As Big Food continues to be starved for growth, deal activity is heating up in the yogurt section.
The $7.6 billion yogurt category has been a rapidly evolving segment of the food industry for the past several years. Consumers continue to look to high-protein alternatives to their morning cereal, and there is an expanding coterie of options available. With upstart brands outpacing their legacy peers, deals have followed suit.
Danone sold its organic Stonyfield yogurt to family-owned French dairy company Lactalis for $875 million last summer, in an auction that also drew the interest of Chinese dairy company Yili, Grupo Lala and Dean Foods . Lactalis earlier this month also acquired Icelandic-style yogurt brand Siggi's last for an undisclosed amount.
Noosa Yoghurt, likewise, is working on a sales process, sources familiar with the matter tell CNBC. The company expects to generate more than $250 million in sales, the sources added. The sales process was first reported by the New York Post.
The sources asked not to be named because the information is confidential. Noosa declined to comment.
Distinction in the yogurt aisle has come in many flavors. Yogurt companies are looking to cater to those looking for a snack, an indulgence or a breakfast. They also claim different origins, ranging from Icelandic to Australian. They've developed brand identities: Siggi's is the serious one, Noosa the fun one, and Stonyfield the organic one.
Some, though, have struggled to find an identity or to innovate in a way that caters to the younger generation. Packaged food giant General Mills continues to see sales of its U.S. yogurt drop, posting a 11 percent decline last quarter, as demand for Yoplait Greek and Yoplait Light products remained weak.
The deal activity in the yogurt segment comes amid broader activity in the $33 billion U.S. snacking space, as food giants, which are under increasing pressure, look to reach diners that eat on the go.
Just within the past few months, Kellogg announced its $600 million acquisition of RXBar , and Mars invested in the parent company of Kind Bar at a valuation of $3 to $4 billion.
Some have fetched multiples more than five times revenue, sources say. Food deals last year were at record valuation multiples, according to data from Dealogic that dates back to 1995. These deals fetched an average value of 25 times enterprise value to EBITDA.
On a larger scale, Campbell Soup announced plans to buy snacks company Snyder's-Lance for $4.87 billion. Hershey announced plans to buy SkinnyPop's parent, Amplify, for $1.6 billion. Both are the companies' largest acquisitions to date.