this approach has long been recognised as an opportunity for established grocers, they have been slow to act – allowing value retailers to gain a foothold in the market.

“Value retailers like Aldi and IGA are acting less like shop keepers and more like consumer brands that develop products based on what customers want,” said Gavin Parker, Partner and Managing Director in BCG’s Sydney office.

“Using customer insights and efficient, end-to-end value chains, value-retailers are driving quality improvements and operating at cost advantage so it is economically difficult to compete with if you’re operating on a traditional three-tiered structure,” added Parker.

To help well-established grocers retain market share, the report outlines several key steps:

  • Define a clear vision and strategy. Leadership team must establish the aspiration for how the private-label business will fit into the organisation and overall brand architecture.
  • Understand customer needs and build a strong R&D and innovation function. Grocers need to map and prioritise customer demands so they can more effectively meet those needs.
  • Establish a clear value proposition for each quality tier or brand. Companies need to rethink the value proposition for each of their own brands.
  • Consolidate and build scale at the level of individual products and brands. To generate and capitalise on their scale, grocers should consolidate sourcing, testing, quality control, packaging and design, and other functions that apply across categories.
  • Explore partnerships and alliances. Grocers should explore alliances with other players in areas like sourcing and product development.



Winemaker announces Graduate Program Intake

Pernod Ricard Winemakers has announced its 2018 Graduate Program Intake, a program intended to open up a world of wine to the next generation.

Since 2015, the Pernod Ricard Winemakers’ Graduate Wine Ambassador Program has opened doors for young professionals who are keen to pursue a future in the international wine industry. Over the past three years, the company has placed 25 Graduate Wine Ambassadors in 14 countries, guiding them on a journey to some of the most famous and stunning wine regions in the world.

The program itself is broken up into two stages, each offering the graduates a unique insight into the world of wine, and the Pernod Ricard Winemakers’ portfolio. Once selected for the program, participants are invited to undertake a four-month training program that sees them introduced to all aspects of wine, including tasting and viticulture, and to have the opportunity to visit wineries and vineyards across Australia, New Zealand, Spain and the USA. To ensure that the business is supporting leaders of the future, graduates are also mentored in business and professional skills, receiving training in finance, marketing, consumer insights and business development to prepare them for a multitude of roles across then business.

“Through this program, graduates are provided with the opportunity to focus their natural talents and passion for wine while securing a strong development career path in the second largest wine and spirits organisation in the world.” says Alicia Partridge, Pernod Ricard Winemakers Graduate Program Manager.

“Our Winemakers and team are proud to be sharing our knowledge, instilling a love of wine and winemaking, and to also be attracting young talent to our diverse industry. Our Graduate Wine Ambassadors are advocates for wine right across the world.”

Following the initial introduction to the Pernod Ricard Winemakers business and its wine labels, graduates then progress to the next phase of the program, commencing their in-market placement. Completed over a two-year period, this stage of the program provides the graduate with a holistic view of Pernod Ricard Winemakers’ global operations, establish opportunities for continued learning and development opportunities, as well as providing the graduates a personal introduction to the global Pernod Ricard Winemakers family.


NSW to host inaugural food expo in India

Premier Gladys Berejiklian today announced a NSW Food Expo will be held annually in India to showcase NSW food and beverage exporters to one of the world’s fastest growing markets.

Berejiklian made the announcement in New Delhi overnight, alongside Indian food industry representatives, chefs and food writers.

“The inaugural NSW Food Expo will help farmers and producers showcase their clean, safe and fresh produce to Indian buyers in a market where middle class numbers are tipped to swell from 250 million to 550 million people by 2025,” Berejiklian said.

“We will take a delegation of food and beverage exporters to Mumbai in September to take part in this new Expo to promote NSW products ranging from fresh fruit and vegetables to meat, dairy and processed foods like jams, honey, pasta, and even ready meals.

“This will provide our producers with a major opportunity to showcase the fantastic quality and diversity of our State’s food and beverage industry and connect our best export companies with potential Indian buyers and growing markets.

“NSW agricultural exports to India, including vegetables, fruits, wheat, oils and much more, grew almost 200 per cent to reach $760 million in 2016-17 and there is massive potential for further growth.”

Berejiklian said NSW has a growing international reputation as a provider of clean and green produce with the State’s worldwide exports of food and beverage products growing 4.6 per cent in 2016-17 to top $5 billion for the first time.


Snack-sized crumbles from Sara Lee

As more households in Australia contain just one or two people, and family meal times are becoming more fragmented and less routine, there is greater demand for flexible portions and immediacy. ‘Portionable Indulgence’ equals the justification to have a dessert on your own – not only on sharing occasions.

Sara Lee has responded to this demographic shift with a  range of portioned fruity Crumbles that can be ready to eat after just 75 seconds in the microwave.

These crumbles are a traditional favourite with a more visual and textural twist. The Apple Berry and Chocolate Crumble features apple and berries topped with chocolate biscuit crumb and white chocolate chips, while the Apple and Butterscotch Crumble features apple and caramel topped with biscuit crumb and chewy butterscotch pieces.


These individual desserts are now available in the freezer aisle of Coles (Apple Berry Chocolate flavour only), Woolworths (Apple and Butterscotch only) and Metcash stores nationally. Available in 4X100g packs.

Review of sheep exports to Middle East during northern summer

Minister for Agriculture David Littleproud has announced the terms of reference for the short, sharp review into sheep exports to the Middle East during the northern summer.

Minister Littleproud said the review will consider information including scientific literature, outcomes of recent voyages and reports from observers.

