Greek dairy firm Fage is investing in its overseas production capacity to offset losses within Greece, given that elsewhere the company’s sales are going from strength to strength while domestically things are looking rather grim.
As a result Fage has decided to invest more in its expansion abroad, increasing the output capacity for its flagship product, strained yogurt, at its production plant in New York. This is aimed at beating competition from rival products that bear no relation to Greek yogurt even though they often market themselves as such.
The same holds true on this side of the Atlantic, in the UK. Fage has performed outstandingly there following a court decision in favor of Fage and against Chobani, a company owned by a Kurdish entrepreneur. The verdict has forbidden the use of the term “Greek yogurt” for products that are not produced in Greece and do not follow the specific straining procedure. The decision also prevents Chobani from selling in Britain a product that is produced in the US and branded “Greek yogurt.”
Fage is planning to almost double the output capacity of its New York plant from a current level of 85,000 tons per year to 160,000 tons.
Fage’s yogurt sales in the US have grown multifold in the last four years, climbing from 16,600 tons in 2009 to 69,250 tons last year. The new investment amounts to $100 million, while the Greek company has already invested some $235 million in the US.
Last year Fage’s overall sales expanded by 4.5 percent compared with 2012, thanks to the growth in its sales abroad. The dairy firm distributes its products to 280 chains and 75,000 outlets in 40 countries, mainly in the US and Europe. In the US alone its sales grew by 6.9 percent year-on-year in 2013, and in Britain by 5.2 percent, while in Italy they soared 51.5 percent.
The picture is entirely different in Greece, where the company’s sales declined by 4.1 percent last year from 2012. The yogurt market as a whole in Greece is shrinking, as in 2012 it amounted to 250 million euros, down from 267 million euros in 2011.