Dive Brief:
- WhiteWave's Earthbound Farm has struggled with recent sales declines, but the company is confident that it has laid the foundation for long-term growth potential, WhiteWave COO Blaine McPeak said at the Deutsche Bank dbAccess Global Consumer Conference last week.
- Challenging weather conditions, the exit of lower-margin businesses, such as fresh fruit, and moving to SAP in Q4 2015, which hurt shipping efficiencies, have all contributed to Earthbound Farm's 2% sales decline between fiscal 2014 and 2015 to $567 million, according to McPeak.
- However, fiscal Q1 2016 sales "grew sequentially" as WhiteWave continues "to optimize our shipping and customer service levels," McPeak said. Between category growth and a slew of new fresh and frozen products, Earthbound Farm is poised for a turnaround, he said.
Dive Insight:
McPeak said with Earthbound Farm, WhiteWave is well-positioned in the fresh category, "one of the fastest growing areas in the store." Packaged salads offer manufacturers opportunities to appeal to consumers' often competing desires for both freshness and convenience in a RTE meal.
Earthbound Farm has taken the packaged salad concept and added bold flavors in the brand's new line of flavorful salad blends. It's also launching new slaw blends and cooking vegetable blends, which also tap convenience for meal preparation.
But Earthbound Farm isn't stopping at the fresh category. It also has its sights on expanding in the freezer aisle, where it could be a surprise contender for frozen produce heavyweights like Pinnacle's Birds Eye and B&G Foods' Green Giant brands.
The organic frozen category grew almost 40% over the past year, though organic still composes only 3% of the total frozen category, McPeak said. The interest in organic frozen products is there, and low penetration means ample opportunities for Earthbound Farm to become a go-to brand in the category.
Earthbound Farm has armed itself with fresh and frozen innovations that could disrupt already fast-moving categories, just in time to make up for WhiteWave's slowdowns in the growth rate for premium dairy. WhiteWave continues to maintain solid double-digit category growth, but it isn't immune to the dairy segment's challenges.