Features

  • 15 May
    COCOFINA:   Jacob’s journey from Kerala to Dragon’s Den and beyond

    COCOFINA: Jacob’s journey from Kerala to Dragon’s Den and beyond

    Jacob Thundil is a London based entrepreneur born in the Indian state of Kerala “The land of coconuts”. After his father’s passing at the age of 17, he took over and ran the family business while pursuing a mechanical engineering degree and working in several blue-chip companies before founding Cocofina in 2004. 

    Cocofina, the ‘Coconut Experts’ boast an innovative range of 32 coconut-based products, including their top selling coconut water, many of which are Great Taste Award winning, that are vegan and vegetarian friendly and UK Soil Association certified. Now sold throughout the UK and in 28 countries worldwide, the organic evolution of the brand from its beginnings in Kerala to recently securing investment on the popular UK BBC TV series Dragons Den is a truly inspirational journey. Fruit Juice Focus reports on the Cocofina story and the message it gives to others just starting out, or looking to develop their more established brands.

    In a recent interview with the BBC, Jacob explained how taking over and running a business from such a young age forged the basis of his future success: “My dad was into cashew nut products and I took over the business and ran it while doing my engineering degree. Food I think is also a science when you’re producing it to scale and the engineering helped me in a big way to understand the specifications of the raw materials and eventually produce our pure coconut water. How do you get purity? How do you conserve the quality of the water and to add to it?” “Kerala helped me a lot”, added Jacob, “because coconut is like wine as it’s affected by taste, terrain, climate and also the species of the nut. When you’re looking at all of those factors, it helped me because I grew up with it”

    An innovative approach was evident in the brands’ early life when Jacob rediscovered coconut water in 2004 on a beach in Brazil. In that same year Cocofina became the first to bottle it in its purest form and launch throughout Europe. Jacob states, ‘as a pioneering brand in the coconut space in Europe, we had the luxury of setting the bar high. I spent all of 2004 sampling across food festivals such as Taste of London in Regents Park and travelling around Asia and South America to choose the best species of coconuts suitable for the European palette. Positive feedback from customers makes all of this research all the more worthwhile’.

    The journey began with a vision to create an innovative range of products that would not only appeal to health and lifestyle conscious consumers but also to those that have food intolerances. The current range boasts products such as a superior Coconut Nectar with a low GI of 38, a Coconut Amino which is a soy sauce alternative, sustainably produced Coconut Vinegars infused with Chili and Nutmeg and a range of Free-From cooking and baking products such as Coconut Flour, Sugar, Chips and Desiccated Coconut.

    Premium quality, honesty and healthy are core brand values as well as sustainably producing products utilising every part of the coconut palm. Cocofina also supports the charity Action Against Hunger (ACF) by donating to help fight child hunger around the world. Ethically responsible and completely transparent, the brand is continuously evolving and achieving success.

    Since receiving offers from all five Dragons from the Dragon’s Den, the long running UK BBC TV programme where entrepreneurs pitch for investment from the Dragons (five venture capitalists willing to invest their own money in exchange for equity) they are now working with two Dragons – Sarah Willingham and Nick Jenkins. Their expertise is already being imparted and they have both facilitated introductions at boardroom level with some key players.

    Since pitching in the Den, Cocofina have secured listings within all 60 stores of UK premier lifestyle retailer Lakeland and the UK health products retailer Holland and Barrett have expanded their Cocofina range to 20 products. Orders have significantly increased as have the number of social media followers which are continuously rising, with awareness for the brand at an all-time high.

    This exposure has also instigated a number of approaches from wealthy investors and a well-known financial institution with offers ranging from £150K to £1M tabled.

    With evidence of a shift in consumer attitude towards coconut products over recent years, Cocofina have come through this period, grown at a fast rate year on year, expanded into new territories and markets and received significant credit from the UK organic industry for cementing themselves as a trusted and go-to brand.

    Jacob states ‘I am flattered with the offers and the trust that the public have placed on us. I was not in the den for the money and very happy with the experience that the new investors have brought to the table to take our dreams to the next level’.

    The next stage of brand evolution is already underway. Firstly a competition was won with SAGE to create a pop-up-shop at Piccadilly Circus tube station in London for one week where Cocofina were seen by a potential 800,000 passers-by across the seven days. Many recognised the brand from being on television and immediately associated with it and in excess of 5,000 samples were given out.

    Jacob has since been invited to speak at a number of export focused events; the Santander Red Box event held at Spitalfields Market in London in September last year, that also focused on labelling, a UK Department of International Trade (DIT) Kickstart Export conference with over 400 businesses in attendance which has led to a case study, an ‘Entrepreneur Masterclass’ for students at a London school, who are taking part in the prestigious Tycoon in Schools initiative in association with the Peter Jones Enterprise Award. The Cocofina journey will also be an example case study across every business course at the school.

    The Soil Association website currently features Cocofina within the ‘Meet our Licensees’ section, which spotlights the brands’ efforts in helping to shape the future of organic. Cocofina will be showcased as an organic export case study by the UK Department for Environment, Food and Rural Affairs (DEFRA) and HSBC has selected Cocofina as a chosen best brand to include in their marketing and advertising campaigns for 2017. Jacob appeared as a guest speaker at the 2016 Health Ingredients Europe event in Frankfurt which is the leading global event for food and beverage innovation.

    The future is certainly brighter than ever before, as a new journey begins on the road to establishing Cocofina as a global super brand.

    By Caroline Calder Features
  • 15 May
    Is the container shipping industry bound for Nirvana or Armageddon?

    Is the container shipping industry bound for Nirvana or Armageddon?

    Since the global financial crisis, the container shipping industry has been plagued with government bail-outs, huge corporate losses, and an ever expanding fleet of mega vessels. But the 2016 collapse of South Korea’s Hanjin Shipping, seemingly triggered a new era of reform across the container shipping industry.  Nevertheless, critics reflect on a conservative, even archaic, industry which has been too slow to modernize and adapt to change, and wonder if we are really witnessing a ground zero moment when the tide is at last turning and shipping lines can begin to claw their way back to profitability after years of losses. Or have those operators who made such heavy weather of their recovery from the financial crisis of 2008 still not regained full control of the levers they will need to see them through the coming storms which undoubtedly lie ahead?

