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January 12, 2005

DFA buys out Keller's Creamery...AMPI to rebuild fire-damaged butter plant...Organic Valley posts record year...Kraft realigns financial reporting...Marketing Mix...Supervalu news round-up...A&P posts third quarter loss...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Dairy Farmers of America has bought out its partners in Keller's Creamery LP. The butter company, based in Harleysville, Pa., was formed in May 2000 as a joint venture between DFA and the former management team of Sodiaal North America Corp., Frank Otis and Glenn Millar. Terms of the deal were not disclosed. The Keller's Creamery offices, warehouse and distribution center are in Harleysville, while its butter processing plant is in Winnsboro, Texas. (The Kansas City Star)

Associated Milk Producers Inc. will rebuild its New Ulm, Minn., butter processing and packaging plant damaged by a Dec. 1 fire. Insurance is expected to cover most of the structural and equipment damage, as well as the loss of nearly 3 million pounds of butter with a market value of $6 million. In addition, local, state and federal entities are expected to offer support. Construction to refurbish the facility could begin this spring. Since the fire, employees have been dismantling, cleaning and refurbishing equipment recovered from the building; five packaging lines are now running, producing some of the small, individual sized packages used in foodservice from bulk butter churned at other locations. (Associated Press)

LaFarge, Wis.-based Organic Valley Family of Farms reports record sales of $208 million in 2004, a 33% increase over sales of $156 million in 2003. The co-op projects 2005 sales of $259 million. Organic Valley has a growing total of 689 organic farmers in 20 states; in 1988, when the cooperative was founded, it had only seven dairy farmers, all from southwestern Wisconsin. In other news, Organic Valley has added Rocky Mountain Pastures organic milk to its regional offerings, which also include New England Pastures, Northeast Pastures, Northwest Pastures and California Pastures. Milk for the latest addition is sourced from organic producers on the Colorado Front Range, and is bottled near Colorado Springs, Colo. Rocky Mountain Pastures is available in whole, reduced-fat (2%), lowfat (1%), and fat-free in both gallon and 64-ounce containers (SRP $3.49 per half gallon). (Company reports)

Following its agreement to sell its sugar confectionery brands, Northfield, Ill.-based Kraft Foods Inc. has realigned the financial reporting structure for its North American businesses. The changes will be reflected in the company's financial results, including its fourth-quarter and full-year 2004 results (to be released Jan. 25). The new segment reporting structure is expected to provide more focus, and will include five North American reportable segments: U.S. Beverages, including coffee and refreshment beverages; U.S. Cheese, Canada & North America Foodservice; U.S. Convenient Meals, including pizza, meats and meals; U.S. Grocery, including desserts and enhancers; and U.S. Snacks & Cereals, including biscuits, salted snacks and cereals. Kraft will continue to report its international results within the same two geographic segments: Europe, Middle East & Africa; and Latin America & Asia Pacific. (Company Report)

MARKETING MIX

Celebrating the 24th year of its "Cones for Kids" program, Friendly Ice Cream Corporation has launched its 2005 Valentine's Day fundraiser to benefit local Easter Seals. Since the program's inception in 1981, "Cones for Kids" has raised $22 million for Easter Seals (including $870,000 in 2004). In exchange for a dollar donation to Easter Seals, Friendly's provides its restaurant guests with either a kids' Valentine's Day card redeemable for five free Friendly's kid cones or an adult coupon booklet worth more than $35. (Company report)

The "got milk?" advertising campaign will be a featured exhibit at Copia: The American Center for Wine, Food & the Arts. The Napa Valley, Calif., cultural museum and educational center created the exhibition from the archives of the California Milk Processor Board and its San Francisco-based ad agency, Goodby, Silverstein & Partners. The exhibit highlights how "got milk?" was transformed from a regional ad campaign to a national icon through TV commercials, billboards, licensed products and posters. It will also feature "got milk?" rip-offs and a video montage of its award-winning commercials. The Copia exhibition will additionally display the campaign's partnerships with pop culture icons including Cookie Monster, Snap Crackle & Pop, Barbie and Oreos. The exhibit will run Jan. 21 through May 30. For more about the museum, visit the museum's website at www.copia.org. (CMPB report)

