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Danone brings US organic yoghurt to Europe

By Anita Awbi , 11-May-2006

French food giant Danone looks set to launch a new range of organic yoghurts in Europe, made by its US subsidiary Stonyfield Farm.

The firm intends to use the launch to capitalise on growing demand for organic dairy products across the bloc, but has not yet settled on a European brand name or distribution plan.

According to reports in French daily Le Monde, Danone will invest $66m (€51.9m) into the Stonyfield plant in New Hampshire, US, increasing production capacity to cope with its new export market.

However, the problematic sourcing of raw materials may hinder its success in Europe. British consultancy firm Organic Monitor recently told FoodandDrink.com's sister site FoodNavigator-USA.com that the US organics market is being stunted by undersupply, with the dairy and meat sectors hardest hit.

"Nearly all market sectors would grow at much higher rates if sufficient supply was available. For instance, lack of organic milk has caused many retailers to have empty shelves throughout the year," Organic Monitor's Amarjit Sahota said.

"Scarcity of raw material is leading Stonyfield Farm, the dominant producer of organic yoghurt, to look at sourcing organic milk powder from New Zealand. The company is to send inspectors to New Zealand to ensure the organic milk meets American standards," he added.

Meanwhile, Organic milk sales in the UK grew 91 per cent in the 12 months up to last November and had grown 30 per cent per year for the decade before that, a report by the Organic Milk Suppliers Co-operative (OMSC) revealed.

Sales have now topped £100m (€146.7m) per year thanks to organic milk's healthy and environmentally friendly image.

OMSC's report says Britons spent a collective £1.25bn on organic food in 2005, a far cry from the £100m in sales made by the sector a decade ago. The UK was Europe's fourth largest organic food market in 2003, behind Italy, Germany and Spain, said Organic Monitor.

Danone, manufacturer of Actimel bio-drinks and Volvic mineral water, acquired an 80 per cent stake in Stonyfield Farm two years ago.

Since Stonyfield's inception in the early 1980s, it has risen from owning seven dairy cows to being America's third largest yoghurt producer.

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