April 28, 2004

Kraft considers board expansion...Dean to close California plant...Brigham's ice cream acquired by investment firm...Milk powder linked to 15 baby deaths in China...Group Danone, Dairy.com financials...New Product Scanner...Kroger expands upscale units in Detroit market...Continental Custom Ingredients breaks ground for new facility...Supermarket Labor Issues Flare... Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Northfield, Ill.-based Kraft Inc. is considering expansion of its board of directors as a way to increase the board's independence from the company. An announcement could come in the "not too distant future," said acting chairman Louis Camilleri at the company's 2004 stockholders meeting on Tuesday. Any board members added to the current nine would be independent of Kraft. The company also announced progress toward its sustainable growth plan. Components include building superior brand value, transforming its product portfolio, expanding global scale and driving out costs and assets. The Capri Sun "bottle can" and new products such as DiGiorno Thin Crispy Crust Pizza, which will launch in May, were cited as innovations that are helping the plan move forward. (Reuters; Company report)

Dean Foods, Dallas, Tex., is closing its San Leandro, Calif., milk processing facility at the end of the month. Many of the 84 employees will be transferred to the Berkeley Farms plant in Haywood, Calif. Dean said that it decided years ago that if volume ever went down at either plant, the company would merge the two facilities. (Oakland Tribune)

Brigham's Inc., Arlington, Mass., was acquired by investment firm New England Capital Partners in Boston. The ice cream company is a market leader in Boston. The new owner plans to boost sales by strengthening its position in the rest of New England and by expanding distribution to foodservice venues, such as sports arenas. New flavors and products are also part of the plan. (Boston Globe)

Substandard milk powder baby formula under 55 different brand names made by 46 processors has been linked to 15 deaths and more than 350 cases of malnourishment among babies in China since May 2003. Police in Fuyang City, where the scandal first broke, have arrested five wholesalers and have detained as many as 39 others associated with the scandal. China's State Food and Drug Administration has requested inspections of milk powder production plants in eight areas. Of the 55 brands, 31 were found to have less than 5 percent protein, with some carrying as little as 0.37 percent. The Fuyang City government has offered assistance to the families affected by the scandal, ranging from free medical treatment, reimbursement for medical bills, or compensation for deaths. (Chicago Tribune; South China Morning Post)

Dairy Financials: Group Danone, French parent company to Tarrytown, N.Y.-based The Dannon Co. Inc., reported that total first quarter sales rose to just over $4 billion, up from $3.85 billion in the same 2003 period. The dairy products division sales increased 12.8 percent to $2.05 billion. (Company report)...Dairy.com, an electronic commodities exchange for the dairy industry, also reported robust first quarter results. Spot trading increased 75 percent, while contract revenue jumped 120 percent. Dairy.com's cream market grew 98 percent in the quarter, with more than 6,600 loads of cream traded during the period. Membership totals more than 250 companies with 1,300-plus users. (Company report)

NEW PRODUCT SCANNER

Velvet Ice Cream Co., Utica, Ohio, is introducing Fabulous Flavors, a new ice cream line based on old favorites. It includes Moose Tracks and Turtle Tracks, two former Kids' Club favorites; Buckeye Classic, The Ohio State University's fans' choice; Strawberry Cheesecake, previously unavailable at retail; and new flavor Chocoholic. (Company report)

To satisfy increasing demand for more flavor and less carbohydrates, Minneapolis-based General Mills will launch Yoplait Ultra in May. A 6-oz. individual cup serving of the yogurt has 90 calories, and 70 percent less carbs and sugar, than traditional lowfat yogurt. Flavors include Strawberry Creme, Peach Creme, Blueberry Creme and Raspberry Creme. This latest yogurt rollout is one of several products that General Mills has introduced recently to broaden its focus on weight management, including 8th Continent Light soy milk. (Company report)

Responding to consumer demand, Mayfield Dairy Farms, Athens, Tenn., will bring back two classic flavors, Mayfield Classic Cherry and Mayfield Classic Orange-Pineapple. The two ice creams are the most requested flavors at Mayfield's visitors' centers in Athens and Braselton, Ga. Previously seasonal flavors, the two ice creams will become part of Mayfield's regular line of more than 30 flavors. (Company report)

