News and Information

Agri-Food News from Germany, Austria & Switzerland

Volume Sixteen / Number Four - October 2006

OPPORTUNITIES

MA-04/06-01 An Austrian company is looking for Canadian exporters/processors of organic soybeans. Special products in question: soybean flour, coarse soybean meal toasted or roasted. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number MA-04/06-01.

LP-04/06-02 A German leather processor is looking for Canadian suppliers of salted and/or dried bison hides. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number LP-04/06-02.

RE-04/06-03 A German importer is looking for Canadian suppliers/exporters of wild rice. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number

AA-04/06-04 A German importer of dry food products and beverages is looking for Canadian producers/exporters of all kinds of dry- and non alcoholic beverage products, e.g. baking mixes, pan cake mixes, bbq- and other sauces, chutneys, peanut butter, cookies, canned beverages etc... Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number AA-04/06-04.

DE-04/06-05 A German health food distributor is looking for Canadian exporters/producers of organic and conventional oats. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number DE-04/06-05.

ACTIVITIES 2006

August

Incoming Meat Journalist and Meat Buyer to Alberta
Aug 20 - 27, 2006 (Alberta Agriculture and AAFC)

Canada-Food-Promotion at Julius Meinl am Graben GmbH, Vienna, Austria, Aug 20 - Sept 30, 2006, www.meinlamgraben.at

September

Canada-Food-Promotion at KaDeWe, Berlin, Germany
Sept 17 - Oct 01, 2006, www.kadewe.de

InterMeat, International trade fair meat, cold meat and sausage, üsseldorf, Germany, Sep 24 - 27, 2006, www.intermeat.de

InterCool, International trade fair frozen foods, ice cream, refrigeration technology, Düsseldorf, Germany, Sep 24 - 27, 2006, www.intercool.de

October

SIAL, International food trade fair, Paris, France, Oct 22 - 26, 2006, www.sial.fr

November

EuroTier, international exhibition for livestock & poultry production and management, Hannover, Germany, Nov 14 - 17, 2006, www.eurotier.de

HIE - Health Ingredients Europe
International trade fair for food ingredients, Frankfurt, Germany
Nov 14 - 16, 2006, www.hi-events.com

ACTIVITIES 2007

January

International Green Week, Exhibition for the food industry and agriculture, Berlin, Germany, Jan 19 - 28, 2007, www.gruenewoche.de

ISM, International trade fair for sweets & biscuits, snacks, Cologne, Germany
Jan 28 - 31, 2007, www.ism.de

February

Fruit Logistica, International trade fair for fruit and vegetable marketing, Berlin, Germany, Feb 06 - 10, 2007, www.fruitlogistica.de

BioFach, World organic trade fair, Nürnberg, Germany
Feb 15 - 18, 2007, www.biofach.de

March

INTERNORGA, International trade fair for the hotel, restaurant, catering,baking and confectionery trades, Hamburg, Germany
Mar 09 - 14, 2007, www.internorga.de

SIAL Montreal, International food and beverage trade fair in Montreal, Canada, Mar 28 - 30, 2007, www.sialmontreal.ca

CONFECTIONERY

'Healthy' confectionery boosts market

New opportunities for health-focussed products in the confectionery industry have bolstered the market, which is estimated to increase by 16 per cent in the next four years to more than €115bn.

According to a new market report, Global Confectionery 2006, by researchers Leatherhead Food International, the driving force and most innovative area within the confectionery industry has been health - as evidenced by Mars' decision to set up a health and well-being unit.

Published this month, the report notes that new product development has centred on creating healthier options to long-established favourite products such as gum and chocolate. The report stated: "In spite of rising levels of obesity, consumers in general are also becoming increasingly aware of the role their diets play in maintaining levels of health and well-being."

Sales of chocolate last year were worth €54bn, making it the largest confectionery sector. Demand for dark chocolate has increased, following evidence that it is better for heart health than milk or white chocolate due to its high concentration of natural flavanol and antioxidants.

And it's not just chocolate - health concerns have impacted on development across the sector with sugar-free gum and medicated sweets on the increase with Proctor and Gamble launching Red Energy bonbons which contain guarana, caffeine and taurine.

Gum marketed under the claim of having dental health benefits has proved popular as has confectionery fortified with vitamins and minerals. In 2005, Wrigley launched its new Airwaves gum, fortified with guarana, menthol and green tea onto the French market and extended it to the UK at the start of the year.

Low fat and additive-free products have been prevalent on the market and nutritional ingredients such as green tea, seaweed and natural sugar alternatives have grown in use, especially in Japan, where Nestlé have released a Green Tea Kit Kat bar.

Other dominant trends in the market are the preference for convenience, with more 'eating-on-the-go' products, an emphasis on seasonality as chocolate is increasingly seen as a luxury purchase and greater moves towards targeting an adult audience in the face of falling birth rates in more developed areas of the world.

Packaging developments in 2005 reflected the need for convenience in the sector with handy sharing bags and smaller, more portable containers making an appearance.

Source: Article published on July 25 on www.nutraingredients.com

FRUITS

German blueberry harvest

Due to unfavourable weather conditions, the supply of German blueberries will be smaller than expected. Despite an increase of the cultivation area of 200 hectares to a total of 1,800 hectares, the Bonn-based market experts of ZMP do not anticipate the record amount of 10,000 tons to be realized - only about 8,000 tons, i.e. the same volume as in 2005.

Source: Lebensmittel Zeitung No. 32, August 18, 2006

RETAIL MARKET

Own label food sector set to rocket

Research analyst IGD claims that own label food and grocery products will account for more than a quarter of the market (26.8 per cent) across Europe within four years.

By 2010, Europeans will be spending around €430bn on supermarkets own brands, up 45 per cent from €298bn. And this own brand revolution is increasingly creeping eastwards. According to IGD, own label already accounts for £2 of every £5 spent in UK supermarkets, and is set to continue growing across Europe.

"The UK currently leads the way in terms of food and grocery own label," said Jonathan Gunz, senior international business analyst at IGD. "The future growth in Europe will come from Russia and the rest of Eastern and Central Europe, where penetration levels are currently fairly low despite relatively large grocery market."

As a result, private label popularity is beginning to seriously challenge the reign of famous brands. Branded products command a premium price for manufacturers compared to the foods they produce for private label retailers, piling the pressure on iconic brands to compete or lose valuable market share.

"Many marketers say that those brands in the middle, not premium or economy, will suffer as they are neither cheap nor groovy. And for those manufacturers brand erosion is something very real," Datamonitor consumer analyst Matthew Adams recently told FoodandDrinkEurope.com.

It may therefore be tempting for European producers to take on more private label orders so they can operate across both sectors and take advantage of the wide appeal of private ranges. In the meantime the growing private label market share continues to hasten brand erosion.

Indeed, IGD believes that the trend towards own label is inexorable. "Shoppers in Western Europe have seen for themselves how own label is taking up more and more shelf space," said Gunz. "Categories like healthy eating, premium, value, organic and lifestyle have helped retailers own brands become much stronger. The same is likely to happen in the emerging markets of Europe and beyond."

The following table details Europe's top 10 private label markets (2005 figures):

Source: IGD estimates

Source: Article published on August 29, 2006 at www.nutraingredients.com

Private label market share continues to rise

The international trade show "World of Private Label", organised by the Private Label Manufacturers' Association (PLMA) and held in Amsterdam, continues to grow in significance. This year a record-breaking 3,000 exhibitors from 60 countries took part in the show, which covered 27,000 m2 of net exhibition space.

This development mirrors the increasing private label market share throughout Europe, says PLMA president Brian Sharoff. The show, now in its 21st year, welcomed 100 first time exhibitors. All in all there were 30 national and regional stands, with Wales, Egypt and Slovakia represented 2006 for the first time.

According to the organisers 7,000 buyers, category managers and department heads serving Europen retailers and merchandisers had travelled to the Amsterdam show in May in order to find out more about current private label trends and concepts. This is 1,000 more than the previous year.

Numerous confectionery manufacturers present

Not only the "traditional" private label food range has been growing recently; the number of non-food products has also been increasing. Numerous confectionery manufacturers make use of the show to display their private label competence.

At the PLMA "Idea Supermarket", a special exhibition held during the PLMA show, new private label projects and packaging from all over the world were on display. Hundreds of items form leading retailers in Europe, the USA and elsewhere were showcased.

New ideas, new retail trends

The "Idea Supermarket", which was introduced last year, was considerably expanded this year to include even more food and non-food articles.

In addition, an attractive seminar programme provided the very latest information and data. Jeff Freeman, PLMA Research Director, previewed the International PLMA Yearbook, compiled by ACNielsen.

Market share data from the three additional countries - Portugal, Switzerland and Austria - has been included for the first time, making the 2006 yearbook the most comprehensive ever. The data contained in the yearbook - soon to be published - clearly shows that there were considerable private label market share gains across Europe last year, said Freeman.

Pieter Peerlings, a leading analyst at Deloitte, spoke on the topic "Retailing in Europe: opportunities and challenges". He described changes in the retail business and discussed the significance of private label brands and flexible supply chains in achieving success.

The final talk focused on Russia - a market which may well possess the biggest potential for private label. Alexey Filatov, MD of BBPG, spoke on the subject "Market profile: retailing and private label in Russia". He examined the current situation in Russia, a country characterised by rapid change, and described what this meant for private label growth there.

