Dairy Crest said this morning (11 February) product launches and promotions have helped improve the performance of its struggling spreads brands, Clover and Country Life.
In its interim management statement, Dairy Crest said since the launch of Clover Simple – made with no artificial ingredients – in September the brand has grown volumes year-on-year. Meanwhile, Country Life volumes were up “markedly” in the third quarter thanks to increased promotional activity built around new “best of British” packaging.
As a result, Dairy Crest was able to report all of its four key brands – also including Cathedral City and Frylight – increased or maintained value share in the third quarter. “Combined sales of Cathedral City, Country Life, Clover and Frylight over the nine-month period have remained broadly in line with the same period last year and volumes have increased by 2%,” the company reported.
Dairy Crest also revealed the proceeds from the sale of its liquid milk division to German dairy group Muller are expected to come in at the lower-end of expectations after a challenging trading period. Proceeds of the transaction are subject to “certain adjustments” and are expected to come in at the lower end of the GBP40-50m (US$47.7-51.2m) guidance before working capital adjustments. After working capital, Dairy Crest said it anticipates proceeds before costs to total around GBP30m.
Updating on the progress of its investment in Davidstow, Dairy Crest said production of demineralised whey powder and galacto-oligosaccharide (“GOS”) has started. “These are both ingredients for the growing, global infant formula market which will give Dairy Crest access to new growth markets and customers,” the UK dairy group stressed. The company took 100% control of Promovita Ingredients, its GOS joint venture, indicating the importance the group places on the ingredients side of its business.