News Wire

February 1, 2004
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News Wire

Kraft Foods Inc., Northfield, Ill., announced it will lay off at least 6,000 employees, or 6 percent of its work force, and close more than 20 plants worldwide over the next three years. An aged-cheddar plant in Canton, N.Y., and a sour cream and cottage cheese plant in Farm­dale, Ohio, are earmarked for closure. The cutbacks follow a year of disappointing sales and a recent leadership restructuring. Fourth-quarter earnings were down 7.4 percent from 2002, but the company made strong gains in cheese due to improved consumption and share trends from its investments in the third quarter. Chief executive officer Roger Deromedi announced a new management structure in January, which closed a 1,000-employee office in Rye Brook, N.Y. Deromedi also created a group to further trim expenses. Kraft operates 18 dairy processing plants in Arkansas, California, Idaho, Illinois, Minnesota, Missouri, New York, Ohio, Pennsylvania and Wisconsin. The company employs about 65,000 in North America and 100,000 worldwide.
State departments of agriculture in New Jersey, New York and Pennsylvania say dairy producers have stopped selling their milk to Parmalat following weeks of late payments. New Jersey dairy producers want their state to step in and help protect them from losses. State agriculture officials agree the $100,000 bond Parmalat pays to do business with 62 of New Jersey’s 130 dairy producers needs to be raised. The bond not been updated in 32 years and changes must come through legislation. In Pennsylvania, a growing number of dairy producers have stopped selling milk to Parmalat’s Brooklyn, N.Y., and Wallington, N.J., plants. In January, Italy-based Parmalat was late on its payments to dairy producers, which the bankrupt company blamed on “issues associated with the transfer of funds through the international banking system.” Syracuse, N.Y.-based Dairy Marketing Services, which sells 40 percent of the North­east’s raw milk, began to require advance payments from Parmalat in early February. A recent audit found Parmalat’s debt for the first nine months of 2003 was $17.9 billion, not the $2.3 billion it had previously reported. Parmalat’s U.S. headquarters are in Wallington, N.J.; the company operates six dairy processing plants in Wallington and West Caldwell, N.J.; Brooklyn, N.Y.; Atlanta; Decatur, Ala.; and Grand Rapids, Mich.
“Dairy Counts in 2004,” the new political action campaign (PAC) of the International Dairy Foods Association (IDFA), calls for greater political participation by dairy processors and their employees during election year. IDFA’s PAC encourages the dairy industry to get voters to the polls, pooling resources to support business-friendly candidates and ensuring that elected officials know where the industry stands on key dairy policies such as expanding school milk sales and fighting the dairy compact program. IDFA will organize a voter registration and education drive for member-company employees.
Work began in early January on Southwest Cheese Co.’s new $190 million cheese and whey products plant in Clovis, N.M. The 300,000-square-foot plant will produce cheddar cheese blocks and is expected to open in late 2005. The manufacturing facility is a joint venture between Glanbia, the Irish-based dairy company with U.S. headquarters in Twin Falls, Idaho; Dairy Farmers of America, Kansas City, Mo.; and Select Milk Producers Inc., Artesia, N.M.
Members of Kansas City, Mo.-based Dairy Farmers of America (DFA) support the USDA’s proposal to terminate the Western Milk Marketing Order, which oversees fluid milk marketing from producers to processors in Idaho, Utah, Oregon and Nevada. Federal Order 135 would end effective April 1. Without approval, the order no longer complies with the Agricultural Marketing Agreement Act of 1937, so the USDA must take action toward termination. According to DFA, USDA’s proposals “did not go far enough in correcting the gross inequities caused by pool riding and other issues related to servicing and balancing the Class I marketplace.”

After two requests for federal mediation, a bargaining session was scheduled for early February with WestFarm Foods and Teamsters Local 66 in the ongoing labor dispute at the Seattle-based processor. A King County judge issued a second temporary restraining order to limit picketing at WestFarm plants in Seattle and Issaquah and at corporate headquarters in Seattle.

