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November 10, 2004

Dreyer's launches expansion project...Anderson Erickson in the spotlight...FOCUS created from Carvel, acquisitions...Milk offerings good for restaurant trade...Dairy Financials...Wal-Mart to add stores in China...Giant Eagle rolls back prices...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Dreyer's Grand Ice Cream Holdings Inc. will triple the capacity of its Laurel, Md., frozen novelty processing facility with a $180 million expansion project that breaks ground today. Due for 2007 completion, the expansion will add nearly 600,000 square feet of production and warehouse space, 10 frozen snack production lines, and two packaged ice cream lines. Also, a 200,000-sq.-ft. ice cream warehouse will hold up to 23,000 pallets of ice cream and frozen snacks to serve the eastern half of the United States. More than 300 employees will be added to the existing staff of 220. Dreyer's considered building a new facility in Pennsylvania, but local and state officials in Maryland authorized financial incentives to promote the expansion. For instance, the county will defer about $1 million in property taxes on the new plant over the next four years and make about $1 million in road and sewer improvements. The state financial package includes at least $400,000 in job training funds. (Company report, The Baltimore Sun)

The Des Moines Register reported that low-carb diets are creating new demand for the dairy products offered by local processor Anderson Erickson Dairy Co. The article highlights Anderson Erickson President and Chief Operating Officer Miriam Erickson Brown's recent speaking engagement at Drake University. At the event, Brown said that low-carb diets have reversed declining cottage cheese sales across the country. She also said that the diets have created new demand for Mr. E's Garden Vegetable cottage cheese and AE's newly released Carb Nog, eggnog sweetened with Splenda. In addition, the company has expanded fruit combinations in its yogurt products. (Des Moines Register)

Roark Capital Group, an Atlanta-based private equity firm, has created FOCUS Brands Inc. The company will combine premium soft-serve ice cream and ice cream cakes company Carvel Corp. with last week's purchase of Cinnabon and Seattle's Best Coffee International from AFC Enterprises for $21 million in cash. Since Roark acquired Carvel in late 2001, it has added more than 150 new outlets (a 40% increase), entered 17 new states and increased supermarket distribution to more than 2,600 new outlets (a 50% increase). (Company report)

Milk offerings can woo families to restaurants, according to a new, national survey of nearly 600 parents conducted last month by Connecticut-based Insight Express. The Berkeley, Calif.-based California Milk Processor Board is spreading the word about the survey and about healthful beverage choices, with statistics from the survey including:

  • Sixty-three percent of respondents said milk on the menu was important in deciding where to take their kids to eat;

  • More than half (53%) of parents surveyed said they were more likely to go to a restaurant that promotes milk as an alternative to soda;

  • The majority of parents (70%) want their kids to drink milk when they go out to eat; and

  • The majority of parents (62%) said their kids ate and drank healthier foods at home. (CMPB report)

    DAIRY FINANCIALS

    Dreyer's Grand Ice Cream Holdings Inc. total net sales decreased 8% to $473.7 million for the third quarter ending Sept. 25 from $514.9 for the third quarter of 2003. Gross profit dropped 30% to $57.3 million for the quarter, driven by increased cream costs and decreased partner brand sales. Net sales of Dreyer's company brands jumped 18% in the third quarter to $410.4 million, a gain of nearly $62.9 million for the quarter compared to third quarter 2003; including $13.1 million in sales from the July 2004 purchase of Silhouette Brands Inc. Meanwhile, termination of distribution agreements during the Dreyer's-Nestle merger led to a 63% drop in net sales of partner brand products manufactured or distributed for other companies; a decrease of $91.2 million to total $53.8 million for third quarter 2004. The third quarter of 2004 is the first quarter following the Dreyer's-Nestle merger in which operations for the quarter can be directly compared to the prior year period. (Company report)

    Montreal-based Saputo Foods posted a gain in sales to roughly US$833.3 million for the quarter ending Sept. 30 from US$762.5 million for the comparable 2003 quarter. Net profits fell 4% to US$46.6 million, down from US$48.5 million for the same period in 2003. Saputo reports all divisions performed well, though U.S. operations were hurt by lower prices for cheese and rising costs for milk as raw material. Sales from the U.S. division decreased by US$8.4 million, mainly because of the appreciation of the Canadian dollar and lower cheese prices. (The Gazette, Montreal)

    CUSTOMER CLIPS

    Wal-Mart Stores Inc. plans to open as many as 15 new stores in China next year as the government lifts restrictions on foreign retailers. Wal-Mart already has 40 outlets in major cities such as Beijing and Shenzhen, and will focus expansion on smaller provincial cities. The retail market in China has reached $553 billion and is expanding rapidly. Beginning on Dec. 11, the Chinese government will let overseas companies open as many wholly owned stores as they would like to meet necessary pledges made in 2001 to join the World Trade Organization. (Bloomberg News)

    Pittsburgh-based Giant Eagle rolled out a new price reduction strategy in all 221 Giant Eagle stores in Pennsylvania, Maryland, West Virginia and Ohio. The program aims to lower prices on "thousands of items customers purchase most frequently" as part of ongoing efforts to streamline operations and pass the savings on to customers. Giant Eagle plans to continue its existing weekly specials, double coupons, seasonal and holiday offers, as well as loyalty-based Giant Eagle Advantage Card promotions. Price reductions on dairy products will include national and Giant Eagle brand cheese and yogurt. (progressivegrocer.com)

    IDFA NEWS

    Register Now for Dairy Security Workshop and Dairy Forum
    Be sure to reserve your spot at two upcoming programs for the dairy industry! First, IDFA's Dairy Security Workshop will be held next Tuesday, November 16 in Washington, D.C. This intensive one-day program will review government concerns, current regulations and guidelines relating to the dairy industry and security. In addition, the 2005 Dairy Forum is set for January 9-12 in Orlando. This unique conference brings together all sectors of the industry—processors, producers, cooperatives and suppliers—to discuss the most pressing issues facing dairy. Complete agendas and registration information can be found on IDFA's website by clicking here.

    ODDS-AND-ENDS

    Fort Washington, Pa.,-based McNeil Nutritionals, LLC is launching CALCIMILK®, fortified milk with double the calcium of standard fluid milk, boosting the calcium value to 600 mg per 8-oz. serving. CALCIMILK is partnering with the Foundation for Osteoporosis Research and Education to provide educational materials, free CALCIMILK® samples and free bone density screenings at shopping malls during the holiday season...China has found 97 people in local governments and supervision departments criminally responsible for the inferior milk powder scandal in the eastern part of the country this spring. A government inspection team found 49 sub-standard milk powder companies, 12 of which were involved in the April outbreak of baby malnutrition in Fuyang City that resulted in the deaths of at least a dozen babies. Specific sentences will be handed down upon completion of the investigation. (Xinhua News Agency)

    STOCK MARKET TICKER

    As of 11/09/04, 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
    		     31.91
    80.19
    45.14
    17.39
    51.12
    12.25
    34.37
    16.15
    21.70
    19.64
    33.80
    31.95
    35.27
    37.69
    14.67
    03.58
    		     -0.59
    -0.05
    +0.11
    +0.01
    -0.56
    +0.00
    -0.11
    +0.05
    +0.32
    -0.03
    +0.35
    +0.54
    -0.37
    +0.15
    +0.06
    -0.04
    		     +1.96
    -0.11
    +1.19
    +0.40
    +0.42
    +0.04
    +0.92
    +0.90
    +1.56
    +0.99
    +0.70
    +1.43
    +0.47
    +0.68
    -0.09
    +0.26
    Source: Yahoo! Finance

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