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PepsiCo-Muller set to enter the US yoghurt market

The world’s leading beverage and snacks maker, Pepsico, has reportedly decided to put its footing into the yoghurt world and is hatching a joint venture with Theo Müller Group, Germany’s largest privately-owned dairy business. Zacks Equity Research company says that Pepsi and Müller will soon launch an as-yet-unnamed yoghurt brand in the US.

Theo Müller has operations in many European countries as well as Israel. The group has strong brands like Müller, Weihenstephan, Sachsenmilch and Käserei Loose in its portfolio. Retail brands and basic dairy products include butter, UHT-milk, lactose powder and whey protein complements the portfolio.

Besides the milk processing subsidiaries, the Müller Group also comprises the Optipack packaging company, the company’s own logistics enterprise Culina, as well as Fahrzeugtechnik Aretsried and Müller Naturfarm, one of the largest fruit processing companies in Germany.

The soda manufacturer has been trying to expand into the dairy business for quite some time nowm, reports Zacks. Back in 2003, the company applied for three trademarks, covering “dairy-based beverages” namely “Smooth Moos”, which was used in prior Pepsi testing for shelf-stable dairy products, “Milk quakes” and “Milk Chillers”.

Pepsico had also launched a yoghurt-flavoured soft drink in Japan, which unfortunately failed to enter into the popularity list. However, very recently, the company closed a $3.8 million takeover deal of Russia’s juice and dairy king Wimm-Bill-Dann. The buyout conferred the snacks and beverage giant a strong, high-growth platform in the dairy category of Russia.

Pepsi’s rival, The Coca-Cola Company, introduced new drink “Vio” in US back in 2009. Vio is made from skimmed milk, mixed with sparkling water, flavoured with fruit and sweetened with cane sugar. However, it did not generate much positive response from customers.

The company also entered the dairy segment in India with the successful launch of “Maaza Milky Delite”, a deal that has several of the attributes that are sought by international consumer goods groups, including exposure to emerging markets and more nutritional products.

Pepsico has revealed plans to embark on more upcoming collaborative deals and alliances to reach its goal of nearly tripling annual sales of nutritious and functional foods to $30 billion by 2020.

PepsiCo expects healthier products to make up as much as 30 percent of its portfolio in 10 years, as the company expands its range of juice, dairy and grain products.

“Right now, good-for-you products are about 22 percent of the portfolio. It might rise to 27 or 30 percent of the portfolio (10 years from now), but the rest of it is also growing,” PepsiCo Chief Executive Indra Nooyi said this week in an interview with Reuters Insider in Moscow.

Source: Zacks Equity Research

Is there room for PepsiCo in the yogurt fixture? Absolutely, says Euromonitor

With per capita consumption of yogurt in the US still way behind western Europe, a major new market entrant such as PepsiCo could breathe fresh life into the fixture and generate incremental sales rather than merely stealing market share off the top two players, according to one analyst…..

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