Good news about the healthfulness of yogurt continues to abound. According to the National Dairy Council, yogurt consumption lowers the risk of osteoporosis, hypertension and certain cancers. And then there’s the discovery that eating lowfat dairy products such as yogurt can help consumers lose weight.

One would expect such a revelation to lead every news report across the country. But that hasn’t been the case, as the low-carbohydrate craze has the nation transfixed, leaving processors struggling to garner even a modicum of interest in products not overtly Atkins-friendly.

“Among the trade and the buyers, we’ve barely been able to get their time or attention if we’re talking about anything other than low-carb,” says Gary Hirshberg, president and chief executive officer, Stonyfield Farm, Londonderry, N.H.

That said, Hirshberg remains impressed with the overall performance of the yogurt category. During the 52-week period ending March 21, 2004, unit sales of refrigerated yogurt in U.S. food, drug and mass merchandisers, excluding Wal-Mart, rose 3.6 percent, according to Chicago-based Information Resources Inc. (IRI).

Granted, those figures pale in comparison to the category’s vigorous growth of a few years ago, but that’s primarily because they fail to reflect the higher ring of the category’s newer product entries, according to Eric Leventhal, senior vice president of marketing, The Dannon Co. Inc., Tarrytown, N.Y. Leventhal reports yogurt sales grew about 8 percent in dollars last year, mostly due to value-added offerings such as drinkable yogurts and smoothies.

“The yogurt category has done a remarkable thing over the past three to five years, which is to introduce much more value-added products,” he says. “As we get consumers interested in yogurts that have a higher benefit, they tend to buy products that have a higher cost per ounce.”

As consumer interest in low-carb products grew into a full-fledged craze, yogurt processors began keeping a close eye on the trend in order to gauge its potential impact on category sales. According to Jim Rossiter, director of brand strategy and retail marketing for Le Mars, Iowa-based Wells’ Dairy Inc., what they saw wasn’t entirely bad. In fact, he says, many carb-conscious consumers had already embraced low-calorie, no-sugar-added yogurts, such as his company’s Blue Bunny Lite 85.

“We saw that Lite 85 was being touted on a bunch of carb-related Web sites as an alternative,” Rossiter says. “Compared to categories like pasta or bread or even milk, I don’t think yogurt has been impacted much.”

While Rossiter remains convinced the low-carb craze has not had a negative impact on the yogurt category, Leventhal couldn’t disagree more.

“We started to see household penetration decline for the yogurt category, especially in the light segment,” Leventhal says. “That was certainly a threat to our business, but a threat can always be turned around into an opportunity, so we decided to formulate a low-carb yogurt.”

The result was Dannon Light ‘n Fit Carb Control, a nationally available reduced-carbohydrate cultured dairy snack. Each 4-ounce cup features 3 grams of net carbohydrates, 60 calories and 80 percent less sugar than regular lowfat yogurt. In addition, Carb Control boasts 5 grams of protein and 15 percent of the recommended daily value of calcium. Sold in packs of four cups, Light ‘n Fit Carb Control is available in four flavors — Strawberries ‘n Cream, Peaches ‘n Cream, Raspberries ‘n Cream, and Vanilla Cream.

“Carb Control gives the nod to the tens of millions of people who have chosen to watch their weight by watching their carbs,” Leventhal says.

Needless to say, the category’s branded leader, Yoplait, was not about to be left out of the low-carb equation. This past March, the Minneapolis-based company celebrated the nationwide rollout of Yoplait Ultra, a 6-ounce cup yogurt featuring 8 grams of carbs and 5 grams of sugar — 70 percent fewer than in regular lowfat yogurt. Boasting 90 calories per serving, Ultra is available in Strawberry Crème, Peach Crème, Blueberry Crème and Raspberry Crème varieties.

Despite their discovery that carb-conscious consumers were flocking to Blue Bunny Lite 85, Wells’ Dairy still found the need to develop their own full-fledged low-carb yogurt, Blue Bunny Carb Freedom.

