Tag Archive | "dairy"

Yoghurt brand reduces sugar content in kids’ products by 40%


Anchor Uno, a New Zealand-based yoghurt brand owned by dairy giant Fonterra, has re-launched its children’s yoghurts with 40% less sugar than the original product.

Brand manager Nicola Carroll said: “We are always working on our product formulations, fine-tuning, reviewing and improving our products, prioritising ones that deliver the goodness of dairy nutrition to kids.”

The fine tuning from Anchor Uno has removed the sugar from the yoghurt base altogether, with the only sugar content coming from added sugar in the fruit preparation. This 40% reduction in sugar was achieved with no artificial colours, flavours or sweeteners.

The company indicates that their extensive research has shown that the reduction in sugar has not translated to a compromise on taste, with the new formulation equally or more preferred than the previous recipe.

General Manager of Nutrition at Fonterra, Angela Rowan, commented: “Anchor Unois a great example of our commitment to nutrition – providing the goodness of dairy with less added sugars, in line with recommendations from public health authorities such as the World Health Organisation.”

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Pakistan dairy first to pack creamer in Ecolean pouch


ecolean-air-aseptic-125ml-mini-mePakistan Dairy producer Fauji Foods  is the first to introduce its tea creamer in the brand new Ecolean® Air Aseptic 125ml package. The two companies signed one of the most comprehensive deals in the industry during 2015. The corporation is now further deepened when Ecolean’s new smaller 125ml package solution hits the shelves.

Earlier this year, most of the products in Fauji Foods’ liquid dairy portfolio were introduced in a variety of Ecolean®packages to the Pakistan market, making Ecolean the company’s leading packaging supplier. Fauji Foods will premiere the unique 125ml Ecolean® Air Aseptic package for its popular Dostea brand, shortly to be followed by its UHT brand Nurpur.

“In order for our brands to be number one in the eyes of the consumer, the packages must be convenient as well as easily recognisable on the shelf”, says Aamir Khawas, Head of Marketing & Sales at Fauji Foods Ltd. “That’s exactly what we get with Ecolean. The new, smaller 125ml package fits our consumers perfectly, with just the right portion size for everyday consumption. For us, Ecolean’s stand-up pouches are the future for liquid dairy products”.

“The on the go trend and smaller, single-serve packaging sizes continues to show strong growth globally. With the launch of our new smaller packaging size Ecolean continues to follow current consumer convenience trends”, says Anna Annerås, Marketing Director of Ecolean. “We are very excited to launch the 125ml size together with the successful and innovative company Fauji Foods, in one of the world’s most dynamic dairy markets”.

Ecolean’s new 125ml package is available in the Ecolean® Air Aseptic product range, for ambient distribution, with or without a straw. As with all Ecolean packages, the ease of use when opening, handling and pouring, together with its unique ability to be microwaved, attracts the Pakistan consumers, and liquid food producers worldwide.

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Parker launches clean-label cake inclusions


ice-cream-01Ingredients company Parker has launched a new line of seven clean-label cake inclusions, produced using a unique hot-panning process, to help support customers in the dairy industry.

Brands that make indulgent products like ice cream have historically valued performance and sensory attributes over clean labels, but the new range has been warranted because of increasing consumer interest in health, Parker said.

Its new line offers stable, reliable products that allow for exciting new flavours – while at the same time removing artificial flavours and colours, partially hydrogenated oil, preservatives, and allergens including dairy, soy, and nuts.

“As indulgent food brands move toward cleaner labels, they will need inclusions that can still preserve a great sensory experience,” said Greg Hodder, president of Parker. “Parker is available to help with intriguing ingredients – like our new cake inclusions – that possess claims including all natural, allergen-free, and others.”

Parker’s cake inclusions are produced using a unique hot-panning process, which leaves lower moisture content in the final piece. This allows for a longer shelf life – up to 12 months – whereas traditional baked goods often have a shelf-life of weeks. A longer shelf-life can help manufacturers eliminate food waste and create operational efficiencies, particularly for brands that use smaller portions or have a longer manufacturing cycle. The ingredients are also shelf-stable, eliminating the need for costly frozen shipping and storage, and maintain the same shelf-life whether stored in a dry, refrigerated or frozen setting.

The cake inclusions have a crunchy texture when dry, and absorb fat and moisture in ice cream to create the dense mouthfeel of real cake. Inclusion flavours include brownie, pie crust, and carrot, vanilla, red velvet, lemon, and German chocolate cake. These classic flavours can be added to other ingredients to create exciting combinations like key lime pie or mixed berry cake, the Fort Worth company added.

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General Mills partners with Organic Valley


dairy-production-in-NigeriaGeneral Mills today announced a strategic sourcing partnership with the largest organic cooperative in the U.S. that will help about 20 dairy farms add around 3,000 acres to organic dairy production over the next three years.

The program with Wisconsin-based Organic Valley will drive more acres in the U.S. into the organic certification process and builds upon General Mills’ commitment to double the organic acreage from which it sources ingredients by 2019.

General Mills has transformed its portfolio in recent years and is now the No. 3 maker of natural and organic foods with nine brands including Cascadian Farm, Muir Glen, LÄRABAR, Liberté, Mountain High, Food Should Taste Good, Immaculate Baking, Annie’s and EPIC Provisions.

The strategic alignment with Organic Valley will build General Mills’ relationships with the organic farmers who will be supporting its yogurt operating unit in the U.S., which includes brands like Yoplait, Annie’s, Liberté and Mountain High.

Earlier this year General Mills introduced the Annie’s brand to the U.S. yogurt category with a new line of certified organic whole milk yogurt.  In addition, the company is transitioning its Liberté yogurt brand in the U.S. to USDA certified organic, which will roll out nationwide this summer.

“To ensure we are able to deliver great tasting organic yogurt offerings to our consumers we are committed to supporting a framework in partnership with Organic Valley that will not only ensure a consistent supply chain, but also make it easier for dairy farmers to successfully manage through the transition to organic,” said David Clark, president of the General Mills Yogurt Operating Unit.

While demand for organic food is increasing in the U.S., supply has not been able to keep up. In the U.S., acreage devoted to organic agriculture is about one percent of total cropland, according to the U.S. Department of Agriculture.  General Mills has made sizeable investments to meet growing consumer interest in natural and organic foods, which is expected to drive double-digit industry sales growth over the next five years.

“We recognize that one of the biggest challenges to accelerating organic supply is enabling farmers to bridge the three-year period required to attain certified organic status under USDA rules.  There is tremendous opportunity for Annie’s — with the scale of General Mills — to increase the organic ingredient supply needed to support the rising consumer interest in organic foods,” said John Foraker, president of Annie’s.

Since 2009, General Mills has increased the organic acreage it supports by 120 percent and is now among the top five organic ingredient purchasers — and the second largest buyer of organic fruits and vegetables — in the North American packaged food sector.

In addition, General Mills will launch the Organic & Regenerative Agriculture Transition Council, which will bring together sustainable agricultural leaders, farmers and industry stakeholders with the mission of advancing organic and regenerative agriculture practices. The first project will focus on dairy.

General Mills has long been committed to dairy sustainability initiatives and has been focused on advancing the sustainability of its supply chain to reduce greenhouse gas emissions, improve water quality and promote better animal welfare.

In 2013, as part of the company’s sustainable sourcing commitment, General Mills said that by the year 2020, 100 percent of its U.S. directly sourced fluid milk would be sourced from producing regions that demonstrate continuous improvement as measured by the Dairy Sustainability Framework in the U.S. and other comparative environmental metrics globally.

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O-I teams with Hungarian dairy firm


italok_csoportkepGlass container manufacturer Owens-Illinois (O-I) has teamed up with Hungarian dairy supplier Cserpes Sajtműhely to open a new market for healthy, non-allergenic dairy products.

The Budapest-based company has launched a range of lactose-free milk and yogurts, filled exclusively in glass containers from O-I. Many Hungarians had grown up without the opportunity to taste milk in glass, O-I said, and Istvan Cserpes, owner of Cserpes Sajtműhely, has claimed that these new products would help renew a much-loved tradition.

The new milk is packed in O-I’s 50cl Bohus standard bottle and the yoghurt in 28cl Siola jars. Both products are made at the Dubi plant in the Czech Republic.

“Everyone is interested in health nowadays and we are sure these new products will appeal both to older generations and to health-conscious consumers who are too young to remember a time when milk consumption from glass was part of daily life,” said Istvan Cserpes.

O-I Hungary sales coordinator Guido Robustelli said: “This is a result of a four-year partnership between O-I and the customer to develop the right pack and the right product to enthuse Hungarian consumers. The number of people suffering lactose allergies is increasing across Hungary, so consumers have been waiting for this for a long time. In addition, the health and environmental credentials of glass and the renewal of the tradition of milk in glass meet the nation’s developing interest in authentic food and drink.”

Environmental considerations play a large role in the product launch, O-I said. Consumers can return the empty glass containers to Cserpes milk bars or shops and Cserpes will collect and return them to O-I for use as cullet. This provides a great opportunity to heighten awareness of the 100% recyclability of glass and improve waste management across the country, the packaging manufacturer said.

It follows on the heels of Müller Dairies’ announcement that it would extend its Milk&More doorstep milk delivery programme in the UK.

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Arla launches new campaign – Maximum Yield


Arla--wheyFood ingredients company, Arla has launched a new drive to raise awareness of the ways in which whey protein ingredients can enable dairy companies to maximise output, increase profits and significantly cut waste.

The campaign – called Maximum Yield – will highlight how simply adding whey protein to an existing production process with only small or no processing adjustments can significantly increase a dairy’s efficiency and boost its sustainability credentials at a stroke.

The campaign is focusing on two fronts – the elimination of unwanted by-products, and the use of by-products as a raw material – underlining that there is an approach available to suit every dairy, whatever their circumstances. As well as supplying a wide range of tailored whey protein solutions, Arla Foods Ingredients offers the technical expertise to ensure factory managers can get the best out of them with little or no further investment in manufacturing equipment required.

“Maximum Yield is about emphasising the benefits of whey protein ingredients in terms of either making sure 100% of the milk processed ends up in the finished product, or alternatively treating any by-products created during production as a valuable raw material,” said Brian Jørgensen, Business Unit Director at Arla Foods Ingredients. “In both cases, dairies will be maximising their productivity and reducing the burden they place on the environment.”

Waste is among the leading consumer concerns in today’s food and beverage industry, notes Arla, and Euromonitor International has ranked sustainable food production among its top 10 trends for 2016 . However, a sustainability positioning alone isn’t sufficient – and product quality remains the major driver to purchase.

