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Tristan Harris, the co-head of family-owned grocer Harris Farm, says he is looking forward to the day when customers can shop for a chocolate bar and get a carbon credit in return for their purchase.

Mr Harris said offsetting or avoiding carbon pollution in the production of food was the best way forward, but the retailer was working hard in every part of the business across its 10,000 products and thousands of suppliers to create a more ecological supply chain.

“So what we’re spending our time on at the moment is measure directly or get good enough proxies to measure carbon, and then allow the customers to opt in to offset,” Mr Harris told the UBS Australasia Conference.

“Obviously, it’s much better to avoid creating a carbon problem in the first place. I’m really looking for the time when we have carbon negative products so when somebody buys their bar of chocolate, they can get a carbon credit.”

Mr Harris said while it sounded relatively simple to bring all this information around production to the consumer, it was not.

“It’s going to take some innovative companies a bit of work to try to muster all that vast range of information and present it in a beautiful way to both retailers and customers,” he said.

Harris Farm is seeking to gain B Corporation status, spending time educating the consumer and seeking to move to 100 per cent renewable electricity by early next year.

Mr Harris noted Harris Farm also repurposed food: old bread was turned into bread crumbs and fresh kale was made into kale chips.

Consumers consider production

Anthony Pratt, the chief operating officer, northern operations, at JBS Australia, said the group was investing in high-end automation in its factories, which was improving the welfare of its people and creating higher global energy savings.

JBS Foods Australia is part of the Brazilian giant that is Australia’s largest meat and food processing company. The global company’s CEO recently made the commitment to go to net zero by 2040.

Mr Pratt added that if any business wanted to be a major player in any industry, as an operator, you felt the “gravity” of sustainability.

He said consumers made decisions to purchase your products or a competitor’s, taking production into account.

“If you’re not active in this space then it’s hard to get the consumers interested in your product,” he told the conference.

When asked about the rise in popularity of plant-based protein and if it would play a role in achieving its carbon reduction goals, Mr Pratt said there was no “silver bullet”.

“Will people eat more plant-based than animal protein? On the evidence we’ve got today, no. Plant-based protein has been around for a couple of years now, and it’s certainly a marketplace on its own that has contributed to people’s diets, but we’ve not seen any reprieve for our core products,” he said.

Brendan Savage, owner of Tolga Farm in Western Australia, said finding a cheap and efficient way to measure soil carbon would be welcome.

“Any work we’re doing with soil organic carbon testing, we’re in the infancy as far as that goes. We try and renew projects that were up and running in 2008 to 2012 ... but everything takes time as far as the bureaucracy goes,” he said.

Mr Savage hoped this project would enable him to go back to the sites and find out which practices had resulted in a beneficial change.

The boss of ASX-listed GrainCorp says the grains giant has side-stepped and even benefited from the global supply chain crisis after reporting a $139 million profit in 2021 due to bumper harvests.

Pandemic-triggered disruptions in the global supply chain have left many retailers short of stock and consumers have been warned to start their Christmas shopping early amid major delays caused by ongoing shipping issues.

However, GrainCorp chief executive Robert Spurway said his company had managed to avoid the supply chain issues because more than 95 per cent of GrainCorp’s goods are delivered in bulk, meaning they do not require shipping containers, which are in short supply and the cause of major congestion and delays.

“If anything, supply chain challenges globally have benefited us,” Mr Spurway said on Thursday at the company’s 2021 financial year results.

He said only two of GrainCorp’s 115 vessels carrying grain experienced minor delays this year, which was “unusual” in the current environment. “In my experience over the years of global shipping, that’s almost unheard of,” he said. “That gives me huge confidence as to our resilience in terms of the model we operate, the decisions we make.”

Likewise, ingredients, packaging, imports or exports associated with the processing business have experienced no interruptions, he added. “That’s not just through good luck. It’s through very good management, working with our suppliers and our partners to make sure we’re planning ahead.”

GrainCorp posted an underlying net profit of $139.3 million for the 2021 financial year, up from a $16 million loss the year before. The company more than doubled its dividend to 18 cents per share fully franked, up from 7 cents per share in the 2020 financial year.

