Chris Brook-Carter

The food business blog from Chris Brook-Carter

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Tech advances make work a home from home

28 Sep 2011 12:38

Launch shows for new software applications into the food and drinks industry are, I must admit, not a regular entry in my diary.

However, a number of factors combined to make a visit on Monday to see the US-based group Infor unveil its latest ERP (enterprise resource planning) product an intriguing use of time.

The first is the continued economic woe that characterises the climate most companies are operating in. Cost-cutting and efficiencies are at the heart of initiatives to raise the bottom line and the more you speak to companies about these programmes, the more you'll hear about efforts to install new systems in the search for a competitive edge. The second was that a long-term partner of just-food, Lawson, had recently been acquired by Infor, and this was the first chance to see where this newly-enlarged group was heading.

Finally, I must admit to a certain geekish fascination with digital information platforms, something, I hope you'll agree, sits comfortably with my position as publisher of a food information and intelligence service.

A select group of potential customers from across the food and drinks industry heard much about the speed and flexibility of the new product from presentations by Duncan Angove, Infor's president for products and support and Massimo Copoccia, its senior director for product management. Undoubtedly, some of the technicalities were above my pay grade. But, what struck me most were the efforts made by the company to deliver a user experience akin to consumer applications such as Twitter and Facebook on a B2B platform.

It is symptomatic of the way technology in business is changing. Usability has been a low priority for years in software systems and digital tools at work. As long as the data, information or end result stood up, the way in which it was delivered was secondary. As long as it was functional, it was good enough.

But the extent to which Facebook and its ilk have pervaded almost every aspect of our lives and the premium placed on the user experience by tools such as the i-Pad have changed the way we view technology, even in the workplace.

"Enterprise software users want to work the way they live," said Angove. "They can see what's going on in the consumer world, where social media, collaboration and mobile devices combined with beautiful design, ready-to-use applications and agile technology have substantially improved the speed, value and productivity of the consumer experience. With Infor10, we are delivering a consumer-grade user experience that begins with a beautiful user interface."

Speed of information pertinent to the user, Twitter-style newsfeeds from across the organisation and the ability to monitor what is said about your brand on the world's social networks were just three of the examples of applications mentioned in Angove's presentation.

None of these are revolutionary to any regular user of digital technology at home, but they are indicative of a sea change of expectation of what technology should deliver at work. Functional is no longer good enough.

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Krafty Peltz eyes second bite at US food giant

30 Jun 2011 15:56

I suspect there will be mixed feelings amongst the Kraft Foods leadership this morning to news that Nelson Peltz is once more on the share roster. The news pushed Kraft's share value north this morning by some 2%.

Peltz is no stranger to Kraft and has held shares within the food giant before. He has a reputation for ruffling feathers in the food industry, whether it be Cadbury or HJ Heinz and his presence can engender confidence in the market.

Kraft's senior management last saw Peltz in 2007 and later that year the company sold its US cereals arm and acquired Danone's biscuits business. Peltz's presence also seemed to have an effect on the composition of Kraft's board, with independent directors soon taking up most of the seats around the boardroom table.

But his presence can also be divisive, with the 2006 battle with the Heinz board an acrimonious and public affair.

Peltz's modus operandi is to buy shares in food manufacturing giants that he believes need to change strategy. It's as yet unclear where he sees this latest investment going. But what will be fascinating is that this second foray into Kraft could bring him head to head with that other investing giant Warren Buffett.

 

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Weather or not we will see a recovery

04 Feb 2011 15:14

There was a time, when covering the financial performance of the world's FMCG groups, that I got fed up of reading statements that blamed weak sales performance on the weather.

"It's too wet to sell sausages." "It's too hot too sell soup." "It's too cold to sell ice cream." I just never really bought into the idea that 21st century sales and marketing strategies could be floored by something as primeval and ad hoc as the climate. Don't get me wrong, I could see the logic to some extent. But this is the UK, not flood-ravaged Queensland. And executives seemed so keen to point to average rainfall figures that, in reality, meant you forewent the flip-flops before heading to the shops anyway and exclaimed: "See, there you go. We never stood a chance."

That has all changed in the last two years. The winters of 2010/11 and 2009 have been so spectacularly awful here in the UK that it has become a kind of sport to see which brand, company or category has become the latest to fall foul of the elements. But even now I have tried to maintain a healthy scepticism to its effects. I am, I suppose, a financial climate change denier.

