Possibility of No-Deal Brexit Chills And Fills Cold Storage Sector in UK

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With Brexit looming large over the United Kingdom, many food importers have been stockpiling inventory for some time now. Although this may provide temporary relief from any supply issues that could arise if Britain leaves the European Union with no deal or agreements in place regarding post-Brexit relationships with the EU, there isn’t infinite storage space and the predictions surrounding the impact of stockpiling aren’t positive. 

"There is no available space," stated Peter Ward of the United Kingdom Warehousing Association (UKWA) when he spoke to BBC Newsnight earlier this month. "The market, as represented by our members, is full. The biggest concern at the moment is that the October deadline comes right bang in the middle of peak season." 

The timing could not be any worse, he believes, as warehouses are already gearing up for black Friday and Christmas retailing, and there is a limit to the volume of stock that UK cold storage providers can accommodate.

According to estimates from the Savills real estate service company, approximately 7.5 million square feet of warehouse space are currently under construction, but this is equivalent to only 1.4% of the total capacity of around 514 million square feet.

"You can't just turn on supply,” pointed out Ward. “Putting real estate in the system takes five to seven years.”

Aside from the fact that construction of new refrigerated warehouses is not a feasible option within the time frame, it is unlikely that providers would go down that road because the space is highly likely to become redundant in the weeks and months following Brexit. 

CEO Colin Taylor of UK cold storage operator Rick Bestwick Ltd, believes that there is a strong possibility that shortages of certain products are inevitable. Pointing out that throughout the year refrigerated warehouses generally function at around 90%+ capacity, and while this figure increases to and occasionally exceeds 100% from October to December as a result of the build-up of Christmas stock, he noted that the space is typically reserved months or years in advance. This means that it would be impossible to stockpile to the extent that the government and consumers would expect in the event of a No-Deal Brexit later in the year.

2 Colin TaylorCEO Colin Taylor of Rick Bestwick Ltd thinks that shortages of certain imported food products may be inevitable should a “no-deal” post-Brexit UK become a reality.

“Every effort is being made to optimize the space that is available, and we are working with our customers to more accurately predict space requirements in order to accommodate as much additional Brexit stock as possible,” said Taylor. “We will always prioritize the needs of our customers and aid in any way we can to guarantee the smooth operation of their supply chain.” 

Sustainable Storage 

As an industry that relies on high and reliable levels of energy supplies, refrigerated warehouse operators are increasingly looking for and implementing ways to reduce their use of electricity. Of course, all businesses in Britain are expected to run as sustainably as possible, but with energy accounting for a large proportion of cold storage costs and frozen food production budgets there are huge financial incentives for suppliers and manufacturers to innovate.

The cold storage industry is innovating in a number of ways to address this issue, with many warehouses, including Rick Bestwick, turning to renewable energy solutions. The fact that warehouses have a significant amount of roof space means that there is a huge opportunity to generate on-site solar power by means of a photovoltaic panel system.

“Other very effective automated tools we’ve installed throughout our facilities are automated fast sealing doors,” said Taylor. “Imagine opening the door to your freezer and the energy that is wasted when all the chilled air escapes. Now imagine that the door is large enough for a lorry to drive through and it becomes obvious that the faster it shuts the better.” 

The employment of smart lighting is another way that Rick Bestwick has reduced its energy consumption. The use of motion sensitive on/off lighting arrays mean that only areas in use are illuminated, thus creating significant power savings over time. 

“Heat mapping is also important for us,” added Taylor. “With the use of thermal imaging cameras and drones we can pinpoint areas of concern. If something as simple as a rubber seal on a door deteriorates large sums of energy can be lost and product quality can suffer, so our engineering director maintains rigorous inspection and maintenance protocols to reduce and eliminate this issue.” 

Evolving Trends.

There appears to be three major trends in the cold storage sector at present, with the first being a reduction in the number of small to mid-size players on the scene. Governmental legislation and challenging market conditions have driven a number of companies out of business, and the extremely high barrier to entry has reduced the quantity of independent operators across Europe. 