“The footage I saw recently from voyages in 2017 shocked me. After meeting with the stakeholders last Monday, I announced this review on the Tuesday,” Mr Littleproud said.

“The review will consider stocking density on ships, bedding and animal waste management, ventilation and heat stress risk.

“It will also consider and evaluate the potential use of air conditioners, and conditions placed on recent voyages, which includes the independent observer paid employed by the Department of Agriculture.

“The review will identify any improvements in how the current standards, known as the Australian Standards for Export of Livestock or ASEL, can be administered or executed.

“The review will also consider the number and skills of the crew in managing animal health and welfare, contingency planning and reporting. The TOR allows for Dr McCarthy to delve into other issues he considers worth exploring.

“Transparency builds trust. We need to let the light shine in. It’s important we get this trade right for our farmers.”

This short, sharp review will complement the review into the investigative capability, powers and culture of the independent regulator as well as the ASEL review (which was already running) as Minister Littleproud takes decisive action to address the issues raised in the past fortnight.

The review will be complete in time to make any recommended changes to the 2018 northern summer trade.

New partnership to develop treatment for peanut allergies

Prota Therapeutics, the developer of oral immunotherapies to treat food allergies, has partnered with Chr. Hansen. The partnership will assess the world’s best documented probiotic strain, LGG, in a Phase III clinical trial to develop a treatment for peanut allergy.

Approximately 220-250 million people globally suffer from food allergies, an increase of 350 per cent over the past 20 years. The economic impact for treatment of food allergies in the US has been estimated at US$24.8 billion per year[1].

Peanut allergy is the most common cause of anaphylaxis, a life-threatening allergic reaction, and one of the most common causes of death from food allergy2. More than 3 million Americans suffer from peanut allergy3 resulting in a global peanut allergy therapeutics market estimated to reach more than US$10 billion by 20252.

Prota Therapeutics is pioneering a new form of oral immunotherapy treatment. It combines Chr. Hansen’s specifically formulated LGG®4 probiotic strain, Lactobacillus rhamnosus, with targeted doses of proprietary formulations of peanut protein. The treatment is designed to reprogram the immune system’s response to peanuts and eventually develop tolerance.

One of the first Phase III clinical trials with a live microorganism

Building upon earlier trials conducted at the Murdoch Children’s Research Institute, Prota Therapeutics is progressing towards a large-scale Phase III clinical trial, under a US Investigational New Drug Application (IND). The aim is to commercialize a medicinal product using a new pharmaceutical grade therapeutic dosage form for treating peanut allergy, and to explore indications for treating other food allergies.

“An effective therapy to treat peanut allergies is now a realistic target. Chr. Hansen is the ideal partner for us in this next step, both as the owner of one of the key components in the therapeutic product – LGG® – and as a leading expert in microbial solutions. Chr. Hansen has demonstrated the capability to deliver a pharmaceutical quality product that can be regulated as a biological therapeutic product.  Together with our proprietary peanut protein formulation, we aim to progress this through to commercialization of a treatment for peanut allergies,” says Dr. Suzanne Lipe, CEO at Prota Therapeutics.

Unlocking the potential of good bacteria

Numerous studies have highlighted the therapeutic potential of specific bacteria in preventing and treating metabolic, gastrointestinal and other diseases. Investigating specific bacteria for the treatment of food allergies is an area that has recently gained momentum.

Having produced LGG® for more than 10 years before fully acquiring LGG® from Valio in 2016, this new partnership is an example of how Chr. Hansen’s focus on industry leading product quality and clinical documentation can expand the potential of the LGG® probiotic strain into a new breakthrough area.

Christian Barker, Executive Vice President, Health & Nutrition at Chr. Hansen says:

“Chr. Hansen has the ability to maximize the value of a probiotic strain through our deep experience in microbial process development and formulation, our focus on quality, and our global reach. The partnership with Prota Therapeutics is part of our strategy to become the partner of choice for companies wanting to develop new generations of therapeutic microbes.”

According to the company, Lactobacillus rhamnosus is the best documented probiotic strain in the world. It has been used in food, dietary supplements and infant nutrition since 1990 and has shown beneficial effects on the gastrointestinal and immune system. It is supported by more than 300 clinical studies and 1,200 scientific publications.


[1] Gupta R et. al., JAMA Pediatrics 2013; 167(11):1026-103

2 DelveInsight, “Peanut Allergy – Competitive Landscape, Market Insights, Epidemiology and Market Forecast-2025”

3 Sicherer et. al., J Allergy Clin Immunol 2010;125:1322-6

4 LGG® is a trademark of Chr. Hansen

AMHA adopts guidelines to endorse a mark of authenticity for Australian Manuka Honey

The Australian Manuka Honey Association (AMHA) has brought to fruition one of its major aims – the formulation of a robust, scientifically based international set of guidelines that benchmark authentic Australian Manuka.

The guidelines are entitled Criteria for Defining Australian Manuka Honey and can be downloaded from the Association’s website.

AMHA Chairman, Paul Callander, said, “This important milestone was made possible by eminent scientists Dr Peter Brooks, Dr Shona Blair, Dr Nural Cokcetin and Dr Craig Davis joining our recently established Scientific Advisory Committee. These scientists are experts in the Manuka honey field and have outstanding global reputations. No-one could doubt the credibility of these guidelines, which will now be circulated internationally.”

The AMHA will also soon be launching its Mark of Authenticity.

“Once certified as authentic Australian Manuka honey, in compliance with the Criteria for Defining Australian Manuka Honey, producers (who are members of the AMHA) will have the opportunity to display the AMHA’s Mark of Authenticity on their tested and approved products. The Mark of Authenticity will allow businesses and consumers in Australia and around the world to have confidence that the product is authentic Australian Manuka honey. The AMHA’s Mark of Authenticity displayed on products will provide assurance and confidence as to the quality and genuine aspects of the product,” commented AMHA Director, Joe Baini.


