Yogurt is Officially a Trend, And PepsiCo Wants In

Yogurt is Officially a Trend, And PepsiCo Wants In

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In case you missed it, yogurt has gone from drab to fab, with the market for yogurt-based products constantly expanding. From frozen yogurt (FROYO to the uninitiated) to the allegedly more healthy Greek yogurt, milk fermented by bacteria has become so much more than that rather unappetizing description.

While traditional dairy producers may come to mind as the dominant companies in this segment, consumer goods giant PepsiCo Inc (PEP) is making a big play into the US market, valued around $7 billion. Through its Quaker division, PepsiCo has partnered with European dairy titan Theo Müller Group. Already this month the joint venture started a plant in upstate New York to produce yogurt – combining PepsiCo's strong marketing and distribution channels with Muller's industry know-how. 

While PepsiCo and Muller are well placed to meed the growing American demand for more nutritious meal and snack options, pricing in the market is extremely competitive. The stalwart Kraft Foods Group, Inc. (KRFT) introduced a line of Greek yogurt, Athenos, in 2010, but removed it from supermarket shelves only two years later after failing to make inroads among consumers. 

So will PepsiCo have better success against already established yogurt brands? We decided to compare the stock to other companies that already sell yogurt to US consumers. Three of these competitors are publicly traded companies: Dean Foods Company (DF), General Mills, Inc. (GIS) and Lifeway Foods Inc. (LWAY)

The List

Click on the image below to see returns over time.‪ ‬One year returns sourced from Zacks Investment Research.‬

Do you think PepsiCo will have success where Kraft did not? Use this list as are a starting point for your own analysis.

1. Pepsico, Inc. (PEP, Earnings, Analysts, Financials): Engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide.

Market cap at $123.72B, most recent closing price at $80.13.

Sells yogurt through its subsidiary Muller Quaker Dairy – products include Corner, Greek Corner, and FrütUp. Currently available in the Great Lakes region, Northeast, Southeast and mid-Atlantic US, in major grocery retailers such as: Dillons, Dominick’s, Giant Eagle, Hannaford, Kroger, Meijer, Pathmark, Publix, Safeway, Shop Rite, Stop and Shop, Walmart and Winn-Dixie.

 

2. Dean Foods Company (DF, Earnings, Analysts, Financials): Operates as a food and beverage company in the United States.

Market cap at $1.8B, most recent closing price at $9.70.

Sells yogurt through its Alta Dena brand based in Southern California, and the Virginia-based Shenandoah's Pride.

 

3. General Mills, Inc. (GIS, Earnings, Analysts, Financials): General Mills, Inc. manufactures and markets branded consumer foods worldwide.

Market cap at $31.34B, most recent closing price at $48.32.

Owns a 51% stake in Yoplait, with French dairy cooperative Sodiaal controlling 49%. GIS has sole franchising rights to Yoplait pre-stirred yogurt in the US. The company also markets Trix Yogurt, based on the breakfast cereal flavors, Go-Gurt, packaged in plastic tubes for easy consumption, and a probiotic line of yogurt sold as Yo-Plus.

 

4. Lifeway Foods Inc. (LWAY, Earnings, Analysts, Financials): Manufactures dairy and non-dairy health food products.

Market cap at $278.86M, most recent closing price at $17.06.

Sells kefir, a fermented milk product similar to yogurt, thought to originate in the Caucasus region of Eurasia. Products include original, organic, probiotic, frozen, and Greek-style FROYO under the Lifeway Kefir brand name. 

 

(List compiled by Emily Smykal. All data sourced from Finviz. )

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