CUSTOMER CLIPS

Cincinnati-based Kroger Co. has reopened two stores under the Fresh Fare banner in the Detroit area. The Fresh Fare banner was established in California and offers a broad range of premium and gourmet food items. The Detroit market is the first to debut the concept outside of California. Kroger aims to gain ground on Farmer Jack's, which has converted a number of its stores in the Detroit market to its no-frills Food Basics brand. Kroger also opened a store under its traditional Kroger banner in nearby Howell, Mich., as part of its expansion plans. (Crain's Detroit Business)

Today, West Chicago, Ill.-based Continental Custom Ingredients (CCI) breaks ground for a new 128,000-sq.-ft. facility in Sycamore, Ill. The new structure will house the entire corporate staff, the research and development personnel and the production facility for the Flavored Systems Division. It will also serve as the central distribution point for all CCI products sold within the United States and Mexico. Completion of the project is expected in November. (Company report)

Labor Issues: Both sides in a Seattle supermarket labor battle are preparing for a strike when current contracts end May 2. Safeway, QFC, Fred Meyer and Albertsons posted store flyers and placed newspaper ads seeking replacement workers in case of a strike or lockout. Meanwhile, the United Food and Commercial Workers (UFCW) Local 1105 scheduled credit counseling and "strike preparation workshops" for the two days before the contract expires. (Seattle Times)...Kroger Co. will pay up to $75 million after taxes to Safeway and Albertsons as part of a mutual aid pact signed prior to the California supermarket strike and lockout. Kroger set aside $116 million to compensate the two rivals in case the union did not apply pressure evenly to all three chains. The pretax total claimed by Safeway and Albertsons is likely to be more, since the strike/lockout lasted beyond the end of Kroger's fiscal year. (Los Angeles Times)...UFCW Locals 455 and 408 plan to strike against Houston-area Kroger stores if negotiators cannot reach a deal soon on a contract that expired April 3. Both sides have agreed to extend the contract day by day as long as talks continue. The contracts cover about 11,000 workers at roughly 100 stores. (Houston Chronicle)

IDFA NEWS

Hotel Deadline is Monday for Dairy Cost Accounting Workshop
Reserve your spot today for IDFA’s all new Dairy Cost Accounting Workshop, scheduled for May 25-26 in Rosemont, Ill. IDFA has redesigned this year’s program, which will continue to present the solid cost accounting and route distribution analysis found at past programs, but will also incorporate new sessions about crucial strategic issues and efficiencies. Certified public accountants (CPAs) can earn 16 Continuing Professional Education (CPE) credits by attending the program. Hotel reservations must be made directly with Sofitel Chicago O'Hare (847/678-4488) by Monday, May 3, in order to guarantee a room; be sure to mention the program name to receive a special room rate. Then, click here to register for this program. http://www.idfa.org/meetings/2004dairycostacct.cfm

ODDS-AND-ENDS

Ben & Jerry's Homemade Inc. and Penn State University have completed a three-year development process for a freezer cabinet that chills using high-decibel sound waves. Called thermoacoustic refrigeration, the process creates high-amplitude sound energy in helium, then converts it to cooling power that creates temperatures of -11° F (-24° C). The sound levels can only be reached in contained, pressurized gas, so the prototype emits a barely audible hum. The finished prototype chilling unit will be introduced to the public before installation at Ben & Jerry's Waterbury, Vt., processing facility and will be showcased in factory tours. (Company report)...Using a centuries-old recipe, a Latvian company will introduce the world to cannabis butter, a legal delicacy enjoyed for generations. The butter uses soaked, roasted and milled cannabis seed (which does not contain any narcotic substances). (Agence France Presse)...In Passing: Earl P. Strong, 93, died on March 22. Strong was a professor emeritus of management at Penn State University and was director of the International Ice Cream Association's Management Development Programs held from 1956-1970.

STOCK MARKET TICKER

As of 4/27/04, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Last Week's D-brief
ConAgra Foods/CAG 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		29.31 33.60 78.91 48.28 34.15 89.30 11.56 33.06 17.50 21.22 23.25 32.50 31.25 40.86 35.50 18.01 07.87		+0.00 -0.80 -0.01 -0.05 +0.13 -0.79 +0.03 +0.28 +0.00 +0.32 +0.10 +0.00 +0.14 +0.42 +0.31 -1.20 +0.09		+0.38 -0.65 +0.02 +1.16 +0.87 +4.75 +0.12 +1.79 +0.54 +0.81 +1.30 -0.20 +0.87 +0.91 +0.57 -1.41 -0.13
Source: Yahoo! Finance

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