Natural Foods Merchandiser

Stonyfield Farm Partners With Groupe Danone

Paris-based Groupe Danone, makers of Dannon yogurt, acquired a 40 percent stake in Stonyfield Farm, the Londonderry, N.H., organic yogurt 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, Stonyfield said.

"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.

The Stonyfield brand is the leading seller in the organic yogurt category, and the fourth-largest yogurt brand overall. Adam Ismail, senior consultant at Health Business Partners in Providence, R.I., 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 yogurt, 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 yogurt currently being test-marketed in the United States.

Natural Foods Merchandiser volume XXII/number 11/p. 1

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