So, when GDP figures here in the UK for the fourth quarter showed the country's economy had slipped back into negative growth, I was not convinced by arguments that the snow was the trigger for a one-off blip. "Here we go," I proclaimed, "it's going to be a double dip!"

So, it is a with a degree of humble-pie - which I am happy to eat for once - that I read the latest indicators that the weak recovery is still underway in 2011 Q1. The service sector rebounded strongly in January, according to the latest purchasing managers' survey from Markit/CIPS. This follows equally promising signs from the manufacturing industry last week.

And, of course, January in the UK has been as grey and un-noteworthy as it could possibly be. The lesson is, I guess, that you under-estimate Mother Nature at your peril.

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One poor harvest from chaos?

11 Jan 2011 15:20

 

We are only one poor harvest away from chaos, a leading food analyst predicted this week. Coming in the same week as the floods in Australia, which, aside from awful social affects, will devastate the region's wheat harvest, it has thrown the spotlight quickly back onto rising food prices once again.

Meanwhile, the CEO of Carlsberg used an interview in the British media yesterday to attack the hedge funds for artificially increasing the cost of raw materials. The practice of short-selling in particular, he argued, is making an inflationary situation worse.

Presently, agricultural commodity prices are almost 50% higher than they were this time last year. A series of weather disasters have grabbed the headlines. There has been a severe drought in major wheat-producing countries such as Russia and Ukraine, whilst ironically it has been floods in Colombia, Brazil and Vietnam that have affected the production of coffee and sugar. But, food supplies still remain at historically high levels. The reality is that it's demand at the heart of the long term trend, with a booming middle class in India and China eating more meat, which produces a hike in demand for grain for animal feed.

Financial speculators have latched on to this and the attractiveness of commodities as an investment vehicle, in otherwise uncertain times, has boomed.

All combined, the potential is a crisis of epic levels. Stable rice supplies and prices have shielded the world's poorest so far. But it's what happens should there be an even more serious failure in the world's harvests that worries watchers. Robert Zoellick, president of the World Bank, has warned that the rising prices are "a threat to global growth and social stability".

In this environment, it is intriguing to hear corporate CEOs and poverty campaigners both play the blame game with regards to financial speculation in the market.

The role of the hedge funds in exacerbating food prices has been criticised before. But the comments from the likes of Zoellick and the very real possibility that we'll see social unrest and food shortages for some of the world's most vulnerable will place the practice under scrutiny like never before.

Looking at the UN figures, there is a clear hike in the price index in July last year when money flooded into the commodity market.

"The real reason for the large and rapid increase in wheat price lay in banks trading in exchanges in Chicago, US," an article on the website Share the World's Resources recently argued. "Away from the wildfires of Russia, hot money flooded into the wheat markets in July 2010, betting on an increase in prices."

It continued: "The ugly face of banks and hedge funds speculating on the price of food had raised its head once again."

Ultimately, the money being piled into commodity trading remains a symptom of the underlining trend rather than a de facto cause. But it's hard not to believe that short-selling on agricultural commodities doesn't exacerbate the problem. The very real prospect of the terrible social consequences of spiralling costs gives the calls to rein in these trades a moral legitimacy regardless of whether it will curb the long-term issues.

 

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We'd like to wish you a great 2011, but fear it may not be that simple

05 Jan 2011 17:12

Welcome back from a long Christmas and New Year break. As always at this time of year, the media is awash with predictions about the 12 months ahead. Who are we to buck against this time-honoured trend. So each of the just-food team has gazed into our proverbial office crystal doughnut and given his or her top tip of the year. Maybe it's something to do with the holiday hangover, but it's looking a tough year ahead...

  • Little in the way of economic recovery: It would be nice to report on the potential for growth, but sorry, we just don't see it yet. Dangerously high deficits and the fiscal stimulus pedal to the floor, but still no signs that industrial output is recovering. The threat of a double-dip recession has receded but it's far from gone.
  • PE to take back seat to industry buyers: Despite a continuing lack of credit, some momentum will return to the M&A wheel. Rather than being driven by private equity, however, we will see a return to the old-fashioned trade deal, as business logic, rather than short term financial gain, shapes strategies
  • Continued globalisation of retail: The internationalisation of food retail continued in 2010, albeit at a much slower level than in previous years. With financing easier to come by this year, and with deal valuations improving, there is likely to be more activity as buyers and sellers find conditions more favourable. Retailers, particularly in Europe, face mature markets at home and overseas expansion is certain to be a key way to expand.
  • US retail scene will consolidate: A&P going to the wall, speculation of possible private-equity interest in Supervalu Inc and the failed attempt to buy Casey's last year could be seen as a precursor to events this year. There remains uncertainty about how the US grocery sector will fare during 2011, amid still-high unemployment and weak consumer confidence, but what is becoming increasingly clear is that the landscape is overly fragmented.
  • Fears will grow that the East is overheating: A recession, which we may or may not be coming out of, began to be seen as purely a Western phenomenon by the end of the year. Growth in the economies of the East remained stubbornly strong. International businesses, quite rightly, diverted investment that way and results from the emerging economies underpinned many of 2010's success stories. But, fears remain that all is not well. Vietnam, pundits believe, has problems with its banking system, which may have a widespread impact in the region. Worse still, China and India are over-heating, with a serious potential for stagflation. The food industry will play a pivotal part in any crisis, as rising prices bring pressure on governments to cool growth.

