Daily Market Wire 21 August 2024


Offshore wheat firmed less than one percent. ASX December eastern Australia wheat eased 2pc. All other markets settled unchanged to lower.

International

According to Russia’s Ag Minister Russia maintains its 2024 forecast of 132Mt, including wheat at 86Mt. The grain export forecast remains 60Mt.  

Black Sea market analyst SovEcon increased its Russia wheat crop forecast to 83.3Mt from 82.9Mt reflecting yields close to record levels in Siberia and the Urals. Wet weather in those areas may complicating harvest and lowering quality. Unharvested crops should be near average yield.  Its corn crop estimate was cut to 11.9Mt from 13.4Mt, the lowest level since 2018, due to adverse weather with southern regions such as Krasnodar seeing close to record low yields. The barley forecast was cut to 18.2Mt from 19.3Mt due to lower area and yields. 

China’s soybean imports from the US jumped threefold in July from a year earlier but Brazilian supplies still took the bulk of the market share. China imported 475,392t from the US, compared with 142,129t a year earlier. Imports from Brazil eased slightly to to 9.12Mt. For January-July, China’s imports from Brazil totalled 43.55Mt, a 12pc increase from the same period last year. Total arrivals from the US are at 12.63Mt, down 25pc year on year. 

Michael Cordonnier left his US corn forecast unchanged at 183.5 bushels/acre with production of 15.17 billion bushels. Dr Cordonnier noted weather continues to be beneficial for grain filling though the next few weeks are likely to see soil moisture decline. He left his bean yield estimate at 53.5 bushels/acre with production of 4.61 billion bushels. He has a neutral bias for both crops. 

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. are facing a potential nationwide shutdown on Thursday if they cannot reach an agreement with their unionised workers, affecting over 9,000 employees. The impending strike threatens to disrupt the movement of essential goods like wheat, chemicals, and fertilisers, with industries bracing for billions in losses. 

Tunisia’s state grains office is looking to purchase 75kt of soft wheat, for Sept-Oct shipment. 

Japan’s MAFF is seeking 81,442t milling wheat from the United States and Canada in a regular tender that will close late on Thursday.

Australia

Yesterday’s bids in the west were largely unchanged with new crop canola bid around A$755/t FIS in most PZs, wheat $358 and barley $315.  

In the east new crop bids were down a couple of dollars, with canola bid around $685, wheat $328 and barley $313.  

Victorian old crop barley is being bid around +$10 over new crop highlighting low supply and a feeding demand still present, with new crop wheat being bid +$10 over old crop pricing full carry.



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Ridley FY24 earnings lift, return to Tas milling announced


Ridley has added a feedmill in Carrick, Tasmania to its portfolio. Photo: Ridley

THE RIDLEY Corporation has unveiled the acquisition of a feedmill at Carrick in Tasmania, as well as the construction of a new ingredient-recovery facility and more than $10 million in plant upgrades in releasing its financial results for the year to June 30.

This announcement marks Ridley’s return to Tasmania after selling its Westbury pellet factory to Skretting Australia for $54.85 million in June 2021.

The mill, located 17km west of Launceston, will be purchased from Tasmania’s largest egg producer, Pure Foods Eggs, for $6.5M.

Ridley managing director and chief executive officer Quinton Hildebrand told shareholders the company aims to increase production at the site from a single shift to a three-shift operation.

Mr Hildebrand said Ridley currently supplies 20,000 tonnes of dairy feed to Tasmania via its Pakenham plant in eastern Victoria, and this will now be supplied from the Carrick mill.

“Then as we will have local-supplier status, we think that will support us gaining further market share of the dairy sector within Tasmania,” Mr Hildebrand said.

“The combination of growing our volumes in the Tasmanian market and having capacity to continue increasing our market share out of the Pakenham feedmill into the Gippsland market gives us a good return on this investment.”

Mr Hildebrand also announced the construction of a new leasehold facility to replace an existing ingredient-recovery plant at Timaru, on New Zealand’s South Island.

The plant came as part of the acquisition of petfood input producer Oceania Meat Processors, finalised in March.

He said the facility will be equipped with $9M worth of plate-freezing equipment which will result in the plant processing product in block form rather than in tubs.

Mr Hildebrand said this method was preferred by customers, would be more energy efficient, and would create capacity to grow output.

Commissioning is underway to upgrades at the Clifton feed mill. Photo: Ridley

“We’re very excited by the opportunity that this presents when it comes online before October 2025.”

