What will stop these self-driving lorries colliding?

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Scania believes 5G could improve communications between “platooning” lorries

What impact could 5G – the new high-speed mobile technology being trialled around the world – have on the way we work and play?

Swedish transport company Scania believes lorries could use far less fuel if they drove much closer together, controlled by wirelessly communicating onboard computers.

But to prevent these “platooning” lorries crashing into each other, you’d better be sure your communications are fast and reliable.

So Scania is working with Ericsson on trials of the new 5G (fifth generation) wireless broadband technology, due to be rolled out globally in 2020.

It promises much faster data transfer speeds, greater coverage and more efficient use of the spectrum bandwidth.

“Platooning works very well with wi-fi, but in dense traffic situations with many vehicles communicating, 5G is designed to offer more reliable communication,” says Andreas Hoglund, Scania’s senior engineer for intelligent transport systems.

This is because 5G direct communication is designed to handle fast moving objects and congestion more efficiently, he says.

“Faster communication will make it possible to reduce the distance between vehicles in the platoon, which might further reduce the air drag and give positive effects on fuel consumption,” he explains.

This could help create “a more efficient, greener” world.

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Media captionWATCH: What is 5G?

5G is designed to accommodate the growing number of devices reliant on a mobile internet connection – from fridges to cars – and is 10 times faster than the highest speed 4G can manage.

“It will enable a lot of applications which were unthinkable before,” says Mischa Dohler, professor in wireless communications at King’s College London.

South Korea has plans to implement 5G for the Winter Olympics in February 2018, giving visitors access to virtual reality (VR) content on their mobiles.

One of the UK’s first 5G test-beds is in Brighton, where non-profit innovation hub, Digital Catapult Centre, has just completed a series of workshops for small businesses.

“Hypothetically, 5G is fast enough to download a 100GB 4K movie in two-and-a-half minutes,” says Richard Scott, innovation manager at Digital Catapult.

“But it isn’t just about speed – [5G] has specific features that will unlock and enable new technologies.”

Chiefly, these include fewer dropped connections and lower latency – the time it takes for data to be stored or retrieved.

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“Wi-fi is fine if you are sitting with a few people in a meeting, or moving slowly around indoors,” explains Rahim Tafazolli, head of Surrey University’s 5G Innovation Centre.

“However, once you start to move quickly and the number of people increases to more than 10 – at Waterloo Station, for example – you need to have a system that can hand over connection between radio cells without causing a drop in signal, and which can accommodate several people simultaneously.

“Wi-fi can’t do that.”

This is because every wi-fi signal has a defined range, whereas 5G will be flexible, enabling mobile devices to switch automatically between the various newly available frequencies.

One frequency will be for long-range connections, across rural areas for example; one will be for urban environments, providing high numbers of users with high-speed connectivity; and there will also be a high-capacity frequency for densely populated areas, such as sports stadiums and railway terminals.

This flexibility will lead to “an ever-expanding array of new business services”, Mr Tafazolli believes, and could be critical to the success of autonomous vehicles and the internet of things.

Faster wireless connectivity should also give VR and augmented reality (AR) technologies a boost, argues Digital Catapult’s Mr Scott.

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Faster mobile connectivity could greatly improve virtual reality experiences

“If you have a very detailed, immersive VR experience and you try to run it over a mobile headset currently, there is enough latency… that it makes you feel sick,” he explains.

So high-quality VR experiences rely on headsets being “tethered” to a computer, which provides the necessary computing power.

5G offers the opportunity to recreate high-quality experiences on the move.

“It could enable you to have an experience comparable with home gaming on your mobile,” says Mr Scott, “allowing you to compete or collaborate with other people in real time.”

Andy Cummins of Brighton-based digital agency, Cogapp, says 5G will allow his firm to create much more exciting AR and VR content for visitors to museums and galleries.

“Without [5G] these types of experiences… would at best seem laggy and unintuitive,” he says.

And Tim Fleming, founder of Future Visual, another Brighton company preparing to trial 5G, says: “We are very interested in in-store retail VR experiences, and creating a flagship VR experience that can be taken to any location.

“At the moment we have to use a dedicated PC, but with 5G you just need a headset and a mobile device. The heavy lifting is done in the cloud. That’s very interesting.”

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5G enthusiasts say it could underpin smart cities and augmented reality services

Of course, 5G roll-out is not without its technical challenges.

Installing all the base stations and antennae is very expensive, and many of today’s devices will not be compatible with the new technology.

It is not clear at the moment who is going to pay for it.

But Ericsson’s head of 5G commercialisation, Thomas Noren, is confident that 5G services will be cheaper to run because the network will be more energy efficient and production and operational costs will be lower.

There is clearly still much detail to iron out, but research consultancy Ovum predicts that there will be 389 million 5G subscriptions globally by the end of 2022.

Users still struggling with patchy 4G coverage maybe forgiven for being a little sceptical about the ambitious claims being made for 5G.

But the potential to transform a number of businesses – and create many new ones – is clearly there.

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Source : [1] http://www.bbc.co.uk/news/business-41467871

Can ice structures solve a Himalayan water crisis?

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Media captionEngineers in the Himalayan Desert are coming up with solutions which could help the world’s water crisis. Credit: Natural History Unit

It’s midnight at 3,500m (11,000ft) above sea level, the coldest time of the day, in one of the coldest places on the planet. In the middle of winter, temperatures here plunge to -30C (-22F).

A group of 10 volunteers are gathering; putting into place a plan to solve a water crisis in Ladakh, the northern most region of India, in the high Himalayas.

They are building manmade ice structures, more than 30m tall, that they hope will melt early in the spring and give villagers and their farms the water they need.

The ice structures are the brainchild of engineer Sonam Wangchuk. Born in Ladakh, he has worked for several years to find innovative solutions to everyday problems facing the local communities.

“We tend to get the solutions created in New York or New Delhi, but they don’t work for us here in the mountains. I believe mountain people have to find solutions for themselves,” he says.

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Sonam Wangchuk is the inventor of the ice structures

Villagers in Ladakh face harsh living conditions. Road blockages in the winter months mean they are cut off from the rest of the country for most of winter.

Mr Wangchuk says the effects of climate change are adding to the problem. He says there are signs that global warming is damaging the delicate climatic water balance in the Hindu Kush Himalayan range.

