Stonyfield Founder Happy With New Private Owner
Danone sells organic yogurt company to French family-owned company
By April Hall
Co-founder of Stonyfield Farm, Inc., Gary Hirshberg, has long had an aversion to taking his company public so ending up in private hands again suits him just fine.
Danone announced this week the sale of organic yogurt company Stonyfield to Lactalis, a third-generation, private company owned by the Besnier family of France.
“I learned a lot in the 16 years with Danone,” says Hirshberg, who co-founded Stonyfield with Samuel Kaymen in 1983. But he looks forward to becoming part of a private company.
“Having a parent who is private means they are unmoored from those short-term pressures and therefore understand the investment necessary to make our goals,” he explains. “If I can ever avoid being a public company, I will certainly do so," noting the pressures of short-term returns on shareholder investments rather than creating long-term goals.
“Once you go public you are at the mercy of forces way, way, way beyond your control,” Hirshberg says.
He saw the perils of being public first hand when his friends, the founders of Ben & Jerry’s fought off a hostile takeover in 2000. At the time, Hirshberg was considering taking Stonyfield public because after 20 years the business needed an influx of capital the then 247 independent investors couldn’t provide. But the struggle over Ben & Jerry’s stopped him in his tracks.
So he started looking for a large company that could handle Stonyfield’s trajectory.
Danone, which is publicly held, first bought a 40% stake in Stonyfield in 2001, shortly after Kaymen retired in 2000, and then an additional 40% in 2004. Hirshberg, who is still chairman of Stonyfield, sold his and his family’s stake in 2014, after stepping down as CEO, giving Danone 100% ownership. (A driving force behind the Stonyfield sale is Danone’s pending purchase of natural foods company WhiteWave. The Department of Justice could have objected to Danone owning both companies in the organic dairy space.)
With the announced sale of Stonyfield to Lactalis, which generates about $1 billion in U.S. sales but has lacked a strong yogurt brand, Hirshberg will remain Stonyfield Chairman.
Stonyfield CEO Esteve Torrens and Hirshberg are just getting to know Lactalis management, but the chairman says the company is appealing. He says he has confidence in the new owners because they, too, know the passion of not only business, but having a mission behind the business.
“The one thing I would say is, they just spent $850 million for a company with $370 million in sales,” Hirshberg says. “That’s an expression of passion and belief. I now have a strong motivation to prove them right. Hopefully this is a marriage of two passionate folks with two passionate missions.”
The current CEO of Lactalis, Emmanuel Besnier, is only the third CEO in the private company’s 84-year history. His grandfather Andre Besnier founded the company in 1933.
Lactalis’ investment in Stonyfield, notes Hirshberg, will help the New Hampshire-based brand improve its share of the yogurt market from 5% to double digits. Stonyfield, a direct competitor with Dannon (also a Danone brand), was often left in the shadows when it came to corporate investments, he adds.
Having a parent company that is also committed to organic farming and sustainability provides, he continues, “the opportunity to influence Lactalis and for them to influence us.”