Great demand for private label in Russia forecast

Total retail sales in Russia stand at ¤300bn, with ¤130 bn of that sum accounted for by food. The Russian market was growing at a double digit rate every year, said Filatov. In urban centres large scale C&C's and hypermarkets were booming; market leaders were now aiming to expand into regional areas.

The private label sector could benefit from this rapid growth, said Filatov. Private label sales were currently worth ¤2.3 billion according to Filatov. An actual ACNielsen report that private label accounts for less than 1% of overall sales and 4% of sales at the 28 leading retail chains in Russia.

Alexey Filatov expects private label market share to total between 30% and 40% within three years. In support of his prognosis Filatov quoted several retailing executives from leading chains that are in favour of private label and have already announced plans for their own projects.

Source: SG Sweets Global Network 7/2006

Prices of raw materials soaring

Harvest losses and strong demand raise raw material prices

The food industry suffers from clear price increases for agricultural raw materials like pork, fruits, vegetables and potatoes. The reasons are harvest losses after the heat wave and the high demand during the BBQ season and throughout the Soccer World Cup. Besides, producers are also facing high energy costs.

The seven-week heat wave in Germany and the increased demand due to the Soccer World Cup and the BBQ season have lead to shortages and often significant price increases for agricultural raw materials. Consequently, the German Food Industry Association (BVE) expects a marked price increase for food products. However, due to the strong competition, the German Food Retail Association does not see much space to raise prices. The food industry cannot compensate the cost increases through cuts in other sectors, explains BVE. Increased energy prices are another burden for the industry which will be forced to raise its sales prices for the food retail trade.

Prices for slaughter pigs have increased by more than 20 percent during the last months, prices for certain fruit varieties rose by up to 90 percent. A meagre potato harvest with losses of up to 30 percent and low quality will lead to rising potato prices.

In many sectors of the food processing industry, prices for raw materials account for the largest share of the production costs, explains BVE. Company's yields are thus very sensitive to increasing prices for raw materials.

Source: Lebensmittel Zeitung No. 34, August 25, 2006

The best of the last five years

Germany's 100 biggest restaurant chains/companies rang up an additional 4.6% in sales revenues in 2005 (2004: +3.9%; 2003: +0.4%; 2002: -0.9%). Out of the doldrums at last! With growth of over 5% in some-store sales, market-leader McDonald's posted above-average results. Two estimated, triple-digit cases of growth - Resto-Lutz and Do & Co: both come from Austria and both are newcomers to the ranking (52nd and 67th place). And the outlook for 2006? Undiluted optimism. Altogether, the top 100 generated revenues of EUR 8 billion with over 15,500 outlets.

2005 was noticeably better than the year before. In many cases, companies reported not only having met their revenue targets but also having exceeded them. Growth really set in during the second half of the year. It seems we have definitely left the Valley of Tears - 2002 and 2003 were the worst years since the end of the eighties. The mood in the sector has not been so good for a long time. This year, 86% of companies polled expect to increase their revenues over the previous twelve months. A few headlines to start with:

• Hardly any shifts among the top 10 or, come to that, among the top 20. Ikea has moved up to 9th place (double-digit growth rates 13 times over the last 15 years). Since 1995, the revenues of the top 10 have risen by a total of 31%.
• 4.6% more revenues for the top 100. In other words, the leading companies did much better than the broad mass with the German Statistical Office reporting a nominal minus of 1.9% for the sector as a whole (last year: -3.3%). Thus, there were, once again, more structural changes per brand, per system and per size - per multiplied formula for success. Mark you, Germany still has very many small businesses.
• In terms of revenues, fast food accounts for almost 50% of the apex of the market. When it comes to growth in the individual segments, leisure leads with 8.9% (2004: +9.5%). At the other end of the scale comes travel with +2.6% (2004: +2.1%). For the second time running, not one of the five segments ended the year with a minus.
• 13% of the top 100 companies regard themselves as global players. And they generate 52% of the to-100 revenues - mainly in the fast food and travel segments (2004: 12%/51%). At the other extreme, 16% operate solely in a single city. They account for 3% of the top-100 revenues. Between the two poles comes a broad spectrum of companies active on a regional to multinational basis.
• The leaders in terms of revenues in 2005 were McDonald's with +EUR 119.3 million, Burger King with +EUR33.8 million and Subway with +EUR 28.0 million. In relative terms, the rating looks as follows: Do & Co and RestoLutz each with +100% followed by Subway with +62.2%. Starbucks (+39.8%), for the first time without ex-joint venture partner Karstadt, now has a special place of its own in this hit list.
• Business in the event catering, 'eatertainment', fresh fast food and takeaway segments were better than average. And it was business with caffè latte & co. that provided the most insights for dealing with structural change in the sector. Here, it is lifestyle that sells.
• Anniversaries in 2005: 75th anniversary of Käfer, Munich (delicatessen, party service, restaurants), 50th anniversary of Wienerwald (Germany's oldest restaurant brand/chicken), 40th anniversary of Nordsee Fisch Fast Food (formerly part of the Unilever Group) and the 30th anniversary of Europa-Park Rust (Germany's No. 1 fund park with more than 4 million visitors per year).
• Profitability: up again. 50% describe their profits as being good. Two years ago, only 28% could say this. Moreover 12% report very good profits and only 3% a bad profit situation. For 2006, 85% anticipate improved revenues (50% more guests, 57% higher average bills - 77% bigger profits).
• Same-store sales/like for like: positive in more than half of all top 100 companies. Outstanding in the case of Ikea with +14.5%, Joey's Pizza with +14.4%, Café Del Sol with +13.4%, Hallo Pizza with +10.8% and Le CroBag with +8.5%. Big, double-digit declines for all multiplex cinemas (not enough good films).

An analysis of the five market segments:

Fast-food/QSR is the biggest sector: 30 names, 23 of them with increases. The bulk of the new outlets were opened by Subway (+125), Burger King (+50) and Tchibo Coffeebars (+50). Market leader McDonald's returned the best figures since 2000. But with no new openings. Just 50-plus McCafé installations within the framework of outlet remodelling. 100 McCafés are to be added this year. Germany is the test market for Europe. Subway once again took a big step forward and now, after six years in Germany, can boast almost 300 outlets. Pizza delivery: 3 out of 6 names reported above-average increases.

Travel: 18 names and only 2 of them in the red. Nevertheless, the overall result was below average. Railway stations and airports have undergone a rapid decoding process over the last ten years. No longer are they simply places of arrival or departure. What counts nowadays is shopping and, of course, eating and drinking. Important in this connection is the right mix of concepts. To upgrade a much-used facility at the same time as exploiting it to the full calls for the great expertise and sensitivity.

Fullservice: 21 companies, around half of them based in Munich. Together, the highest growth rate of the last ten years - despite 2.9% fewer restaurants. Good business, especially in niche markets.

Retail: 8 companies, mainly flat. Only Ikea and XXXLutz/RestoLutz (both furniture store empires) with outstanding growth/buying sales.

Leisure: the smallest group with 23 names and a top 100 market share of 7.2% reports the most growth with 8.9% and 3.5% more outlets. An exciting newcomer: the Arena One catering company in brand new Allianz Arena in Munich, a shrine to football and a tourist magnet.

To summarise: a good start to the second half of the decade. The most important challenge facing many companies: how to keep older concepts fit. After all, it is worth taking great care of good brands. Parallel to this, the emergence of a remarkable number of new and fresh concepts.

Growth Chances
Opportunities for expansion over the next 2-3 years*

*based on a scale of +5 to -5 / expert estimates

Source: FoodService Europe and Middle East 3/06

World Champion Host

Although the Germans missed winning the World Cup, they were virtually unbeatable when it came to the services offered and performed in the host country. During the four weeks of the Soccer World Cup 2006, some 3 million guests in the public areas of the 12 stadiums, around 350,000 VIPs in the hospitality areas and a total of 2 million foreign football fans gained a great impression of German hospitality.

With a staff of 4,000 in ten stadiums, Aramark, the Master Concessionaire for the public areas, catered for some 2.7 million guests while the 400 employees of Eurest Sports & Food (Compass Group) looked after another 300,000 in Stuttgart and Cologne. The top products at all matches: grilled sausages and, of course, beer.

Aramark alone sold in the region of 709,000 sausages to hungry fans. With an F:B ratio of approx. 30:70, the average bill per stadium visitor came to between €6 and 7, which was significantly more than estimated beforehand. In comparison, stadium caterers ring up an average bill of €3-4.50 during German first-division matches. Thanks to the ebullient mood and the super weather, the fans tended to stay for a much longer time in the stadiums: frequently for as long as six hours, which meant lots of time for them to get hungry and thirsty.

There was also a relaxed party atmosphere in the VIP areas and tent villages around the stadiums where caterers Käfer, Haberl, Stockheim, Kofler and Lenôtre pampered a total of 350,000 VIPs. And, although the standard could not have been higher, it was the simple things that proved the most popular. Regardless of fan nationality, the curry sausage turned out to be one of the international favourites.

