The Financial Times reported earlier today that Premier Foods, the UK baker of Hovis bread, plans to cut its dividend in half as it tries to repair some of the damage from losses, which analysts estimate as close to £20m. Premier paid total dividends of 12p per share in 2006, and last year paid an interim dividend of 4.3p. When Premier Foods bought RHM for £1.2bn more than a year ago, chief executive Robert Schofield said the deal was about "big brands". He added: "The prospects of what we can do with that brand are enormous." Yet, last year, sales of the brown bread fell 11% as it lost market share to Warburtons (Britain's biggest bread brand) and Kingsmill. The decline was blamed on having to increase bread prices more quickly than rivals because of rising UK wheat prices. Wheat accounts for nearly a third of Hovis's raw material costs, which analysts at Credit Suisse estimate at nearly £1bn. Rising price of wheat Premier, like other food producers, has been hit hard by dramatic jumps in wheat prices, creating concerns that margins will be squeezed, making it more difficult for the company to service its debts. The price was fairly stable until last summer, but then it doubled from £100 a tonne to £200 within a few months. This has meant that the retail price of a loaf of bread has increased by about 15p.

*Net sales by US beverage maker Hansen Natural Corp jumped 63% to $246.6 million in the last quarter of 2007, driven by continued strong growth of the company’s Monster Energy line. * Hansen’s earnings for the quarter more than doubled to $45.1 million, or $0.45 per share. Net sales for the full year rose 49.3% to $904.5 million, with earnings up 52.5% to $149.4 million, or $1.51 per share. However, Hansen’s results were impacted by higher raw material costs. The company’s gross profit margin in Q4 declined to 51%, from 53.1% in the last quarter of 2006, while its margin over the full 12 months of 2007 was 51.7%, down from 52.3% in 2006. Hansen also incurred contract termination costs of $15.3 million as it switched distribution to the Anheuser-Busch system last year, while a further $9.8 million was paid out to independent assessors who investigated Hansen’s granting of stock options to executives. Rodney Sacks, Chairman and Chief Executive of Hansen, said in a formal statement that the company’s record revenues reflected continued strong sales of Monster Energy drinks, as well as the Java Monster line of non-carbonated, dairy-based coffee drinks (introduced in April 2007) and Monster M-80 energy juice (introduced in March 2007). Sacks said: “We're excited by the launch in December 2007 of the five new Java Monster line extensions, as well as the launch of our new Monster Heavy Metal (introduced in November 2007) and Monster MIXXD (introduced in December 2007). We are extremely pleased by the reception, both from the trade and consumers to our new line extensions. “The energy category continues to show strong growth, and the Monster Energy brand continues to grow in excess of the overall category growth.”

*Following Tuesday’s announcement of the 2008 Federal Budget by Minister Flaherty, the Canadian Health Food Association (CHFA) has announced that it's pleased to see that $33 million will be allocated to the Natural Health Products Directorate (NHPD). * However, CHFA believes that the Government missed an opportunity through the tax system to enable Canadians to better manage their health. “The Government is to be applauded for recognising the importance of responding to Canadians,” said CHFA President and CEO, Penelope Marrett. “A robust and thriving natural health products (NHP) industry will help to ensure that Canadians have access and choice when they're seeking NHPs. However, Marrett said that, as a regulator, what's needed is A-based funding for NHPD, since they're currently dealing with a serious backlog of applications from 2004, when the regulations came into being. “This backlog is of grave concern to our members,” said Marrett. "We've already seen how this backlog has had a very negative impact on our industry, which includes many small businesses. Most importantly, we're worried that this backlog is hindering the supply of these products to Canadians, many of whom rely on NHPs for their health and well-being. “The government needs to do more to strengthen the ability of Canadians to better manage their own care, including the use of NHPs,” said Marrett. “Enhancing self-care is of primary importance to Canadians and will save Canada’s health system millions of dollars a year.” Background NHPs have become increasingly popular as Canadians look for better ways to manage their health. Over 75% of Canadians purchased natural health products in 2005, according to an Ipsos Reid survey. NHPs available in Canada include vitamins and minerals, herbal remedies, homeopathic medicines, and traditional Chinese medicines. The Canadian NHP industry is currently valued at over $2.5 billion and is growing. * About CHFA* The Canadian Health Food Association (CHFA) is a non-profit, federally chartered trade association. Its 1,300 members include retailers, wholesalers, distributors, manufacturers, consultants and other associations that are involved in a variety of industry sub-sectors, such as supplements, vitamins, herbals, homeopathics, sports nutrition products, natural foods and organic products.

