Monday, 19 July 2010

LIQUID INTELLIGENCE

“People consume fewer calories when their meals and snacks have a high liquid content.”

New York Times, 29 June 2010 , summarising findings of research by Barbara J Rolls of Penn State University.

Tuesday, 13 July 2010

IT’S FINALLY HAPPENED

Something I predicted more than 20 years ago has finally happened.  I had openly questioned how long public authorities could go on investing in new high quality tap water systems, when only a small fraction of the volume was needed for people to drink.

It would, of course, be better to have proper piped public water provision direct to every home.  But the cost is huge.

It would also be better for all water to be sensibly costed, priced and valued so that supplies are not squandered. But water is emotional as well as economic.

I have often reflected on these themes in this blog.

So, what has changed ? Well, a Government Minister in India has finally decided to consider investing in bottled water rather than tap water. Moreover, the city identified for this trial is none other than Mumbai.

I saw the story last week on dnaindia.com under the heading “Soon, bottled water may replace public taps in Mumbai.” The cost would be 5 Rupees for 20 litres. “Though it is dearer than tap water, it would help us sorting out sanitation problems and control waterborne diseases”, said Water Supply and Sanitation Minister Laxman Dhobale.

Perhaps inevitably, there was a twist in the tale, as the Minister is also planning a 1 Rupee tax on all mineral water bottles to help pay for this.

There are all kinds of pitfalls in this radical new approach, but the search for new water supply alternatives has to be applauded.

Wednesday, 7 July 2010

MODEL OF SUSTAINABILITY

I read endless reports.  Some of them put a smile on my face.  Notably when I see businesses performing well and communicating well.  Thus, I commend to you the latest Social Responsibility Report of Coca-Cola Hellenic.  It seems every dimension of the company’s operations is now conscious of and improving its contribution to sustainability.  I cite a selection of measures that caught my attention.
  • 37% reduction in operational water footprint between 2003 and 2009, despite a 69% increase in production volume.

  • 25% decrease in water usage per litre of product from 3.2 litres in 2002 to 2.4 litres in 2009.

  • 31% improvement in plant energy efficiency since 2002.

  • 4 on site combined heat and power units constructed, with 12 more planned.

  • 66% energy saving from latest vending machine technology compared with 2004.

  • 36% lightweighting of average 50cl PET water bottle since 2005.

  • 66% of packaging in Europe recycled.

  • 18% lowering of average calorie content per 100ml from 37 in 2001 to 30 in 2009. 

If Coca-Cola Hellenic can report as comprehensively on 77 bottling plants across 28 countries  from Ireland to Nigeria and Moldova, then so can most other businesses.

Tuesday, 6 July 2010

42 ACQUISITIONS IN MAY/JUNE

That’s more than earlier in 2010.  And some were sizeable too.

Five involved sums in excess of US $1billion.  Three of these were dairy mergers: Sodiaal absorbing Entremont in France, taking combined sales to €4.0 billion; Eurial and Glac also joining forces in France, adding up to €1.3 billion in sales; and Danone linking up with Unimilk in Russia, bringing together sales of €1.5 billion. The other two were the European speciality chemicals purchase of Cognis by BASF for €3.1 billion and the US acquisition of Michael Foods by GS Capital Partners for $1.7 billion.

Of the 42 deals, 9 were in dairy, 8 in soft drinks, 5 in alcohol, 5 in packaging and 14 in other food sectors.  12 took place within the borders of the United States, 5 within France and 4 within the United Kingdom.  Among the 17 international transactions, the United States was the main acquirer and China the leading seller.


Apr Beer US Griffin Group buys Anchor Brewing

May Packaging O-I from US to buy majority of Cristalerias Rosario in Argentina

Packaging US Berlin Packaging to buy All-Pak

Dairy Unilever increases stake in Strauss Ice Cream of Israel from 51% to 90%

Soup France’s Soup’ Ideale buys closed plant from Bongrain

€10m
Alcohol UK Global Brands buys Inspirit Brands

Beer Molson Coors from US to buy 51% of Hebei Si’hai Beer Company in China

$40m
Foodservice Spain’s Pascual buys Azkoyen Hosteleria

€33m
Coffee US Green Mountain to buy Diedrich Coffee

$300m
Packaging Berli Jucker and O-I from US buy Malaya Glass Products from Fraser & Neave

