Grupo LALA continues to post steady gains in Q3

24-Oct-2016 - Last updated on 25-Oct-2016 at 21:30 GMT

During its quarterly earnings call, Grupo LALA credited the growth of its yogurt category to the success of its US yogurt brand and LALA 100 products.

Related tags Grupo lala Dairy product Milk

Grupo LALA’s focus on nutritious food and beverage products (both dairy and non-dairy) continues to pay off as the Mexican company reported a 12.5% increase in net sales and $2.4m (44m pesos) in profit compared to the same period last year for its third quarter in FY 2016.

DairyReporter previously covered the company’s second quarter earnings when it reported an 8.9% quarterly net sales increase closing at $648.8m.

"2016 has been a year with a strong sales performance, in addition to important challenges resulting from our exposure to exchange rate fluctuations. I remain confident that our business and operational fundamentals are solid, and will enable us to maintain a sustainable and profitable growth,” Grupo LALA CEO Scot Rank said.

Sales by segment

The dairy company’s sales are broken down by three product segments: milk, “other dairy products,” and “beverage and others,” with milk products representing the largest portion of sales at 62.7%.

The “other dairy products” segment includes cream, butter, cream-based spread, yogurt, cheese, and ice cream, and comprises Grupo LALA’s second biggest sales segment at 32%. “Beverages and others” makes up just 5.3% of the company’s product portfolio, but represents the fastest growing segment growing, 19.6% year-over-year dollar sales growth.

Innovation for emerging consumers

Since the introduction of LALA 100 lactose-free milk beverages, the fresh milk category has reached double-digit growth (10.5%) with 85% of the growth coming from LALA 100 products, according to the Grupo LALA third quarter earnings call.

One of the key areas of focus for Grupo LALA is targeting an emerging market with its Nutri Leche brand. The value-added product line has expanded from one SKU (originally launched in 2003) to four SKUs to include Nutri Leche Panela Cheese, drinkable yogurt, and a lactose-free, milk product with 1L carton packaging that does not require refrigeration until after it’s opened.

US yogurt category lifted by drinkable products

While blended yogurt is declining, drinkable is growing by double digits, and LALA US has emerged as the brand leader in adult drinkable yogurt with nationwide presence in major retailers, the company said during its earnings call.

To keep up with the demand for drinkable yogurt, LALA doubled its production capacity at its Omaha, Nebraska, facility.

Yogurt drinks are outpacing blended yogurt at 11.5% year-on-year growth compared to 1.7% for traditional yogurt products.

“Drinkable yogurt represents 9% of the total yogurt category value in the US,” and is still growing, Rank said.