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This is a transcript of episode twelve of the Down to Agribusiness podcast. Visit the show page here.


Anuga Review: Insights from inside the world's largest food show

Neil Murray

Hello, welcome to the twelfth episode of the Down To Agribusiness podcast. My name is Neil Murray, I am the editor of Foodnews in IEG Vu, and I'm sitting here accompanied by Christina Nanni who handles our tomato and our frozen coverage.

Cristina Nanni
Hello.

Neil
Hello. Well, we're back from Anuga, we've been back for about ten days, and it was, as ever, a marathon, and hugely enjoyable at one and same time. I understand from the organisers that, yet again, the attendance was up, and there was always something to see. Beverages was a little bit subdued this year, partly because Anuga took the decision to move things like hot drinks into a separate hall, which was actually probably a good idea in long term, but also because of the situation in the industry itself.

Price is absolutely the top issue of the moment. Everything was going up in price, even at the show, to the extent that the Chinese pulled their AJC, apple juice concentrate offers, and simply told everybody that they were going to assess the situation, and then come back into the market. During the show, at the famous Cutrale Monday evening cocktail party, the Brazilian price increases for FCOJ were confirmed, so they have gone up by $2-300 a tonne. Apple juice concentrate is at, not a record level, but it's heading that way. Grape juice concentrate was rising in price during the show as well, that's being pushed because it competes, in some applications, with apple juice, and also because, this year the grape juice manufacture has been severely curtailed, because has been enough fruit, and there hasn't been enough fruit because the frost that damaged a lot of the apples also damaged a lot of the grapes.

In soft drinks, it was interesting to note that the really big soft drinks companies, the multinational giants, you know who we're talking about, were actually not present. To be fair, a lot of their subsidiaries, their smaller companies, like Innocent which is owned by Coca-Cola, and other companies which are owned by, for example, PepsiCo, were there, but you didn't see a big, big presence by the soft drinks companies. This industry is under threat as well, because there's the sugar issue, which is affecting everything, including consumption of fruit juices, and there's was also the problem of caffeine, which is also getting a bad press. So, this have a knock-on effect in that the energy drinks industry, which in the past has had a series of massive pavilions, and music, and dancing, and everything else, that was remarkably subdued as well.

Cristina, what do you see?

Cristina
Yes, for the frozen sector, what I saw is just the market is on a little bit of a standstill right now. So, the European buyers bought what they could on the market, the stocks are low in Europe, as we know, the price is really high. There was quite an excitement on the Chilean stands, because there they expected, they have great expectations for the coming season, hoping to sell more, higher volumes in Europe, rather than only in the US, at more convenient prices than last year.

Interesting was the launch of a few new products for frozen, particularly for, like, a little package with a variety of fruit for a smoothie, so ready-made, ready-mixed, ready to blend. Another interesting element was for the tomato sector, that I'm covering too, so there was the fact that, this year, there were really few stands of tomato brands, or tomato processors, so the few processors that were at Anuga, they were presenting several products, or they were sharing booths with other brands, or other products. That is a sign of the crisis that the tomato sector is having in the last period.

Neil
Yes, I thought the new product development in the beverages hall, again, was subdued. If the major juices are falling out of favour as drinking juices, because of the sugar issue and other things, price will probably be one of them, you would expect possibly more new product development happening in juice drinks, juice blends and so forth, but it doesn't really seem to be happening. Everybody is worried about the effect of the price increases and consumption of fruit juices, but if you actually look at the overall export and import figures, as much juice and juice concentrate is being traded as ever it was, it's just that it's becoming an ingredient, and because it's become an ingredient, I would have expected to see more new product development.

People seemed to be concentrating on, as you said, exotics, tropicals, berries, drinks with added chia seed, I noticed that, drinks with extra vitamins, minerals, and so on and so forth. Really, the most, shall we say, emphatic new products being showcased at Anuga, tended to be water products, flavoured water, bottled water, water made from icebergs and all sorts of exotic things like that, it's still water, after all, but this was evident. It was evident at the last show as well, and, of course, in the United States now, bottled water is the number one soft drink, so people are doing whatever they can with water, because, 'Hey, guys, it's low-calorie, hey, it hasn't got any sugar in it,' and they're doing what they can.

I didn't think, from the beverage side, it was the best Anuga I've been to. It was it was slow. How busy was it in the frozen hall?

Cristina
No, it was pretty busy in the frozen, it was alright. I think it was depending really on the nationality. So, there were, like, the Serbians, Ukrainian, they were really busy, because they are exporting berries. Less busy, for example, were the exporters of frozen vegetables, because it's a more stable market. Not really busy, the tomato stands, to be honest. They were quite empty, so it's really a sign of what's going on in the market.

Neil
For me, one of the things I noticed, was seeing European buyers, and industry people that I know, engaged in-, I'm not going to say stealthy, but quiet discussions in corners, and stands, with people that they would not normally buy from. I'm particularly thinking here about apple juice, and about grape juice. The Europeans are having to deal with the Chinese on apple juice. AJC from China is going to be a big thing in Europe this year, and it's going to be blended with European apple juice, because that's the only way, really, the industry can work it at the moment. I also noticed somebody I know quite well, on a corner one of the Latin American stands, no names, no pack drill, again engaged in in earnest conversation, because we shouldn't forget that Latin America is going to have an opportunity in 2018, both in the US market, and also in Europe. For example, Chile, a few years ago, when European apple juice was expensive and its own was cheap, was able to come into Europe, and for a while, for one season, maybe two, Europe was actually a bigger market for the Chileans than the United States was. Well, the pendulum's swung back, and European apple juice became extremely cheap, to the detriment, also, of the Chinese, and Chile, not abdicated the market, but its sales went right down. Well, I think the pendulum is going to swing back again, and to judge by the people I saw talking in quiet corners, this is a certainty. I don't know what you think's going to happen from Latin America into Europe?

