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Lamb Weston (LW) Introduces Fresh Fries in Mercosur, Aids Growth

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Zacks Equity Research
·3 min read
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Lamb Weston Holdings, Inc. LW is focused on undertaking initiatives to boost offerings and enhance market presence. Progressing along these lines, the company announced that its branded french fries are now available in Mercosur. Notably, the company’s joint venture with Sociedad Comercial del Plata in Argentina, called Lamb Weston Alimentos Modernos S.A. (AMSA), will bring the Lamb Weston brand to Foodservice across the region.

We note that Alimentos Modernos has been manufacturing good quality french fries for more than 30 years in Argentina. Incidentally, it has an in-depth understanding of the potato category as well as consumers’ preferences in Mercosur. Markedly, the company runs almost 70,000 MT production facility in Munro, Buenos Aires, Argentina.

Well, the partnership will help Lamb Weston provide local items along with export specialties from across the globe to thealmost 900,000 MT Latin American market. Notably, Lamb Weston boasts a strong global presence as it serves many quick service restaurants. Also, it is recognized as one of the largest frozen french fry manufacturers worldwide. The company along with its joint ventures runs 27 production plants globally.


Incidentally, four Lamb Weston branded traditional straight cut items were rolled out from the AMSA production plant on Feb 8, 2021, locally. Specialty cuts including wedges and CrissCut are going to be imported from Europe to meet customers’ preference. Morixe brand will focus in Retail channel, while Lamb Weston will take over the Foodservice space. Rapipap brand will be available for purchase in both the aforementioned channels.

Other Efforts to Boost Offerings & Expand Capacity

Lamb Weston is committed to undertaking initiatives to boost offerings and operating capacity. These efforts enable the company to effectively meet rising demand for snacks and fries. Markedly, it completed the acquisition of joint venture interests in Lamb Weston BSW sometime around mid-fiscal 2019. Among other moves, the company acquired Australia-based companies Ready Meals and Marvel Packers in 2019 and 2018, respectively. These buyouts have bolstered Lamb Weston’s market share in Australia.

Speaking on capacity expansion endeavors, the company completed the expansion of a facility located at Hermiston, OR on Jun 18, 2019. The expansion has facilitated the addition of a new processing line for increasing the production of frozen french fries. This is expected to cater to demand in North America and key export markets as well as support production needs emerging from, innovation and limited time offerings (LTOs).

Notably, shares of this Zacks Rank #3 (Hold) company have increased 23% in the past six months compared with the industry’s 9.4% growth.

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