“The highlight of the first quarter of 2017 for Grupo LALA was the acceleration of organic sales, which contributed to a total sales increase of 18% versus the first quarter last year,” Grupo Lala CEO, Scot Rank, said.
The company’s “Other Dairy Products” category, which includes yogurt, cream, cheese and desserts, grew by 38.6% to nearly $260m in Q1 2017. The milk category also experienced positive gains increasing 11.4% to $478m, up from $430m in Q1 2016 and now accounts for 61.3% of total sales.
The growth of the milk category “was fueled by an overall good performance in our portfolio and in particular, by the introduction of LALA 100 in Mexico,” the company said.
Operating income decreased 19.5% to $70m, compared to the first quarter of 2016, this contraction was attributed to an increase in operating expenses, due to the integration of business in Central America and the US.
Drinkable yogurt drives LALA US growth
Grupo LALA started its US business after acquiring Laguna Dairy, announced in May 2016, for $246m, which included three production plants and more than five brands.
In Q1 2017, net sales of LALA US were driven by the expansion of the company’s drinkable yogurt business and the performance of Borden Dairy’s drinkable yogurt products under the LALA brand in July 2016.
The overall yogurt drinks category grew 62% in the past five years, reaching $893m in 2016.
“Yogurt drinks are becoming increasingly popular among US consumers, and as adoption of the yogurt drinks segment grows, so too does innovation,” Beth Bloom, senior analyst, US Food & Drink at Mintel, said.