 

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The door closes on just-food's open house

03 Dec 2010 16:44

Wednesday morning brought to an end just-food's first-ever open house. It was a rare opportunity to demonstrate to those in the food industry who are not already full members of the site what they have been missing.

And the food industry has certainly played its part, allowing us to show the service in full flight, by announcing mergers, acquisitions and financial scandal in a jam-packed 14 days.

just-food was ten-years-old earlier this year. At its conception in 2000, it was at the very forefront of news and intelligence publishing within its industry. Over the last decade, a number of competitors and alternative information sources have sprung up, many of questionable quality.

As readers will have recognised, this year has witnessed a major relaunch of just-food. Not only was a new website delivered, but it was marked the culmination of a year's work on our content strategy. Recognising that basic news on the industry has become something of a commodity, just-food now delivers a full industry intelligence service. Breaking news is still a core part of the product, but just as important now and far harder to find on "free" services is the insight to put that news in context. Internally, we've coined the phrase i3 - Information, Insight and Intelligence.

If you have been part of our open house, I hope you have seen this approach in action a number of times in the last fortnight: whether it be the Greencore/Northern Foods merger, the race to buy yoghurt brand Yoplait or Carrefour's recent financial woes. If you have, I thoroughly recommend you take this opportunity to give our full membership a go - we are confident you won't be disappointed. 

To find out more about joining just-food, click here.

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A 60-day mash-up

29 Nov 2010 17:00

In these days of health-conscious consumers and a vociferous obesity lobby, brand owners working in a huge number of sectors have had to defend their products from claims they are the root of all health evils. Defend them they do though, often very vocally, some more convincingly than others.

I am sure there are few marketing managers, CEOs or brand directors, however, that would go as far as to eat nothing but the products they are selling for 60 days on the trot.

But this is what Chris Voigt, executive director of the Washington State Potato Commission, has been doing in an effort to counter the idea that potatoes are unhealthy and instead are a good source of fibre, potassium and vitamin C. I have to say, I am a little surprised that the noble spud needs to defend itself like this, but the fightback by this supporter has been an Herculean effort.

Voigt has eaten nothing but 20 potatoes a day since 1 October. There been some variety - baked, chipped, boiled, steamed, mashed, fried - but otherwise, he hasn't even added cheese or milk to his mash.

He hasn't gone as far as to recommend this as a diet for anyone. He has, however, been keen to shout about the health benefits of his spud diet. A mid-way "weigh-in" returned these results:

Beginning weight: 197 Midpoint weight: 189
Beginning blood glucose: 104 Midpoint blood glucose: 92
Beginning cholesterol: 214 Midpoint cholesterol: 162

With good justification, the stunt has also seemingly garnered an impressive amount of column inches across the globe. "It's been crazy," Voigt said, "and totally unexpected. It's not like potatoes are some exotic fruit or vegetable."

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A sad day, but a bootiful legacy

26 Nov 2010 17:20

Bernard Matthews died last night, aged 80.

With some of the negative press the company attracted in the last few years, it's easy to forget what this entrepreneur of the food industry achieved. He began his business in the 1950s in a one-bed flat but in 2010 the company will farm 7m birds.

His legacy is not only a company that is still family run, and one from which he only stepped down as chairman in January this year, but a hand in modernising the food industry. His company said today that it was a trip to the US in the 1950s that prompted his vision for the freezer revolution which would transform the demand for oven-ready turkeys.