In the bulk stockfeeds business, a $7.9M project to upgrade the Clifton site, south of Toowoomba, is currently in the commissioning stage.

The project will increase capacity at the site by 25 percent, and accommodate increased demand following the expansion of an existing poultry customer.

An increase in demand after the closure of the AJ Bush rendering business in Sydney has spurred investment in Ridley’s ingredient-recovery segment.

Mr Hildebrand said currently, extra material was being processed by the Maroota plant in north-west Sydney, with the company “now considering what investment opportunities there are to make better use out of those raw materials”.

“We’ve also had raw material growth into our Laverton ingredient-recovery facility and we’ve committed there to a $1.9M debottlenecking project just to give us some runway for that expansion.”

Mr Hildebrand also foreshadowed “a number of other initiatives and growth plans that we’re working on and that we will progress in [FY25], but at this point there isn’t sufficient certainty to elaborate on those.”

Minor earnings growth

Ridley reported a modest increase of 1.7pc to the FY24 earnings before interest, taxes, depreciation and amortisation of $90M.

Net profit after tax for the period fell 4.7pc to $39.9M.

The bulk stockfeeds business led the results, returning an EBITDA of $44.4M, an increase of 23pc on FY23.

“This was a pleasing performance, driven by a 12.7pc increase in ruminant volumes as we gain market share in the dairy sector, enabled by the capacity from our debottlenecking projects.

“We also enjoyed a few months of supplementary feeding during the dry conditions back in quarter one.

“The benefit from the high ruminant volumes was partially offset by the 1.2pc decline in monogastric volumes, which was mostly the result of the…broiler industry breeder limitations.

“However, we did gain through some customer acquisition in the layer sector.”

The packaged feeds and ingredients business reported a decrease in EBITDA of 9pc at $59.7M, attributed to reduced sales prices for tallow and meal, and lower domestic aqua nutrition sales.

The company also incurred costs in the second half from the restructuring of the “underperforming aquafeed business” and pivot to increase capacity in the packaged petfood segment.

In FY25, Mr Hildebrand said he was confident the bulk stockfeeds business would continue to record strong financial results from increased capacity at Clifton and Pakenham, growth in the Tasmanian market and increased broiler feed volumes following the recovery from industry breeder limitations.

The packaged and ingredients segment was also expected to rebound due to the full-year earnings contribution of OMP and increased volumes following the closure of AJ Bush.

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Site issue prompts AEGIC moves in WA


AEGIC’s noodle and Asian products technical functions have moved to the Food Innovation Precinct of WA. Photo: FIPWA

THE Australian Export Grains Innovation Centre is in the midst of an unexpected move in Western Australia.

It has come about following the detection in June of concerning levels of asbestos at the WA Government’s Department of Primary Industries and Resources Development site in South Perth.

While AEGIC’s WA non-technical staff were quickly relocated to leased premises in Subiaco in Perth’s inner west, a new home for the unit’s technical staff has taken longer to find.

This week, AEGIC has announced its technical functions related to noodles and Asian products will temporarily relocate to the Sustainable Innovative Food Technology (SIFT) facility within the Food Innovation Precinct of WA, east of Mandurah, and around 50km south of the city.

“As WA’s leading food innovation and technology facility, SIFT is the ideal home for our Asian products and flour-quality labs in the medium term as we work towards more permanent arrangements,” AEGIC executive general manager Courtney Draper said in a statement.

Move expected, but not so soon

AEGIC is an independent not-for-profit company funded by the WA Government and Grains Australia, an initiative of the grower levy and Federal Government-funded Grains Research and Development Corporation.

Following the end of the single-desk marketing era which saw entities such as the Australian Wheat Board promoting Australian grain in offshore markets, AEGIC was founded in 2012 to increase value in the Australian grains industry.

In WA, AEGIC’s home from the start has been at DPIRD South Perth.

The WA Government had earlier announced plans to include AEGIC in a move to Murdoch University as part of a new complex which would enable DPIRD to move out of the aged South Perth site.

Announced in December 2022, the new facility was also to be home to InterGrain, DPIRD’s and GRDC’s joint-venture seed company.

AEGIC technician Kishor Sharma Regmi at AEGIC’s previous site in South Perth with udon noodles made from flour milled on the premises.

The asbestos issue has necessitated a faster move.

