Weekly Digest: IFF sets environmental goals for 2025, Gillco & Cargill enter distribution agreement

29 Jun 2018 --- This week in business, International Flavors & Fragrances (IFF) launched a new set of environmental goals, UNITAR announced a partnership with Danone that aims to bring education on climate change to drive sustainable change. Also this week, Kalsec released its first social responsibility report to share its sustainability efforts with stakeholders and Gillco Ingredients and Cargill’s Food Ingredients & Bioindustrial business in the US entered into a distribution agreement.

In brief: Sustainability
International Flavors & Fragrances Inc. (IFF) has launched a new set of environmental goals focused on emission reductions, zero waste to landfill and water stewardship. The initiatives are known collectively as “EcoEffective+.” “After surpassing three of our four 2020 environmental targets, I am proud to say that EcoEffective+ will take us to 2025 and beyond,” says Andreas Fibig, IFF Chairman and CEO. “We developed these goals by reviewing what is essential to IFF, our stakeholders, and most importantly, the planet.” Fibig continued: “We have an unyielding commitment to the Earth and I believe that excellent environmental stewardship is both good business and absolutely the right thing to do.”

UNITAR has announced a partnership with Danone that aims to bring education on climate change to drive sustainable change. The UNITAR partnership will help promote conservation, restoration and safeguarding of our planet while encouraging Danone employees to take concrete action. Overall, this partnership nourishes the global ambition of the company to empower its teams so that they can drive sustainable change. As a starting point for this participative journey, Danone has inaugurated its internal learning platform with extensive sharing and learning resources related to the company vision and goals. All Danone employees will have the opportunity to learn more, better understand and build on the issues, challenges and opportunities that come with its 2030 targets.

Corbion has signed a new five years syndicated Revolving Credit Facility (RCF) with an interest rate that will, among others, depend on the company's year-on-year sustainability performance improvement. Interest rate on the RCF is linked to sustainability indicators, measuring the performance of Corbion on a year-to-year basis. The indicators are linked to Corbion's key sustainability initiatives from its Creating Sustainable Growth strategy: Responsible sourcing, Responsible operations and Sustainable ingredient solutions. Based on the progress on these indicators, a discount or premium may apply to the interest rate on the RCF. 

Kalsec has released its first social responsibility report to share its sustainability efforts with stakeholders. “Kalsec has a long history of prioritizing social responsibility, it is a part of our DNA,” says George Todd, Executive Chairman of the Board.

Highlights from the report include: 
• Joined the Sustainable Agriculture Initiative (SAI) Platform. 
• Opened the Farmhouse Early Learning Center, providing on-site child care for employees. 
• Increased productivity per acre for rosemary and orange paprika. 
• Significant investments in solar energy. 
• Technical laboratory facilities and resources added to operations in Europe, the Middle East, Africa (EMEA) and China.

Dalziel Ingredients has been accredited to the highest level – AA – at its Gateshead (Felling) and Hull manufacturing sites by the BRC Global Standard for Food Safety. It’s the 11th consecutive year Dalziel’s Gateshead factory and new product development center has successfully passed the rigorous BRC audit, together with the recent BRC accreditation at nine of its major depots across the UK. The BRC audits were carried out against BRC v7 Global Food Standard with Gateshead (Felling) also successfully passing the additional module 12 Gluten Free Production.

In brief: Partnerships
Gillco Ingredients and Cargill’s Food Ingredients & Bioindustrial business in the US, have entered into a distribution agreement. Gillco, already a primary nationwide distributor for Cargill’s chocolate, cocoa, chicory root fiber, erythritol, isomalt, trehalose, and stevia products, will now have access to a broader portfolio of ingredients within Cargill’s Starches, Sweeteners, Texturizing Solutions, and Edible Oils businesses. “This expansion with Cargill is a giant leap for Gillco. We are now in a position to offer our customers one of the most comprehensive product offerings of any distributor nationwide,” says Bill Gillies, CEO of Gillco. “Also, access to Cargill’s extensive technical capability will supply Gillco with the tools to become the market leader as a provider of ingredient solutions.”