The unexpected winner of the World Cup: the fan festivals with public viewing, which were offered for the first time and attracted thousands and thousands of people in numerous cities. According to Germany's ZDF television station, up to 16 million people watched the top matches on public screens. And this had a direct impact on the hospitality sector. In many cases, both restaurateurs and hoteliers were disappointed with their World Cup results - something that was not unrelated to the exceptionally good weather. The main factors were leading to additional income in the hospitality field: a city-centre location convenient for the matches or the public-viewing areas, live broadcasts of the matches on the biggest possible screen and lots of outdoor capacity. The losers: classic restaurants, especially up-market concepts. Although not everyone in the hospitality business benefited from the World Cup, most people agree that it has given Germany an enormous boost as an international tourist destination - something that will benefit the sector as a whole in the medium term.

1) Top 10 from a ranking of the top 40 operators / *estimated

The turnover of the largest contract catering companies in Germany was up by 8.2% in 2005 to €2.9 bn. The top 45 found new impetus for growth primarily in new markets (up by 38.4%) and in school meals (up by 34.8%). It is worth noting that the entire business of contract caterers is divided up as follows: 50.2% B&I, 24.5% hospitals, 13.8% old people's homes, 4.4% schools and 7.1% new markets (arena catering etc.).

*estimated Source: TradeDimensions/M+M Eurodata, 2006

2005 brought only marginal increases in turnover for food retailers in Germany. The whole sector grew by 0.2% to €218.5 bn. Of this, 99.5% was generated by the top 50. Their takings split into 67% for food items and 33% for non-food items. Leading the rankings for 2005 is Edeka, who managed to topple the Metro Group from this position (take-over of Spar AG and the discount chain Netto Süd). Still in the number 3 position is Rewe with a stagnating turnover. As for the discount companies: the rapidly expanding Schwarz Group can, for the first time, count themselves ahead of Aldi in the field.

Ice Cream Consumption in 2005 - per capita in litres

Source: www.markeneis.de

Source: FoodService Europe & Middle East 04/06

Manufacturers are annoyed about politics

Food industry against increasing regulations in Berlin and Brussels - World Cup stimulates the business 2006

Germany. The German food industry complains about a growing number of legal control attempts regarding available foods. The industry sector is especially hard on the European consumer politics.

"It should not be allowed that the EU commission can interfere massively in the product composition and that they want to regulate the offer," says Jürgen Abraham, chairman of the Bundesvereinigung der Deutschen Ernährungsindustrie (BVE) (Federal Association of the German Food industry) in Berlin.

The industry sector especially registers tendencies in Brussels from just subtle to outright blunt to influence the composition of the foods on offer and the marketing. This political approach assumes that grave social problems and aberrations can be corrected by law. As example Abraham names the issue of the increasing obesity of children and teenagers. The internationally discussed approaches to a solution include changes in the composition of food products as well as an increase in taxes, marketing bans in schools or even a limitation on advertising.

"It is alarming that the EU commission unmistakably asks the European food industry to do something about the "finding new formulas" for their products, meaning that they should use less salt and sugar and offer low fat foods", says the BVE general manager Prof. Dr. Matthias Horst alarmed.

It is naive

It is naive to believe that the composition of foods can be ordered independently from the acceptance of the customers regarding the taste of the products.

In the fight against the social problem of obesity all facets have to be included that form the live style of the individual and his socio-economic environment. "Only this approach promises success," is the conviction of the BVE manager and he refers to the engagement of the industry sector on the platform Food and exercise (peb). The association sees further troubles ahead in the area of the EU alcohol politics that is currently planned in Brussels. The proposed measures match the usual pattern. Advertising bans, prohibitive taxes and especially the increase and standardisation of the age limits for alcoholic beverages. None of the existing measures have proved their effectiveness, says the BVE.

Against the background of the necessary decrease of red tape that is loudly publicized from Brussels as well as from Berlin, the food industry demands more caution from the legislator as well as an increased sense of proportion. Abraham is also questioning the necessity of the planned consumer information law. For the industry sector it is now important - as it is now a politically arranged matter - that the operational concerns meet practical and adequate consideration.

Increase

According to the BVE, the World Cup, high summer temperatures and last but not least the increase in business activity stimulate the anticipated sales volumes of the industry sector. We are moving with the trend, says Abraham in allusion to the current boom. In the first three months of the year the national sales of the food industry increased by 2.9 per cent. The total sales volume even increased by 4.2 per cent to 34.7 billion Euros. With this the positive trend of 2005 continues. In 2005 the industry was able to increase the sales volume by 2.9 per cent to 133.6 billion Euros. The export had again a significant influence on the good result. For 2006 the BVE reckons again with an overall sales increase of maximum three per cent.

Sorrowful, the companies are looking towards the for 2007 planned increase of the value added tax and the consequences for the consumption of the private sector.

"I think that the increase in value added tax will at the same time also be a program to increase illicit employment", says the BVE manager fundamentally doubting the measure. Even if foods will probably be exempt from that as far as possible, around 25 billion Euro spending capacity will be taken away from the consumers.

Also, the skyrocketing energy costs create problems in the companies given declining margins. In an EU-comparison, German businesses have to pay the second highest electricity costs, states the BVE. That means that the industry sector faces severe competitive disadvantages in the global competition. "We will plead for more competition in the electricity sector," says Abraham commenting on the rising concentration in that sector. The politics of the big coalition are meanwhile triggering increasing scepticism in the industry sector that is mostly made up of medium-sized companies.

In this context the draft of the equal treatment act is symptomatic as it will again be put on top of the guidelines from Brussels - in spite of different sounding statements by the chancellor Angela Merkel (CDU).

Source: Article published on http://english.lz-net.de on June 26, 2006

Purchasing Managers optimistic

Study by Consumer Research Institute GfK: Sales expected to be above last year's figures - organic and wellness still in trend

For 2006, the food retail trade expects higher sales than in the previous year. Purchasing Managers are currently most concerned about next year's VAT increase. These are the results of a study called "Image im Handel 2006" (Trade image 2006) by GfK Panel Services Deutschland (Consumer Research Institute).

Most buyers of the German food retail trade have an optimistic view into the future: 61 percent of the decision makers expect that the industry's economic development will be better than in 2005. According to GfK, every third interviewee thinks that their business will perform like in 2005. Only 6 percent anticipate a decline compared to last year.

However, the most important question for Purchasing Managers is the increase of the value-added tax as of January 1st, 2007. Though the tax rate for food products will remain at 7 percent, 37 percent of them consider this subject to be important for the food retail trade. Every fifth decision maker is actively involved in the price calculation and marketing process, reveals the study, whereas the question of profit is of importance to every sixth central buyer. When conducting the study in spring 2006, the only other subject with similar importance was the marketing of the Soccer World Championship.

Forty-three percent of the buyers think that the consumer demand for organic and wellness products will be increasing. Another 39 percent are convinced that the importance of convenience products will continue to grow. Diet and low-calorie products, however, are less important: Only 6 percent of the Purchasing Managers of major food retailers rate these products, together with probiotic and lactose-free articles, to be trend-setting.

Source: Lebensmittel Zeitung No. 35, September 1, 2006

NEW ENERGIES - BIODIESEL

Biodiesel - The fuel of the future

Why new energies are so important

Some 13 billion litres of crude oil and 14.7 billion kg of hard and brown coal are used worldwide every day, of which the majority is used to produce electricity and heat and to run airplanes, cars and trucks. About 25 billion tons of carbon dioxide evaporates into the atmosphere when burning fossil fuels - with drastic consequences for the environment and climate. This alone justifies the use of alternative energy sources.

The most important reason, however, is the limited supply of crude oil and the dependence on producers and possibilities of supply. The last years have shown that the development of new energy sources have to be pushed vigorously. Europe is lagging far behind. In Brazil, drivers have been using ethanol for years.

Biodiesel is environmentally friendly and costs only half of the regular gas. Besides, almost two thirds of the newly registered cars have a combined engine where you can choose to go on gas or ethanol. This neither affects the engine power nor the life span, but pollutant emission is far less.

There is no comparable flexibility among German consumers or the industry. Large gas companies have already discovered the growing market, but they are not (yet) pushing forward. Above all, the infrastructure (gas stations) is only reluctantly expanding. So far, biofuels only cover 3.4 percent of the gas demand in Germany. Meanwhile, prices for raw materials to be used for the production of biodiesel are rising steadily. Corn prices have increased by 25 percent since the beginning of the year. The USA goes ahead at full pace: Mineral oil producers are forced to add ethanol to their gas. The annual consumption is to be doubled by 2012. This law triggered a flood of money. Small investors, investment funds and venture capitalists pump billions into logistics and production.

A similar boost would have even more positive results in Europe: A relief for the environment and less dependency on unreliable suppliers. Besides, billions of agricultural subsidies might become superfluous. Farmers could produce sensibly and would not have any difficulties diversifying. Fuels can also be produced from grass, hay or corn stalk.

Source: Rheinische Post of August 19, 2006

Südzucker counts on biodiesel

Aiming for market leadership in Europe - high investment goals

Europe's largest sugar producer, Südzucker, plans to extend the segment of bioethanol for fuels and aims to be market leader in Europe.