Mr Spurway said 2021’s “bumper” harvest was due to excellent growing conditions and the end of three years of drought which allowed farmers to plant “just about a full crop”. The company expects the favourable conditions to continue through to the 2022 financial year.

“There’s very strong evidence that that’s absolutely continuing across the rest of the country. Farmers are now just working through the logistics of getting that crop harvested and bringing it into storage.”

GrainCorp shares were down 1.64 per cent to $6.57 in late afternoon trading.

The Coca-Cola Company has acquired an 85-per-cent stake in BodyArmor, a line of sports performance and hydration beverages, after taking a 15-per-cent share three years ago. 

The deal, valued at US$5.6 billion, will see BodyArmor managed as a separate business within Coca-Cola’s North America operating unit. The brand will keep its base in New York, while the co-founder and chairman, Mike Repole, and president Brent Hastie will continue their roles at the company. 

“BodyArmor has been a great addition to the system lineup over the last three years,” said Alfredo Rivera, president of the North America operating unit of The Coca-Cola Company. “The company has driven continuous innovation in hydration and health-and-wellness products.”

Under the partnership, Coca-Cola and Repole will also collaborate on BodyArmor’s still beverages portfolio, including marketing, packaging and innovation strategies across multiple brands. The company will continue to be distributed by the US Coca-Cola bottling system. 

According to the company, BodyArmor is currently the number two sports drink in the category in measured retail channels, growing at about 50 per cent to drive more than US$1.4 billion in retail sales.

“Ten years ago, we set out with a vision to create a better-for-you sports drink with a goal of becoming the number one global sports drink,” Repole said. “Our talented leadership team under Brent Hastie, our 400 dedicated employees and incredible Coca-Cola bottling partners have helped us build this remarkable brand.” 

Wesfarmers will acquire 100 per cent of Priceline Pharmacy-owner Australian Pharmaceutical Industries, signaling the retail conglomerate’s entrance into the wellness space.

API had been locked in a tug of war between Wesfarmers and fellow pharmaceuticals firm Sigma, which made a bid at keeping Wesfarmers out of the health space, but ultimately stepped out of the contest over the weekend after the retail business upped its ownership of API to 19 per cent and said it would vote against Sigma’s deal.

Wesfarmers’ offer landed at $1.55 per share, signaling a 35.4 per cent premium to the business’ closing share price as of 9 July, and a 36.8 per cent premium to its one-month weighted average.

API’s board recommends its shareholders vote in favour of the deal, which will still need to be approved by the ACCC, and which is expected to be completed in the first quarter of calendar year 2022.

According to Wesfarmers, the aim of the buy-up is to enable the conglomerate to enter the “growing health, wellbeing and beauty sector”.

“API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector,” Wesfarmers’ managing director Rob Scott said earlier this year.

“The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our business for growth over the long term.”

Allied Foods has received regulatory approval to proceed with its planned acquisition of independent rival bakery Dad’s Pie’s. 

The Commerce Commission said today it had granted clearance to Allied Foods’ subsidiary George Weston Foods NZ to buy the business. Both companies make savoury pies and sausage rolls retailed through supermarkets, dairies, convenience stores, petrol stations and food distributors that supply cafes and restaurants. Allied’s pies bear the Big Ben brand, while Dad’s sells them under its own name, along with The Baker’s Son in supermarkets. 

Commissioner Dr Derek Johnston said in a statement that the commission is satisfied the acquisition is unlikely to substantially lessen competition in any New Zealand market. 

“Our investigation found that GWF and DPL are not each other’s closest competitors in New Zealand. Customers consider Big Ben to be a ‘base’ or ‘mainstream’ pie, whereas Dad’s Pies are considered to be ‘premium’ pies,” he said.  

“We also found that GWF and DPL compete against several large and well-resourced competitors, including from Australia. Post-merger, we expect that the merged entity will face significant competition from these players for all the different types of customers they supply.” 

Listed Australian single malt whisky distiller Lark Distilling Co is to pay $40 million to acquire Kernke Family Shene Estate, the owner of the Pontville Distillery and Estate. 

Lark will raise $53 million to complete the purchase and fund construction of a 1 million litre distillery on the acquired land as well as accelerate the company’s export strategy.

