Food Business News - Oct 11, 2005 - (Page 1)

FoodBusinessNews October 11, 2005 NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Improved results at Topps Dean Foods finds focus 19 envelope in dairy 22 In his vision of Dean Foods Co. as a company with a growth with the food and beverage industry's leaders, Gregg L. En faced no shortage of obstacles. As chairman and chief executive officer of the nation's larg est dairy company, Mr. Engles sits atop a food industry segment that could be portrayed as the precise opposite of what has popularly become known as an "advantaged category." With a core business in liquid milk, Dean's products have faced a long-term trend of declining consumption. Hardly a consolidated segment with just a few large players, the dairy market is extraordinarily fragmented, and margins are tight. National brands in milk are utterly lacking and the industry's flagship products attract no impulse buying. Notwithstanding these handicaps, Mr. Engles is hard at work shaping Dallas-based Dean into a dairy company that consistently will deliver earnings growth in an 8% to 10% per year range. And he won't be running from the company's heritage dairy business to achieve its growth. "Broadly described, Dean Foods' strategy is to focus on its core businesses - the fluid dairy business, particularly in North America, and its branded business, particularly in the dairy case," Mr. Engles said in August after announcing the company's second-quarter financial results. Dean has made progress toward his objectives, both in Continued on Page 28 Convenience, flight from Atkins dieting drive consumption shifts from 2004 and 10% from July. WASHINGTON - Gains in new convenience-oriented products and waning interest in low-carbohydrate diets were two factors contributing to shifts in food and beverage purchasing decisions in the first quarter of 2005, according to new data from the Economic Research Service of the U.S. Department of Agriculture. Convenience helped drive purchases of yogurt drinks, ready-made salads and bottled water, with gains of 17% for each category, the Department said. Meanwhile, declining pork, poultry, fish and meat were attributed by the Department to "waning interest in low-carbohydrate diets." In calculating changes in volume sold of the major food categories during the first quarter, the E.R.S. used ACNielsen Scanner Data sales estimates from all major retail channels and a wide variety of food products making up most of the food-at-home items purchased by U.S. consumers. The most notable increase in broad food categories occurred in fruits and vegetables, the E.R.S. noted. "Lower fruit prices at the beginning of the year encouraged consumers to increase Continued on Page 15

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Food Business News - Oct 11, 2005