Yoghurt: an innovative product

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Related tags: Yoghurt, Convenience store, Euromonitor

A recent report from Euromonitor reveals how yoghurt has been
transformed into a highly innovative food category.

A recent report from Euromonitor reveals how yoghurt has been transformed into a highly innovative food category. Consumers are now more aware of the various health benefits, and manufacturers are continually developing more convenient formats and new taste sensations.

As a consequence, the increase in yoghurt sales has outstripped that of other dairy sectors. Worth nearly 13 per cent of global dairy sales according to Euromonitor, yoghurt has been by far the fastest-growing sector over the 1998-2002 review period.

Convenience boosts away-from-home snacking

In order to drive yoghurt sales and increase usage occasions, manufacturers have been experimenting with differing formats designed to improve the experience of yoghurt consumption. Manufacturers are aiming to shift yoghurt from at-home breakfast and dessert consumption to a viable all day snack.

Some key examples of more convenient yoghurt formats include General Mills' Colombo Spoon-In-A-Snap, which offers yoghurt with a disposable plastic spoon, while Yoplait's Go-Gurt and Exprèsse brands dispense with the need for utensils altogether, offering yoghurt in a squeezy tube. The purpose of such innovation is to make yoghurt a more convenient lunch-box or on-the-move snacking option, as well as making it a more fun product which appeals to children, rather than the standard adult demographic.

Drinking yoghurts offer the best way forward

Danone, world market leader in yoghurt products, has avoided development of squeezy tubes or in-packaging spoons, preferring instead to focus on building a strong drinking yoghurt portfolio. A key advantage of drinking yoghurt over squeezable formats is that it is positioned as an impulse product, available in single-serve format from convenience stores as well as from grocers.

Squeezy tubes, by contrast, are typically purchased as multipacks and are designed to be eaten as relatively pre-planned snacks during the day while away from home. Drinking yoghurts like Danone's Dan'Up or the leading Yoplait/Yop brand, in addition to a growing number of probiotic variants, underpinned what was the fastest growing yoghurt sector between 1998 and 2002.

Probiotic remains a significant growth strategy

A slight slowdown in sales of standard probiotic yoghurts at the end of the review period was partly a consequence of the increased popularity of drinkable probiotic formats. Other factors included competition from organic yoghurts, which also claim health benefits, and the increasing adoption of Every Day Low Pricing (EDLP) policies by private labels which narrowed the price differential between probiotic and standard types of yoghurt.

Nonetheless, the digestive health aspect of probiotic yoghurts means that it was the fastest growing sector behind drinking yoghurt, led by core brands in the world's largest, Japanese, market such as Meiji Dairies' Bulgaria. As the market for probiotic yoghurts is still negligible in many countries world wide, it can be assumed that the sector still has considerable growth potential in 2003 and beyond as an ever increasing number of countries get caught up in the wellness trend.

Luxury yoghurts positioned as dessert options

Alternative ways of adding value to standard yoghurts has been to produce more luxury and typically custard-style or creamier varieties such as Danone's La Crème. In the US in particular exotic flavours have been driving yoghurt sales with options such as dulce de leche or Key Lime Pie, clearly positioning these yoghurts as dessert options. Yoplait Whips, a mousse-like product, has also tapped into this trend.

Such yoghurts successfully compete with flavoured fromage frais, and chilled desserts, but are not successful on a global scale. In many countries yoghurt is still not seen as a dessert option due to the predominance of plain yoghurt used in cooking as is the case across much of the Middle East as well as in Turkey. Locally produced varieties of yoghurt also dominate much of Asia Pacific, such as the drinking yoghurt lassi and fruit flavoured yoghurt shrikhand in India. In such countries Western-style yoghurts are chiefly consumed by middle- and upper-income groups.

Euromonitor expects retail value sales of yoghurt to increase by more than 4 per cent annually over the coming years, driven by increases in drinking and probiotic yoghurt. This is due to the nature of yoghurt, a product which more than any other in the dairy market addresses the key needs of today's consumers, namely, health, convenience and taste.

For more details on Euromonitor reports, click here.

Related topics: Ingredients, Yogurt and Desserts

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