Plant-based and dairy drive growth in yogurt side-by-side, Danone exec says

By Elizabeth Crawford

- Last updated on GMT

Plant-based and dairy drive growth in yogurt side-by-side, Danone exec says
While still growing at a healthy clip, the yogurt category is slowing slightly – but Danone North America still sees significant potential for the segment, especially related to options that are plant-based, lower in sugar, packed with science-back probiotic strains and dairy-based, according to a top company executive.

“The yogurt category has not been growing at the same rate as it has over the past decade, it has slowed down a little bit, but compared to many other segments, the yogurt category is growing very rapidly,”​  Sergio Fuster, president of US Yogurt Danone North America, told FoodNavigator-USA.

Indeed, the category is expected to grow from $8.8 billion in 2017 to a predicted $9.8 billion in 2022, according to ResearchAndMarkets, and Fuster says Danone is aggressively pursuing the driving trends behind this.

Plant-based yogurt sees strong double-digit growth

One of the fastest growing categories within yogurt is the development of plant-based options, which Fuster said is growing 55%, according to recent research.

“There is clearly a movement or desire to produce more plant-based in our diets, so that is a source of inspiration and source of innovation in everything we are doing,”​ Fuster said.

For example, Fuster noted that Danone Worldwide’s recent acquisition of Whitewave brands, including Silk and SO Delicious, means it now commands about 70% market share in the plant based yogurt segment.

“We have complemented them with a third brand called Vega, which is a performance brand in the protein powder market,”​ and together the three offer a diversity of plant-protein bases, including soy, almond, cashew and coconut, Fuster said.

Consumers still want dairy yogurt

Even as interest in plant-based options grows, dairy-based yogurt is holding its own – especially among children’s products, Fuster said.

“Dairy plays a key role in kids’ nutrition and the prevalence of plant-based is not so relevant when it comes to the kids’ space, but offering super low sugar, more natural options in kids’ area is fueling continuous growth,”​ he explained.

For example, he noted the company’s decision last year to make key brands Non-GMO Project Verified has resonated with parents and helped drive sales.

“It is one thing to say that you use non-GMO ingredients, and it is another to say that your milk is fully non-GMO, all the way back to the way the cow produces the milk, including being fed non-GMO food,”​ Fuster said. He explained the switch was a bit of a challenge because most of the animal feed in the US is from genetically engineered crops such as soy and corn, but it also was a “major, major breakthrough and we have had great reception.”

For dairy yogurt to truly succeed, Fuster said, the brands must balance messages to parents – like non-GMO – with the brands’ appeal to children.

“When it comes to speaking to kids, it is all about the fun and the flavor and the characters. So, one of the biggest things we have done is enter our first licensing deal with the Disney brand’s Incredibles 2 movie, that came out in June,”​ Fuster said. He added the launch “has been exquisite for us, so that licensing space will play a really important growth role for the brand going forward that hasn’t been covered until now.”

Strategies for cutting sugar and keeping flavor

Another winning move in the children’s space and in products targeting adults has been to dramatically cut the amount of added sugar, Fuster said.

“Around three years ago we made a commitment to reduce sugar in our Danimals by 25% and we did that while achieving consumer preference when it comes to flavor,”​ Fuster said.

He explained that there are several ways to cut sugar while still maintaining favorable flavor profiles, including using natural sweeteners, as in the case of the company’s leading brands Light & Fit and Triple Zero brands.

Another strategy to balance the flavor profile of yogurt while cutting back on added sugar is to increase the amount of fat, Fuster said.

“Most yogurts in Europe are whole milk and in the US historically yogurt has been either zero percent fat or low-fat. And today you see that whole milk yogurts are starting to gain more presence”​ in America as emerging research suggests consuming more fat than previously though could be healthy, he explained.

Looking forward, he added that Danone will continue to develop in the area of sugar reduction.

Demand for probiotics fuels consumer interest in yogurt

Yogurt’s age-old connection to fermentation and probiotics also is inspiring renewed consumer interest in the space, and as the owner of Activia the brand is well-positioned to capitalize on this growth, Fuster said.

He explained that as one of the first brands to focus on probiotics in the US starting in 2005, Activia’s claims are well supported by science – which some companies’ probiotic claims are not.

“Our probiotics help you when it comes to promoting gut health and well-being, and this what you see in our ads,”​ which is based on 20 years of science, Fuster said. He added that additional claims  may come in the future, but only once the research adequately supports them.

Consumers seek out convenient options

While not as influential as some of the other trends, convenient and innovative packaging has also helped drive growth in yogurt in recent years, Fuster said.

“We believe in convenient ways to bring yogurt like a drink or pouch or other growth forms. We are very present in the yogurt drinks, as well, and they are growing a lot versus a year ago, but that is from a relatively small base,”​ he added.

One example of this is the company’s launch of Activia Probiotic Dailies shots, which, Fuster said, “is one of the most successful innovations in the yogurt categories … and is showing significant potential.”

As the company moves forward, Fuster said, it will continue to focus on probiotics, sugar-reduction and plant-based to drive growth. At the same time, he added, it will explore innovative packaging to meet demand for convenience and different consumer benefits.

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