“We can see that the glaciers are receding, to higher altitudes. There is less water in spring, but in the summer months we have experienced dangerous flooding. The water flow in the valley has become erratic,” he explains.

Mr Wangchuk was inspired by a fellow engineer working in the region, Chewang Norphel. Mr Norphel had created flat artificial glaciers at heights of 4,000m (13,123ft) and above. But the villagers were reluctant to climb up to those levels.

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Life in Ladakh has always depended on glacial melt-water

Mr Wangchuk says he was crossing a bridge when the idea for his ice structures crystallised.

“I saw that there was ice under the bridge, which at 3,000m (9,842ft) was the warmest and lowest altitude in the whole area,” he recalls.

“And this was in May. So I thought – direct sunlight makes the ice melt, but if we protect it from the sun, we can store ice right here.”


  • Remote villages at an altitude of 2700m (8860ft) to 4000m (13,123ft) above sea level
  • Population of almost 300,000
  • Winter desert temperatures as low as -30C (-22F)
  • Meagre rainfall of on average only 100 mm annually

And so, in 2013, he and his students from the Secmol Alternative School began to create prototypes of the ice structures near the village of Phyang.

They call the structures “stupas” because they bear resemblance to Tibetan religious stupas – elegant hemispherical or conical structures with pointed tops that contain relics, such as the remains of Buddhist monks.

The technology behind the ice structures is simple. Pipes are initially buried under the ground, below the frost line, before the final section of the pipe then rises vertically.

Due to the difference in height, temperature, and the gravitational force, pressure builds up in the pipe. The stream water eventually flows up and out from the pipe’s raised tip like a fountain.

The sub-zero air freezes the water to gradually form a pyramid like structure.

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Sonam Wangchuk

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In late spring, the melting ice stupa provides water for the crops

“We are freezing water that goes unused in winter and, because of the geometric shape it doesn’t melt till late spring,” says Mr Wangchuk.

In late spring the artificial glacier starts to melt and water can be used for drip-irrigation of crops.

The BBC’s Innovators series reveals innovative solutions to major challenges across South Asia.

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As the ice structures look like the familiar religious stupas, Mr Wangchuk believes that this leads to a better sense of ownership amongst the locals.

After some initial success with one ice structures in 2014 the nearby Phyang Monastery got involved. The Buddhist monks asked the team to build 20 ice stupas. A successful crowd funding campaign raised $125,200 (£96,500).

This money funded a 2.3km (1.43 mile) pipeline which brought water down to Phyang. Mr Wangchuk claims this pipeline can support at least 50 ice stupas.

Mr Wangchuk is also now helping to build ice stupas near the winter sports resort town of St Moritz in Switzerland.

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The ice stupa team are working to made many more of the structures

After an initial prototype is built and tested, the Swiss want to expand the project to counter the phenomenon of fast-melting glaciers in the upper reaches of the Swiss mountains.

“In exchange for the ice stupa technology, the Swiss will share their expertise and experience in sustainable tourism development with the people of Phyang, to revive the dying economy of the village,” says Mr Wangchuk.

But he feels positive about the future.

“We want to train enthusiastic youth through our university, and eventually we are hoping to create a whole generation of ice or glacier entrepreneurs.”

Source : [1] http://www.bbc.co.uk/news/business-40404852

100 Women: Do women on boards increase company profits?

“Having women on company boards leads to better financial performance” came the headlines from report after report, highlighting a business statistic guaranteed to capture the imagination and prompt debate.

What better way to encourage companies to focus on equality and diversity than to make them think of their bottom line?

In the UK, the 30% Club was set up in 2010 with the aim of having women make up at least 30% of the members on every board.

In the US, the Thirty Percent Coalition – a group of people who are chief executives and chairs of their companies – was created to achieve the same thing.

Of course, there are many other – and some say better – reasons to argue for gender equality, but we wanted to look at whether this broadly accepted claim is true – does having more women on the board really mean the company makes more money?

Academics have warned against jumping to simple conclusions.

A report published by Credit Suisse last year said companies with at least one woman director received a better return on their investments compared with companies with all-male boardrooms.

They say companies where women made up at least 15% of senior management were 50% more profitable than those where fewer than 10% of senior managers were female.

But Prof Alice Eagly, at Northwestern University in the US, says many of the studies commissioned by corporations are “naive” as they don’t consider other variables.

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Some European countries have introduced quotas for female board members

She explains that more sophisticated pieces of analysis carried out by academics have shown very small positive correlations between female board members and financial success. But this is an average – in some companies the relationship was neutral and in some it was negative.

And proving causation is far harder. It is difficult to say that it is having more women on boards that makes companies do better, rather than other factors – something corporate reports acknowledge.

This is because companies with more women on boards are different in other ways, too, according to Prof Eagly.

For example, firm size seems to be one of the most significant factors in determining profitability. And larger companies are likely to employ more women at every level.

More innovative companies were more likely to use their talent effectively, regardless of gender. And companies that were already more profitable may have been more able to focus efforts on diversity, she says.

A study looking at the gender make-up of the top management of the US’s biggest firms, not only their board members, found female representation in top management improves firm performance but only in companies that are “focused on innovation”.

‘Add women and stir’

And, interestingly, female board members appear to have more of a positive impact on their company’s performance in countries where women have more equal rights and treatment overall.

It looks like there is a relationship between more successful companies and those with more women in senior positions in general, but it’s not enough to simply “add women and stir”, as Prof Robin Ely at Harvard Business School puts it.

Another study from a group of German, Dutch and Belgian researchers found “the mere representation of females on corporate boards is not related to firm financial performance if other factors are not considered”. It relies on there being a good company culture too.

If women are in the minority in a room that is hostile to them, they are unlikely to be able to have a positive effect and that applies to other kinds of diversity too, the study suggests.

Focusing on numbers without also addressing structural diversity issues is not enough, according to Prof Ely.

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In the biggest US companies on the stock market, around 16% of board seats are held by women

Looking at how many spaces on a board are filled by women doesn’t tell you how influential the board is, and it doesn’t tell us whether those women are being listened to and allowed to have an impact, Prof Ely points out, as “not all spots on a board are created equal”.

There is some evidence that having three women on a board of 12 to 15 people is the tipping point for them to actually be heard and able to have an influence at all. So there are good arguments for the 30% rule – it just doesn’t necessarily translate directly to profits.

