Ice Cream Race Escalates as Nestle Takes Bigger Stake in Dreyer's

Caption: Former Senators George McGovern and Bob Dole unveil the new "got breakfast?" poster, which will be distributed to schools nationwide to help foster participation in the School Breakfast Program.

Ice Cream Race Escalates as Nestle Takes Bigger Stake in Dreyer's

When the Dreyer's-Nestle merger was completed in 2003, the two companies said the combined company would continue to operate under the Dreyer's moniker. But now it's Nestle.

Last month a unit of the Swiss food giant purchased more stock in Dreyer's Ice Cream Holdings, giving Nestle a 90% stake. As a result, Nestle said it has now achieved "clear global leadership" in ice cream sales, with more than 17% of the world market.

Nestle's claim takes into account a January agreement to buy Greek ice cream firm Delta and the completion of full ownership of Oakland, Calif.-based Dreyer's.

The world ice cream market is estimated at more than $40 billion.

Nestle says it has a 23.2% share of the U.S. market, the world's largest per-capita consumer of ice cream.

Nestle chairman and chief executive Peter Brabeck said the moves were part of "a long-standing strategy to achieve leadership in the world's largest ice cream market," and that he wants to raise profitability in the sector to an "appropriate" level.



Shullsburg Creamery to be Sold

Wisconsin cheesemaker and distributor Shullsburg Creamery is on the sales block a year after completing a major upgrade of its facilities. Located in Shullsburg, Wis., less than an hour west of Monroe, Shullsburg is a 70-year-old company that makes and markets American and Italian style cheeses.

Last December the company placed its five separate holdings in receivership. That move came just a month after it shut down a modern cheese factory.

An attorney handling the process said Shullsburg planned to maintain its cheese marketing business and other operations while seeking a buyer.



BRIEfly...

Dreyer's Plant Closing

Dreyer's says it will close its Commerce, Calif., plant in late April and move its operations to the newly expanded facility in Bakersfield. Ninety-nine employees will be affected by the closure, most being offered positions in other locations, including Bakersfield, where a $100-million expansion was completed last year.

Campina in Alaska

Netherlands-based dairy firm Campina has bought an 8% stake in publicly listed Alaska Milk Corp. Alaska began its operations in 1972 through Holland Milk Products, Inc., a partnership between Holland Canned Milk B.V. and General Milling Corp., focusing on local manufacture of high-quality milk products.

Ice Cream Hot

Baskin Robbins has announced plans to open 8 to 10 more stores in the United Arab Emirates. The company and its Middle Eastern partner currently operates 71 stores in the UAE alone, and around 230 outlets across the Arab nations known as the GCC.

Ice Cream Cold

From Moscow, where Russians are shivering through record cold temperatures, the country's ice cream makers are rubbing their hands with glee, according the news service Reuters. The extreme cold weather has allowed ice cream makers to save money on refrigeration, while Russians are continuing to wolf down record quantities of sorbets and sundaes.

Ring My Bell

Kefir maker Lifeway Foods, Inc. began the New Year with its top executives presiding over the closing bell ceremony of the NASDAQ stock market on Jan. 4. Lifeway is celebrating its 20-year anniversary in 2006.



DFA Makes Appointments

With new President/CEO Rick Smith at the reins, Dairy Farmers of America, Inc., has announced a new management structure effective immediately. Several veteran executives have been promoted or will serve in new roles.

John Wilson will serve as senior v.p., marketing and industry affairs. David Geisler is now senior v.p., legal and administration. Mark Korsmeyer now serves as president, Dairy Food Products Group. Joel Clark is senior v.p., accounting, and David Meyer now serves as senior v.p., finance.

"These senior managers understand the needs of dairy farmers, know the dairy business, are strategic thinkers, and are capable of expanded managerial roles," explained Smith, who became DFA's pres./CEO on Jan 1.

"Working with our dairy farmer board of directors, they will help to refine DFA's business plan with the goal of maintaining our financial stability and integrity, and maximizing the income of our 22,000 member-owners," he added.



Bravo, Jasper Sign Co-packing Agreement

With a distribution and stakeholder agreement in place with Coca-Cola Enterprises, Florida-based flavored milk specialist Bravo! Foods has signed a new agreement with its bottler, Jasper Products, LLC, of Joplin, Mo. The agreement lasts through 2010 and will allow Jasper to expand production capabilities as Bravo ramps up orders of its Slammers™ flavored milk products. Bravo paid a one-time equipment mobilization payment of $2.7 million to Jasper. The agreement incorporates per unit monetary penalties for both unused capacity by Bravo and any production shortfall by Jasper.

Swiss Company Partners with Roth Kase

ZURICH—Emmi AG, the listed Swiss dairy group, is entering into a strategic partnership with the Wis. cheesemaker Roth Kase Ltd. to strengthen its position in the North American market over the long term. Emmi will take on a minority stake in Roth Kase. Financial details were not disclosed.

