News

Natural health and supplement retailer Mr Vitamins has launched a natural health bundle range called Vit Kits to “streamline” the supplement shopping experience.

The range is available in five kits under Sleep, Skin, Kids, Calm and Soothe categories, with each kit containing three natural supplements and remedies designed to address relevant conditions.

According to Better Health research, about two-thirds of Australians use complementary and alternative therapies.

Garry Mortlock, CEO at Mr Vitamins, described the kits as a “culmination” of the brand’s quality supplements and expert advice condensed into one kit.

“Each Vit Kit was caringly curated by our qualified naturopaths and nutritionists. From a topline perspective, we believe there is a gap in the market for holistic product bundles, which is why we decided to launch these first five Vit Kits that can assist with some very common health ailments.”

He added there are plans underway to expand the Vit Kits range further according to consumer demand.

The kits are available across Mr Vitamins stores in Sydney and online.

Stuart Alexander & Co, the privately-owned trans-Tasman food and grocery distributor, has secured the rights to represent global tea company Ekaterra’s brands in Australia.

The brands – including Lipton, Bushells, Pukka and T2 – will be distributed across the distributor’s established supermarket channels along with restaurants, hospitals and corporate offices.

Robby Lowrey, Ekaterra’s head of customer development, said the company sees the partnership as “key” to accelerating the growth of its Australian business.

“Ekaterra’s establishment as an independent, single-category business since its sale from Unilever provides a big opportunity to realise the potential of our incredible tea brands across a multitude of channels,” he said.

Stuart Alexander & Co CEO, Nick Nairn, said the partnership will assist Ekaterra to break into new channels and grow its portfolio by 25 per cent in the next three to five years.

The wholesaler already distributes global brands including Chupa Chups, Lotus Biscoff, Mentos, Hershey’s, Monin, Evian and Tabasco.

The world’s largest food trading companies detailed a plan on Monday to eliminate deforestation from their supply chains for soy, beef and palm oil by 2025, a step seen as essential to averting catastrophic climate change.

Destruction of forests – like the Amazon rainforest to make way for farm fields and ranches or Indonesian jungle for palm oil – emits huge amounts of greenhouse gas each year, helping to drive climate change.

The roadmap, launched at the COP27 United Nations climate summit in Egypt, comprises 14 firms including Cargill, Bunge, Archer Daniels Midland, Louis Dreyfus Company, Brazil’s JBS and China’s COFCO International.

The firms said the plan helps put the world on track to limit global warming to an increase of 1.5°C above pre-industrial levels, the threshold beyond which scientists say climate change risks spinning out of control.

The roadmap “represents a significant sector milestone in eliminating commodity-driven deforestation in line with a 1.5°C pathway,” COFCO International CEO Wei Dong said in a statement.

Many of the firms had previously committed to eliminating deforestation by 2025, with the plan establishing milestones along the way that vary slightly by sector.

The environmental advocacy group Mighty Earth CEO Glenn Hurowitz said that 2025 was not soon enough, calling for all deforestation to be ended immediately.

“The roadmap’s insistence that individual companies undertake best efforts to establish individual cut-off dates for deforestation no later than 2025 means the bulldozers will keep running and the destruction will continue,” he said in a statement.

The industry has a spotty record of meeting past deforestation commitments.

In 2010, hundreds of the world’s largest consumer brands as part of the Consumer Goods Forum pledged to reach “net zero” deforestation by 2020. But as the deadline approached, Cargill said that the food industry would fail to meet the goal.

The plan also calls on firms to establish targets for reducing their greenhouse gas emissions and to begin disclosing their emissions from land use change in 2024.

Family-owned pie brand Mrs Mac’s has been sold to Aus Pie Co, following months of financial pressure and tough times as a result of the Covid-19 pandemic.

In July, The Australian Financial Review and The West Australian reported that Mrs Mac’s was seeking an emergency capital boost to pay down debt or attract a new owner to take control of the iconic brand.

AFR reported that KPMG’s advisers were quietly taking a handful of potential investors through due diligence.

The West Australian stated this week that it had “made inquiries after a filing with the corporate regulator late on Wednesday showed a creditor’s voluntary winding-up process of the 68-year-old company had begun. However the liquidation is only for the old corporate entity, with Mrs Mac’s to continue trading under the new owner”.

“The acquisition of the Mrs Mac’s ensures that the tradition continues and that Mrs Mac’s has a bright future ahead,” said Bruce Feodoroff, CEO at Aus Pie Co. “We have plans to revitalise the company with further investment and improve the range, without sacrificing the flavour’s Australians and New Zealanders love.”

Mrs Mac’s began in Perth as Bakewell Pies in 1954 and was started by the Macgregor family, moving from the city to its current Morley manufacturing headquarters in 1968.

