The WhiteWave Foods Co. wants to extend its plant-based brandsâ€™ reach into the yogurt category. Using insights from is European Alpro business unit, company executives believe they may grow and expand in the U.S. yogurt market.WhiteWaveâ€™s growth in yogurt reflects its strategic insights into the fact that the dairy-based category is going to remain under pressure relative to cost increases related to feed.
â€œAt the end of the day, the plant-based model is a lower-cost model because the cow is a relatively inefficient converter of grain into protein,â€ Mr. Engles said. â€œSo in what we believe will be a long-term inflationary environment, the cost advantage of plant-based over dairy, we believe, will continue to grow.
â€œAnd today, that model puts us in a position of having a â€˜premiumizedâ€™ product that we can innovate against and invest a robust amount against in terms of marketing to consumers.â€
â€œThereâ€™s outstanding potential in this arena, and this is a powerful area where we are going to leverage the know-how across our business in growing the plant-based alternative to the dairy yogurt business in the United States,â€ said Gregg Engles, chairman and chief executive officer.
But Mr. Engles added there will need to be an education component for U.S. consumers, and the plant-based yogurt market will be a â€œslow build.â€
WhiteWave Foods currently has a line of yogurts it sells under the Silk brand. Silk Live Soy Yogurt includes probiotics and is currently available in nine flavors. Blaine McPeak, president of WhiteWave Foods, said at the end of December 2012, the company will begin shipping Silk Fruity & Creamy yogurt.
â€œWe currently have plant-based yogurts under the Silk brand today, but in partnership with the Alpro organization, who have just a fantastic tasting yogurt, we have been able to fundamentally improve the overall performance of the launch that we have coming up here in January,â€ Mr. McPeak said. He added the new products will be available in a soy and almond variety.
WhiteWave, which posted a 13% rise in adjusted net sales to $581m in Q3, has greater potential as a standalone company, said Engles.
Meanwhile, managers will be solely focused on WhiteWave, which as a public company will have an â€œenhanced ability to pursue strategic acquisitionsâ€, he said.
WhiteWave recently agreed to sell certain assets to Morningstar Foods for $60m in connection with the latter’s sale to Saputo.
Following the deal, Morningstar will continue to manufacture certain products for WhiteWave, and WhiteWave will continue its business relationship with Saputo, pursuant to which Saputo manufactures and sells WhiteWave products in Canada.
WhiteWave’s US brands include Silk (plant-based foods), International Delight and LAND O LAKES (coffee creamers and beverages), and Horizon Organic (dairy products). Its European brands include Alpro and Provamel (plant-based foods).