To understand how Fairtrade products measure up against some of the big brands, Which? asked a panel of experts to sample both and compare them for taste and value for money. The report’s results suggested consumers who avoided Fairtrade products because of concerns about quality might want to try them again. Giles Hilton, chief taster for Whittard and a member of the Speciality Coffee Association rated Cafédirect’s Medium Roast fresh ground coffee higher than the non Fairtrade coffee for both taste and value for money. Cafédirect Head of Corporate Affairs Zachary Dominitz says, “We are delighted, but not surprised, that our coffee has beaten off the competition on taste. Growers are the heart of Cafédirect, and our direct relationships with them – and their pride in their work – guarantees we get the best possible beans, and that’s reflected in the quality of our coffee. “In the last three years alone we've reinvested 60% of our profits directly into growers' organisations and communities, which has enabled them to build sustainable businesses and continually improve the quality of their crops. And it shows!"

The CavinKare group of India, manufacturer of personal care and food products, has acquired 100% of beverage maker Maa Fruits for INR300 million ($7.5 million), including INR24 million ($600,000) in debt. Based in Dharmapuri in the eastern state of Tamil Nadu, Maa produces a range of fruit drinks packed in 200ml and 1 litre PET bottles and 200ml Tetra Pak cartons. The Maa line is distributed chiefly in rural areas across southern India, where it's said to rank fourth in the market with a share of about 5%. The company’s new owner plans to invest some INR300 million ($7.5 million) in expanding Maa’s production facilities, as well as adding new drinks and extending distribution of the brand to northern India. “Apart from expanding the portfolio and capacity, we want to take the brand to other geographies in phases over the following months,” CK Ranganathan, Chairman and Managing Director of CavinKare, told a press conference in Chennai. “We propose to spend at least 17% of Maa’s turnover on advertising and marketing during the first few years.” Ranganathan said Maa has a skilled workforce and a strong raw material procurement system. CavinKare will leverage the strength of its own sales and distribution system to grow the fruit drinks brand. Maa sales are expected to reach about INR400 million ($10 million) this year, contributing around 7% to CavinKare’s group turnover. Ramesh Vishwanathan, Executive Director of CavinKare, said the total market for juice and juice drinks in India was reckoned to have reached no more than 25% of its full potential. The fruit drinks market in southern India is currently growing about 50% annually.

