Business

Pepsi: Now in dairy aisles with yogurt offerings

PepsiCoGeneral Mills Incorporated

PepsiCo. Inc., purveyor of sodas and brands such as Quaker, Frito-Lay and Gatorade, has a new sacred cow: dairy.

This month, the soft drink giant will venture into the increasingly active yogurt market, starting with products in 17 markets in the Northeast and mid-Atlantic before expanding outward. The move signals Pepsi’s growing focus on good-for-you options instead of the sugary, calorie-laden offerings it’s best known for.

The company is partnering with the Theo Muller Group, the largest private dairy business in Germany. Their joint effort, Muller Quaker Dairy, will sell options such as Choco Balls, Honeyed Apricot and Splendid Strawberry as well as Greek varieties.

Initially, the yogurts will be produced in Europe until PepsiCo finishes building a factory in Batavia, New York, which is expected to open next year.

At the moment, Americans consume less than half the yogurt that Europeans do. But the U.S. market for the dairy product is expected to reach $9 billion by 2016, more than double its standing in 2008. Worldwide, the dairy sector will be the fastest-growing food category, according to research from Euromonitor.

In the last three years, sales of Greek yogurt have spiked 100% annually. Pepsi will face stiff competition from companies such as Ben & Jerry’s and General Mills, which have hustled to join the market along with upstarts such as Chobani and Fage.

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