    Here Peter West who is the Director of the supply chain and logistics company Maia Global, brings Fruit Juice Focus up-to-date with the latest changes in the container shipping industry, recent problems and the likely impact on the international trade of fruit juice products.

    The new container shipping landscape

    In addition to the shockwave of the Hanjin bankruptcy, several rounds of mergers and acquisitions have seemingly created a new order in the shipping community: Maersk Line have bought the family-owned Hamburg Süd, CMA CGM have secured the NOL Group, Hapag Lloyd have acquired UASC, to mention just a few of the recent realignments.

    Even more importantly, this has prompted the introduction of three new mega alliances designed to achieve economies of scale, address the excess capacity problems and maintain more sustainable freight rates – all problems that have constantly dogged the industry. These mega alliances will now line up as follows:

    •  2M (32.3%): Maersk (18.5%) & MSC (13.8%)
    • Ocean Alliance (26.1%): CGM CMA (10.5%), COSCO (8.0%), Evergreen (4.8%) & OOCL (2.8%)
    • The Alliance (16.4%): Hapag Lloyd (7.1%), Yang Ming (2.8%) & the Japanese carriers 1 (6.5%)

    The Alphaliner Top 100 2 shows that the container shipping industry still regards itself as very fragmented, with the main carrier still only controlling 18% of the market and the top five controlling a total of 58%. However, further analysis of the cumulative capacities of above-mentioned carriers, shows they control 75% of overall capacity, with the remaining 25% handled by niche carriers on smaller trades. Using those numbers, it means that the number one carrier Maersk Line controls approximately 25% of market capacity and the whole 2M alliance commands 43%.

    Despite all this seemingly positive news for the container shipping industry and ever-increasing geopolitical features such as regional trade wars, the escalating risk of terrorism, and growing legislative burdens, it remains vital that the global container shipping industry persist with its transformative initiatives.

    Recent changes to carrier services in Europe and the effects on juice producers and customers

    From March to May this year the carriers have been implementing the changes to services and rotation as the new alliances come into force, with shipments from Europe being heavily impacted as a result. Space then became an issue for the hub ports as the backlog built up. For example, we have seen containers of juice that have sat at the hub ports for more than 35 days – which is unheard of. In my whole experience of the industry I have not seen containers purposely miss more than two.

    The problem hasn’t stopped there. When the containers finally get shipped and arrive at their destinations they have been unrefrigerated for more than five in transit in direct sunlight which raises the issue of potential spoilage of the juice and the compensation and insurance issues. You then have the situation where there has been a shortage for those past five weeks because there is no supply coming in which in turn means that the customers have had to scramble to get other supplies from elsewhere. When the containers finally arrive they inevitably end up with far too much stock.

    The outlook for customers in the fruit juice trade

    Life is no easier for customers in such an uncertain environment where service contract priorities seem to dictate that choosing a carrier who will still be trading in a years’ time is arguably more important than sourcing the lowest freight rates.

    However, seemingly unnerved by the market volatility, exporters and importers are increasingly adopting short-term pricing strategies, effectively gambling on container spot rates in the hope that the market may soon revert to back its downward trend. So, when recommended to lock in rates and commitments for 2017, a customer will invariably ask: ‘But what if rates go down?’ This is the wrong perspective in the current climate because, whilst occasional falls can never be ruled out, the real risk is that substantial increases are much more likely.

    The general effect of industry restructuring has been to limit carrier options and services. So with the newly consolidated carriers now inclined to be much more cautious and inflexible, freight forwarders are trying to fill the void by leveraging their global relationships to make life somewhat easier for customers.

    All these factors influence market behaviours and can be illustrated by referencing some of these effects on two major trade juice trade lanes:

    China to US

    The transpacific trade lane from China, carries around 67% of all imported Apple Juice Concentrate to the USA 3. In a sector where packaging and logistics can make up as much as 35% of the delivered cost, managing these spikes will be key to maintaining profitability.

    Rate volatility on this trade lane can be demonstrated by looking at the price movements over the past 5 years for dry containers from China bound for the USEC. Average prices in 2012 were USD2500/20’, bottomed at USD550/20’ in 2016, rose sharply to above USD2500/20’ in the wake of the Hanjin failure, and are now hovering around USD1900/20’.

    The apple juice producing season clashes with the retail peak seasons moving on this trade lane. So with the transpacific peak season approaching, it is expected that shipping rates will continue an upward trend over the next two quarters.

    Brazil to Europe

    The South American trade lanes have always been the traditional preserve of major carriers such as Maersk Line and Hamburg Süd. JOC.com estimated in a recent study that if Maersk is successful in acquiring all of Hamburg Süd’s assets, the new conglomerate could control as much as 80% of the market on some major trade lanes from South America 4.

    Rate movements on the Santos to Rotterdam trade lane for refrigerated containers dropped from USD3200/40’ in 2012, bottomed at USD1450/40’ in 2016 and since then, have been recovering slowly having now reached around USD1900/40’. Now the Southern hemisphere growing season is well underway, and with the Brazilian orange juice production season  starting this May in Sao Paulo state, we expect rates on these lanes to continue an upward trajectory for at least the next 6-12 months.

    Future implications

    With industry consolidation well underway, plus a raft of changes in carrier services, the expectation is that carriers are set to remain in the driver’s seat for the foreseeable future. Viewed objectively, available capacity has not reduced but has instead increased, even though the locus of control is now very much in the hands of a few. As these carriers push to increase rates, keep their vessels full and meet new rotations, it seems very likely that the second half of 2017 will precipitate a significant increase in rates – a bloodbath which may once again test the industry’s resilience. Expect many exporters and importers to adopt tactics such as desperate, ad hoc pricing strategies and increasing safety stocks in response to price instability and uncertainty surrounding service performance.

    But over the next 2-3 years, rates will again stablise and return to levels at or below the current market. Major trade lanes will be serviced by larger and more economical vessels, bunkering costs are likely to remain at or around their present low levels, and the overall service costs will correspondingly decrease. The recent expansion of the Panama Canal has at last opened this ocean corridor allowing larger vessels from Asia to gain greater access to the US East Coast, which should lead to a long-term reduction in the East vs. West Coast rate differential. And the world will return to normal, if such a term exists anymore.

