November 1, 2005
by James Dudlicek
Yoplait strives to feel small but do things big through team work and leveraging the strengths of parent General Mills.
“We’ve got two simple missions,” says Bob Waldron, president of Yoplait-Colombo USA. “We want to keep the buyers of our yogurt happy and we want to keep the retailer happy.”
As the top-selling yogurt maker in the United States, it would seem Waldron and his team are succeeding. With an estimated $1 billion in annual sales and about 37 percent of the U.S. market, this unit of Minneapolis-based General Mills Inc. is committed to product innovation while remaining devoted to the core products that consumers love so much.
“We’re in a very favorable category. It’s on-trend,” Waldron says. “It tastes great, it’s convenient and it’s healthy — kind of the trifecta of food for us.”
The company’s most recent products meet those consumer demands hands down: the fortified yogurt beverage Nouriche®, along with the new Yoplait® and Go-Gurt® Smoothies; Yoplait Healthy Heart, a lowfat yogurt spiked with plant sterols, proven to lower cholesterol; and Yoplait Whips!® Chocolate Mousse Style, which at long last answered the cries of chocoholics seeking solace in cultured products.
Yoplait’s product innovations, and its efforts to promote dairy as an integral part of health and wellness, are among the reasons Dairy Field selected the yogurt maker as its 2005 Processor of the Year.
In discussing the innovations and wellness efforts of Yoplait, it’s tough to decide where to begin. Perhaps a good place would be the research the company helped fund that shows consumption of dairy calcium as part of a calorie-restricted regimen can help dieters lose more weight and burn more fat. The study, led by the University of Tennessee’s Dr. Michael Zemel, found that individuals who included Yoplait Light fat-free yogurt as part of their weight-loss plan lost significantly more weight than those who simply reduced calories.
This groundbreaking research gave birth to an industry-wide campaign to promote the weight-control benefits of dairy calcium. Unfortunately, it also led an anti-dairy animal rights group to sue various members of the industry, including Yoplait, charging the health claim is unfounded.
As such, the Yoplait team is hesitant to comment on the company’s role in the Zemel research until the case plays out in court. “We are very confident about the claim, that it’s fully substantiated, and that the litigation will be resolved in our favor,” says Lisa Schroeder, vice president of research and development.
But the litigation isn’t stopping the team from moving forward. “We’re very fortunate to be in a great category, one with a lot of growth potential, so we’re always looking ahead to what’s next,” Waldron says. “We discovered what we believe is new science and we try to leverage it as best we can.”
Yoplait continues to maximize the health benefits that yogurt has to offer. The broad appeal of the nutritionally enhanced Nouriche beverage paved the way for the kid-targeted Go-Gurt Smoothie earlier this year, followed by the Yoplait Smoothie in regular and light versions.
Meanwhile, Yoplait is busy carving out a new niche for yogurt that some might describe as functional foods or nutraceuticals, one that the company calls “proactive health.” Yoplait’s team is seeking inspiration from the numerous health needs of American consumers.
Leading the way in this direction is Yoplait Healthy Heart, a yogurt that contains plant sterols, which are clinically proven to reduce cholesterol. While results vary by individual, studies have shown that eating 0.8 grams of plant sterols (the amount in two servings of Healthy Heart) each day for a period as short as a month may reduce LDL, or “bad,” cholesterol by an average of 6 percent.
The LDL-reducing qualities of this new product are seen as an extra enticement for consumers to eat an extra dairy serving of yogurt. But based on the response, the Yoplait team reports, it doesn’t look to have been a hard sell.
“We get numerous calls on how great it tastes,” Waldron says. “You usually get calls when someone has a complaint, not just to tell you it tastes great. To have something that’s healthier and to have that level of taste has been very positive for us. The question is, what comes after Healthy Heart to keep building this proactive health segment?”
Choc Up Another Hit
Taste is the key factor in yet another recent Yoplait breakthrough: a successful chocolate-flavored yogurt. “For years, consumers have told us they would love to have a great-tasting chocolate yogurt,” Waldron says of the Chocolate Mousse Style additions to the Yoplait Whips line. “You may remember years ago, one company did come out with chocolate, but they had to heat-treat it after culturing, so it didn’t deliver on live and active cultures, which I think most consumers believe is the promise of yogurt, along with all the rich nutrients of dairy. We worked hard, and our R&D team cracked a new recipe.”
Yoplait had a stab at chocolate in the late 1980s, but new technologies finally allowed its researchers to surmount the obstacles in adding the flavor to cultured dairy. “Whips itself took several years to come to market, and our chocolate work took us a couple of years also, in our latest go-round,” Waldron explains. “This has been something the category has wanted for a long time — a new technological insight leading to a new proprietary recipe that we hope will continue our success in that range.”