In fact Corinne Post, a professor of organisation management at Lehigh University, says that board members don’t have a direct influence on the bottom line of a company, but they do have a greater influence on corporate social responsibility.

She found that there was a five times stronger correlation between a company having female board members and stronger performance when it comes to ensuring they are environmentally friendly as a company, or involve themselves in philanthropy for example, than the correlation between female board members and profits.

Profitability is highly complex and there’s even evidence that chief executives might not have much of an influence on company profits.

“In companies with any women on their board at all, they tend to have between one and three – are you really saying the gender of three people on a board is going to have an impact on the bottom line?” Prof Ely asks.

For Northwestern’s Prof Eagly, the most pertinent question is why we would need evidence women bring in more money than men, before they are given equal status on boards.

“Why should you rule out 50% of the population from important jobs. It’s about social justice not about profits.”

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Source : [1] http://www.bbc.co.uk/news/41365364

The man who built a drinks empire… twice

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Califia Farms

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Greg Steltenpohl was a pioneer of the whole foods movement

Greg Steltenpohl was a pioneer of the “whole foods” movement in the 1980s. But he almost lost everything after his first company faced a major corporate crisis.

After creating not one but two highly successful natural drinks companies, Greg Steltenpohl is “not one for regrets”.

However, the former jazz musician does rank the sale of his first business, Odwalla, to Coca-Cola back in 2001 as a “pretty big disappointment”.

He co-founded the firm, now one of America’s best-known juice and smoothie brands, with some friends back in 1980, simply as a way to support his career as a musician.

It became an early pioneer of the “whole foods” movement, priding itself on its all natural ingredients, quirky branding and independent ethos.

But after an outbreak of E. coli was associated with one of its juices in 1996, sales dried up.

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Mr Steltenpohl co-founded Odwalla, one of America’s best-known smoothie brands

The founders had to take on new investment to stay afloat and lost control of the board.

Within five years Mr Steltenpohl had quit, and Odwalla was sold to Coke for $181m (£134m).

“I’m not evangelising against ‘evil corporate empires’,” the genial Californian says over coffee in London.

“But these big firms tend to target smaller ones like Odwalla because they can’t innovate those ideas internally.

“The problem is they end up destroying what make those brands unique.”

The 62-year-old is trying to set the record straight with his latest venture, the plant-based food company Califia Farms.

Launched in 2010, its main line is in almond and coconut milks, which come either plain, or in flavours like matcha green tea, or ginger and turmeric.

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Mr Steltenpohl’s new firm, Califia Farms, makes plant-based milks and cold coffees

The Los Angeles-based firm also sells bottled coffees and natural juices, with all its products low in sugar, dairy free and ethically sourced.

Whereas Mr Steltenpohl’s first company was launched at time when natural and organic foods were a novelty, the sector is now well established, with industry-wide sales of $69bn in the US alone last year.

Large food companies are also losing market share to smaller ones that offer more artisanal, niche products.

Califia already has sales of more than $100m a year, and is the number one premium bottled coffee brand in the US.

However, Mr Steltenpohl says big corporations have been “jumping into” the whole foods market, and smaller companies like his face competition.

“They have much better supply chains, distribution and marketing. At the moment we’re just a fly on the back of an elephant.”

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Califia Farms makes more than $100m in sales annually

Mr Steltenpohl fell into the drinks business by chance after studying at the Creative Music Studio, a renowned music school in upstate New York, in the late 1970s.

He and two friends moved to Santa Cruz, California to seek fame and fortune with their “avant garde jazz” band The Stance. But they quickly ran out of money.

“We were broke and we weren’t that good! So I came up with this idea that we could squeeze fresh orange juice every morning, sleep during the day, and play music all night.”

The juice company took off, and the music tapered out. Under the brand Odwalla – named after a song by experimental jazz group Art Ensemble of Chicago – the trio started selling to restaurants and health food shops, but were soon stocking grocery stores across the US.

By 1996 Odwalla was listed on the Nasdaq stock exchange and sales were approaching $100m a year.

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Califia’s cold coffees include a nitrogen-infused variety

Then disaster struck.

A child died and scores were sickened after drinking a batch of the firm’s apple juice; Odwalla had to issue a huge product recall, and its sales dived by 90%.

Jeffery Kline, editor of drinks industry website Bevnet, says Mr Steltenpohl has been “very open about how painful the experience was”.

Mr Kline adds: “People in the industry believe Greg acted respectably throughout the crisis. And he never talks about it in terms of what he went through, but in fact what an incredibly devastating impact it had on others.”

Within two years Odwalla had rebuilt its reputation, thanks in part to its loyal customer base. The problem, says Mr Steltenpohl, was the new backers wanted a “quick return” on their investment by selling the firm.

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“In hindsight I think we could have found investors who shared our values and stayed independent. But we had to move fast to protect people’s jobs.”

Not long after Coca-Cola swooped, and Odwalla soon “lost its ethos”, he says.

“We were a local brand, but Coke shut our plant and shifted the main staff to Atlanta. It also replaced the key managers with their internal people who all had two year rotations, and you can’t run a passion brand that way.”

A spokeswoman for Coca-Cola says it is keen to nurture new brands, and Odwalla remains an “important part” of its natural health drinks portfolio.

Mr Steltenpohl says he has learnt from the experience, as well as from several other unsuccessful ventures he launched after leaving Odwalla.

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Califia’s plant in Bakersfield, California

He now wants to keep Califia Farms “independent” for as long as possible. But is that realistic?

Phil Howard, an associate professor at the Department of Community Sustainability at Michigan State University, says that only a “small number” of values-driven firms manage to stay independent and be successful.

“As big distributors and retailers consolidate it becomes difficult to compete, so many smaller firms sell up to multinationals,” he explains.

“And a lot depends on the small firm’s ownership structure, for instance whether they need to repay investors.”

Califia Farms has already sold a minority stake to a private equity firm, but Mr Steltenpohl says the investor fully shares its values. Califia is also majority owned by the farm that produces its oranges, while Mr Steltenpohl is its boss and a founding shareholder.

Tellingly, he has hired people with experience of working in bigger firms to help guide the business.

These include a plant manager who trained at Danone, and a head of human resources who worked for Virgin boss Richard Branson.

Mr Steltenpohl says he is determined to strike a better balance between keeping the firm on track, and upholding his “starry eyed” ideals than he did at Odwalla.

