Background on Grupo Lala and its Significance
Grupo Lala, a Mexican food manufacturer specializing in dairy products, has announced its ambitious plan to triple the per capita consumption of dairy in Mexico and expand its business in the United States, despite uncertainties surrounding tariff policies. With a rich history spanning 75 years and being present in 97% of Mexican households, Grupo Lala is a significant player in the dairy industry. The company offers a wide range of products under its well-known brands, such as Lala and Nutri, through nearly half a million points of sale and a sales force of 19,000 people.
Current Dairy Consumption Situation in Mexico
Currently, the per capita consumption of dairy in Mexico stands at 30.5 liters, falling short of the 90 liters recommended by the World Health Organization (WHO). Grupo Lala’s Vice President of Marketing for Dairy, Javier Pejito, acknowledged this challenge: “The dairy category has been contracting for the past decade, reaching 30.5 liters per capita… Today, WHO recommends consuming 90 liters; we’re taking almost a third of that. It’s a massive challenge that we’re comfortable tackling.”
Strategic Initiatives to Boost Dairy Consumption
- Product Innovation: Grupo Lala plans to invest in product development to meet the challenge of increasing dairy consumption.
- Consumer Engagement: The company aims to connect with consumers and dispel myths surrounding dairy consumption by emphasizing its health benefits, such as protein and calcium content.
- Promote Consumption Outside the Home: Currently, 95% of dairy consumption occurs at home, mainly during breakfast. Grupo Lala seeks to encourage dairy consumption in other settings, considering the growing time consumers spend outside their homes.
U.S. Expansion Strategy Amidst Tariff Concerns
Grupo Lala’s strategy for the next five years includes further expansion in the United States, capitalizing on the growing Hispanic market and product innovation. The company’s current product portfolio primarily consists of yogurt and cream, which they plan to expand. Rosalina Tornel, Grupo Lala’s Vice President of Marketing, stated: “Our business is heavily based on yogurt and cream. We will continue to work on expanding our product line, as there is a geographical opportunity we’ll address in the coming months and years.”
Tornel also mentioned that they are evaluating “the correct ways to possibly bring certain innovations” due to tariff pressures from President Donald Trump’s policies. Despite these challenges, Grupo Lala maintains a strong foothold in the U.S. market with its relevant product offerings.
Financial Performance and Market Position
Grupo Lala’s sales grew by 8% in the first quarter of this year, reaching 26,388 million pesos, surpassing the 5% growth reported in the previous year. More than 80% of their sales originate from Mexico, with over 55% of revenues coming from milk and related products, accounting for 80% of total sales.
Key Questions and Answers
- What is Grupo Lala’s goal regarding dairy consumption in Mexico? Grupo Lala aims to triple the per capita dairy consumption in Mexico from the current 30.5 liters to the WHO-recommended 90 liters.
- How does Grupo Lala plan to achieve this goal? The company intends to invest in product innovation, engage consumers, and promote dairy consumption outside the home.
- What is Grupo Lala’s strategy for expansion in the United States? Grupo Lala plans to capitalize on the growing Hispanic market and introduce new dairy product innovations, while navigating tariff uncertainties.
- How has Grupo Lala performed financially in the first quarter of 2023? Grupo Lala’s sales grew by 8% in the first quarter, reaching 26,388 million pesos.
