Horizon Organic Holding Corporation, which claims to be the world's leading producer of organic dairy products, reported record sales and profits for the final quarter and full year 2001.
Sales for the final three months were up 16 per cent to $43.7 million (€50.5m) compared to $37.8 million for the comparable period a year earlier. Net profits were $940,000 compared with a net loss of $579,000 in the same quarter of 2000.
For the year as a whole, sales of $159 million were 25 per cent above the previous year's $127 million, while net profits were more than three times higher than in 2000 at $1.74 million.
"Once again we have demonstrated our ability to achieve sales and earnings growth at the same time," said Chuck Marcy, president and CEO of Horizon Organic. "We exceeded our distribution growth target in the US, and Horizon Organic products are now available in more than 50 per cent of conventional grocery stores. We registered sales improvements in each of our product categories, increased market share for milk and, importantly, were successful in controlling expenses."
Marcy said that fourth quarter results had been boosted by growing consumer interest in the company's ultra-pasteurised (UP) milk and the success of new products. Milk sales increased 20 per cent during the quarter, reflecting the popularity of UP milk with grocery store customers, he said. For the first time, UP milk accounted for more than 50 per cent of the company's milk sales.
Cheese sales were also helped by new varieties and by a stylish new pack design, rising by 79 per cent in the fourth quarter. Customers also responded positively to the company's December introduction of single-serve flavoured milk and initial consumer acceptance has been very strong. In the UK, the introduction of Rachel's Organic butter was well received and contributed to a 32 per cent increase in Rachel's Organic branded sales during the quarter.
Marcy stressed that the company hoped that a number of initiatives put into place during 2001 would help the company further improve its business in 2002, with sales expected to rise by 20 to 25 per cent. These new initiatives include a recent tie-up with Starbuck's, which is selling both Horizon's yoghurt and single-serve milk products, as well as a new advertising campaign and the decision to create a corporate development department to accelerate new business development.
Last year also saw Horizon form a strategic partnership with UK group Dairy Crest, the largest dairy company in the country. This agreement will allow the company to outsource processing to Dairy Crest's new state-of-the-art organic processing facility and also allows the organic group to benefit from the UK group's long-established retail and home customer relationships. Marcy said that the first deliveries of Rachel's Organic branded milk to home delivery customers were made last week.
"Our strong performance in 2001 has given us the resources to launch these new and important initiatives designed to stimulate continued sales and earnings growth in 2002," Marcy said.