irst commercially available in the United States in 1929, yogurt was quickly branded a chalky-tasting health food. Seeking to improve its image and gain the same kind of following it had long enjoyed in Europe, yogurt makers invested heavily in consumer research, product development and marketing. As a result, the yogurt of today barely resembles the yogurt of years gone by.

TOP 10 COTTAGE CHEESE BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$863.5	-0.6%	100.0%	414.2	-0.8%
Private Label	309.8	-0.5	35.9	161.2	1.0
Breakstone	84.2	0.2	9.8	32.4	1.4
Knudsen	75.4	-1.4	8.7	28.2	-2.5
Breakstone Cottage Doubles	28.8	6.7	3.3	26.3	8.4
Dean’s	27.9	6.6	3.2	12.4	0.9
Friendship	27.6	1.9	3.2	13.4	1.0
Hood	22.4	-0.5	2.6	10.2	-4.8
Prairie Farms	19.2	4.2	2.2	8.9	-0.6
Light ‘n Lively	17.4	-9.4	2.0	6.7	-10.8
Hiland	13.4	-18.0	1.6	6.8	-18.0
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending July 10, 2005. SOURCE: Information Resources Inc.

TOP 10 YOGURT BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$2,870.7	7.8%	100.0%	3,270.7	6.3%
Private Label	341.7	3.6	11.9	604.9	5.2
Yoplait Original	293.3	4.4	10.2	455.3	7.4
Yoplait Light	188.1	19.5	6.6	297.5	25.4
Dannon Light ‘n Fit	173.1	9.4	6.0	222.9	10.1
Yoplait Go-Gurt	129.2	4.7	4.5	48.7	5.2
Dannon D’animals	97.0	2.3	3.4	38.0	-7.8
Stonyfield Farm	91.0	22.6	3.2	72.6	24.5
Yoplait Trix	90.9	-2.5	3.2	36.0	-2.8
Yoplait Whips	82.1	-3.0	2.9	132.3	1.1
Dannon Fruit on the Bottom	78.9	-3.3	2.7	132.8	-0.9
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending April 17, 2005. SOURCE: Information Resources Inc.

With offerings ranging from kid-friendly, squeezable tubes to rich, indulgent, adult-oriented dessert-style products, yogurt has clearly shaken its old reputation as something only the most hard-core health nuts would eat. These days, people of just about every age, race and income level can be found scooping up a cup of yogurt or chugging down a frothy yogurt smoothie, either as part of a meal or a tasty snack.

The growing acceptance of yogurt is evident in data from Chicago-based Information Resources Inc. (IRI), which shows sales have been steadily increasing for the past several years. Once again, the category turned in a strong performance, with sales of refrigerated yogurt rising 7.8 percent in dollars and 6.4 percent in units throughout supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, during the 52-week period ending April 17, 2005 (the most recent data available at press time).

Having spent much of the 1990s nursing the children’s market and the past several years expanding usage throughout the development of drinkable yogurts (also known as smoothies), manufacturers remain remarkably confident that yogurt still has many opportunities for growth.

“Our per capita consumption to this day remains well below that of any western nation, so there’s still enormous upside,” says Gary Hirshberg, president and chief executive officer, Stonyfield Farm, Londonderry, N.H. “In Europe, the average yogurt consumer eats yogurt multiple times per day, so there’s still a very long way to go.”

Learning from their own experience, garnered while building initial acceptance of yogurt, manufacturers have been actively flexing their R&D muscles, rolling out a bevy of new products, designed to give consumers more reasons — and more occasions — to enjoy the product. Last year, it arrived in the form of an influx of reduced carbohydrate offerings, as well as the long-anticipated opening of the floodgates with regard to drinkable yogurts/smoothies. The latter have done fairly well and were even cited in an ACNielsen executive news report, “What’s Hot around the Globe: Insights on Growth in Food and Beverages 2004,” as one of the top two growth categories. That said, the general consensus is that drinkable yogurts have failed to live up to the lofty expectations of many in the industry.

That’s not to suggest that manufacturers are about to give up on further development of the drinkable segment. On the contrary, investment in drinkables continues, with Tillamook County Creamery Association among the latest to throw their hat into the ring. The Tillamook, Ore.-based cooperative recently introduced Yogurt Smoothies, featuring some of the flavors that have proven most popular in its cup yogurt line: Vanilla Bean, Oregon Strawberry, Orchard Harvest, Marionberry and Mixed Berry.

Category leader Yoplait expanded its drinkable offerings with the introduction of Go-Gurt Smoothie, a 5-ounce yogurt product available in such kid-friendly flavors as Strawberry Splash, Wild Berry and Paradise Punch.

Stonyfield also expanded its drinkable offerings to include a Light Smoothie with 50 percent fewer calories and no artificial sweeteners. Rather than using Splenda, the sweetener of choice for many food and beverage manufacturers, Stonyfield opted for erythritol, an all-natural sweetener found in fruits, such as grapes and melons. Stonyfield also uses erythritol in its MOOve Over Sugar (previously MOOve Over Carbs) yogurt, a lowfat organic product sold in 4-ounce “snack-sized” cups.