Environmental consultancy ADAS is conducting research for Defra into the calculation of Greenhouse Gas (GHG) emissions from the food supply chain in order to inform the consultation process towards the development of a Publicly Available Specification (PAS). Every food product has an impact on the environment via its 'carbon footprint'. This is determined by calculating the GHG outputs at each stage of the food supply chain - from farm production and its inputs through the manufacturing process to the final product. Defra and the Carbon Trust are co-sponsoring the BSI to develop a robust, consistent approach for measuring GHGs (a Publicly Available Specification or PAS) which organisations can use to calculate and target where GHG emission reductions can be made for the products that they manufacture, buy or sell. ADAS has been appointed to lead a two-phase project that will test and apply the approach. Campden and Chorleywood Food Research Association, Cranfield University, the EuGeos environmental consultancy and the Institute of Grassland and Environmental Research are also involved. Firstly, ADAS will test the draft BSI methodology for GHG calculation on a range of commodity foods such as beef, lamb and bread wheat within forms of farming (intensive, extensive and organic). At this stage further proposals for developing the methodology will also be accepted. In the second phase of work, ADAS will apply the revised measurement system to new products, including chicken, strawberries and also revisit testing on the original commodities to provide increased accuracy. This will provide a range of GHG 'footprints' at the pre-farm gate stage. In parallel CCFRA will be testing the PAS on products through the post-farm gate (manufacturing) stage with a focus on highly processed foods with short shelf life and on foods requiring high temperature processing or refrigeration, in order to capture the complexities of processing and to factor in waste and high energy processes such as baking and freezing. The total GHG of the final processed products will then be calculated by combining the pre- and post-farm gate figures. Cranfield University and EuGeos will compare these results against the detailed Life Cycle Analysis studies they have previously completed to assess their robustness and hence to comment on the methods in the PAS. The agreed methodology will be very valuable to the food industry as it can be used to assess not only the green credentials of different food supply chains and different products, but also offer comparison of organic systems with conventional intensive and extensive systems, and for some products comparing UK systems with those in other countries. In particular, it will indicate those parts of the food chain that are GHG 'hotspots', to enable GHG reduction strategies to be developed. ADAS Senior Consultant Jeremy Wiltshire said: "We are very excited about this project - once a PAS is established, it may be applied across a wide range of product categories. It will also provide a tool to predict the environmental impacts of future food production methods, helping the move towards a low-carbon economy." He explained: "The process of gathering GHG data is fairly complex - we devise a Process Diagram for each product, charting all GHG outputs. It's essential that every component is accounted for, from the fuels burned by the tractor, to gases emitted in soil processes and during storage of commodities." Phase One of the project will be completed in March this year and Phase Two will be completed by December. This project is part of a suite of three currently running that are designed to test and inform the PAS as it develops, covering the stages from food production, manufacturing and retailing through to how the consumer stores, prepares and consumes food at home. The research will identify possible limitations of the BSI-PAS method and how these might be overcome.

*Feel Good Drinks has teamed up with independent charity, Trees for Cities, for a national year-long tree planting partnership. This initiative will see Feel Good Drinks and the charity holding ‘Feel Good Carnival Planting Days’ throughout the year. * “We think planting trees is a good thing to do, but we wanted our team and local communities to be able to get involved too, which is why Trees for Cities is a perfect partner for us,” said Dave Wallwork, Managing Director and co-founder of the soft drinks company. “These planting days will be loads of fun for all our team and our drinkers, as we don our wellies and get planting!” Trees for Cities is an independent charity that works to transform urban wasteland into green spaces by getting the local community involved in the tree planting, and educating them on how to sustain the transformed green areas. As well as tree planting, each carnival planting day will include face painting, live music, football games and loads of arts and crafts, including bird box making! As well as planting 1,000 trees, Feel Good Drinks will be supporting the partnership with sampling, digital and PR activity. “The Feel Good Drinks Company has spreading feelgoodness and making people smile at its heart,” added Mr Wallwork. “Outside space provides communities with a place to relax and feel good, and we’re thrilled to have the chance to be able to do our bit to regenerate wasteland into places that locals can truly enjoy.” The first of the five ‘Feel Good Carnival Planting Days’ kicks off on Saturday 1 March at Braithwaite Park in East London. <1>. <1>: http://maps.google.com/maps?f=q&hl=en&geocode=&q=Braithwaite+Park&sll=37.0625,-95.677068&sspn=56.637293,70.136719&ie=UTF8&z=17&iwloc=addr

*Campina was the bestselling brand in Dutch supermarkets for the sixth year in a row, according to market research agency IRI in a list compiled for the Foodmagazine trade journal. * The strong increase in the consumption of healthy dairy made by Campina has led to growth in turnover for supermarkets, generated specifically through the sale of the Campina brand. First place in the retail top 100 was assigned to the following products, which the dairy organisation markets under the Campina brand in the Netherlands: Campina milk, yogurt, custard, cream and coffee creamer, Campina Optimel (yogurt drinks, yogurts, quark and custard with zero fat, no added sugar), Campina Vifit (for balanced intestinal flora) and Campina Botergoud (butter). An important factor in the consolidation of the company's position is due to higher sales of extra-healthy dairy products. Campina Optimel in particular made spectacular strides. The flip side is a lower brand turnover in the shrinking milk and custard segment. Growth of the breakfast dairy product Goede Morgen, and the chilled coffee drink Café Fresco, have further underscored the position of the brand. Turnover from supermarket sales of Campina brands rose to more than €380 million in 2007.