That said, he hopes business culture is changing to accommodate different notions of success.

“It is partly the fault of the business media and business schools,” he says, “but we tend to celebrate a firm’s growth and quarterly reports above all else.

“But wouldn’t it be great if we were saying, ‘Wow, they managed to stay independent for 20 years, stayed true to their values, and they grew their sales too.'”

Source : [1] http://www.bbc.co.uk/news/business-41390704

How market research revolutionised advertising and shopping

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In the early years of the 20th Century, US carmakers had it good. As quickly as they could manufacture cars, people bought them.

By 1914, that was changing. In higher price brackets especially, purchasers and dealerships were becoming choosier. One commentator warned that the retailer “could no longer sell what his own judgement dictated”. Instead, “he must sell what the consumer wanted”.

That commentator was Charles Coolidge Parlin, widely recognised as the world’s first professional market researcher and, indeed, the man who invented the very idea of market research.

A century later, the market research profession is huge: in the United States alone, it employs about 500,000 people.

50 Things That Made the Modern Economy highlights the inventions, ideas and innovations that helped create the economic world.

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Parlin was tasked with taking the pulse of the US automobile market. He travelled tens of thousands of miles, and interviewed hundreds of car dealers.

After months of work, he presented his employer with what he modestly described as “2,500 typewritten sheets, charts, maps, statistics, tables etc”.

Better adverts?

You might wonder which carmaker employed Parlin to conduct this research. Was it, perhaps, Henry Ford, who at the time was busy gaining an edge on his rivals with another innovation – the assembly line?

But no: Ford didn’t have a market research department to gauge what customers wanted.

Perhaps that’s no surprise. Henry Ford is widely supposed to have quipped that people could have a Model T in “any colour they like, as long as it’s black”.

In fact, no carmakers employed market researchers.

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Charles Parlin was charged with investigating markets to facilitate more effective advertising

Parlin had been hired by a magazine publisher.

The Curtis Publishing Company was responsible for some of the most widely read periodicals of the time: the Saturday Evening Post, The Ladies’ Home Journal, The Country Gentleman.

The magazines depended on advertising revenue.

The company’s founder thought he’d be able to sell more advertising space if advertising were perceived as more effective, and wondered if researching markets might make it possible to devise better adverts.

‘Constructive service’

In 1911, he set up a new division of his company to explore this vaguely conceived idea, headed by Charles Parlin. It wasn’t an obvious career move for a 39-year-old high school principal from Wisconsin – but then, being the world’s first market researcher wouldn’t have been an obvious career move for anyone.

Parlin started by immersing himself in agricultural machinery, then tackled department stores. Not everyone saw value in his activities, at first.

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Department stores such as Selfridges also had a massive influence on the way people shopped

Even as he introduced his pamphlet The Merchandising of Automobiles: An Address to Retailers, he still felt the need to include a diffident justification of his job’s existence.

He hoped to be “of constructive service to the industry as a whole,” he wrote, explaining that carmakers spent heavily on advertising, and his employers wanted to “ascertain whether this important source of business was one which would continue”. They needn’t have worried.

‘Consumer-led’ approach

The invention of market research marks an early step in a broader shift from a “producer-led” to “consumer-led” approach to business – from making something then trying to persuade people to buy it, to trying to find out what people might buy, and then making it.

The producer-led mindset is exemplified by Henry Ford’s “any colour, as long as it’s black”.

From 1914 to 1926, only black Model Ts rolled off Ford’s production line: it was simpler to assemble cars of a single colour, and black paint was cheap and durable.

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Henry Ford famously began by selling one type of car available in one colour

All that remained was to persuade customers that what they really wanted was a black Model T. To be fair, Ford excelled at this.

Few companies today would simply produce what’s convenient, then hope to sell it.

A panoply of market research techniques helps determine what might sell: surveys, focus groups, beta testing. If metallic paint and go-faster stripes will sell more cars, that’s what will get made.

Where Parlin led, others eventually followed.

By the late 1910s, not long after Parlin’s report on automobiles, companies had started setting up their own market research departments. Over the next decade, US advertising budgets almost doubled.

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George Gallup pioneered opinion polls in the 1930s

Approaches to market research became more scientific. In the 1930s, George Gallup pioneered opinion polls. The first focus group was conducted in 1941 by an academic sociologist, Robert K Merton.

He later wished he could have patented the idea and collected royalties.

But systematically investigating consumer preferences was only part of the story. Marketers also realised it was possible systematically to change them.

More from Tim Harford:

How department stores changed the way we shop

TV dinners: The hidden cost of the processed food revolution

How the barcode changed the retail world

How a razor revolutionised the way we pay for stuff

Robert K Merton coined a phrase to describe the kind of successful, cool or savvy individual who routinely features in marketing campaigns: the “role model”.

Manufacturing desire

The nature of advertising was changing: no longer merely providing information, but trying to manufacture desire.

Sigmund Freud’s nephew Edward Bernays pioneered the fields of public relations and propaganda.

In 1929, he helped the American Tobacco Company to persuade women that smoking in public was an act of female liberation. Cigarettes, he said, were “torches of freedom”.

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Adverts began to portray smoking and smokers as liberated and modern

Today, attempts to discern and direct public preferences shape every corner of the economy.

Any viral marketer will tell you that creating buzz remains more of an art than a science, but with ever more data available, investigations of consumer psychology can get ever more detailed.

Where Ford offered cars in a single shade of black, Google famously tested the effect on click-through rates of 41 slightly different shades of blue.

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Google carried out exhaustive tests on which precise shade of blue performed best

Should we worry about the reach and sophistication of corporate efforts to probe and manipulate our consumer psyches?

The evolutionary psychologist Geoffrey Miller takes a more optimistic view.

“Like chivalrous lovers,” Miller writes, “the best marketing-oriented companies help us discover desires we never knew we had, and ways of fulfilling them we never imagined.” Perhaps.

Conspicuous consumption

Miller sees humans showing off through our consumer purchases much as peacocks impress peahens with their tails.

Such ideas hark back to an economist and sociologist named Thorstein Veblen, who invented the concept of conspicuous consumption back in 1899.

Charles Coolidge Parlin had read his Veblen. He understood the signalling power of consumer purchases.

“The pleasure car,” he wrote in his address to retailers, “is the travelling representative of a man’s taste or refinement.”

