USA – General Mills is reportedly considering the sale of its North American yogurt business, a move that could fetch the Minneapolis-based company over US$2 billion, according to sources cited by Reuters.
The exploration of this sale comes amid growing competition in the yogurt market from industry leaders such as Chobani and Dannon.
Sources familiar with the matter revealed that General Mills has enlisted the assistance of New York-based investment firm JPMorgan Chase to facilitate the potential sale.
The company views its yogurt assets as non-core to its current strategy, prompting consideration for divestment.
General Mills’ portfolio of yogurt brands includes Yoplait, Oui, Liberte, and Ratio Food. Yoplait, introduced in 1964, has been marketed by General Mills in the US since 1977.
In 2011, General Mills acquired a 51% stake in Yoplait from PAI Partners and Sodiaal in a transaction valued at $1.2 billion.
In 2021, General Mills sold the European operations of Yoplait to Sodiaal, retaining full ownership of Yoplait’s Canadian business while securing a reduced royalty rate for the use of Yoplait and Liberte brands in the US and Canada.
The North American yogurt business generated US$1.4 billion in net sales in fiscal 2020.
Recent financial data from General Mills indicates a decline in yogurt sales within its North America Retail division, with third-quarter sales totaling US$367 million compared to us$378 million in the same period the previous year.
Despite challenges in the category, General Mills remains focused on innovation and improvement.
Jeffrey L. Harmening, Chairman and CEO of General Mills, acknowledged the struggles in the yogurt segment during a conference call in March.
He highlighted the positive reception of new products such as Yoplait Protein while emphasizing the company’s commitment to enhancing competitiveness and driving growth in the category.
General Mills’ efforts include expanding the distribution of its successful: ratio product line, focusing on low-sugar weight management options, and increasing investment in brand innovation.
The company is also working to address supply chain disruptions to improve on-shelf availability and customer service.
The potential sale of General Mills’ yogurt business aligns with broader industry trends, as evidenced by Campbell Soup Co.’s exploration of alternatives for its Noosa yogurt brand.
With yogurt manufacturers reassessing their portfolios, the sector may see significant changes in the coming months as companies seek to optimize their strategies and focus on core businesses.
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