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How did FOODNEWS come about? What values and practices have lasted from its foundation to the present day?

BY NEIL MURRAY

WITH the first issue of FOODNEWS on 5 January 1973, owner and publisher Roy Ellard nailed his colours firmly to the mast, declaring: “FOODNEWS is for Europe and international trade.”

The new publication would carry no advertising, and would sell on its own merits through subscriptions. It would provide buyers and sellers of food products with weekly market information and would inform them, in non-bureaucratic language, about EU legislation, rules and regulations.

Remember that the UK had joined the EU only four days previously.

Before he launched his own title, Ellard had been markets editor of The Grocers’ Gazette, a title that was in decline. Back then, there was even the London Provision Exchange, a trading floor for canned goods. Eric Clark, a friend in the public relations business, supported him by providing rent-free accommodation in London’s Oxford Street (what would that cost today?), plus trade credit and living expenses. Clark’s agency was called The Mouse That Roared, and there was an equity swap – he took 25% in FOODNEWS and Ellard got 25% of The Mouse That Roared. Clark definitely got the better deal, as it turned out, but in the end there was an amicable agreement to

return the stakes in the respective businesses, as the interests of Ellard and Clark diverged.

Forty years later, there has been little change. FOODNEWS now carries advertising, mostly in the glossy magazine-style supplements that were launched a few years after the initial weekly title. But our core revenue stream is, and is likely to remain, subscriptions. Businesses all over the world recognise that if they want the latest market information, news, prices and insight, then a subscription to FOODNEWS is money well spent. Just one scoop story, if acted upon, will save a subscriber a decade’s worth of subscription fees.

Into this category (within my memory) falls the time when we called out the USDA over the Californian tomato harvest. The USDA was forecasting a normal harvest: we predicted a bumper one, and we were right. Then there was the time that we discovered that Florida was sitting on an ocean of overpriced grapefruit juice and was hoping nobody would notice. We noticed, told the world, and when the trade figures came through from Customs a few months later, you could see exactly when we ran the story, because that was when the EU stopped buying. Traders in the Netherlands and Germany told the Americans: “Yes, we’ll buy your grapefruit juice, but not now. Your storage tanks are full and the new crop juice has to go

somewhere, so you have to liquidate stocks. So we will wait until then, and the low prices we expect.”

“You know, you have influenced world markets with that story,” said a German trader. And he was right.

Then we managed to scoop the EU with the news that the EU was going to lift its duties on US cranberry juice, six weeks before it was due to be announced in the EU Official Journal. Subscribers were able either to clear their existing stocks, or to make sure goods still on the water would be put straight into bond until the new duty regime came into force. It saved them a fortune. Non-subscribers had to live in ignorance.

Another time, as Messrs. Bush and Blair were poised to launch Gulf War Two on the Middle East, we discovered that markets in the Middle East were being flooded with Iraqi dates, which were pushing down prices. Why was this? We investigated, and discovered the simple truth was that Saddam Hussein knew war was coming, wanted to get as much foreign exchange in as possible before the shooting started, and Iraq had simply dumped an entire year’s harvest onto the market in one fell swoop, with a predictable effect on prices.

Some things have changed. When Agra Europe acquired FOODNEWS, shortly after the death of Ellard in October 1993,

The old faiThful 6 all in a day’s work 10 unchanged fcoJ values 12 healThy markeT 13 sTrange buT True 14 showTime! 15 changing paTTerns 16 indusTry guardian 18

CONTENTS

4 www.agra-net.com © Informa UK Ltd 2013 - FOODNEWS® 40th Anniversary Supplement

the task of interpreting and re-presenting the Sybilline pronouncements of the EU fell to the eponymous Agra Europe, a task which it still undertakes to excellent effect.

Other commodities were added to the portfolio of foods covered by the title. Fruit juices, frozen foods and tomato concentrates were not initially covered. On the other hand, dairy products were a mainstay of the early issues, and we cover them no more: we have a specialist online title, Dairy Markets, devoted to dairy. But who now remembers that back in 1973, the UK was subsidising its dairy products to the tune of GBP400 million annually (whatever that was in dollars then!). We have almost forgotten the butter mountains, but they were there, and in fact grew even bigger under the EU.

FOODNEWS initial coverage, besides dairy, was the canned food trade. The title actually started life as Intercan, reflecting Ellard’s involvement with and fascination for canned goods, particularly meat and fish. Fish we still cover (tuna and salmon are the big ones, with pilchards, mackerel, sardines, anchovies and a few minor species trailing behind). Canned meat is not the big item it was 40 years ago, when canned pork and chicken were big-ticket items. Who in the UK remembers the TV advertisements every Christmas for Ye Olde Oak Ham (a brand that still exists)? Today, canned meat is represented by corned beef (and the US and the UK seem to be the only people who buy it) and Hormel’s everlasting Spam product. There was an initiative in Russia, some years ago, to can walrus meat, but as far as we know it never came to anything.

In those days before computers, Ellard’s insistence on accuracy was legendary. He would patiently convert tonnes into cases or vice versa, and if a mistake occurred, he would take it very personally. Truth be told, we still find ourselves irritated

when we make a slip-up (it does happen). In these days of email and instant messaging, we know that if we make an error, somebody will tell us within hours, sometimes minutes, of the issue going online (and there’s something that Ellard never imagined).

At the time, the most influential trade association covering the canned foods industry was Germany’s Waren-Verein. It still is. Ellard had very close links with the Hamburg traders, but did not speak German. Doris Butler joined the team. She spoke fluent German, and Ellard needed her to translate German price lists, press releases, circulars and publications such as Der Speigel. Butler made friends with people at the Waren-Verein, and there is still a cordial relationship between us and the German association.

Tony Butler held the purse strings. The title ran into severe trouble at the end of its first half, when the revenue from the early subscriptions ran out and there was no money to pay the printer. Ellard’s bank refused him a loan, and FOODNEWS would have died there and then had not Ellard’s friends in the canned industry itself loaned him the money to carry on. Nearly 40 years after that, if there are any of these benefactors reading this, I’d like to add my personal thanks, because if you had not helped, I would not today have a job.

As mentioned above, things changed when Agra Europe acquired FOODNEWS and moved it into its offices in Tunbridge Wells. Agra was then a relatively small company itself, but had a clutch of quality newsletters devoted to various agricultural commodities plus, of course, the title devoted to interpreting EU legislation. By this time, fruit juices and concentrates had become the title’s largest area of coverage and accounted for the largest number of subscribers. Canned food was still very important, though, and was the title’s second-largest sector of coverage.

Tomato products (it had been decided to maintain canned tomatoes as a separate entity from other canned foods; a wise decision, as it turned out) were becoming increasingly important, and dried fruit and nuts, herbs and spices, and frozen foods (chiefly fruits and vegetables, but also ice cream and ready meals) were coming up fast.

Agra Europe also owned The Public Ledger, one of the UK’s oldest titles, and there was a degree of overlap between the two journals, especially in the realm of herbs and spices and dried fruit and nuts. Today, FOODNEWS has left herbs and spices to The Public Ledger, and has added soft drinks, fresh produce and wines to its portfolio.

Why this change? Well, we realised that our core business was processed fruits and vegetables, in all their forms. And the various forms of processing and the fresh markets are frequently interlinked. So grapes may be eaten as fresh fruit, or turned into grape juice, or grape juice concentrate, or wine, or raisins and sultanas. Peaches can also be eaten fresh, or canned, or turned into purée, or peach concentrate, or diced and frozen. And in many countries, the quantity of fruits (or vegetables) destined for processing rely, to a great extent, on how much is left over from the fresh sector. There are exceptions, of course – in California, most tomatoes are grown under contract for processing into paste, and not many oranges are processed for juice, while in Brazil, most of the orange harvest is destined for juice production, but by and large, there is an interdependency between the various finished products and the raw material. If there is a poor harvest, all sectors suffer. If, in Argentina, the government decides to divert more fruit to the wine industry, then there will be less for dried products. If the peaches get damaged on the trees, there will be less for canning and probably more for purée production. And

“Today, canned meat is represented by corned beef and Hormel’s everlasting Spam product. There was an initiative in Russia, some years ago, to can walrus meat, but as far as we know it never came to anything.”




so on. We continue to cover nuts, to great effect, because the dried fruit trade is inextricably linked with the nut industry.

