Saputo expands US goat cheese capabilities, reports 24.1% revenue growth in Q1 2023

US- Canadian dairy company, Saputo, is streamlining its footprint in the US through a CAD45million (US$35 million) investment to convert its mozzarella cheese facility in Wisconsin into a goat cheese manufacturing plant.

The dairy giant revealed that the converted and expanded goat cheese plant would increase capacity and expand Saputo’s position in specialty cheese categories.

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Many market analysts are noting that goat cheese which is also known as chèvre, is witnessing significant growth in the market owing to its easy digestibility when compared to the cheese derived from other ruminants.

The company said many consumers are shifting to goat cheese over other types because it has a comparatively better mouthfeel, appearance and flavor, as well as being smooth and having a creamy texture.

 The cheese also has the ability to incorporate very well into various food products such as pizza, salads, and even certain desserts.

Fortune Business Insight says 50% of the goat cheese products consumed in the US are imported mainly from France.

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Even as the market for goat cheese is anticipated to be a good investment space, the Montreal-based company has taken another step back.

Saputo plans to close its existing goat cheese manufacturing facility in Belmont, Wisconsin, impacting approximately 200 employees.

Both initiatives will begin in the second quarter of fiscal 2023 and are expected to take up to 18 months to implement. 

The latest series of investments and consolidation activities will strengthen the competitiveness and long-term performance of our cheese operations in our USA sector while increasing efficiency and productivity.

Lino A. Saputo, president and CEO of Saputo Tweet

He added that the initiatives announced will allow the company to enhance its manufacturing footprint and drive organic growth.

Saputo reports 24.1% revenue growth in Q1 2023

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Meanwhile, the dairy giant has reported net earnings of $139 million for the quarter ended June 30, up from CAD$53 million (US$ 41.14M) for the same quarter last year.

The company said the earnings were boosted by increased prices, productivity, and undertaking cost containment initiatives that enabled it to navigate inflationary pressures.

Revenue for the company’s first quarter of fiscal 2023 was up by 24.1% totaling CAD$4.3 billion, up from CAD$3.5 billion in the same quarter of 2022, while Adjusted EBITDA1 amounted to CAD$347 million, up CAD$57 million or 19.7% high. (CAD1:US$0.78)

The company said it expects continued inflation pressures ahead on both product inputs and on logistic costs but that it will minimize the effects by raising prices as necessary.

Despite inflation and supply chain disruptions that are likely to persist, the company expects a meaningful recovery in earnings in fiscal 2023, driven by the full impact of previously announced price increases, and improved productivity.

It will also rely on fixed cost absorption, a return to historical order fill rates, and benefits stemming from our Global Strategic Plan to cushion its progress.

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