Saputo Dairy UK is the new name for what was previously Dairy Crest until recently the UK's biggest homegrown dairy producer, managing a portfolio of leading branded products as well as a large foodservice and private label division. It accepted a takeover by Canadian producer Saputo in 2019 that valued the business at £975m. Cathedral City is the UK's best-selling branded packaged cheese by far, almost four times bigger by sales than its closest rival Pilgrim's Choice. Sales for ye Sept 2019 were approx £270m according to Nielsen, or roughly a quarter of the branded cheese sector (and 10% of the whole branded cheese market including own label). It is supported by premium-priced Davidstow, and a portfolio of butters and spreads including Clover, Country Life and Utterly Butterly that make Dairy Crest the local #3 in that segment after Arla and Unilever. Until recently, the company supplied almost a third of the fresh milk sold in national supermarkets, at retail and via door deliveries. However it lost its valuable Tesco contract in 2012, and agreed in 2014 to sell its remaining dairies business, including leading flavoured milk Frijj, to Muller for £80m. It took more than a year for regulatory approval to be granted, at the end of 2015. Milk production had been Dairy Crest's biggest business, but also its least profitable. As a result, revenues have plunged from over £1bn in 2015 to £435m for the year to March 2018, and a net profit of £145m. Cathedral City alone accounts for almost two-thirds of revenues. Mark Allen stepped down as CEO following the Saputo acquisition; he was succeeded by Tom Atherton, previously deputy CEO and group finance director. Dairy Crest evolved from the old Milk Marketing Board established by the government in the 1960s to sell off dairy producers' excess milk. It became an independent company in the late 1980s and has expanded through a series of acquisitions, including St Ivel and the Unigate and Express Dairies businesses.
Capsule checked 29th April 2019
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Adbrands Daily Update 29th Apr 2019: Hot on the heels of its acquisition of UK-based cheese producer Dairy Crest, Canadian firm Saputo strengthened its position in Australia with a deal to acquire the speciality cheese unit of Lion Dairy & Drinks for A$280m (around US $197m). Brands being transferred include South Cape, Tasmanian Heritage, Mersey Valley and King Island Dairy. Saputo established a dominant presence in the Australian market in 2018 with the acquisition of leading local producer Devondale Murray Goulburn. Lion is continuing to look for a buyer for its remaining dairy and juice assets.
Adbrands Daily Update 4th Mar 2019: In an entirely unexpected development, Dairy Crest accepted a buyout by Canadian company Saputo which values the British producer at £975m. Saputo is one of the world's top ten dairy processors in the world, with 62 plants spread across 40 countries. It is the local leader in cheese, milk and cream in Canada, the biggest dairy processor in Australia, and the second largest in Argentina. Saputo sees considerable potential for the Cathedral City brand in North America. The deal means that all three of the UK's biggest dairy companies - Arla, Muller and now Dairy Crest - are foreign-owned.
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