With FOODNEWS’ increased global coverage came the appreciation that we needed languages. By and large, English is the language of international business. Anyone who wants to do business around the world has to speak English. Any executive who reaches a certain level of responsibility and decision-making will have English. But as everyone will appreciate, there are enormous advantages to be had if one can converse with citizens of other countries in their native languages. So these days, when recruiting for FOODNEWS, we tend to look for candidates who have a foreign language. Between them, today’s staff are fluent in French, Spanish, Italian, German and Mandarin Chinese. If anyone is interested, the most important language for us, after English, is Spanish, but Mandarin will be at least as important soon.

Those who maintain regular contact with us actually become friends. I have broken bread with contacts in many countries, and a cordial business relationship has grown into real friendship. We have met their families, and seen their homes. I have welcomed them in my own country. There is an extraordinary fusion of business and pleasure; of formality and informality. I have given personal gifts of (for example) good Scotch whisky

and received (again, for example) bottles of fine Chilean wine. It seems a fair exchange…

Agra Europe put FOODNEWS on the internet. Speed is everything today, and nobody wants to wait for (perhaps) a couple of weeks for the latest news. FOODNEWS is online now on Wednesday afternoons (UK time), and the online edition is exactly the same in terms of content as the paper issue. For all that, there are still people who relish and appreciate the convenience, portability and user-friendliness of old-fashioned paper.

This journal was also the first (in fact, the only) title in Agra Europe’s Tunbridge Wells office that was interactive. Half a dozen years ago, on the PDF version of the paper, clicking on a graph or chat or table would allow the subscriber to download the data from the original Excel document used to create the graphic. This, when it started, was an incredibly valuable tool for subscribers.

Now, that data availability has been extended further. We have the Data Library (Ellard would have been amazed!) that subscribers can pillage at will. We have calculated that it would cost a company between GBP100-200 to source the data presented in a single FOODNEWS price graph or import/export table. Very little of this sort of information is available free on the web. A dozen Excel spreadsheets downloaded thus covers the cost of an annual subscription.

We also have the Ask The Analyst service. For many years, we have always done our best to help subscribers who are searching for answers to questions such as: “Do you know what the price of FCOJ was between April 2002 and June 2008?” or “What were Greece’s canned peach exports in 2011?” Now, this service is formalised and free to subscribers.

Sometimes, even FOODNEWS is stumped. “Do you have historical price records of strawberry juice concentrate?”

was one such query. However, questions like this help us improve the service. If we receive several queries on the same topic and we have no answers, we investigate, because it is obviously important to more people than we thought.

And what of the future? It is likely that the weekly edition of FOODNEWS will go 100% online in the next couple of years. Immediacy of news and data is what people want, and print, even air-mailed to offices overseas, is not as prompt as downloading a PDF. People who want to peruse a print edition can print it off themselves.

One thing is certain: the old-fashioned way that FOODNEWS obtains its information, that was founded and nurtured by Ellard, will continue. The journal exists because its staff get the information the hard way, and that information is unique to FOODNEWS. We genuinely do

talk to people all over the world, as whereas (for example) a Greek peach canner may not talk to the competition in South Africa or Chile, and a Polish AJC processor will not talk to a Chinese rival, and an French prune processor will rarely maintain regular contact with his Argentinian counterpart, they will all talk to us.

Newcomers to the journal are told, in no uncertain manner, that their job includes the maintenance of existing contacts and the cultivation of new ones, and told that they may spend two years, or more, talking to people around the globe before they actually meet them face-to-face. And when they meet them for the first time, they will be greeted as old friends. For such they are. Forget Facebook – we got there years ago. Long may this wonderful fusion of fun and deadly serious business intent, founded by Ellard, long may it continue.

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The old faithful

BY AMY BOOTH

“ThE NExT 20 years are going to see more ‘consumer friendly’ cans (will we really see an ‘easy opening’ corned beef can that delivers the promise?) and new sizes. But I expect salmon, corned beef and tomatoes will still dominate the imported sec-tor.” These are the words of Bruce Daly of haigh Castle and Co, writing on the occasion of FOODNEWS’ 21st anniversary. An interesting reflection.

Roy Ellard was passionate about the salmon business, and salmon is indeed still big business – but with developments in trans-port and logistics, more and more salmon from key canning origin, Alaska, is being diverted to trendi-er sectors, such as fresh or frozen.

More significant for the canned fish business, however, is the rise of canned tuna, which has rather blown salmon out of the water (forgive the pun). When FOODNEWS was founded, Japan was a major supplier of canned tuna to the UK market. By the early nineties, this volume had dwindled to zero, and the country had also become a net importer of canned salmon. Following close behind its heels was Thailand. Nowadays, a tuna industry without Thailand is unthinkable, but Thailand was not in the picture until 1981, at least as far as the UK market is concerned. The Thai Food Processors’ Association cele-brated its 40th birthday in 2012, just before FOODNEWS.

Pineapple processors led the way, followed by tuna packers.

According to the website of Thai Union, now one of the largest seafood companies in the world, the 1980s saw a spate of new pro-cessors. Thai Union Manufacturing was established in August 1973, Songkla Canning in 1981, Asian-Pacific Can in 1987, Thai Union Frozen Products in 1988, Lucky Union Foods in 1990, and so on. Narong Canning (bought in 2004 by ISA Value, which along with Unicord Public formed another Thai giant, Sea Value) was also established in the late seventies. By 1994, Thailand was supplying the UK with nearly half of its tuna. Thailand has lost its former domination in this regard – Thailand supplied around 17% of the UK’s canned tuna in 2011, while the top spot has been taken by Mauritius. But the for-mer’s importance for the industry is as great as ever – among other considerations, many Thai compa-nies own canneries throughout the world.

What with government inter-vention and raw material prices below the minimum, those reading FOODNEWS today could be for-given for thinking that the pineap-ple sector was going through some real difficulties. With this in mind, it was eerily poignant to find the following article in a past supple-ment – written in in 1993.

This sparks a number of thoughts. The first is that this could almost have been written today – bar the prices, of course!

The second is that the same cycle and the same attempts to bolster the market have been happening for a long time. How should we react to this? There are both posi-tive and negative aspects to be gleaned from it. On the one hand, we could conclude that the indus-try has shown great resilience in the face of challenge: Thailand is still far and away the world’s larg-est exporter of canned pineapple. On the other, it suggests that repeated attempts to protect pine-apple growers from making a loss on their product at times of over-supply have failed. Boom and bust. Perhaps it is time to change the conversation.

This said, there are already some green shoots in the under-growth. Some of the initiatives in the industry today may have real potential to change things for the better. SamRoiYod are the pio-neers of Fairtrade canned pineap-ple (see FOODNEWS Global Outlook 2013). The Fairtrade movement, which guarantees a fair price and good working condi-tions for farmers and factory workers, is still a novel concept for many, but there is no doubt that it is gaining momentum. Fairtrade is one of the 10 ‘trend themes’ at ANUGA 2013, as demand for these products “has been growing rapidly over the past decade”. Moreover, in a visit to the EU in March, Thai prime min-ister Yingluck Shinawatra named Fairtrade as one way of boosting Thai exports to the bloc. A trade contact commented at the time:

“This is generally good news for the Fairtrade movement in Thailand as so far the Thai gov-ernment had always ignored requests for support in this matter.”