    By Caroline Calder Features
  • 15 May
    Case Study: Gerald McDonald. Blending the old with the new in the world of ingredients

    Case Study: Gerald McDonald. Blending the old with the new in the world of ingredients

    Gerald McDonald & Company have been supplying the food and drink industry for 100 years. Since 1917 their mission has remained the same – to source the finest quality ingredients for their customers. Demand from the fruit juice industry for more exotic and unusual ingredients has been on the increase in recent years as consumers tastes become more adventurous, and Gerald McDonald are rising to meet the challenge. Fruit Juice Focus talks with Maxim McDonald a director of the company to find out more about this fascinating side of our industry. 

    Fruit Juice Focus (FJF): Gerald McDonald has been in the ingredients market for over 100 years now. Can you tell us a bit about the background to the company and how the company has developed over the years?

    Maxim McDonald headshot

    Maxim McDonald

     

     

     

     

     

     

     

     

    Maxim McDonald (MM): The company was started in the City of London in the UK over 100 years ago by my great grandfather Gerald J. W. McDonald trading as a spice merchant dealing in herbs and spices. Back then spices were considered an exotic product and the company became well known for being a specialist in this area. Over time they decided to expand into juices, and my grandfather Gerald I. M. McDonald started this side of the business in earnest back in the 1950s when he joined the Citrus Fruit Juice Control Committee. This government backed organisation was set up to help promote fruit juices as a good source of vitamin C in a time of austerity when the government was looking at different ways of getting people to consume vitamin C. From then-on the fruit juice side of the business grew and grew with Gerald McDonald building a name for itself in both the ingredients and the fruit juice market and eventually buying into a citrus processing company in Italy known today as Agres.

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    We stayed in the City of London up until the year 2000 when we moved out to Basildon, a town 30 miles east of London, in the county of Essex. The decision to move came about primarily due to the need for more space and to consolidate all our activities such as blending, warehousing and administration more efficiently under one roof.  We couldn’t just stay as a trading company any longer, time had moved on and customers wanted more from their supplier.

    FJF: Can you tell us how the ingredients market has developed in recent years?

    MM: The ingredients market is a lot more interesting and varied than it used to be and there are a lot more products that are available now. In the earlier days it was really just the citrus products – your standard orange juice and lemon – and maybe some of the soft fruits but now there is a whole plethora of choices, I think that is happening with everything. there’s a lot of niche markets opening up, not just for general ingredients but for fruit juices as well.

    FJF: Can you tell us about some of the more unusual ingredients you are currently working with?

    MM: There is one we are working on at the moment which is a washed seaweed purée. We have been developing this with Agres.

    This seaweed that has been specifically farmed and cultivated with the purpose of creating a seaweed purée that can be used in juices and a wide range of other food products. Unwashed it has a fishy smell and taste to it which some people either love or hate, but we have eliminated this through the washing process to produce an ingredient that has a neutral colour and flavour. The benefits of using this in juices and other food products is that it is a rich source of minerals and trace minerals, vitamins, antioxidants, amino acids and fibre and is a particularly good source of dietary iodine – all of which will appeal to the health-conscious consumer purchasing juices with this as an ingredient.

    We have been working to wash, process and pack it in asceptic bags and we have introduced lemon to acidify the purée as it has a high ph content. We are pleased with the results and have now launched the product into the market. Feedback from customers has been promising since the sample packs were sent out.

    Other more unusual ingredients that we deal with include:

    Aloe Vera juice which boosts the immune system – high in vitamins, minerals, amino and fatty acids. Our product has a low aloin content so it does not have the bitterness normally associated with some Aloe Vera products.

    Prickly Pear, a fruit from the cactus Opuntia cactus plant – our company in Agres is the biggest processor of Prickly Pear in Europe, which is done to a very high quality in 54 Brix Clarified, 38 Brix Puree, NFC and organic formats. This has been growing in popularity with the rise of cactus water products available in the market. It’s also very eco-friendly as it does not need a lot of water to grow.

    FJF: How do you go about sourcing ingredients 

    MM: Because we have been around for a long time we know quite a few of the suppliers in the market just from our history but we also travel around the world to visit existing and new suppliers to see what they are offering, to do audits and to check they have all the correct accreditations – that’s something that is becoming more important now as well. We also attend food shows such as the Anuga food fair and the SIAL food innovation exhibition to meet suppliers.

    Some of the ingredients trends go in cycles because the prices can vary from year to year for some of the fruits we use. It will depend on what the farmers can get for the fruit. For example, if they feel like it’s not in their interest to produce a crop due to poor price returns then they quite often just stop growing the fruit and move onto something else.

    FJF: Can you tell us a bit more about the research and development side of your ingredients business?

    MM: We have a team of dedicated people working in our research and development (R&D) who also work in our laboratory checking and monitoring samples. We are finding that the R&D part of the business is becoming increasingly important for our customers. Until recently they undertook their own R&D and just asked us to supply the ingredients to match what they were looking for, but now we are finding more and more customers are coming to us asking for our opinions, advice and suggestions which has added a whole new side to our operation.

    HRH Duke of Gloucester and right, Matthew Cousins technical manager

    HRH Duke of Gloucester and right, Matthew Cousins technical manager

     

     

     

     

     

     

     

     

     

    We deal with customers both large and small and, as you would expect, most of our larger customers will have their own R&D facilities. However, for the smaller companies, those for example who might be just starting up in the fruit juice business our R&D facilities provide an important service. A company may come to us with an idea for a drink made up of some unusual exotic ingredients but will not be sure whether the ingredients or blends will work from a production point of view let alone the taste angle.

    We sit down with them and explore all the options from the costs of sourcing the ingredients through to the practicalities of the blending and production process giving as much advice and direction as we can in the early stages. For example, they might have what they think is a brilliant and novel idea for their juice which includes an ingredient that is quite difficult to source at certain times of the year. Picking the wrong ingredient could be a costly mistake. It might be ok if the company is still small in five years’ time but if suddenly sales explode and their chosen ingredients are hard to get then they are going to have major supply and production issues leading to delayed or cancelled orders from their customer base leading to people being let down. Therefore early discussions on appropriate ingredients has to be taken into consideration.

    FJF: Do you work with clients from around the world or just in Europe?

    MM: We import the ingredients from around the world and store them in our specialist warehousing facilities prior to processing and supplying them to our customers. But our customer base is mainly the UK along with exports to Europe and to a growing market in Asia.

    Coming back to the Asian market. Last year we opened an office in Japan – Gerald McDonald Asia –  which hasn’t been officially announced yet so this is an exclusive for Fruit Juice Focus! The plan is to replicate in Japan what we are doing here in the UK. And we are going to be exporting a few juices to customers in Japan and also importing juices from Japan back into Europe.

