Page 6 - Food&Drink July 2019
P. 6

NEWS
FIAL: $55 billion from rethinking protein
THE Australian food and agribusiness industry could capture an extra $55 billion by shifting its mindset around protein, Food Innovation Australia Ltd (FIAL) says. In its report Protein Market: Size of the Prize Analysis for Australia, FIAL analyses 50 protein types in 11 regional markets. The aim is to “trigger a national call to action for industry to adopt new thinking around protein and help position Australia as a leading supplier of the world’s proteins,” it says.
KKR frontrunner in Arnott’s sale
KKR & Co. (formerly Kohlberg Kravis Roberts) has become the frontrunner to buy Arnott’s biscuits from its current owner, Campbell Soup Company.
Campbell Soup Company announced plans to sell off
a number of business units
in August last year, to enable it to simplify its operations and focus on its core portfolio of soup, simple meals and snacks. It is selling its fresh food and international units along with manufacturing operations in Indonesia and Malaysia and businesses in
Hong Kong and Japan. In May, The Australian
Financial Review
reported Campbell
had asked Mondelez International and KKR to reconfirm their bids as neither had hit the $3 billion asking price.
Mondelez is said to have walked away due to its price and consumer trends moving towards healthier snacking options, AFR says.
Campbell Soup took full control of Arnott’s in 1997, paying$420millionforthe
remaining 30 per cent after its hostile $1.2 billion takeover bid in 1993 netted only 70 per cent.
KKR told F&DB it would not commentatthisstage. ✷
China shakes up formula market
FIAL says shifting Australia’s protein production mix to match projected global consumption for high-value proteins could create an additional $55 billion in 2025. Global protein consumption
rose 40 per cent from 2000 to 2018 with Asia making up more than 50 per cent of that growth. Protein demand is expected to grow by up to 20 per cent by 2025.
FIAL says plant-based proteins account for 66 per cent of global proteinconsumptionsupplyand is expected to remain the dominant source through 2025. By then the global protein market will be worth up to $513 billion, 40 per cent coming from meat proteins.
Companies should look to strengthen partnerships in high-potential markets by taking advantage of existing free trade deals and forming commercial collaborations with local players inthesemarkets,FIALsays. ✷
THE Chinese Government released an action plan to strengthen the domestic infant formula market. Its goal is to increase domestic supplies to more than 60 per cent of the market. China Daily reported domestic milk formula accounted for 43.7 per cent of the market in 2018 with a 21.1 per cent growth rate.
The notice also encourages companies to acquire and restructure the infant and toddler formula milk industries to eliminate outdated production capacities and further consolidate the industry.
It is expected to support eligible companies to issue shares and bonds to grow larger, and other taxation benefits
will be offered to companies that establish dairy manufacturing
facilities overseas.
The government
notice outlined the need to tighten registration of overseas formula milk producers
and to strictly carry out the implementation of recording and registration of the sales system for imported dealers.
Media reports said in China the wholesale infant formula market was worth $15 billion in 2018, with $8.7 billion
from imported products. The impact on Australian
infant formula manufacturers was immediate. A2 Milk Company, Bellamy’s and Bubs Australia are the biggest formula exporters to China.
A2 shares fell more than seven per cent on the day after the announcement (4 June)
to $13.25. Almost $1 billion has been wiped from its value since the announcement.
Bellamy’s stock fell eight per cent to $7.85.
Bubs Australia dropped eight per cent on 4 June after falling seven per cent the day before.
Bubs CEO and founder
Kristy Carr told The Australian Financial Review the news would work in Bubs’ favour after it signed a deal with Shenzhen- listed dairy and infant
nutritioncompany
Beingmate in March. Such a joint venture
was the type of relationship Chinese authorities were encouraging, Carr says.
BUBS DEAL WITH CHINA’S KIDSWANT
On 27 June, Bubs Australia and China’s largest baby store chain, Kidswant, announced a supply agreement. Bubs food products will now be available in 275 Kidswant stores in 123 cities throughout China.
It is the first project of the its joint venture with Beingmate.
Bubs said the annual retail sales performance of Bubs products through Kidswant stores is now expected to reach RMB 30 million ($6.24m) within fiscal year 2020.
Bubs shares jumped 31.7 per centto$1.23. ✷
6 | Food&Drink business | July 2019 | www.foodanddrinkbusiness.com.au


































































































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