Another opportunity is the fledgling futures market. All scep-ticism aside, futures have been a tool for farmers to escape risk for a long time. The market may not have taken off yet, but it could offer a valuable degree of stability – which, one might hope, could lead to the more balanced supply and demand that the industry could really use.

fruitful endeavoursEven at FOODNEWS’ inception, the pessimists were saying that changing eating habits, more exciting alternatives and a lack of appeal to the young would mark the end of canned fruit. During the nineties, some cynics could reportedly be heard saying that “canned fruit is for selling, not for eating”. Plenty of consumers were eating it at the time, though – a slowing in the canned peach market in 1993 came only after five years of growth, according to our Canned Foods Supplement of 1994.

Admittedly, at that time there were reports that apricots had “drifted to the fringes” in the canned fruit trade, with traders selling growing volumes to the bakery trade rather than supermarkets – but then, we are still hearing doom and gloom in the apricot market today, and yet

IT FEELS like a particularly onerous task to look at 40 years in the canned foods business, because FOODNEWS’ first products were canned foods. Indeed, it was originally conceived as Intercan. However, it is edifying and reassuring in equal measure to look back over the years and see that, in some respects, little has changed.

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exports are still breaking the 100 000 tonne mark every year. Perception is still a problem in the canned fruit industry – but that hasn’t stopped customers globally buying almost 800 000 tonnes of canned peaches a year in recent times.

There are a few reasons one might worry about the canned deciduous fruit sector at the moment. Over the past couple of years, there have been noises of concern coming from the South African sector regarding investment in processing apricot and pear plantations. SPC Ardmona is struggling to export, and also facing slow demand on the home market. Del Monte sold its Kingsburg cannery, causing the nearby canmaking plant to shut its doors.

This all sounds very downbeat, but there is good news, too. Packers in global top producer, Greece, were remarkably resilient to the country’s beleaguered economy last year. Another important consideration is that China, which is home to almost a fifth of the world’s population, is far from a mature market. While there are some adverts for Chinese white peaches from the early nineties and the country was already being described as a “key global source” in 2001, China was represented for the first time at

CANCON11 last year. On the export side, traders are saying that quality has improved markedly in recent years. Domestic demand for canned peaches is increasing, too. Peaches seem to be ahead of the curve, with apricots, pears, mandarins and other canned fruits still relatively unknown, but the buzz is optimistic.

As far as the pessimism goes, we can hope that this, too, shall pass. Many of the problems the industry is having are down to external factors which do fluctuate. If South Africa’s commendable efforts to build its domestic canned fruit market succeed, we can hope for a revival there. Australia’s dollar is unlikely to stay high against key currencies forever.

Perhaps there would be potential in revamping the products’ market image? We have seen this in the canned soups business over the past year. Campbell Soups launched its “Go! Soups” range, aimed at younger consumers, in March 2012, which featured updated packaging and marketing as well as new, modern recipes such as Thai tomato coconut. Baxters did similar in August, revamping its packaging and launching five flavours such as Fragrant Thai Vegetable (note the focus on Thailand!).

If you look objectively at the product profile of canned fruit,

there is a lot going for it. Not only does it count as one of your five a day, it is also low in calories, very long-life, and affordable. These are qualities which appeal to many increasingly health-conscious consumers looking for convenience – and the trade is aware of this. It would be good to see some experiments with revamped marketing.

The other area with potential is added-value canned or preserved products. Glass jars of peppers stuffed with cheese are riding a wave of demand in the tapas sector. Over the Christmas period, FOODNEWS also noted in one British retailer well-presented jars of nectarines in liqueur. It was essentially a canned deciduous fruit which was being marketed like an artisanal jam and sold as a Christmas gift idea. Of course, not all producers can afford to produce added value canned foods, but it is certainly not one to be dismissed.

peruvian promise?One product which has seen particularly interesting market movements in recent years is canned asparagus. Peruvian asparagus was first granted duty-free access to the US market as part of the Andean Trade Preferences Act 1991. The US, whose own asparagus industry had until then been chugging along

quite happily, slowly went under. “Washington’s last asparagus processing plant, Seneca, which packed only frozen and canned asparagus, closed in July and a lot of the blame for such closures has been put on the Andean agreement,” noted FOODNEWS on 19 August 2005. On 7 December of the same year, the US and Peru signed a free trade agreement, cementing the latter’s position as a serious contender in the market.

Peru’s problem was that it remained pricier by a fair chunk than China. However, the follow-ing year, two successive abysmal harvests in China meant that a number of contracts were broken. “It is like the Wild West out here and canned asparagus is like gold dust,” said one Chinese contact in June 2006. “Right now, a contract is as valuable as a piece of toilet paper,” one German trader com-mented bitterly. “The only options open to us are to buy from Peru, whose product is very expensive, or take legal action.”

Later that month came reports that Peru’s exports were outpacing China. At the time, FOODNEWS heard: “As prices are extremely high and quantities of white limit-ed, this is considered a stop gap measure.” By September 2006, though, German trading compa-nies had called the lawyers in,

The old faithful

http://www.trisun.co.il


The old faithful

with two companies filing law-suits. Peru, at this stage, was “cer-tainly attracting interest”, although buyers were “hoping to see more Peruvian white asparagus”.

Fast forward to 2013 and Peru has continued to grow as an agri-cultural exporter in a very big way. Over the past few years, it has been able to offer very credi-ble competition to China. As Peruvian agricultural minister, Milton von Hesse, told FOODNEWS at Expoalimentaria 2012 (FOODNEWS Global Outlook 2013), the government is continuing to invest heavily in the sector, implementing an ambitious irrigation programme and invest-ing in infrastructure, research, technology, and credit access. This could render the whole sector more efficient and reduce costs, meaning higher margins and better competitiveness.

However, there are some clouds on the horizon – not only are

many companies turning to the fresh market, but Camposol con-firmed recently that many growers were also switching to other crops. Certainly, Peru will not stop grow-ing any time soon, but the shifting dynamics of the market will be worth keeping an eye on.

A final reflection which may elicit some wistful laughter today, also from FOODNEWS’ 21st birth-day: “The prices of many canned goods and dried fruit are unchanged or even lower now than then [1973].” It goes on to cite prices such as DM0.60 for an 11oz can of mandarins in the early seventies and DM0.51 in the early nineties. “Of course, there have been many variations up and down… due to crop changes, cur-rency exchange rates, import or export restrictions, but generally it can be said that pricewise, nothing has changed very much over the past 21 years,” the writer concluded.

Nineteen years later, this jour-nalist would venture that prices seen in more recent times are more reflective of growing econo-mies, rising labour costs, higher demands on product specification, inflation, and so on. Looking through the archive, in March 2002, prices for pineapple pieces 24x20oz fob were quoted at USD5.50. Nowadays, the trade is looking at double that. USD5.50 is a price to balk at even in the worst situations of over-supply. With peaches, too, Chilean and Argentine prices seem to be drift-ing upwards in line with inflation. And then there is tuna – with the raw fish prices charting unknown highs for a good part of last year, it seems highly unlikely that we will return to prices paid decades ago any time soon.

Yet, canned foods seem as well-positioned as ever to keep supply-ing quality, convenience and reli-ability for the foreseeable future.

“There have been many variations

due to crop changes, currency

exchange rates, import or export restrictions, but generally it can

be said that pricewise,

nothing has changed very

much over the past 21 years.”

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http://bit.ly/YKDIkP

http://www.tbfruit.com


freedom of the cityBEING granted the Freedom of The City of Vinces, home of Quicornac, in Ecuador, happened in a truly surreal ceremony in which… I was presented with a glass plaque, I handed Bernhard Frei of Quicornac a bottle of lethal over-proof Scotch, the mayor of the city thought it was for him, and tried to grab it, while all the assembled dignitaries chanted at Bernhard to get him to open it there and then (he didn’t!).

On the other end of the scale, I came as close to death as I’ve ever been when a suicidal Colombian taxi driver taking me to Pereira went for an overtake on a blind mountain bend, and a truck came the other way. I vividly remember a chrome Virgin Mary atop the truck’s radiator, and thinking incredibly calmly: “I wonder how they’re going to get my body back home?” In the event, the vehicles missed each other, though God knows how. The taxi later got jammed in top gear, and parts of the transmission fell out when we arrived at our destination. I didn’t leave a tip.

