US food group Boulder Brands has decided to operate its Smart Balance milk line through a licence deal with co-packer Byrne Dairy.

Byrne will distribute and market the milk with Boulder, which sells other dairy products under the Smart Balance brand, receiving royalty payments.

Boulder chairman and CEO Stephen Hughes said: “Boulder Brands entered into a co-packing agreement with Byrne Dairy over four years ago and has developed a strong partnership. This agreement demonstrates our commitment to further strengthening Smart Balance’s profitability and its core portfolio of products, while strategically positioning Smart Balance Milk for future growth.”

The company said the financial benefit of the deal would be outlined when it announces its second-quarter results on 1 August.

BB&T Capital Markets Andrew Wolf said Boulder would shed an estimated pre-tax&operating loss from milk of US$5m.

Byrne president and CEO Carl Byrne said the company was “thrilled” to have Smart Balance milk join the firm’s “growing portfolio of brands”. He added: “We expect the collaboration between Byrne Dairy and Smart Balance will bring supply chain efficiencies and accelerate the growth for the Smart Balance milk business.”