Arla Foods Ingredients has developed a portfolio of whey-based solutions that offer the benefits of Maximum Yield in conjunction, the company says, with exceptional quality. These include ingredients from the Nutrilac HiYield range, which will enable dairies make cheese, Greek-style yoghurt and fermented beverages using 100% of their milk, as well as Nutrilac ingredients that enable processors to turn acid whey into added-value dairy products. In addition, Arla Foods Ingredients offers Nutrilac Softcheese, which makes it possible to reduce fat in soft ripened cheese by 50% with no loss of creaminess and increase the final yield by up to 20%.

“Whether you’re a dairy looking to eliminate by-products like acid whey, or one that wants to turn it into a product you can sell, our high-yield whey protein solutions will help you achieve your aims, increase profitability and reduce waste,” said Jørgensen. “They offer a straightforward and cost-effective way to use 100% of your milk, to optimise production and make the most of the resources at your disposal – with nothing going to spare.”

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Arla Foods promotes whey protein ingredients


wArla Foods Ingredients is to launch a new drive to raise awareness of the ways in which whey protein ingredients can enable dairy companies to maximise output, increase profits and significantly cut waste.

The campaign, called Maximum Yield, will highlight how adding whey protein to an existing production process with only small or no processing adjustments can significantly increase a dairy’s efficiency and boost its sustainability credentials at a stroke, the company said.

The campaign is focusing on two fronts : the elimination of unwanted by-products and the use of by-products as a raw material.

Brian Jørgensen, business unit director for Arla Foods Ingredients, said: “Maximum Yield is about emphasising the benefits of whey protein ingredients in terms of either making sure 100% of the milk processed ends up in the finished product, or alternatively treating any by-products created during production as a valuable raw material. In both cases, dairies will be maximising their productivity and reducing the burden they place on the environment.

“Whether you’re a dairy looking to eliminate by-products like acid whey, or one that wants to turn it into a product you can sell, our high-yield whey protein solutions will help you achieve your aims, increase profitability and reduce waste. They offer a straightforward and cost-effective way to use 100% of your milk, to optimise production and make the most of the resources at your disposal – with nothing going to spare.”

Arla Foods Ingredients is a global leader in natural whey ingredients for products in a range of categories – from bakery, beverages, dairy and ice cream to clinical, infant and sports nutrition.

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Probi acquires license for new probiotic strains


Modifying-microbial-fermentation-conditions-can-improve-probiotic-survival_strict_xxlProbi has signed an agreement with the Swedish biotech company, Probac, to acquire a license for two probiotic strains for use in food applications, primarily dairy products. The license covers the global market, excluding the Nordic countries. The IP rights for two additional patented strains are included in the agreement, and these will be used for future product development.

Through the agreement, Probi strengthens its offer within the area of Functional Food with specific strains for dairy products. The strains licensed from Probac are based on probiotic research that shows positive effects on the gastrointestinal tract and the immune system. The strains are currently used in the Verum™ range of dairy products, including yoghurt and soured milk, produced by the Norrmejerier dairy company, which owns the rights for the Nordic market.

“We regard this acquisition of new probiotic strains as a great opportunity to grow our Functional Food business area by adding the dairy segment to our offer,” says Peter Nählstedt, CEO of Probi.

The new strains will complement Probi’s existing offer of clinically documented probiotics within the gastro, immune and iron absorption areas. Probi’s strains are used in both Consumer Healthcare products and Functional Food products, including chilled beverages such as ProViva and GoodBelly.

“There is a strong global market potential for functional food with probiotics. These strains have been used in the Verum dairy products for quite some years with proven success, and they will give us the opportunity to develop new product applications,” concludes Peter Nählstedt.

The agreement also includes the IP rights for two thermostable strains, which will enable Probi to extend its offer into new applications in new and growing market segments for probiotics.

Probi AB is a Swedish publicly traded bioengineering company that develops effective and well-documented probiotics. Through its world-leading research, Probi has created a strong product portfolio in the gastrointestinal health and immune system niches. Probi’s products are available to consumers in more than 30 countries worldwide.

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Dairy Crest banking on infant formula market growth


Inexperienced-infant-nutrition-brands-putting-NZ-export-reputation-at-risk-INCSolid performances from cheese and spread brands Cathedral City and Country Life helped Dairy Crest report a 2% uplift in volume sales.

Dairy Crest said its cooking oil spray Frylight and Clover, another spread, had also performed well in the nine months to end of December 2015 amid a challenging market across cheeses and spreads.
The company also flagged up that its new spread brand, Clover Simple, which has no artificial ingredients, as a solid performer which had seen year-on-year volume sales growth since its launch in September 2015.

It said that Country Life sales has been aided from promotional activity which highlighted its British provenance.

Dairy Crest is banking on strong growth in the infant formula market for future growth.
It has begun production of demineralised whey powder and galacto-oligosaccharide (GOS), which are both ingredients in the infant formula market, which Dairy Crest said it will give it access to new markets and customers.

In 2015, Dairy Crest acquired the 50 per cent share it didn’t own of Promovita Ingredients Limited, which makes GOS.

Mark Allen, Dairy Crest chief executive, said: “Dairy Crest is now a branded and added-value business well placed to achieve profitable and sustainable growth.

“The strength of our brands is demonstrated by their performance in a challenging, deflationary consumer environment.

“We are also entering an exciting new chapter for Dairy Crest. Our functional ingredients business will be a key part of Dairy Crest in the future, giving us access to new growth markets “The outlook for the full year remains in line with our expectations.”

Dairy Crest Group plc is a leading British dairy products company. Its brands include Cathedral City Cheddar cheese, Country Life butter, Utterly Butterly, Vitalite and Clover. The firm employs over 4,500 people.

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New ISO standard validates flow cytometry


standardA new ISO standard (ISO 19344 (IDF 232)) describes a method for the quantification of lactic acid bacteria by flow cytometry in fermented products, starter cultures and probiotics used in dairy products. The publication is the result of the joint work of ISO and the International Dairy Federation (IDF).

Lactobacillus and bifidobacterium, present in yogurt and other dairy products, are well-known medical foods used as probiotics, or “friendly bacteria”, to maintain a healthy digestive tract. Flow cytometry, a cell-counting method for assessing the quality of cultures by determining the proportion of active cells, has met with a degree of scepticism. The new ISO standard is claimed to rubber-stamp the validity of this method, speeding up quality control and facilitating trade.

The standard provides quantification of lactic acid bacteria (LAB) and is important in assessing the quality of starter cultures, probiotics and fermented milk products. Examination of LAB in these products can be carried out following different methods, with plate count techniques being the most traditional and widely used. Newer techniques include flow cytometry, which is able to determine the proportion of active cells and/or total units.

“Advantages of the use of flow cytometry include low variation, reduction of testing time, differentiation between active and total cells and the possibility of high-throughput analysis,” said Dr. Sandra Casani, IDF/ISO Project Leader. “Furthermore, quantification of the fraction of active cells per total cells is a key feature of flow cytometry. This is of special relevance for certain applications, such as optimization of production processes and stability assessment during shelf life.”

This ISO/IDF project relied on the participation of producers and users of LAB as well as experts and users of flow cytometry from both industry and academia. This reflects the need and support for such a standard, which is crucial for obtaining general acceptance by the industry and for getting the recognition of this methodology by regulatory bodies.

“Joint standards such as this one are important to avoid duplication of work and ensure optimal and harmonized procedures in analysis and sampling of milk and milk products around the globe,” said Harrie van den Bijgaart, Chair of the ISO technical committee on milk and milk products (ISO/TC 34/SC 5) and Chair of the IDF Methods Standards Steering Group. “They also provide safeguards to the equivalence of testing results, whereas the availability of these well-respected joint standards also limits the required in-house validation efforts of the instrument users. The collaboration between IDF and ISO is key in achieving this.”

An international collaborative study of ISO 19344 (IDF 232) was conducted to determine precision figures, which validated that the method is fit for purpose.

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USDEC negative on dairy market recovery


dairy_productsA blog post by Alan Levitt on the USDEC web site outlines the seven reasons – described in more detail in USDEC’s recently-published Global Dairy Market Outlook – why he believes that a global dairy recovery is not imminent. He claims that it will take most, if not all, of 2016 for the markets to rebalance, noting that the world dairy markets remain in oversupply.

Fragile world economy. The headlines at the start of the new year are dominated by anxiety over global commodity and equity markets. Oil prices are at 12-year lows. Grain prices are at their lowest since 2009 and the outlook keeps softening. Global stock markets are rattled. Concerns about the health of China’s economy continue to spread. This broadly reflects a fragility in the world economy, which doesn’t suggest a near-term turnaround in dairy.

Ample global dairy supply. Heavy inventories on both the sell and buy side of the supply chain, as well as EU government stocks, will limit recovery prospects in the months ahead. Through Jan. 10, EU intervention stocks were 46,639 tons after offers of 6,359 tons last week. At 6,000 tons per week, the 109,000-ton limit will be reached by March—just as the European spring flush is getting under way. In the United States, commercial stocks of cheese, butter and NDM at the end of November were about 115,000 tons greater than normal for the seasonal inventory trough.

EU milk production. Milk deliveries in October were estimated to be 4.0 percent higher than a year ago. We estimate November up close to 4 percent as well. And we look for a 1.0 to 1.5 percent year- over-year gain in the first half of 2016. In the eight months since production quotas expired, milk deliveries in Ireland and the Netherlands were up 10 percent. This more than offset a 3 percent decline in production in New Zealand in the first half of their 2015/16 season.

Still waiting on China. China imports were above year-ago levels in November (albeit against a low comparable). In addition, New Zealand exports to China were up dramatically in November, which suggests good China import volumes in December. However, these purchases are thought to be mostly China’s annual binge on low-tariff milk powder from New Zealand that re-sets at the start of every year. China manufacturers are believed to have finally worked milk powder inventories down near comfortable levels, but while domestic production growth is modest, so far it is still growing sufficiently to mitigate the need for game-changing imports.

Stagnant prices. Commodity prices have been relatively steady over the last month. The EU intervention price for SMP (about $1,844/ton at current exchange rates) has put a floor on prices for now. However, there’s no urgency to bid prices higher given current surpluses. Prices decreased at the Jan. 19 GDT auction, the second straight decline. WMP averaged $2,188/ton and SMP averaged $1,835/ton. Traders don’t anticipate much improvement in the months ahead; on Jan. 19, NZX futures for WMP averaged $2,297/ton for Q2-2016.

Weather. One of the climate-related drivers that could have pointed the markets into positive territory has moderated in the last two months. The threat of El Niño on New Zealand milk production has softened as the Kiwis move past their flush. In the peak months of October and November, New Zealand milk production was down just 2.4 percent from the prior year.

Little urgency for buyers. Dairy buyers have good coverage for the months ahead as well, with plenty of product in the pipeline. There’s also concern that several major importing countries dependent on oil revenue—Algeria and Venezuela in particular—have pared back purchases in recent months.