Pontville is located north of Hobart in Tasmania and the site includes 16ha of land, a 130,000-litre distillery, cellar door, bond stores, cooperage, stables and homestead. 

Pontville will become Lark’s third working distillery in Tasmania, alongside its Cambridge and Bothwell sites and will contribute to the inhouse production of 576,000 litres of Lark whisky each year. Lark at Pontville will commence distilling in February and open its cellar door there with Lark’s master distiller Chris Thomson and his team will continue to oversee whisky distilling, and product development for the combined business. 

The new 1 million-litre distillery is scheduled to be commissioned in 2023. 

“The acquisition of the Pontville Distillery and Estate supports our vision of becoming a global icon in single malt whisky,” said Lark Distilling’s MD Geoff Bainbridge. “This builds on our vision to become the world’s most innovative distiller.”

Bainbridge said the assets provide significant whisky inventories on value-accretive terms and re-balance the maturity profile of the company’s whisky under maturation. 

“Critically, the age profile and quality of the whisky under maturation being acquired will enable The House of Lark to commence an export programme from FY23 which is approximately 12 months ahead of previously published plans.”

With the acquisition including 483,000 litres of whisky under maturation, Lark now expects to have more than 2 million litres of whisky under maturation as of June 30 next year, valued at around $435 million. 

The deal is binding with settlement scheduled for early next year. 

• Australian start-up Zero Co broke records on Tuesday by raising $5 million in crowdfunded investment in less than seven hours.
• Founder Mike Smith said the day felt like “a cheesy Hollywood start-up movie.”
• The funding, and additional investment, will see the company expand its range of refillable personal care and household products

Mike Smith and the team at Zero Co expected Tuesday’s equity crowdfunding round to succeed. What they didn’t anticipate was $5 million in new investment in less than seven hours, breaking records to become one of the most spectacular crowdfunding rounds in Australian history.

“It was ridiculous to be completely honest with you,” Smith told Business Insider Australia. “It was a wild, crazy, rollercoaster of a day… It felt almost like a cheesy Hollywood start-up movie.”

‘Just crazy’: Zero Co breaks Birchal crowdfunding records

Australian start-up Zero Co launched in 2020, pledging to cut down on single-use plastics with refillable personal care and home cleaning products under a direct-to-consumer model.

Boosted by a compelling product, savvy marketing, and an initial $250,000 Kickstarter campaign, Zero Co says it now services 43,000 Australian households, accruing $8.2 million in total sales.

Seeking the funds to expand its operations at home and abroad, Zero Co took to equity crowdfunding platform Birchal to seek a maximum of $5 million in fresh investment.

Pre-registration opened 11am Tuesday, with the offer set to open to the general public on Thursday.

Smith would not need to wait that long. When the dust settled, 3,082 investors had contributed the full $5 million in six hours and 27 minutes.

Zero Co’s funding round became not only the largest in Australian history, but the fastest to meet the $1 million and $3 million marks.

“Honestly, people were dancing and hooting and screaming in the office all day,” Smith said.

“We were quietly confident that we were going to be able to reach the $5 million maximum funding limit. But we had no idea that it was going to happen as quickly as it did.

“You know, most of us thought it was probably going to be about a week long campaign and to have it done in under seven hours was just crazy.”

Although the target has been reached, the round will officially close on Thursday, 4 November. Smith said over half a million dollars is effectively sitting in a “waiting list”, should existing investors pull out in the coming days.

The round also serves as a major victory for platforms like Birchal. The ability to meet investor demand for start-up equity powered the sector to its biggest-ever quarter through September, the company said. The Zero Co round suggests the field has more room to grow.

‘Big demand out there for products like ours’

The crowdfunding success was backed by a further $6 million in investment from venture capital fund Square Peg, and a $2 million boost from existing investors — a roster including names like Koala founders Dany Milham and Mitch Taylor, and Atlassian co-founder Scott Farquhar.

Smith said the Square Peg investment came under the same terms and price as the crowdfunding offer.

That funding will go towards the expansion of Zero Co’s range to 30 personal care and household products, each of which will fit into the company’s circular economy philosophy.