“Our technical experts have been hard at work moving equipment and setting up the new noodle labs at SIFT, which I’m pleased to say are already operating,” Ms Draper said in a statement.

SIFT is an investment of DPIRD and is operated by the Future Food Systems Co-operative Research Centre and Murdoch University.

AEGIC said it was working closely with DPIRD, Grains Australia and other industry stakeholders to identify medium-term alternative arrangements for all its WA-based technical functions.

This indicates baking is yet to find a new home.

New home for biosecurity prioritised

DPIRD’s South Perth site was also home to its Diagnostics and Laboratory Services.

On August 8, the WA Government announced a new State Biosecurity Response Centre was to be built for emergency management of priority pest and disease threats such as the critical polyphagous shot-hole borer response.

It is expected to accommodate more than 200 staff, and the location is yet to be announced.

“The Response Centre will also accommodate the department’s Diagnostics and Laboratory Services which were disrupted due to asbestos management and restricted access at DPIRD’s South Perth site,” the WA Government said in a statement.

“Suitable metropolitan locations have been identified for the new centre which is expected to be operational within months.”

The government said it has fast-tracked $83 million to urgently procure and fit out diagnostic laboratories and biosecurity response operations at the new centre, and that work on a new fit-for-purpose facility for DPIRD at Murdoch University will not proceed as planned.

It went on to say it “remains fully committed” to providing a scientific base for DPIRD with the previously allocated $320-million budget.

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Train collision highlights training gaps: ATSB


The collision caused major damage to a wagon and locomotive. Photo: ATSB

THE AUSTRALIAN Transport Safety Bureau is urging rail-transport operators and registered training organisations to review and validate their rail safety worker competency assessments following an investigation into a grain train collision near Tamworth on 6 January 2022.

The investigation was launched after Southern Shorthaul Railroad locomotives detached from the train, which led to a collision when the train stopped.

This resulted in significant damage to the rear wagon and one locomotive.

Three locomotives, which detached during the journey, were an addition to the rear of a loaded grain train at Werris Creek, to assist it up a steep uphill gradient later in its journey.

A transport safety investigation was conducted by the Office of Transport Safety Investigations (OTSI), which investigates rail accidents in New South Wales on behalf of the ATSB.

The investigation found the train separation was highly likely due a knuckle on one of the locomotives not being locked.

OTSI’s acting chief investigator Jim Modrouvanos said it was found the train crew had not performed a “stretch test” after attaching the banking locomotives.

“A stretch test would have identified that the knuckle on the bottom-operated coupler of the lead banking locomotive had remained unlocked after coupling,” Mr Modrouvanos said.

“It was also found that while the train crew had been assessed as competent in shunting during both vocational education and training (VET) and enterprise-based assessments on several occasions, the supporting evidence collected was usually limited to a single check box that the task had been ‘performed correctly’.”

Mr Modrouvanos said as a result of these findings, a Safety Advisory Notice has been issued to rail transport operators, and registered training organisations acting on their behalf, to review and validate their rail safety worker competency assessments.

“The competence of rail safety workers is critical to safe railway operations.

“Relevant industry members should validate their competency assessments to ensure their assessment tools, processes and judgements are reliably meeting the principles and requirements of competency-based training and assessment.”

Additionally, OTSI’s investigation found after the separation event, the response taken by the banking locomotive’s driver in relation to the sudden loss of brake pipe pressure was consistent with their training and SSR’s emergency response procedures, despite being inappropriate for the situation.

“It was also found the operator’s risk assessments for this operation were mostly performed by members of the management team.

“While the team had varying levels of operational experience, consultation with operational staff directly affected by the operation did not occur.

“During assessment of risk, consultation consisting of effective and meaningful engagement becomes critical in identifying novel risks which may not be immediately apparent.

“Particular attention should be given to procedures utilised in past operational environments to ensure their ongoing appropriateness in these unique operational circumstances.”

SSR has taken a range of safety actions since the accident, including providing train crew with reference materials related to coupler functionality, defining the process for a stretch test after coupling, and contextualising emergency-response procedures for banking operations.

Source: ATSB



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General Mills achieves financial goals for fifth consecutive year



MINNEAPOLIS — While the company celebrated multiple financial successes achieved in fiscal 2023, weak volume trends at General Mills Inc. loomed ominously at the start of the company’s new fiscal year.