Smart Messages

IDFA conference promotes marketing to consumers’ health concerns
Dairy weight-loss messages, dairy benefit health claims and food-service growth opportunities — these are some of the biggest issues facing the industry today, and all will be discussed at the International Dairy Foods Association’s (IDFA) SmartMarketing conference.
Smart Marketing 2004 will be March 16 to 18 at the Astor Crowne Plaza in New Orleans. The three-day event will focus on three main areas: weight-loss marketing, foodservice channel development and new research on dairy benefits and consumer behavior.
This year, Smart Marketing’s main thrust will be what is potentially the single largest volume sales opportunity in dairy’s history: weight-loss marketing. Timing is everything, and IDFA says the time is right to promote the connection between dairy consumption and weight loss. Emerging research suggests a link between daily dairy consumption and lower body weight. Weight loss has always been a concern of consumers, but research now shows they’re actually doing something about shedding those extra pounds. For the first time since 1998, Americans overall have actually lost weight.
As consumers’ eating habits change and they seek out healthy food choices, the dairy industry must be ready to develop and market healthier products. The conference will explore the dairy industry’s opportunity to be top of mind with consumers when making healthy weight-loss choices. Topics to be discussed include the latest scientific research, consumer insight and examples from marketers who have capitalized on weight-loss opportunities. IDFA will also give details on how dairy processors can obtain the new dairy weight-loss license and its importance.
Weight loss is obviously a consumer concern, but how can dairy processors enter the health claim game? What can be legally stated on packaging, shelves and in advertising? There’s a lot of positive nutrition research available to help remind consumers that dairy products are an essential part of a healthy diet. Research suggests daily dairy consumption may play a role in preventing high blood pressure, osteoporosis and colon cancer. Sessions will examine these issues along with Food and Drug Administration and Federal Trade Commission regulations.
As soy milk muscles its way into school cafeterias and milk programs, the dairy industry needs to reexamine declining school milk consumption. IDFA will introduce a major new initiative designed to make milk a positive experience for students and a better business for dairy processors and school customers. Sessions will look at opportunities for improving the milk experience from the lunch line to a la carte to vending machines.
Developments for dairy in foodservice will also be discussed, identifying new ways milk, cheese and yogurt can fit into restaurant operations.
The annual spring fluid milk sales kickoff meeting will include advertising, public relations and promotion plans for the National Milk Mustache “got milk?” campaign for the second half of 2004. IDFA will also unveil its first national promotion for the Healthy Weight with Milk initiative.
Keynote address speakers include Jared Fogel, national spokesperson for the Subway sandwich chain; and Richard Coad, creator of the “Jared” Subway campaign. Fogel will share his famous weight-loss story and Coad will reveal how Jared helped Subway become the largest franchiser in the United States, edging out McDonald’s in 2003.
Other SmartMarketing sessions will cover the low-carb revolution and implications for dairy; the competitive landscape of health claims and what other food and beverage makers are saying; changes in weight loss marketing; understanding the facts behind the 3-A-Day marketing campaign and making a compelling argument for including dairy in a weight-loss plan; consumer reaction to dairy weight-loss claims; and ways to build a credible marketing campaign.
The annual Achieving Excellence Marketing Awards luncheon, scheduled for the last day of the conference, will honor the dairy industry’s most innovative marketers as the most creative and effective advertising and marketing programs are named. Categories include cheese, cultured dairy, fluid milk, frozen novelties, ice cream, ingredients and processing/
packaging equipment. The contest is sponsored by IDFA and Dairy Field magazine.
For more information on Smart Marketing 2004, contact Tanika Manning at tmanning@idfa.org or (202) 220-3557.

