To view D-brief online, visit www.dbrief.org

January 19, 2005

CoolBrands earnings drop .... Kraft Foods revamps nutrition marketing efforts .... Dannon introduces new yogurt with fiber .... Parmalat restructuring update .... Dairy People News .... Milk pricing lawsuit against supermarkets thrown out .... Ahold earnings down .... Labeling workshop next week .... Odds-and-Ends .... Stock Market Ticker .... More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Toronto-based CoolBrands International Inc. announced that revenues for its first quarter of fiscal year 2005 (starting Sept. 1, 2004) declined by 3.3% to $100.5 million from $103.9 for the same quarter last year. Net earnings for the quarter declined 48.5% to $2.6 million ($0.05 basic and diluted earnings per share) compared with net earnings of $5 million ($0.09 basic and diluted earnings per share) for the same quarter last year. Sales for the first quarter increased 5% to $96.3 million compared with $91.6 million for the first quarter of 2004; decreased revenues reflect a delivery fee change in a business arrangement with Dreyer's. CoolBrands stated that the revenues drop was a result of increased competition; its response strategy includes new brand introductions and increased promotional support. As reported previously in D-brief, the company is also expanding its product line through the recent acquisition of the Breyer's and Creme Savers yogurt business from Kraft. Because the majority of its business is conducted in the United States, CoolBrands adopted the U.S. dollar as its functional and reporting currency as of Sept. 1, 2004. (Company report)

As part of its Sensible Solution marketing initiative this year, Kraft Foods is phasing out advertising for certain products in media primarily aimed at children ages 6 to 11, including ads for Oreo cookies and Kool-Aid. During the year, Kraft will shift its promotions in these media outlets to its products that meet a new nutritional criteria derived from standards set by the just released 2005 U.S. Dietary Guidelines and government authorities. (Kraft will continue its existing policy of not advertising in television, radio and print media with a primary audience under the age of six.) Kraft will also add a Sensible Solution label on products for both kids and adults that meet the nutrition criteria, including Kraft 2% Milk Shredded Reduced Fat Cheese. In 2006, Kraft plans to end advertisements for all products that do not meet the Sensible Solution criteria. (Company report)

White Plains, N.Y.-based Dannon is also tapping into the newly released U.S. Dietary Guidelines in order to promote the February launch of its new Light 'n Fit with Fiber nonfat yogurt. Dannon notes that this addition to the Light 'n Fit line is a good source of fiber and calcium, both nutrients that the government says Americans are lacking in their daily diets. Each 4-oz. serving offers three grams of fiber, 160-170 milligrams of potassium and 10% of the recommended daily value of calcium. Initial flavors include strawberry, peach and apple. (Company report)

Parmalat Update: Parmalat USA Corp.'s request for a $15 million supplemental debtor-in-possession credit line (provided by GE Capital Corp.) was approved by a bankruptcy court. The funds will be used to keep the dairy operation running, including meeting its payroll. (Daily Deal/The Deal) ... In a prepared statement read by his lawyer, Calisto Tanzi, the founder and former CEO of Parmalat Finanziaria SpA, asked for a pardon from those who suffered losses in the Italian company's collapse. He also pledged to help prosecutors with their investigation. Tanzi is "perfectly aware that a pardon can only have moral valence and is ready to recognize his responsibilities and take the consequences," the statement said. (Associated Press) ... The Parma Football Club in Rome is officially up for sale, after the Italian government agreed that Parmalat could invite bids for the team. Enrico Bondi, the government-appointed administrator, secured the approval of the Italian Industry Ministry earlier this month following a review of the soccer club's finances, which determined that its liabilities are more than $200 million. (National Post's Financial Post & FP Investing, Canada) ... Parmalat Uruguay and its new owner, identified only as "Argentine businessman Campiani," have 90 days to cancel or refinance the company's $30 million in debts. The banks to which Parmalat Uruguay owes money have agreed to postpone legal claims so that the company can resume production. (Latin America News Digest)

DAIRY PEOPLE NEWS

Joseph Cervantes, Binghamton, N.Y., was appointed to the National Fluid Milk Processor Promotion Board to fill a Region 2 vacancy for an existing term, which expires June 30, 2005. The board is composed of 15 fluid milk processors from 15 geographic regions and five at-large members; Agriculture Secretary Ann Veneman made the appointment. (Regulatory Intelligence Data)

International Dairy Queen COO Ed Watson, a 33-year veteran of the company, will step down later this year. He will be succeeded by the current chief concept officer, Chuck Chapman, in September. In other company news, Michael Keller, executive vice president of marketing and R&D, has been promoted to chief brand officer, a new position. Jean Champagne, COO of Dairy Queen Canada, was promoted to COO of DQ's international groups. (restaurantbiz.com)

In Passing: Jay Schulberg, 65, an advertising executive who helped launch the industry's Milk Mustache print advertising campaign, died last week in Doylestown, Pa. Schulberg was the chief creative officer at Bozell Worldwide in 1994, when the Milk Processor Education Program (MilkPEP) board hired the firm to create a campaign to boost milk consumption. Schulberg retired in 1999 and was also known for his contributions to campaigns for American Express and Excedrin. (Los Angeles Times)... Joseph Pollio Sr., 92, a third-generation cheesemaker and former owner of Polly-O, died Monday. He began working at the family cheese business as a young teen, making cheese in the back of the store and delivering it in a truck with no windshield. The Mineola, N.Y.-based company produces ricotta and mozzarella cheeses. The company was sold to Kraft in 1985; he stayed on as a consultant until 1995. (Newsday, New York)

