Dive Brief:
- PepsiCo and its German partner Theo Muller Group have agreed to cease production at the Muller Quaker Dairy yogurt plant in Batavia, NY.
- Dairy Farmers of America will buy the $208 million plant and "is exploring several milk handling and manufacturing options," the Associated Press reported.
- The transition is expected to cost more than 60 of the 170 jobs at the plant, which was opened two years ago with the help of about $14 million in state tax credits.
Dive Insight:
"The PepsiCo spokesman said Muller brand yogurt wasn't meeting expectations in a competitive and dynamic marketplace," according to the Associated Press.
The company did not comment whether it intended to return to the U.S. yogurt sector, though it is focused on its nutrition ventures, dairy included, reports The Wall Street Journal.
Yogurt has become an especially competitive market since the expansion of Greek yogurt, led by Chobani, over the past few years. As consumers turn away from cereal and look for alternative breakfast options, yogurt has become a go-to for many health-conscious consumers. As a result, cereal makers have begun looking outside of breakfast for opportunities to promote cereal as appropriate for other meal times.
Other companies are also recognizing the growth potential for yogurt, with WhiteWave Foods acquiring Wallaby Yogurt Co. earlier this year.
While Coca-Cola and PepsiCo were both considering investments in Chobani, according to Reuters sources, Coca-Cola has since dropped out, leaving PepsiCo in the running. Chobani is looking for an investor that can boost its supply chain, distribution, and geographic presence for its more popular yogurts, though whether PepsiCo will acquire that potential minority stake is still unconfirmed.