FDBusiness.com

PepsiCo, the world’s second largest snacks and beverages company, and Theo Muller, Germany’s largest privately owned dairy business, have chosen New York as the site for their first yogurt production facility in the US. Through their joint venture, Wave, the companies will invest $206 million (Eur153 million) and create 186 new manufacturing and support jobs to operate the new state-of-the-art facility in Batavia.

Wave considered other locations both in and outside of New York State for the facility. After a thorough evaluation, including an assessment of access to dairy resources, water supply and distribution routes to key markets, the company chose Batavia. While the facility is being developed over two years, Wave may import Muller products in order to establish a foothold in the fast-growing US yogurt business.

Wave’s investment continues a strong recent trend of major yogurt producers opening manufacturing facilities in New York. The state currently has 29 yogurt plants, which employ more than 2,000 people and produced a total of 530 million pounds of yogurt in 2011—a 43% increase from 2010 and more than double 2008 levels.

New York State is the US leader in the production of the highly popular Greek-style yogurt. Producing Greek yogurt requires approximately three times the amount of milk than traditional yogurt, making the industry a major economic driver for dairy farmers across New York State. In 2011, more than 1.166 billion pounds of milk was used for yogurt production. This is comparable to the milk production of 500 average-size dairy farms inNew York State (115 cows/farm).

The joint venture with Muller reflects PepsiCo’s ambitions to expand in dairy. In 2010, the beverages and snacks manufacturer acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.