Tereos and Brazilian logistic firm VLI have announced a joint investment for the construction of two sugar warehouses in São Paulo, Brazil, within VLI’s railroad system to Santos port and the signing of a long-term agreement for the transportation of 1 million tons of raw sugar per year. During this fiscal year and next, Tereos will invest a total of R$145 million (US$37.5 million). VLI will also spend R$60 million (US$15.5 million) over two years. Through this partnership, Tereos, the second largest sugar producer in the world, secures the inland logistics and a port outlet for its current and expected growth in raw sugar production and trading.

In brief: Appointments & retirements
New Zealand’s Synlait Milk has appointed Leon Clement, who will assume the role of Chief Executive Officer from mid-August. Clement, the Managing Director of Fonterra Brands New Zealand, will replace incumbent John Penno who announced his departure in November last year.

Vivek Sankaran, President and Chief Operating Officer, Frito-Lay N.A., PepsiCo, has been elected as the new chairman of the Board of Directors for the Grocery Manufacturers Association (GMA). Sankaran, who was elected chairman by the GMA Executive Committee effective July 1, will lead GMA’s Board of Directors. He will succeed Chris Policinski, who is leaving the GMA board upon his retirement as president and CEO of Land O’Lakes, Inc. at the end of June. In addition, William Cyr, Chief Executive Officer of Freshpet, Inc., is becoming GMA Board Treasurer and Chair of the Board Finance & Audit Committee. Sankaran and Cyr take their new positions as GMA is in the midst of a reinvention to meet the needs of consumers, and as member companies refocus priorities at a time of significant change and disruption throughout the CPG industry.

Elsewhere, 2 Sisters Food Group has announced a major investment into its Scottish Coupar Angus plant following funding from the Government-backed Food Processing Marketing and Co-operation Grant Scheme. More than 250 new jobs will be created as a result and the business can now double the cutting capacity in the portions department. The move aligns with the food group’s strategic aim of developing more efficient, shorter supply chains. 2 Sisters will be investing around £3.5m (US$4.6m), which will be topped up by the grant to total £5m (US$6.6m). The funding will go towards the development of existing colleagues, the purchase of new equipment required to increase capacity and the recruitment of an additional 250 colleagues. In the same week, the company announced that Richard Pike, Group CFO, has decided to leave the company to pursue opportunities outside the group following internal changes to the finance function.

Hain Celestial has announced a Chief Executive Officer Succession plan, whereby, upon the hiring of a new Chief Executive Officer, Irwin D. Simon, Founder, President and Chief Executive Officer will become Non-Executive Chairman of the Board for a transition period to work closely with the incoming Chief Executive Officer. 

In brief: Other highlights
AAK is set to open a Customer Innovation Center in the Minato ward of Tokyo. The investment further expands AAK's presence in a market that the company fully entered in early 2016 when establishing a partnership with Miyoshi Oils & Fats Co. by forming a new company for the Japanese market, AAK Miyoshi JP. “The center will be focused on applications within Chocolate & Confectionery Fats but will also cover customer innovation projects and new product development within our Dairy and Special Nutrition segments,” says Torben Friis Lange, President Asia. “By investing in these facilities, we are dedicated to support our customers in the region and give them access to AAK's global solutions.”

Bell Flavors & Fragrances has launched two new locations in Thailand and Indonesia to help bolster its business in Asia. Asia Bell Flavors & Fragrances Thailand Ltd and Asia Bell Flavors and Fragrances Indonesia were recently officially opened and the company held a launch event in Bangkok attended by several company executives as well as major customers and business associates in Thailand. Bell’s new Thailand location is in the capital, Bangkok while the Indonesian office is in Banten close to Jakarta and with a satellite office in Surabaya. They will function as a sales office with warehousing and local delivery capabilities.

Finally this week, more than 60 companies and organizations representing American dairy farmers and cheese makers commended President Donald Trump for his efforts on fair trade and for insisting that Canada halt its market-distorting dairy practices. At the same time, the companies urged the administration to reconsider its imposition of new tariffs on Mexico in light of that country’s constructive engagement in NAFTA negotiations and the harm that Mexico’s retaliatory tariffs will have on US dairy’s trade with its most significant and most reliable market. In retaliation for US actions on steel and aluminum imports, Mexico recently added new tariffs – some of which will reach as high as 25 percent next month – on American-made cheeses, among other products. These tariffs will undoubtedly diminish demand for high-quality dairy products that are produced across the US.

By Elizabeth Green