FRANCE: Isigny Sainte-Mere eyes infant formula growth
French dairy co-op Isigny Sainte-Mère, better known for its AOC butter products, is eyeing further growth in its own-label infant formula business, especially in Asia.
The company, which has two sites in Normandy producing butter, cheese, cream and fromage frais, supplies milk powder to baby-food makers for infant formula.
The milk powder element of Isigny's business has grown in recent years and export director Stephane Plessis told just-food this week that it will continue to grow and further boost the co-op exports.
In 2009, some 43% of the co-op's EUR178.4m turnover was generated by milk powder for infant formula.
The balance of sales was made up by Isigny's signature dairy products but Plessis predicted: "It will be fifty-fifty in ten years."
Plessis said further growth of Isigny's private-label infant formula business would drive export growth in the years ahead. Exports account for 35% of Isigny's turnover, with milk powder sold largely to Asia and the co-op's cheese, butter and cream sold to markets like the UK, Germany and the Benelux.
However, Plessis said Isigny would target growth in Eastern Europe - two months ago, it entered the Russian market - in the Middle East and in the US.
He cautioned that the worldwide economic crisis was still affecting consumer behaviour but said companies like Isigny could benefit from the switch to eating at home.
"From what I can see all over Europe, we are still in the middle of crisis. It will still be there until 2011," Plessis said. "[But] people still want to treat themselves and, if they want to have guests at home, they will have a premium product."
With sterling weak against the euro in the last 18 months, there have been concerns that Isigny's powerful retail customers in the UK could squeeze the co-op's margins.
Plessis acknowledged that 2009 was "tough" but said the co-op had managed to secure price increases.
"In any relationship, you have to find a win-win situation. The retailers understand. When there is a big difference [in the exchange rate], they understand that we have to change prices."
In 2009, Isigny booked a group net profit of EUR1.5m, against a net loss of EUR6.5m in 2008, when the bottom line was hit by soaring commodity costs.
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