Currently, Mrs Mac’s head office and factory are based in Perth, with an office in Sydney and representatives across Australia and New Zealand.

Coining the famous term “if it’s not a Mrs Mac’s, take it back”, the company employs more than 330 people and has produced more than 100 million pies, rolls and other pasties across Australia and New Zealand.

In September 2021, Mrs Mac’s introduced a new and improved bakery range to be sold at local supermarkets, petrol and convenience stores.

In 2018, the business underwent a rebrand, complete with a new logo, a fresh look and new packaging which highlighted the company’s 68-year history.

Australia’s national wine inventory has risen for the second consecutive year as sales lull, according to a new survey from Wine Australia.

The industry body’s annual production, sales and inventory report found that supply chain constraints in the past two years have severely impacted the Australian wine sector coupled with high deposit tariffs on bottled wine imported to Mainland China along with changing consumer habits.

Total sales for both domestic and export wines were down by 9 per cent to 1.06 billion litres while total Australian wine production was down by 12 per cent to just over 1.3 billion litres.

The national stocks-to-sales ratio for red wine increased by 35 per cent to 2.77 while white wine remained static at 1.52.

Wine Australia’s manager for market insights, Peter Bailey, said the report captures the challenges the Australian grape and wine community have endured during the past couple of years.

“Wine inventory levels fluctuate during the year, generally being at their maximum just after the new vintage and then depleting over the next 12 months as wine is sold.

“However, transportation challenges in getting wine to market is reported to have had a flow-on effect, with wine production capacity expected to be further constrained ahead of vintage 2023 as a result of the higher-than-average inventory.”

The report is a “snapshot” of the national position and covers an estimated 77 per cent of total wine production and is not representative of smaller wine models.

Danielle Byrne has been named Reckitt Hygiene’s new head of sustainability and purpose for Australia.

The newly created leadership role will see her develop and execute the sustainability agenda for consumer household brands including Finish, Glen 20 Vanish and Pine O Cleen.

Byrne joined Reckitt in 2018 and has worked with several strategic customers, most recently with Woolworths. She has experience across the consumer goods industry internationally and lead commercial roles in the UK prior to joining the company.

Reckitt Hygiene ANZ’s regional director, Oliver Tatlow, said Byrne is already playing a “critical role” in helping bring the business’ sustainability strategy to life.

“We recognise that there is more to be done which is why we’ve appointed Danielle Byrne to this newly created role. Danielle brings great energy, drive and focus to the areas where we can make the biggest impact, and her appointment reinforces Reckitt’s commitment to work towards a more socially conscious and environmentally sustainable future.”

Last year, Reckitt pledged to halve its carbon footprint and the use of virgin plastic. It is moving to be 100 per cent renewable energy by 2030.

Major food and grocery brands in Australia are supporting a new scheme to keep soft plastic packaging out of landfills and build a new recycling industry that can produce food-grade, recycled soft plastic packaging in the country.

Led by the Australian Food and Grocery Council (AFGC), the National Plastics Recycling Scheme (NPRS) is a project designed to close the loop for soft plastic packaging and produce food-grade packaging from recycled materials local FMCG companies need but have to source overseas.

The initiative comes just days after the suspension of RedCycle’s soft-plastic recycling scheme that has left thousands of tonnes of unrecycled plastics in warehouses, and supermarket giants Woolworths and Coles forced to suspend collection from customers.

Seventeen major food and grocery manufacturing companies listed below have signed on as Foundation Supporters of the NPRS project, committing funds to the trials and pilots:

• PepsiCo
• Haribo
• Mars
• Simplot
• Unilever
• Mondelez
• Goodman Fielder
• Mayers Fine Food
• Unicharm
• SC Johnson
• Arnott’s
• Fonterra
• George Weston Foods
• Nestle
• Kimberly-Clark
• Kellogg’s
• Lactalis

Tanya Barden, CEO, AFGC, mentioned that the paused RedCycle store drop-off program – unconnected to the NPRS project – addressed a part of the recycling market. However, she said there is a need for a larger-scale program to recycle soft plastics for the long term. 

“Soft plastic packaging plays a vital role in ensuring the freshness and protection of food, personal care and home care products, and manufacturers use soft plastics because they are strong and light with a low carbon footprint,” said Barden.

Nearly 487,000 tonnes of soft-plastic packaging was used in the country from 2019 to 2020, with just 4 per cent of that material recycled. The organisation said diverting soft plastics from landfill on a larger scale can provide a clean stream of material for the country’s emerging advanced recycling industry. 

Darren Thorpe, managing director for APR Group, added there is a huge demand for recycled food-grade plastics not just in the country but all over the world and that collecting soft plastics in large volumes is crucial. 

