Pernod Ricard has signed its first sustainability-linked loan, totalling €2.1 billion, which will be used to refinance an existing facility that is due to expire in June 2024. The decision to refinance the facility is connected to two environmental commitments, both of which are part of Pernod’s ‘Sustainability-Linked Financing Framework’. The first commitment is to reduce absolute greenhouse gas emissions (Scopes 1 and 2) on operated sites, while the second aims to reduce water consumption per unit produced at its distilleries. The loan is also indicative of Pernod's commitment to becoming more sustainable in its daily operations and financing strategy, and meets the Group’s Sustainability & Responsibility (S&R) Roadmap goals. Vanessa Wright, chief sustainability officer, said: “As part of our sustainability and responsibility roadmap 'Good Times from a Good Place,' we are committed to preserving the world's natural resources by reducing carbon emissions, water consumption and waste throughout our value chain”. She added: “The group's recent sustainability-linked facility is another demonstration of our drive to reduce our environmental footprint and protect the natural ecosystems, where we source all the ingredients that make our iconic brands”. The line of credit has been signed for by 22 banks, with an initial maturity in April 2028 and a two-year extension option. Pernod launched two sustainability-linked bonds in 2022, linked to the same key performance indicators; however, this announcement marks its first sustainability-linked loan.

In a bid to ignite economic growth in South Africa, many food and beverage companies have recently made key investments in the country. From food giants establishing manufacturing facilities to enable local food production, to beverage leaders injecting hundreds of millions of dollars into strategic projects, it is clear that the global F&B industry is beginning to see the potential of South Africa’s lucrative market. Taste and nutrition company Kerry opened the “largest and most advanced taste manufacturing facility on the African continent” in May last year. Located in KwaZulu-Natal, South Africa’s most eastern province, the €38 million facility produces sustainable nutrition solutions for consumption across the African continent. The facility is one of Kerry’s most environmentally efficient manufacturing sites with sustainable features including low energy usage equipment, solar power generation to reduce consumption from the local grid, waste heat capture and efficient water capture, reuse and reduction. Speaking about the opening of the facility, South Africa’s deputy minister of trade, industry and competition, Nomalungelo Gina, said: “The project is recognised as a key strategic investment in the region of Kwa-Zulu Natal and within South Africa’s food manufacturing industry and has been included as part of the South African Presidential investment drive to stimulate sustainable, equitable and inclusive growth as the foundation for socio-economic transformation in the country. We are excited about this investment because it aligns very well with our re-imagined industrial strategy.” Energy supply challenges Sustainability is key – particularly in energy-intensive industries like food and beverage. Implementing sustainable systems is vital to the endurance of large companies in South Africa, as the country has been constrained by electricity supply shortages for years. Rolling scheduled power cuts (load-shedding) started in 2007 and have intensified exponentially, reaching around nine hours of power cuts daily in 2022. The severe electricity shortfall has disrupted economic activity and increased operating costs for businesses, many of which rely on diesel generators, which are costly to both wallets and the environment. In November last year, Nestlé installed a solar plant with a capacity of 966kW at its Babelegi manufacturing facility in Hammanskraal, around 100 kilometres from Johannesburg. The company ground-mounted 1,806 solar photovoltaic panels at the site, which produces Maggi noodles and Nestlé Cremora and expects the panels to generate 15.6% of the total electrical energy required at the factory each year. Xolile White, technical director at Nestlé East and Southern African region, said: “We believe that this will help in energising the region’s increased efforts towards energy security, this way Nestlé Cremora and Maggi two-minute noodles not only remain tastier but also contribute to making better the environment”. Similarly, at its Harrismith Factory in the eastern part of South Africa, Nestlé installed a ground-mounted system as well as solar photovoltaic panels on the roofs of new carport structures, sized with a capacity of 1,189kW. This equates to 10% of the total electrical energy requirement of the factory for the full year and will generate approximately 45% of the factory’s demand during daylight hours. In October, ADM announced that it acquired leading South Africa-based flavour distributor, Comhan. The acquisition was designed to enable ADM’s continued development of its nutrition business in key growth markets including Africa, opening up opportunities