Business Strategies / Industry News / Manufacturing Trends / Process and Operations

PepsiCo Ends Yogurt Partnership with Muller, Closes Plant

By Lauren R. Hartman, Product Development Editor

Dec 14, 2015

PepsiCo, who was recently named Food Processing's 2015 Processor of the Year, has halted production at a Batavia, N.Y., yogurt plant, and is exiting the US yogurt market. less than four years after entering it, after a decision to end the joint venture was reached with Germany's dairy giant Theo Muller Group. The companies ended production because the plant didn't meet expectations, a PepsiCo spokesperson said in a report last week from The Associated Press.

The Dairy Farmers of America cooperative will purchase the facility and retain some of its employees, and is exploring several milk handling and manufacturing options for the facility.

PepsiCo said about 64 of the plant's 170 jobs are expected to be cut and transition assistance will be offered. Opened in 2013, the $208-million Muller Quaker Dairy in Batavia was pegged as a key player in the yogurt boom, touted by Gov. Andrew Cuomo at the state's first "yogurt summit" in 2012.

"We are immensely appreciative of the support we've received over the years from the community, our customers and the consumers who purchased our products," PepsiCo said in a statement. "We are also pleased to know that DFA, the nation's leading milk marketing cooperative, with nearly 1,400 member farms in New York alone, intends to continue to invest in the community and further expand their production and agricultural presence in the state."

Muller yogurt has been a popular brand in Europe for more than a century. Muller products including dessert-inspired flavors like Raspberry Brownie Supreme and Dulce de Leche Delight will disappear from U.S. shelves after current stocks are sold, the PepsiCo spokesperson said.

PepsiCo continues to operate in the dairy category in several overseas markets including Russia, Brazil and the Middle East. The company says it recently launched a Quaker-branded high fiber oat drink with a dairy in China.