Pepsi stays dairy-free despite yoghurt drink launch

By Neil Merrett

- Last updated on GMT

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Pepsi says that the Asian launch of a yoghurt-flavoured soft drink does not reflect a wider-company focus on harnessing the potential nutrition benefits of dairy beverages, despite a growing number of product launches across Europe.

The emergence of the yoghurt drink segment in recent years has offered new areas of product innovation for dairy manufacturers, though the potential functional benefits of the products may see other soft drink makers attempt to enter the market.

However, David DeCecco, a spokesperson for PepsiCo, was keen to stress that the launch was not a specific attempt by the company to target possible consumer interest of yoghurt and dairy drinks, but more a reflection of its regional product innovation.

It's all part of our ongoing strategy to expand in emerging markets and broaden our portfolio of locally-relevant products,” he​ added.

DeCecco told that the Pepsi White brand had been launched solely on the Japanese market to cater for local tastes and was actually free of any traces of dairy or yoghurt itself.

Euro potential

While Pepsi and their major rivals may not yet be taking the yoghurt drink bait, European manufacturers are showing growing interest in the segment.

Throughout 2008, 310 new drinking yoghurt or liquid culture milk-based beverage products have been launched in the bloc, according to figures by consumer analyst Mintel.

Nonetheless, taking the UK market for an example, the analyst said that despite rapid growth in sales volumes and value over the last six years, manufacturers of yoghurt drinks are set to face some difficulties.

Mintel says that after an initial sales surge in the country between 2002 and 2005, which saw yoghurt drink value climbing by £183m to £268m, the retail value of the segment was estimated to have fallen to £245m in 2007.

Healthy difficulty

The analyst says that despite its initial potential, 90 per cent of yoghurt drinks sold within the UK are sold under the banner of active health, an area it claims is confusing for the casual consumer.

Mintel cited this uncertainty over potential health benefits of the yoghurt products as a major factor setting back further development in the segment.

Even in terms of non-functional yoghurt drinks, the analyst said that it was the only really the licensed Yoplait brand Yop, that was currently succeeding as a yoghurt drink geared solely as a form of refreshment.

“The sector has become almost entirely dependent on the active health product and drinking yogurt for pleasure or refreshment purposes has declined to very low levels, as a result of competition from smoothies and adult soft drinks,” ​stated the analyst. “Yop remains the principal non active health yoghurt drink brand in this market.”

Citing additional research by the TGI group, Mintel argues that there is still strong potential in the market for yoghurt drink development.

“Only 32 per cent of all adults drink these products and enormous opportunities remain to resume its former growth track if suppliers can successfully simplify the [health] message and educate the consumers,”​ stated the analyst.

In the next part of this article on Thursday, looks at how dairy manufacturers are looking to tap the potential of yoghurt-based drinks and the potential challenge they face from soft drinks groups entering the market.

Related topics Markets Yogurt and Desserts

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