Danone Completes Acquisition of Organic-foods Producer WhiteWave

While Danonemay be the global leader in yogurt, it has been struggling to improve annual sales growth afterdisappointing performance from itsActiviabrand.Since Danone first announced it wouldacquire the fast-growing organic foods maker WhiteWave for $12.5 billion last year, analysts predicted the purchase would give it a premier position in soy and plant-based products popular with American consumers.

The merger was allowed to proceed followingDanone’srecent antitrust deal with the U.S. Department of Justice, which required the company to sell its Stonyfield organic yogurt brand.Danoneexpects the acquisition toraise its full year like-for-like sales growth by an extra 0.5% to 1%and boost run-rate operating profits to $300 million by 2020. Improving the company’s dairy division has been a top priority for executives at Danone.

The WhiteWavepurchase comes as consumers embracethe plant-based and dairy-free lifestyle — one that is conscious of environmental, ethical, and health concerns. There are a significant number of consumers who can’t eat dairy. More than 40 million Americans are lactose intolerant. But many others are looking to dairy alternatives.The purchase, which is Danone’s largest in a decade, willimprove the company’s product line with brandsincluding Horizon Organic milk, Wallaby Organic yogurt and Earthbound Farm packaged salad, which WhiteWave says are the top sellers in their categories. If the trend of moving toward plants and away from dairycontinues, Danone’s acquisition — viewed by some analysts as expensive — could prove to be a bargain.