February 7, 2011


Dairy Crest sees 2011 sales growth from new products



Dairy Crest Group PLC said Friday (Feb 4) it wants 10% of 2011 sales to come from new products, amid tough financial conditions driven by higher raw material costs.


Chief Executive Mark Allen said Dairy Crest had been working on a number of new products during the past three years which he expected to substantially contribute to sales.


"We have a very strong pipeline of innovation," he said.


The company, best known for its Cathedral Cheese and Country Life Milk brands, said it was witnessing the return of the doorstop milkman following growth in its home delivery service, milk and more.


"For the first time in 20 years we have seen depot sales growing," Allen said.


The increased cost of milk, driven partly by high farming costs, had put pressure on finances, said Allen, who added the company was also vulnerable to the volatile price of commodities.


Fuel oil is used in Dairy Crest's product packaging, and the firm uses vegetable oils in its range of butter and margarine spreads.


He said his preference was to avoid increasing the cost of the final product, but rather drive down costs. The company has introduced an internal internet tendering system aimed at driving down the costs of basic company supplies, including mechanical parts and stationary.


"The most important thing is that we recognise that the consumer is going to go through a tough time and we do as much as we can to minimises the impact," he said.


Allen said he isn't overly concerned about gloomy economic outlook for 2011.


"We make very good, high-quality, everyday, products that offer value for money and if we carry on doing that, and continue to look at our cost base, we should be in a good place whatever happens to the economic conditions," he said.