Best ‘work’ moment? Scooping the world with the news that the EU was going to lift duties on

some juices, six weeks before it made the announcement official. (Neil Murray, Editor)

part of the industryUNDENIABLY the most memorable moment of my time on FOODNEWS was being hugged by a giant of a man, Costas Apostolou, president of the Greek Canners' Association, EKE and now also vice-president of Profel.

Turning up at my first World Canned Deciduous Fruit Conference and to be embraced – literally – by the industry was something I’ve not experienced since.

I think this is one thing that FOODNEWS has always prided itself on. Not only does it talk with people in the industry, it becomes part of the industry.

Only once you’ve been up on stage in front of leading industry executives with Kari Kari dancers from Easter Island at the same event in Chile; or scarcely survived beer and wine fuelled toasts with the head of the largest fruit canner in China and his senior communist party friend; or ridden a tuk-tuk back to the Bangkok event hotel with a lost broker you met only hours earlier, can you truly understand the price

of canned foods. (Ian Hart, then a rookie reporter, now Editor of The Public Ledger)

you couldn’t make it upWRITING about a niche subject, you soon get used to looks of bewilderment when you explain what you do for a living. My personal favourite was telling custom officials in Toronto that I was over for a tomato paste conference. Their laughter echoed behind me as they let me through with a yell of: “Well, you couldn’t make that up!” as I scuttled past, the colour of said tomato.

The conference itself turned out to be a lot of fun. I made contact with a group of delegates and ended up partying with them until the early hours in the hotel’s penthouse suite. As the sun started to come up, I ran from the party in a desperate attempt to get some shut-eye before the day’s sessions, dodging calls to come back as the party carried on in full swing. Later that morning as I dragged myself down to the conference, I did take some pleasure in noting that the first speaker was one of the last men standing from the party. He bumbled and stumbled through his talk, eyes red, wild-haired and desperately hung over. I took some comfort in the fact that there are always those worse off than you. (Kathleen Retourné, reporter)

a great Thai lunchBEST-ever FOODNEWS memory was meeting Jim at Champaca to talk on tuna in Thailand in 2000. Went to a wonderful Bangkok restaurant and discussed the wonderful world of Thai trade over lunch. Cheers Jim! Other highlights included a rice conference in Bali, meeting a tomato paste canner in Jakarta,

some traders in Singapore, and top palm oil and rubber people in Malaysia. What a trip! (Alan Bullion, Analyst)

interview of a lifetimeI WORKED with FOODNEWS for almost three years and it was a period full of surprises, excitement, hard graft and much fun. My most memorable moment (if I had to choose just one) would have to be meeting Mr Muhtar

Kent of Coca-Cola (aka ‘God’ in some beverage-related quarters) during a conference in Brussels. It was my pleasure to get an exclusive interview with Kent and even more of a pleasure to make the front page of FOODNEWS.

If you ever have the opportunity to meet the FOODNEWS team, you will notice something unusual: no sooner have you stepped onto the fourth floor at Guardian House than you will spot a corner of the office full of debate, banter and minds hard at work (not to mention some unusual ranges of peanut samples and old motorbike

all in a day’s workFOODNEWS staff are a cosmopolitan bunch of people. They always have been. They meet people all over the world, and then have to present the facts as concisely and clearly as possible. Staffers and contributors past and present reminisce…

Neil Murray

alex Masters

iaN Hart

alaN BullioN


all in a day’s work

parts). There was a reason why people referred to us as ‘The FOODNEWS family’ and I doubt I will meet or work with another team like them. Viva FOODNEWS! (Alexandra Masters, business editor)

called to prayerI WAS beverages editor for nearly three years, covering everything from French wine to Irn-Bru. A story I covered that stands out in my mind was in March 2010, about how the Chilean wine industry was recovering after the earthquake of the previous month. The resilience shown at that time by the country’s wine industry, and by the Chilean people in general, after what was a terrible disaster, has stayed with me.

Another story I remember well came a year later, when from Gulfood in Dubai I was able to report that Del Monte had begun production of its 100% Freshly Squeezed Gold Pineapple juice in Saudi Arabia. This was a result as the trip was very tough, no one seemed to want to talk and, as someone who dislikes early mornings, I found myself staying at a hotel situated a few metres from a mosque that broadcast the call to prayer before dawn. My abiding memory of working at FOODNEWS was how much fun it was, despite – or perhaps because of – the tight deadlines, and most of all the dedication of everyone to ensure the paper was as informative as it possibly could be. Long may it continue. (Rob Selby, beverages editor)

The freelancer’s breakLOOKING back, I must admit that I am still amazed that FOODNEWS editor Neil Murray had the confidence to offer me a freelancer position with FOODNEWS back in mid-2009, even though my email address at that time was a confidence inspiring (and extremely professional) vpekic[at]mindless.com.

After I cautiously sent my first batch of five story ideas to Neil back in August 2009, I got the best-ever response that a freelancer

can get from a new editor. I still remember proudly showing Neil’s message to my mum (yes, I know!), who was in my house when his email arrived. Let me quote Neil’s response: “Jaysus. These are all good. We want these pronto.” It was the dream start of a delightful relationship with a ground-breaking publication. Happy 40th Anniversary, FOODNEWS! (Vladimir Pekic, freelance)

anuga: a rite of passageAFTER booking a “hotel” in the middle of nowhere (company executives: central Cologne; FOODNEWS journalists: anywhere else) and driving all the way to Cologne (surprisingly not a cost measure, as evident from the way the editorial Nissan was loaded up at Auchan on the return journey), I never thought I would actually prefer to do some work.

As a newbie, any major food show, especially ANUGA, is a great chance to finally meet the contacts you have hassled time and again on the phone. And there’s always time for a glass of Chilean red at 11am. And while the big bosses partied the night away after a day of hard work, us hacks were sent back to our room writing up news and gossip. It was not until my return that I realised why the rest of the team wanted to be there on the last day – more free food than you can shake a stick at. (Maria Iu, reporter)

before the internet“KEEP it simple and never use clichés”, was Godfrey Brown’s gruff retort as he swept a disapproving pen over my verbose copy, during my early days at FOODNEWS. Sorry Godfrey, but when you were editor in the 1980s, FOODNEWS was a family: you were dad and your statuesque German deputy, Doris Butler, was a surrogate mum to me and the other young staff journalist, Mark Say. Mark and I were nurtured into learning our craft, with firm kindness, but the bar was set high: we knew that we were always expected to maintain professional and personal integrity.

The entire FOODNEWS team then comprised eight staff members, jammed together in a claustrophobic, open-plan office down a South London backstreet. It seems ridiculous now that it took four journalists to produce a weekly newsletter of just eight pages. But bashing out copy on manual typewriters; interviewing traders over dodgy phone lines; undertaking primary research pre-Google; not to mention faxing endless proofs through to the printers, meant we were time-poor. Roy Ellard, FOODNEWS’ founder, used his maverick streak and sheer force of personality to launch FOODNEWS many years ago, sometimes almost losing his shirt along the way. It’s a fitting tribute to him that FOODNEWS continues to strive and remains a beacon in trade journalism. (Eugenie Bryan, frozen foods reporter).

an old prunePRUNES, that’s everyone’s favourite word when describing what I do. I actually write across a wide variety of sectors, but it all comes back to those crinkly fruits. People have actually laughed in my face when I’ve told them I’m jetting off to Cape Town for a prune conference. I can’t work out whether they’re amused that it’s being held in such a wonderful destination, or that a conference for this type of thing exists at all.

Then there was the prune trip to California last year, where one evening I found myself sitting cross legged, bare footed, on the floor of a Thai restaurant with a group of Chilean prune growers. It

was ridiculously hot that evening, the drinks were flowing and we couldn’t stop laughing. I still remember being taught the various meanings of the word ‘huevón’ (I’m still learning, by the way).

