Dairy Crest looks to innovation as adjusted profit grows

Dairy Crest revenue dropped in 2016, but adjusted profit before tax rose by 5%.

UK company Dairy Crest Group plc has published its preliminary results for the year ending March 31, 2017.

While revenue dropped from £422.3m ($551m) in 2016 to £416.6m ($543m), adjusted profit before tax was up 5% to £60.6m ($79m). Profit before tax dropped 11% to £40.3m ($52.5m) from £45.4m ($59.2m) a year earlier.

Overall revenues from the company’s four key brands were down 6%, which Dairy Crest attributed to the deflationary marketplace for more than three quarters of the year. 

Volume growth in Frylight (23%), Clover and Country Life spreadable was offset by declines in Country Life block butter, and Cathedral City cheese.

GOS growth

Mark Allen, chief executive, said the company has continued to make progress in its demineralized whey operations at Davidstow.

“We are now hitting our targeted level of infant formula grade,” Allen said.

“Developing our sales of demineralized whey and galacto-oligosaccharide (GOS) into the high-margin global infant formula market will be a key priority this year. At the same time, we will continue our research into other potential animal and human applications for GOS.”

Dairy Crest said it has met its target of 80% of its whey being of infant formula grade.   

It added that in partnership with Fonterra, the company is building sales relationships with infant formula producers for both GOS and demineralized whey, and strong growth in sales of these products during the coming year is expected.

The research and development program for GOS in animals has broadened, and during the year Dairy Crest signed an agreement with Danisco Animal Nutrition, part of DuPont. 

Trials are now under way in this partnership to will provide research into the benefits of GOS in the animal husbandry industry.


The company said its innovation center on the Harper Adams University campus, which opened in late 2015, is contributing to the target of 10% of annual sales coming from innovation.

In 2016, with the re-launch of Clover with 'no artificial ingredients', Dairy Crest said it achieved 13% of sales from innovation during the last three years.

Other innovation in dairy included the launch of a new Cathedral City snack bar range; relaunch of the Cathedral City spreadable range; a new coconut variant of the 'Dairy Free' Vitalite range; and agreed a partnership with Fowler Welch Coolchain Ltd, a logistics specialist, to maximize the throughput at Dairy Crest’s Nuneaton distribution and warehousing site.

Related News

Cathedral City went through a recent rebranding and packaging, and is doing well for Dairy Crest, which has announced adjusted profit before tax of £19m for the six months ending September 30, 2016.

Dairy Crest profits up

Dairy Crest says that its outlook for the year remains unchanged, and that its trading in the first quarter of 2016 was in line with expectations.

Dairy Crest trading ‘in line with expectations’

Cathedral City was expected to suffer a small volume decline in the first half

Dairy Crest’s key brands to deliver volume growth

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