Like all commodities, the author concludes. saying that dairy needs a bullish story to ignite a global rally. Currently, that story doesn’t exist. Lewitt notes that USDEC’s outlook hasn’t changed materially since its previous report and its early December “Global Market Outlook” webinar.

“Our previous assessment of market conditions stands,” he concludes. “it will take most, if not all, of 2016 for the markets to rebalance.”

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Fonterra sets new export record


fonterra1368608181Fonterra sets a new record for a single month’s export volume, with more than 300,000 MT shipped to its global markets, with December’s volume approximately 10% higher than its previous record month in December 2014.

Fonterra Managing Director for Global Ingredients, Kelvin Wickham said the new record reflected the ongoing successful performance of Fonterra’s direct-to-customer ingredients, consumer and foodservice sales despite the tough global market environment.

“This is an excellent achievement by our sales and logistics teams and it is gratifying to finish 2015 on a high with this record export volume,” he said. “We have seen unprecedented global volatility due to geopolitical events over the past year. The dairy market has been a tough environment globally, so we are pleased to achieve record export volumes despite the challenges.”

Wickham said the new benchmark would be difficult to surpass as reduced milk volumes began to impact on the co-operative’s production levels.

Fonterra is forecasting a year-on-year reduction of milk volumes by at least 6% this season as farmers responded to the low milk price environment and dry conditions impacted parts of New Zealand.

Since August 2015, Fonterra said it has reduced the amount of whole milk powder it expects to offer on the GlobalDairyTrade (GDT) platform over the next 12 months by 146,000 metric tonnes in response to a change in product mix away from base milk powders and continued successful contracting and demand through other sales channels.

“An increased portion of product is being sold through bilateral customer agreements for a premium on prices achieved on GDT. Ingredients inventory levels for the first quarter were in line with the same period last year,” said Wickham.

Fonterra Co-operative Group Limited is a New Zealand multinational dairy co-operative owned by around 13,000 New Zealand farmers. The company is responsible for approximately 30% of the world’s dairy exports and with revenue exceeding NZ$19.87 billion, is New Zealand’s largest company.

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Oculer to save €200m a year for dairy industry


Oculer’s new technology cuts lead times for identifying thermoduric bacteria from 72 to 24 hours, saving up to €200m ($219m) a year for dairy industry, says the company.

Oculer is an Irish company that specializes in delivering thermoduric bacteria detection technologies to the world’s dairy industry.

Oculer’s solution to dairy processors features an integrated automated “early-warning” feature, where raw milk coming into the production cycle can be identified as containing unacceptable levels of thermoduric bacteria in the fastest possible time, according to Brian Byrne, CEO of Oculer.

The capabilities of the new technology include the precise measurement of thermoduric bacteria in both raw and pasteurized milk, Byrne said.

Thermoduric bacteria are naturally occurring microorganisms whose spores are resistant to heat and chemical treatments. As a consequence, the bacteria are not eliminated by the pasteurization process that’s normally used by dairy processors to sanitize raw milk, Byrne said.

However, Byrne said this type of bacteria is not normally harmful to human health, but they accelerate spoilage and tainting of dairy products, and can dramatically reduce their shelf life.

“As in many countries around the globe, when test results indicate a high incidence of thermoduric bacteria in their raw milk collections, Irish farmers suffer penalty deductions from the payments they receive from dairy processors,” Byrne said. “This unwelcome deduction comes at a time when world prices are already depressing farm incomes.”

Dairy processors are using agar to test milk for its thermoduric bacteria currently, he added, “Which is slow, laborious and costly. Most importantly however, it is inherently imprecise and open to subjective error.”

“Not only does the physical constitution of milk vary from farm to farm, and from season to season – but also by different geographical locations and climates. The microorganisms that thrive within raw milk can also vary substantially depending on the environment and other characterization factors.”

“However, Oculer overcame those difficulties by first establishing the reliability of the assay to determining results using laboratory strains of various thermoduric bacteria in a stable medium, such as UHT milk”, he added.

“The financial cost of thermoduric bacteria to dairy producers is estimated to run into hundreds of millions of euros annually in Ireland alone, arising from milk or milk products that must be either destroyed or re-processed due to untimely and inaccurate identification of thermoduric bacteria”, Byrne said.

With Oculer’s new technology, ‘Mere will be a substantial reduction in operating costs for dairy producers, with lower laboratory costs and an associated environmentally favorable reduction in laboratory waste,” he said.

Byrne believes that the global microbiology testing industry will undoubtedly undergo a fundamental overhaul in the years ahead. With the consequential economic impact on all stages of the dairy industry, its clear that a rapid and robust system for the detection and analysis of thermoduric bacteria is required, he said.

“Farmer lobby groups and tighter regulation will inevitably impose greater pressures on dairy producers to account for deductions in a more uniform and transparent manner,” Byrne added.

In the New Year, Milk Test New Zealand, an independent laboratory that carries out thermoduric bacteria testing for over 97% of the New Zealand dairy industry, is scheduled to receive a system in Hamilton for trials.

Byrne added, “touter will continue to work with industry leaders around the world in order to develop new microbiological test methods.”

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Dairy ingredients to reach $60 billion by 2020


Dairy ingredients, including milk powder, whey, MPC & MPI, lactose & casein, is expected to reach USD 59.8 Billion by 2020 at 5.6% between 2015 and 2020.

The segmentation considered for this report is based on type, application, source, and region. The dairy ingredients market, by type, has been segmented into milk powder, whey ingredients, MPC & MPI, lactose & its derivatives, casein & caseinates, and others which include milk protein hydrolyzed, whey protein hydrolyzed, milk and whey peptides, dairy protein fractions, colostrums, and a-lac. On the basis of application, it is segmented into bakery & confectionery, dairy products, convenience foods, infant milk formula, sports & clinical nutrition, and others which include meat, beverages, and non-dairy creamers, of which dairy powder accounts for the largest share.

The market for dairy ingredients is projected to witness an increasing trend in the upcoming years due to the growing awareness about the health benefits of nutritional food products, and increasing production in countries such as the U.S., India, and China. The increasing demand for healthy and diversified food and the growing convenience food & beverage industry support the growth of the dairy ingredients market, along with growing income levels and disposable income, especially in the Asia-Pacific region.

The dairy ingredients market is projected to grow at a CAGR of 5.6% from 2015 to 2020. The major drivers of the market are increasing awareness towards health & wellness, growth in application sectors, and R&D and innovations to expand applicability & accelerate growth. Additionally, increase in sedentary lifestyle, along with consumer preference for nutrient rich diet are projected to augment the overall growth of the market. The major restraining factor includes alternatives such as plant protein may restraint the market growth. Easy availability and low cost of soy protein is further projected to hamper the overall growth of the dairy ingredients market. Rising incidences of lactose intolerance and milk allergies is also projected to pose a challenge to the growing dairy ingredients market.

Leading players in the dairy ingredients market include FrieslandCampina (The Netherlands), Fonterra Co-Operative Group (New Zealand), Dairy Farmers of America (U.S.), Arla Foods. (Denmark), Glanbia Plc. (Ireland), Euroserum (France), Groupe Lactalis (Germany), Saputo Inc. (Canada), Volac international Limited (U.K.), and Murray Goulburn Co-Operative Co. Limited (Australia).

One of the major developments in the dairy ingredients market is expansions & investment. This strategy was adopted due to the increasing requirements for nutritional and dairy products all over the world. It helped the manufacturers to increase their dairy-based portfolio and also increase their geographic presence in the dairy ingredients industry. Companies are also adopting other growth strategies such as new product launches, acquisitions, agreements, and joint ventures to cope with the increasing demand for dairy ingredients in key emerging markets. These strategies have helped companies to create a large customer and partner base in key markets.

MarketsandMarkets is world’s No. 2 firm in terms of annually published premium market research reports. Serving 1700 global fortune enterprises with more than 1200 premium studies in a year, M&M is catering to multitude of clients across 8 different industrial verticals. M&M’s flagship competitive intelligence and market research platform, “RT” connects over 200,000 markets and entire value chains for deeper understanding of the unmet insights along with market sizing and forecasts of niche markets.

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Lactose Free Dairy Market Offers Substantial Opportunities


With estimates that 70-75% of the world’s population may be lactose intolerant and with total milk, yogurt and cheese consumption at over 200 million tonnes in 2011, lactose free dairy products represent a substantial opportunity for dairy manufacturers. In a comprehensive study of the lactose free dairy market across 33 countries around the world, leading food and drink consultancy Zenith International found that the most developed markets include the USA, Scandinavia, Germany and Spain.

Families are an important target market for lactose free dairy products, especially for parents who wish their family to benefit from dairy nutrients even if they are lactose intolerant. Plant and nut-based dairy alternatives such as soy beverages, are a competitive threat, but these do not always provide the nutrients that consumers can obtain from dairy. Encouraging dairy consumption is particularly important in addressing deficiencies in calcium and vitamin D.

Although lactose free dairy products are currently a niche segment, it is clear that they have considerable long term potential. Most significant opportunities lie in markets with a prevalence of lactose intolerance and where dairy consumption is rising, such as Asia and Latin America. Manufacturers are in a strong position to drive milk and dairy consumption through lactose free offerings, provided they meet the challenge of affordability for lower average incomes.

“Another vital challenge for manufacturers looking to enter underdeveloped markets is education,” comments Zenith senior analyst Laura Knight. “Consumers need to be educated about what lactose intolerance is, how lactose free dairy products can help them manage their condition and to overcome the misconception that lactose free milk is not real milk. Education of health professionals is also important, so they are encouraged to advise those who are lactose intolerant to avoid cutting dairy products from their diets and use lactose free products as a way of continuing to consume dairy without experiencing discomfort.”

There are also opportunities in more developed lactose free dairy markets to broaden the range of lactose free dairy products available and to drive consumption in non-retail channels. Given the higher price points that lactose free dairy products often command, there is great potential to help manufacturers drive value growth despite the current challenging market conditions.

The 2012 Zenith Report on Opportunity for Lactose Free Dairy contains over 110 pages of market commentary, tables and analysis, together with brand profiles. Contact Zenith International on Tel +44 (0)1225 327900 or E-mail mi@zenithinternational.com.

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Muller and PepsiCo Commence US Factory Construction


Muller Quaker Dairy, a joint venture between PepsiCo, and the Theo Muller Group, has started construction of a 350,000-square foot state-of-the-art yogurt manufacturing facility on an 82-acre parcel of land in Batavia, New York. The site is situated in one of the US’s most concentrated milk-producing and processing regions. The first phase of construction is scheduled to be completed in 2013.

