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Yogurt category sales have been growing at a healthy clip for several consecutive years, based on the great taste of products, convenience, variety and an overall sense of wellness that is associated with these products. But new products offering specific benefits from equally specific types of probiotic bacteria have become another engine of growth.
Over the past three years, yogurt sales have increased by 5% to 7% in each of those years, with some brands like Dannon's new Activia line, Stonyfield Farm's YoBaby and Horizon Organic easily eclipsing that rate of sales growth.
Dannon's Activia line, introduced early in 2006, and featuring a proprietary, probiotic culture, Bifidus Regularis, with specific benefits for digestive system, has generated sales in excess of $100 million in less than a year, and has prompted Dannon to announce plans for a new Activia Light line to be introduced in January 2007. Stonyfield Farm and Horizon Organic both report growth of 30% or more.
While retaining their emphasis on great taste, convenience and variety, some leading brands are adding to yogurt's allure by creating products that offer specific health benefits and the appeal of being all natural or organic.
Horizon Organic, Broomfield, Colo., is riding a wave of consumer demand for organic products with annual sales growth that is in the mid-30s, and with expectations of more of the same in the coming year.
"We expect to see that level of growth in 2007, if not potentially higher," says Caragh McLaughlin, director of marketing. "As we figure out how to talk to American consumers about the benefits of (probiotic cultures) it will continue to drive a lot of growth in this category."
Horizon Organic's yogurt products' own probiotic cultures are called NutraFlora, also known as fructan or fructooligosaccaride. NutraFlora passes to the lower intestines undigested, where it becomes a food source for healthy native bacteria. Eating foods with NutraFlora increases calcium and magnesium absorption and helps maintain a healthy immune system, among several other benefits. The majority of the company's products already offer this health benefit, and most of those few that don't will have it by January.
While Horizon Organic's packaging makes prominent mention of its NutraFlora, McLaughlin says, "we are looking at some other options to promote it—to get the word out that we do have this unique ingredient in our products. My sense is that probiotics is definitely the buzz word or buzz ingredient set in the category, but I don't know that probiotics will succeed without offering specific benefits."
Stonyfield Farm, Londonderry, N.H., continues to promote its all-natural yogurt products, the benefits of its six probiotic cultures—L. reuteri, which helps fortify the immune systems of adults and children by inhibiting the bacteria Salmonella, E. coli, Staphylococcus, Listeria and the yeast, Candida. The company is also achieving dramatic success with its YoBaby line, launched in 1999 as the first whole milk yogurt specifically formulated for babies and toddlers.
"YoBaby has been an amazing growth story for Stonyfield Farm and the yogurt category," says Tim Kenny, vice president of marketing. "It is now the number 2 kids' multi-pack brand in the U.S. and has growth of 36% year to date versus the same time last year. That compares to category growth of 6.5% and kids yogurt growth of 0.3% versus last year."
The company's newest product, 2-a-Day yogurt, is scheduled to be on store shelves in January, and is being directed at women and teenage girls—as well as those men and teenage boys who don't get enough calcium in their daily diets. Flavors include wild berry and strawberry, raspberry, and apricot mango, with the suggested retail price being 79 cents per 6-oz. cup.
Eating two cups a day of the new 2-a-Day yogurt provides 100% of the recommended daily values of calcium. Other benefits include 3 grams of dietary fiber, no fat, and just 120 calories. The products are made with milk from cows not treated with synthetic growth hormone, and have no artificial flavors, colors or sweeteners.
Yoplait, a General Mills company based in Minneapolis, Minn., keeps the emphasis on yogurt products that offer great taste, good health and convenience. "Those have been the key drivers in the category and we anticipate that will remain the same," says Bibie Wu, marketing manager. "Consumers want healthy and convenient choices, but if the products don't deliver on taste, repeat purchase suffers."
The brand's top performing product lines include Yoplait Original, it's light line and its Whips!, all three of which are generating double-digit growth. The brand's newest products are three new flavors in Yoplait's Whips! line: Dulce de Leche, chocolate mint and creamy latte, which have proven to be strong performers.
Noting the current interest in all things probiotic, Wu cites the National Yogurt Association, noting, "All live and active cultures are considered pr0biotic cultures, so in that regard our full line is a probiotic offering."
Dannon's success with the Activia launch should not obscure its other top performing product lines—Dannon Light 'n Fit and its Frusion line, among others, which show average annual sales increases that are well into double digits.
To the original Activia line, which consisted of six flavors and three multi-pack sizes, Dannon is adding a new line in January called Activia Light, which will be available in 4-packs of 4-oz. cups in Strawberry, Vanilla, Peach and Raspberry.
"Activia was the fastest sell-in for any yogurt—90% distribution within the first two months," a spokesperson explains. "Dannon is continuing to support that growth with the Activia Challenge," essentially a money-back guarantee if desired results are not achieved after two weeks.
The actual benefits from Activia's Bifidus Regularis involve regulating the digestive system by helping reduce "long intestinal time"—the time it takes food to pass through the digestive system.
At Stonyfield Farm, Kenny describes greater awareness and sensitivity to eating a healthier diet, saying, "We do feel that consumers are becoming increasingly more savvy about the food they are eating, whether smoothies or cup yogurt. Certainly the availability of information on the internet, combined with films such as 'Super Size Me' has Americans putting more consideration into what they're eating and why. We believe that's certainly part of what's driving the boom in organic foods and functional foods."
author: By Michael Hartnett