Infant nutrition is the whey for Dairy Crest

Against a backdrop of lower sales for its four key brands, Dairy Crest in the UK says it will concentrate on making demineralised whey powder at its Davidstow creamery. “This is a base ingredient for baby food – a rapidly growing market with significant potential. We are currently finalising the necessary investment required to move this forward and are talking to several prospective partners,” according to the company.

However, the firm also reports that profits are in line with expectations, and “against strong comparatives and in a tough consumer environment, sales of two of our four key brands, Cathedral City and Clover, increased in the quarter ended 30 June 2013 compared to the quarter ended 30 June 2012. Both these brands outperformed their respective markets.”

Frijj and Country Life fared less well: “Sales of Country Life spreadable were flat, however Country Life block sales were significantly lower as we chose to promote less following recent cream price increases. As planned we have also scaled back FRijj promotions while we upgrade our capacity and capability. This will allow us to produce different formats and pack sizes and remove constraints on meeting promotional demands.”

Dairy Crest CEO Mark Allen says, “The profitability of our dairies business continues to improve towards our 3% medium-term target.” Cost reductions of £20 million are planned for this year, and higher returns from cream have also enabled the company to pay farmers more for their milk.