White Wave Foods 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Supply of organic products responds slowly to demand

“I think it’s important to step back and remember the fundamentals of this business which are that to increase the supply of organic milk, takes considerably longer than what instantaneous changes in demand might be. So to increase the organic milk supply you have to have new organic animals. You can’t convert conventional animals from eating a conventional feed ration and have been producing organic milk. You have to have cows that are of organic stock in order to have organic animals and that just takes time. So we would love to have more supply and we would love to have it on an instantaneous basis but it just doesn’t work that way in this industry. The organic farm community has to be convinced that the demand that they are going to try and satisfy is enduring, isn’t a permanent demand and that the pricing environment gives them a return before they will make the investments to grow the organic herd.”