Grupo Lala’s Q2 shows growth in US premium products

By Beth Newhart contact

- Last updated on GMT

Grupo Lala has been setting its sights on more premium products, like Promised Land's high-protein and high-calcium milk.
Grupo Lala has been setting its sights on more premium products, like Promised Land's high-protein and high-calcium milk.

Related tags: Grupo lala, Yogurt, Milk, financial report

Mexican dairy producer Grupo Lala's 2019 second quarter sales netted 14,467m pesos ($758m) in Mexico, a 3.9% increase from Q2 2018. The company cited “innovation and an improved mix” of its ‘value-added dairy’ offerings as reason for the jump.

Premium milk, cheese, cream and yogurt saw single-digit increases, while the company’s plant-based products saw triple-digit increases. The non-dairy items now have the second largest share in the Mexican market.

Grupo Lala also noted a ‘softening in consumption’ overall in Mexico, flat milk volume and double digit decreases in soft drinks, which lessened its volume across the country.

Mauricio Leyva, CEO of Grupo Lala, said, “The virtuous cycle is in place and starting to deliver results, albeit lower than expected topline growth in Q2. Productivity initiatives are fueling resources for our premiumization and value-added growth strategies in Mexico, allowing us to invest more in innovation and categories like premium milk and plant-based beverages.

"We have started to see signs of profitability recovery, as well as a strengthened working capital, setting the path to deleverage the business and increase value for our shareholders.”

In the US, Grupo Lala reported 860m pesos ($45m) in net sales, a 1.6% growth over last year. The Promised Land milk brand remained steady in the US, while its drinkable yogurt declined by double digits.

The company attributed this to an overall slow-down in the yogurt category growth and more focus on “a more profitable geographic and channel footprint.”​ The Central American market grew 4.4%, netting $710m pesos, driven by expansion in Guatemala and Nicaragua.

Grupo Lala said it has been setting its sights on more premium products since posting disappointing mid-year numbers in 2018, like the Promised Land's high-protein and high-calcium milk.

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