PepsiCo Expands Upscale Yogurt Category

BATAVIA, N.Y.PepsiCo, Inc., took a healthier angle in the food product industry by expanding its portfolio with Muller yogurt, a nationwide brand targeting the health-conscious U.S. consumer.

In 2012, the company entered into a joint venture with Theo Müller Group, Germanys largest privately held dairy business,  to bring innovative premium yogurt products to the U.S. market. The joint venture, called Muller Quaker Dairy, opened a new yogurt manufacturing plant in May 2013 in Batavia, N.Y.

Yogurt is the fastest-growing dairy category in the United States, with retail sales of yogurt drinks hitting nearly $6.4 billion in 2011, which is up 31% from 2007, according to Mintel. Muller Quaker Dairy will help satisfy the increasing demand for dairy products in the United States, where yogurt consumption is still less than half of that in Europe.

With PepsiCo's portfolio of 22 billion-dollar brands, Theo Müller's dairy expertise and the growing demand for yogurt products, the Muller Quaker Dairy joint venture has a good chance of succeeding in the food product industry. Wells Fargo analyst Bonnie Herzog said PepsiCo's outcome within the yogurt industry may depend on how much the company spends on marketing for this endeavor, Reuters reported.

In 2009, yogurt claimed the No. 1 spot on the NPD Group's list of top growing snack foods, with more kids ages 2 to 17 years snacking on refrigerated yogurt compared to the previous year. As U.S. consumers learn more about yogurt's health benefits as a "superfood," manufacturers can expect more competition from upcoming brands in the industry.