A little more than a year ago, growth in the yogurt, and subsequently the overall cultured products category was losing steam. Quarterly growth, which had been in double digits in 2002, dropped to around 2-3% by the middle of 2003. Chalk it up to the low-carb diet craze if you will, but yogurt weathered the storm. Sales are growing again and the pace has quickened.

A little more than a year ago, growth in the yogurt, and subsequently the overall cultured products category was losing steam. Quarterly growth, which had been in double digits in 2002, dropped to around 2-3% by the middle of 2003. Chalk it up to the low-carb diet craze if you will, but yogurt weathered the storm. Sales are growing again and the pace has quickened.

According to data from Information Resources Inc., cup yogurt sales have grown at a faster pace in each of the last three quarters with dollar sales up nearly 7% and unit sales up more than 9% in the most recent period ended June 26. Meanwhile, the fast-paced sub-category of yogurt drinks is showing some signs of maturing, and cottage cheese remains sluggish.

These numbers represent food, drugstore and mass merchandiser sales excluding Wal-Mart but not foodservice or convenience store sales.

The sub-category we call cup yogurt includes six and eight ounce cups as well as larger tubs and unique packages like tubes. Going back to the first quarter of 2004, sales were actually down a bit compared to the same period a year prior. By the second quarter of last year however, they began to rebound. By the first quarter of this year cup yogurt sales were again growing by about 5%.

Yogurt drinks represent a small share of the overall cultured products segment, and it's a new market, so sales have been growing at breakneck speed in recent years. In 2004 quarterly sales shot up by as much as 97% a quarter, and even in more recent quarters the growth was in the 20% ranges, but sales growth in the most recent period, was just 2.5% by unit. Still, looking at the track record of the top 10 brands during the most recent 52 weeks shows what a dynamic area this is. Several new brands are being introduced and some brands are giving up market share to new light versions. Interesting to note that DanActive, Dannon's probiotic shot, has entered the top 10.

Finally, half of the top ten cottage cheese brands, and the overall category experienced some declines in the last year. Those brands that are doing well include Breakstone Cottage Doubles and Deans.