Majority of fresh meat now bought at Coles & Woolworths

Analysis of long-term market trends shows that for the first time in 2017 Australia’s two largest supermarkets captured more than 50% of Australia’s $13 billion+ fresh meat market between them.

Market leader Woolworths Group with a 26.5% share, up 1.1% points since 2016, and Coles Group with a 24.3% share, up 2% points, had a combined share of the fresh meat market larger than all other retail outlets including rival supermarkets Aldi and IGA, butchers, markets, other supermarkets and other non-supermarkets combined.

Both Australian supermarket giants have enjoyed stronger growth in the fresh meat market over the past year than rival Aldi which now has a 9.6% share of the fresh meat market, up 0.9% in a year – although all three have clearly taken substantial market share from traditional butchers.

Ten years ago butchers and markets had nearly a third (32%) of Australia’s fresh meat market. Today this is just under a quarter (24%) of the fresh meat market is now held by butchers and markets.

In the last 12 months fresh meat market share for butchers and markets dropped 3% points. This is steepest drop of any time period in the last decade.

These results are from the Roy Morgan Single Source survey of over 50,000 people per annum, including over 12,000 grocery buyers.

Michele Levine, CEO, Roy Morgan, says Australia’s increasingly competitive fresh meat market is squeezing the market share of the traditional Australian butcher:

“Australia’s ‘Big Two’ supermarket chains Woolworths and Coles now capture over 60% of Australia’s $100b+ grocery market. In recent years the Big Two have been moving to consolidate their market shares in various fresh food markets including fresh fruit & veg, fresh meat, fresh bread, fresh deli and fresh seafood,” she said

“In just the past year Coles and Woolworths achieved a milestone, capturing a majority of the fresh meat market for the first time and now hold 50.8% of Australia’s fresh meat market between them. Woolworths’ fresh meat market share of Woolworths has increased 1.1% points over the past year to 26.5% while Coles has continued a decade long-trend by increasing its market share by 2% to 24.3%.

Australian fresh meat market 2016 v. 2017


Source: Roy Morgan Single Source Australia, January 2016 – December 2016, n=8,301, January 2017 – December 2017, n=8,691. Base: Last 7 day fresh meat purchasers aged 14+ weighted to Australian households.

AFGC calls for energy policy action

The Australian Food and Grocery Council (AFGC) has called for all state and territory energy ministers to support the Australian Government’s National Energy Guarantee (NEG) on Friday at the COAG Energy Council Meeting.

Designed to deliver reliable and affordable energy to consumers whilst delivering emissions reductions, the NEG could potentially help provide confidence to the food and grocery manufacturing sector which is seeing a doubling and tripling of energy bills.

AFGC CEO Ms Tanya Barden said that Australia’s $127 billion food and grocery sector’s international competitiveness is being hampered by high energy costs that are likely to have dire consequence for Australian jobs and investment.

“The NEG’s focus on delivering affordable and reliable power is a fundamental step forward in providing long term policy certainty for Australia’s largest manufacturing sector,” said Ms Barden.

“The Government’s ongoing commitment to emissions reduction is clearly critical to meeting our international obligations, whilst providing industry policy certainty to ensure secure, affordable supply that does not inhibit the sustainability of the food and grocery manufacturing sector.”

“Many food and grocery manufacturers are due to renew their electricity contracts and are concerned about their viability in the next couple of years. We also remain concerned about the gas market with food and grocery manufacturers being quoted prices that are still above where they should be given recent supply commitments by the gas producers.”

“Food and grocery companies will only invest in Australia if they can see a stable policy framework for driving reliable and cost effective power supplies. To achieve this there is a need for ongoing reforms that will address other shortfalls in the energy market, including improving energy retail competition, transactional behaviour and gas availability and pricing.”

“The AFGC continues to support the ACCC’s inquiries into Australia’s operation of the electricity and gas markets with view to examining mechanisms to address a lack of competition, including in energy retail. This will be crucial to ensuring the NEG’s ability to deliver energy affordability.”

“The AFGC calls on the energy ministers to work collaboratively with the Commonwealth in order to deliver long term reform of the energy market, and necessary policy certainty for industry to continue drive jobs and investment growth,” said Ms Barden.

Adelaide Hills wineries head to Surry Hills

More than 25 Adelaide Hills wineries will descend on Winebar One in Sydney’s Surry Hills on May 8 for three hours of tastings and masterclasses.

With around 70 wines on offer, the trade will be able taste their way through the 70km stretch of the Adelaide Hills from sparkling wine and gruner veltliner, to shiraz and pinot noir, experiencing the best of the Adelaide Hills.

A trade tasting hosted by the winemakers will run from 2-5pm while three masterclasses will run consecutively from 3-5pm. Places to the following masterclasses are limited and must be booked in advance by emailing

The winemakers attending include Murdoch Hill’s Michael Downer, crowned the nation’s best emerging talent at the 2017 Young Gun of Wine awards, along with Adelaide Hills’ royalty Andrew Hardy (Petaluma, pictured), Adam Wadewitz (Shaw + Smith) and Tim Knappstein (Riposte) among others.

Situated just 45 minutes outside of Adelaide, the Hills is home to every winemaking approach and philosophy and is currently seen as Australia’s hottest region at the moment.

