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March 9, 2005

Dreyer's reports financials, names CFO ... Schreiber Foods to close cream cheese facility ... Horizon Organic launches education program ... Parmalat USA reorganization plan, settlement approved ... Global Marketwatch ... Kroger reports earnings dip ... Publix to open Hispanic-themed stores, celebrates 75th anniversary year ... Bruno's, Bi-Lo to close 29 stores ... Odds-and-Ends ... Stock Market Ticker ... More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Dreyer's Grand Ice Cream Holdings Inc., Oakland, Calif., reports that its net revenues increased 33% to $1.59 billion for 2004 (ending Dec. 25, 2004). Net sales of the company brands, including owned, licensed and joint venture brands of packaged ice cream and frozen snacks, increased 49% to $1.3 billion. Net sales of partner brands (products distributed for other manufacturers) decreased 11% for the year to $235.5 million due to the termination of various programs. Cream costs as well as decreased partner brand sales are behind the decrease of gross profit to $152.6 million for 2004, representing a 10% gross margin compared with a 16% gross margin for 2003. (Company report)

In other news, Dreyer's has named Doug Holdt as executive vice president and chief financial officer. Holdt is a 19-year veteran of Nestle, most recently serving as senior vice president and chief financial officer of Nestle Canada. He previously served as vice president and corporate controller for Nestle USA in Glendale, Calif. Holdt replaces Alberto Romaneschi, who is transitioning back to Nestle after having served as Dreyer's CFO for the past two years. (Company report)

Green Bay, Wis.-based Schreiber Foods Inc. will close a cream cheese processing facility in north St. Louis that was formerly part of Raskas Foods, which Schreiber acquired in 2002. The closure, planned for this summer, will impact 220 employees. Production will gradually be moved to other facilities; Schreiber reports the plant, which is leased, was in need of extensive renovations to improve its operating margins. (St. Louis Post-Dispatch)

Boulder, Colo.-based Horizon Organic, a division of Dean Foods Co., is launching a national education initiative dubbed the "Year of Organic Good Beginnings." The campaign aims to promote "the positive role that organic food plays in the overall health and well-being of consumers." The program includes a grant to a nonprofit group -- the National Healthy Mothers, Healthy Babies Coalition -- to develop and distribute a brochure on organic foods and nutrition. Horizon Organic will also work with the Organic Trade Association's "Go Organic for Earth Day" campaign to provide educational information to teachers and retailers. In a back-to-school campaign this fall, the company will focus on promoting organic foods in children's lunch boxes. (Company report)

Reorganization plans by Wallington, N.J.-based Parmalat USA unit Farmland Dairies LLC have been approved by a New York federal bankruptcy court. Farmland will reorganize around its fresh milk and dairy products business in the Northeast and its national aseptic milk products business that is based in Grand Rapids, Mich. Marty Margherio, the company's president, will assume the additional title of CEO. He reports that the company plans to emphasize operations efficiencies and to grow business through its Farmland, Skim Plus, Parmalat Aseptic and 'Lil Milk' brands. The federal bankruptcy court has also approved a settlement of claims between parent company Italian dairy giant Parmalat Finanziaria SpA and its U.S.-based subsidiaries. Under the terms of the settlement, the Italian parent company will receive a $22 million fee from Parmalat's U.S.-based affiliates in order to fund a litigation trust established as part of Parmalat USA's reorganization. In return, Parmalat USA will release all of its claims against its parent. (Daily Deal/The Deal; Company report)

GLOBAL MARKETWATCH

In other Parmalat news, Parmalat Finanziaria SpA has detailed its latest plan to re-list shares in the insolvent Italian dairy group and hopes to be back on the Italian stock exchange in July. The plan proposes new swap ratios for a debt-to-equity conversion; creditors are expected to vote on the proposal later this year. (Associated Press)

Shareholders of China's Bright Dairy & Food Co Ltd. have approved a plan to allow Danone Asia Pte Ltd to buy an additional 5.85% stake in the company, through purchases from Dazhong Transportation (Group) Co Ltd. and Shanghai State-Owned Assets Operation Co Ltd. Danone Asia currently holds a 3.85% interest in Bright Dairy. The new purchases would make Danone the Chinese dairy's third largest investor. (AFX International Focus)

New Zealand investment firm Rank Group may be in the process of approaching potential buyers for New Zealand Dairy Foods (NZDF), the country's second largest dairy processor. Rank Group bought the company for AUS $250 million in 2002, and a sale could top AUS $700 million. Industry experts believe that potential buyers could include Nestle, Danone or Coca-Cola Amatil. There is also potential that a deal could be linked to the competition between Fonterra and San Miguel to take over Australia's National Foods. Rank Group is owned by Graeme Hart, New Zealand's richest man. (The Press-Christchurch, New Zealand)

