Dannon sees opportunities in U.S. yogurt market

Gustavo Valle, CEO of Dannon, said the U.S. market for yogurt is still very underdeveloped. Annual U.S. yogurt consumption is 11-1/2 pounds per capita compared to six times that level in Western Europe and twice the level in Canada.

 

Valle expects double-digit percentage dairy sales growth in the U.S. over the long-term and aims to double per capita consumption in this market within four years, reports Reuters. Danone, which enjoys U.S. yogurt sales of  $1 billion-plus, has focused its marketing resources on Activia, advertising the digestive health benefits of eating yogurt. In mid mid-2009, Dannon cut yogurt prices, helping boost sales by 15 percent in the second half of the year compared to flat sales in the first half of 2009.

 

Dannon changed its strategy mid-2009 to support all of its brands, such as Like and Fit, Danimals and Dannon, with heavy promotions as it looks to gain shelf space and attention from consumers looking for lower prices. At the same time, competitor Yoplait, a unit of General Mills, promoted its yogurt with large discounts on store shelves.

 Although there are up to 25 different flavors in the market and Dannon is introducing cheesecake flavored Activia, the two most popular flavors are strawberry and vanilla, which account for 80 percent of sales.

 

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