Danone Acquires US Plant-Based Organic Formula Maker Kate Farms

Santa Barbara, California-based Kate Farms makes formulas and shakes for everyday needs as well as for tube feeding for people with health conditions.

Richard and Michelle Laver founded the company in 2012 after their daughter Kate, who has cerebral palsy, had difficulties with eating. Their products are sold to hospitals and consumers across the country.

“We consider Kate Farms very complementary to our specialised nutrition offerings and capabilities, which we believe will allow us to reach more consumers and patients and bring a high-quality new standard of care to more people with a wider variety of health needs,” Danone group deputy CEO Shane Grant said in an interview. “It’s a really important build for us in the US.”

The size of the majority stake and financial terms were not disclosed.

Paris-based Danone, which owns yoghurt brand Activia, plant-based milk brand Silk and Evian water, signalled its interest in acquisitions after it reported strong 2024 earnings in February.

Kate Farms

Kate Farms has previously raised money from investors such as Goldman Sachs Asset Management and Main Street Advisors. In 2022, it raised $75 million (€67.6 million) in a Series C growth capital round.

Kate Farms’ senior management will retain a minority stake in the business, and its CEO, Brett Matthews, will serve as chairman and CEO of Danone’s North American Medical Nutrition business.

Danone has been operating in the US since 1942, and now has more than 5,000 US employees and 13 US manufacturing facilities and one research and development hub. It has a market value of about $57 billion (€51.3 billion).

Analyst Comment

Barclays believes that while the acquisition is a small one, it is ‘very strategic’ and aligns with the company’s strategy to expand into US medical’.

‘Medical Nutrition is, in our opinion, the best and highest​-​growth part of Danone’s portfolio. Globally, we estimate that medical​/adult accounts for 12% of group revenues but close to 20% of group EBIT, and is a good hedge to declining fertility rates, which could impact its infant nutrition unit,’ the investment firm noted.

Last year, Danone acquired Functional Formularies as it strengthened its position in the whole food tube feeding segment – a niche and fast​-​growing category in medical nutrition.