It’s a wild time for the cultured dairy products category as marketers go to extremes to create points of differentiation in this overcrowded segment.




It’s wild times for the cultured dairy products category as marketers go to extremes to create points of differentiation in this over-crowded segment. Probiotics, fiber, omega-3 fatty acids, superfruits and more - these are the ingredients being added to all types of cultured dairy foods as consumers prey for health- and wellness-promising products.

Almost every top-10 food trend report issued this year has included probiotics as a wonder food. The concern among probiotic authorities is that marketers are jumping on the probiotics bandwagon and misusing the term on product labels and promotions.

“It’s only a probiotic product if it contains the same strain at the same dose as was proven in a clinical trial for a specific benefit,” says Mary Ellen Sanders, executive director of the International Scientific Association for Probiotics and Prebiotics, and consultant based out of Centennial, Colo.

As Good Housekeeping responsibly reported in its June 2008 issue: “Microbes have invaded the supermarket: Many brands of yogurt, drinks, bars and cereal have now added healthy strains of bacteria called probiotics to their products. Since the term probiotic isn’t legally defined under federal regulations, companies can brandish the word without stating the strain of bacteria a product contains or whether there are enough to be beneficial. Nor do they have to make sure the bacteria will still be alive when you buy the item. You may find more info on a company’s Web site, but not always. So choose these products if they deliver the taste and nutrition you’re looking for; just be skeptical about their ability to treat particular illnesses.”

Dairy marketers must act responsibly when using the term probiotics. This includes referencing the inclusion of specific strains and the clinical trials that support the strain’s classification as a probiotic. Without that, it is false advertising. And if you think no one is watching and taking notes, think again.

Watch your back

The two leading U.S. yogurt marketers - The Dannon Co., White Plains, N.Y., and General Mills Inc., Minneapolis - have been in somewhat of a cat fight over claims. 

In December, the National Advertising Division of the Council of Better Business Bureaus, New York, recommended that General Mills modify advertising claims for its Yo-Plus product after conducting a review of its advertising. The review was the result of Dannon’s complaint to NAD about specific wording of digestive-health claims that General Mills used in its yogurt ads.

NAD took issue with a chart General Mills employed to compare the attributes of Yo-Plus with those of Dannon’s Activia. The chart indicated both products were fortified with probiotic cultures, but that only Yo-Plus contained prebiotic fiber, vitamin A and vitamin D. NAD agreed with Dannon that the chart implied the probiotic content of the products was the same when it is not, as both the strains and the clinical evidence supporting their benefits are different.

NAD told General Mills to avoid communicating the unsupported message that the Yo-Plus product itself has been proven to help “regulate digestive health” and expressly limit digestive health benefit claims to the bacterial strain. NAD said it had no issues with General Mills promoting the fact that its product contains an ingredient that has been shown to help regulate digestive health, as well as the fact that Yo-Plus, unlike Activia, contains fiber and additional vitamins.

On the attack

It took less than three months for the tables to turn. This time, NAD reprimanded Dannon, on behalf of a complaint brought forward by General Mills. The complaint was on claims for Dannon Light & Fit 0% Plus Yogurt.

One claim at issue was: “Light & Fit 0% Plus contains 12% of the recommended daily value of protein and 10% of the recommended Daily Value of Vitamin A.” Consumers have to consume two 4-ounce cups, not one, to attain the stated levels of protein and vitamin A, and thus the claim is misleading, according to NAD.

In responses, both companies have been quoted as stating that they “support the self-regulatory process, and will take NAD’s recommendations into account in future advertising.”

The mighty jungle thrives

None of this stopped the two yogurt giants from innovating. General Mills adds Blueberry Açai to the Yo-Plus line, while Dannon has turned Activia cups into a drink for on-the-go consumers.

For kids who want interactivity, there’s new Dannon Crush cup - crush the cup and slurp up the yogurt using animal instincts. The cups are molded with accordion-style pleated sides that permit them to be squeezed to dispense the yogurt for direct eating from the cup.

Stonyfield Farm, Londonderry, N.H., is upgrading its YoBaby yogurt line. Designed for babies six months and older, the whole milk cup yogurt is now fortified with 25% of RDV for both zinc and vitamin D.

Hitting shelves this July is YoBaby Meals. These whole milk yogurt-based meals combine both fruits and vegetables for babies’ growing appetites. Combinations are Apple & Sweet Potatoes, Peaches & Squash and Pear & Green Beans.  

With outdoor entertaining season nearly here, Heluva Good, a brand of HP Hood LLC, Lynnfield, Mass., is making three changes to its line of sour cream dips. First, there’s the new Feature Flavor: White Cheddar & Bacon. Next, given the success it enjoyed last year as a Feature Flavor, the brand is making Jalapeño Cheddar a permanent dip offering. And last, the company’s Creamy Salsa dip has been renamed Fiesta Salsa.