    Gerald-McDonald, Maxim McDonald and HRH Duke of Gloucester looking at Yuzu juice

    Gerald-McDonald, Maxim McDonald and HRH Duke of Gloucester looking at Yuzu juice

     

     

     

     

     

     

     

     

     

     

     

    One particular juice we are looking at is yuzu which is a citrus based juice with a taste that is a mix of lemon, mandarin and grapefruit. An interesting taste with a lot of health benefits. Yuzu juice is reported to have three times the amount of vitamin C than normal lemon has and it is beginning to be used in quite a few restaurants in the UK. Waitrose, the UK supermarket chain, has a berry blend that has a bit of yuzu in it and there are some tonics with yuzu in them also. We are now starting to import yuzu from Japan with a view to taking advantage of the predicted demand.

    Interestingly the yuzu tree can take many years to grow to full fruit bearing maturity leading to yuzu becoming a very precious fruit. In Japan people not only love yuzu juice, they also use its peels in tea or for seasoning purposes in foods and they even float them in the bath for skin care! The yuzu tree can live for 100 to 300 years or more.

    FJF: With your own blending facilities and a research and development lab as well as a packaging facility are you self-sufficient in the whole process of sourcing through to delivery?

    MM: Yes, I think that’s definitely one of the value-added services that we offer. As well as blending we then have the ambient, chilled and frozen storage option so everything is stored under BRC conditions and if customers want frozen juice instead of asceptic juice for instance then we can supply that.

    We employ more than 50 staff in the UK now and we looking to expand the blending facility as we still have space on this site. For the moment that is! The Basildon location has good links with ports and motorways with the London Gateway and Tilbury port close by and many large companies are settling here including Costa the leading coffee retail chain who have their main UK roastery here.

    FJF: Can you tell us about some of the challenges you as a business face going forward and the industry as a whole?

    MM: Timing is always a challenge in the fruit juice business because unfortunately nature doesn’t always do what you want it to! Sometimes crop seasons can be late. For instance, this year we were supposed to be getting offered lemon prices from producers in Argentina in March but they are only just starting to come through now. A lot of customers were expecting lemon to be ready much earlier but it has been considerably delayed. This has been due primarily to the weather in the north of Argentina where a lot of the lemon crop is grown. There has been extensive, unseasonal rain and a lot of flooding so it hasn’t been physically possible for anyone to pick the lemons off the trees. You have customers wondering what’s happening and what’s going on and you are trying to hurry things along to get the fruit and the prices in but it’s so unpredictable at times like this.

    There is obviously the whole sugar tax issue which affects our customers more than us but in a way we haven’t really seen the full effect of it yet. Because we deal a lot with citrus products like lemon which is not associated with being bad for you it hasn’t really been a problem for us so far. The soft drink companies have really acted quickly to change their recipes before it is actually implemented which is a good thing as we thought they would take much longer to react.

    As a business we have high hopes for the Japanese market and are closely watching to see how it goes. It is a very difficult market and we plan to be there for the long term as it will take a while before things really take off there. As mentioned earlier we now have an office in Kobe staffed by Japanese colleagues and we are off to Japan next month to display the company’s products at several exhibitions including the Tokyo Café Show where we are promoting some British drinks there and some of the ingredients that we can offer.

    Even though Japanese tastes are very different – they are very big on seaweed for instance whereas in the UK it is just starting to develop – the market is a very mature one like the UK. You get a lot of different products and there are some quite adventurous tastes in Japan just as there are in the UK. We think there are some key similarities despite the different cultures and there are some things that connect the two and we hope to take advantage of that. The Japanese love British food and drink as well so we feel that our investment in Asia will be a positive one for the future of Gerald McDonald.

    By Caroline Calder Features
  • 13 Mar
    CASE STUDY  From field to shelf, Sono Global’s acquisition of the Cajuba juice production facility in Bahia, Brazil strengthens the company’s fully integrated chain business model

    CASE STUDY From field to shelf, Sono Global’s acquisition of the Cajuba juice production facility in Bahia, Brazil strengthens the company’s fully integrated chain business model

    Sono Global recently acquired the Cajuba juice production facility at Nova Soure in Bahia, Brazil with a view to complementing and increasing its product range. The plant has the capacity to produce both FCOJ and Tropical juices (including passion fruit, mango and acerola, amongst others). Following a downturn in the plant’s fortunes due to funding problems and lack of access to the key markets, Sono Global stepped in and acquired the company back in July 2016. This was part of their strategy of adding another key link in the integrated supply chain that Sono Global are pioneering in the fruit juice industry through the introduction of a business model that has been so successful in other commodities such as oil.

    Fruit Juice Focus talks with three of the principles of Sono Global: Frank Runge, Darren Jenkins (CEO) and Richard Malpass.

    Fruit Juice Focus (FJF): Could you give a brief background to Sono Global

    Sono Global (SG): Sono was formed in 2010 with the objective of becoming an integrated fruit juice production and distribution business, focusing on our first production plant in Ghana. From that initial business the group has developed to the point where we now have two production units, a distribution and packaging solutions business, Maia, and two trading arms, Steinhauser in the US and Sono Bv in Europe.

    FJF: You purchased a production facility in Brazil in July last year. How did this come about?

    SG: We are always looking for production assets in prime locations to expand the range of products that we can supply to our customers. We have been aware of the plant in Brazil for some time and its excellent access to a wide range of tropical and citrus fruits.  As the plant was part of a larger group which was in Administration the challenge was to find a way of acquiring the plant from the authorities. This was a very complex process and took far longer than we expected.

    FJF: What were the reasons behind the failure of the Cajuba operation before the acquisition?

    SG: The world of banking for a commodity our size has changed quite dramatically. In the recent past the agricultural banks were comfortable with financing this (Cajuba) type of business and the various seasonal fluctuations that went with them. But after the banking crisis the majority of these banks decided to restructure with the aim of looking to invest in commodities that were far greater than the citrus industry. So for Cajuba they were falling unfortunately into the bracket of being too small for one and then too big for the tier below and so the business ultimately failed. However it must be noted that this was not due to the orange juice side of the operation, as that is actually a fairly standardised and commoditised business, but it was on the tropicals side of the business that the funding became an issue. The tropical fruits are very expensive and you require an awful lot of financing to fund the cash flow requirements at peak times when they come into season. The Cajuba plant is an integrated plant where you need both critrus and tropical to work simultaneously. You can’t switch a plant like this on with just the tropicals and then not run the orange line and vice versa, you need both as a contributor to the fixed cost. They might not make the margins or the profit at the same time but you need to run them both simultaneously.