Muller Quaker Dairy entered the US dairy market last month with innovative premium yogurt products. It is the first entry by both PepsiCo and Muller into US dairy aisles. The products – Müller Corner, Müller Greek Corner and Müller FrütUp – are initially being sold through supermarket and club retailers in the Northeast and Mid-Atlantic.

“We’re excited to introduceU.S.consumers to the types of products that have made Müller a household name in many countries around the world,” says Stefan Muller, board member of Theo Muller Group. “Our joint efforts with PepsiCo will open the door to new yogurt options that we are confident consumers are going to love.”

In addition to building the Batavia facility, Muller Quaker Dairy will source its milk supply from US dairy farmers, with the majority coming from New York State and Northeast region dairy farms. According to data from Euromonitor, demand for value-added dairy is expected to increase in the coming years. In the US, variety and innovation within the yogurt category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

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Rise in Interim Profit and Sales at Parmalat


Parmalat has reported a 9.4% rise in EBITDA to Eur183.3 million on revenue up 6.1% to Eur2.28 billion for the first half of 2012, aided by increases in sales prices implemented last year in the Italy-based international dairy group’s main countries and higher sales volumes in Australia, Russia and Africa.

In Italy EBITDA grew by 16.0% to Eur45.9 million on flat sales of Eur482.4 million compared with the same period last year. In the Other Countries in Europe sales region, which includes the subsidiaries in Russia, Portugal and Romania, net revenues increased by 7.7% to Eur82.8 million and EBITDA rose from Eur3.3 million to Eur6.5 million chiefly as a result of a strong performance by the Russian subsidiary, which benefited from an incisive sales policy and the lower prices for raw milk.

Group EBIT at Eur96.2 million was down slightly from the Eur96.6 million reported at June 30, 2011, as operational improvements were offset by lower non-recurring activities.

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Dairygold Confirms €120 Million Phased Investment Programme


Dairygold Co-op, one of Ireland’s largest dairy processors, has confirmed its post quota strategy. As a farmer owned co-operative Dairygold has committed to accept all the milk that its Members would produce post quota. Through comprehensive surveys Dairygold’s milk suppliers have themselves forecast of a 63.5% increase in milk production from 941 million litres in 2011 to 600 million litres a year extra by 2020.

In order to facilitate that expected increase, the Society has agreed a carefully planned and phased investment of Eur120 million over the next eight years to incrementally expand its weekly processing capacity by 18.5 million litres by 2020.

Dairygold’s product strategy is firmly established in cheese and dairy ingredients and its expanded product profile will focus on these core products. Dairygold’s three existing processing sites at Mitchelstown, Mogeely and Mallow have capacity for varying degrees of expansion. Sweating these existing facilities makes absolute sense for Dairygold as they offer established infrastructure, which will reduce the capital cost of expansion.

Dairygold is already investing from its existing cash reserves to increase its weekly processing capacity by 4.3 million litres (15%) by 2014. This comprises expansion at its speciality cheese plant at Mogeely and its Cheddar plant at Mitchelstown, the latter is one of the largest in Britain and Ireland.

Dairygold plans to invest Eur120 million to add another 18.5 million litres weekly capacity up to 2019. This will comprise of an upgrade of the existing dryer in Mitchelstown and the development of two 7.5 tonne/hour dryers in Mallow, one in 2015 and one in 2019 or earlier if required.

In addition to Eur120 million capital investment required for expansion an associated Eur50 million increase in working capital will also be required to accommodate the extra volumes of product with long lead times before customer payment. The Dairygold board has agreed that the investment required cannot be funded from operating surpluses, existing reserves or entirely from bank debt and an element of Member funding is required. Based on projected financials and corporate finance evaluation the Member funding required is in the order of Eur50 million.

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PepsiCo and Muller Enter US Dairy Market With European-style Yogurt


Muller Quaker Dairy, the US joint venture between PepsiCo and Theo Muller Group, is entering the growing US dairy market with innovative premium yogurt products. These products – Muller Corner, Muller Greek Corner and Muller FrutUp – mark the first entry by either PepsiCo or Muller into US dairy aisles.

Together, PepsiCo and Muller will complement each other’s strengths and are expected to drive growth for both companies. PepsiCo brings scale as the largest food and beverage business in the US and has unmatched innovation-driven research and development programs, a robust go-to-market system, and superior marketing and brand recognition across its portfolio of 22 billion-dollar brands. Muller has decades of category leading innovation and dairy expertise, having grown to become Germany’s largest privately held dairy business, and one of Europe’s most well-known yogurt producers.

Muller Quaker Dairy aims to satisfy the increasing demand for value-added dairy products in the US, where variety and innovation within the category lags behind other regions, especially Europe. US consumption of yogurt and other value-added dairy products is generally less than half that of Europe.

The joint venture is building a new, state-of-the-art yogurt manufacturing plant in Batavia, New York. Once completed in 2013, it will be one of the largest yogurt plants in the US, and is expected to create more than 180 new jobs in upstate New York.

Worldwide, the dairy category is expected to grow more than any other through 2016, exceeding the growth of the next two food and beverage categories combined. This growth is driven by the progressively increasing consumer demand for packaged milk, yogurt and other value-added dairy products, and for other products containing dairy protein, probiotics, and calcium.

PepsiCo already holds a strong position in the global dairy products business. The company acquired Wimm-Bill-Dann, Russia’s largest dairy company, in 2011 and has been part of a successful joint venture with Almarai, Saudi Arabia’s largest dairy company, since 2009. PepsiCo has a previously stated goal of growing its global nutrition portfolio to $30 billion in revenue by 2020.

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First Milk Cuts Milk Price


Due to declining returns from customers in the liquid market, British dairy co-operative First Milk has announced that it has no option but to reduce its liquid and balancing milk prices from 1st August. Its liquid pool price will reduce by 1.7ppl and its balancing pool price will reduce by 0.9ppl. Despite growing market pressure there is no change to First Milk’s cheese pool price.

The move follows recent milk price cuts by three major dairy processors – Robert Wiseman Dairies, Arla Foods UK and Dairy Crest – who supply fresh liquid milk into the UK market place.

First Milk’s chairman Bill Mustoe comments: “It is hugely frustrating to see further reductions from the liquid sector, which give us no option but to move our milk prices to reflect the impact these have on our co-op. I am under no illusion as to the effect these price reductions will have on our members’ businesses and their confidence in the dairy industry as a whole. The strategy for First Milk remains unchanged – we believe the route to a long term sustainable future for farmers is through accessing a broader range of products and markets.”

He adds: “I firmly believe that the current market situation will result in more farmers choosing to be part of a business that welcomes their input and allows them to shape their own destiny, rather than sitting back and allowing others to dictate it.”

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Catastrophic Cuts Threaten UK Dairy Industry


The NFU (National Farmers Union) has strongly condemned the latest round of milk price cuts after three major dairy processors, who supply fresh liquid milk into the UK market place, issued notices for reductions. Robert Wiseman Dairies, Arla Foods UK and Dairy Crest have announced cuts to their milk prices paid to farmers of 1.7ppl, 2.0ppl and 1.65ppl respectively, following further significant cuts in recent months.

“This price slash comes at the expense of the average dairy farmer who is now making a significant loss for every litre they produce,” says NFU dairy board chairman Mansel Raymond. “Three processors will all cut their milk price on August 1; they all blame deterioration in commodity markets and cream prices – but none of them is taking responsibility for this dire situation.”

He continues: “For me, this just typifies everything that is wrong with this market place. It is time for liquid milk processors – and retailers and other major buyers – to take responsibility for this totally dysfunctional supply chain. It fails to address the one basic need of any business – the need to cover costs and make a profit.”

Mansel Raymond adds: “Until all retailers and processors commit to a fair and transparent supply chain, one that ensures a fair return for farmers, we will never break free from this vicious cycle of crisis after crisis in the dairy sector.”

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Emmi Strengthens its International Business


Swiss dairy group Emmi has further strengthened its international business by increasing its stakes in Kaiku Corporacion Alimentaria in northern Spain (from 42.6 % to 66 %) and Diprola in France (to 63 %). In the medium term, Emmi’s strategy is to increase the share of sales generated by its international business from 30% to 50%. This growth is to be achieved organically and through acquisitions. By increasing these two stakes, Emmi is taking a further significant step forward in its internationalisation.

Kaiku’s main markets are Spain, Chile and Tunisia. The company is market leader in northern Spain with regional brands and leads the Spanish market in the area of lactose-free milk and chilled coffee beverages. In 2011 Kaiku generated sales of Eur278 million. Thanks to the partnership with Kaiku, sales in Spain of Emmi Caffe Latte, produced in Ostermundigen (Switzerland), increased by more than 70% in the first five months of the current year, a growth rate bigger than in any other market.

Kaiku’s particular advantage is its broad geographical diversification – over half of the company’s sales are in fast growing markets outside Spain, notably in South America (in particular Chile). It is also successful in Tunisia, where it has a majority shareholding in Vitalait, the country’s second leading player. Emmi’s increased participation in Kaiku will enable it to benefit from rapid and strong growth in these markets.

Since January 2008 Emmi and the Italian cheese specialist Ambrosi. have been expanding the distribution of Swiss and Italian cheeses in France through the jointly owned company Ambrosi Emmi France. In January 2010 the two companies acquired a combined 25% stake in the French cheese packaging specialist Diprola, which operates in the market under the name ETS Schopfer. The company operates in France and Germany.

Emmi and Ambrosi have now decided to fully acquire the French company, which is headquartered in theAvignon. Emmi will be the majority shareholder with a stake of 63%. Diprola commands a strong position in the fresh packaging (frais-emballe) and distribution of cheeses from Switzerland, Italy and France.

Freshly packaged cheese has been a growth segment in Emmi’s key European markets for a number of years, and is also becoming increasingly popular in the Swiss retail trade. The acquisition of Diprola will enable Emmi to increase its access to know-how in this specialised area of cheese packaging, while also allowing it to further strengthen its position in the European cheese market by further exploiting the export potential of Swiss cheese.

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Dairy Crest to Sell St Hubert For €430 Million


Dairy Crest, the UK’s leading dairy foods company, has received a binding offer from Montagu Private Equity to acquire St Hubert, the French branded spreads business, for a cash consideration of Eur430 million (£3441 million).

The transaction follows Dairy Crest’s announcement in March 2012 of a strategic review of St Hubert. During the review a range of options were considered but as a result of substantial interest from a number of potential purchasers it was decided to pursue a divestment.

St Hubert was purchased in January 2007 for Eur370 million (approximately £248 million). Since its acquisition Dairy Crest has increased the revenue and EBIT for St Hubert by 35% and 45%, respectively.

St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of the acquisition and it believes that greater value may be generated for shareholders through the proposed disposal of St Hubert.

