Danone sees US yogurt consumption doubling

Tue Mar 16, 2010 4:03am IST

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(for other news from the Reuters Food and Agriculture Summit, click here)

CHICAGO, March 15 (Reuters) - Danone (DANO.PA), the world's largest yogurt maker, expects double-digit percentage dairy sales growth in the United States over the long-term and aims to double per capita consumption in that market within four years.

Gustavo Valle, the chief executive officer of Dannon, the French group's U.S. $1 billion plus yogurt business, said the U.S. market is still very underdeveloped with consumption six times lower than in Western Europe.

"For the future, we see double digit growth on a long-term basis," Valle said on Monday at the Reuters Food and Agriculture Summit in Chicago. "In four years, we can double the consumption per capita."

Dannon cut U.S. yogurt prices by 3 percent to 5 percent in the middle of 2009 as part of a wider group move to reflect the fall in milk prices. That helped boost sales by 15 percent in the second half of 2009 compared to flat sales in the first half of 2009.

Valle added that yogurt sales including its best-selling Activia brand were continuing to grow around 15 percent in the first 2-1/2 months of this year. Activia is made by Dannon.

He expects to keep U.S. yogurt prices flat this year despite the first signs of milk prices starting to rise again.

"We are already seeing milk prices rising, but price rises are not an option," he said.

Danone's fresh dairy division worldwide makes up nearly 60 percent of the group's 2009 total sales of almost 15 billion euros, and the mid-year price cuts helped push up global sales volumes by 4.6 percent

(For more on the Reuters Food and Agriculture Summit, see [ID:nN152052901])

(Reporting by David Jones and Brad Dorfman; Editing by Carol Bishopric)

((bradley.dorfman@thomsonreuters.com; 312 408 8133; Reuters Messaging: bradley.dorfman.com@reuters.net)) Keywords: FOOD SUMMIT/DANONE

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