Lamb Weston Holdings SWOT and PESTLE Analysis

Strength

Strategic joint ventures help secure global markets: Lamb Weston has three major joint ventures in which it owns majority stake. They hold a fifty percent ownership interest in Lamb-Weston/Meijer v(“Lamb-Weston/Meijer”), a joint venture with Meijer Frozen Foods B.V. headquartered in the Netherlands. They manufacture and sell frozen potato products principally in Europe.
They hold a fifty percent ownership interest in Lamb-Weston/RDO Frozen (“Lamb-Weston/RDO”), a joint venture with RDO Frozen Co. This joint venture operates a potato processing facility in Minnesota while Lamb Weston provides sales and marketing services to Lamb-Weston/RDO in exchange for a fee based on a percentage of the net sales of the venture.
They also hold a fifty percent ownership interest in Lamb Weston Alimentos Modernos S.A. (“LWAMSA”), a joint venture with Sociedad Commercial del Plata. Headquartered in Argentina, this joint venture manufactures and sells frozen potato products principally in South America. Therefore, Lamb Weston’s joint ventures have helped it secure loyal markets in other continents and delegate manufacturing work efficiently.

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Weakness

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Opportunity

1. Plans to build a new plant in China will consolidate market there: China is a critical market for Lamb Weston and they have offices in Beijing and Shanghai as well as a manufacturing facility in Shangdu. In March 2021, the company announced plans to invest in a new factory in Ulanqab, Inner Mongolia, North China to add to their existing Shangdu facility in the same region. The new factory will have the capacity to produce more than 250 million pounds of French fries and other potato products. Lamb Weston is investing approximately 250 million dollars into the facility and it is expected to be completed by the first half of 2024. It will also generate 280 full time jobs in China and will enhance China’s in house production of frozen potato products. Increase in in-house production brings in the double bonanza of reducing cost of supplies to that country and also consolidates market share in that region.

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Growing concerns with plastic packaging: An increasing number of companies are shifting towards sustainable packaging of their products. Market research company GlobalWebIndex reports that 42% of U.S. and UK consumers seek out products that are recyclable or that use sustainable materials when making day-to-day purchases. In the U.S., 61% of consumers want to support companies that protect the environment. In the UK, 56% of consumers want to support eco-friendly companies.
Lamb Weston – in April 2021 – introduced sustainable packaging in two of its products. The packaging will use corn and potato starch as a raw material. Potato starch is a by-product of their product so it ensures waste usage. Additionally, it also followed the trend of setting sustainable goals for the future. The company has set Sustainability Agenda 2030 which include zero waste and climate action.