After months of waiting, the ingredients sector in Europe is set to welcome a new kid on the block – the intense sweetener, stevia.
The European Commission has given the green light to the use of stevia, already approved in the US, across the EU.
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Unsurprisingly, producers of sweeteners containing stevia, such as Cargill and PureCircle have welcomed the Commission’s decision, and suppliers and food manufacturers will now look to develop products using the natural, zero-calorie ingredient.
However, not everyone is as excited about the ingredient’s potential. Derek Yach, senior vice president of global health policy for PepsiCo, once said: “We have got a market that contains things called consumers and they tend to be rather fussy about taste.” Plus, in September PureCircle announced losses in its full-year, hurt by a move to scale back production as demand waned.
Another major legislative development that emerged last week was Russia’s step to at last becoming a member of the World Trade Organisation (WTO). A trade deal with Georgia appears to have been the final breakthrough to Moscow’s accession to the WTO, which could take place as soon as December.
Nevertheless, some observers are not celebrating the announcement. Ivan Tchakarov of Renaissance Capital investment bank said Russia stands to gain little and voiced fears about domestic industries losing ground against more competitive foreign rivals.
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By GlobalDataHere in the UK last week, a clutch of the country’s major food retailers provided an update on their performance in what remains a difficult market. Marks and Spencer, Sainsbury’s and Morrisons all reported healthy trading.
M&S saw a rise in food sales in the first half of its financial year, with chief executive Marc Bolland highlighting that the retailer had managed to maintain market share at a time when all of its competitors have been in what he called a “race for space”.
Two of the competitors in this race, Sainsbury’s and Morrisons, both posted strong third quarters, although Sainsbury’s chief Justin King admitted the UK’s number three supermarket chain had a job to do to shift an “historical legacy” of being perceived as uncompetitive on price, despite recent moves in the right direction.
Morrisons cited the rise of the “professional shopper” for its third-quarter growth, as consumers become more savvy on price matching and promotions as the UK’s economy nervously eyes the ramifications of the sovereign debt crisis over the water.
Also celebrating was major food manufacturer Associated British Foods, which defied high raw material prices to post a rise in annual operating profit. However, Australia continues to be a thorn in the company’s side, with its George Weston Foods unit seeing profits fall in a market that is proving problematic for a number of suppliers.
Elsewhere in Asia-Pacific, the floods that have hit Thailand are continuing to hit the food industry, with Nestle confirming that production at two of its plants have been affected as the water levels rose. Nestle has six factories in Thailand and employs around 2,500 people.
Over in America, the death toll from the cantaloupe listeria outbreak went up, making it the largest food-borne outbreak in US history. The total number of people who have died from the outbreak in the US has reached 29, with most of the victims elderly. The cantaloupes responsible have been off the shelves a long time but more people could be affected as the symptoms can take two months to appear.
Food safety has made the headlines on both sides of the Atlantic this year – the E. coli outbreak in Germany this spring rocked Europe’s produce sector – and, in our latest management briefing, we have looked at the challenges companies and regulators face in improving traceability in the supply chain.
Dean Best is away.
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