    The other problem was that this was a very Brazilian inwardly looking organisation and they didn’t have access to the European and US export markets for tropical products leaving it stuck in a trap in terms of market.

    FJF: Had the plant ceased operations when Sono took over? 

    SG: It wasn’t quite ‘mothballed’ but it was in a state where it needed a fair bit of refurbishment to get it up and running again.

    FJF:  How long had the plant been operating before you purchased it?

    SG: The original plant had been producing juices and concentrates since the early 1970s including cashew, mango, passion fruit, acerola and guava.

    FJF: Were you able to get any local government support or aid to help get the plant up and running?

    SG: No. We’ve learned from having our first plant in Ghana (Africa) not to rely on government aid or grants. They may come later. People are very happy that we are here in Brazil and providing a welcome boost to the local economy but this has not translated into any offers of financial support or investment.

    FJF: Are you able to say how much Sono invested in the purchase?

    SG: This is confidential information although part of the information is available from the public records office in Brazil but this doesn’t give the complete picture.

    FJF: How many people does the plant employ?

    SG: The plan is to bring the workforce up to about 180 employees when we are fully up and running and bringing on different fruits at different times. At the moment we employ around 120 staff.

    FJF: There has been much talk over the past decade of juice traders being squeezed on price by both the big producers and the big global supermarkets. Was this part of your reason to get into production?

    SG: We have always been a producer of juice, which also trades a number of other products. Our plan is to sell more and more of our own production. This gives us control of the whole supply chain which for many of our customers is becoming a key issue.

    FJF: This strategy of controlling the whole supply chain is an interesting one and quite new to the fruit juice industry. How have you developed this for Sono?

    SG: We (Darren and Frank) and a lot of the other investors come historically from an oil background where integrated chains were created as early as the eighties and the nineties. In the business that we are finding ourselves here there are very few players who have an integrated chain. You have got the brands whether they are supermarkets or just big brands on the one side who don’t really look for an integrated chain. They just make sure they have got the right quality at the right price point at the right delivery point throughout the year. And then you’ve got the super-producers who again don’t really go down this integrated route either, and in-between you have the people who do the infrastructure – the shipping industry, the warehouse industry. But somebody who really goes from field to shelf is very very rare in this sector.

    We are working to overlay and map out a process that works for another commodity such as oil into the fruit juice industry. So far so good. People are ultimately interested more and more in having security but not ownership or control over the food that they process. So if you are a brand that would like to have an integrated chain but are not in a position to do so for whatever reason, their business model may not allow it or for reasons of the size of their company they can’t develop the chain scenario. But they like the principle and security of whole integrated chain – and that’s where we at Sono come in. Our model aims to control the agricultural asset and deliver that security to the end user. They want to know where their crops are grown, they want to know who the farmer is and they want to know who the people are that are picking it and to know they are being paid properly and they are paying their taxes and they have healthcare and all those things but they don’t want to own the asset to give them that security.

    FJF: Why did you choose to invest in the Brazilian industry?

    SG: We invested in Brazil simply because of the access it provides us to high value tropical products, such as acerola and passion fruit.

    FJF: Do Sono Global own plantations in addition to the production plant?

    SG: We currently do not own plantations, however in the correct circumstances we would not rule this out. Our current model is to contract grow many of our crops. For instance in Ghana we are currently contract growing 15,000MT of MD2 pineapple which the Pinora plant will process.

    FJF: What might the correct circumstances be?

    SG: It is difficult to predict at this stage in our development. It is a huge outlay of capital. Owning land is not the expensive part as we have figured out. It is the irrigation and the plantation, so it becomes a different pot of money that would seek to invest in owning a plantation.

    At present we give plantations the outlet. If you grow it we will be there with the plant and convert it into another commodity. We prefer a relationship with a farmer, who is near to us, where we have a certain dependency on each other. We do a longer term joint venture or growing deal with them as we are not the agronomist, they are. We see no added benefit in owning a piece of land and doing the agronomy ourselves because none of us are agronomists and that is not our focus.

    FJF: What, if any, have been the main obstacles you have faced so far with the facility? And how were these overcome?

    SG: We have not faced any unforeseen obstacles with the plant to-date. We had sufficient time to plan the process with our excellent management team on site and we are delighted the project has run very efficiently so far.

    FJF: Have you kept the local management team in place or have you had to draft in your own people to get the plant up and running?

    SG: From the 180 people that we will have in place when we are fully operational there would be most likely 90 of the original staff, and yes it’s on the management side that we have made changes to the workforce. You just can’t all of a sudden find a workforce locally that is qualified to transform the operation to the level and standards we require. So we brought over key personnel from the management team running our African plant where we spent a time and resource getting that up to speed and working perfectly. Now we are using this expertise in the Brazilian operation. We have a technical guru who has gone into Brazil and done all the work that was needed to get the plant up to the level that it is now so we can confidently produce all of the juice that the plant allows us to.

    FJF: Were there any issues with quality certification standards and laboratory facilities?

    SG: The plant had all of the normal certificates beforehand, BRC (British Retail Consortium) and so on and we are just going through the process now of reinstating everything because it is effectively a new plant. There are two great labs on site which have been refurbished and brought up-to-date so we are basically self-contained in that respect.

    FJF: Are there any specific directions that you hope to take the Cajuba plant in?

    SG: We are seeking to develop the Agro supply base around the Cajuba plant in the coming years, with a view to having around half of our fruit contract grown in the next five years. It is also our intention to develop the volume for organic fruit we process at the plant. In our Ghana plant 39% of the fruit we process is organic or Fairtrade.

    FJF: With regards sustainability, do you plan to introduce the support initiatives of the local farmers with farm school programmes similar to those you run in the African plant?