There’s actually a whole world out there that few people know about. The dried fruit industry is absolutely fascinating and the people involved in it a real laugh. If there’s anything I’ve learnt, it’s never judge a book by its cover. (Jennifer Willis-Jones, deputy editor)

egged onWHEN I applied for my job at FOODNEWS, I could barely even spell “commodity”, let alone knowing my Engraulis ringens from my Sprattus sprattus. Translating a rather frank exchange of views between Neil and a restaurant waiter during ANUGA 2011 – my second week – left me wondering where I’d landed.

But my abiding memories of my team so far are not only of their enthusiasm in chasing a good story, but of colleagues who look out for each other. Neil bringing in eggs from his chickens and giving me a spare bicycle when mine was stolen; Jen regaling us with stories of her family in rural Spain; Davide’s jealously-guarded teacup with the strawberry on; or Louis’ expression when he was given a sample of an adult soft drink best described as “an acquired taste” – these all go to form a most quirky and excellent office. (Amy Booth, reporter)JeNNifer Willis-JoNes

aMy BootH




unchanged values

BY NEIL MURRAY

ORANGE juice: then, as now, Brazil and Florida were the two largest suppliers, but Bra-zil’s star was clearly in the ascendant while Florida never recovered from disastrous frosts in the 1980s that seri-ously damaged its citrus groves.

Refrigerated orange juice was still a small category. Most juice was sold in shelf-stable packaging. In the US, retail frozen orange juice was still a significant category. Freshly squeezed juice was a rarity except in countries where the fruit grew, and refrigerated short-life pre-packed NFC juice practically unheard of.

Production records were broken in the early 1990s: in 1993, the two regions produced 1.85 million tonnes of FCOJ. Remember this was in the days before NFC orange juice was a large commodity. “Buyers revel in abundant supplies,” said FOODNEWS, and global prices were at their lowest level since 1986. They started at USD1 000/tonne, fell USD50-100/tonne, and then Brazil pushed through a price increase to USD1 175/tonne and then, later, to USD1 350/tonne

However, it is worth reflecting that, allowing for inflation, this equates to USD2 180 today: pretty much precisely what FCOJ costs in 2013. The ‘official’ price is a bit higher: independents are selling for slightly less.

Production continued to climb, and in the mid-1990s there was

the problem of excessive inventory. Processors had a stock of over one million tonnes of FCOJ to sell, in a scenario eerily reminiscent of today’s huge inventory in Brazil. Only this was Florida.

If there has been one massive change in the FCOJ market in the last four decades, it concerns what has happened in Florida. High costs, low FCOJ prices, and (above all) a US real estate boom in the first decade of the 21st century meant that Florida’s growing area and production shrank. The state also started a long, long battle against citrus greening (also known as huanglongbing or HLB). And then the hurricanes hit: four of them, in August and September. Florida’s citrus growing regions were devastated, especially where the grapefruit were grown, which happened to be at exactly the point where the tracks of all four hurricanes intersected. Apart from the damage itself, the hurricanes blew the greening all over the state. Florida saw that its tree eradication programme was now futile, and called it off. Today, greening remains an issue in both Florida and Brazil, but the battle is slowly being won.

Some things never change. In 1995, there was a severe shortage of grape juice concentrate, after the Spanish crop failed. Prices rose fast, and traders and end users scoured the planet for supplies. Argentina cashed in: it was able to supply its US commitments and still export as much as Europe needed across the Atlantic. And in another EU bureaucratic blunder over duty, again reminiscent of the recent problems with duty on tropical purées, the EU had decided that there had to be a minimum entry price on extra-EU imports of grape juice concentrate, and there were big penalties if the goods imported were cheaper than this level. The cheaper the juice, the higher the levy. At the top end, the levy was equivalent to USD1 500/tonne. Oh, and there was 27.1% duty on imports as well. Imports stopped, the

Argentines clamoured for compensation, traders protested to Brussels, and EU officials were forced to re-consider their duty regimes.

China? China simply did not feature on the world’s apple juice radar until the early 1990s. Prices were quoted in US dollars per gallon and European countries routinely exported AJC to the US, then the world’s largest importer.

But in 1993, China diverted 454 000 tonnes of fruit to AJC manufacturers, and this rose to 556 250 tonnes the following year and 611 880 tonnes in 1995 – enough for 100 000 tonnes of AJC. To put things into perspective, this was roughly two-thirds of the quantity of apples processed by Poland in the same years. However, the first FOODNEWS reference to Chinese AJC comes in 1995 – and there was just the single above reference to raw material use. The next year saw (as far as we know) the first-ever advertisement for Chinese AJC, placed by a small company called Haisheng. There was also one single reference that year in our pages to Chinese apple juice, and this time it concentrated (no pun intended) on Japanese AJC exports. They had doubled to just under 5 000 tonnes between 1992-93 and grew by 58% to 7 800 tonnes in 1994. Oh, and in the same year, China officially imported 439 tonnes of orange juice (though the USDA reckoned imports through “unofficial channels to avoid high tariffs” made the true figure rather higher.

In 1993, China sold 3 000 tonnes of AJC into the US. In 1998, it sold 40 000 tonnes. It

would take too long to provide a step-by-step account of China’s rise to dominance in this sector, but by 2000 the US had imposed anti-dumping duties on Chinese imports (over 54% in some cases) into the country and Tim Gibney, then editor of FOODNEWS, was writing: “Trade sources in Europe predict that [Chinese production] could herald the start of a Chinese campaign to boost sales to that region, especially as European buyers have been snapping up substantial supplies of cheap low-acid juice from China during recent months for blending in multi-flavour juices and drinks.”

By 2001 the country was producing 200 000 tonnes of AJC annually, and the stage was set for the incredibly steep rise in Chinese AJC production and exports, which peaked at over one million tonnes, and then the nearly-as-steep decline in sales and the start of the incredible difficulties that still plague the Chinese industry. This has been well documented in the last decade’s worth of FOODNEWS.

Other fruit juices? Interestingly, over the years, the stories have been ones that seem utterly familiar today. Passion fruit juice was being described as having “gained a reputation for being unpredictable and erratic” decades ago. Demand for pineapple juice concentrate has waxed and waned almost as regularly. Mango harvests have been poor and good and poor and good, but at least mango is one of the crops where the main producer (India) is actually planting more and increasing production to meet demand.

And then there are the exotics: açaí, seabuckthorn, maqui, pomegranate, blueberries, dragon fruit and all the others. Volumes are small but interest is high. Forty years ago, nobody had heard of most of them. And vegetable juices were utterly unheard of. We shall look back in another decade’s time, when we celebrate our 50th anniversary, and see what has become of them.

IT TOOK a few years before FOODNEWS started covering fruit juices. And how the global map and market has changed since then.


BY JENNIFER WILLIS-JONES

ThE dried fruit and nut mar-ket has remained remarkably healthy over the past decade, and FOODNEWS has dili-gently charted its progress along the way. One thing is clear: the sector is still grow-ing, and at a rapid rate.

The dried vine fruit industry, that is raisins and sultanas, is a particular success story. Californian raisin exports grew 27% between the 1988/89 and 1991/92 season.

In 1993, FOODNEWS carried the story that the sultana industry was “in balance” and one could say the same today. Farmers have enjoyed good farm gate prices, processors have enjoyed good demand, and consumers enjoy dried fruits.

In fact, as the healthy eating message gains momentum, FOODNEWS can only foresee consumption of dried fruit growing yet further. The image of prunes, a mainstay of the industry which FOODNEWS has been covering since it can remember, is still being transformed (now known as ‘dried plums’) in order to garner a new, younger set of consumers concerned about their

well-being. News of these fruits helping prevent osteoporosis and their usage as a high-energy snack for athletes are all good examples of how the industry is being transformed.

A real success in the nut sector has been almonds and there is evidence pointing to increasing demand way back in the 1990s. Small crops in California and Spain were rocking the market, while buyers keen to get their hands on as much as they could had no choice but to fork out high prices. FOODNEWS recalls that “there were signs that some confectioners and bakers had become less inclined to use almonds”, while a supplement devoted to the industry recalls that “higher prices challenge trade”. These worries seem trivial to us now – ingredient usage of almonds continues to grow fast.

