PepsiCo's new yogurt production unit
The joint venture signals the company's shift with changing consumer tastes.
By Zacks Equity Research
PepsiCo, Inc. (PEP) recently announced the opening of a new yogurt production facility for Muller Quaker Dairy, a joint venture between PepsiCo and Theo Muller Group.
Muller Quaker Dairy will source milk from the local market and the new facility will produce Muller Corner, Muller Greek Corner and Muller FrutUp yogurt varieties.
The new state-of-the-art manufacturing unit, located in Batavia, N.Y., will have three production lines and can produce 120,000 cups of yogurt per hour. The facility will employ about 180 people. The facility can further accommodate up to eight more production lines in the future.
Yogurt is one of the fastest growing categories in the U.S. With changing consumer preferences, there is a huge demand for nutritious products. Yogurts are rich in protein, calcium and vitamin D and thus prove to be a healthy snacking option.
Despite PepsiCo’s increased marketing investments and package and product innovation, to boost its American beverage business, the company’s carbonated beverage sales have been sluggish due to changing consumer preferences, increasing health consciousness, rising obesity concerns, possible new taxes on sugar-sweetened beverages and growing regulatory pressures.
As such, PepsiCo is continuously focusing on products that have improved nutritional value. Quaker is one of the company’s leading health and wellness brands, which also include other non-carbonated beverages such as Tropicana and Gatorade. The latest attempt to produce yogurt compliments the company’s focus on wellness brands.
PepsiCo carries a Zacks Rank #2 (Buy).
Some other consumer staple stocks that are worth a look include Flower Foods Inc. (FLO), carrying a Zacks Rank #1 (Strong Buy), J&J Snack Foods Corp. (JJSF) and H. J. Heinz Company (HNZ) holding a Zacks Rank #2 (Buy).
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