Cristina
I think, like, what I notice is that Peruvian products are really strong now, so mango, avocado, what is a superfruit (ph 08.31) is getting the market, and, what I noticed-, it my first Anuga, so I cannot really compare, but I can compare to Sial. I compare to last year in Sial, there were many more Peruvians than in France.

Neil
Yes, the Peruvians were there. The South Africans had a smaller presence, I think, as far as southern hemisphere people go. The Chileans had a large pavilion, but it was noticeable that, I think, at least 75% of the Chilean pavilion-, there's a rhyme there-, was taken up with dried fruit and nuts. They were relatively poorly represented on the beverages, canned, and also frozen side, but on the frozen side, they can't compete with Europe anyway.

You mentioned Sial, the big rumour that was running around Anuga was, 'Is Anuga going to go to an annual show?' This was interesting, because it was mentioned to me by somebody who possibly shouldn't have mentioned it, and I tackled Christine Hackman, who is the wonderful Anuga press officer, and said, 'Look, what's going on here?' I didn't get a direct denial. I was told, 'Well, we are examining opportunities, and we are looking at options, and we always do,' and this, that, and the other. If Anuga is planning to go to be an annual show, then (TC: 00:10:00) the only way it can really work is to knock Sial out of the alternating years, because, as everybody knows, they switch years. This year, it's Anuga, and next year, it's Sial, and in 2019, it will be Anuga again. Well, there's no way that Anuga could possibly, I don't think, organise itself to launch a competing show for Sial in 2018, and besides which, in 2018, most people have probably already booked, or the show's fairly heavily booked.

If they decide to do it as an option, if they take up the option and try to launch a competing show in 2020, then they would have to count on a head-on confrontation with Sial, and the question to that is, would they win it? What do you think?

Cristina
We don't know, we'll see, we'll see. I don't know, we'll see where it's going.

Neil
Yes, okay, yes-,

Cristina
Let's not get into this.

Neil
We shall refrain from comment. Of course, one thing that both the shows have, is they are limited in their expansion. Anuga is plainly booked out. Sial, although smaller than Anuga, is also fully booked out, and there isn't that much room for either to increase further. Sial has added a couple of extra stands in the last few years, and Anuga has remodelled the halls and given itself a bit more space, but certainly the case of Anuga, there are people who would love to get in there but haven't booked early enough. If they can, perhaps, have the option of taking-, not through, shall we say, not every single Anuga, but doing perhaps two out of three, maybe the market is big enough for Anuga to take Sial head-on, I don't know.

For the other things around the stands, there was an awful lot of interest in-, not so much interest, it was fresh produce, and products made with freshness emblazoned on the packs. You saw, again, cold pressed juices, which are the premium, premium fruit juice, NFC-type, and this is something we're going to see more of. These are super-premium products. They are made from all-natural ingredients, and they are gaining traction in China, among other places, which is interesting to see. What did you notice?

Cristina
Whatever is like, not compared to Sial again, it's just that the organics area was quite big compared to-, I don't think Sial had, to be honest, such a hall dedicated to organic, and if it had, it was pretty small.

Neil
I don't think-, I can't remember if Sial does or doesn't. Anuga certainly had organic as a subplot, a subsection.

Cristina
Yes, exactly.

Neil
You're right, this is something also that's growing. Organic sales took a dive in the credit crunch recession, and they're now pulling themselves out, but this also comes back under the theme of naturalness, and good for you, and healthy, and I think you're right. You're going to see more organic products. I was able to get a price for organic apple juice, which is something I've never been able to get before. I could actually get a price quote, and have somebody else say, 'Yes, that's about right, that's about right. So, it's getting more mainstream, and with the customs, the HS codes is now being expanded to include organics, they started doing this, what was it, three or four years ago, starting with dairy products, so you could get organic milk, organic milk powder and so forth, and they're rolling organics out across other sections. Obviously, the fresh fruit and vegetable section is one, but it can't be long before it starts impinging on the sort of products that we are involved with, fruit juices and processed tomato. You're absolutely right, that is something was very evident at Anuga, and is going to get stronger.

Cristina
Especially in frozen berries, that was something that was growing.

Neil
Yes, well, this year's been a disastrous year for everything berry anyway.

Cristina
We hope, you know, a better year-,

Neil
Hope for better luck next year.

If you would like to comment about Anuga, or let us know something more about this event, you can reach out to us on Twitter or send us an email.

Neil
We also still have our Anuga supplement, which is available for a free download from our website. Details are on the episode page, or on the description notes for iTunes. You'll also find details of our last two country supplements, which we published pretty much simultaneously, on South Africa, which is the first time we've done one on South Africa, and also Chile, we've been doing a Chile supplement for many years. These also are available as free downloads to non-subscribers.

You can access additional content on the episode 12 page.

If you have any questions or comments regarding this podcast episode, or if you have a topic you’d like us to cover, you can reach out to us on Twitter using #DowntoAgribusiness. Be sure to subscribe to this podcast on iTunes or agribusinessintelligence.com where you’ll also find additional resources on this topic. Thanks for listening.

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