Land O'Lakes Inc. and egg cooperative Eggland's Best Inc. are creating a joint venture that will be the nation's leading marketer of branded, premium eggs.

Arden Hills-based Land O'Lakes, one of the largest U.S. egg producers, will invest an undisclosed amount in a 50-50 joint venture with New Jersey-based Eggland's Best.

It's a move aimed at increasing distribution of Eggland's Best eggs and bolstering Land O'Lakes' namesake premium national egg brand.

"This joint venture brings together two leading brands in the egg business that are known for providing retail customers and consumers with products of the highest quality," Land O'Lakes Chief Executive Chris Policinski said in a news release.

Most of the U.S. supermarket egg business involves generic brands made by big laying operations, including Moark, a Land O'Lakes egg subsidiary. Eggland's Best is a national egg brand -- the nation's largest -- that sells into the premium segment, entailing a premium price for consumers.

While still a niche market, premium or "specialty" eggs are a fast-growing part of the egg business, capitalizing on consumer health concerns.

Eggs marketed under the Eggland's Best brand come from hens on strict diets that include only vegetarian feed. Those birds in turn produce eggs with lower cholesterol and fat levels than standard eggs, said Charles Lanktree, the company's chief executive.

Eggland's Best has posted annual double-digit sales growth for the past 15 years, Lanktree said. "Land O'Lakes is saying, 'We want to be part of this growth.'"

Land O'Lakes own brand is the nation's second-largest-selling branded egg, and it will be licensed and marketed through the new joint venture with Eggland's Best.

Moark is the nation's third-largest egg producer with 15.7 million hens, according to Egg Industry, a trade publication.

Moark is one of 13 "franchisees" and owners of Eggland's Best that produce eggs under the Eggland's Best brand. With its investment in the joint venture, Land O'Lakes will partially buy down the stakes of other co-op members.

On Tuesday, Eggland's largest franchisee, Mississippi-based Cal-Maine Foods, said it will book a one-time gain of $27 million in connection with the joint venture's creation.

Mike Hughlett • 612-673-7003