“Our 10% top-line growth in the first quarter resulted in sales of $91 million, an increase of over $80 million in 2014 even after notable currency headwind and a lower top-line from our Americas fresh food segment” due to extreme weather that damaged produce, said CEO Gregg Engles.
This allowed the firm to raise its full year guidance 2 cents to $1.10 to $1.14 per share for the year, including a negative hit of 6 cents related to a joint venture, he added during the firm’s first quarter earnings call May 8.
The successful launch of Silk Cashew Milk in the U.S. in late 2014 and the firm’s relauch of Silk dairy-free yogurts were key drivers in the firm’s overall sales growth, Engles said.
“We’re very pleased with the recent launch of our Silk Cashew Milk. It has been the fastest distribution build in Silk history with ACV that now stands at over 85%,” Engles said.
Bill McPeak, president of America’s food and beverage, added that while it is still too early to evaluate the full extent of the launch, the repeat purchases and initial trial by consumers of the cashew milk are encouraging and should improve with more consumer education. In addition, the firm plans to roll out vanilla and chocolate flavors, which will further drive awareness.
Excitement around the cashew milk helped WhiteWave Foods' share of the nut-based market increase to 51% and 57% in total plant-based food and beverage. It also helped the firm’s nut-based category grow 18%.
The firm will further develop the presence of cashew-based dairy alternatives with So Delicious cashew milk frozen desserts and coconut toppings, Engles said.
Also in the beverage category, WhiteWave’s coffee creamer business had a strong quarter – up 9% – thanks in part to the launch of Dunkin’ Donuts branded in-home coffee creamer flavors announced in February, Engles said.
The relaunch of Silk dairy-free yogurts also “is going as planned,” and is a significant contributor to the firm’s Q1 sales, but the firm is taking “a bit more measured approach on how we roll out our distribution,” said Engles. He explained that the company is focusing on traditional grocery stores first to allow the firm time to scale up a new yogurt manufacturing facility.
Horizon-branded line extensions boost sales
Horizon Organics also had an “outstanding” first quarter with sales up 15% compared to an 8% increase of the overall organic milk category, Engles said.
Most of the growth came from higher prices due to limited organic supply, but innovations in Horizon-branded shelf-stable snacks also contributed to the top-line growth, Engles said.
“Our Horizon innovation continues to drive a large portion of the growth in the better-for-you mac & cheese, cookies and cracker categories,” Engles said, adding: “Based on these results, we remain committed to building our Horizon brand beyond the dairy case to drive growth and enhance margins in this platform.”
Earthbound sales dip, but remain promising
WhiteWave’s Earthbound Farm Organic segment is the only dark cloud in the quarter and even it has a silver lining related to innovation.
Sales in the segment fell 4% due to weather related declines in organic leafy greens, which also negatively impacted several retailers in the natural channel.
However, Engles said, the organic packaged salad segment remains fundamentally strong and WhiteWave is poised to take advantage of consumers’ interest in healthy eating with the launch of several new salad kits this year.
He noted that the packaged salad category grew 11% in the quarter and the organic sub category grew 14%. This growth so far has continued in the ongoing quarter, according to the firm.
Thanks to successful launches across categories, WhiteWave is “off to a strong start in 2015,” Engles concluded, adding the firm will continue to develop this strategy going forward in 2015 with more product launches, expanded geographic distribution and other opportunities.