Decline in U.S. fruit juice, private label hurts Lassonde in Q3
Private brand beverage supplier Lassonde Industries saw a drop in U.S. private label sales drive a lower performing third quarter of 2021.
The Canadian company is a leader in private label juice in the United States but for the third quarter reported that plants experienced slower production rate given scarce labor and higher sales volume of national brands in the U.S., per the company. For the first nine months of 2021, sales totalled $1,405.3 million, down 4.1% from $1,465.9 million in the first nine months of 2020.
For the third quarter, sales totalled sales totalled $469.3 million, down $25.9 million or 5.2% from $495.2 million in the same quarter a year ago.
The company's operating profit for the third quarter of 2021 totalled $25.4 million, down $14.6 million from $40 million in the same quarter last year. Lassonde said the decrease came mainly from a lower gross margin realized by U.S. operations, explained by a decrease in sales of private label products, which had an unfavorable impact on the allocation of manufacturing overhead to product costs and by an increase in the cost of certain inputs, the company said in its report.
"While demand for our products remains strong, the company has been facing shortages in labor and supplies and in the availability of raw materials. The combination of these factors has slowed productivity and our ability to fully meet demand,” said Nathalie Lassonde, CEO and cice-chair of the board of directors of Lassonde Industries Inc. “Like the other companies in our industry, we are being hit by inflationary pressures that are affecting transportation costs as well as the cost of inputs. I would like to thank our teams, who have been sparing no effort to meet the needs of our customers and to make the necessary adjustments to minimize impacts on our profitability.”
The 2021 third-quarter profit totalled $17.2 million, down $9.2 million from $26.4 million in the third quarter of 2020. For the first nine months of 2021, profit totalled $56.7 million versus profit of $77.6 million in the first nine months of 2020.
Lassonde Industries is a North American leader in the development, manufacture and sale of ready-to-drink juices and drinks marketed under brands such as Apple & Eve, Everfresh, Fairlee, Fruité, Graves, Oasis, Old Orchard, Rougemont and Sun-Rype. Lassonde is the largest producer of fruit juices and drinks in Canada and one of the two largest producers of store brand shelf-stable fruit juices and drinks in the United States. It is also a major producer of cranberry sauces.
The company also produces fruit-based snacks in the form of bars and bites and develops, manufactures and markets specialty food products under brands such as Antico and Canton. Lassonde also imports and markets selected wines from various countries and manufactures apple ciders and cider-based beverages.