For the year ended 31 March 2012, St Hubert generated EBITDA of Eur48.1 million and EBIT of Eur46.1 million. The gross assets of St Hubert at 31 March 2012 were Eur169 million (£1413 million).

Following the disposal, Dairy Crest will remain a broadly based dairy business entirely focused on the UK with strong brands including CathedralCity, Country Life, Clover and Frijj. It intends to continue to build on the success of its UK branded foods business and restore its Dairies business to a satisfactory level of profitability in the medium term.

“Over the coming months, with a strengthened balance sheet, we will be able to consider a wide range of opportunities including synergistic acquisitions in the UK,” points out Mark Allen, chief executive of Dairy Crest. “This will allow us to employ the same brand-building skills that have contributed to the strong growth of our UK brands and St Hubert’s success. However, we will only do this within strict financial criteria and where an acquisition would add value for shareholders.”

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Danone Expands in Morocco With €550 Million Acquisition


Danone is paying Eur550 million to increase its stake from 29.2% to 67% in Moroccan dairy company Centrale Laitiere. Danone has held its 29.2% shareholding since 2001.

Centrale Laitiere is Morocco’s leading dairy products company with nearly 60% of the market. It has sales of around Eur600 million in a fast-growing market and operates the country’s largest distribution platform with 30 storage hubs serving 70,000 points of sales. The Danone brand is already very well known in Morocco through products including Yawmy, Moufid and Activia, all sold by Centrale Laitiere.

The deal represents a key step in Danone’s development in Morocco. It will allow the French food and beverages group to invest more in a market with major potential, and thus support growth of the local dairy industry. The move also confirms the strategic appeal of markets in North Africa for Danone.

 

This acquisition is subject to the approval of relevant authorities and is expected to be finalized by the end of 2012. With a majority interest, Danone will fully integrate Centrale Laitiere into its consolidated accounts, and the transaction will be accretive for Danone net earnings per share from the first year.

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Arla’s Proposed German and UK Dairy Mergers Approved


Arla Foods’ board of representatives has approved the dairy group’s proposed mergers with the German Milch-Union Hocheifel and British Milk Link. The board of representatives voted in favour of the two mergers by a large majority as did the members of the MUH and Milk Link co-operatives.

Peder Tuborgh, chief executive of Arla Foods, comments: “This is an important decision and fundamentally strengthens Arla. The circle of ownership is being expanded with more owners and with owners in the UK, who all share our vision of the future – to be a strong European dairy company that operates in a global market.”

The two mergers will now be examined by the relevant regulatory authorities. Arla Foods expects to be able to carry out the mergers during the autumn of 2012.

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Sale of Wiseman Stake Lifts First Milk


UK dairy co-operative First Milk has delivered a robust performance and solid financial results for the year to 31 March 2012. Pre-tax profits increased from £7.2 million in 2011 to £13.3 million but £9.6 million of this figure relates to the profit made on the sale of First Milk’s shareholding in Robert Wiseman Dairies, which has been acquired by Mullar Dairy (UK).

Group turnover increased by 1% £579 million. During the year First Milk increased the milk prices paid to its farmers – farmers in the liquid pool saw their price increased by 2.9ppl, whilst those in the cheese and balancing pools saw their prices increase by 2.98ppl.

First Milk is committed to rewarding its members for the money that they have invested in the business. In the last 12 months the dairy co-operative has made two payments, in July 2011 and January 2012, which together represent a return of 6% on members’ capital for the year.

Net debt rose during the year by £3 million to £47 million, mainly as a result of increased stocks required to facilitate the growth in the sales in the company’s Lake District Cheese brand, investments at manufacturing sites and the acquisition of Kingdom Cheese and Kingdom Dairies, but reduced in February 2012 following the sale of the Wiseman stake.

£6.3 million was invested in capital projects during 2011/12 and First Milk is continuing to invest at all its sites to drive efficiencies. During the financial year First Milk was also able to recruit 195 million litres of new milk.

“We have set out a clear path to develop First Milk into an added value food business and 2011/12 was notable for the opportunities we realised, as well as the delivery of a robust financial performance in tough market conditions,” comments Bill Mustoe, chairman of First Milk. “Over the last 12 months we have bought two businesses – a soft and grated cheese operation in Fife and a sports nutrition business in Manchester. These purchases have not only enabled us to diversify our product and customer base, but most importantly they provide a broader platform to drive cash for our farmer shareholders.

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Dairies Business Behind Loss at Dairy Crest


Although revenue increased, due to strong growth in its Foods business, and group operating profits levels were maintained, UK dairy group Dairy Crest has reported a pre-tax loss of £10.1 million for the year ended 31 March 2012. Dairy Crest’s revenue rose by 2% to £1.63 billion during the year, with its Foods business growing sales by 10% supported by continued progress from its five key brands, which increased sales by 11%, boosted by a strong performance by Cathedral City cheese. However, revenue at the Dairies business fell by 2%.

Despite the challenging trading conditions, Dairy Crest managed to maintain adjusted profit before tax at £87.4 million but exceptional non-cash impairment charges in Dairies of £81.7 million resulted in a reported loss.

Mark Allen, chief executive of Dairy Crest, comments: “Dairy Crest’s results for the year demonstrate the continued benefit of being a broadly based business. Double digit growth in our branded Spreads and Cheese businesses has offset unsatisfactory results in Dairies. We have maintained adjusted group profits despite facing inflationary cost pressures of around £80 million this year by making annualised cost savings of around £22 million and achieving selling price increases. This has been made possible by a programme of consistent investment in developing our key brands and building a modern, efficient supply chain.”

Since the year end, Dairy Crest has announced a series of measures to restore its Dairies business to a satisfactory level of profitability in the medium term. In March 2012, Dairy Crest commenced a strategic review of its French spreads business, St Hubert, which is progressing.

Mark Allen adds: “In the current financial year, we are seeing continued strong momentum in our Foods businesses and we expect Dairies to benefit from the decisive action we are taking and our continued discipline on costs.”

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Parmalat Enters US Dairy Market


Italian dairy group Parmalat has completed the intra-group acquisition of Lactalis American Group for $904 million. The deal marks Parmalat’s entry into the US dairy market, which is one of the largest in the world. It also strengthens Parmalat’s position in Latin America with the addition, to its current activities in Colombia and in Venezuela, of access to high growth markets, such as Brazil and Mexico with cheese products manufactured in Canada, the US and Europe.

Lactalis American Group operates mainly in the US in the production and distribution of cheese and other dairy products. Its portfolio of proprietary and licensed brands includes international brands, such as Galbani and President, and local brands, such as Sorrento, Precious and Mozzarella Fresca. The acquisition includes the distribution, on an exclusive basis, of the products of the Lactalis Group throughout the Americas. In 2011, Lactalis American Group reported revenues of $979.3 million and EBITDA of $84 million; its net financial assets amounted to $19.4 million as at December 31, 2012.

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Arla Foods to Merge With Milk Link and MUH


Arla Foods is planning two mergers in the British and German marketswhich will immediately increase its revenue by DKr9 billion (Eur1.2 billion) per year and strengthen its position as one of Europe’s leading dairy groups.

Arla Foods is seeking to complete two major mergers – with Germany’s eighth largest dairy, the co-operative Milch-Union Hocheifel (MUH), which has owners in Germany, Belgium and Luxembourg, and with the UK’s fourth largest dairy, the co-operative Milk Link.

As a result of the mergers, Arla will have, for the first time, co-operative owners in the UK, and in Germany the group of owners will be significantly expanded.

The owner representatives in Arla Foods and MUH and the members of Milk Link will make a decision on whether to merge on June 26th and the mergers will require clearance from the regulatory authorities. If the mergers are finalised and approved, Arla will be represented by owners in its four largest markets, the UK, Sweden, Denmark andGermany, and also in Belgium and Luxembourg.

The planned mergers are in line with Arla’s Strategy 2015, the key objective of which is to improve returns for its owners by, among other things, enhancing their positions in the core markets of the UK and Germany.

“Both Milk Link and Milch-Union Hocheifel are strong, well run dairy groups, which, with their product portfolios and production systems, will strengthen our business in both countries,” says Peder Tuborgh, chief executive of Arla Foods. ”In each of the three companies, the aim is to create value for our farmer owners in the form of a strong milk price. This will also be the case going forward, and our ability to deliver good results will be strengthened if these plans are realised.”

The mergers will bring Arla a significant step closer to a number of the main objectives in the group’s Strategy 2015: Arla will be the UK’s largest dairy company and will rank third in Germany; these are both stipulated objectives for Arla by 2015.

Another Arla objective is to achieve a revenue of DKr75 billion by 2015. The two companies, which will become an integral part of Arla Foods if the mergers take place, have combined revenues of approximately DKr9 billion. In 2011, Arla’s revenue amounted to DKr55 billion. Together, the companies are expected to generate revenues of DKr70 billion by 2013.

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Sales and Profits Increase at Milk Link


UK dairy co-operative Milk Link has produced a solid financial and trading performance over the last year. Group turnover increased by 7.1% to £628 million and EBITDA rose 15.4% to £33.7 million for the year ended 31st March 2012.

Milk Link lifted comparable profit before tax up by 42.7% to £14.3 million and the Member milk price increased by 2.5ppl during the year bringing the standard litre price to 28.5ppl. This meant that in comparison to the previous year Milk Link generated and paid out an additional £33.7 million to its Members for their milk.

Group borrowings rose by £2.1 million to £82 million. However, at the same time capital expenditure increased to £10.0 million compared to £5.5 million in the prior year.

“Despite an extremely difficult trading environment the group’s financial performance again strengthened,” says Neil Kennedy, chief executive of Milk Link. “During the year we benefited from strong commodity prices for our skimmed milk powder, cream, curd and whey products; from an increase in milk production from our Members and long term ‘direct’ suppliers; from cost savings resulting from the implementation of rigorous efficiency and productivity programmes across all areas of the business and from our continuing emphasis on cash, stock and debt management. Nevertheless, the results also reflect that Milk Link’s trading performance in our main retail and foodservice markets held up well despite highly challenging conditions. Indeed, sales both in terms of value and volume increased year on year in relation to our core Cheddar business, speciality cheese and flavoured milks.”

Milk Link has also been strengthening its processing business for the longer term by undertaking its largest capital investment programme to date. During the year, Milk Link completed two major investment programmes. The first was, as a result of a £12.5 million joint venture with Volac, the development of a state-of-the- art whey processing plant at Milk Link’s Taw Valley Creamery in Devon. A new £4 million production facility at the Trevarrian Creamery in North Cornwall was also completed by year end and to budget which has substantially increased the capacity of the creamery to meet a growing demand from major retailers and foodservice providers for its premium soft cheeses.