Strong interest in the company has reflected an unmet demand for reusable products across a range of categories, Smith said.

“There is this big demand out there for products like ours, and in in all kinds of different product categories that are more sustainable and have less of an impact on the planet,” he said.

The funding will allow Zero Co to set its sights on the European and North American markets, he added.

“We want to go after the big fish,” Smith said. “And, you know, markets that we can have a really oversized impact on the single use plastic problem.

“Going into a market with 300 million customers that are all using single use plastic every day is really exciting for us, and the impact that we can therefore have on the problem [of single-use plastic].”

And if the launch was a Hollywood movie, Smith already has eyes on the sequel: building out the circular economy worldwide, and providing a template for other major producers to emulate.

“Big ships take a long time to turn,” he said.

“But they are they are starting to, and I’m heartened by some of the experiences I’m having with the companies about their ability and their willingness to want to kind of do the right thing.”

London | Australia will on Tuesday force China into a formal World Trade Organisation dispute process over Beijing’s punitive wine tariffs, in a move the beleaguered wine industry hopes will offer “an exit ramp” from the stoush.

“We’re not going to get a silver bullet from it. It’s not going to solve the problem unless the international relations improve,” said Tony Battaglene, chief executive of Australian Grape and Wine.

“But it does give us an exit ramp: it gives everyone the opportunity to shake hands, make up and move on. And to show our customers that we don’t subsidise our production.”

China last November slapped tariffs of between 107 and 212 per cent on Australian wine, claiming Australian exporters were dumping their product in China between 2015 and 2019, when shipments soared.

The federal government sees the tariffs as politically motivated – part of a broader series of punitive trade actions designed to deter Australia from taking political positions or making strategic moves that Beijing dislikes.

The chief executive of beleaguered milk and infant formula producer A2 Milk has said the company will double down on its China aspirations despite major uncertainties over future growth amid changing consumer preferences and economic instability.

David Bortolussi, who stepped into the role of A2’s head in February this year, told The Age and The Sydney Morning Herald the company was confident it could rebuild its sales in the key region, with the business telling investors at a strategy day on Wednesday it was planning to grow sales by around $NZ800 million ($763 million) to $NZ2 billion in the next five years.

“Through [today’s strategy] you’ll see there’s, if anything, actually a doubling down on China,” he said. “Yes it is a risk, in many ways, but it’s also our biggest opportunity by a long, long way.”

However, A2’s short-term woes remain, with the company providing a trading update that revealed that there had been little improvement in sales in the region for the first quarter of fiscal 2022. Shares plunged 10.6 per cent to $6.12 following the news.

In fiscal 2021, China made up around 32 per cent of A2’s revenue, though this is down on fiscal 2019 where China contributed to 40 per cent of sales. Since then, the advent of the COVID-19 pandemic has brought about a number of fundamental changes in the region that have hurt A2’s growth.

A drop in China’s birth rate has shrunk the market for infant formula, and the pandemic has also seen a sharp reduction in ‘daigou’ resellers, which drove a significant chunk of A2’s sales into the region. In response, domestic formula producers in China have stepped up to fill the gaps, creating more competitive intensity and faster product innovation.

On Wednesday, A2 outlined a new strategy to address these issues, telling investors the company would look to double its Chinese-label product market share, regain at least half of the English-label revenue lost in the region during COVID, and grow its other dairy and nutritional products in the region.

“It’s such a heavily regulated category, so it’s much more challenging for us. We’re going to be very careful where we expand to.”

A2 Milk chief David Bortolussi

It plans to achieve this through increased investments in marketing and e-commerce, along with expanding its distribution into more stores and Chinese cities, along with exploring other product ranges at different price points, as the company’s products are currently in a higher cost, more premium bracket.

“I think there’s an opportunity for us to expand our brand. We’ve been very successful with a...very simple, focused portfolio, but when we look at the competition you see how much others have actually innovated and expanded,” Mr Bortolussi said.

“One opportunity that we may have is actually to innovate over time and introduce another product that allows us to access perhaps a different demographic and price point.”

A2 will also focus on expansion into other markets such as Korea, Vietnam and Singapore to further build the business in non-Chinese Asian markets. It will also focus on growth in its already sizeable US business, announcing on Wednesday it had struck a deal with major US chocolate company Hersheys to produce A2-branded chocolate milk.