The Hills Heist event is aimed to reflect the diversity of the region with Adelaide Hills’ originals and household names including Penfolds, Henschke and Shaw + Smith standing alongside The Pawn Wine Co, Nepenthe and Hahndorf Hills, producers of the Austrian variety, Gruner Veltliner, which has found its home in Australia in the Adelaide Hills.

Other Adelaide Hills specialties to discover include sparkling wine, Mediterranean varieties and cool new shiraz.

Attending wineries include:

Anderson Hill; ArtWine; Barristers Block; Bird in Hand; Chain of Ponds; Deviation Road; Elderslie; Elysian Springs; Fox Gordon; Golding; Hanhdorf Hill; Henschke; Howard Vineyard; Lobethal Road; Longview; Mike Press Wines; Mt Lofty Ranges; Murdoch Hill; Nepenthe; Paracombe; Penfolds; Petaluma; Red Heads; Riposte; Sew & Sew; Shaw + Smith; Somerled; The Lane Vineyard; The Pawn Wine Co; Tomich; Wicks Estate



Creso to launch global beer and tonic products

Creso Pharma has announced that CLV Frontier Brands, its equal one-third joint venture with UK-based Baltic Beer Company Ltd and Canadian TSX Venture incorporated LGC Capital, is planning to have its first beers and tonics on sale in Europe and Canada during the summer, with global sales to follow thereafter.

CLV is developing a bespoke and unique range of beers and tonics at its newly-built facilities in Europe, with test brewing well advanced.

Creso is also pleased to announce that the TSX Venture Exchange has conditionally accepted LGC’s joint venture investment in CLV, subject to LGC filing standard documentation with the Exchange.

“We see CLV as an exciting business partnership that we believe can add significant sales revenues to Creso Pharma over the coming years. Full details of the beer and tonic ranges will be released when CLV debuts its products and branding at a world-wide product launch. Europe will be the initial focus for sales, as Europe is the home market for the Baltic Beer Company’s multi award winning Viru beer. The company also plans to launch in Canada this summer,” said Dr. Miri Halperin Wernli, Co-Founder and CEO of Creso Pharma.

CLV’s beers contain terpenes, which carry the flavour and aroma of cannabis, but which do not contain THC or CBD or any other cannabinoids. The terpenes are extracted from various plant sources, all of which are food-grade, 100% natural and non-genetically modified (GMO) ingredients. The terpenes are pure, not contaminated with any other ingredient, and safe for human consumption as flavouring and food additive ingredients, meeting the criteria of FDA/FEMA GRAS (Generally Recognized as Safe) for human consumption. The terpenes are introduced to the beer at the post-fermentation stage in much the same manner as hop extracts are added.

CLV will have vast commercialisation reach spanning various continents leveraging the networks of all three companies.

Healthy bones for happier golden years

Osteoporosis drastically reduces the quality of life for many elderly people. It increases the risk of falls and fractures, which are associated with serious disability and increased mortality rates.[1] Osteoporosis affects 2.2 million elderly people in Australia.[2] By 2050, the worldwide incidence of hip fractures in men is projected to increase by 310% and 240% in women, compared to rates in 1990.[3]

Calcium is a key nutrient for bone health even in the elderly. In fact, calcium intake has been shown to have a positive effect on bone mineral density. Good nutrition also plays a role in the successful rehabilitation of patients who have suffered osteoporotic fractures.[4]

With increasing life expectancy in Asia Pacific,[5] it is crucial for the elderly to maintain good health, so that they can live their golden years to the fullest. How can food manufacturers play a part in stemming the tide of osteoporosis?

Increasing calcium absorption

It is known that consuming calcium-rich foods as part of a healthy diet is important for bone health, since the body does not produce its own calcium. However, many people in Australia do not consume adequate dietary calcium. Furthermore, most people absorb only about 30 percent of dietary calcium, while the rest is excreted.

One way that food manufacturers can help improve bone health in the elderly is by boosting calcium absorption using innovative food ingredients, such as Beneo’s Orafti Syngery1 (oligofructose-enriched inulin). Orafti Synergy1 enhances the bioavailability of calcium in the diet so that more calcium is absorbed. It is a patented blend of oligofructose and inulin, which are extracted from the chicory plant.

Oligofructose and inulin are prebiotic fibres that stimulate the growth of bifidobacteria, the beneficial bacteria in the large intestine that helps to support a healthy digestive system. The prebiotic fermentation of these fibres leads to the production of short-chain fatty acids in the large intestine, which acidifies the entire large intestine and thus enhances the body’s absorption of calcium. This calcium-enhancing benefit of Orafti Synergy1 has been shown in several human intervention studies where it increased calcium absorption and bone mineral density.

BENEO_Asian Senior Couple

This translates into tangible improvements in bone health, such as a marked increase in bone mineral density. The study, conducted on 100 subjects, was designed to test whether oligofructose-enriched inulin could increase calcium absorption in the bones. Over a period of one year, calcium accretion in the bones increased by as much as 17 percent in the group supplemented with oligofructose-enriched inulin compared to a control group.[6]

Naturally good to the bone

Besides looking for products that can benefit bone health, today’s consumers prefer products of natural origin, which reassures them of the safety and trustworthiness of food products.[7]

Beneo’s inulin and oligofructose stand out in the market as the only existing prebiotics derived from non-animal sources. They are of 100% plant origin and are naturally extracted from chicory root using hot water.

These naturally-extracted soluble prebiotic fibres are easily incorporated into dairy products, which can boost the nutritional value of bone-friendly food products in a natural way. This makes them attractive options to boost bone health, and are highly suitable for all age groups, including the elderly.