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Acquisition of Skanemejerier by Lactalis Approved


The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Swedish dairy products and fruit juices company Skanemejerier by French dairy giant Lactalis. The Commission examined the competitive effects of the proposed acquisition in the markets for dairy products, notably the supply of cream and the procurement of raw milk in Sweden.

The Commission’s investigation showed that the proposed transaction would not significantly alter the market structure in relation to dairy products and that the merged entity would face competitive pressure from a number of credible competitors. It also showed that the proposed transaction was unlikely to lead to a lessening of competition in relation to the procurement of raw milk, since farmers will be able to sell raw milk to third parties to the same extent as before the transaction.

Lactalis is active internationally in the dairy sector. Its core business is the production and marketing of drinking milk, butter, cheeses, fresh dairy, cream and industrial dairy products.

Skanemejerier is active in the dairy sector and especially in the markets for the production and marketing of drinking milk, fresh dairy products, cheeses, cream, butter and juice.

The acquisition of Skanemejerier, which has annual sales of Eur330 million, strengthens the international presence of Lactalis.

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Glanbia Remains On Track


Glanbia, the international nutritional solutions and cheese group, has reported that international demand for dairy products has remained solid in the first three months of 2012, supported by demand from developing economies. Prices for most dairy categories have weakened in the year to date, mainly due to an oversupply of milk resulting from sustained good weather in most milk producing regions. Similarly, US cheese prices have also declined in response to strong US milk production. Robust demand for higher end whey products continues, reflecting very good demand across all sectors of nutritionals, with prices firm in the face of tight short-term supply of these key ingredients.

In the first quarter, to the period end 31 March 2012, Glanbia’s total revenue grew 1.9% when compared with the first three months of 2011. Volume was down 1.5% as lower volumes in Dairy Ingredients and Agribusiness more than offset growth in Global Nutritionals. Overall pricing was up 3.4% driven by higher year on year pricing in Global Nutritionals.

John Moloney, group managing director of Glanbia, comments: “The group is performing in line with expectations in what is a more challenging operating environment this year. We expect to deliver earnings in the first half of 2012 which are broadly similar to an exceptionally strong first half in 2011. We are successfully driving growth in nutritionals and the depth and strength of the portfolio in these dynamic growth sectors positions Glanbia well for the future. We remain focused on strong cost management and operational execution across the business. We reiterate our full year guidance of 5% to 7% growth in adjusted earnings per share, on a constant currency basis, for 2012.”

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Nestle Supports Global Dairy Industry With New Partnership in Morocco


Nestle is building on its commitment to help support the development of the global dairy industry with a new partnership in Morocco. The collaboration with the local authorities in the Moroccan region of Doukkala-Abda aims to increase milk production, improve the quality of fresh milk and encourage the development of the dairy industry throughout the private sector.

The Doukkala-Abda region currently produces 22% of the milk in Morocco, sourcing over 340 million litres a year. Nestle’s partnership with the Agency for Agricultural Development and the Regional Office of Agriculture seeks to increase the company’s own milk collection in the region by 10% by 2014.

Nestle will invest more than SFr5.3 million (50 million Moroccan Dirham) over the next three years. It will help more than 10,000 farmers by providing training and expertise in milk supply, technical equipment, management and finance. Nestle began its operations in the Moroccan dairy sector in 1992. Today Nestle sources about 73 million litres of fresh milk from over 16,000 dairy farmers in the country.

Nestle’s work with farmers inMorocco is part of its approach to business which it calls Creating Shared Value. The company aims to create value for its shareholders while at the same time creating value for the communities it serves and in which it operates. Rural development is one of Nestle’s three key CSV focus areas, as well as nutrition and water.

Nestle’s new partnership in Morocco is the latest in a long-line of investments it has made to support the development of the global dairy industry. The company invested SFr127 million in a new milk products factory in Chile and opened a UHT milk factory in Sri Lanka in April. It also announced the construction of a dairy farming institute in China in January, and joined a dairy partnership in Brazil at the end of last year.

 

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Carbery Group Continues to Grow


Carbery Group, the Irish and international food ingredients, flavours and cheese manufacturer, had a positive year in 2011 with revenues increasing by 14.5% to Eur256.5 million and profit before tax advancing 27.8% to Eur8.7 million. Carbery’s 2011 performance reflects an underlying strong performance from the Ingredients division whilst by contrast its Ireland-based Cheese division had a challenging year principally due to market returns for cheese under-performing relative to other dairy products.

The weak cheese markets had a significant effect on performance as Carbery is a substantial manufacturer of cheese and produces a range of cheeses including mature cheddars and reduced fat cheddars. Its flagship brand, Dubliner continues to grow in export markets, particularly in the US. Carbery’s Ingredients business, which includes its flavour business, Synergy, as well as its dairy ingredients business, had a strong year. Synergy continues to grow in existing markets and establish itself in new markets, acquiring two new flavour businesses in the US.

Like all other dairy businesses, Carbery Group is addressing the opportunities and challenges that will come with the removal of quotas in 2015. It has just completed a milk supplier survey regarding additional milk output post 2015. In short, the survey indicates that West Cork suppliers from Bandon, Barryroe, Drinagh and Lisavaird Co-ops intend to increase milk supply by up to 45% between 2015 and 2020. While Carbery has processing capability in place to handle this extra production, over the next few years it will address associated challenges such as working capital requirements and developing markets for this extra output.

As well as preparing to process and market extra product post 2015, Carbery also plans to launch a scheme whereby it will align milk supply to shareholding for milk suppliers. This scheme will address certain key issues, amongst them that of securing milk processing capability for expanding milk suppliers and that of accessing shareholding value.

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University College Dublin Signs MOU With Leading Chinese Dairy Producer


University College Dublin (UCD) has signed a memorandum of understanding (MOU) with a leading Chinese dairy producer Dairy United. The MOU which will result in multi-million euro contracts for products and services, envisages the development of a China-Ireland Agricultural demonstration farm in Hohhot(Inner Mongolia), collaborative research projects, the provision of education and training services, and collaboration on the creation of a trade corridor to facilitate the introduction of Irish exporters to the Inner Mongolian region. The Dairy United/UCD link was established through contacts made by Enterprise Ireland over the past 18 months.

UCD will be collaborating with a number of Irish agricultural equipment and services companies to deliver an integrated package of education and training, research, services and technology to Dairy United.

The UCD Dean of Agriculture and Food Science Professor Alex Evans comments: “This partnership came about because of Ireland’s global reputation in dairy production and the ability of UCD and Irish agri-service companies to offer a complete solution, incorporating education, training, agricultural products and services, that meet Dairy United requirements and will form the basis of a long term relationship.”

Julie Sinnamon, executive director of Enterprise Ireland, says: “This MOU is the fruit of substantial work conducted in the past two years, between Dairy United and UCD, with the support ofEnterpriseIreland. The MOU paves the way for a range ofEnterpriseIrelandclient companies across the agri-services sector to provide world-class agri-technology and services to the China market“

Dairy United was founded in 2004 and specialises in dairy production and processing in China. Dairy United has total assets of Eur75 million and operates fifteen 1,000 cow dairy farms supported by over 2,000 ha of forage production land. Dairy United is currently undertaking an expansion strategy which will see it invest Eur360 million over the next five years for the construction of another 35 dairy farms and a modern dairy processing factory. On the completion of the expansion strategy by 2015, Dairy United will have 50 dairy farms with 100,000 dairy cattle and 20,000 ha of forage producing land, and the factory will have a daily fresh milk processing capacity of 500 tons.

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Arla Foods UK Appoints Contractors For New £150 Million Dairy


Arla Foods UK has appointed Caddick Construction and NG Bailey to build its £150 million fresh milk dairy at Aylesbury in England. Caddick Construction has started on site as principal contractor, with works expecting to take 75 weeks to complete. The company will be responsible for the construction of the main dairy and the energy centre, as well as all ancillary buildings and associated site works. NG Bailey will be responsible for the mechanical and electrical engineering portion of the contract, starting on site in June 2012.

Arla Foods UK has already worked with Caddick Construction on a number of other projects, including Stourton dairy in Leeds and Westbury Dairies, and NG Bailey has also worked with Arla on various build phases at Stourton.

Once completed, the dairy will process and package up to one billion litres of milk per year. It will provide a £20 million annual wages bill, which will have a positive impact on the local economy, and will also create around 700 new jobs and up to 1,000 construction jobs over the next 18 months.

Peter Lauritzen, chief executive of Arla Foods UK, says: “We are delighted to be underway with this project. In addition to it being one of the largest construction projects in the UK, we have ambitions for it to be the world’s first zero carbon fresh milk dairy, which will help Arla achieve its growth ambitions in the UK.”

Both contractors were appointed following a six-month tender process, in which they were up against some of Europe’s leading constuction and mechanical and electrical companies.

In addition to being responsible for the installation of the mechanical and electrical works, such as boilers, air compressors, ventilation and lighting in the energy centre, across the site and throughout the main dairy building, NG Bailey will also be responsible for wastewater and effluent treatment and recycling. Alongside the engineering division, the offsite manufacture and IT services arms of the company will also play its part in the development.

NG Bailey has also been awarded the facilities management contract, which will be serviced by the company’s facilities services team.

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Dairygold to Invest €130 Million in Capacity Expansion


Irish dairy co-operative Dairygold is preparing to invest Eur130 million in its processing facilities in Malow, Mitchelstown and Mogeely. The move is in preparation for the ending of milk quotas in 2015 which offers Dairygold its first real opportunity in more than 30 year for substantial dairy growth.

Dairygold currently processes about 960 million litres of milk annually (equivalent to 18% of the Irish milk pool) from its 3,000 dairy suppliers. The planned capacity expansion would allow Dairygold to process an extra 23 million litres of milk per week, in addition to its current peak of 30 million litres per week.

According to chief executive Jim Woulfe, the Dairygold team is excited about the opportunities and confident about the company`s ability to process and market up to 50% increase in milk production by 2020.

 

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Dairygold Reports Strong 2011 Performance


Strong returns from international dairy markets and increasing on farm milk production, which created higher processing throughputs, helped Dairygold, the Irish farmers co-operative, to generate an operating profit on its core activities of Eur22.6 million for 2011, a 19.6% increase on the 2010 figure. Dairygold’s optimisation of its product and customer mix, together with improved operating efficiencies helped to increase profitability.

Turnover in 2011 was Eur757.8 million – up 9.3% on the previous year. The increase was generated across the main business activities of dairy processing and agri trading.

Dairygold’s dairy processing division (Dairygold Food Ingredients) had a strong year. Dairygold has well invested and highly efficient processing facilities which benefited from investments of over Eur60 million in the last four years. The investment included an upgrade at Dairygold’s ingredients facility at Mitchelstown to facilitate the increased supply requirements of the expanded Danone infant formula facility at Macroom.