Südzucker AG in Mannheim/Ochsenfurt, whose subsidiary "Südzucker Bioethanol GmbH" already runs the largest bioethanol plant in Europe, intends a significant expansion of this segment. They produce 260,000 cubic metres of bioethanol with 700,000 tons of wheat every year. An additional 100,000 cubic metres of bioethanol are to be produced in the future. According to Südzucker, bioethanol will be marketed under the name 'Crop Energies' to be added into petrol. According to EU regulations, the percentage of bioethanol to be added must increase from currently 2 to 5.75 percent by 2010. By then, the Crop Energies brand is expected to achieve a market potential of €4 billion annually. The subsidiaries in Belgium, France, Austria and Hungary will also be enlarged.

In Belgium, Südzucker is constructing a bioethanol production plant on the basis of wheat and sugar beets with an annual capacity of 300,000 cubic metres. The French Ryssen Group, a subsidiary of Saint Louis Sucre (which also belongs to Südzucker) will extend the annual capacity of its current plant for dehydration and rectification of raw alcohol from currently 30,000 to 100,000 cubic metres. To be able to further expand the bioethanol business, Dr. Theo Spettmann, Spokesman of the Managing Board of Südzucker, considers going public with the company's bioethanol branch.

Source: Lebensmittel Zeitung No. 34, August 25, 2006

ORGANIC MARKET

Dynamic growth for organic foods

The German organic market will be Europe's largest organic market, reveals the latest study of IRI. A good 28 percent of all organic products sold in Europe are sold in Germany. According to the IRI study conducted at the POS in May 2006, main motives for buying organic food were the ongoing food scandals and the overall refusal of genetically modified foods.

ACNielsen calculated a 10-percent increase for the food retail trade in 2005. Dairy products, juices and vegetable spreads show over-proportional growth rates. The market share of organic milk expands from 3 percent at the beginning of the year to almost 5 percent towards the end of the year. For the first quarter 2006, ZMP (Center for Market and Price Reporting) calculated a sales increase of 32 percent for milk. The reason for this new virtuous circle is the market entry of the discounters. The forerunner Plus is now followed by Aldi, Lidl & Co.

Source: Lebensmittel Zeitung No. 35, September 1, 2006

Source: Lebensmittel Zeitung No. 33, August 18, 2006

German organic industry turns over EUR 3.9 billion in 2005

Increasing competition led to bigger changes in the organic industry is the conclusion drawn by Professor Ulrich Hamm of Kassel University. Better availability of organic products in organic supermarkets, conventional food retail outlets and discounters is putting pressure on the direct marketing farmers and forcing them out of business, unless they specialize or can offer a broad range of produce, says the ZMP Organic Market Forum reporting on current industry figures.

Whereas the conventional retail food trade increased its market share from 37 % to 41 %, the producers had to give up 2 % and now hold 14 %. The health stores declined just as much and their share fell to only 6 % due to real turnover drops. Despite turnover growth in absolute figures, the market share of the organic retail food trade dropped slightly from 26 to 25 %, according to Hamm's surveys.

Organic butchers and bakers also registered 1 % less turnover. The winners besides the conventional retail food trade were the drugstores, box schemes and processing companies, which grew from 8 to 9 %. The discounters are not shown separately in this study. The turnover of all marketing channels together was estimated at 3.9 billion EUR, which is 11 % up on the previous year.

Source: BioFach Newsletter No. 127 of Aug 11, 2006

Source: Lebensmittel Zeitung No. 33, August 18, 2006

Trade with organic foods in Germany

Last year, the German food retail trade realized a 10%-increase in turnover with organic products, reported the market research institute AC Nielsen. The reason for this development was a growing awareness of health and healthy nutrition among consumers, found the market researchers. The milk products, fruit juices and vegetable spreads segments recorded over-proportional growth rates. Many consumers of conventional foods argue that the high price of organic products is the main reason why they prefer conventional articles. Turnover of the German organic food retail trade rose by 5,5 % in the first half of 2006, according to business and organization consultant Hartmann.

Source: Lebensmittel Zeitung No. 27, July 7, 2006 / BioFach Newsletter No. 127 of Aug 11, 2006

Source: Lebensmittel Zeitung No. 33, August 18, 2006

Organic meat - prices on the rise

Prices for organic slaughter pigs increased significantly in the first quarter of 2006: Prices for animals grade E rose by 7 percent on average compared to the fourth quarter in 2005. This means that organic farmers, who submitted their figures to ZMP (Center for Market and Price Reporting), realized a price of € 2.41 per kg slaughter meat when selling their product to producer cooperatives or processors.

The increase was not entirely surprising, as prices had already been re-negotiated in long-term contracts last year, when the limited supply had pushed customers' payment reserves. Slight price increases are again expected for the second quarter of 2006. Organic cattle also registered price increases in the first quarter of this year: Throughout all quality grades, organic farmers realized 3 Cent more on average when selling growing bulls to producer cooperatives or processors. Therefore, prices were at € 3.39 per kg slaughter weight, due to a growing demand for organic beef and price increases for conventional beef. In contrast to pig prices, cattle prices orientate stronger by the official price quotations for conventional animals, since surcharges are more common, and the market more easily adapts to price increases.

Source: Die Fleischerei 9/2006

FISH AND SEAFOOD

Germans not put off by high seafood prices

Rising fish prices are not discouraging German shoppers from dropping more fish products into their shopping baskets, half-year figures released by the country's seafood processors association (BFF) show. With high raw material and fuel costs contributing heavily to the price of fish during the first six months of this year, the overall average price of fish in Germany rose 5.8 percent to €6.32 ($8.13).

"Even if the price is increasing, price is not really preventing the consumer from buying fish," BFF Secretary Matthias Keller told IntraFish.

In value terms, German household seafood consumption rose by 8 percent to €1.185 billion ($1.5 billion) this first half-year. The figure equates to 188,000 tons, a 2 percent increase over the same period. The figures do not include seafood sales in the German food service market, which account for at least 40 percent of sales, Keller said.

The decision by hard discount chains such as Lidl to sell fresh fish from October last year, may have contributed to a 9.6 percent increase in sales by value and a 4.3 percent increase in volumes, Keller said. From January to June, households bought 24,334 tons of fresh fish worth €347 million ($443.1 million), while the average price of fresh fish rose 5.1 percent to €10.18 ($13).

The value of frozen sales also climbed by 10.2 percent in the first half of the year to €347 million ($445.4 million). Households also increased their volume purchases by 4.9 percent to 64,000 tons, BFF said.

Source: www.intrafish.no, article published on Aug 11, 2006, Editor: John Evans

Power outage at fish market in Hamburg - 1,000 lobsters choked

A power outage of six hours caused heavy losses for fish dealers at the fish market on 'Grosse Elbstrasse' in Hamburg. All companies on the fish market in Hamburg-Altona were affected by the outage on July 18th from 11:45 am till 5:44 pm with an outside temperature of more than 30°C, thus being part of the group of 621 households and 422 companies without electricity. Dealers of fresh fish like 'Hummer Pedersen' suffered the most: approx. 1,000 lobsters choked in his basins, reports owner Joachim Niehusen. Although the lobster meat could be chilled and parts of the live animals were cooked, he estimates his loss at about EUR 30,000.00, which he is claiming back from Hamburg power supplier 'Vattenfall'. According to Peter Timmann, employee with fresh fish dealer 'Möller & Reichenbach', the company had to destroy all of their weekly delivery right on that day. "The water was just too warm". Alexander Schumann, CEO of 'Frische Paradies', had to close his company temporarily.

Source: Fischmagazin 7-8/2006

Fish in trend - the favourite: salmon

The per-capita consumption of fish and fish products in Germany increased from 13.8 kg in 2004 to 14.8 kg last year. The highest growth was realized in the smoked fish segment, where sales increased by 8.5%. Salmon still remains very popular among German fish consumers. In the salmon market, with 31,909 tons the largest fish segment, salmon accounts for the largest share with 41.2% or 13,204 tons.

The trade has adapted accordingly. In the fine fish segment, full-range food retailers try to extend their offer towards discount by pushing their private labels. On the other hand, discounters increasingly count on brand names.

According to Gottfried Friedrichs KG, the discount concept of full-range food retailers will fail in the long run. Consumers associate a certain value and image with brand products. Both values will gradually fade the more a brand product is sold too cheap.

Though 61.8% of the smoked salmon is currently purchased at discounters, the segment is stagnating there, unlike in other distribution channels. According to GfK ConsumerScan, self-service department stores registered an increase of 42.5 % with smoked salmon in 2004 in terms of value. The traditional food retail trade realizes 10%, consumer markets 12.9%, and even specialty fish dealers with an increase of 7.1% were ahead of discounters with a growth of only 6.3 in this segment.

The market leader for smoked salmon did well to concentrate on premium products. Therefore, the sales of brand products again registered double-digit growth rates in December 2005 (high season: Christmas), and developed exceptionally well in the first half of 2006, reported Gottfried Friedrichs KG.

However, the company does not take any risks with raw products or processing quality. As a raw product for their trout filets they only use fresh trout from carefully chosen and regularly controlled fish breeders in Denmark or Poland. With Alaska Pollack, the MSC certificate guarantees sustainable fishing.

Source: Lebensmittel Zeitung No. 34, August 25, 2006

Fish swimming on the wave of success at Intercool, Sept 24-27, 2006 in Düsseldorf

Per capita consumption continues to rise - salmon in trend - wellness out of the ocean

Compared to last year, the per capita consumption of fish and fish products in Germany increased once more to an average of 14.5 kg (2004: 13.8 kg). In other words: 'fish is on everyone's lips', be it in the catering industry, in the trade or among consumers. Therefore, fish will be a very important subject at the trade fair in Düsseldorf. Almost 70 exhibitors will be showing fish and fish products.

