Crux of Lassonde

In Canada, A.Lassonde has a 18% share of the fruit juice market followed closely by Pepsiwith 17% and Coca-Cola with 14%. In the U.S, Pepsi and Coca-Cola control roughly 25% of the market while Apple and Eve has ~1.5-2% according to LAS COO Jean Gatusso.

The North American juice industry is facing strong secular headwinds, how can branded manufacturers cope with these shifting consumer preferences:

• One option is to pivot with them by either innovating and developing new products that meet consumer demand for ‘healthier options’ and greater variety

• In the shelf-stable juice category , new products represent $300 mln of annual sales, Lassonde’s emphasis on innovation has let it to capture 25% of new product sales in the past 3 years  
• Lassonde has not diversified its portfolio like Coca-Cola and Pepsi
• RTD tea, sports drinks, energy drinks, and enhanced water categories, which generated 55%-60% of NARTD value sales growth in the US over the last 3-5 years → Coca-Cola and Pepsi have been aggressively acquiring and innovating in these emerging categories

• Another option is to gain a larger share of the shrinking pie

• In Canada, As the largest shareholder, Lassonde, with the brands Oasis, Allen’s, Rougemont, and Del Monte, has seen sales decline in part due to growing competition that’s lead to price wars in parts of the category

• I’ve visited several grocery stores in an attempt to confirm the existence of a ‘price war’ and took note of the fact that Tropicana, Minute Maid, Oasis and  private label juices we’re all discounted 47%, 25%, 40% and 25% respectively to bring their prices in line with $2.99/carton.

• Lassonde notes in their recent annual reports that “the competitive environment in Canada remain challenging and the company does not see any signs of competitive activity diminishing”
• → show trend of declining national brands sales
• LAS is seeking to limit the impact through national brand product innovation and continued private label customer development.
• Use apple&eve platform to introduce Canadian brands to U.S

• which put him up against some of the biggest beverage companies in the world whose marketing/sales/brand capabilities were clearly superior

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Private Label Penetration

value proposition centres around producing a quality product with large volumes on a limited number of SKUs

need to cater to servicing the needs of their largest customer

be an intelligent follower of consumer trends and keep operations simple and efficient

Private-labels have gained traction in recent years as a growing number of food retailers believe that strong private label programs can successfully differentiate their stores and help them develop customer loyalty. Furthermore, North American grocers are turning to private label purchasing as a means to increase profitability by cutting out braded suppliers. This trend bodes well for LAS who has a leading 50% share of the private label juice market in Canada and 38% in North America.