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September 1, 2004

Nestle gets vending placement in Florida schools ... Ice cream franchises expanding on East Coast ... Lucille Farms earnings report ... Wisconsin cheese promotions ... Dairy People News ... BJ's Wholesale profits rise on improved perishable sales ... Albertsons earnings dip ... Penn Traffic files restructuring plan ... 2005 milk promotions ... Odds-and-Ends ... Stock Market Ticker ... More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

The Miami-Dade County Public Schools district has partnered with Nestle to install 150 Nesquik milk vending machines in 32 senior high schools this school year. The machines will carry 14-oz. resealable bottles of chocolate, vanilla, strawberry, double chocolate, 1% milk and fat-free chocolate. The school system ran a pilot Nesquik lowfat milk program in 17 schools last year. (Company report)

Ice cream scoop shop franchises are cashing in on the East Coast. Cold Stone Creamery, which originated in Tempe, Ariz., 16 years ago, has surged in popularity in the East and plans to open 21 stores in Maryland alone over the next two years. The Scottsdale, Ariz.-based ice cream franchise ranked 35th on Entrepreneur magazine's list of fastest-growing franchises in the United States; there are 800 Cold Stone Creamery outlets in 46 states. Already strong in the northeast, Carvel Corp., Atlanta, Ga., announced plans to add 15 stand-alone shop locations in Maryland in the next few years; only one of Carvel's 480 franchise locations is located in the state now. It plans to introduce 85 more franchise outlets across the United States by the end of the year. Maggie Moo's International LLC, Columbia, Md., hopes to add 1,000 locations nationwide by 2007. It currently has 135 franchise outlets, including five in Maryland. (Daily Record, Baltimore; Stamford Advocate, Conn.)

Lucille Farms, the Montville, N.J.-based manufacturer of mozzarella cheeses, reports net income of $475,000 for its first quarter of fiscal year 2005 (ending June 30, 2004), jumping up dramatically from $22,000 the same quarter last year. Reduced operating costs, improved plant productivity and stronger cheese prices boosted results. To offset volatile pricing in milk this year, the manufacturer introduced two new products with higher margins: Lucille Select, a pizza cheese for "value-conscious" consumers, and Lucille Premium Reduced Fat Mozzarella Cheese. (Company report)

The Wisconsin Milk Marketing Board in Madison aims to increase cheese consumption and sales with two fall promotions. The "Wisconsin Cheese Secret Ingredient Contest" encourages consumers to submit favorite recipes using Wisconsin cheese. The winner will receive $10,000 worth of home appliances plus a private cooking class in New York with Sara Moulton, Gourmet magazine's executive chef. In addition, the "Friday Night is Pizza Night" promotion returns this fall in a partnership with Fleischmann's Yeast and the nation's beef producers. The goal is to boost cheese sales by generating interest in making homemade pizza. The promotion includes free-standing inserts and 25,000 retail floor displays with coupons for Wisconsin cheese. (Company report)

DAIRY PEOPLE NEWS

Seattle-based WestFarm Foods named John Underwood as president and CEO Aug. 30. WestFarm is the manufacturing and marketing arm of the Northwest Dairy Association, the fourth-largest dairy co-op in the United States. Underwood has been with WestFarm for 22 years and has been serving as interim CEO since April 1. Before that, he served as senior vice president of the ingredients division, where he led worldwide sales and marketing initiatives for WestFarm's bulk cheese, bulk butter and milk powder products. (Company report)

Scottie Mayfield, president of Mayfield Dairy, Athens, Tenn., was the recent subject of an extended Q&A interview in the Chattanooga Times Free Press in Chattanooga, Tenn. Mayfield discussed growing up with the Mayfield Dairy, which was started by his grandfather in 1912. (Chattanooga Times Free Press)

Michael Reinke, associate director of dairy procurement for Kraft Foods and a director on the Milk Industry Foundation board, died Aug. 27 of complications from injuries suffered in a bicycle accident near his Algonquin, Ill., home. He was 55. He worked for Kraft for 23 years; his primary responsibility was for regulatory affairs. (Chicago Tribune, MIF)

CUSTOMER CLIPS

Natick, Mass.-based BJ's Wholesale Club reported $28 million in net income in its second quarter, a 25% gain over the same period last year. Net sales for the quarter totaled $1.8 billion, up 12.5% from last year. For the first half of 2004, the wholesale club reported net income of $44.1 million, a jump of 31% from the prior year. Solid sales of perishables helped boost income totals. (Company report)