According to the Centre for Fish Information (Fisch-Informationszentrum e. V. - FIZ), four fish varieties are dominating the German market: Alaska Pollack, herring, tuna and salmon account for 63 % of the German fish consumption. But more exclusive varieties like pangasius or tilapia have also gained in popularity, just like pollack, which the German fish industry had been declared 'trend fish' (plus 42% in 2005). On the listing of the most popular fish varieties, saithe moved up from 8th to 6th place. "By means of various events, we managed to create public interest in pollack, a fish which is very popular but often underestimated", resumes Dr. Matthias Keller, General Manager of FIZ.

Just like many Germans he likes to see fish, and especially pollack, on his plate: Fish is known to be beauty food, and thus taps into the wellness trend. Nutritionists recommend eating fish every day, if possible. Besides the low fat content, fish is a rather light meal with so-called Omega-3 fat acids, which slow down the process of skin aging - a hot topic in the cosmetic industry.

Consumers perceive fish as a high quality product which enhances fitness and health, and is thus consumed more often than in the past, also due to the frequent meat scandals. Consumer trends in this sector are very interesting: Frozen food (33 % of the total fish consumption) and fish products such as marinades and canned products are bought more frequently. Fine food salads with fish, crustaceans or molluscs are a highlight for special occasions, and are thus bought less frequently, but also at slightly higher prices.

Surveys reveal that fish consumers consider the price to be secondary; freshness, quality, hygiene and taste are more important. Buying fish is something special to most customers: Fish is bought at the end of their shopping tour and is processed at home as soon as possible - fish is hardly ever bought ahead. No wonder that the specialty trade and delicatessen stores are the market leaders in this segment.

Industry experts anticipate that the market will change severely over the next years: The number of self-service fish counters in the food retail trade will decline, and will soon be replaced by a new concept: Service counters. They are not simply weighing the salmon or halibut, it's about advice, personal contact and decorative product presentation - following the example of our French neighbours. Shopping adventure and product placement are key. This concept can only be successful with the right mix of convenience, including frozen food, and conventional products. Market researchers have learned that customers appreciate a clear product presentation, variety, even whole fish in the display and communication. There is no other fresh food counter where customers talk as long and intensively - recipes and tips for preparation are part of the daily sales routine. Customers honour this: The value of their shopping baskets is some €12.00 above the average.

Speaking of 'quality': The Frosta company broke new ground in the frozen food and convenience segment: Some years ago, the company located in Bremerhaven decided to ban any additives such as taste enhancers, preservatives etc. from their frozen food and fish meal products. At first, consumers did not appreciate this initiative, which has changed drastically since 2004. The cooperation with 'Brigitte-Diät' (women's magazine) is boosting the discussion about pure food: If consumers do not have enough time to cook themselves, they can choose from 'Frosta's' frozen menus - one hit: "Gourmet Baked Fish". Gourmet convenience is also offered by other companies in the fish industry. The Hamburg producer "Christian Gödeken" only recently received the gold medal of the German Agricultural Society (DLG) for its smoked salmon comfit, which is made of smoked salmon, fresh cheese, pumpernickel and a topping of dill, blue poppy and roasted sesame seeds. The motto of their fish cuisine: innovative products will make life easier for the HRI industry, e.g. for banquets.

Source: Lebensmittel Zeitung No. 37, September 15, 2006

Fish industry full of confidence

Turnover increasing - sales almost unchanged - exports recovering -raw material prices rising strongly

Due to rising raw material prices, German fish processors benefit from strong increases in turnover. However, in the first months of 2006, sales were only slightly above last year's level. In 2005, volumes had actually been declining. Exports increased for the first time in the last three years.

Matthias Keller, General Manager of the Federal Association for the German Fish Industry and Fish Wholesale Trade, does not want to overvalue the sometimes double-digit growth rates in turnover realized in the first months of 2006. He admits that this increase is hardly driven by larger volumes but mostly due to significantly higher raw material prices.

While in the first quarter of 2006, the turnover of fish and fish products realized an increase (in value terms) of 6.6 percent up to EUR 426.3 million, production rose by only 1 percent. "This is an important sign", observes Keller, which means that consumers are not put off by high prices.

That's why the fish industry and fish wholesalers are optimistic. In the current discussion about lifestyle and healthy nutrition, fish and seafood products are very important. One proof is the growing per capita consumption of fish and seafood products, which reached 14.8 kg in 2005 (according to preliminary figures). The Federal Association calculated a per capita consumption of 14.2 kg for 2004, whereas the Federal Statistics Office counted only 13.8 kg for the same year.

Keller is not concerned about globalization in the fish industry. He feels that the German fish production is competitive. The continuous increase in turnover per company only proves this. While more and more raw material is processed in the country of origin, the know-how cannot so easily be transferred abroad. Besides, consumers' demand for fresh processed products is increasing which in turn calls for domestic production.

The product ranges are already expanding due to innovative fish and seafood products. One example is a mixed box with small portions of different smoked fish varieties or new salads with prawns and crayfish.

All in all, the German fish industry (here: companies with more than 10 employees) produced a total of 469,903 tons of fish products, i.e. 0.9 percent less than in 2004. Like in 2004, the most important product group in terms of value were breaded fish filets and herring products. Frozen fish filets now rank third; they ousted smoked salmon from third to the fourth place. Smoked salmon had to take severe losses with a decline in volume of 22 percent and a drop of 19 percent in value terms. The main reason for this development is the shift of production to Poland, comments Keller. Highest growth rates in terms of volume and value were realized with seafood products, fresh fish filets, smoked herring and frozen crustaceans.

The total turnover of the 87 companies reporting to the Federal Association increased by 7.8 percent to some EUR 1.86 billion. The lion's share of EUR 1.5 billion was realized in Germany. Moreover, exports increased for the first time in three years, accounting for an over proportional growth of 15.7 percent to EUR 338 million. Consequently, the export ratio rose from 16.9 to 18.1 percent.

The Federal Association observes strong competition both on sales and on buying markets, which leads to higher costs for purchasing, processing and distribution. Ninety percent of the raw frozen fish filets had to be imported from third countries, as the European fishing industry was unable to supply enough raw materials.

Special fish varieties like Alaska Pollock, hake and hoki fish could not be supplied at all. Only very small amounts of the raw herring required by the German herring processors are supplied domestically. All in all, the self sufficiency rate of the German fish industry is at about 25 percent.

Source: FIZ / Federal Statistics Office

Source: FIZ / Federal Statistics Office

Source: Lebensmittel Zeitung No. 33, August 18, 2006

Aquaculture grows in importance as demand for fish increases

To feed the world's increasing appetite for fish, food processors are going to have to turn to commercial aquaculture farms for their supplies, according to a Food and Agriculture Organisation (FAO) report.

A levelling off of the amount of fish caught in the wild, coupled with a growing world population and increasing per capita demand for fish, means a shortfall in supply, the FAO stated. The shortfall will have to be made up by supplies of farmed fish. However, aquaculture might not be able to deliver the goods. Nearly half the fish currently consumed as food worldwide are raised on fish farms rather than caught in the wild, the FAO stated in the report. Aquaculture now provides 43 per cent of the fish consumed by humans, compared to just nine per cent in 1980.

About 45.5m tonnes of farmed fish, worth $63 billion, is eaten worldwide each year. Meanwhile levels of captures of fish in the wild have remained roughly stable since the mid-1980s, hovering at around 90 to 93 million tonnes annually. Of the wild fish caught about 60 million tonnes is destined for human consumption. Since there is little chance of any significant increases in catches beyond these levels, companies are going to have to use more farmed fish to meet any supply shortfall, the FAO says.

Globally, consumer demand for fish continues to climb, especially in affluent, developed nations, which in 2004 imported 33 million tonnes of fish worth about $61 billion. The FAO's report estimates that an additional 40 million tonnes of aquatic food will be required by 2030 -- just to maintain current levels of consumption. The FAO also found that the wild fish stocks are in poor condition to meet any further increase in demand.

Of the nearly 600 wild fish species the UN organisation monitors, 52 per cent are considered fully exploited while 25 percent are either overexploited, depleted or recovering from depletion. Twenty per cent of the species are moderately exploited, with just three percent ranked as underexploited.

"Catches in the wild are still high, but they have levelled off, probably for good," stated Rohana Subasinghe of the FAO's fisheries department.

The only option for meeting future demand for fish, Subasinghe argues, is by farming them. However, she finds that the aquaculture sector might not be able to expand sufficiently to meet that demand. "Aquaculture could cover the gap between supply and demand, but there are also many forces which could pull production in the opposite direction, making it difficult for the industry to grow substantially enough to meet demand in the decades to come," she stated.

Aquaculture has been experiencing a boom since the mid-1980s, sustaining a growth rate of around eight per year, according to the FAO figures. Today it continues to expand in almost all world regions, with the exception of sub-Saharan Africa. The FAO is concerned that momentum could taper off if governments and development agencies don't adjust their policies to respond to emerging challenges that threaten to damper the sector's future growth. One serious bottleneck, says FAO, is the lack of investment capital for producers in the developing world. Another is a shortage of land and freshwater for use in aquaculture.

