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PepsiCo Partners With German Firm To Build $206M Factory To Help Satisfy Yogurt Craze

Posted On: 3/2/2012

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PURCHASE, NY -- PepsiCo has formed a joint venture with Theo Muller, Germany's largest privately owned dairy business, to open their first yogurt production facility in the U.S.

The joint venture, called Wave, will invest $206 million in the new state-of-the-art facility in Batavia, NY. The company said it selected the site for its access to dairy farms, a water supply and distribution routes to key markets.

The move continues a strong recent trend of major yogurt manufacturers opening factories in upstate New York. The state currently has 29 yogurt plants, which produced 530 million pounds of yogurt in 2011 -- a 43% increase from 2010 and more than double 2008 levels.

New York State is also the leading U.S. producer of Greek-style yogurt, popular for its creamier texture and higher protein content, which now accounts for a quarter of the total yogurt market following rapid growth over the past few years. Greece's top two yogurt brands -- Chobani and Fage -- both have plants in upstate New York, and both are reportedly in the process of expanding their production capacity.

Also competing in the booming Greek yogurt category are U.S. yogurt giants Dannon and General Mills.

The Wave yogurt factory is expected to take two years to complete. In the meantime, Wave may import Muller products in order to establish a foothold in the fast-growing U.S. yogurt business. The company has not said what type of yogurt it will produce.

The joint venture with Muller is PepsiCo's latest move to expand in dairy. In 2010, the beverage and snack giant acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.