Brandweek, January 14, 2008

Extensions: Healthier Products Equal Healthier Sales for Dannon; New Yogurt Extensions Add Fruit, Subtract Calories

Dannon is looking to fatten its yogurt sales by expanding its light offerings.

The push includes a fruit-enhanced Light & Fit extension called Light & Fit 0% Plus and DanActive Light, a new version of DanActive that has fewer than half the calories.

The two entries, hitting stores this month, are the latest manifestation of the company's "high-health strategy," a concept of providing consumers with yogurt with benefits beyond basic nutrition. Previous efforts in that vein include probiotic yogurts Activia (in 2006), DanActive (2007) and Dannon Activia Light (2007).

"Our strategy focuses on the absence of negatives, in terms of calories, and the presence of positives, that is, the addition of nutrients and vitamins in diets," said Andreas Ostermayr, CMO, Dannon, White Plains, N.Y.

Light & Fit 0% Plus ads launching next month will focus on "making every calorie count and adding nutrients into diets, rather than simply reducing calories," said Ostermayr. Young & Rubicam, New York, handles.

Spending was not disclosed. In 2006, Dannon spent $6 million in measured media and, through October 2007, had spent $9 million, per Nielsen Monitor-Plus.

The seven-SKU Light & Fit 0% Plus line retails between $2.59-4.69 for four- and eight-packs and sports 60 calories per 4-oz. cup. "Consumers often have to sacrifice taste when eating light products," said Ostermayr. "Our objective was to create a great tasting light yogurt that doesn't taste light." To achieve that goal, Dannon decided to go with a new proprietary blend of sweeteners that includes aspartame, sucralose, acesulfame potassium and fructose.

A longtime runner-up to General Mills' Yoplait in the U.S., Dannon appears to be benefitting from its focus on healthier yogurt. Activia has grown 48% to $181.3 million in sales, per IRI, for the 52-week period ending Dec. 2. DanActive experienced 185% growth, recording sales of $60 million during that period. Dannon Activia Light (2007) had 197.5% growth with sales of $57 million.

Gary Stibel, president of New England Consulting Group, Westport, Conn., said Dannon was finally catching up to Yoplait. "Now [Dannon] is doing the best job globally of innovating yogurt in terms of taste and bringing new and different products to market that have real, substantive health and nutrition benefits," he said. A new range of Activia products, including new flavors and 24-oz. containers, are also on deck.

"The yogurt category is getting more complex," said Stibel. "Dannon is building a higher ground and is getting a disproportionate share of shelves."