Babybel cheese maker expands south dakota plant as weight loss drugs help stoke demand

Bel Group Doubles Babybel Cheese Production in South Dakota as U.S. Demand Rises

Bel Group's Expansion to Meet Growing U.S. Demand

By Nicholas P. Brown

Major Investment in South Dakota Plant

NEW YORK, March 11 (Reuters) - Bel Group, the French company famous for cheese snacks like Babybel and Laughing Cow, broke ground on Wednesday on a $200 million project to double capacity at its Brookings, South Dakota, Babybel plant, moving to meet healthy snack demand from weight-loss-drug users and other health-conscious Americans.

Job Creation and Economic Impact

The investment, which will create 150 new jobs, will help Bel to meet rising demand for healthy, protein-rich snacks from customers in the U.S., which accounts for about one-third of Bel's sales, said Peter McGuinness, CEO of the company's North American arm. "If we did not act now, we would be squandering growth and running up against capacity constraints," McGuinness said in an interview.

Trends Driving the Cheese Snack Market

The investment comes as consumers grow more conscious of the nutritional value of snacks, a trend bolstered by the rise of GLP-1 drugs from pharma giants like Novo Nordisk and Eli Lilly. 

Government Guidelines and Health Movements

In January, President Donald Trump's administration issued new guidelines recommending Americans eat more protein and less sugar, part of Health Secretary Robert F. Kennedy Jr.'s "Make America Healthy Again" movement.

Product Innovations and Market Response

Expanding the Mini Babybel Line

Bel has expanded the line of wheel-shaped, portion-sized cheese snacks known as Mini Babybel to include gouda and mozzarella versions, and created a new version with more protein and probiotics that McGuinness said is well-suited for GLP-1 users. "The product delivers on GLP-1 (needs)," he said. "We're getting a definite impact from that."

Production Capacity and Future Plans

The Brookings plant, which now churns out around 1.6 million Babybels a day, will soon produce more than 3 million, he said. 

Potential for Acquisitions

McGuinness said the company for now is focused on growing internally, but may eye acquisitions in the future if demand continues to rise.

Factors Influencing Expansion Decisions

Tariffs and Political Factors

While the White House has claimed credit for Bel's and other companies' U.S. investment in the wake of Trump's tariffs, McGuinness said the Brookings expansion was long-planned, and has "nothing to do" with tariffs.

Supply Chain and Local Partnerships

McGuinness told Reuters the company works primarily with three dairy producers near the Brookings plant. Though farmers have faced higher costs for agricultural materials like fertilizer, McGuinness said Bel's high volume of orders keeps prices manageable.

Other U.S. Expansions by Bel Group

Bel, which has four plants in the U.S., has undertaken other expansions of late, including a roughly $140 million expansion of a plant in Nampa, Idaho, that makes GoGo squeeZ snacks. 

(Reporting by Nicholas P. Brown; Editing by Peter Henderson and Chris Reese)