Pepsi to Launch New Line of Yogurts

The consumer craze for yogurts has corporate America scrambling.

PepsiCo (NYSE:PEP) is about to join the fray, launching its own line of yogurt products in the Northeast and Middle-Atlantic regions, the New York Times reports.

The new yogurt products will be produced in Germany in a joint venture with dairy producer Theo Müller.

However, production will eventually be shifted to a $206 million facility currently under construction in Bavaria, New York. The new plant will be run as part of the joint venture, named Müller Quaker Dairy.

The expansion into yogurt marks part of Pepsi’s effort to diversify its product lines away from soft drinks and its traditional competition with snack food rival Coca-Cola (NYSE:KO). It is also part of a strategy by CEO Indra K. Nooyi to develop healthier products.

Entering the yogurt market, it faces competition from Danone Group’s (PINK:DANOY) Dannon and General Mills (NYSE:GIS), which recently announced plans to add 40 new yogurt flavors, capitalizing on a move toward Greek yogurt by consumers.

While Americans have been increasing their yogurt consumption, they remain significantly behind other consumers worldwide. Canadians eat twice as much yogurt, on average, as Americans, and Europeans consumer about three times as much.

Shares of Pepsi slipped fractionally in Monday morning trading.

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