So far, success seems certain based on Waldron’s own simple measure. “I go around to stores in the Twin Cities area and look for new products on the shelf, and the chocolate is usually picked through,” he says. “Retailers have called and told us they are very happy with the performance to date. While we can’t tell you what’s coming in the future, if consumers demand more chocolate, we will deliver more chocolate. We listen to consumers very closely, try to get inside their heads and figure out what they want.”
Officially, though, it’s too early for a precise indicator of success. But the Yoplait team is hopeful the new flavor will give birth to a new eating occasion for yogurt. “Are people going to start eating it for dessert?” Waldron says. “We would hope people would have their regular yogurt in the morning and then one at night.”
The public has gotten even more creative. “We occasionally get calls from consumers who say they’re freezing our Whips products in the summer because it creates an icy treat,” Waldron says. “It also takes longer to eat, so it stems the appetite. They get a portion-controlled, great-tasting, healthy product as a summer treat.”
Spirit of the Small
Waldron says Yoplait was an “interesting oddity” at General Mills for years as its only refrigerated operating division until the acquisition of Pillsbury in 2001.
“It created a culture that we still try to nurture today of the spirit of the small,” he says. “We were a small, little yogurt company in a small, little category with great dreams, and we had the opportunity to leverage the bigness of General Mills. We get great people we can tap into; we flow people in and out of Yoplait through General Mills, so we get a diverse set of thinking. We get people who are gung-ho about taking things to the next level.”
Yoplait can also take advantage of an enormous sales organization. “That’s a benefit of having the scale of General Mills brought into Yoplait. We have a phenomenal supply chain organization where we can get top talent that flows through our area,” Waldron says. “It probably makes us a little different than some of the other dairy operations out there. We keep building scale, but we still try to keep that spirit of the small. We still consider ourselves pretty small. Household penetration of yogurt is only 72 percent, so we’ve got a long way to go versus eggs and milk — even cereal, with penetration in the high 90s. We’ve got huge opportunities, so it keeps us pretty energized.”
According to Waldron, Yoplait’s target audience is the ideal target of most of its retailer customers: the female head of household. “She’s got a slightly higher than average net income base in the household. The household is well-educated. They generally have kids in the household,” he says. “When she walks into a grocery store, usually she walks out with a fairly high basket ring. Yogurt is perfect for her, because she’s looking for tasty, healthy treats for herself and her family. She’s buying single-serve cups for herself, and then she’s picking up some of the kid packs — the Go-Gurts and Trix — for her kids.”
The latter audience is a particular area of success, Gibson says. “We’ve seen kid consumption really grow over the past five years, and we feel like we’ve played a nice role in that,” she says. “We’re growing a future generation of Yoplait users. Some adults now say they came to yogurt later in life, and that’s true for a lot of adult males. The number has been increasing over time, but it’s more with adults, like 70-30 [female to male]. We’re shifting the mix.”
Even with all the success to date, there’s still plenty of room to grow. “Our penetration is still at 72 percent. That sounds high, but grabbing that other 28 percent of the country will be a huge win for the category,” Waldron says. “The thing is to create more occasions, in each household so it becomes more of a staple of life. You look at the international arena — yogurt is used far more times during the day than it is in the United States. So there are opportunities to get people to eat more yogurt, or you create more yogurts to target different occasions.”
Good Problem to Have
Keeping up with growth is a challenge on the manufacturing and retailing ends of the business. “We had to add a manufacturing facility in the last couple of years. But the issue then is, we’re selling so much product off the shelf, we need more section space in the category,” Waldron says. “That’s tough, because retailers are faced with the task of putting up brick and mortar for a store that’s of a finite size, and they have to wrestle with space needs for all categories. And yet yogurt is growing so fast, how do they keep pace?
“Some of the leading retailers — the ones that are growing the fastest with yogurt — have added four or more feet very quickly to try to keep pace. People understand the great potential of yogurt. But that’s the challenge for us right now, particularly when yogurt is on promotion in a store. It will blow off the shelf and the shelf will be absolutely empty, and you have a lot of out-of-stocks. That’s not a win for anybody. So we continue to look at solutions to keep up with the growth.”
The Minneapolis Star Tribune reported in late September that Yoplait sales gained 19 percent on the strength of product introductions during the fiscal year ending in August. Analysts noted Yoplait’s strong showing helped boost General Mills’ overall performance in the face of sluggish cereal sales.
Working closely with retailers is key, says Adam Dill, director of category management.
“The challenge they’ve had is we’ve looked at the dairy category the same way for so many years. How do you allocate the space where there is growth versus where the growth used to be?” he says. “We’re really trying to lead not just in the yogurt category but in the dairy aisle. How do we bring the consumer insights, the category insights, to help the retailer maximize the dairy space they have? Fortunately, we’re on the leading edge of that growth, and it helps their traffic, it helps their ring. But we need to look at the other categories and really help them design a dairy section that can maximize that space.”
