Danone has signed an agreement to offload Earthbound Farm, the US organic salad business, to Taylor Farms.

California-based Earthbound, which had annual sales of around $400 million in 2018, produces a range of organic salads, vegetables, and fresh fruit.

The deal comes five years after WhiteWave Foods bought the business for $600 million. Danone acquired WhiteWave in 2016.

Danone said the deal forms part of its “portfolio management and capital allocation optimisation strategy”.

Taylor Farms, which is also based in California, said Earthbound Farm will join its Taylor Farms Retail Group and help lead growth in the organic fresh produce category.

In a statement, the company said: “We will build on Earthbound Farm’s tradition of organic authenticity, new variety development and quality focus with expanded regional organic growing and processing capability to better serve Earthbound Farm’s customers and consumers across North America.”

It added: “We are grateful for Danone’s stewardship of Earthbound Farm during the past two years and for the opportunity to return ownership of this organic fresh produce leader to local roots and family ownership.”

Last year, Danone recorded a 2.9% increase in like-for-like sales, benefiting from the strong performance of its specialised nutrition unit and water brands.

The Paris-headquartered company last year revealed plans to triple the size of its plant-based business by 2025 by combining its position in the dairy industry with the high plant-based growth potential. It is looking to grow plant-based sales from €1.7 billion to around €5 billion.

In February, Danone North America opened a new building at its DuBois, Pennsylvania, facility to increase production of plant-based foods.