Starbucks, Danone to sell co-branded yogurt starting in 2014

July 23 Tue Jul 23, 2013 12:11pm EDT

July 23 (Reuters) - Starbucks Corp and Danone SA said on Tuesday they agreed to sell a co-branded yogurt through Starbucks cafes and in grocery stores as yogurt makers battle for dominance in the $7 billion U.S. market.

The partnership comes as Starbucks pushes into the "health and wellness" category and as Danone, owner of the Dannon brand, and other yogurt makers seek to conquer the U.S. market, where yogurt consumption lags Europe.

Financial terms were not disclosed.

The first product will be ready-to-eat Greek yogurt parfaits, to be sold in U.S. Starbucks stores in spring, 2014.

Distribution to food retailers is planned for 2015, with global expansion to follow, the companies said.

The U.S. retail market for yogurt is estimated at $7 billion, according to Euromonitor International, a sales tracking firm, having grown an average 8.5 percent during the last five years.

Euromonitor forecasts the growth rate slowing to 5.9 percent for the next five years, double the expected growth of packaged food overall.

Greek-style yogurt now makes up more than 40 percent of the market, though the top-selling brand remains Yoplait, which has a nearly 24 percent share, according to Euromonitor. Privately held Chobani is second though France's Danone has a greater overall share between its Dannon, Activia, Stonyfield Farm and Danimals brands, which together account for 30 percent of the market.

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