Product & Promotion News
San Diego-based Dairy Council of California brings a live cow to elementary schools with its interactive CD-ROM “Dairy Detectives,” which outlines the origins of milk and dairy to students in kindergarten through sixth grade. Inspired by the council’s popular Mobile Dairy Classroom, the CD-ROM follows a brother and sister as they take a virtual field trip through Dairy Day at the state fair, teaching the facets of dairy production and value of dairy foods. Students learn how milk is processed, how to care for cows and the ecological benefits of dairy farming with segments such as “Milk from Cow to Container,” “How Do They Make Cheese?,” “Cow Care,” “Maximizing Resources” and “Processing Plant.” The council’s four mobile classrooms reach more than 200,000 California students annually, and the CD-ROM will help meet high demand for the program both state and nationwide. About 1,800 California schools have been offered free copies of the program and more will be given to 4-H clubs, farm bureaus and other industry groups.
nKemps flavored milk package designs won a Gold Award for Minneapolis-based Compass Design in the 10th Annual Beverage Packaging Global Design Awards. Kemps Strawberry and Vanilla Milk pint-size, shrink-wrapped bottle designs were selected as the world’s best examples of effective beverage design solutions. Compass Designs’ packaging for Kemps Chocolate, 2% and Strawberry milks are featured in “American Corporate Identity, Vol. 19.” Kemps Fat Free, Small Curd and 2% Cottage Cheese are listed in the “Big Book of New Design Ideas.” Kemps is among the brands held by Dallas-based National Dairy Holdings.
Level Valley Creamery, West Bend, Wis., won two Silver Awards at the World Cheese Competition in November in the United Kingdom. Level Valley’s winning entries were Blueberry Cream Cheese in the Soft Cow’s Milk Class and Neufchatel Cheese in the Reduced Fat Class.
Teenagers in Northwest Iowa can now choose milk over soft drinks and juices in their high school cafeterias. The new Iowa Milk Vending & Nutrition Project provides high schools with milk vending machines and educates students about the importance of dairy products in a healthy, well-balanced diet. Vending machines will offer 12-ounce single-serve plastic bottles of skim, 2% and whole milk; 2% and whole chocolate milk; and flavored milks such as strawberry, chocolate milkshake and roasted pecan latte. The non-profit program was created by a small group of Northwest Iowa dairy farmers and will expand with an initial $40,000 donation from Pfizer Animal Health. The program gives participating schools educational materials to encourage students to make healthy food choices and works with foodservice staffs to help them support students in making healthy choices. Fifteen high schools have enrolled since the program began in September.
Dippin’ Dots Franchising Inc. ranked 101st among the country’s top 500 franchised companies in a survey by Entrepreneur magazine. The spot is the highest ranking on the Franchise 500 list for the Paducah, Ky.-based ice cream franchise. The list, released each January, spawns other rankings, including Top New Franchise Companies. On that list, Dippin’ Dots’ ranked fourth in 2004 and 2003, down from first in 2002. Dippin’ Dots sells and establishes retail locations at malls, fairs and festivals and licenses them to sell cryogenically frozen beads of ice cream, yogurt, sherbet and flavored ice.
Wisconsin Dairy Products Association made a $1,000 donation to the Professional Dairy Producers of Wisconsin’s Education Foundation, which provides information on issues impacting the dairy industry, including youth and leadership development, environmental stewardship and biosecurity/food safety. The donation is from proceeds of WDPA’s first World Dairy Expo Championship Dairy Product Contest and Auction in October 2003 in Madison, Wis.
Peanut Butter & Jelly ice cream was named the best kids’ flavor at the National Ice Cream Retailers Association annual meeting last November in New Orleans. The ice cream, one of 15 submitted in this category, was created by Woodside Farm Creamery, Hockessin, Del., which won a blue ribbon for the flavor. Mulberry Street Creamery, Kittanning, Pa., won the white ribbon for its Confetti Gelato. Pineapple Upside Down Cake, formulated and produced by Ashby’s Sterling Ice Cream, Oak Park, Mich., was named the best new ice cream flavor out of 36 submitted. Capturing the red ribbon for its Graham Cracker Gelato was Mulberry Street Creamery; the white ribbon went to Lakeland Confectionery/Ciao Bella, Irvington, N.J., for its Sauza Tequila Raisin ice cream.

With four new cheese classes and an expected 1,200 entries worldwide, the 2004 World Championship Cheese Contest anticipates a healthy competition for its 25th annual event. The contest, hosted by the Wisconsin Cheese Makers Association, will be in March in Madison, Wis. The four categories — colby and Monterey jack, flavored and unflavored spreadable cheese, quesos frescos for Hispanic cheeses and quesos para fundir for Hispanic melting cheeses — round out 40 overall cheese classes. During judging week, contest results will be posted in real time at www.wischeesemakersassn.org. Digital images will be displayed on the Web site and WCMA will broadcast live video of the final championship round.

People on the Move
Processor Suppliers
Comark Corp. — Steve Schott has been appointed president of the Medfield, Mass.-based designer and manufacturer of industrial computer equipment and systems. Schott succeeds Charles Breen, who will continue as chairman of the board. Schott has more than 20 years of technical and operations experience with high-tech companies.
Eurotherm Controls Inc. — Bill Perry has retired as president of the Leesburg, Va.-based automation and controls company. Perry, who will continue as non-executive director for the next several months, joined the company in 1979 and was president for 12 years after serving as applications engineer, regional sales manager and vice president of sales. John Searle, formerly vice president of sales, was promoted to president in January. Al Betz was promoted to vice president of sales; he previously served as regional sales director. Eurotherm is part of the production management division of Invensys plc.
Formost Packaging Machines Inc. — Hap Pool, West Coast regional sales manager, has retired after 18 years with the Woodinville, Wash.-based company. Don Didur, who succeeds Pool, will be responsible for sales in California, Arizona and Nevada.
Orion Packaging Systems — Jean Belair has been named Eastern Canada regional sales manager for the Collierville, Tenn.-based manufacturer of stretch-wrapping systems. He will be responsible for the territory including Quebec and eastern Canada.
Safeline Inc. — Anastasia Snyder has been named special events and promotions coordinator for Safeline Express, the company’s new customized motor coach that serves as a mobile training platform for the Tampa, Fla.-based metal detector manufacturer. Snyder also will plan and coordinate trade shows and launch the company newsletter.
SPX Process Equipment — The Delavan, Wis.,-based company has appointed Stewart Rissley to national sales manager for Premier Mill, Reading, Pa., managing all sales
activities.

