Report: General Mills considers sale of yogurt business

MINNEAPOLIS – General Mills, Inc. is exploring selling its North American yogurt business in a deal that could net the Minneapolis-based maker of Yoplait yogurt more than $2 billion, according to Reuters.

Citing sources familiar with the situation, Reuters said General Mills has hired New York-based investment firm JPMorgan Chase to assist with the sale.

General Mills is viewing its yogurt assets as a non-core part of its current strategy as competition from market leaders Chobani and Dannon increases, the sources said. General Mills’ yogurt brands include Yoplait, Oui, Liberte and Ratio Food.

Yoplait was introduced in 1964 and General Mills has held U.S. marketing rights to the brand since 1977. General Mills acquired a 51% stake in Yoplait in 2011 from private equity firm PAI Partners and French dairy cooperative Sodiaal in a transaction valued at $1.2 billion. Ten years later, in 2021, General Mills sold Yoplait’s European operations to Sodiaal in exchange for full ownership of Yoplait’s Canadian operations and a reduced royalty rate for use of the Yoplait and Liberte brands in the United States and Canada. At the time, General Mills said its U.S. and Canadian yogurt businesses generated combined net sales of $1.4 billion in fiscal 2020.

More recently, General Mills said yogurt sales within its North America Retail division totaled $367 million in the third quarter ended Feb. 25, compared to $378 million in the same period a year ago. In the nine months ended Feb. 25, yogurt sales were $1.1 billion, compared with $1.08 billion in the same period a year ago.

General Mills has not commented on the potential sale of its yogurt business, but has mentioned the challenges the category has faced several times over the past year. In a March conference call to discuss third-quarter earnings, Jeffrey L. Harmening, chairman and CEO of General Mills, said yogurt is “an area where we’ve also struggled.” But he said at the time that the new Yoplait Protein was off to a good start.

A year earlier, in February 2023, at the Consumer Analyst Group of New York conference in Boca Raton, Florida, Harmening identified American yogurt as an area where General Mills needed to improve its competitiveness and accelerate growth. He said that while the category saw retail sales growth of 7% for General Mills, it lagged behind overall category growth of 13%. He said the company planned to strengthen its original-style Go-Gurt and Yoplait lines with flavor news, product enhancements and increased brand investment.

“We are focused on growing our presence in the low sugar weight management space, which is leading growth in the category, by expanding distribution of our highly successful :ratio product line that delivers high protein with less sugar and fewer net carbs. Harmening said in February 2023. “We are also significantly increasing our innovation push, including exciting new offerings, launching early in FY24. And because yogurt is one of the few categories where on-shelf availability lags behind competitors, we are working to reduce supply chain disruptions and improve our customer service.”

General Mills isn’t the only food manufacturer taking a closer look at its yogurt business. The Campbell Soup Co., Camden, NJ, is considering alternatives to the yogurt brand Noosa it acquired it as part of its acquisition of Sovos Brands, Inc. worth $2.7 billion earlier this year.