BATAVIA, N.Y. (WIVB) – The massive $200 million yogurt production facility in Batavia that brought together two titans of consumer food products has called it quits.
Production at the Muller Quaker Dairy LLC plant ceased Thursday, leaving 170 workers wondering, what’s next? The 360,000 sq. ft. production facility is a joint venture of Pepsico’s Quaker Oats unit and the German based Theo Muller Group opened two years ago–amid much fanfare–and yogurt sales were booming.
Is this an indication the Greek yogurt business might be going south? Andrew Novakovic, a professor at Cornell University’s Dyson School of Management, doesn’t think so.
“This is not, in any way shape or form, a reflection of some kind of failure in the yogurt category, and although it is starting to mature, it is still a very successful category.”
Prof. Novacovic is an authority on agricultural economics, and pointed out, while Pepsico and Quaker have the name recognition in the domestic market, and Muller is a dairy products giant in Europe, their brand just didn’t seem to catch on with American consumers.
“The Muller label was not able to establish an identity with consumers. It was not different enough, it did not have a background that was transferable. It just did not have enough assets to gain leverage within a yogurt market that had a lot of competition.”
Now the Kansas City, Mo. based Dairy Farmers of America–the largest dairy co-op in the country–has agreed to buy the sprawling yogurt factory, located in the Genesee County Agri-Business Park.
In a written statement, Dairy Farmers Chief of Staff Monica Massey said, “DFA has agreed to acquire the Muller-Quaker Dairy Plant in Batavia, NY. The acquisition is a strategic one for DFA as it is an important milkshed for us.”
Massey also wrote, “This facility creates multiple potential milk handling and dairy manufacturing opportunities,” which Prof. Novakovic suspects is an indication, if the DFA takes over the Batavia plant, the new owners might decide to use it for other purposes besides making yogurt.
There is no timetable, at the moment, for the DFA to follow through on its pledge to purchase the plant.
State officials provided the Muller Quaker Dairy with $14 million in state tax credits, and another $11 million in property tax breaks. When a company fails to live up to its end of the bargain, the state could try to get its money back, but right now, most of the effort is toward getting the plant back open, and the workers back on the job.