CUSTOMER CLIPS

The Kroger Co. reported a $675.9 million loss for its fourth quarter that ended Jan. 29, but predicts a return to profitability in 2005 as the company slowly recovers from labor issues. Sales for the quarter increased 5% to $13.7 billion from $13 billion a year earlier. The Cincinnati-based retailer said the loss of 93 cents a share for the quarter included an $884 million after-tax charge, or $1.21 a share, for writing down the value of the Ralphs and Food 4 Less operations that were hurt by an extended strike in southern California. The results for the fourth quarter were preliminary and do not include any charges related to a change in accounting practices on leases; Kroger will reduce its earnings for 2001, 2002 and 2003 because of the change. Full-year sales rose to $56.4 billion in 2004 from $53.8 billion a year earlier; Kroger lost $128 million (17 cents per share) in 2004 vs. earnings of $314.6 million (42 cents per share) a year earlier. (Associated Press)

To heighten its appeal to the Hispanic market, Lakeland, Fla.-based Publix will convert two Florida stores (in Hialeah and Kissimmee) into Hispanic-themed supermarkets called Publix Sabor. The format will debut by the end of April and will feature expanded lines of Hispanic food and grocery items as well as bilingual signage and associates. In addition, the stores will help launch the soon-to-debut Publix line of private label Hispanic foods. (The Miami Herald) ... In other news, Publix kicked off a celebration of its 75th anniversary year by inviting customers to a March 3 party in all 849 of its stores in five Southeast states. (The Palm Beach Post-Florida)

Bruno's Supermarkets Inc. will close 20 stores this month as part of its plan to focus on core markets. The store closings include 13 in Alabama, four in Georgia, two in Florida and one in Mississippi. Dallas-based investment firm Lone Star Funds completed its acquisition of the grocery chain and sister chain Bi-Lo from Dutch retailing giant Royal Ahold earlier this year. Bi-Lo is expected to close nine units. (Birmingham News-Alabama; The Knoxville News-Sentinel)

IDFA NEWS

Hotel Deadline is This Friday for Dairy 101 Workshop
If you need to know the fundamentals of milk pricing, sign up now for IDFA's Dairy 101: Milk Procurement Workshop on April 5-6 at the Embassy Suites O'Hare in Rosemont, Ill. This popular annual program is designed to provide the basics on milk pricing mechanisms, including the Federal Milk Marketing Order system, to industry newcomers and veterans alike. Hotel reservations must be made directly with the Embassy Suites O'Hare (847-678-4000) by this Friday, March 11 in order to guarantee a room; be sure to mention "Dairy 101" to receive a special room rate. Then, click here to register for this program!

ODDS-AND-ENDS

The owner of several California cheese companies pleaded guilty in federal court to helping fabricate almost $350 million in sales for former New Jersey cheesemaker Suprema Specialties Inc. before its collapse in 2002. Jack Gaglio, founder of A&J Cheese Co. in Upland, Calif., and co-owner of three other cheese companies, faces up to 15 years in prison for his role in creating false documents that gave the appearance that Suprema shipped cheese to A&J and other Gaglio companies. Suprema inflated sales by $700 million through a six-year false-billing scheme; one Suprema exec and three executives from other Suprema customer businesses entered similar guilty pleas in January 2004. (Los Angeles Times) ... Retail milk prices are on the rise in New York, where tight supply has led the maximum price for a gallon of milk to rise this month to $3.45, a 28-cent increase over last month. Pricing is set by state and federal officials. This month's price is up 41% over March 2003, but is not close to the high point of June 2004, when it went to $4.43. (Newsday-Melville, N.Y.) ... At a meeting this week in Richmond, 7-Eleven store managers and franchisees are being introduced to 150 new products that the convenience store chain will add to store shelves this year to increase sales. Among the new products is the Big Gulp Ice Cream Float, a packaged scoop of ice cream that attaches to the lid of a soft-drink cup; the consumer removes the lid and presses the ice cream into the cup before filling it with root beer. (Richmond Times-Dispatch)

STOCK MARKET TICKER

As of 3/08/05, 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/IMKTE 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*		34.93 80.75 51.70 20.25 63.73 13.05 33.30 16.85 23.10 18.35 36.21 33.01 39.05 37.16 17.00 00.00		-0.38 -0.02 -0.15 +0.10 -0.52 +0.00 -0.12 -0.87 -0.60 -0.40 +0.14 -0.02 +0.04 +0.11 +0.20 N/A		+0.28 +0.08 -1.13 +0.07 -0.09 +0.00 -0.19 -1.20 -0.55 -0.36 -1.39 +0.61 -0.16 -0.36 +0.24 N/A
*The New York Stock Exchange suspended trade of WIN as a result of the company's filing of its Chapter 11 petition on February 21, 2005. Source: Yahoo! Finance

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