Albertsons, Boise, Idaho, saw profits drop in its second quarter because of costly price-cutting that the company used to spur business in order to help it recover from the southern California supermarket labor strike earlier this year. Profits dropped to $125 million in the second quarter from $162 million during the same period in 2003. Total sales in the quarter increased to $10.2 billion, up from $9 billion a year ago, thanks to its acquisition of Shaw's, New England's No. 2 grocer. Albertsons said the five-month strike that ended in February cost it close to $182 million in sales. The nation's second-largest grocer also launched its Internet grocery business in Utah, mirroring efforts in 11 other markets. (Company reports)

On Aug. 20, the Penn Traffic Co. filed plans to emerge from bankruptcy. The reorganization plan calls for repaying $26 million to its post-petition secured creditors and canceling 20 million shares of existing common stock. New stock would be issued to unsecured creditors, who have claims that exceed $277 million. Since filing for bankruptcy in May 2003, the grocer has closed or sold 67 Big Bear stores, sold off 37 other stores, consolidated facilities and trimmed $132 million off its $337 million debt. It currently operates 109 supermarkets in four states under the names P&C Foods, Quality Markets and BiLo. (Associated Press)

MILKPEP NEWS

MilkPEP Looks Ahead to 2005 Promotions
Milk processors should begin planning now for three major promotions from the Milk Processor Education Program (MilkPEP) that are set for next year. Two of the three programs include weight loss themes in conjunction with MilkPEP's "24/24 Milk Your Diet. Lose Weight!" efforts, while the third continues a successful partnership with the National Basketball Association (NBA) aimed at teens. Processors are encouraged to incorporate these promotions into their corporate 2005 marketing plans. "Processors should make sure to attend the MilkPEP Sales Meeting on September 28," noted Elayna McKenzie, IDFA director of marketing. "Not only will the meeting provide a thorough review of these promotions, but it will also cover IDFA's updated weight loss claims that licensed processors can use on labels, and in advertising, public relations and promotional materials." The Sales Meeting is being held in conjunction with BevExpo in Tampa. For more details on the three milk promotions, click here.

ODDS-AND-ENDS

The National Dairy Council and WebMD are partnering in a weight-loss program advocating three daily servings of dairy products as part of a reduced-calorie diet. The campaign will feature a "3-A-Day Milk Cheese Yogurt - Burn more fat, lose weight" logo that will appear on dairy packages in the coming weeks. In addition, television commercials will launch this month. The program capitalizes on research linking three servings of dairy as part of a reduced-calorie diet to help burn fat in the abdominal region. (Company report) ... The Aegean Cheese Inc. plant in Austin, Minn., has closed. The 20-employee plant primarily produced feta cheese. Earlier this year, it appeared headed for growth when Aegean added several products and entered the organic market. Details were not provided. (Associated Press) ... Tapping into the excitement of the upcoming presidential election, Sargento Foods Inc. revealed the candidates' "cheese personality profiles" based on news coverage, public personas and its research of the connection between personality and preference for cheese shapes. The study was originally conducted at the Smell & Taste Treatment and Research Foundation in Chicago. Plymouth, Wis.-based Sargento reports that President George W. Bush prefers shreds (indicates high energy and desire to take on new challenges), while Democratic challenger John Kerry prefers slices (indicates natural leadership and results-oriented drive). To take the quiz and determine your cheese personality, visit http://www.sargentocheese.com/cheesequiz-main.html. (Company report)

STOCK MARKET TICKER

As of 8/31/04, 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		26.20 37.07 79.50 47.25 16.15 48.28 11.39 31.28 16.53 19.07 20.20 32.40 26.36 34.84 33.52 13.20 04.17		+0.06 -0.01 -0.04 +0.30 +0.11 +0.38 +0.06 +0.09 -0.05 +0.17 -0.33 +0.20 +0.41 +0.35 +0.12 +0.06 -0.72		+0.11 -0.37 +0.04 +0.62 +0.14 +0.30 -0.06 -0.01 +0.12 -0.02 -0.25 +0.50 -0.90 +0.33 +0.35 -0.24 -1.38
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.

D-brief is sponsored by Polytainers, Curwood and TIC Gums. 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. TIC Gums is America's oldest supplier of hydrocolloids to food, pharmaceutical, cosmetic and industrial companies worldwide. To learn more about this sponsor, visit www.ticgums.com.

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