Rising energy costs also pose a problem, and environmental impacts and questions of product safety continue to require attention. The Agency's report also points to doubts regarding future supplies of fishmeal and oil, used to feed carnivorous cultured species, such as salmon, grouper and sea bream.

Increased demand could also squeeze supplies of fishmeal and fish oil used for livestock feed. The bulk of fishmeal is used for livestock feed, chiefly by the poultry sector. Aquaculture now accounts for 35 percent of the world's fishmeal supply. "So as aquaculture's fishmeal needs grow, competition with terrestrial livestock for a limited resource will intensify, with ramifications for both price and availability," the FAO stated. "Key to resolving the dilemma will be continued progress in improving the efficiency of feed formulations -- reducing the amount of fishmeal they contain - and coming up with adequate vegetable-based additives."

The report calls for global and national policies to be put in place to cater for the growing appetite for fish. "Markets, trade and consumption preferences strongly influence the growth of the sector, with clear demands for production of safe and quality products," the report stated. "As a consequence, increasing emphasis is placed on enhanced enforcement of regulation and better governance of the sector."

Source: Article published online at www.nutraingredients.com, Sept 4, 2006, editor: Ahmed ElAmin

MEAT INDUSTRY

Food retail trade main distributor of meat products

The food retail trade dominates the sales of meat in Germany. In 2004, a total of some 6 million tons of meat and poultry (by selling weight) were sold on the German market. Some 4.53 million tons, which corresponds to 75 percent, came from domestic slaughterhouses, the remaining 25 percent were imported. 2.8 tons of all meat was processed, of which 60,000 tons were sold directly by producers, another 1.1 million tons were exported. The total of 2.1 million tons of unprocessed meat sold on the German market was mainly distributed through the German retail trade, accounting for a share of 64 percent. One fifth was sold by the hotel and restaurant industry, 12 percent were sold via butchers.

These are some of the results published in "Product Distribution Analysis - Meat", a study examining distributors as well as the end consumer of meat products, published by the Center for Market and Price Reporting in Gira, the Consumer Research Institute and market researchers 'Intelect Marktforschung GmbH". The study can be purchased from the Center for Market and Price Reporting, article No. K 661, at a price of EUR 129.00 (info@zmp.de, www.zmp.de).

Source: Lebensmittel Zeitung No. 27, July 7, 2006

Source: Lebensmittel Rundschau 09/06

Focus on deer

New Zealand plans new promotion campaign for autumn 2006

The New Zealand deer industry plans to further extend its production and supply volumes in 2006. For Germany alone, its traditionally largest export market, they expect an increase of more than 20%. According to the industry association "Deer Industry New Zealand", Wellington, a total of 24,846 tons of deer meat worth NZD 198 million (EUR 96 million) was exported in the last business year, i.e. until March 2006. Compared to 18,876 tons in the previous year, this corresponds to an increase of 33%. For the current year 2006/07, the industry anticipates an export volume of 27,448 tons, of which 11,351 tons are destined for Germany - 20% more than in 2005/06.

The sales will be supported by a new, consumer oriented promotion campaign, which the Munich-based agency 'Modem Conclusa' (responsible for Germany) will introduce at the upcoming Intermeat fair. This campaign will mainly use large banners near hyper- and supermarkets, supported by product samplings, recipe books and a redesigned internet presence.

Deer breeding has a long tradition in New Zealand. With a total of 1.7 million animals spread among 4,000 breeders, New Zealand produces half of the amount farmed worldwide. Due to controlled breeding methods, the product quality can be carefully determined. The meat is mostly exported pre-cut and vacuum-packed, either fresh, chilled or frozen, in most cases by ship.

Germany is by far the most important importer of deer meat from New Zealand: approx. 40% of the export volume is shipped to Germany. Other export markets are Belgium, Australia, Sweden, France and the US.

Source: Lebensmittel Zeitung No. 32, August 11, 2006

Business with bison

Two years ago, the Saxon butcher 'Landhan GmbH' created the brand "Bisonders", which stands for high quality bison meat directly from Canadian breeders. These products serve a growing market niche and correspond to the current trend of health conscious nutrition. This is why well-informed customers accept the slightly higher product prices.

Specialty stores are currently facing the question of how to boost their product range with innovations when almost every possibility has already been exploited in the pork and beef segment.

On the 4th regional brunch in Großstolpen near Groitszsch, "palatine-ticklers" like bison broth, goulash soup or salad from bison whet the appetite for more. Therefore, the team from Fleischerei Landhan GmbH prepared Canadian Prairie Meat, sour roasted bison with apple-raisin sauce and bison roulade "à la Saxon" as a main course. "With 160 guests, the response was far more positive than expected", resumes company founder Dipl.-Ing. agr. Eckhard Landgraf.

Numerous gourmets within a radius of 50 km confirmed in a questionnaire that they had explicitly come to this culinary event in Western Saxony to taste and buy bison specialties.

In the past, Eckhard Landgraf was engaged in pig feeding with agricultural producer cooperative Landwirtschaftliche Produktionsgenossenschaft (LPG) in Großstolpen. Together with Chef Dieter Kükelhan, who worked in the kitchen of LPG's cultural centre, he founded Fleischerei Landhan GmbH in 1991. In very small premises, they started to produce specialties from home slaughtering with six employees. The product line was completed with sausage products of other producers.

As the young businesses' premises soon got too small, they reconstructed the former dairy cow section of the cooperative and opened new facilities with high-tech equipment on 700 square metres in 1994. In the summer 2001, daughter Dana Landgraf was appointed General Manager of the company which today counts 65 employees. Three Master Butchers, twelve assistants and back staff are employed in the production process, and produce 2 to 2.5 tons of fine meat and sausage products every day, sold in 14 subsidiaries in Saxony and East Thuringia. Fleischerei Landhan GmbH also supplies caterers and nursing homes. They also run the kitchen in LPG's cultural centre. The company also supplies three schools with more than 500 lunches during the week and sells 'meals on wheels'.

Imports over the Atlantic

Four years ago, Eckhard Landgraf had his first contact with a bison breeder in Canada, who asked Fleischerei Landhan GmbH to process their meat so that they could promote the products themselves. The product line was expanded due to the positive response at trade fairs and other events. For two years now, Fleischerei Landhan GmbH has been importing Canadian bison meat for its own product line. "At the International Green Week I got to know a breeder from Saxony", reports Eckhard Landgraf. This developed into a firm business relationship and the brand "Bisonders" was created to promote the products in their own subsidiaries.

Canada has only two slaughterhouses which are approved for the export to Europe. Supplying over the Atlantic is reliable and unbureaucratic: "On Monday I order the required amounts, on Wednesday it will be slaughtered and the following Monday I receive the chilled meat by freight forwarder. He orders an average of 250 kg of bison meat per week. Since the Canadian partner has a subsidiary in Europe, the processor has to deal with much less paperwork.

Despite occasional currency fluctuations, prices have so far been stable, says Landgraf.

The prime cuts are sold frozen in the original packaging. Shoulder, (chomp) and parts of the prime cuts are used for sausages. The products range from bison salami to bison bockwurst to raw and hot smoked bacon. Bison meat can also be used for hot dog style sausages (Bruehwurst) and 'Thuringian Rostbratwurst' (rib steak sausage). Very popular is liver pâté with cream or pieces of bacon. The latest innovation of the 'Bisonders' line is a cream liver pâté with lingonberries.

Good chances for niche products

The average slaughter yield of a grown bison amounts to 50.8 percent. Compared to meat of domestic cattle, bison parts are smaller and contain less fat. That needs to be taken into account when processing: Fleischerei Landhan GmbH adds a maximum of 20 percent of pork fat, following the motto "as little as possible, as much as necessary". Bison specialties currently account for a share of three to five percent of their total production. "It's still a niche, but we want to further expand it due to the huge potential", reveals Eckhard Landgraf.

Despite higher prices for bison products, there are already a number of steady customers in the neighbouring area who like to buy "Bisonders" meat and sausage products in one of the subsidiaries. Caterers mostly buy prime cuts for preparation in their kitchens. There are already a few orders per Internet, but the business is still hesitant: "The customer has to see and smell the product", explains Landgraf.

This is why he counts on a future cooperation with distribution partners - such as butchers, delicatessen stores or food retailers who want to keep their clients with culinary highlights and like to attract new customers. One handicap are the relatively high costs for logistics of fresh products, concedes Landgraf. That's why he has launched a canned product in a 100 gram glass jar - to be tried out with liver pâté - which can be stored up to one year and which might, when attractively presented in a store, arouse consumers' interest.

Source: Die Fleischerei 9/2006

BEVERAGES

China to start making ice wine

China's biggest wine producer Changyu has set up an alliance with Canadian ice wine maker Aolos to build what is expected to be the largest ice wine estate in the world. The firms will invest RMB100 million (€9.93m) in a new production facility in Benxi in China's northeast Liaoning province, with Changyu retaining a 51 per cent stake in the venture.

Canada is currently the largest producer of ice wine, a sweet dessert wine made from frozen grapes that was originally developed in Germany in the 1700's. Grapes are left on the vine well into the winter months and then pressed in their cold state. The water in the juice remains frozen as ice crystals, and only a few drops of sweet, concentrated juice is obtained, making the wine much more expensive than traditional red and white wines.