Inulin and oligofructose also work well with other popular products, such as baked goods and cereal bars. With a mild, sugar-like sweetness, oligofructose can be used to reduce sucrose in food and increase fibre content, at just half the calories of sugar. In addition, inulin can be used to replace part of the fat content in some foods, thus allowing for maximum nutritional benefits without changing desired textures and tastes.

Building the foundations of a happy life

As a society we are living longer, but with that comes the need to maintain the health of our elderly so that they can stay active and enjoy their golden years to their hearts’ content. Osteoporosis rates are projected to escalate to epidemic proportions in Asia Pacific, and food manufacturers can address the problem through healthy, prevention-oriented nutrition, with products such as those formulated with Beneo’s Orafti Synergy1 to increase calcium absorption.

[Christian Philippsen is Managing Director, Beneo Asia Pacific]


[1] Epidemiology and outcomes of osteoporotic fractures – Cummings and Melton, 2002

[2] Facts and Statistics – International Osteoporosis Foundation

[3] Facts and Statistics – International Osteoporosis Foundation

[4] Facts and Statistics – International Osteoporosis Foundation

[5] Life expectancy data by WHO region – World Health Organization

[6] Matching today’s expectations. Functional fibres for better nutrition – Beneo

[7] Global Food and Drink Trends 2018 – Mintel



Australian beef – prices ‘off the boil’, but still set to ‘simmer nicely’

While domestic cattle prices have come “off the boil”, they are expected to still “simmer nicely” during 2018, with producers forecast to enjoy a profitable year ahead, according to a new industry report.

In its just-released Australian 2018 Beef Cattle Seasonal Outlook, agribusiness banking specialist Rabobank says a combination of increased cattle supply, reduced producer demand and weaker global prices will see domestic cattle prices ease back from the highs reached in 2017 to stabilise at just above five-year averages.

Cattle slaughter numbers are expected to rise marginally and overall Australian beef production to increase by three per cent for the year.

Report author, Rabobank senior animal proteins analyst Angus Gidley-Baird said while the cattle price declines would more than offset the small rise in production – meaning producers’ incomes would generally be lower in 2018 – the outlook was still for an overall profitable 2018 for Australia’s beef producers.

Four watch factors could however alter the “shape of the year”, and impact upon the fortunes of Australia’s beef sector, both for better and for worse, the report cautioned. These were: the possibility of a big, early Queensland wet season, fierce competition in Asian export markets, rapid growth in Chinese demand for live exports and increased US cow slaughter.

Domestic cattle outlook

Mr Gidley-Baird said Australian beef production was forecast to rise slightly as the herd rebuild continued.

“After falling by 1.7 per cent to 7.16 million head in 2017, we expect cattle slaughter to rise slightly in 2018, with herd rebuilding over the previous two years in southern states now expected to start generating increased turn off,” he said.

The bank expects average slaughter weights – which have increased over the past three years as seasonal conditions have improved and the number of cattle on feed has increased – to remain high.

“We expect the number of cattle on feed to remain high and, with lower cow kill and heavier grass-fed cattle weights due to the better seasons, this should result in an overall increase in production of three per cent,” Gidley-Baird said.

Export markets

While Australia’s key beef export markets are expected to remain strong, competition was also increasing and would “limit price upsides”, the report said.

Gidley-Baird said with the forecast increase in Australian beef production, along with static domestic consumption, exports were set to rise slightly in 2018.

“Japan, the US, South Korea and China will remain key markets. However, we will see increased competition from other exporting nations in all these markets,” he said.

A softening Australian dollar, particularly in the second half of the year – Rabobank’s 12- month forecast is 0.75 US cents – should at least assist Australia’s competitive position, Gidley-Baird said.

Domestic price outlook

High cattle prices seen in 2017 had been driven by strong producer demand in a limited supply market, with producers looking to rebuild herd numbers or purchase cattle to consume available feed, the report said. This had resulted in cattle price movements closely mirroring any changes in seasonal conditions.

However, with stock numbers in southern states now nearing normal levels and the Queensland season on hold until the next wet season commences in October, producer demand is expected to ease in the market, enabling prices to fall back towards the five- year average and be less exposed to dramatic variation around rainfall events, Gidley-Baird said.

The Rabobank report forecasts 2018 domestic cattle prices to come in at 15 per cent below prior-year levels. The Eastern Young Cattle Indicator (EYCI) is expected to average AUc 513/kg cwt for the year – just above the five-year average.

Watch factors

The report said two variables which could have a negative impact on the year ahead were fierce competition in Australia’s Asian markets, as well as the prospect of an increased US cow slaughter.

“Australia’s two key long-standing Asian export markets, Japan and South Korea, are also the key markets for US exports. And with increasing US production, Australia is already facing strong competition in these markets,” Gidley-Baird said. “The US has been undertaking promotional activities to encourage increased sales in both markets, and – while Australia has an advantage with the Japanese FTA – the US is two years ahead in tariff reductions with South Korea. If the US consumer’s appetite for beef wanes, greater volumes will be driven into these key export destinations, most likely at discounted prices.”

US beef production growth for the year had already been revised up from three per cent to five per cent growth (700,000 tonnes), the report said. A larger placement of cattle on feed and ongoing low feedgrain prices in the US has the potential to push carcass weights and production up further.

“Further, and more likely to have a bigger impact on Australia, are the dry conditions and lower cattle prices which could lead to a higher US cow slaughter in Q3 and lower demand for Australian lean trimmings by the US,” Gidley-Baird said.

However, on the positive side, the report said, the possibility of a “big, early Queensland wet season” and the rapid growth in Chinese demand for live exports could have a favourable impact on the year ahead.

