Chain of events: a blog of Food Chain Intelligence

FoodPro 2008 reassured me that innovation in the manufacturing sector is still breathing in Australia. The trade show was held in parallel with the 41st AIFST Convention in the Sydney Convention & Exhibition Centre and more than 280 companies exhibited their forefront technologies.

I was there on Monday 21st at lunch time and the traffic of people walking through the exhibits was fairly ligth. However, 3 years ago Foodpro attracted 8,500 people and the expectation this year was to break that record. The exhibition seemed to be well attended by manufacturers of food machinery and equipment. There were also food manufacturers, process and control automation providers and scientific equipment.

I was particularly interested in 3 products, I will talk about the first one below and I will discuss the other 2 in future postings:

Product 1: The Igloo insulated freezer doors from Envico. This patented design offers a high speed (1.3 m/s) opening. The door is designed for freezers operating at –18 oC to –25 oC, with an average U value of 1.54 W/m2 C (or K value of 0.65 m2 C/W). Although the insulation efficiency of solid sandwich panel doors is about 3.5 times better than the Igloo doors, these doors are slower to open and close. Normal strip curtains and non-insulated roller doors do not offer any real thermal protection (they only act as physical barriers to avoid leakage of cold air). Therefore, the Igloo doors do offer an alternative that combines both thermal protection and speed of operation. The design also avoids the tear and wear of the curtain blade.

Mark Brunton, the managing director of Envico, gave me a detailed explanation and a demonstration of the operation of the Igloo doors. My opinion is that this type of doors would be suited for chillers too. They seem easy to maintain and I think that these doors would be well suited for busy cold stores (e.g. foodservice and many pharmaceutical cold stores with high product rotation).

Next week: VIAScan system for measurement of meat quality and yield.

The ‘Path to Market’ Programme helps NZ manufacturing companies to enter new markets, through a comprehensive set of activities focused to enhance the knowledge of NZ companies in the country’s industry scene. The programme includes a 2-day workshop covering pricing, logistics, strategy and marketing. It also includes a one-to-one coaching session and a customized market research report. Additionally, the programme encompasses a visit to a trade event related to the targeted market.

This year, the programme is supporting NZ manufacturing companies operating in the area of food processing. The culmination of the programme is the attendance of participants to the FoodPro trade show in Sydney, which started yesterday and will run until the end of the week. I will cover this event in a new post.

Scott Riddle, from NZTE, invited me to present an overview of the Australian food industry to the workshop participants. I always enjoy the research needed to prepare a talk like this and I learn a lot from the feedback from the participants. In our session yesterday (21st July), we talked about the general trends in the Australian food industry, but later on we focused on the meat and dairy sectors. We discussed key trends, drivers, logistics, differences with respect to the NZ industry environment, challenges and opportunities ahead.

For the analyses, I used the STEEP and the Porter’s ‘five forces’ methods. The STEEP analysis encompasses social, technological, economic, environmental and political/regulatory factors. The ‘five forces’ analysis focuses on suppliers, industry rivalry, buyers, new entrants and product substitutes.

I find that the combination of these two frameworks helps me to understand how different forces and factors pull the industry in several directions, sometimes even in opposite directions. For example, environmental, social and regulatory forces may push the meat industry towards a more regulated operating environment.  This ensures that aspects such as OH&S, carbon footprints, animal welfare and social justice are all being attended and that enforcement of good practices can be implemented.

However, the meat industry is already highly regulated. Economic forces and competition may push the industry to request a decrease in regulations to speed up the release of new food products and decrease their regulatory costs. A driver for low costs also depresses the investment in new technologies and innovation, which may provide the means to be more profitable in the current food crisis scenario.

STEEP and the five forces analyses enables us to weight each of these issues and determine which forces and players have the highest levels of power in a given industry. After using these techniques, I believe that the key challenge for the Australian food industry in general is the chronic labour shortages experienced in all food sectors. There are many other challenges, of course: the strength of the Australian dollar, fuel prices, competition of resources for food production and so on. But the demand for food products will be strong in years to come. Therefore, our capacity to respond to the demand in a competitive way will be critical in future years.

Back to the NZTE programme: I think this is a great way to introduce exporters to new markets. I like the idea of combining workshops with one-to-one orientation, market reports, a trade event and introductions to ‘in-market ‘experts’ and service providers. The fact that these activities are specifically designed for a sector/market is also a key strength of the programme.