But owing to the strict requirements for growing grapes for ice wine, there are only three countries which are currently able to produce the luxury product - Germany and Austria, as well as Canada - so supply falls far short of current demand.

"Global annual production is only 1,000 tons which is much lower than demand. It is this imbalance that attracts us to invest in this industry, which is entirely new to China," Changyu manager Zhou Hongjiang told AP-Foodtechnology.com.

One of the leading producers, Aolos currently accounts for about 10 per cent of the global supply. Asia is its largest export market, making a Chinese production site a major advantage. Zhou explained that the factory will be supplied by an ice vineyard, built five years ago, that covers 5000 acres. It has been on trial for almost three years. "As a result its production can reach 1000 tons when it comes on-stream. I believe such a large-scaled output will insert great influence on the global market," he said.

China is one of few wine markets that are still expanding, with double-digit growth each year. Changyu, based in Yantai, Shandong Province, dominates the country's wine market with a 21 per cent share and annual capacity of 80,000 tons. Its products are exported to Malaysia, USA, Holland, Belgium, Korea, Thailand, Singapore, Hong Kong and elsewhere.

According to the OIV (Organisation Internationale de la Vigne et du Vin), China's grape planting scale is the eighth largest in the world and its annual wine production ranks eleventh.

Source: Article published on Sept 12, 2006 at www.beveragedaily.com, editor: Dominique Patton

Oktoberfest - Munich beer festival started

The 173rd Oktoberfest Beer Festival has opened in the southern German city of Munich. Hundreds of thousands of people turned up on Saturday for an opening ceremony at noon. To the more than six million people who will visit the German city of Munich over the next month, it makes perfect sense.

Munich mayor, Christian Ude, began the festivities with a twelve-gun salute, a signal to everyone to start the beer flowing. The world's biggest beer-drinking festival has long been a huge tourist draw, and some six million visitors from around the world are expected to fill the beer tents this year. People waited for hours to get a seat for a sing-along with polka bands. The Munich Beer Festival is set to run for 18 days.

Visitors at last year's 172nd Oktoberfest spent € 955 million ($1.2 billion) on accommodation, public transport, shopping and, above all, 6 million litres of beer, 481,000 chickens, 560,000 pork knuckles and 95 oxen, according to the organizers.

Source: Article published on September 20, 2006 in E-Malt. Industry Newsletter at http://e-malt.com

PET FOOD INDUSTRY

Positive development in the pet food trade

Industry records increases in the food retail trade - growth in the cat food segment

The pet food trade got new impetus due to a positive development in the dry cat food segment. Wet dog food, however, is not as successful.

For the first time in years, the food retail trade records positive results for pet food, following a series of increases in the pet food specialty trade. Just like in 2005, this year's main winners are discounters, whose market shares increased significantly, as show recent figures from industry and market researchers. Thus, the undisputed market leader in the pet food segment, Masterfoods GmbH of Verden, participated only to a very small extent in the positive development, as the company, unlike its competitors, does not offer any private label products.

In 2005, the industry realized a turnover of EUR 3.08 billion with pet food supplies (plus 2.3%). Sales of pet food reached EUR 2.3 billion (plus 1.6%), accessories were up by 4.1% to EUR 791 million. Dog food stagnated at EUR 948 million. Dry pet food rose by 3.1 percent to EUR 369 million, wet food dipped by 3 percent to EUR 326 million, and snacks for dogs dropped slightly down to EUR 253 million.

Cat food, on the other hand, realized a growth of 3.2 percent to EUR 1.1 billion, which was mainly due to a rise of nearly 9% in the dry food segment, up to EUR 227 million. Wet cat food, however, was far less successful and recorded a marginal growth of 1.5% up to EUR 765 million. Snacks and cat milk realized a 5%-increase to EUR 111 million. The remaining turnover was realized with feed for birds, fish and other pets. These segments also did over-proportionally well.

*incl. Aldi Source: ACNielsen

Source: Lebensmittel Zeitung No. 26, June 30, 2006

AUSTRIA

Organic food demand outstrips supply

Austria seeks more organic food supply after a surge in demand has caused undersupply. Even discount supermarkets are offering organic products because of high demand from Austrian consumers.

The largest association of organic farmers in the country, Bio Austria, said that despite more than 20,300 organic businesses in the country, not enough farmers produce 'bio' food. Bio Austria believes home-grown organic pear production met only 10 per cent of demand. Apple production satisfied just 40 per cent. Only organic grains and cereals supply exceeded demand.

Organic producers constitute 11.5 per cent of all Austrian farmers and generate turnover of EUR 500 million a year. Bio Austria aims to raise the number of organic farmers to 20 per cent by 2013. Bio Austria chairman, Johannes Tomic, said the 'Green Pact' of the agricultural ministry helps attain this goal. "The pact gives us planning security and ensures that the development of land for organic farming remains anchored in the country's environmental policies," Mr Tomic said. He added that people's changing attitudes influenced the development of the domestic market. "The organic sector has gone from being a niche market to a mainstream one, as more and more discount supermarkets opt for a bio section. This is a very positive step."

Related Report: #1001-42 "The European Market for Organic Fruit & Vegetables"

Source: Austria Today / Industry Watch Newsletter, July 28, 2006

Vienna - stronghold of tradition

Simultaneously architectural, cultural and culinary bastion of tradition and modern metropolis, Austria's capital lies at the crossroads between Eastern and Western Europe. It's hard to think of any other European city where so much of daily life and social interaction is devoted to eating and drinking. Politics, in particular, has gastronomic ramifications in this regards. Major elements of Viennese Cuisine originate from Countries, which were either friends or foes of the Danube monarchy. This, combined with more recent influences, most importantly from Asia and Italy, has given birth to a unique gastronomic culture.

Today, Vienna is home to almost 9,000 restaurants, including any number of gastronomic showpieces.

Source: FoodServide Europe & Middle East 04/06

Spar most popular in Austria

'Hofer' ranks second - one third of the consumers appreciate longer opening hours

Spar, Hofer and Billa are the three most popular food retailers in Austria. The most important criterion for consumers is a good price-performance ratio. A consumer survey reveals that discounter 'Aldi-Sued' is their biggest competitor.

In the Austrian food retail trade, the two market leaders 'Rewe' Group - with its distribution channels Billa, Merkur and Penny - and 'Spar' Group (Spar, Interspar and Eurospar) are fighting hard for market shares and the favour of their customers. 'Hofer', a subsidiary of 'Aldi', is a major competitor, and leads together with Spar the list of 'favoured companies', ahead of Billa. This was revealed by a study from 'Marketagent.com'.

Customers most frequently go to Spar/Eurospar/Interspar, followed by Billa; Hofer ranks third. Spar Group and Hofer, which both account for 25 percent, are the undisputed leaders of the list of 'favoured companies'. The Rewe Group was represented with Billa (17.4%) and Merkur (12.9%), explained Thomas Schwabl, General Manager of Marketagent.com.

With 79 percent of the votes, customers consider a favourable price-performance ratio to be 'very important', second to 'good accessibility'. The third and fourth places were determined by the pricing policy: To 61 percent of the customers, 'frequent price promotions' were very important, followed by 'very competitive prices' (60.1 percent). Only 30 percent of the customers regarded long opening hours, private labels, brand names and specials for regular customers to be important.

Expressed in school grades (1 = very good, 6 = inadequate), the Spar Group was rated 1.8, followed by discounter Hofer (2). Most of the interviewed customers - almost 70 percent - said they would miss 'Hofer' most, Spar followed with 58 percent. Food retailers which the customers would miss the least were Magnet, Contra and Norma.

The market research institute 'SMS-Research' conducted a study among 1,000 consumers in Austria which showed that almost 36 percent of them granted the highest growth chances to Hofer, followed by Spar/Interspar with 26.7 and Billa with 10.6 percent.

Source: Lebensmittel Zeitung No. 27, July 7, 2006

Organic series on Austrian TV

The Austrian TV programme TW1 starts a new magazine called "Full of Life - The Organic Magazine" in September! The series initially planned every Friday and Monday for a month starting on 8 September is a joint production of ORF and TW1. The initiators were the Bio Austria Association and the Life Ministry in Vienna. The aim is to help consumers appreciate the advantages of organic agriculture and organic food.

Source: BioFach Newsletter No. 127 of Aug 11, 2006

SWITZERLAND

Quality more important than price

Switzerland: Promarca' study about consumption habits, choice of POS and brand preferences

Swiss consumers regard quality to be the most important criterion when buying articles of everyday use. Every fifth interviewee sees himself as a fan of brand names. These are the findings of a study conducted by the market research institute 'IHA-GfK'.

Swiss consumers do not let themselves be influenced by the current 'price hysteria'. Quality as well as product qualities have a much stronger influence on the buying decision than promotion sales or the price of a product. On a scale from one to ten, 'quality' and 'product qualities' were ranked most important for products out of six different product groups (soft drinks, chocolate, body shampoo, detergent, yogurt and coffee machines). 'Promotion sales' and 'product price' ranked third and fourth, observed IHA-GfK when interviewing 500 consumers in the German speaking- and Western Region.

