How Lactalis Built a Winning Cost Recovery Strategy in CPG's Least Forgiving Category
At some point, every CPG manufacturer ends up holding more product than the market ordered. For Lactalis, the world's largest dairy group, two business units turned that excess into a strength with Spoiler Alert.
About
Lactalis is the world's largest dairy group. Its Lactalis US Yogurt business manufactures Stonyfield, Siggi's, Brown Cow, and Green Mountain Creamery, among others. Its Lactalis Heritage Dairy business makes Kraft Natural Cheese, Breakstone's, Knudsen, and Cracker Barrel.
Industry
Food & Beverage / Dairy / Consumer Packaged Goods
Running a CPG Supply Chain on Hard Mode
At some point, every CPG manufacturer will end up holding more product than the market ordered. Some categories offer forgiveness — a warehouse of dry goods might be able to wait out a slow period. Refrigerated dairy, however, cannot.
Product entering the secondary market needs enough remaining life to get priced, sold, shipped, and merchandised before a discount shopper ever sees it — often moving through LTL freight networks that run slower than full truckloads, into a buyer pool that needs cold chain capacity to store it in the first place. Fewer qualified buyers, slower freight, and faster clocks: running a supply chain in dairy is like playing on hard mode.
Lactalis, the world's largest dairy group, runs two of its business units under these constraints. Lactalis US Yogurt manufactures Stonyfield, Siggi's, Brown Cow, and Green Mountain Creamery among others. Lactalis Heritage Dairy makes Kraft Natural Cheese, Breakstone's, Knudsen, and Cracker Barrel.
In a period of great transition for both the company and the industry, the amount of excess each unit carried skyrocketed. Both absorbed the shock with Spoiler Alert.
Lactalis US Yogurt: A Good Process With Nowhere to Go
"The shelf life of yogurt is short, but when you're talking about entering the secondary channel space, it's even shorter," said Gennady Glabets, Supply Chain Customer Service Manager at Lactalis US Yogurt (LUSY), whose team manages the liquidation process. "Decisions need to be made faster. It needs to get in a truck and move so that it has enough life to sit on the secondary channel shelf."
Their team was well built for the first half of that problem. A cascading flow through their ERP system identified at-risk inventory quickly and accurately, and information moved down from planning and supply chain to the people responsible for acting on it.
The process hit a wall, however. The business had active relationships with only two or three secondary channel buyers, and every liquidation meant a manual back-and-forth over inventory lists, sales orders, lead times, and sailing schedules.
"It was kind of a mess, and we were only working with maybe two or three different organizations, so it was really hard to manage from a processing side," Gennady says. "We didn't need help identifying the inventory. We needed help in finding where it could go, who we could sell it to."
That was the shape of the partnership from day one. Spoiler Alert didn't upend the processes LUSY had already built. It simply connected that process with the right markets at the right price, with the Spoiler Alert team serving as their trusted advisors to validate inventory decisions.
Results
Over its first three years on the platform, LUSY improved cost recovery by 33% — margin recaptured on product that was previously headed to disposal, at the mercy of whatever volume their buyer pool could accommodate.
"What we do now through the Spoiler Alert platform is just night and day different," Gennady said. "It's a drag and drop. It's taken us from just a couple buyers to dozens, who instantly see what we have available and can quickly make decisions."
The recovery numbers tell half the story. Internally, waste mandates picked up as both a sustainability initiative and cost-saving effort.
So their program now runs as an augmented waterfall: whatever doesn't sell through the secondary channel moves to donation in a single motion. When the business expanded its distribution network into regions where it had no food bank relationships — the Southeast, the West Coast — Spoiler Alert connected them with donation partners there, work that has since earned internal sustainability awards.
"We couldn't liquidate as much as we do without this platform," Gennady said. "We want to see our yogurt get into the hands of people, and not in the hands of the landfill."
Lactalis Heritage Dairy: Navigating Transitions With Confidence
Excess scales with growth. Testing new SKUs, absorbing M&As, transitioning GTIN codes — for giants like Lactalis, large-scale transitions allow little room for error.
Lactalis Heritage Dairy has been living inside that reality since 2021, when it divested from Kraft Heinz. The final project of the separation was re-coding every item in the catalog — replacing GTINs owned by the former parent company with Lactalis' own, category by category, over two years.
Running a refrigerated dairy supply chain, the least forgiving category in CPG
Refrigerated dairy leaves no room for slow periods. Product entering the secondary market needs enough remaining shelf life to get priced, sold, shipped, and merchandised before a discount shopper sees it. Lactalis US Yogurt had only two or three secondary channel buyer relationships, while Lactalis Heritage Dairy faced a multi-year, high-stakes GTIN re-coding project after divesting from Kraft Heinz.
A platform and partnership that adapted to two very different business units
Spoiler Alert didn't replace the processes either team had already built. It connected them to the right markets at the right price, with the Spoiler Alert team serving as trusted advisors on inventory decisions, and helped tie GTIN transitions directly into the liquidation process.
Every one of those transitions forces the same high-stakes math. "We have to thread that needle between not wasting too much of the old product versus when the new product is available for our retailers to order," said Bernard Ben-Carew, Sales Operations Manager at Lactalis Heritage Dairy.
"Not one buyer is going to take all of your cottage cheese or all of your yogurt," Bernard said. "Spoiler Alert has really done a great job of helping us grow that buyer network almost three times since we onboarded, and that's really helped us move a lot of those products."
The bigger unlock came from tying the GTIN transitions directly to the liquidation process. Instead of running out the old code and dumping whatever remained into a last-minute fire sale, the team could transition retailers early and route the remaining cases to its buyer network with far more shelf life than before.
That completely changed what buyers could offer. "It's not like we're giving you fifteen days on the first offer, and if you don't take all of the product, now you're looking at less than ten days," Bernard said. "If we thread that needle correctly, we're able to allow more room for buyers to make their decision on the first round."
Results
When asked what changed most since onboarding, he doesn't hesitate: "Speed, efficiency, and cost recovery." "We're reaching much higher cost recovery than we were getting before Spoiler Alert, and that's really helped grow the business in this sector."
Bernard ran an analysis at the end of the year covering his team's first four months on the platform. "Our supply chain leaders were really surprised at how much we were able to move and save amidst our transitions," he said.
Looking forward, the stakes are rising. The business is now entering its final GTIN transition, the cultured portfolio — cottage cheese and sour cream that hit the liquidation desk with 25 to 30 days of life. Now, though, they have the playbook and the buyers already in place to mitigate the losses.
Gennady and Bernard sat down with us to talk in detail how this played out across their teams. Watch it here.
Gennady Glabets
Supply Chain Customer Service Manager, Lactalis US Yogurt
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