R&D Suppliers
Barry Callebaut — The Swiss ingredients company has made two appointments to its North American division. As vice president of gourmet and specialties, Shawn Davis will expand the company’s presence in the foodservice, confectioner and specialty segments for NAFTA countries. Also, Thomas Brown has been named to the newly created position of national sales manager for cocoa and semi-finished products.
Chr. Hansen Inc. — James Dodson has been appointed vice president of sales for animal health and nutrition in the United States for the Milwaukee-based ingredients company. John Lyne has joined the firm as director of technical development for the company’s dairy business, providing technical support to the dairy sales team in both cheese and fermented milk ingredients.
David Michael & Co. — The Philadelphia-based flavors company has appointed Stefanie Katz as human resources specialist and Gerard Giuffrida as maintenance supervisor, both at the company’s headquarters. Eduardo Villagómez Menéndez was named account manager for David Michael de México.
D.D. Williamson — The Louisville, Ky.-based flavors company named Stuart Watson as technical sales manager.

Faces at the Forum

Processors share opinions at the 2004 Dairy Forum

QUESTION: How will the new bioterror regulations affect how you do business?
Gary Hanman, president and CEO, Dairy Farmers of America: “It’s going to be very burdensome on our members on the farm. Farmers generally are open and friendly, and welcome visitors, and this is going to be a 180-degree turn for them from the way they have normally conducted their lives.”
 Mike Reidy, senior vice president of procurement, logistics and business development, Leprino Foods Co.: “We’re hopeful they won’t have a major impact on us. But food security in general has had a pretty significant impact in terms of the care that we have to exercise in how we operate our plants, everything that goes with a more secure environment.”

Jeff Sterne, executive director, All Star Dairy Association: “We have a comprehensive quality assurance program (in which) we’ve incorporated bioterrorism aspects. There’s no doubt the whole idea is being shared by all dairy processors, as well as communications they have with dairy farmers, to make sure their milk is safe.”

Awards Recognize Industry Leaders
Dairy Field honors Tip Tipton among accolades given at 2004 Dairy Forum.
The 2004 Dairy Forum attracted more than 500 industry leaders to Boca Raton, Fla., on January 18 to 21 to discuss the latest issues affecting the dairy business and honor some of their own.  
At an awards breakfast January 19, Dairy Field managing editor James Dudlicek presented E. Linwood “Tip” Tipton with a framed cover of DF’s December supplement commemorating Tipton’s retirement from IDFA. After nearly four decades of service to the industry, Tipton retired as president and chief executive officer of IDFA at the end of last year.
“From his beginnings as an economist and consultant for milk companies in the Northeast to his leadership of the constituent organizations that he successfully united as IDFA, Tipton has proved himself to be a great leader with a special talent for comprehending complex issues and explaining them in a way we can all understand,” Dudlicek said in his remarks before his presentation to Tipton.
Referring to Tipton’s work to launch MilkPEP, Dudlicek said, “Without Tipton, Americans would have milk, but without him, they would have never ‘got milk.’”
The National Cheese Institute (NCI) presented its Laureate Award to Dr. Elmer Marth, professor emeritus of the University of Wisconsin-Madison. This award recognizes individuals who have made significant contributions to the development and growth of the industry. A panel of industry professionals chooses a winner each year based on a person’s long-term contributions to the industry.
C Bar M Dairy, Jerome, Idaho, was honored with IDFA’s Innovative Dairy Farmer of the Year award. Accepting the award was the farm’s owners and managers, Jane and Greg Ledbetter. This award recognizes U.S. dairy producers who apply creativity, excellence and forward thinking to achieve greater farm productivity and improved milk marketing.
At a special ceremony during Dairy Forum, IDFA presented the third annual GRAND Pioneer Award to Wells’ Dairy, LeMars, Iowa, for its outstanding achievements in encouraging and enabling employees to be more active in the political process. IDFA created this award three years ago as part of its Grassroots Action Network for Dairy (GRAND), a program that encourages member companies and employees to communicate with elected officials on legislative policy.
Sessions during the forum dealt with issues including strategies for growth, dairy and weight loss, marketing priorities, dairy proteins and milk versus soy in schools.

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