“With a poor 2017/18 wet season, Queensland cattle producers (particularly those in central and western areas) have still not had enough of a season to confidently begin restocking. However, if a good, early wet season eventuates in 2018/19, producers looking to restock will drive cattle prices up,” Gidley-Baird said.

In the case of Chinese live export, Australia had sent the first load of live cattle by ship from northern Australia to China in January, he said. “If logistics, markets and supply chains are developed to allow such a trade to operate in large numbers on a regular basis, it will add competition for cattle in what is currently a supply-limited Queensland market – and it would drive live export and other cattle prices up.”


Top international visitors experience Australian wine regions

April is proving to be one of the busiest months ever for immersive wine tours due to additional funding through the Australian Government’s $50 million Export and Regional Wine Support Package, with Wine Australia hosting more than 30 international wine professionals this month.

The groups of journalists, sommeliers, wine buyers and wine influencers from China mainland, Hong Kong, Canada and the United States (USA) are in Australia to gain first-hand experience of the unique regions that help make Australian wine so special.

Across five visits, guests are meeting producers face-to-face and sampling wines over tastings and master classes in regions including the Adelaide Hills, Hunter Valley, Mornington Peninsula, Yarra Valley, Macedon Ranges, Barossa Valley, McLaren Vale, Clare Valley and Margaret River. These visits build their knowledge and confidence to become ambassadors of Australian wine.

Visitors are also exploring wines from Langhorne Creek, Coonawarra, Limestone Coast, Tasmania, Canberra, Tumbarumba, Orange, Mudgee and New England at centrally held master classes, allowing them to explore more regional expressions within the limited time of their visit.

Wine Australia Chief Executive Officer Andreas Clark said the visits give guests insight into the history of Australian wine, modern innovations and our food and wine culture.

“Wine Australia hosts more than 140 visitors each year – bringing influential members of the international wine trade and media to our wine regions to help them discover the people and places that influence the unique characteristics of Australian wine,” he said.

“With the support of the $50m Package, we’re able to amplify the Australian wine experience for many visitors and ensure that they return home with a refreshed perspective of our wines that can be shared with trade, media and consumers in-market.”

Chinese Sommelier Arneis Wu of two–Michelan starred restaurant, L’atelier de Joel Robuchon took part in this year’s China Vintage trip and said the visit provided insight into Australian wine and wine culture.

“The trip is a very good chance to get to know the wine people here, to understand their hardworking and innovative spirits, along with their winemaking philosophy.”

On the wine varieties, he said ‘It’s really rare to find back vintage Semillon in China and during the visit I saw the potential aging of the grape variety, which has quite a different aroma, creaminess and roundness after ageing compared with a young one.

“We also came across grape varieties like Grüner Veltliner and Sangiovese, and wines made from 100% Pinot Meunier from Yarra Valley, which demonstrate the diversity here, as well as the climate, the soil and terroir,” he said.

Sylvia Wu, web editor from Decanter China said she is most surprised with the various expressions and styles of the more familiar varieties, such as ‘the elegant and vibrant Cabernet and Shiraz/Syrah in Yarra Valley, also the incredible complexity of aged Semillon from Hunter Valley.

“I think the diversity is the most exciting element of Australian wines. The trip has been deeply educational for me as we were able to gain visual and sensual experience with the “terroir” of these legendary New World wine regions. The trip will certainly help me to talk and write about Australian wines with deeper understanding and personal interest,” she said.

Murray Goulburn takeover a chance for dairy reform

Canadian dairy processor Saputo has a unique opportunity to play a pivotal role in reforming the Australian dairy industry following its pending takeover of Murray Goulburn, according to a key industry group.

Dairy Connect CEO Shaughn Morgan believes there is need for change particularly in introducing transparency and fairness to contracts between farmers and processors.

“Saputo Australia will have a valuable opportunity to create a new benchmark governing the format and fairness of supply contracts between dairy farmers and processors,” he said.

“Contract transparency is critical as well as ensuring that prices are clear and precise, with a clearly-understood price setting mechanism.

“We also need to remove the current provision in short form contracts allowing processors to arbitrarily scrap contracted prices paid and to claw back a proportion of past payments.”

Morgan said reforming its pro-forma contracts would be a valuable lever in attracting back milk suppliers who began abandoning Murray Goulburn following supplier price cuts in 2016.

“Analysts have predicted Saputo will have to work hard to win the faith of prospective fresh milk suppliers who will be closely watching and assessing the culture of the new enterprise,” he said.

“Any reforms introduced highlighting fairness and transparency will no doubt make their way through the industry nationally in the fullness of time.”

Shaughn Morgan said that the new contracts between farmers and processors must allow the producer to supply milk to other processors.

Murray Goulburn shareholders recently overwhelmingly approved the $1.3 billion sale of the cooperative to Canadian dairy giant Saputo amid some sadness over Murray Goulburn’s demise.

More than 98 per cent of proxies voted in favour of the sale at the shareholders’ meeting in Melbourne early this month.

Murray Goulburn shareholders, who have been extensively briefed on the sale since it was announced in October 2017, appeared resigned to the sale, asking no questions on the resolution.


The a2 Milk Company expands into South Korea

The a2 Milk Company has entered into an exclusive sales and distribution agreement with Yuhan Corporation (‘Yuhan’) to promote and distribute a2MC’s branded products in South Korea.

A formal ceremony in recognition of the new commercial relationship has been held in Seoul today hosted by Mr. Geoffrey Babidge, Managing Director & CEO of The a2 Milk Company and Lee Junghee CEO and President of Yuhan Corporation.