for ADM’s customers in the region and building on the capabilities of the company’s existing offices in Nigeria and Kenya. Big beverage business Last year, through its subsidiary South African Breweries (SAB), and in a bid to ignite economic growth, AB InBev pledged to invest an additional R 920 million (approx. $63 million) into two breweries, boosting its total investment commitment for 2022 to R 4.5 billion (approx. $309 million). According to SAB’s CEO, Richard Rivett-Carnac, the beer industry continues to be a key contributor to the South African economy. Rivett-Carnac cited a recent Oxford Economics study that revealed the nation’s beer industry contributed 1.3% of the national GDP in 2019. At that time, the sector sustained over 248,000 jobs, which was equivalent to 1.5% of national employment. Statista cites that South Africa's beer segment (revenue) amounts to $6.80 billion in 2023, and projects the market to grow annually by 9.27% (CAGR 2023-2027). Rivett-Carnac said: “These investments will give us the capacity to not only contribute to the economy but also to be able to contribute to job creation, tax generation and procurement spend”. The commitment was set to create direct and indirect employment opportunities and help SAB continue transforming the industry through partnerships with black suppliers. A majority of the investment has been used to fund an expansion of the Prospecton brewery in Durban, which is expected to add an estimated R 3.1 billion (approx. $213 million) in tax revenue and create up to 24,000 jobs throughout the value chain. The Covid-19 pandemic caused severe economic turmoil in South Africa, with an unprecedented drop in GDP due to lockdowns and restrictions. Rivett-Carnac explained that SAB intends to assist with economic recovery. “The budget delivered by the Minister of Finance in February ensured that economic recovery was prioritised by keeping the beer excise adjustment closer to inflation,” he said. “This has provided us with the financial space to grow the beer category responsibly and aid our government in our collective mission towards economic recovery and growth.” Last month, beer giant Heineken announced the successful acquisition of Distell and Namibia Breweries, which have been combined with Heineken South Africa into a new Heineken majority-owned business, Heineken Beverages. The acquisitions and establishment of Heineken Beverages are set to capture significant growth opportunities in Southern Africa. Heineken’s CEO and chairman of the executive board, Dolf van den Brink, said: “By combining the strengths of all three entities, we can leverage our expertise and resources to foster growth, create jobs and contribute to the overall economic development of the region”. Driving the economy Following an agreement with the Competition Authorities in South Africa, Heineken Beverages will move ahead with a public interest package which the company says “is a vote of confidence in the South African economy”. The package was announced at the 2023 South Africa Investment Conference, which aims to drive investment into the country’s economy. Since the first investment conference in 2018, South Africa has attracted R 1.14 trillion (approx. $62 billion) in commitments. The package includes an investment plan of more than €500 million over five years, investing more than €250 million towards the construction of a new brewery and maltery, establishing a €20 million supplier development fund and contributing €10 million towards a localisation and growth fund in South Africa over five years. It will also create an innovation and R&D hub for the region and implement a ‘Tavern Transformation’ programme that will support around 1,000 tavern owners to become licensed, sustainable local enterprises over a five-year period. Heineken SA managing director and Heineken Beverages MD designate, Jordi Borrut, commented: “This investment underscores our continued belief in the development and sustainability of South Africa. The 2023 SA Investment Conference is an incredible showcase of how private sector investment can help to transform a country and its economy. We are honoured to take part in this journey and invest further into South Africa – alongside the region as a whole.” He continued: “We fully support the conference’s overall goals of socio-economic development, creating sustainable jobs, reducing poverty and driving back inequality. We remain committed to developing new business in local markets, as well as to build talent, create new employment opportunities, and have an overall positive effect on South Africa’s economy.” In conclusion, the food and beverage industry is playing a significant role in igniting economic growth in South Africa. The investments made by these companies have created direct and indirect employment opportunities and helped the government in the collective mission towards economic recovery and growth. The industry continues to be a key contributor to the South African economy and is set to foster growth, create jobs and contribute to the overall economic development of the region. It's certainly an exciting region for economic growth for F&B players.

