Yoplait should focus on international expansion, says analyst

By Guy Montague-Jones

- Last updated on GMT

Related tags: Compound annual growth rate, United states, Developed country

General Mills should make expansion into international markets a priority for Yoplait after it gained a controlling stake in the French yoghurt company earlier this week, according to a Euromonitor analyst.

The US food giant sealed a 51 per cent controlling interest in Yoplait on Tuesday following a bidding war that it won in March – having fought off other big name rivals including Nestle and the Chinese conglomerate Bright Foods.

With the stake sealed at a cost of €810m, General Mills can now turn its attention to the future direction of Yoplait.

Most attractive markets

Ildiko Szalai, company analyst at Euromonitor International, said international expansion should be a top priority for Yoplait - with emerging markets offering the best opportunities to bolster sales revenue.

Szalai said: “In terms of retail value sales expansion, China, Brazil and India are the most attractive expansion targets, the three markets combined will make up for 47 per cent of the global yoghurt market gain over the 2010-2015 period.”

The analyst added that within the dairy market, yoghurt is the category expected to perform most evenly and most dynamically across regions.

Yoplait’s performance

Analysing the performance of Yoplait to date, Szalai said: “The brand has achieved a healthy 4.4 per cent CAGR (compound annual growth rate) over 2005-2009, although its global market value share stagnated at 1.2 per cent during this period.”

Yoplait is especially strong in the US where General Mills has held the license for the brand since 1977. In 2009 Yoplait generated some 52 per cent of its sales from North America, and Szalai said there is scope for growth in the market as yoghurt sales are growing rapidly and consumption still lags well behind Europe.

As for emerging markets, the analyst said Yoplait is strongest in Latin America, which accounts for 6 per cent of its 2009 retail value sales. And in Asia there is plenty of scope for expansion – currently the brand’s presence is largely limited to South Korea, whose yoghurt market is expected to contract 2 per cent from 2010 to 2015, according to Euromonitor.

The brand’s largest emerging market is Latin America, accounting for 6% of its 2009 retail value sales, with its strongest markets in the region being Mexico and Venezuela. The brand’s presence in Asia-Pacific is largely centered on South Korea, whose yoghurt market is expected to contract by 2% over 2010-2015, or by US$127 million in constant value terms.

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