“Within the natural products industry, Splenda is perceived as being still more processed than it needs to be, so it’s prohibited from use in natural foods,” Hirshberg says. “Because erythritol is just a fermented sugar and nothing more than that, it’s deemed acceptable for natural foods.”

Seeking to expand its dessert-style yogurt offerings, The Dannon Co., Tarrytown, N.Y., rolled out Le Crème Rich & Creamy with Chocolate Pieces in strawberry, vanilla and cherry. The company also introduced Dannon Light ‘n Fit with Fiber; this low-calorie, nonfat yogurt is available in strawberry, peach and apple varieties.

Dannon’s top competitor, Yoplait, has also focused on yogurt with added health benefits. In February, the Minneapolis-based subsidiary of General Mills Inc. introduced Healthy Heart yogurt, the first yogurt containing cholesterol-lowering plant sterols to be sold in the United States. Available nationwide in four flavors — Strawberry, Harvest Peach, Cherry Orchard and Strawberry Banana — Yoplait Healthy Heart is being marketed to women.

“Often, when women set out to lower their cholesterol through the foods they eat, they think they need to remove their favorites from their diet,” says Jean Storlie, M.S., R.D., and manager, General Mills’ Bell Institute of Health and Nutrition. “With Yoplait Healthy Heart, they can continue to enjoy Yoplait yogurt, while getting the cholesterol-lowering benefits of plant sterols.”

With so many new products vying for consumers’ attention, shelf-space is understandably a concern. However, yogurt processors report strong cooperation from retailers, who clearly recognize the popularity of the category.

TOP 10 SOUR CREAM BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$689.2	5.1%	100.0%	443.6	0.6%
Private Label	201.4	6.5	29.2	153.6	4.5
Daisy	124.1	17.6	18.0	69.3	12.5
Breakstone	104.5	2.7	15.2	69.3	-1.7
Knudsen Hampshire	51.2	1.0	7.4	22.5	-0.6
Friendship	13.3	-0.4	1.9	10.8	-8.9
Cacique	11.9	11.8	1.7	3.3	3.6
Knudsen	10.8	2.5	1.6	5.2	-0.7
Dean’s	9.6	-0.9	1.4	6.3	-12.6
Tillamook	8.8	-3.5	1.3	5.2	-4.3
Prairie Farms	7.8	8.5	1.1	5.5	5.5
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending July 10, 2005. SOURCE: Information Resources Inc.

“Retailers tend to make room for new products, especially when they have an interesting hook,” says Dave Holdsworth, vice president of sales and marketing, Old Home Foods, St. Paul, Minn. “It takes a lot of money to launch a product, however, so you need to make sure that what you are launching makes sense for the consumer.”

Naturally high in protein and low in carbohydrates, cottage cheese seemed perfectly poised to reap tremendous benefits from the low-carb craze. To ensure that success, some processors reduced the carb content of their product even further. Case in point: Wells’ Dairy in Le Mars, Iowa, launched Blue Bunny Carb Freedom cottage cheese, containing 3 grams of net carbs, about 25 percent fewer than its traditional cottage cheese.

Other companies actively promoted cottage cheese’s naturally low-carb attributes. As part of its alliance with Dr. Arthur Agatston, author of The South Beach Diet, Kraft added a “South Beach Diet Recommended” button to its Light N’ Lively Cottage Cheese packaging. Likewise, Old Home began promoting its cottage cheese as “the original low-carb food,” touting the low carbohydrate content on its package, in FSIs and on billboards.

Despite all these efforts, reality failed to match expectations, and cottage cheese turned in yet another lackluster sales year. According to IRI, dollar sales slipped 0.6 percent, while unit sales dropped 0.8 percent throughout supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, during the 52-week period ending July 10, 2005.

“Cottage cheese continues to be a conundrum,” says Jed Davis, director of marketing, Cabot Creamery Cooperative, Cabot, Vt. “It just hasn’t migrated from ‘that thing my grandmother likes’ to something that is better plugged in with today’s younger demographics.”

TOP 10 REFRIGERATED DIP BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$407.2	4.0%	100.0%	191.7	-1.4%
T. Marzetti	80.5	9.3	19.8	26.8	8.7
Private Label	72.5	6.2	17.7	40.6	-3.2
Dean’s	47.3	-4.8	11.6	27.3	-6.2
Heluva Good	29.5	3.9	7.3	15.3	-4.2
Kraft	27.3	-8.7	6.7	17.2	-6.4
Classic Guacamole	16.8	-6.7	4.1	4.4	-6.8
Litehouse	10.1	171.6	2.5	3.6	150.5
Salads of the Sea	5.0	51.2	1.2	1.6	50.5
Marie’s	4.9	-46.1	1.2	1.6	-47.1
Bison	4.6	-1.0	1.1	2.8	-0.5
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending July 10, 2005. SOURCE: Information Resources Inc.

