The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
11 - 15 de Febrero de 2008

The World

It’ll kill the worms: Generally if that’s what consumers think about a food product, it wouldn’t last long in market. That, however, is exactly what Kraft Foods is hoping for. Looking to enhance their presence in the rural markets in “Asia, Africa and Latin America, where worms leave millions of children lethargic, dangerously anemic and, sometimes, passing blood”, Kraft is developing a food product that kills these intestinal worms. The product will “incorporate deworming chemicals… derived from plant oils.” While not harmful to humans it does attack the worms’ nervous system. What Kraft wants to do is not all that unusual. Companies will often reformulate products to fortify them, as well as to respond to local tastes and input availability. In Kraft’s case they have also reformulated to position as a healthier alternative. In Asia and Latin America their Tang drink have extra vitamins, while in the Philippines their Eden brand cheese is fortified with iodine. With this product, though, they go beyond “passive” fortification, turning the product into an aggressive treatment option, opening a new category for mainstream food. The risk they run is not only that consumer will confuse the food with medicine, but that government authorities in the different countries will consider this as medicine limiting options for promotion and distribution.

Eggs from happier hens: After an extensive six month effort at consulting with members and customers which showed a strong concern with animal welfare, the UK Co – operative Group has announced that they will no longer sell caged eggs but rather eggs from free range hens. The Co-operative Group is known as an ‘ethical food retailer’; as such, this – along with other measures -- will serve to strengthen their positioning. We feel that this will also put pressure on ‘traditional’ retailers to look closer at their supplier policies.

Mexico

Let them drink milk: Over the past year, while the overall consumer price index grew by 3.7 percent, pasteurized milk prices increased by 11.6 percent and powdered milk by 12.3 percent, respectively. If that wasn’t enough to worry the Calderon Administration, fresh cheese prices were up by 15.8 percent. It shouldn’t come as a surprise, therefore, that last week the Secretary of the Economy authorized a duty free 44,200 MT quotas, in addition to any existing commitments that Mexico has, for dairy preparations. At the same the Secretary of the Economy also authorized 80,000 MT of powdered milk from WTO countries to be imported duty free into the southern frontier zone and Quintana Roo. Access to the quota was also authorized for LICONSA. What is interesting is that imports are being authorized at the same time that some farmers are protesting the end of the NAFTA transition period.

Smoking – a follow up: Last week we mentioned that among the complaints of the restaurateurs was the obligation to separate smokers from non – smokers. To “solve” this problem the City Council is moving to amend the regulations to require that restaurants be 100 percent smoke free.