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Growing A Culture.

Byline: James Dudlicek

Education continues to be a crucial part of the supplier-grocer-shopper relationship in marketing probiotic dairy products.

If milk is the heart of the dairy case, then yogurt must certainly be its backbone.

The reason for this is that while fluid dairy remains the perennially fl at loss leader, cultured products continue to be the department's showcase for growth and innovation.

Dollar sales for the total yogurt category exceeded $3.8 billion for the year ending July 10, 2010, at food stores (excluding supercenters) with at least $2 million in sales, according to data from The Nielsen Company. That's 6.7 percent higher than the same period a year ago and an increase of nearly 25 percent since 2006. Unit sales are up 6.2 percent for the year, to 3.8 billion, and nearly 8.4 percent for the past five years.

"As Americans start to consume more and more yogurt, the category will see more innovation," says Mike Malone, dairy category manager for Brookshire Grocery Co., which is based in Tyler, Texas. "We are still behind the rest of the world in yogurt consumption. As yogurt consumers age, it will become more of a way of life. Yogurt is being introduced to a much younger group today than in years past. It is no longer considered a "diet food.'"

The 150-store supermarket chain does a brisk business with its award-winning own-branded yogurt, manufactured at its own dairy plant in the company's hometown. "Our latest expansion in the yogurt category has been the addition of a new Greek-style yogurt," Malone notes.

Yogurt giants Dannon and Yoplait are following this trend for thicker, fuller-bodied yogurt. "Our introduction of Dannon Greek earlier this year has been a big success," says Michael Neuwirth, senior director of public relations at the Dannon Co., in White Plains, N.Y. "The Greek/ specialty segment of yogurt continues to grow very quickly, which is very good news for category development because it gives new and enhanced relevance to the overall category -- it's a new reason to think about, buy and enjoy yogurt."

Greek yogurt is one of the "treat foods" that helped drive the 15.2 percent increase in new food products launched in the first half of 2010, according to data from Chicago-based Mintel presented at this year's Institute of Food Technologists Annual Meeting and Food Expo.

Going head to head with its archrival, Minneapolis-based General Mills offers Yoplait Greek, billed as having zero fat but twice the protein of other yogurts. New Berlin, N.Y.-based Chobani has launched Chobani Champions, which claims to be the first Greek yogurt in the United States made exclusively for children. In three varieties, the all-natural product line offers 10 percent of the daily calcium requirement with five live and active cultures, including three probiotic cultures. Chobani's latest target audience is a wise choice, as yogurt is currently the top growing snack food among kids age 2 to 17, according to the Port Washington, N.Y.-based NPD Group's SnackTrack.

Yogurt pioneer Anderson Erickson Dairy (AE) used the occasion of the recent Iowa State Fair to preview its new Greek yogurt, scheduled to hit stores this fall. The Des Moines, Iowa-based family-owned dairy processor, which has been making yogurt for nearly 70 of its 80 years in business, sampled blueberry, clementine, honey and vanilla flavors to fairgoers; "classic," or plain, also will be included in the official launch. AE tweaked its recipe for Midwestern palates, creating a slightly higher sweetness profile than other Greek yogurt brands like Chobani and Fage. "What works on the East Coast or on the West Coast isn't necessarily going to work here," Miriam Erickson Brown, AE president and CEO, told The Des Moines Register in an article about the Greek yogurt launch linked to the dairy's Facebook page.

AE is known primarily to consumers in Iowa and Missouri (and parts of at least three other states) for its diverse yogurt flavors -- including Apple Bread Pudding, Blueberry Buckle and Strawberry Rhubarb Pie -- none of which are released without passing an in-house taste test. "We partner with retailers to bring our taste-test experience directly to the customer through in-store sampling," says Kim Peter, AE director of marketing.

Grocers like Brookshire's have no problem staring down their national competitors. "We continue to place our brand next to Yoplait," Malone says. "We have a vertical set that separates each segment (light, regular, etc.). Our pricing is key to continued growth in our brand, making it a value to customers while keeping the quality high. Our customers have responded well to the introduction of the new Greek Style. They are still moving to the better-for-you brands. Yogurt as a whole continues to grow at a steady pace."

While natural and organic yogurts continue to be popular, like those from Dannon-owned Stonyfield Farm, grocers are likewise enhancing their own-brand stables with trendy, value-priced offerings.

