Farmer-owned food and agricultural cooperative Land O' Lakes announced a $30 million advertising campaign to strengthen its position as a leading brand of consumer dairy products, reports Reuters.
President and CEO Jack Gherty told the cooperative's 81st annual meeting in Minneapolis, US that the move is part of the firm's efforts to grow and remain competitive in a changing food industry.
"When we look at how big we are as a food company, and look at how both competitors and customers are consolidating, we're going to have to grow," Gherty said. "If we look at what we have to have to win long term, we're going to have to be a bigger company."
Land O' Lakes is the 21st largest food company, with 2001 sales of $6 billion (€6.89bn) and earnings of $71 million (€81.54bn). In 2001 the coop returned $47 million to its members.
Strategies to grow the company include improving sales of its branded dairy products, as well as development of new products. Gherty said the firm is working on new products that it hopes to introduce over the next three to five years. In 2001 the coop had dairy food earnings of over $50 million.
Gherty said while the company is not yet prepared to detail other growth strategies, one logical area would be to increase its market share in dairy case cheese products.
He said that while Kraft Foods dominates the dairy case cheese market, there are other brands that have only three to four percent of the market.
"We think there is a role for somebody to be the consolidator of some of those other brands", he said. "You may do that through joint ventures, you may do that through acquisition. Other than Kraft, Land O' Lakes is the strongest brand in the dairy case."
The company has also begun test marketing branded brown eggs in the northeastern US. Gherty said that while Land O' Lakes is not making any health claims, the chickens are being fed a special diet free of antibiotics.