Grupo LaLa Q2 sales bump shows continued market value for dairy products

By Mary Ellen Shoup contact

- Last updated on GMT

In the past year alone, LaLa has acquired and launched new products including its yogurt smoothie line, Promised Land Milk, and Skim Plus milk and creamers.
In the past year alone, LaLa has acquired and launched new products including its yogurt smoothie line, Promised Land Milk, and Skim Plus milk and creamers.

Related tags: Grupo lala, Milk, Dairy product

Grupo Lala reported an 8.9% quarterly increase in net sales closing at $684.8m (12,903m pesos) for its second quarter, largely driven by sales of its non-dairy products and strong continued growth of its dairy segment. 

LaLa’s product mix is divided into three segments: milk, other dairy products, and beverage and others, all of which saw an increase in quarterly sales.

"During the first half of 2016, our focus on the four strategic priorities, allowed us to achieve important accomplishments,” ​Scot Rank, CEO of Grupo LaLa, said.

“A solid top-line growth, the agreement to acquire the branded business of Laguna Dairy to enter the US market and the strategic agreement with Florida Bebidas Company for the production, distribution and sell of LaLa products in Costa Rica.”

Dairy still king, but non-dairy grows

Milk product sales account for 62.8% of the LaLa total sales and for the second quarter saw a net sales increase of 6.2% totaling $430.3m (8,109m pesos). The next largest sales segment is “other dairy products”​ (i.e. cream, butter, cream-based spreads, yogurt, cheese, and ice cream) which comprises 31% of the company’s total sales at the end of the second fiscal quarter with $212.1m (3,997m pesos) in net sales. 

LaLa_salesbysegment

In February 2016, LaLa introduced its first-ever national media campaign promoting the launch of the company’s drinkable yogurt smoothies. LaLa Yogurt Smoothies were launched nationally in the US in major grocery retailers such as Walmart and Kroger, and more than doubled its distribution of the product a few months later.

The third segment in the company’s product mix, “beverages and others,”​ encompasses tea, juices, cold cuts, and other income, and represents the smallest segment of the company’s sales at 6.2%, but has seen the most quarterly growth, rising to $42.3m (797m pesos) – 21.9% increase in sales.

‘Value-added’ expansions and acquisitions

Rank also credited the company’s continued growth to its strategic business deals including the acquisition of Laguna Dairy​ for $246m. The deal is in line with Mexico City-based Grupo Lala’s strategy of expanding in value-added branded categories in high-growth markets across the Americas.

Lala acquired Laguna’s entire branded portfolio which includes products in high-growth segments such as mainstream drinkable yogurt under the Lala and Frusion brands and speciality milks under the Promised Land and Skim Plus labels.

The acquisition also included three production plants and at least five brands, and will provide a local platform to expand the presence of Lala’s Mexican product line to the large US Latino segment, the company said.

Additionally, the company’s expansion into Costa Rica​ under its strategic partnership with Florida Bebidas Company has increased its distribution network and strengthened its regional presence, another goal of the company, Rank said.

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