Marketing sustainable products

As a market leader we must ensure our products are safe, produced to the highest quality, reflect community values, changing expectations and regulatory environments, and help promote healthy dietary choices and lifestyles.

To this end, we created a new quality policy for the integrated business, which is now applicable across the group. 

We have scoped and approved an important project that comprises an incident management, action tracking and audit management system. To be implemented group-wide by September 2011, it will provide information about trends in product quality and will be a key enabler for strategic planning priorities.

To meet regulatory requirements in all states in Australia we revised our food safety program, which all farmer suppliers must now meet. 

In our manufacturing facilities we implemented a revised Hazard Analysis and Critical Control Point (HACCP) procedure that standardises HACCP development and management across all our sites. HACCP is a production control system for the food industry that identifies where potential contamination can occur (the critical control points) and strictly manages and monitors these points as a way of ensuring that the safest product possible is being produced. 

Risks to product integrity are regularly assessed, eliminated or placed under control protocols. HACCP assessments are also made whenever new manufacturing installations or processes are introduced. HACCP is integrated into Lion Nathan's quality management systems and accredited under the ISO 9000 series, making it subject to regular third-party surveillance and audit. 

To comply with laws, regulations and customer and consumer standards covering the food industry, National Foods' recently revised quality system is underpinned by the globally recognised SQF 2000 standard and falls under the Lion Risk Assurance (LRA) process. This means food safety risk is managed under a uniform and integrated operational framework. National Foods also implemented a single third party auditing arrangement, and in doing so harmonised multiple customer and certification audits into a single audit. 

Consumer complaint handling procedures have been upgraded, allowing manufacturing sites to follow trends in complaints, and implement corrective actions where required to ensure customer and quality expectations are achieved or exceeded. 

Safety and quality 

As the market leader in fresh milk, we buy 2.3 billion litres of milk that comes from more than 1,000 Australian farms to produce a range of full cream, flavoured and modified fresh and UHT milks. 

Our rigorous monitoring of milk quality standards ensures we have the best possible on-farm standards. Our farmer suppliers are expected to follow best practice animal health and welfare standards. We help farmers with daily practical advice on nutrition, agronomy and animal health issues and work closely with state food authorities, local vets and the dairy industry to ensure our milk supply comes from healthy, well-cared-for animals. 

In 2010, National Foods bought more than 90,000 tonnes of fruit, making us the biggest processor of citrus fruit in Australia. An incentive is being paid (via higher purchase price) to orange growers whose fruit achieves higher quality standards. This optimises the quality of the extracted juice used to make our products. 

To improve the freshness, hygiene and personal safety in the dispensing of our tap beer – as well as reducing product wastage and write off – we offer our customers beer dispense system management training. Beer pumps and small diameter beer lines as standard specification reduce the amount of water and toxic chemicals required during the beer line cleaning process. Chilled water system glycol coolants are supplied and used to food-grade standard to ensure any possible contamination of beer is not hazardous to consumers.

Product recalls 

Where necessary – and often erring on the side of caution – we recall products. During and soon after the year under review we undertook three product recalls.

In November 2009 we initiated a recall of 2L Woolworths Lite milk due to contamination by E.coli. The affected product was manufactured at our milk-processing site in Chelsea Heights, Victoria. Woolworths coordinated the recall and managed media, regulatory communication and consumer complaints. E.coli counts in finished product had not been experienced previously at this site. The root cause was found quickly and corrective measures implemented to prevent re-occurrence. Typing of the E.coli confirmed it was not a pathogenic strain.

In November 2010 Lion Nathan and premium goods supplier, Yetimo Marketing, issued a recall of promotional fridges used in three XXXX promotions during 2009 and 2010 due to a manufacturing assembly error. The recall was organised in accordance with applicable guidelines and in consultation with all relevant authorities and the Minister for Competition Policy and Consumer Affairs was notified.

The fridges were offered as prizes in the: V8 Supercar (WA and NSW) promotion that took place November - December 2009; XXXX Gold Made for Summer (national) promotion that took place September 2009 - January 2010; and a State of Origin (QLD) promotion that took place May - July 2010. The promotions were run through venues such as hotels, clubs and liquor stores.