CUSTOMER CLIPS

Eden Prairie, Minn.-based Supervalu will purchase Milwaukee-based Total Logistics Inc. for $233 million in cash and assumed debt. Total Logistics is a holding company that runs two businesses: a warehousing, transportation and contract manufacturing operation based in Zeeland, Mich.; and a commercial refrigeration equipment maker with headquarters in North Prairie, Wis. Total Logistics provides warehousing and other services to some of the country's biggest food companies, including Kraft Foods. Both businesses will continue to operate under their existing names. The sale is expected to close within 45 days. (The Milwaukee Journal Sentinel)... In other Supervalu corporate news, Roger Davidson has been named to the newly created position of corporate senior vice president and chief operating officer, Retail Food Companies. He joins Supervalu from H.E. Butt Grocery Company, where he most recently held the position of senior vice president, grocery procurement, merchandising and store brands. Davidson spent more than 30 years with H.E. Butt in a number of increasingly responsible positions and led global sourcing for Ahold USA from 2000 to 2003. (Company report)...Meanwhile, Supervalu's Virginia Beach, Va.-based Farm Fresh supermarket chain will buy two former Winn-Dixie supermarkets in Virginia's Williamsburg and Yorktown. Farm Fresh plans to gut the buildings and rebuild over the next six months, and is in the process of building a new store in Elizabeth City, N.C. Farm Fresh operates 38 supermarkets. Terms of the Winn-Dixie deal were not disclosed. Winn-Dixie Stores Inc. announced in May that it plans to close or sell more than 150 stores. (The Virginian-Pilot)

Montvale, N.J.-based Great Atlantic & Pacific Tea Co. reports losses for the latest quarter almost tripled due to modest sales growth. A&P posted a net loss of $75.3 million ($1.96 a share) for the fiscal third quarter ended Dec. 4, compared with a net loss of $25.3 million (66 cents a share), in the same quarter a year earlier. Sales rose 1.6 percent in the latest quarter to $2.52 billion from $2.48 billion. Third quarter results included charges totaling $37 million, mostly due to an impairment charge of $34.7 million for a write-down of the company's Midwest operations. A&P operates 650 supermarkets and superstores in 16 states. (Associated Press)

IDFA NEWS

Register Today for IDFA's Labeling Workshop on January 25
On January 25 in Washington, D.C., IDFA is offering an in-depth briefing, IDFA's Labeling Workshop: Making the Change. Within the next 12 months, dairy manufacturers must comply with new Food and Drug Administration regulations regarding food allergens and trans fat content. In addition, many processors are looking to update their labels in order to promote appropriate health and nutrition claims, including the dairy/weight-loss connection. At this one-day workshop, IDFA will cover what dairy processors need to know as they make labeling changes, whether they are mandatory or for better marketing. For complete details or to register, click here.

ODDS-AND-ENDS

Dallas-based Dairy.com has launched exchanges for seven new condensed and dry dairy commodities, including nonfat dry milk, and dry and condensed versions of whey, whey protein concentrate and buttermilk. The new powder exchanges will support both spot and contract trading. The site allows traders to post buy and sell orders using specified quality, quantity and timing parameters, then it presents matching posts back to the trader for negotiation and deal acceptance. Customers have already committed to trade and schedule more than three hundred million pounds of annual purchases of the newly launched commodities over Dairy.com, involving more than 50 companies. (Company report)...Nearly 50 employees were laid off in mid-December from the Kraft Foods cheese processing facility in Rupert, Idaho. Layoffs will be "indefinite" and were a result of an unforeseen shift in the volume of string cheese production, Kraft reported. Layoffs included 18 full-time employees and 31 part-time employees, all of whom worked on the third shift for string cheese production. (Times-News, Idaho)...Ultima Foods, the Canadian manufacturer and marketer of dairy products sold under the Yoplait brand, has a new president and CEO, Gerry J. Doutre. A 30-year veteran of the food industry in Canada and the United States, Doutre succeeds Pierre Gignac, who retired at the end of 2004 after serving as president since 1989. Ultima is owned equally by Agropur CoopDerative and Agrifoods International Co-operative Ltd. (Company report)

STOCK MARKET TICKER

As of 1/11/05, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Most Recent D-brief
Dean Foods/DF Dreyer's/DRYR General Mills/GIS Groupe Danone/DA Hershey Foods/HSY Ingles Markets/IMKTA Kraft Foods/KFT Kroger/KR Ruddick Corp./RDK Safeway/SWY Saputo/SAP.TO Supervalu/SVU Unilever PLC/UL Weis Markets/WMK Wimm Bill Dann/WBD Winn-Dixie/WIN		32.89 80.33 50.98 18.46 54.65 13.05 34.24 16.63 20.21 18.21 34.45 33.72 38.45 37.35 14.86 03.85		+0.92 -0.11 -0.12 +0.14 +0.47 +0.00 -0.19 -0.23 -0.60 -0.42 -0.55 -0.03 +0.17 -0.43 -0.04 -0.25		+0.58 -0.08 +2.23 +0.23 -0.29 +0.00 -0.50 -0.06 -1.19 -0.66 -1.75 +0.46 -0.56 -0.95 +0.44 -0.60
Source: Yahoo! Finance

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ABOUT D-BRIEF

D-brief is written by Dairy Field magazine, a Stagnito Communications Inc. publication, www.dairyfield.com. It is provided for the benefit of the industry by the International Dairy Foods Association (IDFA), www.idfa.org.

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