WhiteWave has made a strategic move to expand its presence in the growing U.S. yogurt category with the acquisition of California-based organic yogurt producer, Wallaby Yogurt Company, for $125 million in cash.

 

The several billion dollar yogurt category of food products is rapidly expanding to include Greek and Australian yogurts, drinkable yogurts, portable on-the-go yogurts, children’s offerings, and organic varieties – leading the space to become crowded and competitive. But WhiteWave chief executive and chairman, Gregg Engles stated during the company’s second quarter earnings call that he does not believe the space is saturated. In fact, he sees substantial room for growth in select sub-categories.

 

However, Engles expresses that WhiteWave is unlikely to be negatively affected by the fierce competition in the space, stating, “…we are trying to pick places in the category that frankly are the highest growth portions of the category and the highest value-added portions of the category that frankly leverage some of our unique capabilities in places where we have differential competitive advantage.”

 

The deal for Wallaby, which saw 2014 sales in excess of $45 million – a 20% increase year on year, will also work to strengthen WhiteWave’s production capabilities, adding a West Coast production facility to the company’s new yogurt plant opened last year in Pennsylvania, and will integrate nicely into the company’s operations, as its existing organic milk supply will be able to complement its organic yogurt production.

 

On the same day it announced the Wallaby acquisition, WhiteWave also announced the closing of its acquisition of plant-based nutrition company, Vega on August 1. This acquisition gives WhiteWave an opening into the rapidly growing $8.5 billion on-the-go nutritional powder and bars business and reinforces its presence in the plant-based food and beverage space.

 

“The plant-based sub-category has been growing even faster at a 15% compounded annual rate over the past five years,” said Engles, and has “significant opportunity for future growth.”