*UK supermarket chain Tesco is making considerable moves to increase local sourcing across the country with plans under way to implement the programme in more of its 2,000 stores across the globe. * It foresees local sourcing being as important to the company as organic (now worth £400 million in the UK) and being worth £1 billion in retail sales by 2011. In the past year, for instance, the south-west region has sourced 200 new products from 40 new suppliers. Local buyers have been employed in each region to make strong links with smaller suppliers, such as Little Town Dairy and Nichol’s Farm in Kent, to bring new ranges into the stores which will be known and supported by local shoppers. Each region has specialist produce: Essex-based Fairfields Farm making specialist crisps using its own potatoes and Sweet Thai chillis from the The Chilli Company. Hill Farm Oil Heaveningham is making cold pressed rapeseed oil with omega-3. Gloucestershire supplier Bottle Green Drinks has extended its well-known Elderflower to launch its Blossom Hill range of Elderflower, Morello cherry and lemon barley to local stores. The idea is to make local sourcing mainstream, not just gourmet, with the phrase 'Everyday local sourcing' the basis of the new campaign. The most obvious areas are eggs, juice, meat, cheese, milk and vegetables, with black-and-white photographs and details of various farmers appearing on-pack. The company was spurred on after a trial in Padstow, Cornwall, when it noticed that consumers had a different mindset when looking at prices for products from local suppliers. It then set up a local office to deal with local issues and help small suppliers meet the necessary health and safety criteria. In some cases, it supplies just one store. According to Head of Local Sourcing Emily Shamma, Thailand already has local sourced produce, as do Tesco Stores in the Czech Republic and Ireland (where it's particularly strong). On the basis that this move has been consumer led – meeting demand from consumers across the globe – we're unlikely to see a trend reversal.

The Coca-Cola Company has revealed in a regulatory filing that it agreed to pay $626 million plus the assumption of debt to take full control of its German bottling operations last year, buying out almost 20 small regional bottlers and merging them into major bottler Coca-Cola Erfrischungsgetränke AG (CCEAG), already a Coca-Cola subsidiary. Coke negotiated for months to clinch the deal, which finally closed in September. The company said one unified bottling operation would be more efficient and responsive to market demands. Financial details of the transaction were not disclosed. The company’s filing with the Securities and Exchange Commission (SEC) shows Coke paid $385 million for the 17% of CCEAG shares it did not already own: $156 million in cash upfront, and $85 million in “guaranteed future payments". Coke also took over $34 million in debt. The former independent bottlers have shares in CCEAG, which they may sell back to Coca-Cola at a future date. Germany is Coke’s biggest European market, but slumped in the wake of a 1999 contamination scare in Belgium and northern France. In its results for 2007, the company reported that its German case volume edged up 1% over the year, with 2% growth in the last quarter, following 7% growth in Q4 the previous year.

Nestlé Waters Italia owned San Bernardo has revamped the labelling and packaging for its eponymous mineral water brand, with the aim of giving the range a fresher and more distinctive appearance. The revamp was undertaken in conjunction with renowned Designer Giorgetto Giugiaro. San Bernardo Managing Director Stefano Agostini, commented: “The restyling confirms San Bernardo’s positioning as a cool product. There are plans to upgrade the entire range in the near future.” The new formats have been available through horeca channels since January 2008.

*In the US, Cadbury Schweppes Americas Beverages has launched a line of Snapple Antioxidant Waters and LYTeWater. * Antioxidant Water features seven flavours inspired by superfruits, with the antioxidants, vitamins and electrolytes in each flavour offering one of four benefits - Protect, Defy, Awaken and Restore. The Protect line offers tropical mango or orange star fruit flavours; Defy includes raspberry acerola or grape pomegranate flavours; Awaken contains strawberry açaí or dragonfruit; and Restore consists of agave melon. The varieties are packaged in 20oz bottles.