Brand names are still highly regarded among Swiss consumers. Thirty-three percent said to be brand label fans which purchase brand names whenever possible. If they have the choice between brands, promotion items and cheap offers, 30 percent claim to tend to brand products. Besides product specific criteria such as quality, taste, packaging or price, so-called 'soft' criteria are regarded as brand benefits. The consumption of brand products is linked to emotional factors such as well-being, trust, protection, safety or exclusivity.

More than two-thirds of the consumers choose their point-of-sale based on its accessibility. Almost the same number (60 percent) chooses their POS based on the quality of the products sold there. The latter underlines the high importance of brand names when buying articles of everyday use. Further decision criteria are the offer of healthy and fresh products (55 percent), the product line (50 percent), the choice (46 percent), opening hours (39 percent) as well as friendly staff (35 percent). Less than one third of the Swiss consumers considered the price to be important when choosing their point of sale.

Migros and Coop are clearly dominating the Swiss food retail trade. Ninety-five percent of the interviewees say to have purchased goods of everyday use at Migros or Coop within the previous three months.

The importance of brands or private label products is different for each product group. The share of consumers buying a brand-name body shampoo is very high - almost every second consumers says to prefer brand products. The coffee machine market shows the same trend: some 40 percent of the Swiss consumers claim to buy brand products: Nespresso is leading ahead of Jura and Saeco. In the soft drinks and detergent segment, the percentage is at thirty-eight, 29 percent for consumers of chocolate.

Promarca is the Swiss association for brand producers in the consumer goods segment (food/near food). The Association represents the interests of 83 member companies which generate total turnover of CHF 8.8 billion and employ a staff of 13,000 in Switzerland (www.promarca.ch).

Source: Lebensmittel Zeitung No. 26, June 30, 2006

Swiss Exhibition (Messe Schweiz) promoting IGEHO

Instead of launching Lefa (Trade fair for the food wholesale and retail trade), Swiss Exhibition will be expanding Igeho (the International Exhibition for Industrial and Institutional Catering, Hotels and Restaurants). From now on, Igeho will be showcasing all segments of the out-of-home market. Besides, other new segments of the food retail trade with potential of synergies for Igeho will also be integrated. Parallel to the fair, the manufacturing industry will be offered a platform to present itself. In the planning phase, the launch of Lefa as a pan-sectoral trade fair was well-received, but current contracts and projects do not allow a mutual realization of the event. Therefore, Swiss Exhibition will no longer pursue the project 'Lefa'. However, some parts of the former Lefa fair bear high potential of synergies for Igeho, the largest trade fair for institutional catering in Switzerland. As a second step, Igeho wants to meet the needs of visitors of the retail trade (such as independent retailers, the food and drink specialty trade, wholesalers, discounters of specialty food stores). In light of this expansion, Igeho aims at becoming the most important trade fair for the hotel and catering trade in Switzerland and neighbouring German-speaking countries.

Parallel to Igeho, some branches of the producing industry such as butchers will then find their own presentation platform. Together with trade fair committees of Igeho and Lefa, Swiss Exhibitions is currently working on a detailed concept for the planned parallel events and the expansion of Igeho 2007. Information on the event, its contents and themes will be available to exhibitors and interested parties at the end of August 2006. www.messe.ch

Source: Die Fleischerei 7-8/2006

A change in Switzerland's organic food market

Increased competition has hit organic farmers in the Swiss food sector. Last year, the turnover was down 0.5 % to SFr. 1.183 billion, representing three per cent of the food market in the country. And there were 2.6 % fewer organic farms. Still, the Swiss are the world's biggest buyers of organic products; each person spends SFR 160 annually. The Swiss Research Institute of Organic Agriculture found out that farmers face a number of challenges. The arrival of foreign discount supermarkets like the German Aldi and the French chain Carrefour could be key factors. Organic farmers will no longer be able to charge higher prices unless it can be proved that organic products taste better and are more nutritional. Consumers also need to be informed about the reasons for the higher prices.

Bio Suisse, the umbrella organisation for organic farmers, states in its annual report that Coop as the country's second largest supermarket chain is successful in marketing regional delicacies in shops close to where they are produced. As the organisation believes, growth in the organic market will be fuelled and jobs will be ensured by this. Coop played an important role bringing organic products to the consumers. 13 years ago, it was the first supermarket chain to stock organic groceries. This led to a higher acceptance among consumers and these efforts have left Coop with a 50 % market share. Migros stayed behind with a share of 24.7 %, reports the NZZ. When starting to stock organic products, Coop's commitment was seen as a marketing strategy, but by now it has proved its seriousness. 1,400 food items bearing the Bio Suisse label are stocked, fresh produce is the most popular among those.

However, Otto Schmid from the Swiss Research Institute of Organic Agriculture warns organic farmers not to be too dependent on the big chains, since there is growing competition from non-organic products in general, including non-organic premium labels. He refers to a Migros range which gives the false impression to be organic. For the future, Coop is extending its range and improving its communication, since consumers demand tasty, ecologically produced food. Mr. Schmid also states that a similar stagnation took place in Austria before the organic market revitalised itself.

Source: Article published on www.organic-market.info on Aug 2, 2006

The organic market in Switzerland needs changes

Markus Arbenz became Director of Bio Suisse, the Swiss organic farmers' organisation, in June this year. Being an agronomist and former organic farmer, he has recently returned from Swiss development projects in Kyrgyzstan and Afghanistan. As he stated in an interview with Swissinfo, the sector needs to take a new approach in order to reverse a decline in sales. Last year, the number of organic farmers fell for the first time; turnover in organics was slightly down.

In his opinion, organic producers need to adapt to changed circumstances - quality should be more important than quantity. Also, marketing should be improved. Farmers in remote areas are especially worried; in the milk and meat sectors many farmers are unsure about their future. Since markets are opening through the WTO and because of the relationship with the EU, farmers fear competition due to their high prices. In order to support their members, Bio Suisse should market their products, explore new markets and new potential, including in the export sector.

Markus Arbenz states that ecology has a high priority in the Swiss Constitution, but at the level of legislation authorities do not implement the terms of the Constitution in an adequate manner. There is a lot of pressure from lobby groups, saying that it is too expensive to support ecology. But he also states that it is not the Government's duty to solve all of their problems. The organisation would like to be able to develop, to export or to bring innovations to the markets without being burdened by bureaucracy or customs. In comparison with other countries, production costs have fallen very fast due to structural reforms, reduction of costs for input supplies and more efficient marketing. Bio Suisse should accept the further challenge of communicating the message of a healthier life and an environmentally sustainable approach in such a way that people understand that organic products are part of a healthier lifestyle.

Bio Suisse is celebrating its 25th anniversary this year. On August 18th, a big party was held in Bern for farmers, producers, consumers and anyone interested. The history of organic produce in Switzerland is the one of great success, according to Markus Arbenz. When it comes to the consumption of organic products, Switzerland is still world leader.

Source: SwissInfo www.swissinfo.org / Article published on Aug 30, 2006 at www.organic-market.info, Copyright: Organic-Market.info

Swiss ice cream consumption remains stable

In 2005, Swiss consumption of ice cream remained at previous year's level. Due to the rather cold weather, the results of the record year 2003 could not be reached. According to the Swiss glace and ice cream manufacturers association, Swiss per capita ice consumption accounted for 7.3 litres, compared to 8.3 litres in 2003.

Of the total of 54.7 million litres in 2005, some 49.8 million litres were industrially produced ice cream and 4.9 million litres were soft ice and ice cream produced by HRI. The industry association was particularly glad about the export development: More than 10 million litres were exported last year, i.e. the volume more than doubled compared to 2004.

Trend towards less fat and sugar

At the beginning of the summer season 2006, Swiss ice cream manufacturers launched highly promising innovations. There is a clear trend towards diversification and varieties with less fat and sugar and therefore with less calories. However, the taste should not fall by the wayside.

Source: Sweets Global Network 8/2006

Migros undisputed No. 1

The ranking of Swiss food retailers shows that positions have hardly changed, despite the market entry of Aldi in 2005. The market research institute IHA/GfK revealed that Migros remains the No. 1 with a turnover of CHF 15.7 billion (-0.6%), followed by Coop with CHF 13 billion (-0.8%) and the department store Manor with CHF 2.8 billion (+0.2%).

Not at last due to the takeover of Pick-Pay, Denner increased its turnover by 16% to reach CHF 2.1 billion. Turnover of Aldi and Lidl is estimated at CHF 100-150 million. The two German discounters could well account for CHF 1 billion by 2010.

Source: Sweets Global Network 8/2006

Migros' subsidiary to stop turkey production

Due to a lack of profitability, 'Micarna SA', the subsidiary of the Swiss retailer 'Migros', will cease to produce turkey as of mid 2007, and will concentrate their poultry production on breeding chicken. This means that 35 jobs in the turkey slaughter and processing facilities are affected. However, no jobs will be cut, since the employees will move to other departments within the company.

Source: Lebensmittel Zeitung No. 25, June 23, 2006

Coop Switzerland

Coop Switzerland is the new partner of the World Wide Fund for Nature (WWF). This is the first partnership of this size in Switzerland, whose aim it is to promote organic products, improve product declaration and reduce environmental pollution. Coop - a member of the WWF Wood Group and joined WWF Climate Group - has agreed to increase the share of wood and paper products with the FSC label and the share of fish with the MSC label.

Source: Lebensmittel Zeitung No. 33, August 18, 2006 / BioFach Newsletter No. 128, Aug 25, 2006

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