“The craze just got to be so vibrant that we felt there was a market to segment out that specific consumer even farther in developing a new product that had a yogurt profile, but was as low in carbs as we could possibly take it and still make it meet the taste threshold of consumers,” Rossiter says. “Having everyone come out with products targeted to carb-conscious consumers will only continue to increase that solution for the consumer.”

Touted as “an excellent way for carb counters to reap the nutritional benefits of yogurt while watching their waistlines,” Carb Freedom offers 5 grams of net carbs, 3 grams of fat and 90 calories. Although its name might suggest otherwise, Rossiter says Wells hasn’t specifically zeroed in on the carb-conscious consumer as the target market for Carb Freedom. Instead, the company directs its marketing efforts toward the larger “better-for-you” audience, which includes everyone from generally health-conscious consumers to diabetics. Because Carb Freedom is made with Splenda-brand sucralose, a no-calorie sweetener made from sugar, Rossiter says the product is ideal for those consumers seeking to cut back their sugar intake as well.

Meanwhile, Stonyfield’s Hirshberg has been carefully watching the low-carb trend and waiting for just the right time to play his hand. At this point, Stonyfield will introduce at least one low-carb yogurt — it’s “more of a question of when and how,” he says. Although his company is one of the few major players not to have introduced such a product already, Hirshberg says he’s confident Stonyfield will be better off in the long run for not having jumped on the low-carb bandwagon right off the bat.

“In many ways, it doesn’t trouble me that we missed the first round because there’s going to be some shake-out,” he says. “We’re already hearing from consumers a general dissatisfaction with the taste offerings out there, so anybody who is thinking about entering this fray better be ready for the second wave because consumers are not going to stand for that.”

If Hirshberg’s prediction proves true, one of those companies that might be well served to heed his words regarding taste is Old Home Foods. The St. Paul, Minn.-based company has yet to introduce a low-carb yogurt, although Dave Holdsworth, vice president of sales and marketing, says he’s convinced the trend has staying power.

“A year ago, I would have told you I think it’s a fad,” Holdsworth says. “I now believe it’s definitely a trend that’s going to continue for a while. I don’t know if it will forever have the legs it has now, but I think the carb consciousness will remain.”

Although Old Home has not yet officially entered the low-carb yogurt business, Holdsworth says the company has experienced the impact of the growing demand for low-carb products. In response to consumer demand, Old Home rolled out a light version of its Yogurt Smoothie earlier this year. Much to Holdsworth’s surprise, the light variety quickly took to selling on par with the regular smoothie — far better than anticipated. He attributes the sales to the lower carb content of the light product.

Sold in individual 8-ounce bottles, Old Home Light Yogurt Smoothies are available in Strawberry, Strawberry-Banana, Raspberry, Mixed Berry and Cherry flavors. The fat-free beverage contains 11 grams of net carbs and 100 calories per bottle.

According to Holdsworth, the smoothie/drinkable yogurt category has picked up speed over the past year, growing 250 to 300 percent in volume in his company’s market area. That has caused many of the stores to set up special smoothie sections within the overall dairy section.

There’s no doubt that Dannon Light ‘n Fit Smoothies will have taken their spot in those sections, as well. Rolled out nationwide last year, the 7-ounce drink blends fruit and nonfat yogurt. Available in Strawberry Banana, Mixed Berry, Peach Passion Fruit, Raspberry, Strawberry and Tropical varieties, they contain 80 calories — 45 percent fewer than other dairy-based smoothies — and no fat. Light ‘n Fit Smoothies also are sweetened with sucralose, which though made from sugar is not recognized by the body as sugar or a carbohydrate.

Leventhal believes sales of drinkable yogurt and smoothies are primarily incremental and are not cannibalizing traditional cup yogurt sales. Like Holdsworth, he reports stores setting up special sections specifically for drinkable yogurt products, a trend that he feels will only drive the “incrementality.” Leventhal is confident drinkable yogurt products will someday encompass 25 percent of category sales. According to Hirshberg, sales are already approaching 10 percent of U.S. yogurt sales.

