news brief Thursday 18th September 2014
Market watch
By Chris Walkland, who also does market analysis for the Provision Trade Federation and British Dairying.
Can we call the bottom of the market? The take home message today is simple: we may have reached the bottom of the market but it’s a tentative assessment still, and the bottom has been pretty low. No one is predicting a speedy climb out and it might get worse at farmgate level before it gets better. There is, at least, some good news for this market report. But it’s far from great news. That would come if commodity prices had turned and started to rise again. They haven’t done that, but some may - just may – have stopped falling. Have we reached the bottom of the market? Well some traders are calling it, and at Tuesday’s Global Dairy Trade auction overall prices didn’t change at all, with the index static and WMP and SMP slightly up. Don’t let that deceive you, though: UK / EU SMP still fell in price – from $2735 to $2565.
EU SMP
Nevertheless the Dutch dairy quotations reacted in a fairly positive way. Although butter fell another €50 to €2850 (£2260 equivalent), WMP and SMP didn’t fall at all. Whey powder increased. After what has happened in the market recently most sellers will view all that in a positive light, but won’t be getting remotely excited yet.
EU traders are also eagerly awaiting the outcome of the major Algerian powder tender, rumoured to be between 50,000 and 60,000 tonnes. They believe that the EU is in pole position to snap up the lion’s share of the SMP element of this contract because of our low prices and the value of the Euro against the Dollar. If they are right then the mood of the market will shift positively again. Does this stabilisation mean farmgate prices won’t go down any further? Alas, due to the lag effect between market prices changing and it appearing in the farmgate price there is no guarantee that there won’t be further reductions from some buyers before the end of the year. And we still don’t know how great the effect on the Russian trade ban will be on the cheese market – suffice it to say that there is a lot of downward pressure.
Quark’s out of home market debut
2014 AGM
The eating “Out of Home” market currently accounts for £75bn of food sales in the UK and this is expected to grow to £100bn by 2015. Our innovation pipeline has been developing foods which tap into this growing sector, that includes restaurants, bars, casual dining outlets, coffee shops & sandwich retailers. Our naturally fat free and high in protein Lake District Dairy Co. Quark has won new customers as caterers look to tap into the longterm ‘healthier eating’ trend.
First Milk at Tour of Britain
Our sales team has secured a national listing for natural Quark with the UK’s leading foodservice supplier, Brakes, who has major customers including restaurants, pubs, hotels and caterers. The is a national deal for our Glenfield site, and will allow Brakes’ customers, from chefs to caterers, around the country to create healthier and more nutritious dishes for their consumers.
Driving sales through consumer media As our naturally low in fat cooking sauces make their first appearance in over 300 Sainsbury’s stores, and having been made available to over 2,500 Nisa local stores, we are working to support the listings by promoting the product to consumers in the national media. Readers of the Daily Mail will have spotted The Lake District Dairy Co. Garlic & Herb in the publication’s ‘New Out This Week’ column, and also online here.
The Board has decided that in line with our efficiency drive on all business costs, we will not have a conference and dinner around the AGM this year. We will simply have a members AGM with no invited guests. A venue is now being sought at minimal cost that will involve no overnight accommodation expenditure. As soon as a suitable available venue is identified, this will be notified to members.
Last week the country’s biggest professional bike race, Tour of Britain, travelled round the country in 15 stages, attracting thousands of fans who lined the race route. Our lifestyle nutrition brand CNP and dairy nutrition brand Lake District Dairy Co. were on sale throughout the race to keep crowds fuelled during the days. The week-long event was an opportunity to introduce and sell our ranges to an increasing number of UK cycling fans.
News from our innovation pipeline Last week we informed you about the newest products from our Team Sky Breakfast Range; a new raspberry & blueberry flavour of high protein smoothie, and new breakfast pots which utilise our naturally fat-free Quark from Glenfield. Both are now available in Tesco stores around the UK, and went down a storm with consumers during the Tour of Britain. We continue to work with Team Sky to develop the range, targeting the timepressured and health conscious consumers who are looking for a convenient, nutritious breakfast option. We’ve now introduced three high-indairy protein porridge pots to retailers (right), available in Original, Apricot and Super Fruits flavours. This gives retailers another format to offer consumers, and will be available on shop shelves soon.