Under its Mr Kipling brand, Premier Foods has added a trio of healthier loaf cakes to its Deliciously Good range. The new range of loaf cakes contains real fruit, 30% less sugar than other cakes in the market and 115 calories per portion. The cakes come in three flavour varieties, lemon, banana and caramel apple. Naomi Shooman, global marketing director of sweet treats at Premier Foods, said: “The loaf format is incredibly popular with shoppers and our Mr Kipling range offers the great taste customers expect from the brand, with the added benefit of being healthier, a growing trend in the category. The launch aims to unlock more health occasion purchases such as lunchtime, afternoon snacking or as an evening treat.” The cakes join the existing products in Mr Kipling’s Deliciously Good range which was launched last year to cater to health-conscious consumers. In January, Mr Kipling launched new HFSS-compliant Hot Cross Pies and last year launched bite-sized brownie treats. The loaf cakes are available now in Tesco stores for an RRP of £2.25, with further rollout expected later in the year.

Sigma Alimentos has announced that it has acquired a majority stake in US-based Hispanic cheese and cream producer, Los Altos. Los Altos has been operating for over 24 years and produces authentic Mexican cheese products positioned for the North American consumer market. The company operates one plant near Los Angeles, California, employing more than 260 people. Sigma is a global food company that manufactures and distributes branded foods, including packaged meats, cheese and yogurt, among other refrigerated and frozen foods. The transaction involves an 85% stake in Los Altos, with the founding family retaining the remaining portion. Rodrigo Fernandez, Sigma’s CEO, said: “This transaction is aligned with Sigma’s strategy and will allow us to continue growing the core business by strengthening our position in a rapidly growing market that is gaining space in mainstream consumption”. He continued: “I’m confident that the sum of Los Altos and Sigma will allow us to better satisfy the needs of our customers and consumers. This transaction also enhances our existing network with production capacity on the west coast.” Jesus Lobo, Sigma US CEO, commented: “Today, Sigma takes another step to expand its presence in the US and continue increasing capacity in the Hispanic dairy market with a first plant in the west coast”. Financial terms of the deal were not disclosed.

Trane Technologies has acquired MTA, a manufacturer and distributor of sustainable solutions in industrial process cooling, air conditioning and air treatment. Trane provides solutions for indoor environments such as energy-efficient heating, ventilating and air conditioning systems, building, contracting and energy services and more. Italian-based MTA will support Trane’s Commercial HVAC system in bringing sustainable solutions to food, beverage and pharmaceutical markets, among others. MTA has been producing equipment for the treatment of compressed gases, industrial refrigeration and air conditioning since 1982. Jose La Loggia, president of commercial HVAC EMEA, Trane Technologies, said: “We are very excited to welcome our new colleagues and to begin collaborating on new ways we can serve our customers. MTA’s reputation for quality and leading innovation will further strengthen our capabilities to help our customers further decarbonise their operations with sustainable high-performance industrial process cooling, air conditioning and air treatment.” Almost 500 new employees from MTA will join the Trane Technologies team. Trane will also acquire MTA’s manufacturing sites in Tribano and Conselve, Italy, and its international sales offices. Marco Motton, CEO of MTA, said: “Trane Technologies is the perfect fit for MTA. We share a common purpose – to innovate for our customers and deliver sustainable solutions and superior service. I am excited for our future together.” Financial details of the acquisition were not disclosed.

Foodservice and facility provider Aramark has launched what it claims to be the “first” AI-powered ‘Quick Eats’ store in Scotland. ‘Quick Eats’ is an ambient intelligence-driven, no-wait, checkout-free retail store offering foods, beverages and essentials. The store is based at financial advice company Aegon’s offices in Edinburgh and will serve its 1,300 staff members. By using Aramark’s WorkXgo app, customers can walk in and walk out without having to wait in lines or go through a cashier. The launch of 'Quick Eats' in Edinburgh was confirmed in an Aramark LinkedIn post: The store features overhead cameras and intelligent shelf sensors that combine detection, visual cognition and secure payment integration while safeguarding privacy. Helen Milligan-Smith, MD at Aramark UK, said: “The launch of ‘Quick Eats’ in Scotland marks an important milestone on our journey to become the most innovative leader in the hospitality industry. By deploying the most cutting-edge and sophisticated technology in the market, we aim to make the customer journey as seamless and efficient as possible.” The ‘Quick Eats’ store forms part of ‘Aramark Connected’ that applies tech-enabled innovation for frictionless consumer experiences. Globally, this is the third Aramark ‘Quick Eats’ store deploying the technology, following the opening of two stores in Germany and Chile.