One of the products responsible for that showing is Yoplait’s Nouriche, which just reached nationwide distribution in time to celebrate its one-year anniversary. Touted as a breakfast-time meal replacement, Nouriche offers 20 vitamins and minerals, along with protein. Just in time for summer, Yoplait has rolled out Nouriche Light, which features one-third fewer calories than the original product.

“While not totally revolutionizing the category, yogurt beverages have brought new consumers into the category and expanded consumption for current beverage users,” says Jennifer Jorgensen, Yoplait marketing manager. “Smoothies have allowed more consumers to fit the health benefits of yogurt into their lives by expanding consumption to new on-the-go occasions.”

Chief among those new consumers are men. Long considered a category geared primarily towards women and children, yogurt has finally found its way into the hands of more men, mostly due to the recent proliferation of grab-and-go drinkable products.

“Women tend to use the cup yogurt as a lunch,” says Holdsworth. “I don’t see too many men sitting at their desks eating cup yogurt, but if they have a drink that they can grab on the go, it’s easier and more convenient for them.”

If Kraft has its way, men will be reaching for Breyers Crème Savers Smoothies. The Northfield, Ill.-based company rolled out the 10-ounce product earlier this year in markets where Breyers-brand yogurt is sold. The smoothies feature popular Crème Savers hard candy flavors — Strawberries & Crème, Raspberries & Crème, Orange & Crème, Blueberries & Crème and Peaches & Crème.

Naturally, any category that sees a sudden surge in popularity is bound to have its share of party-crashers. For smoothie-producing dairies, that comes in the form of Tropicana, which launched its own line of smoothies two years ago. Promoted as a meal replacement for on-the-go consumers, Tropicana Smoothies are a combination of juice and yogurt. Available in four varieties — Mixed Berry, Strawberry, Tropical Orange and Peach — they’re sold nationwide in select club, mass merchandisers and foodservice locations.

Of course, adults aren’t the only consumers of drinkable yogurt and smoothies. Dannon’s Danimals have been pleasing kids for several years. Recently, the company expanded the line to include Danimals XL, a larger-portion drinkable yogurt geared toward ‘tweens, children age 8 to 12. The 5.75-ounce drink is available in Strawberry Explosion, Orange Strawberry Banana Blowout, Blazin’ Berry and Watermelon Slice varieties. According to Leventhal, the product itself isn’t much different from the traditional Danimals line, but the package size and design has been changed for greater appeal to an older group of children.

For those kids who still prefer to spoon up their yogurt, Wells has partnered with Disney Consumer Products Worldwide, Burbank, Calif., to produce two new lines Disney-Blue Bunny co-branded products. Calcium-fortified Yo-Pals yogurt, aimed at preschoolers, features a Winnie the Pooh story under the lid. Meanwhile, Swirl’n Magic is designed to appeal to youngsters age 4 to 8. Kids are inspired to “create their own brand of Disney magic,” using Poppin’ Flavor Crystals packaged under the lid. When stirred into the yogurt, they produce a colorful “popping” rainbow swirl.

“This was something we didn’t feel we could develop very well within the framework of a Blue Bunny-only product that didn’t have a lot of relevance with little kids,” Rossiter says. “By partnering with Disney, we got the opportunity to add some clout to our marketing cache and our products.”

Top 10 Refrigerated Yogurt Brands*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$3,077.4	3.6	100.0	1,699.2	2.7
Private Label	575.2	3.3	18.7	325.3	2.6
Yoplait	441.1	4.8	14.3	178.5	7.0
Dannon Light ‘n Fit	216.7	12.5	7.0	126.0	11.4
Dannon	242.5	10.9	7.9	117.7	-6.4
Yoplait Light	209.0	-4.6	6.8	78.4	-4.6
Yoplait Trix	37.1	-0.7	1.2	55.6	-0.7
Yoplait Go-Gurt	46.2	4.0	1.5	52.7	4.1
Stonyfield Farm	59.6	19.2	1.9	45.0	11.3
Yoplait Custard Style	112.9	-14.5	3.7	42.3	-14.5
Dannon La Crème	41.7	9.2	1.4	37.9	-0.8
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending March 21, 2004. SOURCE: Information Resources Inc.