I am not sure if there is an equivalent programme for Australian manufacturers, I know there are several export programmes (e.g. export hubs, trade missions, etc). Do we have an all-encompassing export programme for manufacturers? Comments welcome.
 

The 5th PharmaMed Logistics conference is sponsored by the Australasian Freight Logistics and MHD Supply Chain Solutions magazines. The two-day conference will bring together government officials, supply chain operators, medical practitioners and pharmacy logistics companies to discuss key issues, and examine the logistics of health care products.

I will speak about the challenges of cold chain logistics and ensuring temperature control along the supply chain. My talk will include the following aspects:

·         Technology and innovations in cold chain logistics
·         Packaging options and temperature requirements
·         Current cold chain projects

Other confirmed speakers include:

·         David Sanders, Director, RFID Association of Australia
·         Dr Peter Robertson, Director, Centre for Supply Chain Management, University of Wollongong
·         Dan Mellor, Deputy Director of Pharmacy, Peter Macallum Cancer Foundation

I may be able to get a 15% discount, please e-mail me to let me know your interest in attending. A complete program can be found here.
      

As part of the E3 HVAC stakeholder meeting program, Kane Hardingham (Environmental Advisor, Woolworth’s) outlined the sustainability strategy for Woolworth’s during 2007-2015. The targets set are quite demanding, including:
· A 40% reduction in carbon emissions on projected growth levels by 2015, maintaining 2006 levels.
· A 25% reduction in carbon emissions per carton delivered by Woolworths-owned trucks by 2012.
· At least 200 million litres of water saved each year through the “water wise” project.
· Improve the ethical and sustainable sourcing policies for private label.
· Replace single-use waxed boxes with 3.4 million reusable crates, thus eliminating the need for 26 million cardboard cartons per year. Currently, about 1.7 million reusable crates are being used in Woolworth’s operations.
· Achieve zero food waste in the general waste stream by 2015.
· All stores opened after September 2008 will be Green Stores. They open between 15-25 new stores per year.
The 2006 Woolworth’s carbon footprint looks like this:

The challenge is to bring the current footprint of 3.78 to 2.27 million tonnes of CO2 e- by 2015, through behavioural changes, improvements in energy efficiency, use of renewable energy and the Green Stores project.
Refrigeration and air conditioning produce a cumulative 67% of the carbon emissions, therefore this area is targeted for energy efficiency improvements. Specific measures addressing these two areas are:

1. Evaluate climate change impacts from energy use and refrigerant gas leakage
2. Use high efficiency fans and low heat glass doors
3. Use LED lighting in glass door freezers
4. Use automatic night-blinds
5. Implement heat reclamation for air-conditioning
6. Implement cascade carbon dioxide refrigeration
7. Use computerised Energy Management System (EMS)
8. HVAC economy cycle uses fresh outside air
9. Use reclaimed water for water cooling
10. Reclaim heat from refrigeration (compressor)
11. Reuse cold aisle return air

Transport is another area that will receive considerable attention. Measures that target a reduction of 25% in the transport footprint are: reduction of kilometres travelled, improve vehicle design, use alternative fuels and test hybrid trucks.
Suppliers to Woolworth’s are also part of the carbon reduction plan. A current case is Houston’s Farm in Tasmania. They were recently awarded a Horticulture Australia grant to develop an environmental footprint analysis of salads, with a view on producing a greenhouse gas calculation tool .
Woolworth’s is also working with The Australian Food and Grocery Council (AFGC) in a study aimed to understand and evaluate the concept of carbon footprinting overseas and how to apply it in the Australian context.
I wrote extensively about carbon footprinting and labelling methodologies in ‘Chain of Thought’. The main issue in ‘green’ labels is how to convey the information in a clear, useful way to consumers. Let’s remember that consumers are already reading the labels to check the food’s contents, to ensure that products are aligned to the consumer’s diet (e.g. weight loss, diabetic, etc) and to classify packaging waste in their bins (“Is it recyclable?”). There is a limit to the amount of information that can be placed in a label without making it confusing and also a limit to the patience of consumers in reading and digesting information before selecting the next product.
Apart of those issues, there is still no consensus in Australia about the methodology to follow to carbon footprint products. Therefore, there is no point of comparison between two companies manufacturing the same product, because they could use different carbon footprint methodologies. I have also spoken about the risk of using life cycle analyses based on a database that uses industry averages. The effect of any specific strategies (such as the ones proposed by Woolworth’s) to reduce carbon emissions have to be measured and this information has to be used as an input to any carbon footprint analysis.