PepsiCo, Theo Müller to set up yoghurt facility in US

US-based beverage and snack company PepsiCo and German dairy company Theo Müller have entered into a joint venture agreement to establish a $206m yoghurt facility in Batavia, New York, US.

The facility, known as Project Wave, will be located at Genesee Valley Agri-Business Park and will produce a range of new yoghurt products.The companies are yet to finalise on the specific brands and types of yoghurt that the plant will produce.

PepsiCo spokesman Jeff Dahncke said there is a tremendous opportunity for new products to enter the US dairy market.

According to the companies, several other locations in and outside the state of New York were considered but Batavia was finally chosen after evaluating various factors such as access to dairy resources, water supply and distribution routes to key markets. The state and Genesee county have agreed to offer about $26m in tax credits for setting up the new factory.

The construction of the facility, which will start this spring, is expected to be completed within three years. Since producing Greek yoghurt requires nearly three times the amount of milk than traditional yoghurt, the new plant will source huge amounts of milk from local farms.

New York has been increasingly attracting major investments from yoghurt manufacturers: last year, Chobani and FAGE announced major investments in the state to boost their production capacities.

New York currently has 29 yoghurt facilities, which in 2011 produced a total of 530 million lbs, an increase of 43% from 2010 and more than double 2008 levels.