In a blow to Lakeland Dairies’ ambitions for the US grass-fed butter market, its buyer in North America, Vital Farms, has announced that it is to exit the butter business by the end of the year.
Russel Diez-Conseco, president and CEO of Vital Farms, said on the company’s quarterly earnings call that “this was not an easy decision, but we believe it is the right one”, adding that it “frees human and financial capital to pursue more productive growth opportunities”.
Diez-Conseco also cited the “complexity of an international supply chain” and the “very uncertain global trade backdrop” as contributing to the conclusion that it was no longer an appealing business for Vital Farms.
Vital Farms said that it worked with its supply chain partners to explore a variety of potential changes to the business to make it sustainable for the company, but in the end decided that it would focus on its core egg business.
Speaking to the Irish Farmers Journal in mid-April, Colin Kelly, CEO of Lakeland, said the business with Vital Farms “continues to go very well”, adding that “it is growing significantly and is expected to continue to grow significantly”, which suggests the move came as a surprise to the co-op.
When contacted about the decision by Vital Farms to discontinue the business, a spokesperson for the co-op said: “Lakeland Dairies exports over 240 products to more than 120 global markets, where customer arrangements evolve over time. We do not comment on individual commercial arrangements. We continue to work with a broad range of customers and remain focused on growing value-added opportunities, both domestically and internationally to ensure we deliver sustainable prosperity to our farm families.”
In a blow to Lakeland Dairies’ ambitions for the US grass-fed butter market, its buyer in North America, Vital Farms, has announced that it is to exit the butter business by the end of the year.
Russel Diez-Conseco, president and CEO of Vital Farms, said on the company’s quarterly earnings call that “this was not an easy decision, but we believe it is the right one”, adding that it “frees human and financial capital to pursue more productive growth opportunities”.
Diez-Conseco also cited the “complexity of an international supply chain” and the “very uncertain global trade backdrop” as contributing to the conclusion that it was no longer an appealing business for Vital Farms.
Vital Farms said that it worked with its supply chain partners to explore a variety of potential changes to the business to make it sustainable for the company, but in the end decided that it would focus on its core egg business.
Speaking to the Irish Farmers Journal in mid-April, Colin Kelly, CEO of Lakeland, said the business with Vital Farms “continues to go very well”, adding that “it is growing significantly and is expected to continue to grow significantly”, which suggests the move came as a surprise to the co-op.
When contacted about the decision by Vital Farms to discontinue the business, a spokesperson for the co-op said: “Lakeland Dairies exports over 240 products to more than 120 global markets, where customer arrangements evolve over time. We do not comment on individual commercial arrangements. We continue to work with a broad range of customers and remain focused on growing value-added opportunities, both domestically and internationally to ensure we deliver sustainable prosperity to our farm families.”
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