As his business developed, Matthews became a figurehead for the poultry industry, both at home and abroad, and in 1965 he was invited to the Soviet Union to advise Kruschev on modernising the Russian turkey industry. As chairman and president of the British Turkey Federation he presented a Christmas turkey to Harold Wilson and his wife on the steps of No. 10 Downing Street - something he later repeated for Margaret Thatcher (who insisted on paying him for it), and to John and Norma Major and the Blair family.

But he was very much a public as well as industry figure, and, his TV commercials to describe his turkeys, where he coined the famous ‘Bootiful', are among the most memorable of the 1980s.

The company has not escaped controversy or disaster. In 1953 almost everything he owned was destroyed in storms. More recently, the company has fallen foul of the healthy eating lobby after celebrity chef Jamie Oliver criticised turkey twizzlers, one of the company's key product lines.

It also was hit hard by the 2007 outbreak of bird flu, when it was at the centre of a scandal over the origin of its meat. It always denied it had broken rules and escaped any prosecution.

However, the company has made a strong recovery since those difficult years. Matthew's death has been front page news today in the UK and even made the BBC News, an extraordinary feat for a food manufacturing figure. The company's longevity, despite its setbacks, is a testament to his position on family tables around the country for so many years.

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It's an open house at just-food

17 Nov 2010 14:52

There is an ongoing debate within the media at the moment about the direction of online publishing, in particular the virtues of 'paid for' and 'free to access' content. It dominated discussions at the Association of Online Publishers Summit I attended last month and has been given added edge in the last 12 months by the decision of UK newspaper The Times to take all of its journalism behind a paywall, whilst competitors such as the Guardian and the Daily Mail remain free to view.

It has been our policy at just-food and its sister sites to charge for our content for over eight years now. It is not a strategy that we make any apologies for. We firmly believe that quality journalism, research and analysis is something worth paying for. Moreover, like any quality product, it requires significant investment in order to meet the demands of consumers - our readers.

There are alternatives out there to just-food, many of which are free to view. But, we are confident that the extra levels of investment our subscription model allows us, make it the leading platform for food manufacturing and retailing information, insight and intelligence. Access to major news stories on the food industry are available all over the web these days, as information becomes increasingly accessible. But, it is the news stories that a dedicated team of industry experts can uncover, which you won't get elsewhere, that places our readers at the top of the game. And, its our daily feed of analysis and comment on how these events will shape the industry and your businesses that sets just-food apart from more generic rivals.

As an illustration of our confidence, just-food is opening its doors today for two weeks, allowing a unique opportunity for non-members of the site to judge our service for themselves. You'll get all the access to our daily news, analysis and comment that full members do, as well as a one-off give-away of food industry research worth over £1000.

All you need to do is follow this link.

Don't forget, that at any time during the two weeks, or indeed after, we would love to get your feedback.

 

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Chinese pull no punches over melamine scare

10 Nov 2010 14:40

Every now and then there is a story that reminds you of the scale of the food industry's impact on the world at large. When you are caught in the middle, often writing about the nuts and bolts of the sector, it's easy to forget its reach into the socio-political sphere.

As David Cameron tours China - with leading food industry representatives in tow - he has been under enormous pressure from the media at home to bring the Chinese authorities to task over their human rights record. He has so far played things safe - trade not politics has been the mainstay of the discussions. He did address an audience today on the value of a free and fair democracy, but he has carefully stayed clear of criticising his hosts.

However, as if to test their guest's resolve, the Chinese authorities have already prevented Mo Shaoping, the lawyer for Nobel prize-winning Chinese dissident Liu Xiaobo, from boarding a plane to London.

And then today (10 November), one of the greatest scandals the food industry has ever witnessed reared its head again in China to turn up the heat on Mr Cameron. A man whose five-year-old son was poisoned during China's toxic milk crisis of 2008 has been jailed for two-and-a-half years after he set up a website to warn other parents about the disease.

As a report in today's Daily Telegraph explains, Zhao Lianhai, a 38-year-old former employee of China's Food Quality and Safety authority, created the site in 2009 after more than 300,000 Chinese toddlers were poisoned, and at least six killed, by milk that was laced with melamine, an industrial chemical that made the milk appear more wholesome.

Last November, he was arrested by the police and then charged in March with "creating a disturbance".

Two men were executed last year for their involvement in the poisoning whilst Tian Wenhua, former chairman of the Sanlu Group, the dairy firm at the heart of the scandal, was sentenced to life in jail. Three of her colleagues were given sentences ranging from five to 15 years.

This latest development is sure to prove uncomfortably timed for the UK delegation, but it once again illustrates the food industry's ability to shape the political agenda.

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