PARIS — The challenges WhiteWave Foods’ Earthbound Farm business has faced in the past few years have been overshadowed by successes elsewhere within the company. The rapid growth of the plant-based food and beverage categories combined with the acquisitions of Vega and Wallaby Yogurt have given the executives leading Earthbound the breathing room needed to focus the business for future success.
The businesses sales performance fell 2% to $567 million between fiscal 2014 and 2015. Blaine McPeak, chief operating officer, speaking June 14 at the Deutsche Bank dbAccess Global Consumer Conference taking place in Paris, cited three reasons for the sales decline, most notably challenging weather conditions that affected the supply of organic leafy greens; the exit of some lower margin businesses, including fresh fruit; and the transition to SAP in the fourth quarter of 2015 negatively impacted shipping efficiencies.
|Blaine McPeak, c.o.o. for WhiteWave|
“Now, while establishing the right supply chain and the right systems created some short-term sales headwinds, we believe these are the right foundational decisions to support the long-term growth potential of this business,” Mr. McPeak said. “Sales grew sequentially in the first quarter of 2016 as we continue to optimize our shipping and customer service levels.”
Mr. McPeak called the fresh category “one of the fastest growing areas in the store” and added that WhiteWave Foods has a strong foothold in the category with the Earthbound brand.
“The category has grown at a compound annual growth rate of 15% since 2011, over two times the rate of the total packaged salad category,” he said. “This strong growth has put the organic segment at 23% share of the overall salad category. That’s up from 17% in 2011. We continue to grow usage occasions through innovation. And in organic packaged salads, we’ve launched a new cooking series, various salad mixes, as well as new flavor blends.”
The new products include cooking vegetable blends, slaw blends and flavorful salad blends.
To further extend the businesses growth potential, WhiteWave Foods has pushed the Earthbound brand into the organic frozen category.
“The organic frozen category has grown nearly 40% over the last year, and this organic segment continues to have low penetration at just 3% of the total frozen category,” Mr. McPeak said. “We plan to leverage WhiteWave’s strong commercial capabilities with Earthbound’s fresh expertise to generate more innovation and growth for this brand.”
Products within the organic frozen business include kale, pineapple chunks and a smoothie blend featuring kale and berries.