“A dilapidated pleasure car,” he added, “like a decrepit horse, advertises that the driver is lacking in funds, or lacking in pride.”

What should be the 51st Thing?

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Tim Harford has discussed 50 things that have made the modern economy. Help choose the 51st by voting for one of these listener suggestions:

  • The credit card
  • Glass
  • Global Positioning System (GPS)
  • Irrigation
  • The pencil
  • The spreadsheet

You can vote on the 50 Things That Made the Modern Economy programme website. Voting closes at 12:00 GMT on Friday 6 October, and the winning 51st thing will be announced in a podcast on 28 October.

In other words, perhaps not someone you should trust as a business associate – or a husband.

Signalling these days is much more complex than merely displaying wealth: we might choose a Prius if we want to display our green credentials, or a Volvo if we want to be seen as safety-conscious.

These signals carry meaning only because brands have spent decades consciously trying to understand and respond to consumer desires – and to shape them.

By contrast with today’s adverts, those of 1914 were delightfully unsophisticated.

The tagline of one, for a Model T, said: “Buy it because it’s a better car.” Isn’t that advertisement, in its own way, perfect? But it couldn’t last.

Charles Coolidge Parlin was in the process of ushering us towards a very different world.

Tim Harford writes the Financial Times’s Undercover Economist column. 50 Things That Made the Modern Economy is broadcast on the BBC World Service. You can find more information about the programme’s sources and listen online or subscribe to the programme podcast.

Source : [1] http://www.bbc.co.uk/news/business-41188463

Why the big banks are saying goodbye to suburbia

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Two banks are closing branches in this Manchester suburb this year

Next week the boss of one of the UK’s largest banking groups will descend on Manchester, to celebrate the opening of the first of Lloyds’ new super-size branches.

At more than 15,000 sq ft (1,394 sq m) – and at a cost of £3m – it is the bank’s most expensive branch ever, and a likely blueprint for other British cities.

But while Antonio Horta-Osorio will be all smiles, some of his customers may have mixed feelings.

Banks may be investing heavily in mega branches in the centre of cities, but those in the suburbs are disappearing fast.

In Manchester at least 23 suburban bank branches have closed – or will close – in 2017 alone.

Here, as elsewhere, it is the least prosperous places that appear to suffer the worst.

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Droylsden has a number of empty shops

A short tram ride east from the centre of Manchester is the town of Droylsden.

Its economic imagery is stark.

Even at lunchtime, the 1960s shopping precinct has just a handful of customers, mostly visiting the chip shop.

Lloyds closed its branch here this summer, and NatWest is about to follow suit.

Looking at the empty shops and deserted pavements, it is evident that the banks weren’t the first to leave.

Nevertheless, local councillor Anne Holland closed her Lloyds account in protest.

“It’s making the area look poverty-stricken,” she says.

“I’m really upset about it. They’re no longer a service for people. They don’t care about people like us.”

Lloyds points out that in one of its smaller branches in Manchester last year there were just 20 regular customers a week. And that number was down by a third on the year before.

  • Lloyds to shrink hundreds of branches in size
  • Bank branches take on a new fragrance
  • Lloyds names locations for 100 branch closures

But not everyone is unhappy about suburban branch closures.

Along the Oxford Road, to the south of Manchester city centre, all three banks are due to close their doors before the end of the year: NatWest, Lloyds and TSB.

However a shortage of customers – known as “footfall” in the industry – is not the problem, as the streets are packed with students from two universities.

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This NatWest branch is closing, but few students are worried

Most in the internet generation are not particularly bothered about losing their local branch.

“I don’t go into banks that often,” says student James Charnley.

“I try to do most things online. However it’s nice when you’re desperate to have an actual branch.”

“With online banking it’s not that much of a problem,” says another.

Bye bye suburbia

The branches closing in Manchester this year:

  • NatWest: New Moston, Denton, Royton, Hale, Uppermill, Timperley, Marple, Eccles, Ramsbottom, Manchester Univeristy, Droylsden
  • Lloyds: Mosely Street, Manchester University, Tyldesley, Droylsden
  • TSB: Ashton Old Road, Cross Street, Stockport Street
  • HSBC: Manchester University
  • Santander: Atherton
  • RBS: Little Lever

While branches are closing in Manchester’s suburbs, the city centre is another story.

Walk amongst the crowds in Market Street, outside the Arndale shopping centre, and you can appreciate why the banks are apparently so besotted with the spending power of visitors to the centre of the city.

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The new Lloyds branch in Manchester city centre is its most expensive yet

It’s not just Lloyds.

NatWest, TSB and Nationwide are all in the process of opening new or refurbished branches. Their shiny new buildings jostle competitively within 200m of each other.

The trend towards city centre banking is now pretty well established.

“It’s been going on for some years,” says banking analyst Chris Skinner.

“In the States they’ve been doing it for a long time. They call it a ‘hub and spoke’ strategy, where you have a large hub in the centre of the main city, and then micro-branches and self-service operations for the satellites around the city centre.”

He blames the culture of free banking, introduced by the Midland Bank in the 1970s, which has left banks struggling to make good profits.

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Both NatWest and TSB are opening new branches

While Lloyds admits that the new city centre branch in Manchester is the model for the future, it denies that it is turning its back on the suburbs.

“We are considering opening a small number of these flagship branches in the largest city centres across the UK, under the Lloyds Bank, Halifax and Bank of Scotland brands,” says Jakob Pfaudler, Lloyds director of community banking.

“But our investment goes way beyond city centres. We are investing in a number of what we call anchor branches – existing branches in large towns and cities – and community branches in smaller towns and villages.”

Lloyds also has more than 27 mobile branches, particularly operating north of the border under the Bank of Scotland brand.

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The new Lloyds branch is the first to have a coffee bar

For those happy to use a city centre branch, the facilities can be much better thank a typical bank.

The new Lloyds branch in Manchester has free wi-fi and recharging facilities for laptops. And local businesses are encouraged to drop in and use the first floor for meetings – whether or not they are Lloyds customers.

If you want to withdraw a valuable item from a safety deposit box, such as a piece of jewellery, there is no need to speak to a member of staff.

Instead, with the help of fingerprint recognition, a robot will find your deposit box down in the vault, and deliver it to you in a private and secure viewing room.

The concept has been described as being more like an Apple store than a bank.

