French food company Danone is watching its growing Dannon and Stonyfield Farm yoghurt businesses in the United States closely, but it will not "fight a huge fight" in water, its top executive said on Wednesday.

"The U.S. is not exactly our priority in the water business," chairman and chief executive Franck Riboud told the news agency Reuters in an interview.

Danone distributes Evian water in the US through a joint venture with Coca-Cola.
Riboud said it was difficult for Danone to fight in the water business against players such as Coke, Pepsi and Nestle, which had their own set distribution systems in the United States, and that the company had decided to prioritize by focusing on growth in other countries.

Dannon and Stonyfield were the only two yoghurt brands to outgrow the category in 2004, according to Danone, which runs each business separately. Higher dairy commodity prices could force it to raise prices. "We might need a price increase, but if we do we will implement it in a nonstrategic part of the portfolio," said Juan Carlos Dalto Jr, CEO of Dannon's US business. Higher prices, especially for fuel, could bring Dannon to raise prices on traditional "fruit on the bottom" yoghurt, he said.