Packaged Facts: Danone’s WhiteWave acquisition a good deal
The $10.4 billion price tag French multinational food-products corporation Danone is paying for WhiteWave Foods is well worth it, according to market analysts at Packaged Facts who say the move positions the company to become a leader in lucrative and growing food and beverage industry that is favoring natural and organic products.
Researchers estimate the U.S. retail market for natural and organic foods and beverages will reach $87 billion in 2019, up from barely $53 billion in 2014. Packaged Facts analysts say dairy products — including milk and milk alternatives, yogurt, ice cream, eggs, and cheese — comprise 30 percent of natural and organic food retail sales, second only to fresh produce with 35 percent of the market.
By acquiring WhiteWave — known for its popular Horizon Organic and Silk brands — Packaged Facts says Danone will not only control a sizable share of the U.S. market, but the company is now even more formidable when competing with other European food companies.
“The strong get stronger in what is and will continue to be a competitive mainstream segment of the food and beverage industry,” says David Sprinkle, research director, Packaged Facts. “This deal will be the largest to date in the natural and organic foods industry, and for good reason from Danone's perspective. Today's consumers favor fresh and healthy over processed.”
WhiteWave reported double-digit growth across several of its natural and organic brands and business segments, researchers say. Most notable were the 29 percent and 16 percent respective gains in the company's plant-based foods and beverages and premium dairy segments during the last report quarter. WhiteWave's total revenues increased 14 percent to slightly over $1 billion thanks in part to its own recent strategic and high-growth acquisitions.