The assembly error affected the supply wire to the fridge's fan. In some instances the wire was accessible and had not been double insulated. There was a risk that if the insulation was cut, torn or wore out, the wires would be exposed and potentially give a person who came into contact with the wires an electric shock. 

While the amount of accessible wiring was small (approximately 1.5 cm) and the chances of contact very low, we decided the only responsible action was to err on the side of caution and recall all fridges.

A consumer hotline coordinated fridge pick-ups and the replacement of each fridge with an alternative prize of equivalent retail value. Recall advertisements were published in metropolitan newspapers in each state, as well as in regional newspapers in Queensland where the majority of fridges had been distributed. The XXXX and Lion Nathan websites were updated with a recall notice, and XXXX's social media channels were also used to notify consumers. All venues that participated in the competitions were alerted to the recall and provided with the advertisement for display in store. Where the venue had details of the winners, we made direct contact to alert them about the recall. 

The third recall took place in December 2010 (subsequent to the reporting period) when J Boag & Son Pty Limited initiated a recall of certain batches of 375ml bottles within the best before date range of 23 June 2011 to 12 August 2011 (Boag's Draught, Boag's Draught Light, James Boag's Premium, James Boag's Premium Light, Boag's XXX Ale, James Boag's Classic Blonde). All other James Boag's products outside the date range and all other Lion Nathan products were unaffected.

Once again the recall was organised in accordance with applicable guidelines and in consultation with all relevant authorities and the Minister for Competition Policy and Consumer Affairs was notified.

The recall was initiated following the identification of a packaging defect, which could result in a piece of glass breaking away from the rim of the bottle upon opening. While we believed the risk to consumers was low, we erred on the side of caution and voluntarily recalled potentially affected products. 

A consumer hotline managed all consumer enquiries and consumers were directed to take the product back to the store they bought it from for a refund or replacement. Recall advertisements were booked in metropolitan newspapers across all states, and the Lion Nathan, James Boag's and Boag's Draught websites were updated with a recall notice. Boag's Draught's social media channels were also used to notify consumers. 

Extensive communication to customers and wholesalers was managed via our customer call centre, Lion Connect. Additional call centre resources were secured through an external agency, to ensure all customer and consumer enquiries were responded to quickly. All direct Lion Nathan customers received multiple fax notifications advising of the recall, and were provided with the recall advertisement for display in-store. We also worked with our wholesalers to ensure onward communication was issued to their customers. We continue to coordinate the return or collection of recalled products and the destruction of these products in an environmentally friendly manner. 

Providing choice

We believe product information and labelling is a positive step in helping consumers to make healthy dietary and drinking decisions.

In January the federal government released the findings of an independent review of Australian labelling regulation headed by former Health Minister, Dr Neal Blewett. The report recommended significant changes to these standards to protect consumers and encourage awareness and better choices.

Ahead of the government reaction to Dr Blewett’s report, our alcoholic beverages business has agreed to voluntarily adopt consumer health messages that support responsible drinking choices (including during pregnancy).

We have taken this proactive approach to ensure we continue to meet evolving community expectations for more information on primary packaging. Furthermore, because we believe this is the right thing to do we will take these steps regardless of the pending government response to the report and the passage of any enabling legislation.

We are working on a more detailed plan as to how our support for broader consumer messaging will be best delivered across individual portfolios, packaging types, markets and categories.

Over and above this latest development, we continue to roll out the industry standard drinks logo on all primary and secondary packaging material. In 2010 we included the Be Drink Aware logo on our products and marketing collateral in Australia and the Drink Responsibly logo on our products and marketing collateral in New Zealand. These logos are designed to act as friendly reminders to drinkers to seek information and tips to help them make responsible drinking decisions. The websites (BeDrinkAware.com.au and www.drinkresponsibly.co.nz) provide comprehensive information and advice on healthy drinking and on the implications of misuse.