“Several large brands have been rapidly expanding into the EU and the UK in particular, buying many of the smaller independent cold stores and groups,” said Taylor. “This will accelerate in the next few years and the large networks created by consolidating businesses will change the face of the industry. There will be higher quality service, bigger logistics networks, greater investment leverage for new technology and less competition overall.”

With technology advancing at a rapid rate there has been a huge boom with automation and artificial intelligence tipped to feature more in the cold storage sector as it becomes more sophisticated and affordable for operators. 

“This will have several effects,” said Taylor. “Primarily it will help solve the current labor shortages the sector is experiencing, and it will deliver greater efficiency and price stability. However, cost savings for customers will only be deliverable with a change of operating structure. Yearly tenders will no longer be effective at securing cost savings over the long run, so five- and ten-year contracts will become increasingly common.” 

Although the cold storage industry in the UK is facing several major issues at the moment, the most pressing is clearly the rapidly advancing Brexit and the problems associated with leaving the EU without a deal in place. Labor shortages are also a concern for an industry that relies on manpower, but with technological advancements this will not always be the case. Above all else, the cold storage sector needs to continue innovating to avoid being outpaced by competitors. As such, it would seem that automation and AI will be the way forward for some time to come. – Reported by Sarah Welsh

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Hot Summer & Cool Product Innovation Fuel Skyrocketing UK Ice Cream Sales

The British ice cream market got a big boost last year thanks to soaring temperatures in June and July. As a result, Mintel’s Market Size and Forecast report notes a sharp rise in ice cream sales during 2018’s heatwave, with the market currently estimated to be worth £1.4 billion – up 26% from 2013.

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“The scorching 2018 summer has been a boon to the ice cream market, fueling sales growth at a time when cost pressures are putting a squeeze on operators,” said Anita Winther, a research analyst at London-headquartered Mintel.

Iceland, the frozen food retail specialist, rings up ice cream sales of around £100 million a year. Its increased market share, which has risen 12% in the last 12 months, highlights the market’s clear growth.

Evolution

The ice cream sector has evolved way beyond the basics, with unique flavors hitting the market all the time. As the sweet treat is enjoyed year-round it is vital that flavors are continually updated to appeal to consumers, which is why the focus is increasingly on innovation with new players coming into the field.

Lotus Biscoff recently entered the frozen realm with premium individually wrapped, ice cream stick products. Made from real dairy ice cream, these new entries feature the same unique flavor synonymous with the company’s much loved coffee biscuit.

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“The ice cream is wrapped in a layer of Lotus Biscoff spread and coated in a crisp layer of Belgian milk chocolate and crushed Lotus Biscoff pieces,” said Frances Booth, category marketing manager at Lotus Bakeries. “With luxury and indulgent brands continuing to drive the sector's growth, the new ice cream sticks are a must-stock product for the upcoming seasons.” 

Nostalgia

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Although sophisticated flavors such as salted caramel or honey and fig are in high demand, nostalgia among adult consumers means that playful flavors, such as New Forest Ice Cream’s (NFIC) Candy Floss, should be big sellers this year. Available wholesale, the Candy Floss four-liter retails for £12.65, while the 4.75-liter tub goes for £14.75.

“Everything from fun, colorful toppings and vibrant sugar-sleeved cones to pastel colors are great ways to incorporate this trend,” said Christina Veal, director at Lymington, Hampshire, England-based NFIC. “Our latest Candy Floss ice cream has a perfectly pink pastel color combined with strawberry sugar crunch pieces to deliver that sweet pop.”

Although Salted Caramel is by far Iceland’s biggest selling flavor, it’s followed closely by Bubblegum, which is made in Italy and costs £1.75 for a 900-ml tub.

“Our customers prefer the fun flavors,” said Charlotte Durant, Iceland’s senior buyer for ice cream and desserts.

Adult-Friendly

Summer and cocktails go hand in hand in Britain, which is why some manufacturers have introduced alcoholic flavors into their ice cream and sorbet lines. Ocado offers Speakeasy’s Limoncello Alcohol Infused Ice Cream and NFIC has a Gin & Pink Grapefruit sorbet which features delicate botanicals cut with the sharpness of pink grapefruit – the perfect treat for imbibing adults to enjoy.