    SG: Yes we do. Although the position in Brazil is slightly different. In Ghana, we still run these programmes and there we have now educated some 2500 farmers who we have put through a six course module on everything from planting to pruning, weeding to spraying, and given them log books, and undertaken practical as well as theoretical work with them. We have a background in providing that level of educational support to our farmers. It is essential because otherwise the quality of the fruit that we get delivered is too poor. In Brazil they are slightly further ahead in sophistication but we have contracted an agronomist to work with the Cajuba plant because there may be different things that for certain markets we have to control to ensure that the organic chain remains intact, such as the level of pesticide for example. And for that you need an agronomist who can provide schooling for the farmers to help them understand that there is an additional value to them if they control their crop better.

    FJF: Could you give some capacity information on the plant and also the varieties of juice you plan to produce?

    SG: The plant has four lines in total, one running orange products, the remaining three focusing on tropical fruit. The plant is able to process approximately 100,000 tonnes of fruit a year. The main products are frozen concentrated orange juice and cold pressed oil, passion fruit juice, acerola Juice, mango Juice, cashew Juice as well as a variety of other locally consumed products. These juices can be produced as either cloudy or clarified, and we have the ability to run purees and puree concentrates as well. The plant itself is very versatile which is one of the reasons it’s so attractive.

    FJF: In addition to the fruit processing facilities at the plant do you have packaging facilities on site?

    SG: We pack into drums and bins. When we bought the plant there was a tetra pack line there – it was a pretty old line and we had no intention of using it. It’s not our model – we are simply bulk producers of bulk juices. We leave it to the experts to bottle and pack it.

    FJF: In terms of location, is the plant in a good location to serve both the local and international markets. Is it near good road, rail and ports?

    SG: A bit challenged with regards the railways! And it is not exactly close to the port but there is a reasonable road network. This is the sort of thing you learn when you start working in countries like Brazil. 400km for most people in Brazil is like a walk in the park, but it’s still a very long ride in a lorry pulling a container of juice, but it’s perfectly ok, perfectly manageable. The key is that the plant is right bang in the middle of the agricultural area. If you bear in mind that we are making concentrated juices and normally moving ten times more fruit than we are when producing juice it is more important to be close to the fruit!

    FJF: Which destination markets are you targeting?

    SG: Primarily we are targeting the European and US markets and the local markets where appropriate.

    FJF: What do you see as the key consumer juice trends in the medium term? And how do you plan to address these?

    SG: There is a continual trend towards cold pressed juice and puree, and the use of vegetable juices in blends will continue to grow as the focus on the negative issues around sugar intake continue. We see organic products continuing to grow in the medium term. To meet these demands its more about having the right Agro supply chain to support these demands, which we have available to us in both of our production locations.

    FJF: Are the trends global or do they differ in the various markets you operate in?

    SG: They are basically trends in the high value markets. Cold pressed juices are too expensive for more normal people to be able to buy so they are very much an American and European trend. You certainly don’t see that kind of demand in other parts of the world.

    FJF: Is demand for organic and Fairtrade products on the increase from your customers? 

    SG: The market leader is Europe, followed by the US with more and more interest in the US. People locally don’t really value it because they see the fruit which is growing on their doorstep so there is no premium for it in the local market.

    FJF: Are you looking at any other acquisitions/mergers in 2017 and beyond? If so, in which markets?

    SG: In the coming year we are going through a short period of consolidation, whilst we put all of our business units on to an integrated ERP (Enterprise Resource Planning) system. The ERP system understands what the demand is and does all of the maths relating to this. It’s basically an accounting system.

    We are however still investing in our businesses, for instance in Ghana we are installing a cold pressed oil facility to extract further value from the process. We are also installing a Solar park at this plant to reduce costs and improve our CO2 footprint.

    One of the attractions of the Brazilian acquisition was the wide range of premium products that we can now get involved in. Clarification of juices is another key thing for us going forward. Our ability to clarify high end products is a valuable piece of the jigsaw for us. Sono Global plans to be the go-to company for those who have a demand for clarified juice products.

    By Caroline Calder Features
  • 13 Mar
    The market for organic fruit juices in the Nordic region is on fire	 	 	 

    The market for organic fruit juices in the Nordic region is on fire      

    Fruit Juice Focus talks with Jyri Kähönen CEO of Raikastamo (aka Freshery Drinks) about their journey from small beginnings to being one of Finland’s leading organic fruit juice producers

    The market for organic fruit juices in the Nordic region is on fire. There is huge awareness and demand at present and growth shows no signs of slowing down. In Sweden the organic market grew by 25% in 2015 and in Finland growth levels were at 12% whereas the conventional groceries market in Finland managed only 0.3% growth in the same period according to the Finnish Organic Food Association.

    Raikastamo are one of Finland’s leading organic fruit juice producers and their products can now be spotted in the best cafes and shops across Finland and neighbouring Nordic countries.

    Fruit Juice Focus (FJF): Can you tell us a little bit about your company and why you entered the organic fruit juice market?

    Jyri Kähönen (JK): Raikastamo got started from very small beginnings – we were six friends who started pressing apple juice from an apple orchard in Southern Finland. We were lucky to win the prize for the Best Finnish Organic Product in our first year of operation. That’s when things got rolling.

    At the moment we are growing fast – now we are operating in three categories in premium organic bottled juice drinks for HoReCa, children’s organic juice drinks and organic carbonated sodas. During 2017 we will launch a range of 1 litre organic juice drinks for the retail market and a new craft soda brand. We have achieved a steady foothold in the Finnish retail market and are in the process of expanding to other Nordic markets. In the international market we operate under brand name Freshery.

    The organic market provided us a point of entry to the market as a whole. There was still space for a small organic player such as ourselves between the big established players like Valio, Refresco Finland and Eckes-Granini. Also the Minimum Order Quantities (MOQs) for organic ingredients are usually much smaller than for conventional products. That enabled us to source from the global market in the first place – the minimum quantities for conventional products would have been overwhelming for us in the beginning.

    FJF: How do you as a company and your products achieve organic status? Is there a certification process?

    JK: The organic certification process is strict. It is supervised by the national and EU supervision authorities. In Finland the certification is granted by The Finnish Food Safety Authority and the licence is audited annually. The Finnish Customs run random laboratory tests on a regular basis to check for traces of pesticides and other forbidden ingredients from the raw materials we use and the finished products we sell.

    FJF: How and where do you source your organic raw materials, or do you grow them yourselves? Can supply keep up with demand?

    JK: The Finnish domestic supply does not satisfy our need. We are also operating with citrus and other more exotic fruits for which there is no supply from the local market. We source our supply from the global market via agents and also directly from the supplier of the raw materials.

