Dairy Crest Revenue Up 16%, Despite Butter Decline
Dairy Crest has seen double-digit growth in revenue for the six months up to 30 September 2017, compared to the same period last year, according to the group's interim results.
The British dairy company saw revenue grow by 16% to £220.1 million, with profits up 8% to £20.6 million.
This was driven in large part by the strong performance of Cathedral City cheese and Frylight oil, both of which grew by 10% in volume. The company's Clover spread grew by 2%.
“We have had an encouraging first half, with Cathedral City, Clover and Frylight delivering good growth in both volumes and value. Cathedral City, the nation's favourite cheese, continues to go from strength to strength and has produced exceptional growth over the period,” said Mark Allen, chief executive of Dairy Crest.
Overall, Dairy Crest’s four key brands (Cathedral City, Frylight, Clover, Country Life) grew 4% in volume growth and 6% in value during the period.
The growth was hampered by Country Life butters, which decreased in volume by 14% due to sharp rises in cream prices
The wholesale cream price rose by 65% to almost £3.00 per litre over the twelve months to 30 September, although it has fallen again over the past few weeks.
“We have delivered good profit growth despite a record high cream price, which has a temporary but significant impact on input costs in our butter and spreads business,” said Allen.
The company expects the cream price to remain high for the second half of the year and it says it will continue to manage its butters business accordingly.
A Whey Forward
Dairy Crest expects to accelerate sales in demineralised whey and the prebiotic galacto-oligosaccharide (GOS) in the second half of the year, in partnership with New Zealand dairy cooperative Fonterra.
The Kiwi group recently bought a stake in Columbia River Technologies, which it hopes will help meet the growing demand for whey protein.
The company is helping Dairy Crest in securing a customer base in the infant formula market. However, the British dairy company notes that stringent testing and auditing that potential purchasers undertake, along with the impact of regulatory changes in China, have meant it is taking longer than originally expected to deliver new customers.
Beyond infant formula markets, the British company continues to research the impact of GOS in a number of trials. It is also looking at additional sales opportunities in markets where prebiotics are already established, such as adult nutrition and pet food.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.