Alcoholic flavors are a great balance between enjoying a dessert and having a refreshing beverage or cocktail,” said Veal. “Offering ice cream and sorbets infused with alcohol means that customers don’t have to choose between the two as they can enjoy the best of both worlds.”

Non-Dairy Options

The rise of veganism has seen more free-from ice cream variants hitting the market. Although dairy ice cream is the most popular type of frozen dessert, eaten by 75% of adults, the buzz surrounding non-dairy options has resulted in 11% of British consumers choosing plant-based options.

“Vegan diets are continuing to grow in popularity, therefore the need to offer quality alternatives on all menus has never been greater,” said Veal. “It is incredible how many people opt for dairy alternatives wherever they go, whether this is down to diet or lifestyle choices or simply just because they are interested in trying something new. Therefore, we always recommend having a couple of key flavors on hand to ensure you’re appealing to all consumer needs.” 

NFIC has introduced its first vegan range in two flavors: Vanilla Pod and Salted Caramel ice cream.

“We stock two dairy-free option in brands in our The Food Warehouse stores,” said Iceland’s Durant. “The volume is still relatively low but we are working on an own label vegan ice cream offering for next year.”

ASDA sells Magnum Vegan Classic ice cream for £3.50 per pack of three.

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Health 

Ice cream is viewed by many as a treat and as such little thought is generally given to its health credentials. In fact, according to Mintel, 71% of consumers do not believe they eat enough ice cream to be concerned whether it’s unhealthy.

However, many people do focus on health, and with the UK government targeting sugar levels in food an increased number of low calorie variants have hit the market. Low calorie ice creams are predicted to drive sales, with 44% of ice cream eaters encouraged to consume more by such variants, according to Mintel.

“Lower calorie ice cream brands have caused a stir in 2018, building up a not insignificant market penetration,” said Winther. “While the lower calorie proposition has potential to bolster category volume sales and help it withstand the ongoing war on sugar, these products’ relatively high price and poor image as indulgent remain barriers to uptake.”

Consumer interest in health issues has also resulted in increased demand for more single portion ice cream cups, with 57% of ice cream eaters looking for products which deliver convenience and indulgence, reports Mintel. The fact that single cups offer greater portion control will appeal to consumers and Public Health England.

Halo Top, which is sold in the United States, Australia, Mexico, Canada, Ireland, New Zealand, the Netherlands, Germany, Taiwan and Austria, is now available in the United Kingdom. Claiming to have the same great taste as regular ice cream, this product line contains two-thirds less calories. However, health seemingly comes at a price, costing a hefty £5 a tub in ASDA, Sainsbury’s, Tesco and Morrisons stores.

ASDA has also jumped on the bandwagon with its range of high protein, low calorie ice cream. Available in three flavors: Birthday Cake, Vanilla and Peanut Butter, these products come in at under 400 calories a tub. Priced at £2.50 they are a wallet-friendly low calorie option.

Cookie Dough ice cream, another low calorie offering from ASDA, serves up just 199 calories per half tub.

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Although the UK ice cream market’s recent boom can be attributed to the hot weather experienced last summer, innovation within the sector has certainly contributed to increased consumer spending. – Reported by Sarah Welsh

Princess Holds Court at Thai Union Innovation Center Debut

HRH Somdech Phra Kanishthadhiraj Chao Krom Somdech Phra Debaratnarajsuda Sayamboromrajakumari presided over the grand opening ceremony of the Thai Union Group’s new Global Innovation Center (GIC) on June 7. The company’s top management team joined other invited guests in welcoming Her Royal Highness at SM Tower in Bangkok.

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On this special occasion, the Princess granted permission to Thai Union Chairman Kraisorn Chansiri and Chairman of Executive Director Cheng Niruttinanon to present a donation to Her Royal Highness’ charity, while President and CEO Thiraphong Chansiri gave an introduction about Thai Union’s seafood business and the GIC.

