Interview Kees Gillen
'Buy yogurt brand Yoplait game changer for Sodiaal'
The French dairy cooperative Sodiaal signed a deal last month with the American food giant General Mills to acquire the European branch of Yoplait. As a result, the well-known yogurt brand returns to French hands after 10 years. "And the French are very proud of that," says Kees Gielen, COO and CFO of Sodiaal.
For Gielen, who has been active at Sodiaal since 2016, the agreement with General Mills is the culmination of a negotiation process lasting a total of 18 months. He was the leader of the talks with the Americans on behalf of the French cooperative. "It's a very complex deal, it really went step by step, from solution to solution. But it worked out in the end. The little flower comes back home."
With the latter, Gielen refers to the Yoplait logo on the packaging of the dairy products. For the past 10 years, Yoplait has been 51% owned by General Mills and 49% by Sodiaal. It is one of the best-known yogurt brands worldwide, sold in more than 40 countries. Yoplait, however, has its origins in the mid-60s with one of Sodiaal's cooperative predecessors. "That is why our cooperative was very keen to get Yoplait back under its own management," says Gielen. "We once threw a balloon at our partner, but luckily the time was right now."
Dairy flagship back again
Sodiaal has gone out of its way to announce the takeover. The cooperative speaks in a statement about Yoplait as 'national heritage' and about 'the return of the dairy flagship to its founders'. "It fills the 17.600 (former) members and 9.000 employees of the cooperative with pride. With the takeover of Yoplait, Sodiaal is returning to its roots." The announcement of the takeover did stir things up in chauvinistic France, Gielen points out. "We have been showered with compliments. Many French people think it's great that their own brand is now in French hands again."
The deal was quite difficult, given the complex structure. In addition to the ownership relationship between General Mills and Sodiaal, in many countries Yoplait is also operated, produced and distributed by a network of franchisees. In short, Sodiaal takes over Yoplait's European activities in France and the United Kingdom. This division, called Yoplait SAS, achieved sales of €2020 million in 660, including royalties from franchises in more than 35 countries around the world.
Deal with closed exchanges
Yoplait's 3 production sites in France, namely in Le Mans, Vienne and Monéteau, will be further integrated into the French cooperative group. General Mills, in turn, will acquire Sodiaal's 49% stake in Yoplait Canada, giving the US food group full control of the yogurt brand's North American operations. "The total value of the agreement is $1,4 billion", Gielen calculates, but it is all exchanged with closed exchanges.
Apart from the French sentiment, the agreement fits in perfectly with Sodiaal's strategy to add value to the sale of its dairy products with strong brands. In addition to a global brand such as Yoplait, Sodiaal will also manage the French brands Perle de Lait, Panier de Yoplait, Yop, Petits Filous, Câlin and Liberté. Added to its brands Candia and Entremont, which according to the cooperative are bought by 75% of French households, this gives Sodiaal a Top 10 position in the French ranking of largest brand-driven food concerns. "This agreement gives our organization an enormous boost", says Gielen. "Not only in terms of appeal, but also in research and innovation. It is a real game changer for Sodiaal. Our member dairy farmers can also benefit from this."
Towards a better milk price
Yoplait now accounts for an annual purchase of 450 million kilos of milk from Sodiaal's French member dairy farmers. The 10-year purchase contract that the cooperative had with General Mills through Yoplait SAS will expire in June of this year. "That prospect has also put some healthy pressure on the negotiations," Gielen looks back. "We are now going to focus on the integration of Yoplait's activities within Sodiaal and look at how we can take maximum advantage of each other's qualities. It should ultimately lead to a qualitatively better milk price for our members."
Although Sodiaal and General Mills have an agreement, it will take some time before the transactions are fully completed. The approval process by parties such as (cartel) authorities, works councils and social partners such as trade unions is in full swing, explains Gielen. He provides no bears in the way. The entire process of unbundling and acquisition will not be completed until the end of this year, or so it is expected.
Leerdammer beautiful cheese brand
In the 'yoghurt violence' of Yoplait, the purchase of Bel Leerdammer by Lactalis has not escaped the attention of Kees Gielen. He hinted that Sodiaal also explored the possibilities when it became clear that Leerdammer was 'on the market', but that it soon became clear that Lactalis, as a minority shareholder of Groupe Bel, was in a preferential position. "It's a shame, because Leerdammer is a beautiful cheese brand that would have suited us perfectly. But it really doesn't make the joy of bringing in Yoplait any less."
Eric the Thrush
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