Those in the U.S. dairy industry often wonder aloud if functional yogurt can get a foothold in the States. Well, it's happened in Spain.

One of every eight Spanish dairy companies is exploring the functional yogurts market as the sector's sales are forecast to grow 17% annually from $437.0 million in 2004, outstripping growth in all other yogurt categories, industry observers say. Spanish yogurt output grew 13% in the first half of 2004, led by functional products, according to Spain's national dairy federation Fenil, which says the category-comprised mostly of drinkable, rather than spoonable, products, should continue to grow sharply in the future.

France's Danone leads the Spanish fermented milks market with more than 50% of sales and an 80% foothold in liquid probiotics. Spanish Ebro Puleva is also muscling in on the market. It recently launched two liquid yogurts under its Omega 3 functional portfolio. Spain is Europe's fifth-largest food market.