While Davis points to an image problem as the primary roadblock keeping cottage cheese from turning the tide, Annette Jim, director of marketing for Byrne Dairy, Syracuse, N.Y., blames a lack of consistency for turning consumers off. Rather than producing its own brand of cottage cheese, her company buys it from other producers. The problem is, Jim says, it’s rarely the same product twice in a row.

“It never comes in the same — sometimes it’s runny, sometimes it’s dry,” she says. “You might like the taste of it today, but if you buy the same product tomorrow, it could be very different.”

In an effort to help cottage-cheese makers produce a more consistent product, Rosemont, Ill.-based Dairy Management Inc. (DMI) sponsored a research project, which sought to develop a method for manufacturing cottage cheese in an enclosed horizontal cheese vat. According to Lloyd Metzger, director of the Minnesota/South Dakota Dairy Foods Research Center and assistant professor, Department of Food Science and Nutrition, University of Minnesota at St. Paul, the idea behind the project was to automate the manufacture of cottage cheese, thus resulting in a more consistent product.

“Hopefully, with this process, we’re producing a consistent, quality product that will give consumers what they expect every time,” Metzger says.

Cabot hosted a successful trial run, utilizing the method in early 2004, which ultimately led the company to purchase two enclosed vats for cottage-cheese production. In fact, the company completely redesigned its “cottage room,” better positioning it for future R&D initiatives, which could potentially include an assortment of flavored cottage cheese, Davis says.

HP Hood LLC, Chelsea, Mass., unveiled an assortment of flavored lowfat cottage cheese, including Black Pepper & Chives, Chive & Toasted Onion, Peaches, Pineapple & Cherry and Strawberries.

Meanwhile, Anderson Erickson experienced a positive response to its first flavored product, Mr. E’s Garden Vegetable Cottage Cheese, introduced last year. While she reveals that her company is working on more flavored varieties, Betsy Hoye, marketing director of the Des Moines, Iowa-based processor, concedes that such initiatives aren’t likely to see the light of day anytime soon, due to the amount of capital investment and new equipment that would be required.

Those companies that have made tangible investments in the category have reaped rich rewards as a result. Dallas-based Dean Foods Co. undertook a major packaging makeover and consequently saw cottage cheese sales rise 7.1 percent in dollars and 0.6 percent in units.

Even more impressive were the inroads made by Kraft, as the result of an advertising campaign touting the fact that its Breakstone’s Cottage Doubles — a teaming of cottage cheese and fruit toppings mixed in by the consumer — contain “half the sugar of yogurt.” Not only did the brand achieve increases of 6.7 percent in dollar sales and 8.4 percent in unit sales, but more importantly, consumers reported that the advertising made them view the product as “a snack alternative to yogurt,” according to J. Walter Thompson, the Chicago-based agency that worked with Kraft on the campaign.

It’s just that kind of investment from a big-name, national brand that regional cottage-cheese makers say the category needs if it hopes to attract new consumers. However, they are quick to recognize that they can’t leave it all to the big boys with the deep pockets. “There’s no question that when Kraft decides to put some money behind Breakstone, the whole category benefits,” Davis says. “Unfortunately, that’s not something you can count on happening all the time, so we all need to do our part to raise awareness.”

Unlike cottage cheese or yogurt, sour cream is not a stand-alone food. You’d be hard-pressed to find anyone who scoops up a creamy bowl of sour cream for breakfast or a late night snack.  Rather, sour cream is a complimentary product — a topper for baked potatoes or nachos and an ingredient in countless recipes.

Unfortunately, as noted by Molly Murphy, marketing and sales director, Quality Chekd Dairy Association, Naperville, Ill., fewer consumers are taking the time to actually make meals at home anymore.

At the same time, high butterfat prices have hit the category hard, resulting in 15- to 20-cent increases on 16-ounce tubs, Holdsworth says. Consequently, consumers have gravitated toward smaller sizes, often making do with an 8-ounce tub.

The pricing issue is evident in IRI data: throughout supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, dollar sales grew 5.1 percent, while unit sales inched up 0.6 percent.

Refrigerated dips suffered a similar fate, up 4.0 percent in dollars, but down 1.4 percent in units, according to IRI. Carla Laylin, senior marketing manager, T. Marzetti Co., Columbus, Ohio, concedes there has been some softness in the category, perhaps due to a combination of economic issues and the low-carb trend. However, she reports that Marzetti has been experiencing “good, solid growth,” particularly in the produce department.

According to IRI, Marzetti racked up impressive increases in both dollar and unit sales — up 9.3 percent and 8.7 percent, respectively. Laylin credits a slew of new products for keeping the category innovative and fresh. Last fall, the company introduced two new veggie dips — Bacon Tomato and Buffalo Ranch — in addition to a new Light French Vanilla yogurt-based fruit dip, containing 35 percent fewer calories than regular cream cheese-based fruit dips.

Among other dip innovations, this year saw the launch of IncreDiples by Wells’ Dairy, a line of yogurt-based snack dips in flavors like Fajita Lime and Spicy Buffalo, and with 1 gram of fat per serving.

“Dips fit very well into the whole trend of entertaining at home,” Laylin says. “People want something easy and quick, yet different and fancy, giving the impression that they put a lot more into it than they actually have.”