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Black horse with your coffee?

But perhaps what will attract the most attention is the coffee bar.

If you ask nicely they’ll even make a black horse out of chocolate to sit on top of your cappuccino.

Source : [1] http://www.bbc.co.uk/news/business-41440192

How would an interest rate rise of 0.25% affect me?

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The governor of the Bank of England, Mark Carney, has suggested that interest rates could rise “in the near term”.

Many experts think that could mean as early as November.

So how would a rate rise of 0.25%, to 0.5%, affect borrowers and savers?

We know there are more savers than borrowers, so more people are likely to be pleased at the prospect of rising rates, than those who will be disappointed.

Will my mortgage be affected?

According to the Bank of England, 43% of homeowners are on variable or tracker rates. In theory most of those will see their mortgage repayments rise when the Bank of England raises rates. By contrast 57% of borrowers are on fixed-rate deals, and will not be affected immediately.

Currently 90% of new home-owners are on fixed deals, and they tend to have the largest loans. But depending on when their two or five-year term finishes, borrowers will inevitably face higher repayments eventually.

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How would a rise affect repayments?

According to the Nationwide Building Society, a 0.25% rise in base rates would have a modest affect on anyone on a standard variable rate (svr). On the average mortgage of £125,000 an increase of 0.25% would increase monthly payments by £15 to £665. That would amount to an extra £185 per year.

The following table assumes there is 20 years left on a mortgage, and that the rate rises from the current average of 2.56% to 2.81%.

Affect of a 0.25% rise in base ratesMortgage balance
Monthly increase
Annual increase
source: Nationwide

Long-term impact

As Mark Carney is fond of reminding us, the rises in base rates will be small, and the pace will be gradual.

So while the impact of the first hike may be small, someone with a mortgage advance of £150,000 could eventually find themselves paying as much as £161 a month more, according to figures supplied by the Halifax, Britain’s largest lender.

How subsequent rises could affect mortgage paymentsAverage monthly repayment
% rise in mortgage rate
Increase in monthly payments
£679.74 (current average for new mortgages)


source: Halifax
Base: Repayment mortgage for £150,000 loan


The average easy-access savings account is currently paying 0.35% in annual interest. Some banks accounts are paying as little as 0.01%. So any rise in base rates could be a welcome boost for savers, even though any increase would be small.

One other problem in recent years has been that banks and building societies have been able to borrow money from the Bank of England very cheaply, so they haven’t needed to compete for deposits from savers.

The Funding for Lending Scheme (FLS) and the Term Funding Scheme (TFS) have therefore helped to depress returns for savers.

“The good news for savers is that both the FLS and TFS are ending at the beginning of 2018, so perhaps providers will start to need funds from savers once more,” said Anna Bowes, a director of Savings Champion.

“This, as well as a Bank of England base rate rise, will hopefully really make a difference.”

How a 0.25% rise in base rates might affect my savingsCategory
Current best buy rate
Best buy after 0.25% rise
Easy Access
Notice Account
Easy access ISA
Notice ISA
1 year fixed rate bond
3 year fixed rate bond
5 year fixed rate bond
source:Savings Champion (Sept 17)

Source : [1] http://www.bbc.co.uk/news/business-33568469

Could wood pulp make cars lighter and more efficient?

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This replica Citroen 2CV was crafted out of fruitwood. Could future cars contain wooden parts?

Car parts of the future could be made out of a surprising material. Wood.

Researchers in Japan are working to create a strong material out of wood pulp that could replace steel parts in vehicles within a decade.

Work is also charging ahead in the country to develop plastics that can withstand high temperatures, to replace metal for parts near the engine.

These innovations are part of a wider industry push to make cars lighter.

“There is a rush to try and cut as much weight as possible, especially on cars which will pollute more, like SUVs [sports utility vehicles] or pick-up trucks,” says Paolo Martino, principal automotive components analyst at IHS Markit.

Slimmer cars consume less fuel. The US Department of Energy says a 10% reduction in vehicle weight can improve fuel economy by up to 8%.

Manufacturers also want to make electric models as light as possible so they can travel further on a single charge, and help resolve the battery “range anxiety” faced by car owners, Mr Martino says.

And that’s where the humble tree could come in. After all, wood has been used to build ships, homes and furniture for millennia.

Researchers at Kyoto University in Japan say a material made from wood pulp could be as strong as steel, but 80% lighter.

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Image caption

Wood was often used for some car parts, but never near the engine

The team chemically treats wood pulp, which consists of millions of cellulose nanofibres (CNFs), and disperses these CNFs into plastic.

Blending CNFs with plastics creates a strong, hybrid material that could replace steel in auto parts, they say.

Prof Hiroyuki Yano, who leads the work at Kyoto University, says the material could be used to make door panels, fenders and car bonnets. The researchers are working with the Japanese government, carmakers and other manufacturers to develop the material.

Cellulose nanofibres are already used in a range of products, from ink to transparent displays.

While the material faces plenty of competition from more commercially established lightweight options, like carbon fibre, Prof Yano believes CNF-based parts could be viable alternatives.

But Vivek Vaidya, senior vice president at consultancy Frost & Sullivan, has some doubts.

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Image caption

Wood has been used as a building material for millennia

He thinks it’s feasible that “non-performance” parts – anything but the engine, transmission and wheels – could be mass-produced from wood pulp-based materials, but that parts manufacturers might struggle to keep pace with auto production lines.

“Most components are supplied on-demand, [so] whether a wood or organic material can be made available in a just-in-time way is definitely a question mark,” he says.

Separately in Japan, researchers are working on specialised plastics for car parts.

Prof Tatsuo Kaneko, from the Japan Advanced Institute of Science and Technology, is developing plastics made with biological molecules.

The new material is also lighter than steel and can tolerate temperatures of up to 300C, the researchers say.

“Plastics haven’t been used in car parts requiring higher heat resistance around [the] engine block because they haven’t been able to withstand the heat,” Prof Kaneko says.

“But the bioplastics I have produced can withstand higher temperatures.”

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Researchers in Japan say bioplastics could replace metal for parts near the engine

He’s working with a number of Japanese carmakers, auto part and electronics makers – as well as foreign companies – on the research.

And one of the biggest advantages of using the material, which he says could be a viable alternative to steel in around five years, would be a drop in vehicle weight.