"Emmi has been active for several years as an importer of Swiss cheese in the most important market outside Europe and aims to use this cooperation to further consolidate its market position," it said.



Producers Eye 2007 Farm Bill

As Congress prepares to begin work on the 2007 Farm Bill, dairy producers are preparing their wish list for lawmakers. Jerry Kozak, CEO of the National Milk Producers Federation, says producers have been meeting around the country to set priorities, with discussions ranging from ways to maintain a farm-level safety net to product standards, trade policy and health and environmental regulations.

"To the extent that we can achieve a consensus on these topics, we will then pour all of that effort into a document that we can then present to Congress and to the USDA. That consensus document will be our wish list for our policymakers as they devise the Farm Bill," Kozak said in his monthly CEO letter to members.

Kozak admits the current environment is more challenging for producers than in years past. The 2002 Farm Bill, he says, was generous to producers because the federal treasury was flush with cash. That's hardly the case now. Congress, he says, will also have to keep an eye on World Trade Organization negotiations, and whether those talks will ultimately have some bearing on U.S. domestic agriculture policies. That said, Kozak urges producers to think big.

"Rather than worry about what the budget deficit or the WTO will do to the future of farm policy, what we in the dairy producer community need to concern ourselves with right now is what we want out of the 2007 Farm Bill. Christmas may be past, but the list-making season is still before us."

Who needs government subsidies in order to sell U.S. dairy products overseas? That's what dairy processors are asking after breaking down the numbers on U.S. exports. According to the International Dairy Foods Association, U.S. dairy exports jumped 35% in 2004 and rose another 15% last year. Dairy imports were up too, but at a much slower pace.

"Importantly, since early 2004, these exports have been prompted without U.S. government subsidies through the Dairy Export Incentive Program," IDFA said in an analysis of the figures.



Dairy Executives Gather in California

More than 400 dairy industry executives from across the country came together last month to talk about the state of the industry at IDFA's Dairy Forum in La Quinta, Calif.

IDFA Pres./CEO Connie Tipton, gave her annual address, and Rick Smith, the new chief of Dairy Farmers of America kicked off the event as keynote speaker.

Tipton's address was built on the theme of a new generation of leadership in the industry.

"The dairy industry is extremely lucky to have Alan Bernon, who is now leading the Dean Foods Dairy Group, Rick Smith, new CEO of DFA, who we heard from last night, and Chris Policinski, new head of Land O'Lakes," Tipton said. "These are three seasoned dairy veterans, strong business leaders and just plain smart guys. We will all benefit from their leadership." Look for more coverage in our March issue.



Kellogg, Viacom Sued Over Ads

A Massachusetts court is being asked to prohibit cereal maker Kellogg and media conglomerate Viacom from marketing nutritionally poor food to audiences made up of more than 15% of under eight year-olds. Two parents in conjunction with the Center for Science in the Public Interest filed a suit saying the Kellogg ads which appear on Viacom's Nickelodeon channel offer a message that conflicts with the proper nutritional education children receive from their parents.

Supervalu, CVS Buy Albertson's

Albertson's Inc., has agreed to be sold for about $9.8 billion in cash and stock to a group led by Supervalu Inc. and CVS Corp. Idaho-based Albertson's said last month the transaction is valued at $17.4 billion.

Albertson's, the second-largest U.S. grocery company with chains including Acme and Jewel-Ocso, has lost sales to upscale and discount grocers and seen Wal-Mart Inc. move into many of its markets. Minnesota-based Supervalu, owner of the Save-A-Lot and Shop 'n Save discount chains, will become a major player in the grocery business as it adds more than 1,100 stores in urban markets such as Chicago. The deal will give CVS, which bought 1,100 Eckerd locations in July 2004, 700 more outlets mostly in California, the largest U.S. market.



Bel/Kaukauna Moving to Chicago

Cheese manufacturer Bel/Kaukauna USA, will relocate its corporate headquarters from Little Chute, Wis., to the Chicago suburbs. The maker of Laughing Cow®, and other brands, will continue to employ approximately 200 people at its plant in Little Chute. Thirty corporate executives and staff members will move in order to be closer to Bel/Kaukauna USA's customers and sales force.

New DHS Spot Filled

Last month the Department of Homeland Security swore in George Foresman to the newly created position of Under Secretary for Preparedness.

Foresman will manage the nation's preparations for a range of emergencies including terrorist attacks and natural disasters, as well as oversee efforts to protect such critical infrastructures as the food supply.

"We look forward to working closely with Under Secretary Foresman in our ongoing efforts to ensure the security of the U.S. dairy industry," said IDFA V.P. and Counsel Clay Detlefsen, who attended the swearing-in ceremony at the invitation of Foresman. "His experience as an emergency manager will be crucial as DHS moves forward in its reorganization."