Executives at the company spoke hopefully about prospects for stemming the decrease in sales volume in fiscal 2024, but the investment community appeared skeptical. In trading on Wall Street June 29, General Mills’ shares dropped 5%, closing at $76.72, down $4.18 from the day before. At the closing price, the company’s shares were down 16% from the recent high of $90.89 reached in mid-May.

Net income at General Mills in the year ended May 28 was $2.59 billion, equal to $4.36 per share on the common stock, down 4% from $2.71 billion, or $4.46 per share, in fiscal 2022. Net sales were $20.09 billion, up 6% from $18.99 billion the year before. Adjusted earnings per share rose 10% in constant currency.

While sales for the year were up 6% from fiscal 2022, volume was down 8%, with price/mix contributing 15 points of growth and foreign exchange a 1% headwind.

“We delivered excellent results in fiscal 2023, including generating double-digit growth in organic net sales and constant-currency adjusted diluted EPS and exceeding $20 billion in annual net sales for the first time in our company’s history,” said Jeffrey L. Harmening, chairman and chief executive officer of General Mills. 

In comments June 29 to investment analysts, Harmening noted that fiscal 2023 was the fifth straight year General Mills has achieved or topped its targets for sales and earnings growth. Reviewing the company’s results last year, he said General Mills pursued its Accelerate strategy relying on competing effectively in its categories, investing in the future and continuing to reshape its portfolio.

The company said it held or gained share “in 53% of our priority businesses globally,” though the figure incorporated an adjustment for “an unusual competitive dynamic in cereal last year” and viewed the category on a two-year basis. The company’s largest competitor, Kellogg Co., endured supply disruptions because of a fire and then a work stoppage in 2021 and 2022, skewing the comparison.

With the adjustment, Harmening said General Mills gained share in cereal, refrigerated dough, fruit snacks, hot snacks, soup and seasonings.

In terms of investing for the future, Harmening said the company’s media spend in fiscal 2023 was 35% greater than before the pandemic and that General Mills added production capacity for “constrained platforms,” including fruit snacks, pet foods and hot snacks.

Since fiscal 2018, General Mills has “reshaped more than 20% of our portfolio,” Harmening said. The past year featured one acquisition and two divestitures.

For fiscal 2024, General Mills is predicting net sales growth of 3% to 4%, adjusting operating profit growth of 4% to 6% and adjusted earnings per share growth of 4% to 6%, from a base of $4.30 in fiscal 2023.

Keys to the company’s performance in the new year will be the economic health of consumers, easing cost inflation and a more stable supply chain environment, the company said.

“For the full year, input cost inflation is expected to be 5% of total cost of goods sold, driven primarily by labor inflation that continues to impact sourcing, manufacturing, and logistics costs,” the company said.

Harmening pointed out the 5% cost inflation projected for this year compares with 13% in fiscal 2022.

“While certain commodity spot prices are down from their highs, we continue to see labor as the main source of ongoing inflation, showing up in our suppliers’ conversion costs, at our co-packers facilities, in our own plants and downstream in our warehousing and logistics network,” he said.

He said supply chains are currently in line with pre-pandemic levels, adding that General Mills’ customer service levels have climbed to the low 90% range. Capacity constraints in products such as fruit snacks, cereal and hot snacks have kept service levels from reaching the upper 90% range, Harmening said.

Kofi A. Bruce, chief financial officer, drilled more deeply into sales volume trends and offered an upbeat view of prospects for the new year. He said a reduction in retailer inventory was a significant headwind for volume in fiscal 2023, shaving three points from the company’s sales growth in the fourth quarter alone. He and Harmening said such reductions were not expected to be a problem this year.

Price/mix contributions to sales growth will be smaller in fiscal 2024 than in fiscal 2023, Bruce said. Some benefits in the new year will be gained from pricing actions taken later in fiscal 2023. Volume trends should benefit from easing inflation and other factors, he said.

“We see three key drivers of improved organic pound volume performance in fiscal 2024 relative to the decline we posted in fiscal 2023,” he said. “First, we expect less of a headwind from pricing as our price/mix steps down significantly from fiscal ‘23 to fiscal ‘24. Second, a more stable supply chain should allow for much stronger commercial activity, including increased distribution, innovation, brand building investment and quality merchandising. Third, we have added capacity on many constrained platforms, including fruit snacks, pet food and hot snacks.”

