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The food industry in 2010: A retrospective

20-Dec-2010

As 2010 draws to a close, our journalists look back at the issues that have topped agendas across the food, beverage and dietary supplements industries in the last 12 months. Commodity prices, Bisphenol A, obesity, health claims, safety regulations, and more…

Sustainable supply chains

Amid new concerns of rising food prices and serious consideration on how to feed a growing world population, the food industry has stepped up its efforts on sustainability. Major progress has been made towards transforming the supply chains of some vital ingredients, such as palm oil, with major companies – and even the whole of the Dutch food industry – pledging to switch to certified oil. New supply chains, such as stevia, are being developed with sustainability issues built in.

Meanwhile, the European Sustainable Consumption and Production (SCP) roundtable has swung into action, identifying gaps in the scientific assessment of sustainability at various stages of the food supply chain. Some industry commentators have also expressed concern at the proliferation of ethical and sustainable schemes and labels, which may cause competition between schemes and have negative impacts for small producers.

Jess Halliday, FoodNavigator

Health claim wrangles

2010 saw health claims continue to dominate the European functional foods and food supplements space. The European Food Safety Authority’s rejection of reams of nutrition science backing claims has remained at an alarmingly high rate for an industry that requires health claims to exist. Vitamins, some minerals, omega-3s and sterols/stanols have performed better, but pre- and probiotic players are yet to receive a direct positive opinion leaving the sector in an increasingly fraught position. Some are suggesting that like botanicals, the process is inappropriate for them, and should have their science assessed some other way.

But regular readers of NutraIngredients will know nutrition science continues to evolve and proliferate – much of it finding positive nutrient-health benefit links. Question is: Can the paradigm in which that research is taking place ever impress the 21 panelists and their advisors that reside on EFSA’s health claim panel?

And if it doesn’t, will a cornered industry force the whole thing into the courts?

Watch this space.

Shane Starling, NutraIngredients

Takeover talk

The knock on effect of Kraft’s £11.5bn takeover of Cadbury in February grabbed a huge chunk of the headlines in 2010. The buyout drew rancour from both politicians and the UK public, particularly when Kraft reneged on a pledge to maintain 400 jobs and production at Cadbury’s Somerdale site. And the process led to calls for legal changes to make takeovers of UK companies more difficult.

However, the consolidation trend in the confectionery industry that was expected following the Kraft/Cadbury deal did not emerge. In the past nine months, sweet and chocolate manufacturers’ focus has been on long-term plans to expand production capacity in emerging markets organically and enhance the presence of existing brand portfolios using methods such as distribution alliances, with Russia, India and Brazil proving fertile ground.

Jane Byrne, ConfectioneryNews.com

Dairy stability

Market stability has returned in 2010 following the crash in milk producer prices last year, leaving breathing space for the industry to prepare for further volatility. With access to financing easier, processors have started to explore consolidation as a means of reducing exposure to volatile commodity markets. M&A can also offer access to profitable growth markets as PepsiCo and Danone are both hoping to demonstrate with their recent Russian acquisitions.

It is not just the industry itself that has been preparing for a potentially more volatile future. With EU quotas soon coming to an end, the Commission has been working on measures to ease the transition and address any imbalance in power between processors and producers. Much political lobbying and jostling surrounds this work but the likely direction of it is becoming clearer. The first Commission proposals on contractual relations have just been published and we can expect the remainder to come through next year.

Guy Montague-Jones, DairyReporter.com

Mixed year for drinks

2010 has been a mixed year for the beverage industry, marked by continued growth in emerging markets and continued struggles in developed markets. Some confidence has returned and investment is generally on the rise as can be seen from the improved financial fortunes of machinery suppliers in recent quarters. Beverage companies have moved enthusiastically into niches offering solid growth opportunities in 2010. For example, in the US, big names have made investments in coconut water, ‘the natural sports drinks’, and, in European markets, US energy drinks have made an entrance. Meanwhile, investment in emerging markets remains high and international brands are now paying increasing attention to local tastes and preferences.

Guy Montague-Jones, BeverageDaily.com

Bisphenol A

The frenzied debate over the continued use of bisphenol A (BPA) in food contact materials was without doubt the highest profile issue in the packaging industry in the last 12 months. The year kicked off with the US authorities unveiling a five-year review of the chemical, while the European Commission’s decision to outlaw the substance in polycarbonate baby bottles at the end of 2010 appalled industry – particularly as the European Food Safety Authority had appeared to back BPA just months earlier.

Rory Harrington, FoodProductiondDaily.com

Pure and healthy confectionery?

There was a real buzz at HIE in Madrid this year around 'healthy' confectionery, a bit of a misnomer in the past but now (given alternatives to sucrose such as Stevia Rebiana, functional sugars, natural colours and the clean label thrust) it seems real alternatives are in the offing for consumers, with associated benefits for diabetes sufferers, tooth caries, etc.

The recent ECJ decision against Italian chocolate makers' use of 'puro' (pure) as a sales name was also interesting: it highlighted the ongoing tension between local passions surrounding food and the need to comply with uniform regulations, which arouses frustration and acceptance of the benefits of a common market for products in equal turns.

Ben Bouckley, FoodNavigator.com

Flour fluctuations

The hike in wheat commodity prices over the past six months has been a significant challenge for the bakery and snacks manufacturing sector, with industry analysts predicting a sustained increase in wheat commodity prices from now until 2015. Such commentators have noted that a renewed focus on added value bakery and cereal lines would put brand owners in a far better position to pass on price increases to consumers.

Furthermore, insiders observe that a shift to private label bakery manufacturer could internalise some of the commodity-induced price increases through economies of scale linked to mass production.

Jane Byrne, BakeryandSnacks.com

Views from the United States:

Reinforcing DSHEA

The appointment of Margaret Hamburg, and her commitment to strongly enforce DSHEA, really came to the fore in 2010. The agency is baring its teeth and clamping down on the dietary supplements industry in a move that has been welcomed by the major trade associations. This culminated in the announcement last week that FDA in cracking down on products tainted with sibutramine, steroids and other substances. To read our coverage of this, click here .

Similar crack downs have come from FTC on claims being made by companies for both dietary supplements and functional foods. Increased regulatory enforcement is positive, and will ultimately reassure consumers on the safety and efficacy of these products. Expect more in 2011.

Stephen Daniells, NutraIngredients-USA.com

Beating obesity

The impacts of an increasingly obese America weighed heavily on the food industry in 2010. This year’s new Dietary Guidelines for Americans are expected to address the issue directly for the first time, and First Lady Michelle Obama launched the Let’s Move campaign, with the stated aim of ending childhood obesity within a generation.

The food industry backed Mrs. Obama’s anti-obesity drive from the start: 16 major manufacturers united behind the Healthy Weight Commitment Foundation’s pledge to cut 1.5 trillion calories from the food supply by 2015, and the beverage industry responded with new calorie-labeling initiatives.

Earlier this month, the First Lady’s work in this area culminated in the passage of a childhood nutrition bill – the Healthy, Hunger-Free Kids Act of 2010 – which the industry has also supported.

Mrs. Obama urged the food industry in March “to move faster and to go farther” in terms of product reformulation, nutrition information, and marketing. In 2010, the food industry started to do just that.

Caroline Scott-Thomas, FoodNavigator-USA.com

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