WhiteWave CEO: ‘Our almond business is quickly approaching the size of soy’
Speaking on the firm’s Q1, 2013 earnings call, CEO Gregg Engles said North American sales of WhiteWave’s Silk branded plant based foods and beverages grew 13% in the quarter.
He added: “Within the category, almond continues its torrid growth at over 55% … Our almond business is quickly approaching the size of soy and enjoys a similar margin structure.”
We are building the Silk brand to be synonymous with plant based beverages
WhiteWave - which sells plant-based products under the Silk brand in the US and the Alpro brand in Europe - also holds a 67% share of the rapidly growing US coconut milk category, said Engles.
“We are building the Silk brand to be synonymous with plant based beverages and we believe that we can continue to drive its robust growth.”
Recent launches Silk Iced Latte, a non-dairy ice coffee, and Silk Fruity and Creamy nondairy yogurts, have both received “good retailer acceptance and current distribution levels are in line with expectations”, he said.
New products will include light almond milk variants, he said. “This line will have the same great taste as original silk pure almond with a third of the calories.”
Has soy milk usage ‘stagnated’?
Asked by one analyst whether soy milk usage has “basically stagnated”, Engles said: “We no longer think about it as the soy milk business.
“We think about it as the plant based alternative to dairy category or plant based beverage category…The category has gone from being… a mid-single digits grower [in 2009] to being a 20% grower. Right now it's on pace to be 14-15% grower this year.”
They’re not leaving soy because they don’t like it. They're leaving it because they like almond better
And while some people are leaving the soy milk category, they are not exiting plant-based beverages and desserts altogether, he said.
“They are leaving the category and they are going to almond or to coconut or to one of these other choices. They are not just leaving soy; they are moving to another dairy alternative beverage, which we happen to provide.
“They’re not leaving soy because they don’t like soy. They're leaving soy because they like almond better.”
Capacity increase
Asked about production capacity for almond-based products, chief finance officer Kelly Haecker said: “We have taken our almond milk production from no internal capacity when we launched at the beginning of 2010 to now being 100% internally produced.
“Staggered over the balance of 2013 and 2014, we plan to add six new filling lines to plants throughout our network which should increase our production capacity by over 20% once all lines are fully operational.
“This additional capacity is essentially the equivalent of adding one new manufacturing facility which will allow us to produce more volume internally at lower cost but will also increase the efficiency of our distribution and warehousing network.”
Spinoff from Dean Foods ‘just a couple of weeks away’
With the firm’s spinoff from former parent Dean Foods “just a couple of weeks away”, said Engles, WhiteWave is well-positioned to grow as a standalone company.
“Our North American segment sales increased 10% in Q1 led by strong double digit growth in our plant based beverages and coffee creamers platforms.”
Alpro, WhiteWave’s European plant-based food and beverages platform, also performed well in the first quarter despite the weak economy, with sales up 7%, driven by strong growth in almond, hazelnut and rice beverages, he said.