Dairygold chief executive Jim Woulfe comments: “In the dairy operations, improved markets and the higher throughput increased turnover and this along with continuous improvement in efficiencies helped to deliver improved results. The agri operations benefitted from increased on-farm activity which helped the performance of the fertiliser and feed businesses.”

In 2011 Dairygold invested a total of Eur33.9 million in the business – Eur15.4 million in capital expenditure and Eur18.5 million in acquiring a portfolio of strategic property assets from Reox Holdings. The co-op’s net debt was reduced by Eur13.6 million before the investment of Eur18.5 million on the acquisition of a portfolio of assets from Reox Holdings, which increased the net debt by Eur4.9 million to Eur67.2m at the year end.

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Nestle Continues to Develop its Operations in Chile


Nestle has invested more than SFr127 million ($140 million) in a new factory in Chile as part of its continued commitment to developing its operations in the country. The factory will produce a range of milk products and ingredients with added nutritional value for domestic consumption and for export to the United States, Central America, the Middle East and Asia.

When fully operational, the factory will have a production capacity of 30,000 tonnes of milk powder, enabling Nestle to meet increased demand for dairy products that offer a nutritional ‘plus’. One of the most technologically advanced dairy factories of its kind in the world, it will provide 300 direct jobs and 1,500 indirect jobs.

As with Nestle’s other dairy factories around the world, the new manufacturing site is situated in a rural area close to the dairy farms that supply it with fresh milk. This not only enables Nestle to trade directly with farmers, but also to provide them with technical assistance and training to improve milk production and quality.

In Chile, Nestle sells a range of local brands including Savory ice cream, Sahne-Nuss chocolate and McKay biscuits, alongside internationally recognised brands such as Nescafe and Maggi. In 2010 the company opened its first Research and Development Centre in South America in the Chilean capital Santiago. The centre leads Nestle’s global research and development efforts for biscuits and cereal-based snacks.

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Profits and Revenues Rise at Lakeland Dairies


Lakeland Dairies, Ireland’s second largest dairy processing co-operative, has reported an 18% increase in revenues to Eur472 million and a 52% rise in operating profit to €6.85 million for the year ended 31st December 2011.Lakeland exports to over 70 countries offering some 170 branded dairy products to customers. In 2011,Lakeland processed over 700 million litres of milk into a range of value added dairy food service products and food ingredients.

“While global economic and trading conditions continued to be difficult, it has been an excellent year for Lakeland Dairies where we are benefiting from our recent investments in advanced processing capabilities together with focused and intensive business development activities,” says Michael Hanley, chief executive of Lakeland Dairies.

He continues: “During the year, we further developed our market leading presence in Europe and expanded our position as the dairy foodservice market leader in the United Kingdom and in Ireland. We delivered specialist, value added products to the global foodservice, confectionery, bakery and other food industry sectors.  We are market leaders in emulsion technology where we provide dairy based products that delight our customers through their functionality and taste qualities in foods, whether that is in restaurants or retail.”

The turnover figure of Eur472 million was underpinned by strong sales, a maximised milk processing throughput, enhanced logistical capabilities and an ongoing operational efficiency programme across the organisation. This contributed to a further strengthening of the balance sheet with shareholders’ funds of Eur81 million at year-end.

Looking ahead, Michael Hanley comments: “The global economy has slowed with markets facing considerable uncertainties. Prices remain under pressure as food companies compete to retain market share among cost conscious consumers. There is also a global oversupply with surplus product coming onto the market from New Zealand and the United States in particular.  This will place significant pressure on milk processing returns throughout the year.  A weaker euro is required to make Irish exports more competitive. However, with continuing sales and volume increases we still anticipate further solid progress by Lakeland Dairies.”

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Nestle Boosts Dairy Interests in Asia


Nestle is strengthening its dairy industry interests in Asia with the opening of a new UHT milk factory in Sri Lanka. The factory builds on the company’s recent investments in dairy development in China and India. It will produce ready-to-drink brands such as Milo and Nespray at Nestle’s existing manufacturing site in the Sri Lankan province of Kurunegala.

“Our latest investment will have a ripple effect across the local community by helping our company make a positive impact on thousands of suppliers and farmers in the country,” says Alois Hofbauer, managing director of Nestle Lanka. “The new manufacturing capabilities also mean we can produce new products for our Sri Lankan consumers.”

The SFr5.8 million factory is part of a SFr77 million (Eur64 million) total investment in Sri Lanka over the next few years. Two other factories producing Maggi noodles and Nestle brand malt beverages were opened on the site in the last 12 months.

Nestle has supported the Sri Lankan dairy sector since the 1980s. Today Nestle Lanka’s has three UHT milk factories. Nestle isSri Lanka’s single largest private sector collector of fresh milk, procuring fresh milk from over 15,000 local dairy farmers every day.

The new UHT milk factory is part of Nestle’s dairy investment programme in Asia. The company constructed a new dairy farming institute in Shuangcheng in Heilongjiang province, China, in January.

Nestle India has developed milk production in the region since it built its first factory in Moga in 1961. The company now has eight factories in the country. Over the years, Nestle has invested to develop the area around that first factory, setting up milk collection points and training farmers to improve productivity and quality.

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Cost Reduction Programme on Track at Dairy Crest


Dairy Crest’s cost reduction programme is on track to deliver annual savings in line with the £20 million target set at the start of its financial year year. These savings have partially offset higher input costs including milk at the UK dairy group. Dairy Crest will continue to focus on reducing costs into the new financial year and expects to achieve a further similar level of annual savings.

Strong performances from Dairy Crest’s foods businesses are compensating for more challenging trading in its dairies division. However, despite the progress made in identifying and delivering efficiency savings, profits in the dairies business remain under pressure. Consequently, Dairy Crest is looking at a range of options to restore this business to a satisfactory level of profitability.

Dairy Crest’s strategy is to grow sales of its brands and other added value products, control costs and generate cash. Value sales of its five key brands (CathedralCity, Country Life, St Hubert Omega 3, Clover and Frijj) have increased during the financial year. Although sales volumes of these brands fell in the first half while Dairy Crest recovered higher input costs from its customers, a strong performance in the second half means that full year sales volumes will have increased compared to last year.

Dairy Crest will announce preliminary results for the year ending 31 March 2012 on 24 May 2012.

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First Milk Progress Funds Dividend Payment


As a result of the margin made on a number of business activities, including efficiencies gained from investment in its manufacturing sites and supply chain, UK dairy co-operative First Milk will pay a dividend to members in April. An average 1 million litre producer will receive a dividend of £900, and this comes on top of the returns on investment for the same average 1 million litre producer of £2,700 over the last 14 months.

The First Milk board also plans to allocate a proportion of the profit made on the recent sale of the co-operative’s shares in Robert Wiseman Dairies to members, and is currently investigating the most tax efficient way to do this. These decisions do not impact on any potential return on members’ investments for the 2nd half of 2011/12 milk year, which will be decided separately once the year end numbers are finalised.

“Over the last 14 months we have made three returns on member investments and are now announcing a dividend and plans to allocate money to member capital accounts,” explains First Milk chairman Bill Mustoe. “Building a business and a supply chain that is centred squarely on delivering for members is what we’re about, and that’s obviously a different path to other companies in our sector. We will continue to pass back returns to members if and when the money is in the till.”

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Dairy Crest to Review its French Branded Spreads Business


Dairy Crest, the UK’s leading dairy foods company, is to commence a strategic review of St Hubert, its French branded spreads business. The review will evaluate all possible options available to Dairy Crest to maximise shareholder value, including a potential divestment of St Hubert.

Since its acquisition in January 2007, St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of its acquisition of St Hubert and it believes that greater value may be generated for shareholders through the consideration of all the available options for St Hubert.

A disposal would reduce Dairy Crest’s debt and provide it with a number of alternatives which include releasing some proceeds to shareholders, investing in its core business and making strategic acquisitions of branded businesses in the UK. This would further improve Dairy Crest’s strong position in the consolidating UK dairy market. Any acquisitions would be synergistic and made within strict financial criteria, as will any decision over the future of St Hubert.

Whatever the results of the review, Dairy Crest will continue to develop its broadly based UK business including its strong portfolio of brands (Cathedral City, Country Life, Clover and Frijj). The Dairy Crest board also intends to continue with its progressive dividend policy.

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Robert Wiseman Dairies Delisted


Robert Wiseman Dairies has been delisted from the London Stock Exchange following its £279.5 million acquisition by Muller Dairy (UK), the British subsidiary of German dairy group Muller. Operating from six major processing dairies in Aberdeen, East Kilbride, Glasgow, Manchester, Droitwich Spa and Bridgwater, Robert Wiseman Dairies processes and delivers more than 30% of the fresh milk consumed in Britain, every day. Based at Market Drayton in Shropshire, Muller Dairy (UK) is the overall market leader in chilled yoghurts and potted desserts in the UK.

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Green Light For First Milk’s Cheese Packing and Storage Centre of Excellence


UK dairy co-operative First Milk has received planning approval to redevelop its cheese packing site at Maelor near Wrexham, to create a UK centre of excellence for cheese packing and storage. As well as the redesign and rebuild of First Milk’s cheese packing operation, Grocontinental, one of the UK’s leading storage and distribution companies, has also received the green light for the construction of a cold store on the Maelor site that will house all of First Milk’s maturing cheese.

Work will begin shortly on the redevelopment and is scheduled for completion in Autumn 2013. The total cost of the site redevelopment will be £17 million.

First Milk’s manufacturing director Paul Rowe comments: “This redevelopment builds on the significant investment in new technology at the site over the last eighteen months. We have had very positive feedback on our proposals from our retail customers, who can see the clear benefits from the redevelopment in terms of workflows, efficiencies and the scope it provides to increase production.”

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Robert Wiseman Dairies Increases Water Savings


A £100 million fresh milk dairy at Bridgwater, Somerset in England has succeeded in increasing its use of recycled water by 50% to over 300,000 litres of water every day, equivalent to the daily water use of 663 households. Known as ‘Britain’s green and white dairy’ Robert Wiseman Dairies Bridgwater facility has set the standard for environmental performance since it opened in 2009 and was the first dairy in the UK to have its own reverse osmosis (RO) plant to ensure that water leaving its on-site effluent treatment plant could be recycled and reused in the dairy.

Recycled water is returned to the mains water tank to be used across the dairy for everything from cleaning the filling lines to pasteurising the milk and significantly reduces the requirement to draw water from the local water supplies.

The RO technology was first introduced in early 2011 initially allowing around 200,000 litres of water leaving Bridgwater’s on-site effluent treatment plant to be recycled and reused. This installation has been expanded and is now providing over 35% of the water required by the dairy which has an annual production of around 500 million litres.