In our food and beverage business our commitment to front-of-pack labelling goes back to 2007, and we now have a range of dairy, juice, milk, dairy beverage products that comply with Australian Food and Grocery Council’s front of pack ‘Daily Intake Guide Labelling Scheme’. This is complemented with consumer education on the National Foods corporate website.

In February of this year, National Foods became a signatory to the Australian Food and Grocery Council’s Responsible Children’s Marketing Initiative, which guides product marketing and advertising to children under the age of 12 years. We have used communication about products such as Yoplait Go-Gurt and Yogo to encourage balanced eating and an active and healthy lifestyle.

We continue to review and validate product claims to ensure our consumers are provided with the most accurate on-pack information.

For example, in our juice business following concerns expressed by the Australian Competition and Consumer Commission (ACCC) we have undertaken that by March 2011 we will no longer market juices in our Berri Australian Fresh and Daily Juice Company ranges as “Australia Fresh” where they contain cold stored juice.

Cold stored juice is simply fresh juice that has been heated for a short period, filled in a sterile environment and then refrigerated. It is not boiled, frozen, reconstituted and does not contain added preservatives or other additives.

The ACCC considered that the Berri Australian Fresh packaging suggested to consumers that it only contained juice that was recently squeezed when in fact the products within this range may contain either fresh juice or a blend of fresh juice and cold stored (aseptically stored) juice. National Foods accepts that the Berri Australian Fresh packaging is likely to have misled some consumers and contravened the Trade Practices Act 1974. We have agreed to change the brand name of our Berri Australian Fresh Juice to ensure no consumers are misled in the future.

Berri Australian Fresh will become Berri Australian Grown in March 2011 – it will continue to be made in Australia using 100% Australian grown fruit and will offer the same great tasting product range. For our Daily Juice Company range we have undertaken to specify that the juice is made up of fresh, reconstituted and, from time to time, cold stored juice.

Carbon neutral products

In 2008 we gave environmentally conscious consumers the option of a beer that is carbon offset by introducing Barefoot Radler (now called Bare Cove Radler), the first beer to be certified carbon neutral under the federal government’s Greenhouse Friendly™ program, which has since been replaced by the National Carbon Offset Standard (NCOS). We bought around 9,000 tonnes of government-certified carbon offsets throughout the year to neutralise the remaining emissions from the product. These came from investment in energy efficient projects involving capture of landfill gas and conversion to electricity. The product also comes in a carton with 100% post consumer recycled content and cluster packs with 75% recycled content. The bottle was light weighted by 16% in March 2009, which will reduce glass usage by approximately 600 tonnes a year. In FY10, we sold over 4.5 million litres of this well recognised carbon neutral product.

Drinking for the right reasons

To encourage a healthy drinking culture, it’s important for customers, consumers and our people to gain an appreciation of the tastes and flavours of our beers and wines.

Each year, we conduct 150-200 beer dinners with Craft Beer Specialists, as well as numerous staff training sessions, where we taste beers and match them with foods.

James Squire is currently a sponsor of the Taste of Sydney and the Taste of Melbourne festivals. As well as hosting a tasting stand, the James Squire team gives beer and food presentations. We are proud to have the only Australian brewery that’s actively educating consumers about beer and food matching. Stressing the importance of savouring the flavours promotes the practice of drinking in moderation.

Again in 2010, our Fine Wine Partners presented Australia’s Wine List of the Year Awards in partnership with Gourmet Traveller WINE to recognise and promote the country’s most interesting, best-constructed lists. A 28-strong judging panel, including master sommeliers, masters of wine and wine communicators from around the world, assess Australian lists for content, balance, appropriate pricing, suitability to the style of venue and its cuisine, and overall presentation, as well as the quality of the wines chosen.

The overall winner of Australia’s Wine List of the Year Awards was Rockpool Bar & Grill, Melbourne.

Other winners included:

By continuing to raise consumer awareness of restaurants that are offering well-crafted wine lists, Fine Wine Partners is helping to attract more people who are interested in expanding their knowledge of wine and how it works best with food, in turn helping to educate consumers to drink for the right reasons.