International technology group Andritz has expanded its offering to the food and feed industries with solutions to produce alt-proteins. The company’s expertise will help customers scale-up alt-protein production to a commercial level and provide support over the entire equipment life. The new offering will initially focus on alt-protein sources such as peas, pulses, lentils, insects and animal residues. Andritz experts will work side-by-side with customers to find the optimal solution for their alt-protein production needs based on wet or dry processing. The tailored end-to-end solutions include concept design, process engineering, realisation, automation and service. Andritz has technologies for all key process steps available including milling, conditioning, dewatering, drying, extrusion and pelleting – all backed by innovative process automation and proven service. To produce alt-proteins, Andritz says it “will draw upon the broadest product portfolio worldwide” as well as its expertise in project management. Christian Kling, head of alternative protein solutions at Andritz, said: “We are thrilled to officially announce the birth of this new offering. The field of alternative proteins is an exciting market but moving from lab to industrial scale can be challenging.” He continued: “Andritz – as the trusted partner on your side – not only has the production technology but also helps customers speed up commercialisation and bridge the gap to full-scale production”. To support customers, Andritz is building a test centre at Waddinxveen, the Netherlands (around 80km from agri-food research hub Wageningen), which is set to open in Q4 2023. The new centre, named Food Innovation Xperience, will enable customers to validate their concepts by scaling up production and testing quality, consistency and energy efficiency, at industrial levels.

Botanical extracts are everywhere. They give food and beverage products a distinct character, flavour, colour and/or added functionality. Given the growing popularity of botanicals, it is no wonder that more companies are making strategic investments in the sector. Oliver North, associate director at Oghma Partners, discusses the latest surge in demand for botanical extracts, as M&A activity is on the rise. M&A activity in the botanical extracts sector is poised for growth due to various factors. The primary reason is the increasing demand for natural and organic products, leading to an increased need for botanical extracts in various industries such as food and beverage, nutraceuticals, pharmaceuticals and personal care. These extracts are sourced from plants and are widely used as natural ingredients in supplements, cosmetics, and food and beverages. Their medicinal properties have been known for a long time, and the growing preference for natural ingredients over synthetic products has led to increased demand for botanical extracts in recent years. The second reason for the growth in M&A activity in the botanical extracts sector is the increasing trend of vertical integration. Companies are looking to acquire upstream or downstream businesses to enhance their supply chain efficiency and gain better control over the production process. For example, a botanical extract blender may acquire a company with extraction capabilities or that cultivates plants to ensure a consistent and reliable supply of raw materials. Furthermore, the Covid-19 pandemic has accelerated the demand for natural and organic products, including botanical extracts. Consumers are increasingly seeking products that enhance their immune systems and overall health, driving the demand for natural supplements and ingredients. Finally, the botanical extracts sector is an attractive investment opportunity due to its high growth potential and strong market demand. The global plant extracts market is expected to reach $22.5bn by 2030, representing a CAGR of c. 9.0% from 2021 to 2030, according to Precedence Research. A boost for botanicals Amid this increasing demand for botanical extracts, Oghma Partners conducted an M&A review of the European Botanical Extracts Market from 2012 to 2023 YTD (March), focusing on deals where the target company supplies botanical extracts into the nutraceutical or food end markets. The review revealed that consolidation within the European botanical extracts market can be classified into three categories. The first category consists of mid-tier ingredients players such as Döhler, who acquired Natural Origins in 2017. Natural Origins is a France-based supplier of natural health ingredients supported by scientific research, serving various industries including dietary supplements, food and beverage, nutrition, cosmetics and pharmaceuticals. Other mid-tier players such as Nactarome (formerly Aromata Group) made multiple acquisitions in the space including FIAS (2021), an Italy-based flavour extraction company, and Nactis Flavours (2020), a producer of flavours, aromatics and functional ingredients based in France. The second category includes larger global ingredients players seeking to diversify their offerings beyond their core capabilities. For example, Givaudan completed numerous acquisitions during the period, including Naturex (2018), a French plant-based speciality ingredients producer for the food, health and cosmetic industries, and Albert Vieille (2019), an aromatic raw material producer based in France. Other active companies in this space include ABF, Firmenich, Kerry and Symrise. Lastly, there are private equity firms with well-defined strategies to invest in botanical extract producers benefiting from the favourable growth trends in nutraceuticals and increasing preference for healthier food options among consumers. For example, ArchiMed has made multiple acquisitions, including Fytexia in 2016 and Monteloeder in 2022. The Riverside Company and Merieux Equity Partners are also active, with respective acquisitions of HealthTech BioActives (HTBA) in 2019 and Plantex in 2020. A word of caution While there is an abundance of M&A activity in the botanical extracts industry, companies need to be aware of the potential challenges and risks involved. One major risk is related to the valuation expectations of the target company – particularly in a rapidly growing sector such as this. Acquirers must carefully evaluate the transaction's potential benefits and consider whether the target company's price is reasonable and justifiable. This challenge may be compounded by a limited number of available targets in the space, creating a competitive environment where multiple acquirers are competing for the same target company. This, in turn, can drive up the price and make it more challenging to achieve a reasonable valuation for the acquirer. Additionally, the recent decline in valuations of the larger quoted ingredients companies could exacerbate the gap between acquirers and sellers in terms of valuation expectations. In conclusion, the botanical extracts sector is expected to grow, driven by the increasing demand for natural and organic products, vertical integration, strong market demand, and the Covid-19 pandemic. Despite the challenges mentioned previously, increased M&A activity is expected in the sector as companies look to expand their product portfolios, gain better control over the production process, and strengthen their market position.

