Blog: PepsiCo, Muller eye share of US yoghurt market

Michelle Russell | 27 February 2012

PepsiCo and Theo Muller look set to take on Dannon and General Mills in the US yoghurt market with the announcement of a joint venture to establish a US$206m New York facility last week.

The move is unlikely to come as a surprise to many in the industry, who have anticipated a deal of some kind between the two for the last few months.

The US snacks and beverage giant has been linked to Muller since October last year, when reports suggested the two firms were readying the launch of a yoghurt brand in the US.

PepsiCo has made a series of moves in the dairy sector since it formed a global nutrition unit last year to look at ways to expand into the industry, including its purchase of Russia's largest dairy processor Wimm-Bill-Dann. But the company had, until now, made no inroads into its domestic dairy sector.

Given the growth potential of the category, a deal bringing together an industry player like Müller is sure to give PepsiCo the expertise to gain a foothold in the category, according to just-food's managing editor Dean Best.

However, with the likes of Danone and General Mills - which last year year acquired a 50% stake in Yoplait - investing heavily in the market and building brand awareness, he believes PepsiCo is going to need to act quickly.

The firms will need to take into account Dannon's 39% share of the US yoghurt market. As of 2010, General Mills had the number two spot with a 27.6% share, according to figures from Euromonitor.

General Mill's Yoplait is the number one yoghurt brand in the US, with a 27.6% share of the market, followed by Danone's namesake brand with a 19.7% share, as of 2010.

While the move will likely spell increased competition in the US yoghurt market, it could also result in greater investments in marketing as the powerful players battle for market share. This will, in turn, lead to greater consumer awareness of what is still a burgeoning category in the country and could potentially help grow the US yoghurt market as a whole.

With value sales predicted to grow by 9% in constant value terms between 2010 and 2015, there is every reason why PepsiCo and Müller would want a piece of this pie.


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