$260m
Fruit juice Brazil’s Citrosuco and Citrovita to merge

$895m sales
Soft drinks Britvic from UK to buy Fruité in France

€237m
Dairy US DairiConcepts joint venture between Fonterra of New Zealand and Dairy Farmers of America from US buys US cheese business of Swiss Valley Farms from Rochester Cheese

Dairy France’s Agrial to buy milk collection business of Elle & Vire along with 10% of Compagnie Laitière Européenne

Jun Baby food UK Darwin Private Equity buys Plum Baby

£10m
Dairy France’s Sodiaal to buy Entremont €4.0bn sales
combined

Dairy Carlyle private equity group from US to buy minority stake in Tirumala of India

$23.4m
Water US Primo to buy Culligan vended water business

$105m
Beer Carlsberg from Denmark to increase stake in Chongqing Brewery of China from 17.5% to 29.7%

$379m
Nutrition Danone from France to buy Medical Nutrition USA

$62m

Bottled
water

France’s Eurokin buys Arvie brand from Danone
Fruit juice Thurella from Switzerland sells  Biotta in US to local management

Snacks US J & J Snack Foods buys assets of California Churros

$11m sales
Dairy Austria’s Berglandmilch and Tirol Milch to merge

Bottled water US DS Waters buys assets of Chester Mountain

Packaging Ball Corporation from US buys can making plant of Guangdong Jianlibao in China

Packaging US Amcor to buy assets of Ball Plastics Packaging Americas from Ball Corporation

$280m
Dairy Danone from France to buy 57.5% of joint venture with Unimilk in Russia

€1.5bn sales combined
Beer Asia Pacific Breweries joint venture between Heineken of Netherlands and Fraser & Neave of Malaysia buys 75% stake in Rock Ember of New Zealand from CHC Trustees

Food IK Investment Partners to buy majority of Agros Nova in Poland from ITR Investment Partners

PLN 950m
sales
Ingredients US Corn Products International to buy National Starch from Akzo Nobel

$1.3bn
Dairy France’s Eurial and Glac co-operatives to merge €1.265 bn sales
combined

Food Heinz from US to buy Foodstar in China from Transpac

$165m

Ingredients BASF from Germany to buy Cognis of Luxembourg from Permira and other interests

€3.1bn
Sugar Shree Renuka Sugars from India to buy 50.3% of Equipav in Brazil

Rupees 11.5bn
POU coolers US CoolerSmart buys Health Concepts

Soft drinks Coca-Cola Hellenic from Greece to buy remaining 11% of Coca-Cola HBC Serbia

€16.9m
Drinks wholesale UK Manfield Partners and management buy Waverley TBS from Heineken of Netherlands

£500m sales
Confectionery Lotte from Korea to buy Wedel in Poland from Kraft of US

Food Ralcorp from US completes purchase of Sepp’s Gourmet Foods in Canada

Food US ConAgra completes purchase of assets of American Pie

Dairy UK Kerrygold Company and North Downs Dairy to merge as Adams Foods

£335m sales
Food US GS Capital Partners completes purchase of Michael Foods from Thomas H Lee Partners $1.7bn

Friday, 2 July 2010

DIRECT FROM WORLD BANK

Friday 25 June

At the end of the week, I went to Washington, where my first meeting was with someone who had just come from a briefing session on nutrition and health at the White House. My second meeting was with the International Finance Corporation arm of The World Bank.

The subject of our discussion was putting into practice some of the big picture aspirations expressed at the United Nations. More specifically, it was about improving agricultural production of certain fruits that are likely to be in short supply as world demand increases.

Would industry fund a joint initiative with The World Bank to boost output ? We were talking about possible projects in Latin America, East Europe and Asia.

Well, time will tell. Anything you can do ?

Thursday, 1 July 2010

BUSINESS FOR A BETTER WORLD

The second roundtable I chaired literally consisted of the world around one table. There were chief executives, pressure groups, institutions and a business school dean. They came from Germany, Japan, Mozambique, Norway, Sri Lanka, Switzerland, the Ukraine, United Kingdom and United States.

