PepsiCo Inc. said Thursday it has ended its U.S. yogurt joint-venture with Germany’s Theo Müller Group because of weak sales.
The U.S. snack-and-beverage giant also confirmed the two companies have sold their dairy plant in Batavia, N.Y., to Dairy Farmers of America, a milk marketing co-operative. It didn’t disclose financial terms.
Müller Quaker Dairy LLC began selling products in the U.S. in 2012 and opened a $200 million plant in 2013 to take aim at the fast-growing U.S. yogurt market. The move also fit with PepsiCo’s strategy of expanding into more “good-for-you” products.
But the partners struggled to take market share from established yogurt brands including privately held Chobani, General Mills Inc.’s Yoplait and Dannon, owned by France’s Danone SA.
PepsiCo said in a statement Thursday the two companies agreed to shut down the venture “after determining that the business was not meeting expectations in a competitive and dynamic marketplace.’’
PepsiCo disclosed a $65 million impairment charge in April tied to the joint-venture, saying at the time that sales growth was less than expected.
A PepsiCo spokesman declined to say Thursday if the company would record any more write-downs but added that any gain or loss wouldn’t be material.
Sixty-six employees will lose their jobs with the change of ownership at the Batavia facility.
PepsiCo declined to comment on any plans to re-enter the U.S. yogurt market but said it remains committed to growing its nutrition business, including the dairy category.
In addition to Pepsi-Cola and Lay’s potato chips, the Purchase, N.Y.-based company’s billion-dollar brands include Quaker oatmeal and Tropicana Juice.
PepsiCo has dairy businesses in countries including Russia and Brazil. It recently launched a Quaker-branded dairy drink with oats in China.
By Mike Esterl
Source: Wall Street Journal
The company expects to eliminate 1.2 billion tons carbon dioxide equivalent of methane emissions by the end of the decade. The company says that it already reduced its methane emissions by around 14% between 2018 and 2020.
The “first-of-its-kind” pilot project will develop and demonstrate an affordable modular bioprocessing system to produce biodegradable bioplastics from food waste diverted from landfills. The three-year grant will test the scalability and feasibility of the conversion on a national and global scale.
Arkeon is allying with specialty mineral giant ICL to support the scaling of its fermentation bioprocess that converts CO2 into the 20 proteinogenic essential amino acids needed in human nutrition. The process, hailed as carbon negative, is based on the use of archaea, a group of microorganisms that naturally feeds off the greenhouse gas.
