Food Business News - August 16, 2011 - (Page 41)

DAIRYBUSINESSNEWS Conditions remain difficult for August 16, 2011 Dean Foods a multi-decade trend of flat to slightly declining volumes. This is the result of declining per capita consumption, somewhat offset by population growth. As a result of the recession and rising inflation, however, we are now two years into accelerated category declines in fluid milk. Industry-wide, fluid milk volumes were down 1.9% in the quarter, a steepening decline from prior periods and the worst quarterly decline since 2007. This is on top of a year-ago quarter that was down 1.5% for the industry. “With the economy continuing to struggle and dairy commodity prices expected to remain high, we have little Continued on Page 42 Food inflation combined with declining consumer demand for fresh milk remain a concern DALLAS — Dean Foods Co. lost $51 million in the second quarter ended June 30 after it took a $131 million charge related to settling litigation brought on behalf of a class of dairy farmers in various Southeastern states, the Dallas-based company said Aug. 4. While the litigation charge had an immediate effect on company earnings, the economy and emerging consumer trends may have a longer term effect on Dean Foods. The second-quarter loss compared with net income of $45 million, equal to 25c per share, in the previous year’s second quarter. On an adjusted basis, second-quarter net income was $32 million, or 18c per share, which compared with $53 million, or 29c per share, on an adjusted basis in the previous year’s second quarter. Dean had second-quarter net sales of $3.3 billion, which compared with $3 billion in the previous year’s second quarter. Dean attributed the sales gain to the pass-through of higher dairy and overall commodity costs that were offset partially by lower volumes at Fresh Dairy Direct-Morningstar. “In many ways, the second quarter of 2011 is a continuation of the trends we have seen over the last several quarters,” said Gregg Engles, chairman and chief executive officer. “WhiteWave-Alpro again posted strong results, and Fresh Dairy Direct-Morningstar continued to make progress toward profit stability against a backdrop of weak industry volumes. We continued to execute our plan to drive costs out of the business, and progress in this area has been solid.” Second-quarter operating income for Fresh Dairy Direct-Morningstar decreased 21% to $116 million from $147 million in the second quarter of the previous year. Volume weakness across the portfolio offset progress toward the company’s cost-reduction initiatives. Second-quarter net sales for Fresh Dairy Direct-Morningstar rose 12% to $2.8 billion from $2.5 billion thanks to the pass-through of higher average commodity costs. “With widespread food and energy inflation stressing consumer pocketbooks, many Americans are finding areas to cut back even in consumer staples like dairy,” said Mr. Engles on Aug. 4 in a conference call with financial analysts. “We see the impact of this belt-tightening manifested in declining intra-month volumes that reflect the transfer payment and pay cycle. It is also apparent in the performance of customers that derive larger portions of their business from this consumer segment. “The fluid milk category has been on August 16, OODBUSINESS NEWS 41 F 2011 ® April 41 FOODBUSINESS NEWS 26, 2011 ®

Table of Contents for the Digital Edition of Food Business News - August 16, 2011

Food Business News - August 16, 2011
Ralcorp to buy Sara Lee refrigerated dough business
Whey protein’s emerging mass appeal
Gluten-free labeling in the spotlight
Web Contents
Editorial - Search for insights in P.&G.’s farewell to food
Nestle profi t down in fi rst half of year
Sara Lee income up sharply in year
Pilgrim’s Pride’s second-quarter earnings plunge
Snyder’s-Lance swings to loss in quarter
Consumers taking active role in beverage trends
Cargill recalls 36 million lbs of ground turkey
Consumers more concerned with fat, calories than HFCS
Investment group partnering with Kettle Cuisine
Smart Balance purchases gluten-free food company
Sunsweet acquires Function Drinks
Kraft's big Split
Additional amicable separations
Ralcorp to buy Sara Lee refrigerated dough business
Ralcorp net down on impairment charge
F.D.A. warns Lazy Larry brownies are unsafe
Cott income climbs 19% in second quarter
Lower salad volumes contribute to loss at Chiquita
Restaurant Performance Index above 100 in June
Cost and taste remain barriers for functional foods
Sugar prices strong as supplies tighten
Gluten-free labeling in the spotlight
Health and wellness remains at the heart of oil innovations
Inside the guar gum bubble
Use hydrocolloids to save on costs
Dairy Business News
Conditions remain diffi cult for Dean Foods
Dean Foods suffers loss after litigation charge
Whey protein’s emerging mass appeal
Adding ethical value
Dannon adds Greek Oikos to portfolio
Caribou adds ‘Grown-up Grilled Cheese’ to menu
Beech-Nut to co-brand baby food with Mott’s
Earth’s Best expands Sesame Street line
Popchips introduces jalapeño variety
Kettle Brand launches reduced-fat chip line
Tropical fl avor line extends beyond familiar
SunOpta completes purchase of juice company
Spicetec names director of marketing
Carton protects fragile products
GPC hires scientist, sales representative
F.D.A. has no objection to krill oil’s GRAS status
Birko to buy maker of washing, pasteurizing systems
Ingredient Markets
Ad Index
Food Business in the News

Food Business News - August 16, 2011