General Mills’ move to buy into yoghurt maker Yoplait will provide some of the competition needed to help grow the category in the US, according to Danone chief Franck Riboud.
The Danone chairman and CEO regards the US as an “emerging market” for fresh dairy products and told an analyst event in London yesterday (29 March) that more competition is needed to help drive demand across the Atlantic.
Speaking at the Consumer Analyst Group Europe (CAGE), Riboud said US consumption lagged far behind that in France. US shoppers consume 4kg per person per year, Riboud noted, compared to 30kg in France.
Riboud said to get US fresh dairy consumption to double would need more competition in the sector and more development of the range of products on offer. He was, he claimed, “sure” US consumption would rise.
“I will not ask the French to switch from 30 [kilos] to 60 but I’m sure we can switch from four to eight in the US, with the development of the competition – which we need – and the full product range that we have in the rest of the world,” Riboud said.
General Mills has held the US licence to Yoplait since 1977 but its move to buy into the business – by snapping up PAI Partners’ stake in the company – would help develop the market, Riboud argued.
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The Danone boss said the Activia maker had made some progress in developing the category with Wal-Mart Stores in the US. However, more competition in the sector was needed to convince US retailers to expand the range of products on offer.
“It’s a global issue when you try to develop a market, you need strong competitors,” Riboud said. “To see General Mills really anchor in the fresh dairy business is good news for us.”
Riboud pointed to the development of the bottled water category, which he said was helped by Danone, which makes Evian, and Nestle, which owns Perrier and PureLife, promoting the category and not just their brands.
“Nestle is the main example where companies working together on the business, on their segment and on their market will have a better return than just working on their brands,” he said. “Both of us were saying: ‘you drink what you want but you drink water’.”