- Danone will sell its Stonyfield organic yogurt brand in exchange for a swift close of its WhiteWave Foods acquisition deal, per an agreement with the U.S. Department of Justice, the company stated in a news release.
- Stonyfield made about $370 million in total sales last year, but Danone claims its divestiture won't undercut the financial benefits of the WhiteWave acquisition. The Paris-based company will sell the brand in the months following the acquisition, the company said.
- Danone expects the acquisition to boost its full year like-for-like sales growth by an extra 0.5% to 1% and push run-rate operating profits to $300 million by 2020.
Danone may be the global leader in yogurt, but has been struggling to improve annual sales growth after disappointing performance from its Activia brand. The company attempted to overhaul the low-fat yogurt and position it as a premium "lifestyle brand," but consumers balked at the higher price tags — making it clear that product development couldn't pull the company out of its sales slump.
Completion of the $12.5 billion WhiteWave acquisition should revive growth for Danone, since WhiteWave sells several soy and plant-based products that are popular with health-conscious shoppers.
"The combination will allow us to develop a world-leading dairy and plant-based food and beverage portfolio, with a full spectrum of better-for-you offerings, including protein-rich, organic, non-GMO and nutrient-dense choices," Danone CEO Emmanuel Faber said in the company release.
The Cornucopia Institute decried the deal as anti-competitive and a threat to the U.S. organic dairy market last year, but the sale of Stonyfield appeased the DOJ and fast-tracked Danone's WhiteWave acquisition — a big win for the company.
This deal could help vault Danone above the struggles of other yogurt giants, which have been reporting weak sales among rising milk costs and shrinking market share. Because of its smaller size, WhiteWave can better adapt to nutrition trends and anticipate areas for growth. Not only have WhiteWave's sales been increasing, but a synergy between the two companies can increase the quality and reach of trendy plant-based foods.