San Ignacio S.A.: ‘We would love the US to be our next export market’

Located in Argentina’s “milk basin”,​ San Ignacio S.A. processes approximately 33.5m gallons (127m liters) of milk annually and 5,300 gallons (20,000 liters) of milk daily, which is then converted into roughly 12,800 tons of dairy products including blue cheese, cream cheese, and dulce de leche. 

San Ignacio S.A. has two plants both located in Santa Fe, one for the production of dulce de leche and the other dedicated to cheese production.

While the company's legacy ​product is dulce de leche, which was first manufactured in 1939, it expanded to include specialty cheese following an acquisition by Laiteries H. Triballat (LHT) of France, which purchased 55% of the Argentine dairy company’s shares in 1997.

In 2013, three Argentine businessmen and local entrepreneurs acquired LHT’s majority stake in San Ignacio S.A.

“When we bought the company, sales of dulce de leche were basically over 90%,”​ Alejandro Reca, managing director of San Ignacio S.A., told DairyReporter.

Now the company’s portfolio has become more balanced with blue cheese and cream cheese products representing a sizeable portion of the product mix, according to Reca.

Eye on exports​

A shifting focus to exports and move to diversify its dairy products have been key drivers of growth for San Ignacio S.A., Reca said.

San Ignacio S.A.'s history of exports began in 1978 when the company made its first shipment of dulce de leche to Germany in 1978 and has expanded its export reach to 22 countries and in 2016.

Sales of exports reached approximately US$3m (ARS 45m) in 2016, the company said.

To gain “legitimate”​ export capabilities to the UK and EU, San Ignacio S.A. obtained certification from the British Retail Consortium (BRC) and made sure its processing plant was certified according to EU specifications.

San Ignacio also has the ability to export to other markets including, Bolivia, Chile, Cuba, Paraguay, Russia, and has been “pre-approved” ​to begin exports to China where premium dairy products have risen in popularity among consumers.

“We are very eager to start exporting to China,”​ Reca said. “China is all about consumption and that’s what we think will really expand our production.”​

San Ignacio S.A. products also have a slight presence in the US market where, but the company is intently looking to increase its brand recognition among American consumers.

“We would love the US to be the next export market. We are in Whole Foods on the East Coast and we are looking into Costco,”​ he said.

Response to consumer health trends​

Turning to its domestic market, the company has seen sales of its cream cheese product rise as Argentine consumers are looking to replace butter.

“There’s a big move to replace butter with cream cheese,”​ Reca said. “It’s fair to say that cream cheese consumption is increasing in Argentina and every dairy company is getting into it because it’s also a nice margin.”​

San Ignacio S.A.’s cream cheese products come in no-salt and low-fat varieties.

The rising sugar-reduction trend has also been on the company’s radar and a sugar-free version of its flagship dulce de leche product is also available.

Production efficiency ​

Along with its export ambitions, San Ignacio S.A. has plans to invest in a more efficient production line and expand its manufacturing facilities.

“We are looking into the purchase of a small drying facility that will allow us to mitigate operations,”​ Reca said.

With a move to increase production and a focus on expanding exports, San Ignacio S.A. is targeting 8.5% year-over-year growth in exports for the 2016-2017 period.