Blue Diamond remains a force to be reckoned with. Twenty years ago, FOODNEWS reported that the industry was waiting for the firm to start making contracts before big contracts were made, and it still wields a similar influence. On the subject of prices, the almond market has proved fascinating, with real peaks and troughs between 1997-2013, although the current trend is clear: prices will continue rising (the highest they’ve been is USD9 600 per tonne for US Non Pareil 23/25 shelled cif EU at the end of 2005).

Pistachios also appear to have come from nowhere to now dominate global consumption of nuts. In the UK, at least, you can now find them anywhere from corner shops to supermarkets in a variety of exciting flavours. FOODNEWS, leading the way in

commodities forecasting even back in 1993, predicted that “pistachio nuts are a big growth market; demand is on the increase with imports climbing at a fast rate” – how right we were. Back in 1993, of course, Iran was the leading producer. It has now been overtaken by California, but both remain key players in the global pistachio industry.

This review would not be

complete without mentioning the evolution of Latin America as a provider.

Argentina has remained a big producer of peanuts, while upping output of prunes and raisins. Chile, meanwhile, appears to have popped out of nowhere and now produces large volumes of prunes, raisins, walnuts, and is attempting to grow its almond industry. Bolivia and Brazil are also producing good volumes of Brazil nuts (also known as Amazonian nuts following a rebranding exercise).

Overall the global dried fruit and nut industry is in excellent health. It is clear some things will never change, that is California will continue dominating the sector, but we should see some real growth in products coming out of Latin America. FOODNEWS looks forward to covering such developments over the next 40 years.

healthy marketSTRANgE to say, but the dried fruit and nut sector has coped remarkably well with the changes of four decades.

http://www.goodpack.com


strange but true

BY NEIL MURRAY

WhILE FOODNEWS has seen gratifyingly few exam-ples of sharp practice (or outright fraud) over the years, in the last decade or so there have been a few cases that have made our pages, and the website hit counters have recorded the populari-ty of the stories with subscribers.

We are not talking here about relatively run-of-the-mill things like adulteration, re-packaging, dishonest labelling or breaking of contracts.

Possibly the finest example recorded since the Millennium involved the US juice maker, LeNature’s, a modestly successful (it ranked in 33rd place among US beverage manufacturers) fruit juice and bottled water company with plants in Latrobe, Pennsylvania and Phoenix, Arizona. LeNature’s annual sales were something around USD32 million in 2005, but the company’s accounts inflated that figure nearly ten-fold and declared sales of USD275 million. The fake documents needed for all this were produced on the company’s graphics system.

Against this, LeNature’s started issuing bonds and running up bank debts, and managed to accumulate debts of a staggering USD820 million. It also had cash in hand of USD1.5 million, but had even written cheques against that cash for double the sum.

Somebody obviously smelled something suspicious, and four creditors (who between them were owed less than USD1.5 million; a tiny fraction of LeNature’s indebtedness) filed for bankruptcy. And the whole criminal enterprise started to

unravel.When investigators went into

the LeNature’s plant in Latrobe, they found a secret room built into the factory. Inside this was “a quantity of cash”, the real account books and the fake ones, a large amount of expensive jewellery and (this was what raised the affair to the heights of the truly bizarre) a model railway layout, with over 8 000 items of rolling stock, on which over USD1.0 million had been spent.

Can you imagine the train set you could buy with a million bucks?

The company’s founder and former chief executive, Gregory Podlucky, had also spent USD11.0 million on building himself a 13-bathroom 24 000sq.ft. stone castle.

The liquidators tried to sell the business as a going concern, but that was never going to happen. And the business could not practicably be sold with over three-quarters of a billion dollars of debts anyway. So the plant itself was offered for sale. Cadbury Schweppes was reported to have shown an initial interest, but the place was eventually bought for USD20 million by the Giant Eagle supermarket chain in 2007, to produce flavoured waters, iced teas and carbonated soft drinks (CSDs). These would initially be Giant Eagle private label products, but the plan was to offer co-packing to other parties.

Interestingly, Giant Eagle only contributed 1% of the purchase price itself: the 99% majority came from “outside investors”.

In late 2009, those behind the scam were indicted. Gregory Podlucky, his wife Karla, their son Jesse, and other relatives and executives faced charges of tax evasion, mail, wire and bank fraud and money laundering. Podlucky

senior got 20 years in jail, Jesse nine years, and Karla four.

The following year Giant Eagle closed the factory down anyway, after poor sales. Podlucky’s castle, never completed, was sold for USD2.5 million.

a tale of tomatoes and goatsThen there was Northern Star, a tomato paste processor in Ghana. While nobody has actually appeared in court connected with this saga, still less been convicted, the story of a paste factory that has not produced a single can of product in years, and yet still retains a production manager, is incredible.

Northern Star was formed in early 2006 to revitalise a defunct tomato paste factory. An Italian firm, Trusty Foods, was party to the agreement: it had been importing product into Ghana and re-packing it, and reckoned it could easily sell domestically-made paste. In March 2007, the plant opened. A couple of months later it had not actually processed any tomatoes because, it said, it did not have any crates for the raw material nor transport to bring it to the factory. Shortly after that, Trusty Foods complained that it could not compete with imported product because importers were falsifying invoices to evade duty.

Ghana’s government decided to ban imports in November that year.

The next year, the plant could not buy fruit from local farmers because (a) better prices were to be had in the fresh market and (b) the farmers, somewhat understandably, did not trust Northern Star after an agreement whereby the factory would provide local farmers with tomato seedlings failed to produce any of the aforementioned plants. And then Trusty Foods stepped in, and offered to buy the farmers’ fruit at much better prices than Northern Star was offering. By the end of 2008, it was feared the factory would close, though as it had not actually produced anything, it was not going to make a difference to

the local market.Then the government decided

that local farmers should be allowed to buy a 20% stake in Northern Star, in the hope that this would encourage them to supply it with tomatoes. Again, unsurprisingly, the farmers were sceptical.

In the summer of 2009 there was a plan to supply Northern Star with tomatoes from Burkina Faso, but that country supplies Ghana with just 6 500 tonnes of fruit annually, or thirteen days’ worth of production for the factory, so that was hardly workable. Still concerned at the farmers’ lack of faith in the company, the government upped its offer of a farmers’ stake in Northern Star to 30%. No takers.

In March 2010, the factory proudly announced that it would start processing, but strangely, nothing appeared to happen this time either. It turned out the electricity and water had not been connected to the factory. Exactly a year later, it said the same thing, and (incredibly) the regional officer of the trade and industry ministry, Joshua Azure, said the days when tomato farmers committed suicide over the lack of a market for their produce, were “now a thing of the past”.

And that brings us up to October 2012, when an inspection of the plant revealed that it was derelict, deserted, contained no staff at all, but was being used by farmers to house their goats. A local newspaper quoted Northern Star’s production manager as angrily claiming that the goats had been deliberately placed in the factory as a photo opportunity.

We have probably not heard the last of Northern Star.

WHIcH fruit juice company spent a million dollars on a model railway?

LeNature


showtime!

BY DAVID MONAGHAN

SINCE that first World Juice conference we have launched juice conferences all over the world – Juice Latin America, Juice Asia, Juice Middle East and most recently Juice Africa – as well as the FOODNEWS Tomato Forum and events on canned fruits and dried fruit and nuts. In the 40 years since this esteemed organ first hit the presses, practically all markets have become glo-balised – but I wonder if there are any markets more inher-ently globalised than those which FOODNEWS covers?

Just look at a small sample of the locations we have visited over the last 10 years alone – from Shanghai to Santiago, from Mumbai to Mendoza, from Istanbul to Cape Town, from Dubai to Washington D.C. – and many points in between.

