WhiteWave CEO: Organic demand stronger than supply

Gregg Engles, CEO of WhiteWave.
Adam Jeffery | CNBC

It became abundantly clear to Jim Cramer that there is some serious competition in the organic and natural space when Whole Foods reported such disappointing numbers last week.

But there is one company out there that is running stronger than ever. WhiteWave Foods has been a favorite of Cramer's for ages. It is the maker of such brands as Horizon Organic milk, along with coffee creamers, organic products and plant-based non-dairy alternatives.

Ever had cashew milk? WhiteWave's got it.

The demand for plant-based beverages has grown tremendously, which explains why the stock has rallied more than 100 percent since it was spun-off by Dean Foods some two and a half years ago.

WhiteWave reported on Friday and showed that it is still running strong, with a 2cent earnings beat from a 22 cent basis, and in-line revenues up 10 percent year over year and 20 percent growth in its plant-based foods and beverages business.

Should consumers brace for higher prices, along with higher demand?


Cramer recently spoke with Ali Partovi, who outlined that the reason why organic foods are so expensive is because the product cannot keep up with the demand. There simply is not enough organic farmland to support the demand for organic foods.

Gregg Engles, the chairman and CEO of WhiteWave, echoed this sentiment, stating that farms are slowing converting to organic, but it takes time. He explained that it takes three years for organic farmland to convert, and one year to convert an animal.

"So, it just takes time, and the reason we are short is demand is just so strong. As long as this trend is a real trend, we're going to be short because the demand is outrunning our ability to produce supply," Engles said.

Cramer pointed out that plant-based dairy has been wildly popular in Europe, and it is just starting to explode in the U.S. now. The CEO added that this category has expanded to include other dairy products, including yogurt, cheese and ice cream as well.

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Ultimately Engles would like to take WhiteWave in the direction of appealing to families. Going forward, WhiteWave will focus on providing products geared towards children's snacks and meals, to resonate with mothers.

"Horizon Organic, at its essence, is a brand that moms trust. And they trust to put the best nutrition possible in their kids," he said.

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