Several analysts posed questions about expectations for volume in the new year. Harmening predicted volume decreases in fiscal 2024 would be more modest than in fiscal 2023.

“We said our top line will grow 3% to 4% (in fiscal 2024), and we’ll have mid-single-digit inflation, roughly 5%,” he said. “And so we do see pricing this year. I’m confident that our pounds will be better in fiscal ‘24 than they were in fiscal ‘23, which is to say they’ll certainly decline less. Whether they get to positive or not? We’ll see. That’s a really difficult thing to call, especially because of the mix factor involved.”

In the fourth quarter of fiscal 2023, General Mills’ net income was $614.9 million, or $1.04 per share, down 24% from $822.8 million, or $1.36 per share. Sales were $5.03 billion, up 3%. Adjusted net income was up 1% in constant currency. Sales volume fell 6% in the fourth quarter, with a 10% positive contribution from price/mix and a 1-point decrease from foreign exchange.



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Study finds correlation between sweetener, higher heart disease risk



CLEVELAND — A study published June 6 in the European Heart Journal finds an association between consuming the sweetener xylitol and a higher risk of cardiovascular disease.

A research team led by Stanley Hazen, MD, PhD, director of Cleveland Clinic’s Center for Microbiome and Human Health, identified a higher three-year risk of cardiovascular events in an analysis of over 3,000 patients in the United States and Europe. The third of patients with the highest amount of xylitol circulating in their plasma were more likely to experience a cardiovascular event.

“This study again shows the immediate need for investigating sugar alcohols and artificial sweeteners, especially as they continue to be recommended in combating conditions like obesity or diabetes,” Hazen said. “It does not mean throw out your toothpaste if it has xylitol in it, but we should be aware that consumption of a product containing high levels could increase the risk of blood clot-related events.”

Xylitol, a polyol/sugar alcohol, is found in sugar-free candy, low-sugar baked foods and oral products like toothpaste, according to the Cleveland Clinic. The sweetness of xylitol is similar to the sweetness of sucrose, but it has 2.4 calories per gram compared to 4 calories per gram for sucrose.

The US Food and Drug Administration considers xylitol to be Generally Recognized As Safe (GRAS). The European Union allows the use of xylitol but assigns it an E-number: E967.

“The results of this study are contrary to decades of scientific evidence substantiating the safety and efficacy of low-calorie sweeteners such as xylitol by global health and regulatory ‎agencies,” said Carla Saunders, president of the Calorie Control Council, an international association representing the low- and reduced-calorie food and beverage industry. “While the authors used multiple methods, it should be noted that the findings are limited in their ability to establish association only. Further, one phase of the study included individuals who were already at increased risk for adverse cardiovascular events.‎

“These findings are a disservice to those who rely on alternative sweeteners as a tool to improve their health. Xylitol has been trusted as a great tasting, low-calorie sweetener for over 60 years.”



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Grocery shoppers still working through higher prices



LENEXA, KAN. — Although inflation is easing, consumers are still feeling the pinch of higher prices that have been rising the past few years. They have a variety of priorities in how they spend their food dollars, and they’re trying to find a balance between money, time, taste, nutrition and experience. 

“If you were to compare the prices of food and beverages today versus 2019 or 2020, you’re looking at 25% to 30% higher,” said Anne-Marie Roerink, principal at 210 Analytics, who spoke at Corbion’s 2023 Media Day on Oct. 17. “I doubt there’s a lot of us here today that are making 25% to 30% more money today than we did in 2019 or 2020, and that’s really what’s causing a lot of the pressure.”

She talked about the conflicting needs forcing consumers to figure out which items they will splurge on and other areas where they’re cutting back as well as finding a balance between healthy, nutritious foods and indulgent treats. 

“It is not a race to the bottom where it’s always cheapest,” Roerink said. 

Value and affordability are top of mind for consumers shopping in retail stores. 

“When people are buying in grocery stores, they continue to really change things up there,” she said. “We see 93% of shoppers month after month that are applying some kind of money saving measure.”

And nearly four in 10 consumers said they are either eating out or ordering in less often, according to a 210 Analytics survey from August.

Consumers are spending more food dollars at retail stores than at restaurants and spending less at restaurants by cutting back on certain items like alcohol, appetizers and desserts. More people are turning to takeout rather than eating at restaurants. For instance, families may be buying a restaurant entrée to bring home then supplementing the dish with chips, drinks and other items. This creates opportunities for retailers.