One of the things I have enjoyed most about our events is meeting people from almost every part of the world. And like the products we cover, people from each country bring their own special variations. While I am not instinctively drawn to stereotypes, it is true that people of certain nationalities display a keen national pride not seen every-where; some are more punctilious and pedantic; some drive a partic-ularly hard bargain; some give very little – if anything – anyway.

Of course this cuts the other way too. I vividly remember overhearing a delegate at the FOODNEWS Tomato Forum in Madrid remarking that the drinks reception was “a typical British thing”. It was not intended as a compliment! To be fair, we were drinking tepid sangria, but at least I still had my shirt on and was neither sunburnt nor drunk.

There have been many highlights in terms of speakers and content. One which seems apt is the speech by Guy Wollaert, then head of Coca-Cola’s global juice operations, at World Juice 2009 in Nice. Outlining a compelling vision for the global industry which had the audience spellbound, he quoted Bill Gates in saying that we tend to overestimate the extent of change we will see within two years, but underestimate the changes we will see over 10 years. One reading of this is that whilst the world may not seem to change much day to day, when you look back from a milestone like the one which this issue celebrates, a lot of things are different.

At conferences on processed tomatoes and canned fruits in the middle years of the last decade, the top-drawer speakers were always the representatives of the Chinese processing industry. They got a real grilling on every aspect of their business, and were in my opinion very patient in the face of some quite open hostility. But I

think that these exchanges ultimately reduced divisions in the industry – as with all parts of life, seeing the whites of each other’s eyes can remove a lot of barriers. One particular example I recall is the standing ovation which Xu You of Tunhe received after his presentation at the first FOODNEWS Tomato Forum in Lisbon in 2003.

For open and honest discussion, it would be hard to beat Juice Asia 2008 in Mumbai, which at times became a good-natured slanging match between representatives of huge multinationals. The corporate communications officers would have been having heart attacks! For sheer enlightenment as well as entertainment, David Berryman’s presentations at several of our juice conferences deserve special mention. Who ever knew that antioxidants could be so interesting? His explanation of the critical importance of these compounds – particularly in processed red fruit – is also comforting when you are ordering the next bottle of vino tinto.

Which, of course, brings me to the social side of events. As the organiser, one cannot always partake with the vigour of the attendees, but I am sure my liver is grateful. In particular there have been some memorable World Juice Banquets, with last year’s open air reception overlooking the

Port Olimpic in Barcelona standing out in the memory. And the after-parties in previous years, to which delegates were taken by ‘Gonzalez’s coach’, were always fun.

One of the reasons for this, I believe, is the special atmosphere at FOODNEWS conferences. I have been to many events in many different sectors, and I can tell you that there is a genuine camaraderie in the markets we serve which you don’t find in every industry.

I think part of this stems from the globalism I have already mentioned. My suspicion is that if you find yourself holed up for three days with someone several thousand of miles from home and wondering what exactly you are about to eat because you didn’t understand the menu and you don’t recognise what has just been put in front of you – the relationships you make last forever.

Certainly, many of the relationships FOODNEWS has made are enduring. As someone who has been to 11 of the 17 World Juice events we have run, I am still made to feel like a newcomer by the many people who tell me they have been to every single one.

As the organiser, this really is an honour and a privilege. We look forward to bringing more of the world to your doorstep in the next 40 years!

socialisiNg is oNe of tHe draWs of World Juice

NetWorkiNg at a World Juice luNcH

cONFERENcES are a pretty recent part of FOODNEWS’ history, with the first conference we organised – World Juice 1996 in Rotterdam – taking place almost 18 years ago. But like the magazine itself, our events are a great way of bringing events, ideas and experiences from all corners of the globe to your own doorstep.


BY DAVIDE GHILOTTI

IN ThE beginning was the tomato. Well, not quite. Not for us, at least not at the very beginning. Since FOODNEWS first started mainly as a canned foods title, by the time the first sto-ries on tomato products fea-tured in our coverage, it was ‘already’ the 1980s.

Many things have changed in the processing tomato industry over the 30-something years we have been reporting on it. If you were to skip through the dusty yellowish copies of the magazine in our ‘errant’ archive you would notice – besides many odd-looking ads – how different the global tomato industry used to be. Prominent producing countries back then have now significantly lowered their presence on the global market – in some cases, even, they have disappeared.

The issues concerning traders

decades ago, though, were so impressively similar to those we are seeing today. In a number of cases, our analysis at the time could very much fit in one of today’s articles, with not too many changes.

who came, who leftBack in December 1993, we reported how Mexico had become a “leading [tomato paste] exporter to the American market”.

“With a big increase in production after last year’s disastrous crop, Mexican suppliers shipped 20 500 tonnes to the US in the first eight months of this year, almost 90% of all US paste imports.

“Supplies from Chile, the other main shipper of paste to the US, fell sharply to 1 690 tonnes from 4 760 tonnes last year,” we wrote.

Interestingly, a country that had the overall market share of tomato

paste exports to the US market 20 years ago now exports very little, having grown mainly as a fresh tomato producer and exporter (see FOODNEWS’ recent coverage on the renewal of the Mexico-US tomato imports agreement). Mexico’s processing tomato industry, on the other hand, supplies mostly the domestic market nowadays (see graph).

From our 1993 coverage, it can be noticed that US export volumes of tomato paste were oh-so-much lower than they are today. “Total foreign sales of paste were down by 7% to 45 080 tonnes in the first eight months, while shipments to Mexico plunged by 82% to 1 228 tonnes,” FOODNEWS wrote.

That year, the US exported 78 100 tonnes of paste overall. In 2002, US shipments passed the 100 000 tonnes mark and, as of 2012, have increased to 321 000 tonnes.

With some countries slowly edging away from the global tomato picture, such as Mexico, others – more or less rapidly – took their place. The industry, however, was facing issues that are well known to present day traders, too. Only a few names are different.

In the early ’90s, tomato over-production was a paramount concern that came to threaten the whole market for years to come, as we wrote in a feature titled Industry is warned: beware of glut. Now, doesn’t that sound familiar?

Glenn Sullivan, professor of marketing and economics at

Purdue University, the US, estimated that the 1993 tomato crop in the country could have reached 10.2 million (short) tons (the final figure would have been around 9.1 million tons, equivalent to 8.3 million tonnes). Sullivan was the same man who predicted a US crop of 10.0 million tons in 1990 – a prediction which came true, triggering three long years of low prices.

In November 1993, the low tide was thought to be over, as a trader commented emphatically: “We can say goodbye to the cheap prices buyers enjoyed in the last two years due to the depressed market.”

Fast-forward to 2009, swap the US with China, and you can see how history repeats itself. This time the trigger was pulled by the Chinese tomato crop hitting almost 9.0 million tonnes, which resulted in a spiral of underselling, low prices and long-lasting stocks that has lasted until today.

It is hoped the 2013 crop will mark an end to the prolonged market stagnation. The fact that some of the biggest processors in China will keep factories closed this year, while focusing on more lucrative products such as cotton or sugar beet, is one of the reason for this view – the other being that, with the global crisis still biting, few are inclined to risk their investments by producing big amounts until the situation becomes more stable.

meanwhile in europeWhat a decade the ’80s were. I mean, Bon Jovi, Poison, Europe, Guns N’ Roses. Those years also

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SOURCE: INEGI (2006 - present)

meXican TomaTo pasTe eXporTs Trend (Tonnes)STORIES of newcomers, desaparecidos, failure and success from the tomato family tree

changing patterns


changing patterns

marked a clear turning point for Portuguese tomato producers and exporters. The Portuguese industry was forced to cut back significantly its tomato production in the early ’90s, as our deputy editor Doris Butler wrote in FOODNEWS at the time: “Portugal lost its single largest customer, the Soviet Union, after the political changes in eastern Europe in 1989.”

Prices were depressed also in the canned tomato segment, this time after Italy (the biggest producer even in the 1980s) flooded the market with product in 1989. Canned tomato prices fell from LIT9000 (EUR4.65, or USD6.02) per 24.5kg carton

(mid-1989) to LIT7 500/carton in 1991.

