The global operations of Yoplait yogurt could become General Mills' best bet for international growth, executives said at the food giant's annual investor day Wednesday.
Golden Valley-based General Mills Inc. completed its $1.2 billion acquisition of a 51 percent interest in French yogurt maker Yoplait S.A.S. earlier this month. Sodiaal, a major French dairy cooperative, will remain the yogurt maker's other main owner.
General Mills had long been Yoplait's biggest licensee, holding market rights for the brand in United States, where Yoplait is the No. 1 yogurt. Now, as majority owner, General Mills will be looking to gain from expanding Yoplait globally, particularly into developing markets like China and India.
"Yogurt is a great global category," General Mills' international operations chief Chris O'Leary told stock analysts Wednesday. The company expects "robust" growth in the years to come.
Indeed, of General Mills' five international growth platforms -- cereal, ice cream, snack bars, ready-to-eat meals and yogurt -- yogurt is expected to grow the fastest.
Globally, the yogurt category is forecast to grow at an annual rate of 6 percent over the next five years; cereal and ice cream are expected to grow at a 5 percent rate, according to data presented at Wednesday's conference.
The addition of Yoplait's global operations should add $1.2 billion to General Mills' annual revenue, company executives said. That would result in a 41 percent increase in sales for General Mills' international division.
The Yoplait acquisition should be a significant addition to earnings, too; General Mills expects low-double-digit operating profit margins from overseas yogurt operations, company executives said.
Yoplait is the world's second-largest yogurt player after Danone, another France-based company, known in this country for its Dannon brand. Danone has 23 percent of the global market, Yoplait 7 percent.
Western Europe is a prime source of Yoplait's international sales, and that market is relatively mature. France, for example, leads the world in yogurt-eating with 17.8 kilograms of the stuff consumed per capita last year. Ireland was next with 11.5 kilograms.
Still, General Mills believes it can gain market share in Europe. And potentially fast-growing emerging yogurt markets are more up for grabs. Per capita yogurt consumption in China and India respectively is only 2.3 kilograms and 0.3 kilograms, according to data presented by General Mills.
Danone has only 1 percent of the Chinese market, with the rest split among many Chinese players. In India, Nestlé leads the multinational food companies with a 7 percent share.
Mike Hughlett • 612-673-7003