While lighter plastic car parts might help cut vehicle emissions and increase the range of electric cars, doesn’t their manufacture bring other environmental risks?

Prof Kaneko acknowledges that substituting materials like glass for bioplastics could increase pollution, as the waste is non-biodegradable.

More Technology of Business

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But he argues that his materials are kinder overall to the environment than traditional plastics.

The manufacture of conventional petroleum-based plastics results in large amounts of carbon dioxide, whereas bioplastics, made from micro-organisms, produce lower volumes of waste, he maintains.

The drive to use “greener” materials is gathering speed among automakers more broadly.

Frost & Sullivan’s Mr Vaidya says manufacturers are trying to shrink the total carbon footprint of a vehicle and “not just the emissions that come out of the tailpipe”.

The push serves tightening regulations and consumer demand. Both the UK and France plan to ban new diesel and petrol vehicles by 2040, to reduce pollution and carbon emissions.

China, the world’s biggest car market, wants electric battery cars and plug-in hybrids to account for at least one-fifth of its vehicle sales by 2025.

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Image caption

Lightweight carbon fibre is prized in high-performance sports cars

“There’s definite movement towards improving the green credentials of the car by using materials that are more environmentally friendly,” Mr Vaidya says.

To shed weight BMW has focused on carbon fibre, and last month unveiled a new slimmed down M5 sedan with a carbon fibre reinforced plastic roof.

Toyota uses the same material for parts in its Prius Prime and Lexus LC 500 models, cutting weight and boosting battery range in the Prius.

For Jaguar, aluminium is a big focus. The company says the metal weighs about one third of the equivalent amount of steel.

“Every 100kg saved with an aluminium chassis helps to reduce the vehicle’s CO2 emissions by 9g per km, and fuel usage during its life by up to 800 litres,” Jaguar says.

And niche component makers like Corning, which markets its toughened Gorilla Glass for use in windshields and other glass-components, says its high-tech glass is a third lighter than conventional car windows.

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Source : [1] http://www.bbc.co.uk/news/business-41145744

The firms that donate as many goods as they sell

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Hayley Besheer (bottom right) donates lingerie in countries such as Ecuador

More businesses are embracing the “buy one, donate one” model. But can they turn a profit while doing good?

New, clean underwear is one of the most under-donated items to charity, and domestic violence refuges and homeless shelters for women often face shortages.

So American Hayley Besheer came up with an unusual way to tackle the problem.

The 20-something founded lingerie company Make a Difference Intimates (Madi), which donates a pair of its trendy knickers, or other items of underwear, for every one that it sells.

Ms Besheer is following in the footsteps of other entrepreneurs motivated to do good, including US shoemaker Toms, which pioneered the “buy one, donate one” model in the early part of this decade.

And like Toms, her business fully intends to grow its profits while achieving its social mission.

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Image caption

Madi’s lingerie is made of sustainable bamboo cloth

“Consumers are attracted to the buy one, donate one model because it helps them give back,” she tells the BBC.

“The market is leaning more and more towards brands that offer quality products with a social purpose.”

Before starting Madi, Ms Besheer had no experience of designing fashion or running a business, and faced many challenges as she learned to do both.

For instance, a friend who was originally meant to help run Madi, backed out after deciding it was too risky. Ms Besheer understood her dilemma.

“She didn’t want to put any money into the business,” Ms Besheer says. “But you have to be fully committed, and you need to take out a lot of loans in the beginning.”

Madi’s underwear costs more than $30 (£23) per pair – considerably more than what lingerie retailer Victoria’s Secret charges for many of its premium-brand knickers.

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Consumers want brands to have a social purpose, Ms Besheer says

Ms Besheer says her panties are fairly priced, because they are made from bamboo cloth – a material that is “more comfortable than cotton, more sustainable, and longer-lasting”.

People are also happy to pay more to support a good cause, says one customer, Lauren Cimpl.

“While one pair of Madi underwear may cost more than a similar panty in a department store, I feel you’re buying two pairs of underwear for the $30-or-so price tag,” Ms Cimpl says.

“Shopping is usually a self-focused activity, and there’s nothing wrong with that, but being able to give back while you’re shopping makes it even better.”

Brands with a social justice agenda can enjoy a powerful “halo effect”, say some experts.

According to a study published in the Journal of Consumer Research, consumers thought red wine tasted better, and other products – such as running shoes and hair loss treatments – performed better if they knew about a company’s charitable donations.

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Image caption

Toms’ founder and boss, Blake Mycoskie, lists his official title as “chief shoe giver”

However, there are critics of the buy one, donate one model.

In the developing world, Toms was accused of fostering dependency and unfairly competing against local businesses by giving away its products.

Mindful of the criticism, the Californian company revamped its philanthropy, and now produces many of the shoes it donates in partnership with local manufacturers.

It also supports access to eye care, safe water initiatives, and anti-bullying programmes.

More stories from the BBC’s Business Brain series looking at interesting business topics from around the world:

How do you like your wine – with a cork or screw-cap?

Are changeable heels the end to women’s sore feet?

Do the colours you wear at work matter?

Turning the dead into vinyl records

“Our original goal was to produce one-third of the shoes we donated in these regions, and we have since exceeded that with local factories in Ethiopia, India, Kenya and Vietnam,” says Amy Smith, the company’s “chief giving officer”.

Although Toms’ founder and boss, Blake Mycoskie, lists his official title as “chief shoe giver”, he keeps a close eye on the company’s sales and profits.

In 2014, Mr Mycoskie sold half of his business to private equity giant Bain Capital in a deal that reportedly valued the firm at $625m.

Image copyright
Gary S. Chapman

Image caption

Toms donates one pair of shoes for every one it sells

But Toms, which is profitable, says it isn’t looking to make an easy buck at the expense of its mission.

“Toms has proven that conscious capitalism is a viable business model,” Ms Smith says. “But without our mission, the ‘why’ of Toms would be lost.”

Warby Parker, which sells fashionable glasses online, has also proved that the buy one, donate one model can work.

The privately held company has attracted deep-pocketed investors, such as General Catalyst, and has a valuation of more than $1bn. It may also be headed for an initial public offering, various media reports have suggested.

Warby Parker takes a different approach to its philanthropy than Toms. For every pair of glasses it sells, it makes a donation to a non-profit which will produce a pair in the country where it operates.

