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After taking a dip in popularity and sales during last year's low-carb craziness, yogurt appears to be rebounding strongly in 2005, propelled by a new focus on a more balanced approach to eating. Some food industry experts even suggest that Americans may be ready to adopt -- sacre bleu! -- a more French way of eating that will further buoy yogurt sales.
In her popular new book, "French Women Don't Get Fat: The Secret of Eating for Pleasure," Mireille Guiliano, c.e.o. of Clicquot, Inc., the U.S. subsidiary of the noted French champagne house Veuve Clicquot, recommends natural yogurt as part of a Gallic lifestyle that includes consuming three complete meals per day, eating lots of fruits and vegetables, taking walks, drinking plenty of water, and not depriving oneself of occasional tasty indulgences. She relates how after a year studying in America she returned to her native country looking "like a sack of potatoes" and slimmed down by returning to the tenets of French eating.
In the market, signs that more consumers are seeking yogurt for its healthful benefits abound:
-The total yogurt category, according to ACNielsen's Strategic Planner (volume at food, drug, and mass retail outlets, excluding Wal-Mart), reached the all-time high of $2.87 billion in sales during the 12-month period ending Dec. 25, 2004. That's a significant 5.8 percent increase in sales. Add in the estimated sales of yogurt at Wal-Mart's discount stores and supercenters (another $414 million, up 27.7 percent from the previous year), and you have a category that performed much better than many dairy department buyers and category managers had expected, especially in light of the anti-carb movement.
-Drinkable yogurts were the second-fastest-growing product category in ACNielsen's new What's Hot Around the Globe report, growing at more than 19 percent -- bested only by a closely related category, soy-based drinks. In the United States, yogurt-based drinks in both family sizes and single serve captured nearly $400 million in 2004 sales, an increase of nearly 50 percent over the previous year, when sales more than doubled.
-Yogurt was named one of 14 "super foods," in "Super Foods Rx," a popular nutrition book by Dr. Steven Pratt.
The United States is a huge growth market for yogurt, according to Cathleen Toomey, v.p. of communications for Stonyfield Farm, the Londonderry, N.H.-based yogurt maker. "Yogurt is much more prevalent in Europe," says Toomey, "but American consumers are just starting to get educated about yogurt."
Both dietary experts and suppliers emphasize that consumer education is extremely important for driving yogurt sales. As expected, suppliers recommend that retailers dedicate more shelf space to "functional foods" such as yogurt. But they also say that retailers should demand more information from manufacturers about what's in the product, and that they should employ more signage and shelf talkers to draw consumer attention to the dietary benefits of yogurt.
"The best retailers talk to their customers and can tell a story" with in-store signage and displays, adds Toomey, who notes that Stonyfield Farm does its part by including informational messages for consumers on the lids of the company's yogurt containers. Stonyfield Farm also has an electronic newsletter that goes out to 500,000 opt-in readers a month, and maintains five daily Web logs, or "blogs," on such topics as health, organic farming, and kids' nutrition.
Another major yogurt manufacturer, Yoplait, a brand of Minneapolis-based General Mills, also publishes an e-newsletter, "In Good Taste," which is filled with dietary tips and special offers on Yoplait products. Like other suppliers, Yoplait is targeting the children's market: The company recently introduced a product called Go-Gurt Smoothie, a bottled drinkable yogurt for kids on the run.
Drinkables are hot
While the total yogurt category has achieved solid growth in the past three years (sales increases in food, drug, and mass stores of 10.8 percent, 6.8 percent, and 5.8 percent from 2002 to 2004), the yogurt shakes and drinks category skyrocketed over the same period. According to ACNielsen, drinkable yogurt sales rose 35.9 percent in 2002, 104.7 percent in 2003 and 47.7 percent in 2004. And the momentum continued into the first three months of 2005: Yogurt drink and shake sales at grocery stores (with more than $2 million in annual sales) were up 109.1 percent for the 52-week period ended March 25, ACNielsen says.
Yogurt is also benefiting from retailers' greater interest in developing their organic product business. An increase in the awareness of obesity and other health-related problems has driven the growth of the overall natural products market by 17 percent each year since 1994.
In April, 18 U.S. supermarket chains, including Kroger, Rainbow, Food Lion, Giant Eagle, Fry's, HEB, Marsh, Publix, and Pick 'n Save, teamed up with 40 food manufacturers, including Stonyfield Farm, Horizon Organic Dairy, Nature's Path Foods, and Silk, to drive organic food sales around Earth Day. The in-store promotional program, called "Go Organic for Earth Day," united 2,500 supermarket locations, the nonprofit Greenfield, Mass.-based Organic Trade Association (OTA) and the Washington, D.C.-based Earth Day Network to execute the largest national campaign for organic foods, culminating on Earth Day, April 22. The promotion included the distribution of 2.5 million organic educational coupon books, 450,000 point-of-sale materials on supermarket shelves (including signs and shelf talkers), and giveaways of 300,000 organic food samples. Since the average organic shopper's cart contains $36 more merchandise than that of the nonorganic consumer, the goal of the program was to drive the total basket ring among consumers with an interest in natural products.
Phil Lempert, PG columnist, and food trends expert for the NBC's Today show cites the recent media focus on probiotics—yogurts with new bacteria strains that are supposedly more beneficial to the user than the regular kind used in most supermarket varieties. According to the Davis-based California Dairy Research Foundation, probiotic bacteria are more effective in preventing intestinal disease, minimize the symptoms of lactose intolerance, and improve immune function.
More strains, more gains
Stonyfield's yogurts contain four probiotic strains in addition to standard yogurt starter cultures. Other well-known probiotic manufacturers include Morton Grove, Ill.-based Lifeway Foods, the largest U.S. seller of kefir (a fermented milk beverage); Longmont, Colo.-based Horizon Organic Dairy; and White Plains, N.Y.-based Dannon, which makes one of the most popular probiotic foods on the market: DanActive, a fermented milk that purports to contain 10 billion L. casei cultures per serving. Launched in Belgium in 1994 under the name Actimel, DanActive is now available in 26 countries, and the company claims that more than 6 million bottles are consumed daily.
Lifeway markets 12 flavors of kefir and does a successful business exporting its products to Canada. The company also participates in the organic and soy markets with Lifeway Organic, Organic Kefir, and Kefir Cheese, as well as the United States' first soy kefir, SoyTreat. Lifeway's latest products include Lifeway Cream Cheese, La Fruta, and Slim6, a low-carb kefir shake.
Earlier this year the McLean, Va.-based National Yogurt Association established the Live and Active Cultures seal to help consumers identify products made with probiotics. This voluntary designation, which appears on refrigerated and frozen yogurt containers, indicates that the product contains at least 100 million bacterial cultures per gram.
The timing of all this couldn't be better. With U.S.-Franco relations warming up somewhat from the fractious atmosphere caused by the Iraq war, the time may be right for American consumers to adapt some of the ways of their French counterparts when it comes to eating the right foods in the right quantities. The result would be a decided boost for yogurt and other natural and organic food categories.
Don Longo, director of editorial and content development for the Retail Group of VNU Business Publications, can be reached at [email protected].