Danone, the renowned French dairy company, has entered into a collaborative agreement with Else Nutrition, a Canadian provider of plant-based infant formula products.
Vancouver-headquartered Else has announced in a statement that, following Danone’s completion of extensive due diligence, the two companies have signed a letter of intent outlining a “multi-stage collaboration, subject to the finalization of certain commercial terms.”
In the initial phase of the project, the Canadian company specified that the collaboration involves entering into a license agreement. This agreement entails the inclusion of Else’s products in Danone’s specialized nutrition portfolio, with manufacturing, marketing, and commercialization responsibilities undertaken by the prominent French dairy company.
According to a spokesperson from Else, “Danone will produce the products it will commercialise in Europe initially but there is potential for expansion into other markets.”
Established in Israel in 2018 by industry veterans in the infant-formula sector, Else made its debut in the European market with a launch in the United Kingdom earlier this month.
CEO Hamutal Yitzhak said, “the UK represents our first entry into the lucrative European market and we expect to enter additional European countries in the near term.”
He added, “Moreover, Europe is an ideal market for our products given consumer preferences and trends towards healthy and nutritious plant-based options, especially for their children.”
Else said that after the first stage of the project, the two companies will “negotiate other opportunities beyond product commercialisation”.
The spokesperson said this means “other business or scientific mutual activities besides licensing the toddler product in Europe.”
The company stressed this “is not an acquisition of Else at this point”, adding “it’s a collaboration agreement for the Europe market, with an agreement to discuss other activities and geographies that may be negotiated in the future”.
Else, which uses a co-manufacturer, said the deal does not at present impact its business in North America or other countries outside of Europe.
It said the parties anticipate signing the definitive agreement by the end of Q1, 2024.
Danone, which owns plant-based alt-dairy brands including Alpro and Silk, has increased its exposure to the category in recent years through acquisitions and investment.
In 2021, it acquired US plant-based products provider Earth Island, which specialises in faux-cheese and mayonnaise.
And in April this year it invested in Israel-based animal-free dairy start-up Imagindairy.
Danone refrained from providing comments on the collaboration agreement with Else upon contact.