CUSTOMER CLIPS

Upholding an earlier court decision, a state appeals panel dismissed a class-action lawsuit that charged that two Chicago-area grocery chains conspired to fix the price of milk. The lawsuit against Jewel Food Stores Inc. and Dominick's Finer Foods Inc. accused the supermarket chains of antitrust violations in propping up retail milk prices between 1996 and 2000. The First District Appellate Court judge noted in a published opinion that "there is no question that defendants' milk prices did not reflect the actual cost of the various types of milk or any decreases in the cost. But, as the trial court stated, it is not illegal to want to make a profit." (Chicago Daily Law Bulletin)

Accounting scandal-plagued Ahold NV, Dutch owner of the Stop & Shop and Giant supermarket chains in the United States, reported that its fourth-quarter sales declined 3% to $16.3 billion. Full-year sales fell 7% to $69.0 billion. Earnings will be reported March 29. (Associated Press)

IDFA NEWS

Dairy Labeling Workshop Set for Next Tuesday in D.C.
Registrations are still being accepted for IDFA's workshop, "Dairy Labeling -- Making the Change," set for Tuesday, January 25, at the Grand Hyatt in Washington, D.C. By January 1, 2006, dairy manufacturers must comply with new federal 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. "For a variety of reasons, dairy processors will be changing their labels in the coming year. This workshop is aimed at making that transition as smooth and beneficial as possible," said Cary Frye, IDFA vice president of regulatory affairs. For details or to register, click hereFor complete details or to register, click here.

ODDS-AND-ENDS

A lawsuit by People for the Ethical Treatment of Animals (PETA) against the California Milk Producers Advisory Board over cheese ads was dismissed by a state appeals court. In the suit filed in December 2002, PETA claimed that the CMAB ads -- showing cows grazing in green pastures with the slogan, "Great cheese comes from happy cows. Happy cows come from California." -- were misleading. The appeals court agreed with an earlier decision that the false advertising and unfair competition laws invoked by PETA can be used only against individuals, companies and private associations, not government agencies. (The San Francisco Chronicle) ... The Super Bowl XXXIX 3-For-All retail promotion is the latest segment of the dairy industry's 3-A-Day campaign. A wooden football-shaped cheese board (with the logo of a fan's favorite NFL team) is available to shoppers who buy at least one package each of milk, cheese and yogurt during the same shopping trip, then mail in their receipts with $6. Advertising support by the American Dairy Association and National Dairy Council includes print ads featuring Green Bay Packers quarterback Brett Favre. In addition, an online sweepstake offers consumers the chance to win a football autographed by Favre; the offer runs through Feb. 13. (Promo Online) ... As the size of the organic retail market grows, so does the size of organic dairy farms. Last week, the U.S. Department of Agriculture (USDA) asked its National Organic Standards Board to produce a guidance document to elaborate on current federal standards that require organic cows to have "access to pasture." At issue is the development of large-scale organic dairy operations, such as Colorado's 5,300-cow Aurora Organic Dairy, where cows in milk production stages are kept in outdoor pens and consume organic grain. Cows in the late stages of milk production and dry cows are kept on pasture, Aurora reports. An activist group, the Cornucopia Institute, prompted the action by filing a complaint with the USDA alleging that Aurora practices go against federal organic regulations. Specifically, the federal rule requires organic dairy cows to have access to pasture, though it provides exemptions for bad weather, animal health and undefined "stages of production" of the animal. (Chicago Tribune)

STOCK MARKET TICKER

As of 1/18/05, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Last Week's 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		34.32 80.60 51.82 18.24 55.81 13.05 34.43 17.00 20.94 18.56 33.80 32.94 37.41 38.33 15.96 03.90		+1.19 +0.00 +1.18 -0.12 +0.97 +0.00 +0.20 +0.22 +0.52 +0.43 -0.35 -0.07 -0.85 +0.48 +0.19 -0.03		+1.43 +0.27 +0.84 -0.22 +1.16 +0.00 +0.19 +0.37 +0.73 +0.35 -0.65 -0.78 -1.04 +0.98 +1.10 +0.05
Source: Yahoo! Finance

Click here to view last week's edition of D-brief.
http://www.idfa.org/dbrief/archive.cfm

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.

D-brief is sponsored by Polytainers and Curwood. Polytainers is a leader in the design, production and printing of thinwall rigid plastic containers for the dairy and food industries. Learn more about this sponsor at www.polytainersinc.com. Curwood develops and manufactures high-performance, high-barrier, polymer-based packaging materials. For more information about Curwood products, visit www.curwood.com.

For editorial content submissions, contact Cathy Sivak, D-brief editor, at editor@dbrief.org.

To subscribe or unsubscribe to this e-newsletter, send your request — along with your full name, title, company, phone and email address — to subscribe@dbrief.org.