“Every single department around the store has an opportunity to add onto those restaurant-based meals,” Roerink said. 

Consumers are also cooking hybrid meals at home, buying convenience items to make meal prep easier.

Retailers are finding that consumers are really watching their spending because it’s harder to get shoppers to act on promotions, she added.

“That price has to be pretty hot for them to move on it,” Roerink said. “And that’s exactly what we see out in the marketplace. Certainly we see a move toward private brands. They are outgrowing national brands in virtually every category. But we’re also seeing not quite the same reaction to promotions.”

Consumers are gravitating toward value and club stores where they save money and stock up on items.

There is a “big willingness to shift channels, more than I’ve ever seen before,” Roerink said. “Across food and beverages, look at the loss in share for traditional supermarkets. The areas that are picking up share really are the mass supercenters. In other words, Walmart is absolutely growing gangbusters and has been for several years.”

Retailers have many ways to reach out to consumers. They are willing to splurge on holidays and special occasions, which means not only promotions for large holidays but also days like National Grilled Cheese Day.

“You have of course the big primary holidays that we go after, but then if you go after those smaller ones — Mother’s Day, Father’s Day, Labor Day, St. Patrick’s Day — there is a lot of opportunities out there and what I would call the primary holidays, the secondary holidays but also those micro occasions.”

Retailers are finding ways to offer personalized ads, such as highlighting items on sale that the customer has purchased before.

“Value has everything to do with relevance,” Roerink said. “‘I can help you save time and I don’t need to sift through the whole ad when everything I see is relevant to me.’ Sixty-two percent say that is a good or great idea.”

Providing more information on packages to provide greater transparency for consumers and showcasing how products are helping the planet, people or promoting animal welfare are also suggestions Roerink said would appeal to consumers. Additionally, social media is an effective area of promotion, such as viral TikTok crazes for interesting new products.



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Formulators get creative in reducing sodium


KANSAS CITY, MO. — Most people in the US consume too much sodium, with the majority coming from processed, packaged and prepared foods. This includes dairy products, with cheese, cheese ingredients, and dips and spreads being the largest contributors. 

Formulators should explore all ingredients that contribute sodium and make cuts and swaps where possible.

The US Food and Drug Administration (FDA) has provided food manufacturers with guidance for sodium reduction. While the guidance is voluntary, taking action is the right thing to do, especially if one is a supplier for foods intended for school meals. 

The US Department of Agriculture (USDA) recently released a final rule to update meal patterns for the National School Lunch Program and School Breakfast Program to align school meal nutrition standards with the goals of the Dietary Guidelines for Americans, 2020-2025. This rulemaking became effective July 1, 2024; however, program operators are not required to make any changes to their menus as a result of this rulemaking until school year 2025-26, at the earliest.

The updated standards provide schools with time to gradually reduce sodium in school meals by instituting one achievable sodium reduction. These limits apply to the average amount of sodium in lunch and breakfast menus offered during a school week. For the next three school years, schools will maintain current sodium limits. Beginning July 1, 2027, schools will implement an approximate 15% reduction for lunch and 10% reduction for breakfast from current sodium limits.

“The FDA has followed a methodical, iterative process that has encouraged a gradual approach to sodium reduction, with realistic targets, established timelines and ongoing monitoring,” said Jordan Timm, research and development lead, salt, for Cargill. “Regulators put a lot of thought into this approach, recognizing that salt is highly functional in many applications, contributing to taste, texture, food safety and more. Throughout the process, their goal has been to give the right guidance and set realistic targets so that the industry can be successful.

Why it matters

Most Americans 14 years and older consume 50% more than the recommended limit for sodium, according to the Dietary Guidelines for Americans. When it comes to children aged 2 to 13 years, more than 95% exceed the recommended limits of sodium for their age groups. This could have profound impacts on later health outcomes.

“Public awareness and education about the health risks of excessive sodium have been addressed by physicians and health advocates for decades,” said Matt Buss, director of research and development, Allied Blending. “We have created low-sodium and sodium-free versions of hundreds, if not thousands, of products. This can include replacements for sodium in preservatives, leavening agents and other functional ingredients.”

FDA’s voluntary guidance for sodium reduction is one of many efforts to improve dietary patterns in the United States, according to Robin McKinnon, senior advisor for nutrition policy for FDA’s Center for Food Safety and Applied Nutrition.