    The annual alternation of the crop levels in organic farming is much more volatile than in conventional farming because of the smaller scale and because no pesticides or fertilizers are allowed which means that we have to be constantly reviewing our sources of supply. So far we have been able to satisfy our needs but as we are expanding we might face challenges in the future on that side as well.

    FJF: What challenges has your company faced and how have you been able to overcome them?

    JK: The awareness for organic products in the Nordic market is on a good level. Luckily the days when it was necessary to educate or convince the consumers are over. Now we are able to focus on developing our brand and sales in a far more receptive market.

    The big question with the retailers is always the price point. The organic ingredients and raw materials bear a higher price in comparison with conventional ingredients and raw materials and that, naturally, has an effect on the consumer price point as well. The only way to justify the higher price point is to focus on quality and the strong brand.

    From the beginning we have considered marketing as our core competence. In our team we have a television commercial director and an industrial designer, and one of the founding partners was a director for consumer experience in a major IT company. Therefore we had a strong orientation on marketing and brand building from the onset. I believe that is what differentiated us from the other small, production-orientated players.

    FJF: How do you see the organic market developing, and you as a company within the organic space?

    JK: As a small, growing company we plan to work market by market. At the moment we are focusing on the Nordic market. There is still plenty of work and room for development for us here. Having said that, we are always open to discussion if the right distributor should walk in from some other territory.

    Image credits: Antti-Jussi Rantala

    By Caroline Calder Features
  • 12 Mar
    Restoring consumer confidence by rapid authenticity and identity testing for juices and juice ingredients

    Restoring consumer confidence by rapid authenticity and identity testing for juices and juice ingredients

    Stefanie Hellbach (1), Paul Rösch (1,2), Stephan Schwarzinger (1,2)

    ALNuMed GmbH, Bayreuth (1)

    Research Center for Biomacromolecules, University of Bayreuth, Bayreuth  (2)

    Consumers complaining about the quality of a brand product or, even worse, a critical media report by a consumer organization always cause significant costs in trade. In recent years, falsely labelled products pretending superior quality, premium provenance or premium variety caused dramatic losses in consumer confidence, resulting in a loss of faith in product declarations of a large number of consumers. To guarantee the value of store products it is therefore of utmost importance to ensure their quality and authenticity. For both, raw materials and end products, magnetic resonance (MR) based ingredient profiling offers a quick and versatile way to simultaneously screen quality and authenticity, in particular when applied to fruit juice, wine, honey, edible oils and related foods.

    Food fraud is the modern spectre producers, retailers and entire branches of the food industry are afraid of. Scandals such as the horse-meat issue weaken consumer confidence – not only in products of single “black sheep“, but rather in much of the food industry. Thus, products with fraudulent declaration, if or when discovered, damage all participants of the value chain.

    Fraud identification is a very difficult task, as adulterations are in many cases performed with great care and expertise. Rare are those cases in which a single parameter identifies an adulteration. Often, an adulteration is cleverly masked by addition of a blend of ingredients. Particularly difficult to uncover is food-origin laundry, that is the fraudulent labelling of food with a wrong geographic location. Although numerous expensive and time-consuming analyses are often being conducted to reveal food-origin laundry, it is difficult to obtain even close to 100 % confidence.

    SGF (Sure-Global-Fair) Juice-Profiling (1), originally developed and now continuously maintained with support of SGF International (www.sgf.org), and BatchCheck are cost and time efficient alternatives that are based on the magnetic resonance spectra of the foodstuff to be tested. SGF Juice-Profiling relies on a single quick measurement that allows it to quantitatively assess numerous ingredients. Magnetic resonance spectroscopy has a unique dynamic range and high resolution, rendering simultaneous quantification of dozens of substances possible at very high and very low concentrations within a short measurement.

    Very simple sample preparation adds to robustness and reproducibility of the method. For instance, this juice profiling method allows a quick estimate of the concentrations of sugars, organic acids and amino acids, replacing costly and time-consuming traditional analyses and allowing the comparison of the spectral fingerprint with a database of thousands of authentic samples. Thus, fruit type, geographic origin, fruit content and even unexpected and yet unknown adulterations can be quickly screened.  Even if the results from the juice profiling were not perfectly conclusive, usually based on the composition an efficient and inexpensive route for additional analysis – if needed at all – can be delineated of the basis of the profiling results. At present, SGF Juice-Profiling is available for more than 30 fruit types and delivers up to 37 quantitative results in addition to authenticity testing (fruit dependent).

    Adulteration frequently occurs along the trade-chain. Consequently, merchandise samples and delivered batch are not always identical. BatchCheck takes advantage of the high resolution and the unmatched reproducibility of magnetic resonance spectroscopy regarding quantitative information. The procedure relies on the comparison of the quantitative spectral fingerprints of the merchandise sample and a sample drawn from the delivered batch. By contrast to, e.g., stable isotope methods, where typically a handful of parameters are used for such comparisons, BatchCheck utilizes several hundreds of signals available from the magnetic resonance spectrum (Figure 1). Using statistical methods fingerprints of the merchandise sample and the batch that was finally sold are compared in back-to-back measurements with highest sensitivity in the shortest possible time. In the case of deviations of the two samples that are being compared, combined with the quantitative evaluation available from SGF Juice-Profiling can aid identification of deliberate adulteration, dilution or quality defects resulting from inappropriate storage before, during or after transportation.

    Today, magnetic resonance based profiling tests are routinely applied for quality and authenticity screening of fruit juices, wines and honey. Applications include testing of raw materials as well as finalized and packaged products. The method is applied by the private sector as well as governmental agencies. Utilization of a centralized ISO 17025 accredited evaluation method in combination with the outstanding reproducibility of the magnetic resonance technology, maximum comparability and reproducibility of results is ensured. SGF Juice-Profiling has been applied for over 10 years in the market. The Honey-Profiling (2,3) module that was added recently expands the capabilities of the profiling method. With this newly available module it is possible to quickly screen for adulteration of honey, an important ingredient for many fruit juices. Hence, magnetic resonance based profiling offers significant advantages for time and cost savings in production, and can make an important contribution to regain lost consumer confidence.

