- Danone said Monday it entered a binding agreement to sell U.S. dairy business Stonyfield to Lactalis for $875 million, according to The Wall Street Journal and a company statement. Danone said the deal is expected to be completed during the third quarter.
- The French dairy company was required to sell Stonyfield as part of a deal reached with the U.S. Justice Department after getting approval to buy plant-based foods giant WhiteWave for $10 billion.
- Other bidders for the asset included big dairy processor Dean Foods, Mexico’s Grupo Lala and China’s largest dairy company Inner Mongolia Yili Industrial Group, the paper said, citing a person familiar with the matter.
Yogurt remains one of the fastest-growing food categories in the United States, with consumers eating more of the dairy treat as they shun processed foods and embrace those seen as healthier and with cleaner labels.
A study by Transparency Market Research showed the North American yogurt market was valued at $11.18 billion in 2015 and is projected to reach $14.59 billion by 2024, growing at a CAGR of 3% from 2016 to 2024. Many analysts predict the category will benefit from more product diversification and improved packaging methods that enhance shelf life.
The fact that Stonyfield had multiple suitors is further evidence of many things: the popularity of organic products, yogurt's portability as an easy snack to consume on the go, and the dairy company's solid reputation. The purchase by Lactalis, whose brands include President and Rondele, will give the manufacturer a prominent presence in organic dairy.
The French-based company has some operations in the U.S., but it's uncertain how it will incorporate the new purchase or how successful it will be in the ultra-competitive yogurt business. The fact that it will soon own Stonyfield is definitely a plus, and places it in a far better position to compete with other yogurt makers such as General Mills' Yoplait and Chobani, the largest brand in the product segment.
But as General Mills has learned, being a market leader in the yogurt business one day is not enough to guarantee future success. Just last week, right before an earnings report showing double-digit declines in the segment, the company introduced its latest yogurt creation: a French-style treat with no artificial preservatives, flavors and colors and minimal ingredients packaged in a glass jar.