The non-profit also trains local people in how to conduct eye exams and fit glasses. According to Warby Parker, its system makes more sense than just donating goods.

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Two of the Warby Parker founders, David Gilboa (left) and Neil Blumenthal

“Donating is often a temporary solution, not a lasting one,” the firm says on its website. “It is rarely sustainable.”

Back at Madi, Ms Besheer says its sales have grown by 25% every quarter since it was founded three years ago.

The company started to make a profit from the end of 2016, and has no debt thanks to successful crowd-funding campaigns and partnerships with local retailers.

It also has donated more than 4,500 pairs of underwear in eight countries including Haiti, Panama, Cuba and Ecuador.

Ms Besheer now wants to set up a production line in Kansas City, where her company is based, so she can continue to produce Madi garments in the US. Currently the firm relies on subcontractors in the city.

She says it is important to manufacture in America, so she can ensure workers are paid fairly, and to reduce the firm’s carbon footprint.

As for the buy one, donate one model, she feels it strikes the right balance.

“I feel that if we don’t address the underwear issue at refuges, no one else will. And if we can grow a successful business at the same time, that’s even better.”

Source : [1] http://www.bbc.co.uk/news/business-41097280

Why UK exporters are set for a sugar rush

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Media captionSugar gets sweeter for UK farmers

The UK’s sugar beet industry is looking to ramp up production, as European Union quotas come to an end this week after nearly 50 years.

For the first time since 1968 the UK can produce and sell as much sugar around the world as it would like.

The end of the quota also means that French, German and other EU producers can sell more sugar into the UK.

Experts predict that could result in lower prices – but the British industry is confident it can compete.

What will the sugar changes mean?

Two years ago Paul Kenward, the boss of British Sugar, had a problem.

Under the EU’s quota he was only allowed to sell 1.056 million tonnes of sugar beet, but it had been a particularly bumper harvest and he’d produced more than 1.4 million tonnes.

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British Sugar

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British Sugar has four factories in the UK, including this one at Newark, Nottinghamshire

“Customers wanted to buy from me, but I wasn’t allowed by European Union rules to sell it,” Mr Kenward tells the BBC. “We had to store it for two years – that was very expensive.”

From this weekend, those limits will come to an end after years of lobbying by the UK government.

The 3,500 British farmers that grow beet – which looks like a big turnip – and British Sugar, which is the main processor of British-grown beet, see the change as a huge opportunity.

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UK beets account for approximately 60% of British sugar consumption

British Sugar – which also makes Silver Spoon sugar – plans to step up production immediately and is looking to sell 1.4 million tonnes next year, up from 900,000 this year.

It’s also planning to export sugar to the world market for the first time in at least a decade.

“The UK is one of the most efficient producers worldwide,” says Jane Clark, who farms sugar beet in Lincolnshire. “It should put us in a good place to be competitive.”

The changes are not linked to Brexit – and the industry is hopeful it will still be able to compete after the UK leaves the EU.

Britain’s other big sugar producer, Tate & Lyle Sugars, processes sugar cane, and so is not directly affected by the changes.

How big is the UK sugar beet industry?

  • There are nearly 10,000 workers in the industry’s UK supply chain
  • The UK consumes 2 million tonnes of sugar a year
  • 60% of that comes from UK beets
  • Another 15% comes from EU beets and 25% from imported sugar cane

Source: British Sugar

How will it affect sugar prices?

Analysts say the increased supply of sugar – not just from the UK, but from other major EU producers – should ultimately lead to lower prices.

At the moment, white sugar sells for about 500 euros (£440) a tonne in the EU, compared with just over 300 euros a tonne on the international market, according to EU figures.

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Science Photo Library

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Analysts say the price of sugar could fall – but it’ll have little impact on sponge cakes

Prices will become more volatile after the end of the quota, says Carlos Mera, a sugar analyst at Rabobank. “Whether consumers benefit or not, I think they probably will.”

However, the effect on sugary products, like cola and sponge cake, will be more muted, because the cost of sugar only makes up a small part of the overall price of those goods.

For example, if the cost of sugar fell by 40%, that might lead to a saving of less than 1% on the price of a Victoria sponge cake.

So far, though, sugar supply contracts in the EU are still much higher than international prices, says Callum Macpherson, head of commodities at financial services firm Investec. There is also the effect of the sugar tax on soft drinks to take into account.

The Food and Drink Federation says it is difficult to predict how prices will be affected.

A wide range of factors, including world market prices, beet sugar exports, cane sugar imports, the price of other ingredients and raw materials, influence the price of sugary goods, it says.

Will the industry be able to cope?

Although the end of the quota enables UK firms to sell more sugar abroad, it will also allow EU producers to sell more in the UK.

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French beet producers will also be able to produce more and could target the UK

When EU milk quotas were scrapped in 2015, it flooded the market with oversupply and put some dairy farmers out of business.

So will beet farmers suffer a similar fate?

“I don’t think there are any sugar beet producers in the country that just grow sugar beet,” says Jane Clark. “We all grow a range of crops, whether it be wheat, barley, or oats.”

Mr Kenward says the industry learnt a lot from what happened with milk. “We prepared for this for the last few decades, and can change production more easily than dairy farmers,” he says.

There’s also the uncertainty around what trade terms will be in place after Brexit.

British Sugar says that if the EU starts charging tariffs on its sugar beet after Brexit, the firm would ask the UK government to charge the same tariff on EU beet.

As for trade with the rest of the world, British Sugar accepts that dropping sugar tariffs might be part of the deals struck with other countries.

But it’s still confident it can compete, as the UK is “the most cost-efficient producer in the world”, Mr Kenward says.

Is there a difference between sugar beet and sugar cane?

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Brazil, Thailand and India are the world’s biggest sugar cane producers

When it comes to flavour, beet farmer Jane Clark says there is no difference between sugar from beets or cane.

The climate and soil conditions in the UK, France, Germany, and the Netherlands suit sugar beet. Its production took off after an English blockade during the Napoleonic wars hit French cane-sugar imports.

In comparison, sugar cane tends to grow in the tropics, with Brazil, Thailand and India the main producers.

“You can refine sugar down to various levels,” Jane says. “White sugar is the most refined, your brown sugar is less refined.”

Ultimately, it’s all the same chemical formulation: “Sugar is sugar”

Source : [1] http://www.bbc.co.uk/news/business-41412717