    Fig 1 (a)Fig 1 (b)

    Figure 1: ALNuMed’s BatchCheck relies on the quantitative information of hundreds of signals available from a magnetic resonance ingredient fingerprint. In the above, two expansions of such ingredient fingerprints are shown (10 % of total fingerprint; magnetic resonance scale in ppm [parts per million], intensity scale in arbitrary units). The right panel shows fingerprint traces from two different batches of a fruit puree, while the left panel depicts ingredient fingerprints of two samples of the same batch. It can clearly be seen that the fingerprints of samples from different production batches differ significantly – despite resembling the same fruit type. By contrast, the fingerprints of the same sample depicted in the right panel are essentially identical. The region selected typically shows signals of phenolic substances, which are present at comparatively low concentrations. Of note, from the same measurement magnetic resonance allows quantification of ingredients present at much higher concentrations, including sugars and organic acids. The resulting quantitative fingerprint differs in quality and reproducibility form other available technologies and even allows testing for fruit variety, dilution, and geographic origin of the fruit with SGF Juice-Profiling.

    Literature:

    (1) Spraul M et al.: NMR-Based Multi Parametric Quality Control of Fruit Juices: SGF Profiling. Nutrients 1(2), 148-155 (2009). doi: 10.3390/nu1020148

    (2) Schwarzinger S et al.: More than honey? Rapid authenticity testing of honey with NMR spectroscopy and consequences for sample preparation. Q&More 2, 36-43 (2014). http://rs1.chemie.de/images/23940.pdf

    (3) Schwarzinger S et al.: Authentic food: Why a single analysis parameter is not enough. Q&More 1, 37-43 (2016). http://rs1.chemie.de/images/30172.pdf

     

     

     

     

     

     

     

    By Caroline Calder Features
  • 10 Mar
    How the juice industry can adapt to the future of healthy drinks

    How the juice industry can adapt to the future of healthy drinks

    Stefan Fageräng, Managing Director of North West Europe, Tetra Pak

    Consumer habits and lifestyles are changing in many cases for the better, but for the drinks and particularly juice industry, change comes with a considerable number of hurdles and opportunities.

    At a macro level, people are consuming the same or more calories than they did previously, yet they are burning off fewer calories due to their increasingly sedentary lifestyles (1). As we consume more and exercise less, poor health and obesity are issues which clearly go well beyond the influence of one industry sector. Collaboration will be key to avoiding a very serious health crisis in Britain. Industry, government, and health experts must work in partnership to deliver positive change to consumer lifestyles, while encouraging further reformulation in the drinks industry and beyond.

    Why now?

    In the Tetra Pak Future of Healthy Drinks report, we looked at how concerns over obesity levels are starting to influence consumer behaviour and purchasing decisions and what this spells for the future of healthy drinks in the UK. Juice companies must appeal to consumers and see the new health agenda advocated by the UK government as an opportunity for innovation.

    The announcement of the Soft Drinks Industry Levy in March 2016 marked a turning point for the industry, and calls on drinks manufacturers to be accountable for the effect of the ingredients in their products, particularly sugar. Consumers are already becoming more concerned about sugar and calorie intake with more than half worrying about the volume of sugar in their food (2).

    There is already positive innovation in the juice market, as producers launch new drinks with low sugar content or natural ingredients. However, meeting the demands of both the public and the government’s agenda around health remains a challenge. Consumers may be increasingly health-conscious but they still seek indulgence from their beverages. They don’t want to be restricted in their choices just because they’ve decided to take a healthier approach to their food and drink intake (3). It’s about striking a balance – a combination of excitement and adventure, coupled with healthy nutrition.

    What innovation is already happening? 

    Whilst there is concern about healthy consumption, choice and flexibility remain a must for consumers. Portion control and reformulated products play a large role in helping consumers make healthy choices and we are starting to see the juice industry make changes in these areas.

    In depth: Cawston Press

    Cawston Press Kids Blend Sunshine Sipper Landscape

    Cawston Press noticed that consumers’ tastes were changing, and that as part of this people were drinking more plain water, flavoured waters, and generally moving away from overly sweet products, not just in drinks but across the board. As parents themselves, the Cawston team were watering down juice for their own kids, so decided to develop a range of kids’ drinks made from a blend of 60% pure juice and 40% water. In addition to being a product they thought children would like, they felt that for kids who might not have drunk juice before, this was an important opportunity to train their palates to like less sweet things.

    Cawston’s instincts proved well founded: the Kids’ Blends range has done very well since it was launched in 2012. The team recently launched a new variant, ‘Sunshine Sipper’, a blend of fruit and vegetable juices (orange, apple, and carrot), water, and vitamin C, and are also looking at expanding into new markets, such as the US.

    What does the future look like?

    There’s no ‘silver bullet’ solution to solve the current health issues we’re facing in Britain. The government’s obesity plan and the Soft Drinks Industry Levy will continue to cause great debate, and while the drinks industry has already shown a willingness to tackle the problem, there is still a lot more to be done.

    There are practical ways that juice drinks producers can address these challenges. Discussions must continue between experts in industry, health and nutrition committees, and the government, whilst keeping in mind the needs and desires of consumers. There are still a lot more innovation opportunities open to juice drinks producers to encourage healthier consumer choices. Healthy, sustainable nutrition is clearly here to stay; the successful businesses of the future will be the ones which recognise and act upon this.

     

    1 Cut Down on your Calories – NHS – http://www.nhs.uk/Livewell/Goodfood/Pages/eat-less.aspx

    2 Bridgethorne Shopper Index

    3 Fruit juice, juice drinks and smoothies UK, Mintel Report 2015

    By Caroline Calder Features
  • 02 Jan
    Coco-colossal

    Coco-colossal

    Twelve years ago, during a casual outing to a New York City bar, childhood friends Mike Kirban and Ira Liran met two young women from Brazil. Shortly after that night, Ira hopped on a plane to Brazil to see one of the girls and learned that the coconut water hype was real. When Mike came to visit a few months later, they got down to business with a plan to bring coconut water to the US. Vita Coco was born. The rest as they say is history.

    By Steve Features
  • 01 Jan
    The Spread Of Citrus Greening Continues To Be A Worry For The Florida Citrus Industry

    The Spread Of Citrus Greening Continues To Be A Worry For The Florida Citrus Industry

    Citrus greening is a disease that is devastating millions of acres of citrus crops throughout the United States and has already killed massive quantities of citrus plants in Florida and surrounding states causing concern for the future of commercial citrus growers and citrus supply to the fruit juice industry.

    By Steve Features
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