Fourth quarter 2015 net sales, for the three months ending December 31, 2015, increased by 8.2% year on year. Gross profit in the same period increased by 14.3%, to reach $286.6m (4,911m pesos).
Gabriel Fernandez, CFO, Grupo LALA, said, “For the complete year, LALA net sales grew by 7.1% to close at $2.64bn (48.2bn pesos).”
The increase in sales was primarily due to the pricing strategy implemented, to the increase in volumes as a result of the business and sales strategies, and to non-organic growth from the acquisition of Eskimo S.A., and the operation of new categories in the portfolio.
Dairy products perform well
The report showed that milk segment sales (including dairy beverages and powdered milk) grew 6.3% in 2015 compared to 2014, to $1.8bn (31.4bn pesos). Other dairy products, including cream, butter, yogurt, cheese, ice cream and desserts, saw a 13.3% rise, to $770m (14.2bn pesos).
Beverage (including tea and juice) sales dropped by 11.6%.
Scot Rank, Grupo LALA´s CEO, said, "2015 was a year of many challenges, but also of significant achievements, it was a year when LALA was able to prepare to face the future, maintaining the solid results that define us.”
Looking forward to 2016
He added, “With the right approach and strategies, during 2016 we will keep delivering results that reiterate the commitment towards distribution of value for all of our interest groups.”
Looking to 2016, Fernandez said that, “Cheese and yogurt categories were the fastest product lines during the year, and we have room to grow in both categories in 2016 and beyond.
“We are also growing our milk business via many strategies, including upsizing.”
Opportunities for growth
Rank also noted that 2016 provided many opportunities for LALA.
“Today, we believe that the opportunity to grow in Mexico is bigger than originally expected,” Rank said.
“The full opportunity that we see in the market is to grow sales in higher value category, like yogurt, cheese and cream, via innovation that captures the trend toward healthier lifestyle.
“We have seen that the Mexican consumer is increasingly focused on healthier and more nutritious food alternatives, and this is great news for the dairy industry, and LALA in particular.”
Central America investment
He said that accelerating organic growth in Mexico was important.
“To achieve this, we will be expanding our installed capacity and developing our portfolio through customer focused innovation. You will see new product, new packaging, an enhanced go-to market execution, and some ground-breaking customer solutions in 2016.”
Rank said that LALA plans to expand and consolidate its Central America operation, through recent acquisitions and a new production complex in Nicaragua.
He added that in the last three years, LALA has invested close to $150m in the region.