“[It’s about] reducing the burden of diet-related chronic diseases and advancing health equity,” McKinnon said. “Excess sodium intake is associated with hypertension and cardiovascular disease, the leading causes of death in the US.”

Most sodium intake does not come from shaking on salt by the consumer. More than 70% comes from outside the home, she said.

“It is extremely difficult to meet recommended sodium intakes with the current food supply,” McKinnon said. “There’s much variability in sodium across similar foods in the food supply.”

Other countries have implemented sodium reductions in the food supply successfully. It can be done in the United States, but FDA believes it will need to occur over time.

“This creates a level playing field,” McKinnon said. “Consumers’ palates will adjust as long as adjustments are broad and gradual.”

Many marketers think it is best to not flag sodium reduction on product labels, as it is suggestive of less flavor and an inferior product. Simply make the reduction — carefully — and let label-reading consumers be pleasantly surprised when they view the reasonable sodium content of their favorite dairy products. Suppliers are ready to help through the use of varied ingredient technologies.

“The uncertainty of how the US consumer will react to sodium-reduced products may be influencing companies to be very calculated and perform their due diligence to strategize the best approach in reducing sodium,” said Christine Shiinoki, technical applications manager, CJ Food & Nutrition Tech. “Consumers say they want one thing, such as reduced-sodium food products, but may not like the resulting flavor. No company wants to disappoint their customer.”

With many varied sodium-reduction solutions on the market, there is no one product-fits-all ingredient. In many instances, reduction requires a systems approach.

Source: Allied Blending

Salt substitutes

One of the most common swaps is replacing sodium chloride with potassium chloride. Since December 2020, the term potassium salt may be used on ingredient statements rather than potassium chloride. This is considered a more consumer-friendly term, according to McKinnon.

“Potassium salt helps with reducing sodium,” McKinnon said. “Consumers understand it’s a salt, one that is substituting for sodium salt.”

Another FDA initiative to assist with sodium reduction is in the works. The agency proposed to amend standards of identity (SOI) that specify sodium chloride as a required or optional ingredient and to permit the use of salt substitutes in these standardized foods. This impacts many standardized cheeses. There are four types of revisions to the applicable SOI in FDA’s proposed rule.

When the current text of the SOI lists “salt” as an optional ingredient, the proposed rule would amend the SOI to state, “salt or salt substitute.” When the current text of the SOI provides for the use of “salt” in a paragraph, the proposed rule would amend the SOI to state, “salt or salt substitute.” When the current text of the SOI uses terms such as “salted,” “salted with dry salt or brine” or “salting,” to provide for use of salt in the food, but does not specify salt as an ingredient, the proposed rule would amend the optional ingredient list to add “salt substitute.” And lastly, when the current text of the SOI uses terms such as “salted” or “salted in brine” to provide for the use of salt in the food, but does not provide a list of optional ingredients, the proposed rule would amend the SOI to add a paragraph to state: “During the cheesemaking process, where the curd is salted, salt substitute may be used.”

Toolbox of ingredients

There are many sodium salt replacements available to formulators. While potassium chloride tends to be a favorite in the dairy industry, it is smart to look at all sources of sodium and possibly make little cuts here and there.

In addition to Cargill offering potassium chloride/potassium salt, the company also has a uniquely shaped sodium chloride salt crystal. The shape influences salty perception, with a little having a great impact.

“It’s important to consider how the consumer’s taste receptors will interact with the food item,” said Elizabeth Kreger, innovation and analytical manager-research and development, Sensient Flavors & Extracts.

Sensient has several offerings for sodium reduction. They are characterized as flavor enhancers.

“Our proprietary taste technology mimics a full sodium taste perception in a reduced-sodium application,” said Wara Pirzada, senior application scientist at Sensient Flavors & Extracts. “One of the key aspects of all our sodium reduction solutions is the ability to label as a natural flavor. We can also tailor each solution to meet the individual needs of a specific product formulation; it’s not one-size-fits-all.”

Sensient’s sodium flavor enhancer technology is not a 1:1 replacer for sodium. The company recommends using between 0.3% to 0.5% to replace up to 40% sodium in the formula.

NuTek Natural Ingredients offers a variety of potassium-salt based solutions that have been designed to not taste bitter.

“Our clean-label salt solutions are produced using a proprietary washing and drying process to eliminate potassium’s bitterness, without the use of bitter blockers, flavor modulators or synthetic additives,” said Steve Zimmerman, senior director technical sales at NuTek Natural Ingredients. “These cost-effective solutions deliver a healthier nutrition balance, while delivering the same great taste and functionality as regular salt.”

