Growing the base

by Keith Nunes
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WHITE PLAINS, N.Y. — The Dannon Co., Inc., a division of Paris-based Groupe Danone S.A., has expanded its Activia line with the addition of Activia Dairy Drink and Activia Fiber. Like the Dannon Co.’s Activia yogurt line, both products contain probiotics for improved digestive health.

The two new products are designed for consumers on the go and packaged in single-serve containers. The products are available in fourpacks and come in peach, mixed berry, strawberry and vanilla flavors.

"The U.S. is still an emerging yogurt market, as Americans consume about 75% less yogurt per person than people in other countries, such as France and Spain, where the benefits of healthy bacteria and maintaining health through food are better known and embraced," said Marc Jove, senior vice-president of marketing for Dannon.

The two new brand extensions take the Activia brand in the United States in two new directions. The dairy beverage allows the company to capitalize on the demand for on-the-go smoothie-type products, while Activia Fiber allows the company to capitalize on the demand for products containing fiber.

"Fiber is an important component of a healthy diet, particularly when it comes to digestive health," said Michael Neuwirth, senior director of public relations for The Dannon Co. "The product is called Activia Fiber, with the brand name first, because the primary benefit comes from the probiotics culture. But fiber does two things: it is a taste cue for consumers and it offers the functional benefit of fiber, which is delivered via inulin."

Mr. Neuwirth said the product has had good success in other countries and the company is eager to see the results of the roll-out in the United States.

"Retail acceptance is high, and we are optimistic," he said. "The first ship date was the middle of January, and the pipeline is now full."

Despite introducing the Activia brand in new forms, Mr. Neuwirth said the products will be merchandised in the same display area at retail.

"Our vision is for our products to be sectioned at retail by benefit," he said. "That is how functional foods are successfully merchandised in other parts of the world. They focus on what the need states of consumers might be, whether it is weight management, digestive health, immunity or heart health."

Not only is the dairy aisle of a European supermarket organized by need state, but Mr. Neuwirth said they are also much bigger than the space allocated in most U.S. supermarkets.

"Within yogurt in the U.S. the space is about 12 feet," he said. "In France, it is 48 feet. You walk into the aisle and you cannot just walk past it. In addition, the section is organized to reflect mainstream dietary patterns."

The Dannon Co. has been working for the past few years in an effort to grow the amount of space retailers devote to their products. As part of the effort, the company created "store obsession teams," merchandisers whose sole goal is to grow the amount of space devoted to Dannon products.

"One of the first things the teams did was an analysis of what sales were not being captured, because of out-of-stock issues," Mr. Neuwirth said. "We estimate, for the entire yogurt category on an annualized basis, $1 billion in yogurt and cultured dairy product sales are being lost in the U.S."

Dannon’s S.O. teams focused to resolve several problems initially. The first involved making sure products remained in stock throughout the day. The second focused on establishing secondary locations within stores. One such location The Dannon Co. is currently testing is information kiosks featuring touch-screen computers consumers may use to learn more about yogurt and its benefits. The company also is working to incorporate refrigerated islands in supermarkets that are adjacent to the dairy gondola.

"It allows us to segment the proactive health benefits of products and draw consumers into the dairy aisle," Mr. Neuwirth said.

In addition to growing the dairy case in supermarkets, The Dannon Co. also is attempting to grow yogurt consumption regionally in the United States. The eastern and western regions of the country consume the most yogurt, while the north central and south central regions are considered underdeveloped.

Mr. Neuwirth believes the consumption patterns are due to three factors. First, yogurt consumption tends to skew higher among individuals with higher income and are college educated. Second, residents of the East and West tend to live healthier lifestyles. And finally, the two leading companies in the yogurt market, Dannon and General Mills, which owns the Yoplait brand, initially focused their business development on the eastern and western regions of the country.

This article can also be found in the digital edition of Dairy Business News, March 2009, starting on Page 6. Click here to search that archive.

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