IFF has launched Enovera 2000, the latest addition to its range of solutions for the baking industry. A next-generation enzymatic dough strengthener, Enovera 2000 is designed to help bakery manufacturers looking to replace vital gluten in their products, particularly with challenging applications such as whole wheat bread – the range is capable of replacing up to 50% of vital gluten in whole wheat bread. IFF says the enzymatic innovation will enable manufacturers to make operational cost reductions without "quality or volume trade-offs". "The solution...performs equivalently or better than traditional emulsifiers and with a reduced dependence on aids used to compensate for inconsistencies," a statement said. Aurelie Gammelin, global product manager for bakery at IFF, commented: “Managing productivity and protecting cost margins is key for bakeries in Europe right now. Enovera 2000 range is a true industry breakthrough; it reduces up to 50%of vital gluten and brings functional equivalence to traditional emulsifiers – handling process variances and overdosing, as well as whole wheat applications."

IFF has launched Enovera 2000, the latest addition to its range of solutions for the baking industry. A next-generation enzymatic dough strengthener, Enovera 2000 is designed to help bakery manufacturers looking to replace vital gluten in their products, particularly with challenging applications such as whole wheat bread – the range is capable of replacing up to 50% of vital gluten in whole wheat bread. IFF says the enzymatic innovation will enable manufacturers to make operational cost reductions without "quality or volume trade-offs". "The solution...performs equivalently or better than traditional emulsifiers and with a reduced dependence on aids used to compensate for inconsistencies," a statement said. Aurelie Gammelin, global product manager for bakery at IFF, commented: “Managing productivity and protecting cost margins is key for bakeries in Europe right now. Enovera 2000 range is a true industry breakthrough; it reduces up to 50%of vital gluten and brings functional equivalence to traditional emulsifiers – handling process variances and overdosing, as well as whole wheat applications."