The potassium versions of most sodium-based ingredients are typically used in the same manner. However, there will be changes to the ingredient declaration statement and the sodium and potassium content on the Nutrition Facts. The latter is viewed favorably, as many consumers strive to reduce sodium intake while at the same time increase potassium intake, as sufficient potassium intake is lacking in many diets.

“While sodium substitutes such as potassium chloride have been on the market for a considerable period, they bring their own set of risks, including heart palpitations and hyperkalemia,” said Sowmi Raju, food scientist at Allied Blending. “Simply swapping one ingredient for another in an effort to address health concerns can inadvertently introduce new, potentially more severe, problems.”

Yeast extracts have become a label-friendly alternative to added salt in cheese spreads and dips. They are recognized for their ability to provide umami flavor. Yeast extracts are used in a similar way as sodium chloride and are declared on ingredient decks simply as yeast extract.

Permeate, a co-product of the manufacture of high-protein dairy ingredients, contains a unique concentration of minerals with flavor-potentiating properties. Three varieties are available — whey permeate, milk permeate and delactosed permeate — each possessing different beneficial functions.

Permeate is most widely utilized in the dried form, which requires no special handling from distribution through storage. The dried powder flows readily and is easy to mix in with the other ingredients in the formulation.



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Corbion promotes exec to CFO



AMSTERDAM, THE NETHERLANDS — Corbion has promoted Peter Kazius from senior vice president investor relations, corporate development and M&A to chief financial officer. He succeeds Eddy van Rhede van der Kloot, who has been CFO since 2014.

Before his time with Corbion, Kazius was most recently finance director of dry sweet systems EMEA for Kerry and previously senior manager finance planning and analysis, Western Europe for Unilever. He also has held leadership positions at PepsiCo, Inc.

Kazius joined Corbion in 2014 and has held such leadership positions as senior finance director for the food business unit, vice president group business control, and vice president group finance.

“I would like to thank Eddy for his partnership over the five past years,” said Olivier Rigaud, chief executive officer at Corbion. “His long-term dedication and leadership to Corbion have been instrumental. I want to welcome Peter to his new role and very much look forward to working closely with him to continue the Corbion journey.”

Prior to Corbion, Rhede van der Kloot was most recently division finance director for Vopak and previously in technical and financial units for Unilever.



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General Mills announces strategic leadership changes



MINNEAPOLIS — General Mills Inc. is making several changes to its senior leadership team, including the naming of new leaders for its North America Retail, Pet and International, and US Morning Foods units, effective Jan. 1, 2024.

Dana McNabb has been promoted to president of North America Retail, General Mills’ largest and most profitable segment, according to the company. McNabb most recently was chief strategy and growth officer since August 2021. Earlier, she was group president of Europe and Australia. She also spent more than four years as president of the company’s North America Retail Cereal and Snacks operating units.

Jonathon J. Nudi, formerly president of North America Retail, has been named president of Pet and International. Nudi has been with General Mills for more than 30 years. Other roles he’s held at the company include president of Europe and Australasia, president of Snacks and various marketing and sales roles.

Ricardo Fernandez, newly promoted to president of International, will report to Nudi. Fernandez most recently was president of US Morning Foods since January 2020. He earlier was president of the Latin America region. He also has worked as global vice president of marketing at Cereal Partners Worldwide (a joint venture between General Mills and Nestle) as well as vice president of marketing for the frozen division, managing director for Brazil, and marketing director for Latin America and South Africa.

Succeeding Fernadez as president of US Morning Foods will be Bethany Quam. Quam has been president of Pet since 2019. Earlier, she held a variety of sales and finance positions at General Mills.

General Mills said Kofi Bruce, chief financial officer, will oversee the company’s strategy and growth efforts on an interim basis while a search is conducted for a new chief strategy and growth officer. In addition, Sean Walker, currently president of International, will retire on Feb. 28, 2024.

“We are making these strategic changes to best position General Mills for today’s dynamic landscape,” said Jeffrey L. Harmening, chairman and chief executive officer, General Mills. “These moves enable us to best match our deep bench of senior talent to fast-growing and important consumer areas and occasions. I am confident this will help us advance our next chapter in our Accelerate enterprise strategy.” 



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