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Land O'Lakes Dairy Foods addressed many challenges in 2002. Low commodity prices and issues in our industrial businesses caused Dairy Foods to under-perform financially. In spite of these challenges, there were many bright spots which should serve as a strong base for better performance in the future.
Foodservice had a record-setting year in volume. Significant growth came from two segments of the Foodservice business: full-service restaurants and school management channels. Fresh Buttery Taste™ Spread was launched in 2002. This new product was a repositioning and reformulation of the Spread with Sweet Cream product. Fresh Buttery Taste™ Spread was formulated to provide consumers with great taste and improved spreadability. Excellent volume results have been realized and the product is well positioned for 2003. The Deli Cheese business unit had strong financial performance and continued to take actions to strategically position this business for future growth, such as the development of 16 new products to be launched into the market.
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INTRODUCTION | HIGHLIGHTS OF 2002 | LETTER TO THE STAKEHOLDERS | DAIRY FOODS AG SERVICES | BOARD OF DIRECTORS | FINANCIAL REVIEW | SENIOR STRATEGY TEAM |
The Value-Added businesses performed well. Overall product volume was up over a year ago. Total retail butter volumes (branded and private label) were up 4 percent. The Butter Team worked successfully with retailers to implement merchandising initiatives designed to increase sales of branded butter during key holidays.
Land O'Lakes continued to capitalize on its strong brand during 2002. Significant progress was made to build the brand under the new "Simple Goodness Living" positioning. This initiative included a redesign of all retail packages, giving the products a consistent look, a targeted advertising and promotional campaign and a new look to the Dairy Foods web site.