Estancias del lago 2015

Abstract

Estancias del Lago is a dairy company, specialized in the production of whole milk powder, located in Uruguay. In mid-2015 the company finalized the construction of the milk powder plant integrating vertically agriculture, dairy farm and industry on a single field. This integration allows the company to produce high quality milk while increasing the production costs. When Estancias del Lago started the operations the dairy industry was in crisis. The root of the dairy crisis was a lack of demand from the major purchasers of dairy products, which turned into a supply glut since the production in the major export countries continued to growth despite the low international prices. In 2014 Estancias del Lago hired Martin Berrutti, a former commercial executive of the largest dairy company in Uruguay, as Commercial manager. Berrutti developed and implemented the sales and marketing strategy for Estancias del Lago, which aimed to target the most demanding customers in the dairy industry. At the beginning of operations the company faced several short term challenges such as gaining market access, building commercial ties, cash flow issues, limited local market, and low brand awareness. Berrutti had to manage to solve the short term challenges while working toward the long term objectives. In 2015 Berrutti travelled to Anuga, one of the biggest food trade fair in the world, to meet the most important players in the industry. Some traders proposed to Berrutti building partnerships to commercialize Estancias del Lago’s products. Berrutti was wondering whether these partnerships could help to solve the short term challenges while creating some challenges in the long term.

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