Revisiting the Market’s Yogurt Binge

Revisiting the Market’s Yogurt Binge

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It may seem strange to reiterate to aspiring investors that they might seek out their fortunes in yogurt. The brown-bag-lunch staple is hardly sexy, requires a spoon, and resides in an uncomfortable middle-ground between being healthy enough for a stand-alone meal, and indulgent enough for desert. 

It's a small wonder that Greek yogurt dollars financed the rise of one of New York's most successful immigrants into billionaire status. True, enthusiasm for the once hipster-delicacy has waned slightly, in part because kids didn't quite take to the usually child-friendly product. But some companies are making deals which suggest that they think yogurt consumption will continue to rise. 

A recent partnership between Starbucks (SBUX) and Danone (DANOY) is further evidence of the speculation about the yogurt market, as the French dairy distributor hopes to meet a rising demand by developing a new brand to be sold exclusively to Starbucks' 70 million weekly customers.

At the moment, American families consume far less yogurt than those in Europe. The most ardent yogurt-eaters on the planet, the average Frenchman is likely to eat almost six times as much of the stuff as his American counterpart. Danone, a French company, is banking on the idea plenty of Americans haven't discovered their product yet and that there is a huge market of potential new buyers.  

The new brand, Evolution Fresh, Inspired by Dannon may be a bit wordy, but it caters to recent demands among Starbucks customers for more, healthier options. Unlike typical yogurt products, which are sold in supermarkets with a limited amount of space for healthy snacks – Evolution Fresh will provide Danone with a way to side-step the competition from General Mills (GIS), Kraft (KRFT), and smaller independant producers.  

Will the yogurt market continue its rapid growth? Or are French dairy owners in for a surprise? Use the charts below to begin your own analysis.  

The List

1.Starbucks Corporation (SBUX, Earnings, Analysts, Financials):Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $51.7B, most recent closing price at $69.02.
 

 

2.Danone (DANOY, Earnings, Analysts, Financials): Produces and distributes food and beverage products. Market cap at $45.7B, most recent closing price at $15.19.
 

 

3.General Mills, Inc. (GIS, Earnings, Analysts, Financials):General Mills, Inc. manufactures and markets branded consumer foods worldwide. Market cap at $33.36B, most recent closing price at $51.53.
 

 

4.Kraft Foods Group, Inc. (KRFT, Earnings, Analysts, Financials):Operates as a consumer packaged food and beverage company in North America. Market cap at $34.51B, most recent closing price at $58.29.

 

(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Research. All other data is sourced from Finviz.)

 

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2 Responses to “Revisiting the Market’s Yogurt Binge”

  1. Paleo Book says:

    I think yogurt will always be a good investment. There has always been interest and it has continuted to grow. These are all signs of an evergreen product.

  2. read info says:

    The new brand, Evolution Fresh, Inspired by Dannon may be a bit wordy, but it caters to recent demands among Starbucks customers for more, healthier options

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