HRH Somdech Phra Kanishthadhiraj Chao Krom Somdech Phra Debaratnarajsuda Sayamboromrajakumari then officially opened the Global Innovation Center and invited Dr. Tunyawat Kasemsuwan, Thai Union’s Global innovation director, to present an exhibition about the work of the GIC. HRH also visited the global food operation room of the GIC and prepared HRH’s own special recipe of Som Tam Tuna.

During the visit, HRH observed the operations and advanced technology of the GIC, including innovative products such as frozen Yellowfin Tuna Slices – ready-to-eat cooked tuna made from 100% yellowfin tuna meat and high-quality pure tuna oil, a good source of Omega fatty acid and DHA. HRH also inspected the GIC’s DNA printing innovation for tuna traceability that can identify specific tuna species from raw materials, the catch location of Skipjack tuna and the origin of individual fish based on genetic profile. 

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About the GIC

The Global Innovation Center was established in 2015 as the Global Innovation Incubator, a center for research and the development of products for Thai Union’s seafood product brands around the world. It was also created to combine modern nutritional science and production innovations to develop products that address the needs of consumers and the global food industry. The center also uses technology and innovation to improve production processes, providing additional benefits and value to customers, consumers and stakeholders.

In 2019, the Global Innovation Incubator was rebranded as the Global Innovation Center and relocated from the Faculty of Science at Mahidol University to Thai Union’s Bangkok office at SM Tower. The GIC was built over 5,000 square meters with a value of THB 300 million. More than 40 Doctoral Degree scientists and over 120 researchers in the fields of marine biotechnology, engineering, medicine, food science and nutrition from around the world work at the GIC, coordinating and exchanging knowledge and expertise in R&D and using the latest technologies to provide the best outcomes for consumers and the environment.

About Thai Union

Thai Union Group PCL has been supplying value-added tuna, shrimp and other seafood fare to global markets for more than 40 years. Today it ranks as the world’s largest producer of shelf-stable tuna products with annual sales exceeding THB 133.3 billion (US$ 4.1 billion) and a global workforce of over 47,000 people.

First quarter sales in 2019 rose 46.5% year-on-year, as the company reported profit of THB 1.27 billion.

“Our first quarter performance was a positive start to the year,” remarked CEO Chansiri when the figures were posted in May. “Thanks to continued operational efficiencies and continued margin recovery, we are starting to see the flow-on benefits, with a recovery in our overall performance and normalizing of our operations.” 

Gross profit advanced 29.3% from a year earlier to THB 4.38 billion, while the gross profit margin improved to 14.9% from 11.6% in the first quarter of 2018.

Appetite for Own Label Ready Meals Draws Consumers to Freezer Cabinets

Once perceived as inferior to brand name ready meals, own label frozen products have positively shifted consumer perception thanks to innovative recipes that follow cuisine trends and satisfy demand for tasty, affordable and convenient ready meals. 

However, points out Emma Clifford, associate director – food and drink at the London-headquartered Mintel market research firm: “Brands are still seen to have the edge in innovativeness, which is a big advantage, particularly in terms of engaging with the younger generation.”

Frozen own label ready meals are especially popular with consumers in the United Kingdom who are still feeling the impact of economic uncertainty surrounding Brexit and have a more cautious approach to supermarket shopping. In fact, according to Mintel’s Light Speed report, 22% of UK consumers eat frozen ready meals one or two times a week.

Innovation

British supermarket operators are pulling out all the stops to create standout ready meals sold under their own labels, with Iceland heavily investing in a new £2 million test kitchen where new recipes are developed. The facility’s creative team, under the direction of Chef Neil Nugent, deserves credit for bagging the frozen food specialist retailer the Champion of Champion award for its Arctic Royal Salt-Baked Sea Bass and Innovative Product of the Year award for its Luxury Rose Veal Saltimbocca in a contest organized by The Grocer trade magazine last year.

2 Arctic Royal 550g Salt Baked Whole Seabas 69660“Frozen ready meals are fresher, cheaper and often better quality than the equivalent fresh market meals,” said Andrew Staniland, Iceland’s frozen trading director. “Iceland offers the broadest range of frozen meals in the world, and we are enjoying growth.