“We have the technology to do that, and these trials are shaping a scalable model that will enable the creation of a sustainable and efficient advanced recycling industry for soft plastics here in Australia,” said Thorpe.

The first in a series of trials of kerbside collection of soft plastic packaging for NPRS has already begun in Victoria’s Macedon Ranges Shire Council. 

The a2 Milk Company has been granted temporary access to sell its a2 Platinum infant formula in the United States as the country continues to face a significant shortage of baby formula after a contamination scare.

The US government has been dealing with a major crisis since February after Abbott Nutrition’s plant was closed following a contamination scare.

While multiple companies including smaller rival Bubs Australia was given special market access to help with the shortage, a2 Milk had missed out. In August, it received a letter from the US Food and Drug Administration (FDA) saying the regulator was deferring further review of its request to ship tins.

A2 Milk said on Thursday it now expects gross margins to be lower than average, and distribution costs to be higher due to potential air freight and rework costs in the near term, and incremental marketing and trade investment to enter the category.

Overnight, the FDA said a2 Milk will be able to import its a2 Platinum 0-6 months and 6 to 12-months ranges. Danone (Ireland) will also be able to import ​its Aptamil Stages 1 and 2 formulas.

“Both products will be sold at major US retail outlets,” the FDA said on its website.

The FDA added that the grant of special access follows a review of information provided “pertaining to the nutritional adequacy and safety, including microbial testing, labelling and additional information about facility production and inspection.”

The positive news sent the Kiwi company’s share price soaring on Thursday, gaining 29¢, or 5.5 per cent, to $5.56 each in afternoon trade on the ASX. It has been clawing back some ground since dipping just below $4 each in May.

The crisis continues in the US – while shipments of formula have landed, US media reports stores remain unevenly stocked, and officials in charge of the response blame hoarding, supply chain bottlenecks and manufacturers making fewer varieties.

A2 Milk chief executive David Bortolussi said on Thursday that the company has approval through to January 6, 2023 to import tins to the US.

The company can also supply Stage 3 toddler product in addition to Stages 1 and 2, which does not require enforcement discretion.

Mr Bortolussi added that the product to be supplied to the US has the same formulation as a2 Platinum but has different scoops, mixing instructions and labelling requirements to meet the FDA requirements.

This product is not currently available and will need to be manufactured as soon as possible, he said.

While the US represents a significant opportunity to develop the a2 Milk brand in the formula category over the long term, Mr Bortolussi said it is early days.

“In the near-term, and prior to confirming distribution plans, sales during FY23 are expected to be up to 1 million cans all within 2H23, assuming enforcement discretion remains in place throughout the period,” he said.

“Actual sales will ultimately depend on customer demand, consumer offtake, supply shortages and market conditions at the time.”

A2 Milk will provide an update on US distribution gains and sales outlook when it presents its first half results early next year.

Woolworths boss Brad Banducci says shoppers have returned to doing their weekly grocery shop on weekends, but must now face up to paying more as inflation makes itself felt in every aisle.

The supermarket giant revealed on Thursday that food prices across its Australian supermarkets rose 7.3 per cent in the September quarter, with fresh produce spiking even more as inclement weather and supply chain pressures hit fruit and vegetable producers.

“In the last month or so we’ve started to see Sundays become our major shopping day - which means customers have got far more routine and habit [than during COVID],” Banducci said.

But some of these shoppers have started to make tough choices about what goes in their trolleys, with signs people are trading fresh produce for frozen food, or moving to canned goods and cheaper home brand items.

The days of the $6 iceberg lettuce might be over, but the supermarket chain is still seeing price rises from producers and supply challenges across its fresh food range, Banducci added.

Challenges with corn and potato crops were also leading to issues with the supply of frozen products, and there have been delays to in-season fruits coming into stores at good prices, meaning consumers have to wait longer than usual for mangoes and cherries.

Banducci made his comments after Woolworths reported a 1.8 per cent rise in group sales to $16.3 billion for the 14 weeks to October 2 - the first quarter of its financial year. But Australian food sales weakened by 0.5 per cent compared with this period last year, when more shoppers were stuck at home due to the pandemic lockdowns.

Inflation continued to accelerate across the quarter, with the average price of food up 7.3 per cent in Australia, and 5.3 per cent higher in New Zealand.

The company did not specify the exact jump in fruit and vegetable prices during the quarter, but said there had been “double-digit” increases in this category.

Last week, Woolworths’s rival Coles confirmed it had seen inflation of 7.1 per cent across its supermarkets, with prices for fresh food up 8.8 per cent.

Woolworths’-owned discount department store Big W continued to benefit from the end of retail lockdowns, with total sales hitting $1.2 billion for the quarter, up 30.1 per cent on the same period last year. Online sales at Big W more than halved though in a sign that people have gone back to the shops rather than shopping on the internet.