Yuhan is the leading pharmaceutical company in South Korea, with annual revenue in the order of USD1.4 billion. Yuhan also has capabilities in consumer goods and has established relationships with leading international companies including Kimberley-Clark and Clorox Corporation.

South Korea is an attractive market opportunity for a2MC’s products given high per capita dairy consumption, world-class retailers and a fast-growing e-Commerce channel.

“Yuhan Corporation is a long established, highly credentialed and principled Korean business. We share similar values and ambitions, and with our complimentary capabilities believe that together we can build a meaningful business in Korea,” said Geoffrey Babidge.

The a2 Milk Company product range will be sourced from Australia and New Zealand, with nutritional products produced by our key supply partner, Synlait Milk Limited. Initial sales are expected to commence during the second half of calendar year 2018.

Alongside the expansion into South Korea, a2MC is continuing to broaden its nutritional product portfolio. In addition to new a2 Platinum products recently announced, the company is to shortly introduce a unique and premium a2 Milk powder product blended with New Zealand sourced Mānuka honey.

Spirits from the USA head to Australia

The Distilled Spirits Council of the US, the national trade association representing leading producers and marketers of distilled spirits in the United States, has just confirmed that it will participate in the 2018 Drinks Industry Show.

Event Director David Paterson, of organiser Exhibitions & Trade Fairs, said, “This is exceptionally exciting news. The Distilled Spirits Council will showcase iconic American Whiskeys such as Jim Beam Bourbon, Jack Daniel’s Tennessee Whiskey, Wild Turkey Bourbon, Bulleit Bourbon, among others.”

“On top of that, this latest announcement means the Council will be bringing, and exhibiting, a number of distilleries from America that are looking to break into the Australian market. It is a fantastic opportunity for Australians to taste new, boutique American product, offering a unique opportunity for buyers to be the first to taste many in Australia.”

To give the extended numbers of American exhibitors an appropriate platform, the 2018 Drinks Industry Show will have a dedicated American Pavilion on the show floor, with several distillers having a stand. These include:

Corsair Artisan Distillery: founded in 2008, Corsair “sets its marks where it all started”, becoming the first craft distillery in Nashville since prohibition. Its innovative, adventurous spirits have won more than 800 medals at national and international spirits competitions.

House Spirits Distillery: this pioneer of America’s craft-distilling resurgence believes in being distilling’s equivalent to “minimalist cooking”, making its spirits from scratch and crafting each of its award-winning products with an intense and passionate pursuit of perfection, using the best natural ingredients, treating them with care, and allowing them to express their unique character.

Red Eye Louie’s Vodquila: is a special blend of ultra premium vodka and imported super premium tequila. The vodka is made from multiple grains and distilled six times, while the Tequila is made from pure blue agave plants and distilled in the highlands of Jalisco, Mexico. Vodquila’s super clean taste and rich aroma is achieved by blending these bases in small vats, macerated together at a high temperature to achieve a perfect blend.

As well as meeting and engaging on the show floor, buyers can look forward to an exclusive master class on day two, hosted by the Distilled Spirits Council of the U.S. and showcasing the very best in American spirits. Places will be issued first come, first served, so get in early to avoid missing out.

David Paterson said, “Whiskey and bourbon sales continue to rise in Australia. Research has shown Australians drink around 19 million glasses of whiskey a month, which is some three million more glasses than in 2009. In 2006, Australians aged over 65 were the most likely to drink whiskey, and those 18-34 were least likely, but now, the proportion of drinkers of these beverages in the younger group has been steadily growing, year on year. This makes the Distilled Spirits Council’s decision to exhibit at the 2018 Drinks Industry Show very timely.”

Robert Maron, Director of International Affairs, Distilled Spirits Council of the U.S., said, “The American whiskey sector is dynamic and includes internationally recognised brands and new distillers. There is an American whiskey for every palate; from a sweet Bourbon Whiskey with hints of caramel, to a smooth Tennessee Whiskey with charcoal notes, to an American Rye Whiskey with a spicy and peppery finish.

“Within each category, there is an American Whiskey for every adult consumer’s taste preference and price point. Last year, U.S. spirits exports to Australia were valued at $127 million, up 12 per cent as compared with 2016, and in 2017 American Whiskey accounted for approximately 80 per cent of the total in terms of value. So, clearly there is an interest in American spirits and the American Whiskey, making Australia an ideal market for our new distillers to explore.”

Hemp Health & Innovation Expo headed back to Sydney

Australia’s largest cannabis event, the Hemp Health & Innovation (HHI) Expo & Symposium is heading back to Sydney on 12 and 13 May 2018.

Now in its third year, HHI Expo sees thousands of Sydneysiders descend upon Rosehill Gardens seeking information and awareness around all the crucial benefits the hemp and cannabis plants offer: hemp food, medicinal products, fabrics & textiles, clothing, beauty products, building materials, health products, gardening and hydroponic equipment and more.

Featuring a hemp crop, interactive activities for all ages, tonnes of exhibitors from around the globe and the 2018 Australian Cannabis & Hemp Symposium –  HHI is Sydney’s opportunity to taste, touch, feel and experience it all; in a safe, family friendly environment.

Used for both nutritional and industrial purposes for many years, Nov 2017 saw federal legalisation passed that allows for the human consumption (and sale) of hemp foods in Australia.

The commonly misconstrued plant is now readily available as the newest superfood on the market. As a result, HHI Expo 2018 will feature a wide range of new, exciting and delicious exhibitors – allowing attendees to sample and taste test the best hemp foods in the country, all in one place.

The Symposium

For many, information on medicinal cannabis in particular can be hard to come across. Alongside the expo, the 2018 Australian Cannabis & Hemp Symposium will bring to Sydney the world’s leading doctors, pharmacists, academics, research associates, authors and entrepreneurs for presentations, conversations and Q&A sessions around everything medicinal cannabis and industrial hemp.