The Deeside, Wales-headquartered company reports that its Lasagne, Cottage Pie and Chicken Tikka Masala are the most popular products and cost just £1 each. Iceland has also recently launched Luxury Chilli Crab Linguine and Beef Mac and Cheese as part of its Luxury range, both priced at £2.69.

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Waitrose & Partners has also focussed on own label dishes with the launch of a new premium frozen meal range. In fact, frozen food is well and truly back on the menu for 2019 as the food retailer reported searches for “Frozen Ready Meals” on Waitrose.com were up by 500% compared to last year. 

The Bracknell, England-headquartered supermarket chain has taken advantage of this growing trend by reimagining frozen ready meals, giving them a modern and luxurious twist. Due to be launched at the end of this month, the range of 24 products includes everything from classic pies to quick and easy ramen noodles, using innovative cooking techniques such as sous vide and en papillote.

Sustainability is a top priority for the retailer with underutilized British Ray Wings featuring en papillion, cooked with lemon butter and capers to retain the succulence of the fish. Other seafood items in the line include Keralan Cod, Squid and King Prawn Curry, where the cod, calamari and warm water prawns are cooked from raw to maintain texture and flavor and finished with creamed coconut, red chilli, potatoes, spinach and tomatoes; and King prawn and Miso Ramen, with noodles, broccoli florets and spring onion.

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“In developing this range we wanted to make sure our customers were getting top quality ingredients and a range of flavors, textures and cooking techniques,” said James Bennington, product developer at Waitrose & Partners. “We believe there is something for everyone here, and by using our innovative freezing techniques it means we can offer extremely fresh produce, ready to cook straight to our customers.”

Health 

As people in Britain are busier than ever and sedentary jobs are more commonplace, the number of overweight adults in the UK continues to rise with 26% of the population classified as obese. As a result, increasing numbers of consumers are looking for healthier ready meals.

With the government unveiling plans to cut calorie intake among British nationals, makers of ready meals will be required to achieve a target of a 20% reduction of calories by 2024. Meanwhile, retailers are already looking at the salt and fat content of prepared foods and many are promoting their own calorie counted offerings in the freezer case.

5 Morrisons Counted Calorie Controlled Chicken Curry

In January Morrisons launched its new Counted range of calorie controlled frozen ready meals. In providing customers healthy meal options with less than 400 calories, the assortment includes Ham and Mushroom Tagliatelle, Chicken Curry and Beef Lasagne, each of which retails for  £2.50. 

Similarly, Tesco’s Slim Cook range has been specially developed to be calorie controlled and low in saturated fat. The line includes Mediterranean Butternut Squash Risotto, Chicken and Mushroom Platter and Chicken Tikka Masala.

Meat-free

Many consumers now regard themselves as flexitarian as a result of the highlighted benefits of plant-based diets promoted in the media. Increasing numbers of shoppers are looking for meat-free ready meal options in the frozen aisles and this is a development that is getting close attention from supermarket operators.

“The ‘flexitarian’ trend, which sees consumers make a conscious effort to reduce their meat consumption, has become more mainstream in recent years,” said Alyson Parkes, research analyst at Mintel. “Ready meals producers should look to use plant proteins to tap into this trend and to align their products with such ‘positive nutrition’ to address their image of being processed.”

According to Mintel there is great scope to boost the use of meat alternatives in ready meals as plant-based ingredients resonate with 15% of consumers, with interest skewed towards younger age groups. Meat alternatives, such as the mycoprotein brand Quorn, are already present in the ready meals market and so are familiar among consumers. 

UK supermarkets’ own label frozen ready meal ranges are doing well in the current economic and political climate, as consumers look for affordable, quality frozen ready meals. With innovation and improved quality of own label dishes there is every reason to believe their popularity will continue. As for the future? As demand for plant-based options increases it’s likely that more vegetarian and vegan options will soon be hitting the shelves. – Reported by Sarah Welsh