Dairy Crest, the UK’s largest dairy group, is to continue investing behind its five key brands over the next 12 months.
The company, which owns brands including Clover butter, Cathedral City cheese and Frijj milkshakes, has increased spending on TV advertising by 50% in the current fiscal year.
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The group said yesterday (2 February) that sales of its five key brands, which also include Country Life butter and St Hubert Omega 3 spreads, were up 10% in the nine months to the end of December despite “tough prior-year comparatives”.
A Dairy Crest spokesman said the company wanted to “maintain” its TV advertising spending in fiscal 2010/11 although he declined to reveal how much the business would invest.
The continued focus on brands comes as Dairy Crest pushes ahead with plans to “minimise” its dairy commodities business.
The group’s total revenues over the nine months to the end of December dipped 1% due in part to lower commodity sales but the spokesman said the company wanted to scale down that side of the business.
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By GlobalData“We buy 2.5bn litres of milk and less than 5% of that goes into commodity products. You can’t eliminate commodities entirely – when you make cheese, you get whey powder – but we are trying to minimise it. It’s not what we’re good at – what we’re good at is brands,” he said.
Dairy Crest reported that pre-tax profits were “slightly” ahead of expectations, partly due to the growth in branded sales but also due to cost control.
In a further move to reduce costs, the company has identified “potential efficiency savings” at its spreads site in Kirkby.
The spokesman said the plant employed around 120 staff but declined to comment on the future for jobs at the site.
