French dairy giant Danone has agreed to collaborate with Else Nutrition, a supplier of plant-based infant-formula products in Canada.

Vancouver-headquartered Else said in a statement that the two companies had signed a letter of intent providing for a “multi-stage collaboration, subject to the finalisation of certain commercial terms”, following Danone having completed extensive due diligence.

An Else spokesperson told Just Food: “At the first stage of the collaboration under the LOI, Else and Danone will enter into a license agreement whereby Else's products shall be included in Danone’s specialised nutrition portfolio and manufactured marketed and commercialised by Danone.”

Else, founded in Israel in 2018 by veterans of the infant-formula industry, entered the European market this month with a UK launch. CEO Hamutal Yitzhak said then “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.”

On the Danone collaboration, Else said that after the first stage of the project, the two companies will “negotiate other opportunities beyond product commercialisation”.

Else, which uses a co-manufacturer, said the deal does not at present impact its business in North America nor other countries outside of Europe.

It said the parties anticipate signing the definitive agreement by the end of the first quarter of next year.

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 declined to comment on the collaboration agreement with Else when contacted by Just Food.