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New products typically deliver higher
sales and margins and we are targeting
the launch of over 50 new products in
2008. While our major focus is on the
chilled meals category and developing
products that add value to the fresh pork
and poultry we process internally, our
innovation activities also include new
packaging ideas and working closely with
our customers to develop exciting new
products that differentiate them with
consumers. Finally, in the face of ongoing
food inflation, we are working with our
customers to prudently raise prices.
5. Expansion in U.K. Bakery.
Our U.K. Bakery business is now
a material earnings contributor and an
important global growth platform for our
Bakery Products Group. Over the past two
years we have quadrupled the size of this
business through acquisitions and organic
growth. With three more acquisitions
in 2007, we further consolidated the specialty bakery industry and expanded
our presence in new markets - premium
hearth and artisan breads. We now have
leading market shares in several specialty
bakery categories including bagels,
croissants, artisan breads and in-store
bakery breads and rolls, supported
by eight plants across England. We
invested $19 million in 2007 to expand
our manufacturing capacity in croissants,
bagels and in-store bakery products
to support market expansion in the U.K.
and Europe. While this business has also
been impacted by the sharp rise in wheat
and dairy input costs, it is mitigating
these influences through a combination
of cost reduction initiatives and
increased pricing. In 2008, the focus will
be on organizational integration, driving
costs out, and tapping into the breadth
of our significantly larger business
to deliver more products and services
to our customers.
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