UBS analysts said Woolworths’ numbers had come in below estimates, noting that Australian food sales had dropped 0.5 per cent despite inflation jumping during the quarter.

Despite the inflationary challenges, Banducci said that with 51 days to Christmas the company was focused on delivering customers an affordable festive offer.

“We are seeing strong early sell-through of seasonal lines, and we remain cautiously optimistic for the period ahead,” he said.

Woolworths shares opened lower amid a broader sell-off on the Australian sharemarket, and closed 3.5 per cent weaker at $32.05.

Dairy giant A2 Milk chief executive David Bortolussi expects to send a plane full of its custom-made infant formula to the US by late December or early January, having finally found a way into the lucrative market.

However, he is sober about how much market share and earning gains the win will deliver in the short term, given the freight and reworking costs involved.

Dual-listed A2 is preparing to manufacture infant formula made specifically to US requirements after receiving the green light on Thursday morning from the US Food and Drug Administration (FDA) to export its product.

Bortolussi said he was delighted to be able to supply its product to the US as the country continues to grapple with a national infant formula shortage sparked in February after a major infant formula plant in Michigan was forced to shut down following the discovery of a fatal bacterial infection.

“It’s an important longer-term opportunity, but the near-term impact may not be as material,” Bortolussi said. “The longer-term success of our business will depend on how well we market our product and how well that is received by consumers in the marketplace.”

Investors cheered the update, with A2’s shares rising 4.2 per cent to $5.49.

While getting its product into the US is a win for the company, it will have to make a product almost entirely from scratch. The formula inside the tins will be the same as a2 Platinum formula sold elsewhere, it must have different scoops, mixing instructions and labelling requirements to meet US rules.

“We don’t have that product in inventory at the moment. We’ll need to commence manufacturing that product as quickly as possible with [supply partner] Synlait Milk ... within the next couple of weeks,” Bortolussi said.

After the product is prepared, it will be subject to a 25-day quality assurance process before being ready to export to the US, in late December or January 2023.

US FDA’s approval comes more than five months after A2 Milk’s smaller rival Bubs Australia received the green light. On May 16, the US Food and Drug Administration (FDA) released a temporary measure that provided a fast-tracked regulatory process for global companies to help patch the shortage.

ASX-listed Bubs Australia was the first manufacturer in the world to submit its application, and secured approval from the FDA shortly after in late May. Australian brand Bellamy’s Organic secured approval on July 5.

A2 Milk submitted its application on May 26, but had to wait for months before being told by the FDA on August 10 that it had its submission delayed, along with a number of other applicants.

The company expects to sell up to 1 million tins of formula in the second half of the 2023 financial year. Despite gaining a foothold in the massive $6.1 billion baby formula market, A2 Milk expects earnings to be “incremental” as it will be offset by air freight costs, the cost of reworking the formula into new tins, and marketing and trade costs.

“We don’t underestimate the challenge in carving out a significant market share for our brand in the US market over time, but we’re up for that challenge, and we’re going to invest in that and execute the best that we can to achieve that,” Bortolussi said.

A2 Milk is awaiting to hear from the US FDA on whether it will send government-issued planes to collect product under ‘Operation Fly Formula’, through which Bubs was able to send millions of tins.

“We just haven’t received clarification from FDA,” said Bortolussi. “We would obviously like to be able to utilise that; it would be a big advantage and help expedite the process.”

Though global manufacturers have been able to enter the tightly held US baby formula market through the temporary FA measure, 95 per cent of the market is still held by the three dominant domestic players: Abbott’s, Reckitt and Nestlé.

A2 Milk is increasing production amid FDA’s approval and has assured that it would continue to meet regular supply to other markets, such as China. It will provide a market update about US earnings gains when it presents its half-yearly results or potentially earlier.

The FDA has published transition guidance that allows enforcement discretion-approved companies seeking a permanent pathway to the US to extend the temporary period until October 18, 2025.

Citi analyst Sam Teeger expects A2 Milk’s 1 million tins will add “low single digit upgrades” to the company’s 2023 earnings and said Bubs’ first quarter results demonstrated the US market may be more challenging than expected.

“Other brands that have also received enforcement discretion may have not yet made any sales in the US, suggesting execution is challenging despite product shortages,” Teeger said.

”While A2 may also face these same issues, the company’s existing US operations may be relatively better placed to oversee retail merchandising, and arguably it has a relatively more established brand in the eyes of consumers.”

A2 Milk currently sells liquid milk across major US supermarkets and retailers.

“However, A2 won’t have the same first mover advantage which essentially gave Bubs free marketing,” Teeger said.

It’s also unlikely the US will send government-issued planes to collect A2’s product, he added.