Nestlé has officially opened the Institute of Agricultural Sciences, aimed at supporting the development of sustainable food systems by delivering science-based solutions in agriculture. The new centre, located in Switzerland, also incorporates an existing plant science research unit in France and farms in Ecuador, Côte d'Ivoire and Thailand, as well as partnerships with research farms. Experts at the centre will screen and develop solutions that ensure a sustainable food supply for the growing world population while contributing to farmers' livelihoods. Areas of focus will include plant science, agricultural systems and dairy livestock. Nestlé chairman Paul Bulcke said: "We have nurtured direct relationships with generations of farmers around the world. To continue providing people with tasty, nutritious and affordable foods, we need to transition together to a more sustainable food system. The new institute will strengthen our expertise and use our global network to support farming communities and protect our planet." Nestlé says the institute's inauguration is the next step in its efforts to further its expertise in coffee and cocoa production. The institute will help farmers trial regenerative agriculture methods to improve soil health and enhance biodiversity. It will also explore novel approaches in dairy farming that could help to reduce greenhouse gas emissions, focusing on areas such as cow feed and manure management. Jeroen Dijkman, head of Nestlé's Institute of Agricultural Sciences, said: "Our goal is to identify the most promising solutions to promote the production of nutritious raw materials while minimising their environmental impact. We take a holistic approach and look at several factors including impact on yield, carbon footprint, food safety and cost, as well as the viability of scale-up." Experts at the institute will work closely with external partners including farmers, universities, research organisations, start-ups and industry partners to assess and develop science-based solutions. The centre also builds on Nestlé's commitment to strengthening Switzerland's innovation ecosystem. Valérie Dittli, state councillor of the Swiss Canton of Vaud, added: "The new institute is strengthening the Canton of Vaud as a centre of excellence for research and education in agriculture and nutrition. It also contributes to the efforts that are underway to support farmers in the face of climate change. She continued: "Agriculture is at the core of quality nutrition and in the Canton of Vaud we can count on an innovative ecosystem that brings together partners including agricultural professionals, schools for higher education and private research centres such as the one from Nestlé". Also from Nestlé: Nestlé’s Q1 results report “strong start” to the year Nestlé and PAI to create frozen pizza JV Nescafé taps into iced coffee market with Ice Roast

Nestlé has officially opened the Institute of Agricultural Sciences, aimed at supporting the development of sustainable food systems by delivering science-based solutions in agriculture. The new centre, located in Switzerland, also incorporates an existing plant science research unit in France and farms in Ecuador, Côte d'Ivoire and Thailand, as well as partnerships with research farms. Experts at the centre will screen and develop solutions that ensure a sustainable food supply for the growing world population while contributing to farmers' livelihoods. Areas of focus will include plant science, agricultural systems and dairy livestock. Nestlé chairman Paul Bulcke said: "We have nurtured direct relationships with generations of farmers around the world. To continue providing people with tasty, nutritious and affordable foods, we need to transition together to a more sustainable food system. The new institute will strengthen our expertise and use our global network to support farming communities and protect our planet." Nestlé says the institute's inauguration is the next step in its efforts to further its expertise in coffee and cocoa production. The institute will help farmers trial regenerative agriculture methods to improve soil health and enhance biodiversity. It will also explore novel approaches in dairy farming that could help to reduce greenhouse gas emissions, focusing on areas such as cow feed and manure management. Jeroen Dijkman, head of Nestlé's Institute of Agricultural Sciences, said: "Our goal is to identify the most promising solutions to promote the production of nutritious raw materials while minimising their environmental impact. We take a holistic approach and look at several factors including impact on yield, carbon footprint, food safety and cost, as well as the viability of scale-up." Experts at the institute will work closely with external partners including farmers, universities, research organisations, start-ups and industry partners to assess and develop science-based solutions. The centre also builds on Nestlé's commitment to strengthening Switzerland's innovation ecosystem. Valérie Dittli, state councillor of the Swiss Canton of Vaud, added: "The new institute is strengthening the Canton of Vaud as a centre of excellence for research and education in agriculture and nutrition. It also contributes to the efforts that are underway to support farmers in the face of climate change. She continued: "Agriculture is at the core of quality nutrition and in the Canton of Vaud we can count on an innovative ecosystem that brings together partners including agricultural professionals, schools for higher education and private research centres such as the one from Nestlé". Also from Nestlé: Nestlé’s Q1 results report “strong start” to the year Nestlé and PAI to create frozen pizza JV Nescafé taps into iced coffee market with Ice Roast