Rachel’s, a brand of White Wave Food Co., Broomfield, Colo. (part of Dallas-based Dean Foods), has entered the single-serve (5-ounce) cottage cheese business with six flavored products, three sweet and three savory. The U.K. brand, which debuted in the United States in 2007, is borrowing from its European roots to offer American consumers new Cucumber Dill, Roasted Red Pepper and Sun Dried Tomato Pesto cottage cheese.

On the sweet side there’s Lemon Verbena Berry, Pear Mangosteen and Pomegranate Orange Cranberry. The line has no artificial sweeteners, colors, flavors or preservatives, and is made from “rBST-free” milk. The company touts the fact that its new cottage cheese offerings contain 50% to 70% less sugar than most low-fat yogurts.

Breyers Yogurt Co, a wholly owned subsidiary of Healthy Food Holdings, Boulder, Colo., adds Breyers YoCrunch100 Calorie Packs to its famous dome-on-top mix-in yogurt concept. Varieties are Vanilla with Nestle Crunch, Strawberry with Granola, Cheesecake with Graham Cracker Crunch and Vanilla with Chocolate Chip Cookie Crunch.

“The YoCrunch product, which features the healthy smoothness of low-fat yogurt and the tempting crunchiness of cookies, candies and granola placed conveniently atop the package, is doing well in the marketplace, and has seen continued year over year growth,” says Shannon Daily, brand manager. “With our new YoCrunch 100 Calorie Packs, we’re looking to provide today’s busy consumers with a nutritious, portioned controlled and delicious snacking option for healthy eating on the go.”

Wallaby Yogurt Co., Napa County, Calif., introduces Down Under, a line of fruit-on-the-bottom yogurts packed in clear cups so that consumers can see the quality and volume of fruit each serving contains. “The fruit you find in Down Under isn’t a jam or jelly; it’s an abundance of pure fruit and flavor that can be savored all on its own,” according to the company. Varieties are Berries & Cream, Mango Tangerine, Peach Passion, Pink Grapefruit and Strawberries & Cream. For those looking for something a bit wilder, there’s also Dark Chocolate.

Orchard Park, N.Y.-based Healthy-Culture Inc. introduces Healthy 10 Kefir Beverage. One 8-ounce serving, which contains only 140 calories, delivers a billion Bifidobacterium lactis BB-12 probiotic cells and 10% or more of the RDV for protein, fiber, potassium, phosphorous, calcium, iron, riboflavin and vitamins A, C, D, E and B12. Each serving is also considered an excellent source of omega-3 docosahexanoic acid (DHA).

“Healthy 10 was developed based on research conducted with consumers who are actively seeking products that support their healthy lifestyle. Our research identified an un-met need among consumers who are healthy, fit, exercise regularly and live an active lifestyle,” says Rod Dorman, president. “These consumers are proactively seeking products that provide multiple health benefits, meet specific nutritional requirements… and that taste good. Healthy 10 has been formulated to meet these specific health benefits, nutrition and taste desires.”

Speaking of kefir, it’s now available at Chicago’s Lincoln Park Zoo. Lifeway Foods Inc., Morton Grove, Ill., entered an agreement, effective April 1, to sell its kefir products at multiple zoo concessions, making it the first summer that a drinkable yogurt is sold at one of the nation’s oldest, and still free zoos. Products to be sold include Lifeway Kefir and ProBugs, a children’s line of organic kefir that comes in a no-spill pouch in kid-friendly flavors like Orange Creamy Crawler, Goo Berry Pie and Sublime Slime Lime.

“Every year, Lincoln Park Zoo gets millions of visitors, and they host many events that attract the Chicago-area community at large,” says Lifeway President Julie Smolyansky. “This agreement gives us the opportunity to associate ourselves with one of the city’s most popular and respected institutions, reach many new people who may not yet have tasted our delicious and healthy products and increase brand visibility among existing Lifeway fans as well.”

Cultured dairy tracks

Reaching new people is key to growing any business. Dairy Foods worked with Catalina Marketing Corp., St. Petersburg, Fla., to obtain retail purchase trend data on select cultured dairy products as well as to identify which customers are driving sales (see sidebar on page 38). According to data for the past 52 weeks, based on purchases made by 38,061,050 shoppers, 71.7% of all shoppers purchased yogurt, 60.9% bought sour cream, 58.2% bought cream cheese, 41.6% bought cottage cheese and 36.6% bought refrigerated dips/spreads.

Catalina Marketing took a closer look at the yogurt category and found that shoppers who purchased yogurt tend to be more likely to purchase other cultured dairy products. For instance, 70.1% also purchased sour cream, 68.2% bought cream cheese, 49.5% bought cottage cheese and 42.2% bought refrigerated dips/spreads during the same shopping trip.

