Stonyfield Farm Partners With Danone

Paris-based Groupe Danone, manufacturer of Dannon yoghurt, acquired a 40 percent stake in Stonyfield Farm, the New Hampshire-based organic yoghurt company, in October, with the option of acquiring majority control in 2004. Gary Hirshberg, Stonyfield's chairman and chief executive, will retain management duties and remain a principal shareholder. "For a company to grow and become relevant in the mainstream, you've either got to sell outright, which was clearly not something I was interested in, or you have to come up with something like this," Hirshberg said.

Stonyfield Farm is the brand leader in the US natural yoghurt category with a turnover of about $85m, and the fourth-largest yoghurt brand overall. Adam Ismail, senior consultant at Health Business Partners in Providence, Rhode Island, said there should be "significant cost savings for Stonyfield from leveraging Danone's manufacturing and distribution capabilities." Ismail said he believes Danone will eventually acquire the entire company.

Last year, Danone had revenues in the United States of $1.4 billion, primarily from yoghurt, bottled water—including the Evian and Volvic brands—and Lu biscuits. Ismail noted the Stonyfield deal could help Danone roll out a drinkable probiotic-type yoghurt currently being test-marketed in the United States.

The company has built a reputation in the US for its leadership in organics, natural nutrition and corporate and environmental responsibility and Hirshberg said he was especially pleased with Danone's commitment to Stonyfield's ambitious organic, environmental and social mission: "The Stonyfield/Danone partnership is an excellent model for enabling emerging values-driven firms to gain in strength and stature while remaining loyal to the growing base of consumers who support organic and natural products."

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