“Water scarcity, particularly in the south of country is a significant issue and our Bridgwater dairy has amongst the best water per litre of milk produced ratios of any dairy in the country,” says Billy Keane, managing director of Robert Wiseman Dairies. “This water recycling is another step towards meeting the target we set of reducing water use across our network of dairies by 25% by 2015 whilst also helping to further reinforce Bridgwater’s reputation as the world’s most environmentally advanced fresh milk dairy.”

Headquartered in East Kilbride near Glasgow in Scotlant, Robert Wiseman Dairies procures, processes and distributes almost a third of all fresh milk consumed inBritain, every day. The company has six dairies and a distribution network which enables the company to deliver milk to customers in every GB postcode. Wiseman is a wholly owned subsidiary of Muller Dairy (UK) and employs around 5,000 people.

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Strong Performance By Glanbia


Reflecting strong performances from both its Irish and US operations, Glanbia, the global nutritional solutions and cheese group, has reported a 17.9% rise in operating profit to Eur161 million on revenue up 23.3% to Eur2.67 billion for the year ended December 31st 2011. Operating margin dropped 30 bps to 6% due largely to input cost pressures in performance nutrition.

On constant currency basis, Glanbia’s US Cheese & Global Nutritionals division increased revenue by 35% to Eur1.38 billion and operating profit pre exceptional increased 21.3% to Eur113.8 million. Glanbia has invested significant resources in recent years to develop and enhance its US Cheese & Global Nutritionals division. The acquisition and successful integration of BSN into Performance Nutrition complemented strong organic revenue growth during 2011.

Positive global dairy markets underpinned a solid performance by Dairy Ireland despite the challenges of the Consumer Products business. The Dairy Ireland business grew revenue by 19% to Eur1.35 billion and operating profit pre exceptional increased 23.2% to Eur53.6 million.

“Glanbia achieved excellent results in 2011 delivering 26.7% growth in adjusted earnings per share, on a constant currency basis,” says John Moloney, group managing director of Glanbia. “We expect the operating environment in 2012 to be more challenging than in recent years. Current global economic uncertainty has the potential to impact global dairy markets and fragile consumer confidence. The group’s focus on driving growth in nutritionals, combined with deep dairy market expertise and strong execution capability, position us well for the future. Our guidance for 2012 is for 5-7% growth in adjusted earnings per share, on a constant currency basis.”

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PepsiCo and Theo Muller to Build $206 Million Yogurt Factory


PepsiCo, the world’s second largest snacks and beverages company, and Theo Muller, Germany’s largest privately owned dairy business, have chosen New York as the site for their first yogurt production facility in the US. Through their joint venture, Wave, the companies will invest $206 million (Eur153 million) and create 186 new manufacturing and support jobs to operate the new state-of-the-art facility in Batavia.

Wave considered other locations both in and outside of New York State for the facility. After a thorough evaluation, including an assessment of access to dairy resources, water supply and distribution routes to key markets, the company chose Batavia. While the facility is being developed over two years, Wave may import Muller products in order to establish a foothold in the fast-growing US yogurt business.

Wave’s investment continues a strong recent trend of major yogurt producers opening manufacturing facilities in New York. The state currently has 29 yogurt plants, which employ more than 2,000 people and produced a total of 530 million pounds of yogurt in 2011—a 43% increase from 2010 and more than double 2008 levels.

New York State is the US leader in the production of the highly popular Greek-style yogurt. Producing Greek yogurt requires approximately three times the amount of milk than traditional yogurt, making the industry a major economic driver for dairy farmers across New York State. In 2011, more than 1.166 billion pounds of milk was used for yogurt production. This is comparable to the milk production of 500 average-size dairy farms inNew York State (115 cows/farm).

The joint venture with Muller reflects PepsiCo’s ambitions to expand in dairy. In 2010, the beverages and snacks manufacturer acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.

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Arla Foods Increases Revenue and Earnings


Despite continuing weak consumer confidence in Europe, where 80% of its business is based, Arla Foods achieved double digit growth in both revenue and earnings in 2011. Revenue rose by 12% to almost DKr55 billion (Eur7.4 billion) and Arla Foods increased the earnings for its 8,200 co-operative owners in Denmark, Sweden and Germanyby 11%, paying out a performance price of DKr2.80 for each kilogramme of milk supplied. During 2011, Arla also paid DKr1.6 billion more to the co-operative owners than in the previous year. The retained profit of DKr1.31 billion was up from DKr1.27 billion in 2010.

”These are strong results in a difficult time. Primarily because we have improved earnings for our owners to a level that is almost on par with the best we’ve ever delivered,” says Peder Tuborgh, chief executive of Arla Foods. “During an economic crisis, more consumers choose to buy discount products and fewer branded products. This has an effect on Arla’s earnings. But at the same time, we’re seeing a rising demand in markets outside Europe, which will offset the flattening growth in Europe.”

Arla’s brands helped it to grow outside Europe. Half of Arla’s revenue growth was through organic growth, in part driven by Arla’s three global brands – Arla, Lurpak and Castello. The Arla brand showed a significant growth of 8% in 2011, resulting in global revenues of DKr20.6 billion

Arla Foods has enjoyed success in new markets, particularly in MENA (Middle East and North Africa) and Russia. It also made a major breakthrough in Germany during the year following the merger with Hansa-Milch and the acquisition of Allgäuland-Kasereien.

Peder Tuborgh, chief executive of Arla Foods.

Arla Foods Ingredients (AFI), which is responsible for Arla’s global production of whey, whey proteins and ingredients for the food industry, had a strong year and was one of Arla’s most profitable business areas. Despite the rise in raw material prices, AFI succeeded in launching new products and increasing revenues by 25%.

Although Arla Foods expects to maintain growth in 2012, the year ahead will be challenging. “While 2011 was a good year for Arla, the last quarter showed slight pressure on performance, reflecting a deteriorating business environment in Europe, which has continued into 2012. We expect significant revenue growth and for profits to be on par with 2011 albeit with fluctuations in the milk price for our co-operative owners over the year,” says Peder Tuborgh.

He continues: “To secure the top-line expansion effectively converts to the bottom-line, we’re working on all fronts to improve our internal efficiency. For the group as a whole, we’re focusing on growing revenues considerably faster than costs. We’re making progress in this direction, but there’s still some way to go. We’re focusing, therefore, on creating a more structured and less complex way of working, and we expect to launch some specific initiatives in 2012.”

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Senoble and Agrial Joint Venture Approved


The European Commission has cleared the proposed creation of Senegral, a joint venture by Senoble and Agrial, two French companies operating in the dairy sector. The new joint venture will operate in the production and sale of private label fresh dairy products in France, Germanyand Benelux. The Commission concluded that the proposed transaction would not raise competition concerns, in particular because the new entity will have numerous competitors in the markets concerned.

Senoble manufactures and sells fresh dairy products such as yoghurt, fresh cheese, fresh cream. It operates in France, Spain, the UK, Italyand Slovakia in the production and sale of milk, dairy products and fruit-based beverages.

Agrial is a French agricultural co-operative group operating in particular in the milk collection sector.

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Emmi Group’s Head of Finance to Leave


Reto Conrad, chief finance officer of Emmi Group, has decided to pursue a new challenge in his career and will be leaving the Swiss dairy company at the end of May 2012. Reto Conrad joined the Emmi Group in 2005 as head of Group Controlling and designated successor to the group’s chief finance officer at that time. Since 2006, in his role as chief finance officer with responsibility for the finance and controlling, legal and tax departments, he has played an active role in supporting Emmi’s development and internationalisation, developing further the instruments required to manage the group’s finances and in building up a strong team of skilled professionals.

He will continue to carry out his duties as chief finance officer of Emmi Group until the end of May 2012. An announcement regarding his successor will be made at the appropriate time.

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Arla Foods UK Begins Construction on £150 Million Dairy


Arla Foods UK has commenced building work for its £150 million fresh milk dairy in Aylesbury. Work started on site on 6 February 2012, and is expected to take 75 weeks to complete.

Once completed, the dairy will process and pack up to one billion litres of milk per year. The project is being 100% funded by Arla and will provide a £20 million annual wages bill, which will have a positive impact on the local economy. It will also create 700 new jobs and up to 1,000 construction jobs over the next 18 months.

“We are delighted to be underway with the development of this new dairy. We have ambitions for it to be the world’s first zero carbon fresh milk dairy, which will help Arla achieve its growth ambitions in the UK,” says Peter Lauritzen, chief executive of Arla Foods UK. “The new facility will create a platform for the company to grow its fresh milk business, allowing us to deliver our UK growth strategy.”

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Attractive But Unbalanced Outlook For Global Dairy Market


The global dairy market will offer strong growth prospects in the coming five years, but the uneven spread of this market expansion and an era of elevated pricing will create as many challenges as opportunities for key players along the dairy supply chain. This is one of the key conclusions coming from the Rabobank Food & Agribusiness Research and Advisory report, ‘Global Dairy Outlook: Show me the money’.

Rabobank forecasts that the global dairy market will expand at 2.4% pa over the next five years but that growth will be unevenly spread, generating some important market dynamics.

Growth will be highly skewed to emerging markets, with countries like China, India and South East Asia expected to account for more than 80% of market volume growth, while western markets continue to mature. Supplying these growth markets, many of which are already in supply deficit, with safe and affordable milk in coming years will require considerable advancement on many fronts: including the development of safe domestic supply chains in emerging markets and the expansion and marketing of surplus production in export regions. “Tapping into emerging market growth will present a particular challenge for many of the world’s dairy processors, most of which are domiciled in, and still focused on, the EU and US markets,” points out Tim Hunt, global dairy strategist for Rabobank.

Opportunities will also be uneven across product categories. In particular, economic, demographic and dietary trends are likely to see cheese sales underperform the broader dairy market. With sales of higher end whey product set to track a much faster growth path, the strategic value of whey pools is rising rapidly. “The divergence of cheese growth and whey demand represents a major structural shift in the market, and justifies a re-evaluation of ingredient production and sourcing strategies,” he explains.

Rabobank forecasts that solid market growth, supply constraints and a structural shift in the costs of producing milk will sustain high milk and dairy commodity prices over the medium term. But this will not translate to increased profits for all.

The processing sector is confronting enormous challenges from high and volatile input costs, difficult economic conditions and retail power. In general the processing sector has managed to maintain or improve their margins, through a combination of stripping costs, trading to higher value-added products and passing through cost increases to consumers. But experience has varied greatly by sector, with Fast Moving Consumer Goods (FMCG) players like Nestle and Danone faring well, cheese makers also improving their returns, while liquid milk players and major Chinese processors have seen their returns decline.

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