When it comes to purchasing yogurt, 58.5% of all shoppers bought individual cups of yogurt, 25.9% purchased multi-packs, 20.1% bought multi-serve tubs, 16.9% bought kids’ yogurt and 11.5% bought drinkable yogurt. Interestingly, many consumers are purchasing more than one form of yogurt. Of all shoppers who purchased individual cups of yogurt, 32.7% were also picking up multi-packs, while almost a quarter were buying tubs (26.1%) or kids’ yogurt (22.2%). Data further indicates that cup yogurt buyers are more likely to purchase drinkable yogurt (15.5%) during the same shopping trip, than non-cup yogurt buyers (11.5%).

Catalina Marketing analysts also studied 30.5 million transactions from 80 stores across 10 retailers and found that during the 13-week period from Dec. 8, 2008, to March 8, 2009, 7.9% of shopping trips included a yogurt purchase. Not necessarily made at the same time, 3.0% of shopping trips included sour cream, 2.7% included cream cheese and 2.3% included cottage cheese. And not surprisingly, of the shopping baskets containing cream cheese, 20.4% also had bagels.

During the same period, 3.4% of shopping baskets contained regular, full-fat potato chips. Of those baskets containing such chips, 9.7% also included refrigerated dips/spreads while only 5.4% contained shelf-stable dips/spreads, which suggests that full-fat potato chip purchasers made the effort to walk to the refrigerated dairy case instead of settling for a dip/spread merchandised alongside the chips.

Innovating responsibly, marketing effectively and merchandising in the right spots helps make the jungle a little bit more manageable.

Hunting for Customers

Do you know how many consumers drive sales volume for your cultured dairy brand? The answer is certainly important in deciding how and where to invest marketing dollars. The more concentrated your customer base, the more critical it is to understand precisely who your consumers are and how to reach them.

Historically marketers have followed the Pareto Principle, which assumes that 80% of sales come from 20% of customers. However, recent research conducted by Catalina Marketing Corp., St. Petersburg, Fla., and the Chief Marketing Officer Council, Palo Alto, Calif., shows “the 80-20 rule is outdated,” says Trish Brynjolfsson, vice president of business and industry development at Catalina Marketing.

The research, using Catalina Marketing’s “Pointer Media Network” and its collaborative report with the CMO Council, titled “Discovering the Pivotal Point Consumer,” peers inside the shopping baskets of nearly 54 million American consumers over a 12-month period to uncover the truth about consumer fragmentation in today’s consumer packaged goods marketplace. It examines consumer concentrations among major established brands, new products, brand extensions and new consumer preference segments, such as organic, green and heart healthy.

“The report examines the forces behind what we believe is a seismic shift in the way we think about consumer concentrations, along with its implications for brand marketers who are brave enough to embrace a ‘new consumer truth,’” says Brynjolfsson. “It also proposes a new addition to the CPG marketing lexicon, ‘The Pivotal Point Consumer,’ which is the shopper who drives 80% of your brand’s volume.

“For the most part, there are probably far fewer of these consumers than you imagine, and they are highly valuable, even pivotal, to the success of your brand,” says Brynjolfsson.

A key overall finding from the study is that only 2.5% of shoppers (vs. the Pareto Principle’s 20%) make up 80% of the average CPG brand’s volume. Further, the Pivotal Point Consumer who drives 80% of volume contributes to a large portion of the brand’s revenues and should be a significant part of the company’s marketing plans. For some brands, this target audience of “pivotal point consumers” is even lower.

Catalina Marketing provided Dairy Foods with Pivotal Point Consumer data for various cultured dairy product brands. In the full-fat sour cream category, the percent of Pivotal Point Consumers is greater than the CPG average of 2.5% for two of the brands noted. Specifically, 8.5% of consumers are driving 80% of Daisy brand sour cream sales, while 4.2% are driving Breakstone’s sales.

Within the blended yogurt category, Yoplait Original is also above the average, with 6.8% of consumers driving 80% of the brand’s sales. With Stonyfield Farm, the percent of Pivotal Point Consumers drops significantly to 0.9%, suggesting that Stonyfield yogurt consumers are extremely brand loyal. When Stonyfield introduces a new product, it makes sense for them to target their marketing efforts to this less than 1% of shoppers, as they are more likely to try, buy and keep on buying.

“Given the amount of money invested in media campaigns each year, it is not surprising advertisers are frustrated with fragmentation and the inability to precisely reach the right audience. This deficiency costs companies millions, and traditional media often lacks adequate insight into accountability and return-on-investment,” says Dick Buell, Catalina Marketing’s CEO. “Today’s consumers are also operating in a very personalized environment with limited time for clutter and irrelevant ads. The Pointer Media Network is designed to address all of these specific unmet marketplace demands.”

For more information, visit www.pointermedianetwork.com or call 800/290-8450.