Dairy Crest wants to rebuild branded yogurt presence

19-Jun-2011 - Last updated on 20-Jun-2011 at 14:47 GMT

Dairy Crest sold its 49% stake in UK joint venture Yoplait Dairy Crest to Yoplait in 2009

Dairy Crest wishes to either develop or acquire a branded yogurt division to capitalise upon a fast-growing market, despite selling off its UK yogurt business in early 2009.

The firm sold its 49% stake in UK joint venture Yoplait Dairy Crest – brands included Petits Filous, Frubes, Yop and Wildlife – to Yoplait in 2009 for circa £63.5m, “to focus on and invest in core brands owned outright”.

However, chief executive Mark Allen is quoted in the Financial Times saying that a non-competition agreement with French dairy giant Yoplait finished in March.

Allen said that Dairy Crest wanted to move back into branded yogurt, either by developing a new branded business or acquiring one.

Develop or buy brand

Mintel's latest figures value the UK yogurt market at 1.852bn in 2010 with value growth of 3.7% during that year, and predict it could hit 2.188bn by 2013, growing within the 4-4.5% range until then; YouGov SixthSense also reported last June that yogurt was the fastest-growing sector within UK dairy.

Allen added that Dairy Crest was looking at other firms across its branded categories, with a view to making acquisitions, but said the group would not bid for Uniq due to its lack of dairy-related products.

Shore Capital analyst Darren Shirley told FoodManufacture.co.uk that he was not surprised by the yogurt announcement, despite tough competition in the sector from the likes of Müller (29.2% market share, Mintel 2010 statistics), Danone Activia (13.6%) Actimel (7.2%), Petit Filous (6.5%) and Yeo Valley (4.2%).

“It is a competitive market and there are some big brands there – Muller, while Tesco has launched its own brand ‘Yoo’," said Shirley.

“Branded yogurt is competitive, but it’s also a big market, and this announcement demonstrates that Dairy Crest is looking for growth avenues across the chilled dairy cabinet.”

No Uniq interest

Shirley added: “I’ve got to say I’m relieved that Dairy Crest isn’t looking at Uniq at the moment. Uniq makes most of its money in salads and sandwiches [the Food to Go division] and Dairy Crest doesn’t really have that expertise.”

Shirley again highlighted the poor performance of Uniq’s Everyday desserts division and its Minsterley site specifically, a factor analysts say could deter a potential buyer, although Samworth Brothers and Greencore are believed to have lodged first-round bids.

FoodManufacture.co.uk had not received a comment from Dairy Crest as we went to press.