And while innovation will help drive the category, the backbone will always be the basics. “We can never take our eye off the core,” Waldron says. “There’s still a lot of people who are not eating yogurt, or not eating it every day. It’s a marketer’s dream to be in a category where you have that upside opportunity, plus the ability to overlay innovation, like the Healthy Hearts, the chocolates, the drinks. We have to help our retailer partners figure out how to stock all that, particularly when it goes on promotion. Trying to keep up with growth is our number-one issue, which I’m told is a good problem to have.”
Lids for Life
In the realm of corporate outreach to the community, Yoplait has one of the most visible programs today. Its Save Lids to Save Lives® promotion, now in its eighth year, has raised millions for breast cancer research in partnership with the Susan G. Komen Breast Cancer Foundation. Consumers mail in the pink lids off their Yoplait yogurt cups, and for each one received the company donates a dime to the foundation, with a goal this year of 15 million lids.
The program is part of Yoplait’s 17-year commitment to raising awareness of issues important to its core consumers, including cancer, heart health and osteoporosis. Yoplait and General Mills have donated more that $14 million to breast cancer research, and Yoplait is the national presenting sponsor of the Komen Race for the Cure, the world’s largest series of 5K runs and fitness walks aimed at the cause.
“They started very small, with one promise from one sister to another, and they have grown into a great organization of hope, and we kind of feel some kindred there,” Waldron explains, referring to the foundation started by the sister of the late Susan G. Komen. “Even if it wasn’t good business, we would do it anyway.”
The company also works with retailers to promote the program, Gibson notes. “Our retail customers often on a local basis tie in to the race, they tie in to Save Lives. We are often able to give donations to local Susan G. Komen chapters,” she says. “It has been very meaningful to a lot of people, not only at Yoplait but at General Mills as well — not only at headquarters, but out in the field and with our customers.”
Outreach efforts by Yoplait and its parent stretch even further into the community. According to Waldron, General Mills has been the donor to the United Way in the Minneapolis-St. Paul area for many years. The General Mills Foundation benefits other causes as well, locally and nationally, and the company urges its officers to take active roles in community activities and organizations.
“We have several local charities we support as a team,” Waldron says. “Every month, one of our groups will get together and serve lunch at a local crisis nursery, where a mother with children in a distress situation can seek refuge. We have Camp Sunrise, where inner-city youths go up to a campground up north to learn how to canoe and camp. All these efforts have come from individuals within Yoplait who have found an interest in them, and the rest of the team has followed suit.”
It’s all part of the culture of the company, says Kevin Schoen, vice president of manufacturing. “All the individuals who come forward with ideas around giving time, money and effort — it’s very much built into the fabric of the company. You’ll find that whether you’re in the supply chain area or the creative area,” he says. “The foundation is kind of the central hub for all the funding, and also for a lot of the ideas as well. If you go out to the plant sites, you get the same team energy around the Race for the Cure.”
It’s also one of the areas of recognition in Yoplait’s annual awards given at the plant level. “One of them is always geared to the community involvement,” Schroeder says, “the extra bit beyond just coming into work.”
What do the next several years hold for the brand? “That’s a tough question, because we’ve been growing so fast,” Waldron says. “But quite honestly, just bigger and better. Hopefully we’ll continue on a strong growth path because more people are finding their way to yogurt, and that we’ve gone a good job communicating to them and providing them with new products. As I look to the future, it looks pretty bright. I think the core will continue to grow, and I think we’ll have more innovations with enhanced health, greater taste as we have with chocolate, more convenience like the beverages. I think there will be more forms out there five years from today, and it will hopefully be a larger section in the store.”
And part of continuing to do big things will be maintaining the spirit of the small, Yoplait’s team says. “When you come in, you know you’re in a different place,” Schroeder says. “I’ve worked at General Mills in a lot of different areas and they’re all great. They all have their own unique characteristics, and Yoplait certainly has its own. It’s steeped in tradition. We love to tell the story — I think we do as good a job as anybody keeping our stories alive because we learn from them, and it keeps us remembering we did start small. We’re big now, but we want that spirit of the small to continue.”
Waldron agrees. “There’s always something going on that makes us feel like a family. It’s ‘Pink Day’ today,” he notes, referring to the team’s wearing of pink to honor breast cancer survivors. “As the category continues to get bigger — this is the second-largest category that General Mills competes in, and the growth rate we’ve seen has been in double digits for the last 30 years — how do you maintain that small, entrepreneurial spirit that has been helpful to the category? That’s a personal challenge that we face and one we’re always talking about.”$OMN_arttitle="Team Spirit";?>