Murray River Organics appoints new Managing Director and CEO

Murray River Organics Group has appointed Valentina Tripp to the role of Managing Director and CEO.

Valentina is an accomplished chief executive with extensive experience and a track record of success in turnarounds and growing businesses in FMCG, agribusiness and retail across Asia and global markets. Having worked for Simplot, most recently Tripp worked for Top Cut group as Executive Director, where she led the turnaround, repositioning and growth of the meat distribution business in Australia, China, Japan and Korea; together with resetting the future strategy for Simplot as the leading FMCG and agribusiness in Australia.

Prior to Simplot, Valentina was Senior Director with KPMG, leading transformation, strategy, customer growth, supply chain, operational and financial turnarounds. Murray River Organics’ Chairman, Andrew Monk said, “Val’s experience will help steer the direction of the business as it emerges from a period of significant change”.

“The Board of Murray River Organics acknowledges that the business has gone through a challenging period, which has been difficult for our staff, customers, suppliers and shareholders. We are all now focused and aligned on our future, attracting the expertise and skills to drive the performance and growth of the Company in its next phase of development.

“As our company sets its sights on expansion across Australia, Asia, US and Europe, someone of Val’s proven leadership and operational experience will help rebuild a strong operating backbone and positive culture for our organisation – driving change and forward momentum,” added Monk.

In Valentina’s role as Managing Director and CEO, she will ensure the successful integration of Murray River Organics’ recent acquisitions and accelerate the Company’s new product and brand development.

Valentina commented: “I am very excited to be joining Murray River Organics as it prepares for the next stage of growth. As Australia’s largest certified organic producer of dried vine fruit, we have a unique foundation to bring our high quality Australian organic products to the world. I look forward to working with the Murray River Organics team to build on this foundation for the next phase of our growth strategy and to take the business to a new level.”

Tripp’s role commences immediately (16th April 2018), with outgoing CEO Mr George Haggar remaining in the business until the end of June to assist with a smooth transition.

Australian wine exports setting new records

Australian wine exports continue to set records, with a new high for the average value of bottled wine exports of $5.74 per litre and exports to China (including Hong Kong and Macau) increasing by 51 per cent for the year to March 2018 to reach $1.04 billion – a first for exports to a single country – according to data released by Wine Australia today.

Wine Australia Chief Executive Officer Andreas Clark said the 12 months to March saw exports increase by 16 per cent in value to reach $2.65 billion – the highest value in a decade – and volume also increased by 10 per cent to a near-record level of 844 million litres or 94 million 9 litre case equivalents.

Clark said as value growth outpaced volume growth, the average value per litre of all Australian wine exported increased by 5 per cent to $3.14 per litre.

The value of bottled wine exports increased by 15 per cent to $2.15 billion, the highest value since 2009.

The average value of bulk wine also increased, by 8 per cent to $1.05 per litre, the highest value since 2009.

Higher value wine exports grew substantially with exports of wine above $10 per litre reaching a new peak of $779 million for the year to March 2018.

Clark said the high quality of Australian wine plus historically low Northern Hemisphere harvests were driving the demand for Australian wine exported in bulk containers, leading to growth in both volume, which grew by 10 per cent to 462 million litres, and the total value of exported bulk wine, which grew by 19 per cent to $486 million.

“Every country in Australia’s top 10 bulk wine destinations recorded an increase in average value, especially Germany, the largest importer of wine in the world, where average values for bulk wine increased by 20 per cent from $0.87 to $1.05 per litre,” said Clark.

He explained that wine exports to China had grown as wine tariffs had dropped again in January 2018, in line with the China–Australia Free Trade Agreement.

The tariff would be removed completely in January 2019, providing Australian wine exporters with a competitive advantage over key producers such as France, Italy and Spain.

“Mainland China has now overtaken the USA to become Australia’s second largest export market by volume. Pleasingly there was very strong growth at all price points as imported wine becomes more approachable and is increasingly consumed by middle-class drinkers and seen as suitable for consumption at informal gatherings and while relaxing at home.”


Clark said that while the commercial end of the USA market was in decline, contributing to the drop in volume, there had been strong growth in the premium sectors. For wines $10 per litre and over, the strongest contribution came from the $30–49.99 segment, which increased in value by 25 per cent to $5 million.

According to IRI Worldwide, in 2017, Australian sales in the USA off-trade market declined by 1 per cent in value but there was strong growth in two price segments. At US$8–11.99 per bottle, Australian sales doubled while at US$20–24.99 per bottle grew by 22 per cent.

Exports to the United Kingdom (UK), Australia’s largest export destination by volume, increased in value by 9 per cent to $373 million and in volume by 8 per cent to 241 million litres. Average value increased slightly by 1 per cent to $1.55 per litre.

In the UK off-trade retail market Australian sales increased by 2 per cent in value in 2017, maintaining the nation’s long-held number one position in the UK retail market according to market data analysts, Nielsen.

On the domestic front, Australian wine sales in the off-trade retail market increased by 3 per cent in value to $3.5 billion in the 12 months ended 4 March 2018, with the strongest growth occurring in the $15–30 per bottle segment according to IRI MarketEdge.

Clark said excellent vintage conditions in Australia would sustain the sector’s growth as the relatively cool, dry summer had produced high-quality grapes and winemakers are excited about the exceptional quality of the 2018 vintage wines.

“Wine Australia is already reaching out to producers to remind them that now is the time to set their vineyards up for an outstanding 2019 vintage.”