Winn-Dixie Stores Inc., based in Jacksonville, Fla., recently introduced Winn-Dixie Organic Active Yogurt at its 515 markets. All natural, with no artificial preservatives or flavors, the yogurt includes probiotics and prebiotics to help support digestion. It's also USDA certified organic and kosher certified, and contains heart-healthy omega-3s, calcium, vitamin D and 3 grams of fiber per serving.

Going Mainstream

Perhaps one of the most intriguing subsets of the cultured dairy category is kefir. A fermented milk beverage with ancient origins in eastern Europe, kefir is growing at a breakneck pace, primarily at the hands of its market leader, Lifeway Foods. The Morton Grove, Ill.-based company has expanded its product line through organic innovation and acquisition, reporting sales growth of 31 percent in 2009 and 16 percent for the first quarter of 2010.

This is particularly impressive, considering that the overall yogurt/refrigerated shakes and drinks category under which Nielsen tracks kefir sales is down 11.5 percent in dollar sales for the year ending July 10, 2010, and has fallen more than twice that over the past five years. Unit sales are down 9 percent overall in the past year, and a whopping 33 percent since 2006, according to Nielsen data.

"Kefir was once a niche or specialty product, but it truly is gaining mainstream acceptance," says Lifeway spokeswoman Erin O'Connor. "For instance, a bottle of Lifeway kefir recently made its major motion picture debut in "Sex in the City 2.' While that's not exactly a traditional growth indicator, it's part of the growing trend of general awareness that gets us excited."

According to O'Connor, grocers would be wise to heed the call of consumers who strive to learn more about what they're eating and the positive effects of probiotics. "The increasing demand of these foods means that mainstream groceries need to keep up and stock these items for their consumers," she says. "Kefir has grown alongside the need for easy access to healthy, functional foods."

Among Lifeway's latest products are Green Kefir with Phytoboost, which the company says contains the antioxidants of 10 green vegetables, plus green tea extract and proprietary probiotics. Lifeway CEO Julie Smolyansky calls it "a salad in a bottle." Lifeway also has launched a Greek-style kefir, a goat-milk kefir and a line of holiday flavors.

Lifeway's 3.5-ounce Bio Kefir shots are aimed at busy shoppers and might be best placed in a grab-and-go case at checkout alongside other chilled beverages. "Time-strained consumers are looking for ways to maintain their health that will accommodate their busy schedules. The Bio Kefir shots allow them to get a boost quickly and easily by providing the best nutrition in a bottle," O'Connor says of the 60-calorie shots, available in five flavors. "Each shot supports immunity, heart health or digestion."

Just Desserts?

Americans consume four to five 4-ounce cups of yogurt per month, Dannon's Neuwirth says, most of it eaten at breakfast or as a snack. But elsewhere in the world, yogurt is also enjoyed as a dessert and is often used as an ingredient for cooking, replacing higher-fat ingredients such as sour cream.

Dannon aims to cultivate that trend here. "Our ambition is to continue to promote the benefits of enjoying yogurt whether as part of a meal and as a better for-you snack, to help bring health through food to as many people as possible," Neuwirth says. "One of our most recent and major initiatives is the introduction of a new line of Activity Dessert products."

Available in four flavors, these dessert varieties contain the same proprietary digestion-regulating pro biotic cultures as the original Activity line, which was one of the most successful product launches in history.

Neuwirth says: "We are committed to continuing to help retailers grow the yogurt category, which is still quite underdeveloped compared to its potential. Space reallocation to yogurt from underperforming categories in the dairy section, as well as adding linear footage to the dairy section, continues to be an ongoing topic of conversation with our customers as we share the vision of what the category will look like within the next few years."

One of the latest growth efforts comes from Torrance, Calif.-based Yakut USA Inc., which recently unveiled its "Love Your Insides" campaign for its signature pro biotic drink, sold primarily at major West Coast retailers. The mixed-media campaign introduces consumers to a lovable new brand icon in the form of a cuddly digestive system. A plush, pink, smiling stomach -- yes, a stomach -- is shown flying a kite with its owner, helping her with housework, horseback riding on a beach and other activities aimed at illustrating that folks need to pay more attention to their digestive tracts.

It's safe to say consumers would probably be a lot more savvy about macrobiotics if more manufacturers and retailers had the guts to launch creative campaigns like this one.
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Author:Dudlicek, James
Publication:Progressive Grocer
Date:Sep 1, 2010
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