Our brief this time was how to spread the word. We distilled our thinking into five priority tasks, which I was invited to present to the full summit audience of more than 1,000.
  1. Network – use local and national networks, including Chambers of Commerce and business clubs.
  2. Staff – instead of managing this from the top down, enable staff to decide their own contributions and support these.
  3. Communicate – simplify the messages, use new media, tell stories, bring them to life in video.
  4. Celebrate – with fun, including an awards scheme.
  5. Benefit – show that acting on conscience can help business in all kinds of ways from cost reduction to staff retention.

Wednesday, 30 June 2010

IMPROVING SUSTAINABILITY

During the UN Global Compact Leaders Summit, I had the privilege of chairing two small roundtables on what business could contribute.

The first was on sustainability. We had a particular brief. We came up with three conclusions which seemed very consistent with what others were saying too.

  1. Work together to agree a range of global standards, such as for organics and fair trade, with a monitoring process to uphold them.
  2. Promote the standards; share best practice so that more companies achieve them, especially small and medium size firms; build these expectations into business education programmes.
  3. Acknowledge progress generously to encourage this, rather than dismiss others’ efforts towards these goals.
The pressure groups have much to gain by working with, instead of against, business.

Tuesday, 29 June 2010

BIG HOPES AND BIG NUMBERS

Thursday 24 June

After yesterday’s opening session in the UN General Assembly Hall, Secretary General Ban Ki-moon gives his third speech where he talks about “saving the world”. How often do you hear that with credibility in a business meeting ? He is referring to everything from poverty to water stress.

At a workshop on ‘Water : A Business Imperative’, I hear more big hopes and big numbers.

“Water is the lifeblood of our business,” Diageo Americas Executive Vice President Guy Smith.

Coca-Cola International Government Relations Vice President Afzaal Malik – The company and its bottling partners are planning to invest a whopping $12 billion in Africa over the next ten years.

An earlier speaker had said of water : “We simply have to rethink water. Water stress is one of the world’s biggest challenges. Yet the solutions have to be local.”

Last words to Unilever Chief Executive Officer Paul Polman: “Business as usual is no longer an option… Climate change and water stress are real medium term risks… Consumers will be looking to companies that are good citizens.”

Monday, 28 June 2010

DIRECT FROM UNITED NATIONS

Last week I was in the United States. Here are my notes.

Wednesday 23 June

I am writing today's blog from the General Assembly Hall of the United Nations in New York. I am attending a business leaders' summit for companies that have signed the UN Global Compact, which Zenith endorsed some years ago.

Two things strike me about this event. One is that the big picture really is big. It is about the future of our entire world. Sustainability of the planet. The responsibilities of business to society. The goals of true leadership. Good employment practice. Water availability. And the General Assembly Hall is imbued with symbolism.

The other thing is how few companies have actually signed up to the Global Compact, which consists of ten basic principles of ethical business conduct. Under 10,000.

In the past everyone was suspicious of everyone else. Politicians and pressure groups have been suspicious of business. Business is there to compete and yet, here, it must learn to co-operate.

It is clear that we are all in this together, which means we must all work together. Business leaders are not real leaders if they don't take a leadership role in these areas.

The next day consists of a series of presentations and roundtables. Let's see what this summit can achieve.

Tuesday, 22 June 2010

ZOMBIE BLOOD

Why am I fascinated by my job ? One of the reasons is innovation. Every day brings something new. Each new product is an attempt to see the future. Part of my job is to discern between the potential winners and the no hopers.

So I greatly enjoyed the latest issue of functionaldrinks and have picked three launches as examples.

First up is a variant of Poland’s leading natural mineral water brand Ustronianka enhanced with iodine. In recent weeks, several people have told me of thyroid problems. Maybe this could be the answer.

Second is an understated calming drink from Switzerland called Purelosophy Relax. The range recently won an international Prix d’Excellence de la Beauté 2010 award. Drinks for our minds and bodies are definitely in an area of significant opportunity.

I went for the third just for the hell of it. It’s called Zombie Blood and is packed in transfusion pouches. An energy potion in a neon green colour, it could only come from the United States. Dismiss it if you wish, but it put a smile on my face and seems to be backed by genuine science.

For more, go to functionaldrinksnews.com