Mr Bortolussi stressed the company was not following in the footsteps of fellow food company Treasury Wine Estates, which was forced to almost entirely abandon the Chinese market after hefty tariffs were placed on Australian wine.

“It’s such a heavily regulated category, so it’s much more challenging for us,” he said. “We’re going to be very careful where we expand to.”

He also noted the current concerns around China’s economy, including the pressures facing the country’s property market, were not an immediate issue for A2, but acknowledged they could pose a problem in time. However, he was hopeful of government initiatives that may bolster the country’s declining birth rate.

“The government is very focused on this already has announced some policy initiatives, and we don’t underestimate how impactful government policy and action can be in China,” he said.

When ethical toilet paper company Who Gives a Crap first floated the idea of launching its very own coffee brand, “Brew Gives a Crap”, it wasn’t seriously considering the idea, it was purely as an April Fools’ Day joke on social media. But there was an unexpected response. 

“Half of our customers thought it was a funny April Fools’ joke, and the other half was saying, ‘Oh my god, this is amazing, I can’t wait to try it.’ So we thought maybe there’s actually something in this,” Who Gives a Crap co-founder and CEO Simon Griffiths told Inside Retail. 

A few years down the track, the brand has followed through with the launch of a coffee product this week. Who’s laughing now? The aptly titled Blend No. 2 was introduced after much research into the effects of coffee on the human body. 

“After a lot of research, we realised coffee was a product that made some people need to go to the bathroom more. We’re always looking for ways to grow a business and to help stimulate demand,” Griffiths said with a smile. 

The B Corp donates 50 per cent of its profits to water and sanitation charities around the world and to date has donated over $10 million. But in order to reach the billions of people who still lack basic sanitation services, the company says they’re “going to need to sell a lot more toilet paper”. 

“The main thing is that we’re always trying to think about how to accelerate that impact mission. We’re really excited to put this out into the world,” Griffiths said. 

In line with Who Gives a Crap’s core values of operating ethically and sustainably, the organic coffee blend is Fairtrade certified, has carbon neutral shipping and comes in a 500g compostable bag, accompanied by a roll of premium bamboo toilet paper, of course.

“We haven’t seen a bag like this in the market before. Coffee bags typically have a plastic liner in them which cannot break down; this one is fully compostable. It’s a very cool piece of innovation that we’re hoping will become more and more popular with coffee brands in the future,” Griffiths said.

The coffee has been sourced from four different regions and is available as whole bean or ground. Griffiths said it is important for the business that the coffee is Fairtrade certified. 

“Our business exists to make people’s lives better. We take both social compliance and environmental compliance very seriously,” he said. 

The team of coffee drinkers in the business also took the taste very seriously. 

“Many of us are based in Melbourne, so we do take coffee very seriously. This has been through some incredibly rigorous taste testing to make sure we’re putting something out into the world that we’re really proud of and we know our customers will enjoy as well.”

High demand for limited edition products

While the product is intended as a limited edition, for online purchase only, Griffiths hasn’t ruled out the possibility of making it a permanent feature in the product portfolio.

“We expect it will probably sell out. If it’s something that our customers love, we’ll consider turning it into an ongoing product range,” he said. 

Limited editions are an important part of Who Gives a Crap’s product strategy. It collaborates with artists and illustrations on limited edition wrappers which it releases throughout the year and are hugely popular with its loyal consumer base. 

“They’re really amazing moments for us, particularly for customers who’ve been with us for a while to experience something different. They love our product and some customers buy every single limited edition wrapper that we produce which is amazing,” he said. 

“We thought this was an interesting twist to try it with a different product and see how that’s received by our customers.”

The brand has had a bit of a cult following since it launched in 2010. 

“There weren’t many brands that were tightly aligned to the ethics and values of our customers [at the time], and so I think what we were doing really spoke to a lot of people in a powerful way,” Griffiths said. 

“The fact that we follow through on our promises, and when you get in touch, there’s a real human at the other end of your email; by doing all of those things we’ve created a community around our product which is pretty amazing.”