Supervalu Unveils Discount Organic Chain

In an earnings statement a week or so before announcing that it had succeeded in its second attempt to buy Albertson's Inc., Supervalu announced plans to open a new chain of discount food stores specializing in organic and natural products.

The first store in the chain, Sunflower Market, opened last month in Indianapolis. The Sunflower stores will carry 8,000 to 12,000 items, about one-fourth the number in a typical big-box grocery store.

The flagship store features organic dairy products from local Traders Point Creamery, and a French Meadow Bakery and Café. Located in Indy's trendy

Broad Ripple neighborhood, the store hosted a grand opening with specials that included organic bananas at 49 cents a pound.



Supplier News...

Global ingredient company Tate & Lyle has completed acquisition of the U.S. specialty food ingredients company Continental Custom Ingredients. CCI is a leader in dairy stabilizers and emulsifier systems and works closely with customers to develop ingredient systems for the North American market. CCI also has expertise in beverage flavors and vitamin and mineral fortification. CCI will now trade as Tate & Lyle Custom Ingredients.

Danone Canada Inc. has signed a trademark license agreement to include the MEG-3® brand in marketing its omega-3 enhanced yogurt products. Last month, Danone launched Cardivia® a fat-free yogurt product, with the MEG-3® brand omega 3, from Ocean Nutrition Canada.

Taiyo, a manufacturer of Green Tea polyphenols, says that its Sunphenon® manufacturing facility, as well as its line-up of Sunphenon green tea bases achieved USDA Organic Certification by the Organic Crop Improvement Association International.

Master-Bilt, manufacturer of a full line of premier commercial refrigeration systems, is moving deeper into the ice cream market with the introduction of several new gelato and ice cream cabinets. The company recently introduced the American-made GEL series gelato case, and an enhanced version of its Deluxe Ice Cream Dipping/Display Merchandiser, now available with optional rear service doors.

Krofta Technologies, an Ecovation company, now has Multifloat DAF (dissolved air flotation) wastewater treatment units available for rent. Offering an alternative for situations that only require short-term use, the units are engineered to be installed in a wide variety of industrial or municipal applications.

D.D. Williamson, Louisville, Ky., has acquired natural color manufacturer Dinesen Trading Co., Port Washington, Wis. The acquisition will broaden the range of food and beverage color products available from D.D. Williamson, already the world's largest and oldest manufacturer of caramel color. D.D. Williamson will operate Dinesen's color manufacturing facility in Wisconsin as the central source for its expanded natural colors operation.

Stahlman Group, Concord, N.H., is expanding its engineering and design operation and relocating to a new facility in Concord, after recently having merged with Barry-Wehmiller Design.

ETCETERA...

A recent consumer study on white milk preferences by Food Perspectives, Inc. shows high levels of preference for aseptic milk as compared to pasteurized milk. Sponsored by Tetra Pak, the test aimed to disprove existing perceptions that consumers would react negatively to the taste profile of aseptic product. Aseptic milk scored relatively well throughout the study. Steam-injected aseptic skim milk represented the biggest opportunity as it demonstrated several benefits over the pasteurized equivalent.

Yarnell's Ice Cream Co., Searcy, Ark., is honoring that state's only professional basketball team with a limited edition carton that includes an offer for $2 off Arkansas RimRockers ticket prices. Yarnell says it is Arkansas' only ice cream company.

Having just last month acquired the Italian cheese and salami group, Galbani, French privately-owned Group Lactalis has now surpassed Arla Group as the largest dairy company in Europe. Lactalis and Galbani will have annual combined sales of 7.1 billion Euro ($8.61 billion), compared with Arla Foods' 6.3 billion Euro ($7.6 billion).

IDFA is through March 15, accepting applications for the third annual Dairy Industry Safety Recognition Awards. Award winners will be honored on April 26 during IDFA's Plant Operations Conference in St. Louis. Visit www.idfa.org for more information.

To take advantage of the traditional diet season, the Milk Processor Education Program (MilkPEP) held its "Wake Up to Weight Loss" retail promotion last month. Consumers will be encouraged to include milk at breakfast and then "milk their diet" all day long.

A federal antitrust trial against Dairy Farmers of America may begin in late May. A U.S. District Court judge in Lexington, Ky., set May 22 as a tentative trial date in the case. DFA is defending Justice Department allegations that its partial acquisition of a dairy company in Kentucky stifled competition for school milk contracts.

American Harvest Baking, a national distributor of artisan breads and dessert specialties, based in New Jersey, has introduced a line of customized, made-to-order gelato, ice cream and sorbet called Bellissimo.



Grand American Series Cup driver Matt Mullins said last month that Skinny Cow Fat-Free Milk had agreed to sponsor his car in the Rolex 24, the series opening race at the Daytona International Speedway, Jan. 26-29. The sponsorship is the first for Skinny Cow, which is produced and marketed by Dean Foods.