The devaluation of the Italian lira – a phenomenon whose danger has been stemmed by the advent of the euro – was weighing heavily on export prices, which could take sudden and abrupt swings.

The Mediterranean region, however, had an important say in those years, and could count on another member that has now faded from the tomato radar.

Interestingly enough, Israel was a strong player in tomatoes even at the beginning of the ’80s, exporting concentrate, peeled and diced tomatoes and sauces. Of those three categories, peeled,

diced and sauces had, for a number of years, higher sale volumes than concentrate (see table).

Turkey, for its part, had Japan and Switzerland as its largest customers by far, around 20 years ago. If Japan has remained in the customers’ top three list until now (in 2012 it was the second biggest importer from Turkey), Switzerland lost ground, and can be found only in 32nd position as of 2012.

when the orient awokeThe China phenomenon is another watershed, which clearly marked a ‘before and after’ in the global tomato industry.

Looking back at the early 2000s, it can be seen how China was only a relatively small player with its niche processing tomato industry. In the ’90s, the country was quite off the radar altogether – at least, compared with its relevance today. Chinese tomato production in 1997 was 470 000 tonnes, but took an upward trend in the 15 years after that brought the country to the sector’s forefront (2011: 6.8 million tonnes, see graph above).

This progress was mirrored by exports of the main commodity

Chinese factories produce, tomato paste. Figures from China Customs show that paste exports in 1995 were ‘a mere’ 59 477 tonnes. In 2011, they had reached 1.13 million tonnes – 18 times as much.

All in all, lots happened over three decades in the tomato family tree. Newcomers elbowed their way in, while others slowly faded to the edge – sometimes over the edge – of the global scene.

And, besides a few members that are now unaccounted for, and the usual issues that make life problematic – as in every family – new and old generations alike are still working overtime to keep the tomato world alive and kicking.

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SOURCE: WPTC *2013 forecast

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chinese processing TomaTo producTion Trend (‘000 Tonnes)

http://www.minutoverde.cl


industry guardian

BY DR KATRIN LANGNER

CONGRATULATIONS to FOODNEWS on its fortieth anniversary!

The Waren-Verein has worked with FOODNEWS right from its inception, since in the early years, FOODNEWS reported chiefly on the German and British markets. FOODNEWS was and continues to be an important source of information in our sector. Yet, at the same time, it is the mouthpiece of the trade.

Over the past 40 years, much has changed, although some things have remained the same.

In the ‘good old days’, an importer’s task was to scope out new product sources abroad and to lower living costs by using imports. The risks lay chiefly in the reliability of suppliers and exchange rate fluctuations, which had to be hedged against if possible.

Then, the EU – at the time still modestly named the EEC (European Economic Community) – introduced the sugar levy on canned fruit, one of the first so-called market regimes at the end of the sixties. This initially meant an incalculable sugar duty which changed on a daily basis – irrespective of whether the canned fruits actually contained any added sugar or not. A typical instrument of bureaucracy. The EEC’s administrative machine carried on regardless, taking on the dried

fruit sector with, for example, minimum import prices for sultanas. As importers expected, this instrument did not fulfill its intended purpose, either.

And so it continued, with numerous protectionist measures on the imports of canned mushrooms, for instance, and – to cut a long story short – with so-called trade defense measures such as anti-dumping duties. In recent years, European producers have pushed for anti-dumping duties on several imported products. Consequently, there have been and are duties on frozen strawberries from China, canned sweet corn from Thailand, and the recently re-introduced duties on canned mandarins from China.

We continue to hold the opinion that anti-dumping duties are not suited to agricultural products, because harvests are dependent on external factors and cannot be planned. Agricultural products are not comparable with technical products, whose production can be controlled at any time. Unfortunately, we have yet to find any sympathetic ears within the European commission with these arguments. In the event of duties being misinterpreted, the remainder must be paid by the member state. These financial burdens leave member states only a narrow leeway towards their national companies. On 22 March 2012, however, the European court ruled in favour of the import sector and declared the anti-dumping duties on canned mandarins from China to be invalid. The anti-dumping duty had to be repaid. This goes to show that it makes sense to continue fighting in the interests of free trade!

Brussels, with its European institutions, has become increasingly important over the years. The EU has grown to include 27 member states, soon to be 28 with the inclusion of Croatia. With the expansion of the EU, the internal market has grown. What was previously an import from a third country is now internal trade. This has simplified trade. Import duties are

gone, and the same legal requirements prevail to a great extent.

The demands on food are becoming more and more complex. The flood of laws grows daily. In the context of harmonisation, Brussels rules on maximum residue levels, import controls, labelling requirements and much more. But the growing influence of NGOs is not to be forgotten, either. Organisations such as Greenpeace and the WWF currently enjoy high esteem among consumers. The model of the engaged consumer is being increasingly replaced with that of the unengaged consumer who no longer decides what to buy, but rather is told what is good and healthy.

More and more, consumer protection is taking priority. Themes such as sustainability are coming into the limelight, too. Forty years ago, the word sustainability was unknown.

In the customs department, too, there have been serious changes since the terrorist attacks on the World Trade Centre in September 2001. Customs is now taking on tasks in the fight against terror. As a consequence, it has been necessary to register as an Authorised Economic Operator (AEO) since 2008, and since 2011, it has been necessary to submit summary entry or exit reports when importing or exporting.

One thing is certain: single importers would need their own legal departments if it weren’t for organisations like the

Waren-Verein and its European sister organisations. Associations are the only ones in a position to get to grips with this flood of information, which is changing on a daily basis, and to filter it according to the interests of its members.

The Waren-Verein has itself undergone some changes in 40 years. Of course, the association moves with the times, gets to grips with current themes and developments, and positions itself alongside authorities and institutions.

In the Waren-Verein’s specialist areas, the concentration of both the sector and its customers has progressed. On the other hand, one must take into account the role of technological developments. Imports of canned fruit and vegetables, which boomed from the sixties onwards, have started to face serious competition from frozen products. Over the past few years, another growing branch has been organic products. As a result, the Waren-Verein has not only founded a working group for organic products, but also has its own stand at Biofach-Messe in Nuremberg, the leading trade fair for organic produce.

A lot develops over 40 years and there are many changes, but much has remained. Processed fruit and vegetable products are as popular as ever among consumers and we are confident that this will still be the case in 40 years. We hope that FOODNEWS will continue to accompany the trade, both in Europe and worldwide.

HIgHLIgHTINg the importance of trade associations such as the Waren-Verein der Hamburger Börse in an increasingly complex, regulated trading environment.

tHe WareN-VereiN fougHt tHe early Battles oN tHe sugar leVy oN caNNed fruits.

PREVIOUSLY ATTENDED BY:HJ HeinzNestleMars Foods EuropeDSM Food SpecialitiesThe Morning Star CompanyLa Doria GroupConserve ItaliaCOFCO Tuhne Co. LtdItalagroCalifornia Tomato Growers AssociationAssan FoodsConserve ItaliaTamek Food & Concentrate IncOttogi Food CorporationD Nomikos SATetra PakSIG International ServicesOlam International LtdIngomar Packing Company Kagome Co LtdFenco spaIngomar Packing Company

Miller & Smith Foods IncJohn Bean TechnologiesConAgra FoodsSugalidalAll Joy FoodsWPTCPlus Four Company LtdOlam Middle EastIri Sementi s.p.a.JSC NC FoodcorporationConservas Vegetales de Extremadura S A UFerrera FoodAran PackagingBosch Boden Spies GmbHEssential Juices & Foods LtdAgromar ASCampil LDATat Konserve Sanayii ASNunhems Italy SRLFomento da Industria do Tomate SA

...and many more!

6th Global Conference

Delivering Growth by Capitalising on Global Opportunities for Production and Consumption

For more information visit www.ftf.agraevents.com

forum 2013

Join leaders from across the supply

chain from all over the world

“Very good global perspective of the market and future terms”Antonio Coutinho, Factory Manager, Fomento da Industria do Tomate SA

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14-16 May 2013, Rome

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