Danone lines up yogurt facility expansion amid “explosive growth” in US

Danone has revealed plans to expand its Minster yogurt factory in Ohio, which produces brands such as Oikos, Activia, Dannon and Danimals.

In a statement, the global food and beverage major said it had made a “multi-million-dollar investment”, which includes a 48,000 square-foot facility expansion, a new production line and upgrades to existing lines.

It will bring 30 new full-time jobs to the region.

The expanded capacity at Minster intends to address consumer demand, Danone said, noting that the yogurt category was seeing “explosive growth”, driven by consumers looking for “more nutrient-dense foods that are high in protein” and “rich in nutrients and probiotic benefits”.

To meet increasing demand, Danone added that it plans to buy 60% more milk for the Minster facility over the next two years, by working with existing producer partners to increase their production and onboarding new local farms.

Commenting on the news, Dan Magliocco, the president of Danone’s North America business, said: “Our commitment to American manufacturing runs deep, with 90% of our ingredients and packaging materials bought here.”

He added: “Fulfilling our mission to bring health through food to as many people as possible, means producing nutrient-rich foods with US ingredients in American factories that are benefiting local communities.”

In its second quarter ended, Danone saw sales grow 2.3% on a like-for-like basis to €1.6bn. Sales were also up 3% to €3.3bn in the first half of its fiscal year.

Speaking to analysts in a results call at the end of July, CFO Juergen Esser noted that high-protein yogurt “continued to lead the growth” in its Essential Dairy and Plant-Based (EDP) division in North America.

On the call, Danone management was asked by a UBS analyst whether Danone’s management was “satisfied” with its “market share development in yogurt for the region”.

In response, CEO Antoine de Saint-Affrique said Danone was “going in the right direction, not fixed yet”.

He pointed to the growth of the company’s higher-protein products but added: “I mean, we still need to do better from a share standpoint. We have a unique portfolio in the US that covers all offerings and, for the moment, only [high] protein is driving. We are not leveraging the full might of our portfolio.”