The argument could be made that yogurt always has been a functional food. After all, yogurt first broke into American consciousness as something consumed primarily by health nuts and dieters. Over the years, of course, yogurt evolved into a tasty treat, consumed in all dayparts by people of all ages and backgrounds.

In recent years, however, yogurt has undergone an interesting metamorphosis. While it should in no way be construed as a step backward, the category is once again becoming the domain of the health-conscious. Intense media coverage of obesity and growing instances of diabetes, coupled with an increasing awareness of the benefits of probiotics, has lead to the recreation of the yogurt category as one in which manufacturers and consumers alike are looking for the pathway to good health in a container of yogurt.

“With the skyrocketing costs of health care, Americans are looking for ways to proactively manage their health,” says Gary Hirshberg, president and “CE-Yo,” Stonyfield Farm, Londonderry, N.H. “Choosing the right foods can be an important part of that equation.”

As a result, we’ve seen a number of yogurts unleashed upon the American public that are designed to help treat or prevent common health problems. Stonyfield manufactures YoBaby Plus Fruit & Cereal with DHA, deemed an essential building block for optimal brain and eye development in babies and toddlers. Hayward, Calif.-based Omega Farms, a subsidiary of Pacific Cheese, sells numerous varieties of yogurt containing 75 milligrams per serving of EPA/DHA omega-3 fatty acids, which have been shown to help with everything from arthritis to bipolar disease. LightFull Foods, Mill Valley, Calif., produces the Satiety Smoothie, which contains extra fiber to produce a feeling of fullness, thus promoting weight loss.

Nearly 20 years after being introduced in Europe by France’s Groupe Danone, Activia — from The Dannon Co., White Plains. N.Y. — rolled out in American stores. The product contains billions of beneficial cultures, including the company’s proprietary Bifidus Regularis, and has been clinically proven to help promote intestinal regularity. Likewise, Breyers Light! Probiotics Plus Yogurt, now made by The Breyers Yogurt Co., Naugatuck, Conn. (formerly known as The YoFarm Co.), contains Bifidobacterium cultures, which have been shown to help maintain the balance of bacteria in the intestine.

Consumers are clearly responding to those innovations. Once again, the refrigerated yogurt category had another good year — up 4.6 percent in dollars and 2.3 percent in units, according to Chicago-based Information Resources Inc. (IRI).

“What has really spurred the growth in yogurt recently is the addition of all the functional benefits,” says Adam Baumgartner, senior marketing manager for retail development at Le Mars, Iowa-based Wells’ Dairy Inc. “Whether it’s digestive health, antioxidants, added calcium or something else, people are really starting to see a benefit.”

Only by drilling down into the category, however, is one able to get an accurate picture of what’s truly driving category growth. Sales of Dannon Activia soared a whopping 213.1 percent in dollars and 171.3 percent in units. No other top 10 brand even came close in terms of growth.

“Activia has contributed approximately 60 percent of the growth that has taken place in the yogurt category in the last year,” says Gail Barnes, vice president, fluid innovation, Dairy Management Inc. (DMI), Rosemont, Ill. “I don’t think I’ve ever seen a food product that has so quickly become such a runaway success.”

While Barnes believes strongly that a drinkable version of Activia would take America by storm, Dannon chief marketing officer Andreas Ostermayr says the company has no current plans to bring that particular variety of Activia to the United States. Just one year after the U.S. rollout of Activia, however, Dannon did launch a light version of the product in early 2007.

In recent months, Dannon saw rival Yoplait enter the digestive health segment with the introduction of Yo-Plus, which is also designed to promote regularity. While Ostermayr is adamant that Dannon is not concerned about the competition, Yoplait associate marketing manager Derek Herbst says there are some similarities between the two products.  “Yo-Plus does provide the same benefits as Activia, so in that sense, you could say they’re going head to head” Herbst says. “However, there are a lot of things unique to Yo-Plus, such as the Optibalance ingredient, which is a combination of probiotic cultures and prebiotic fiber. That’s something you won’t find elsewhere.”

Dannon, meanwhile, has rolled out more new products with added benefits. DanActive, for example, is a probiotic drink containing proprietary bacteria called L. casei Immunitas, which was specifically developed to help boost the immune system. “This is another big step into the direction of products with functional benefits,” Ostermayr says. “We have high hopes that DanActive will be the next blockbuster for us.”

Dannon also recently boosted the healthfulness of its Danimals line of drinkable yogurt, adding the probiotic culture Lactobacillus GG (LGG), which has been scientifically proven to aid in gastrointestinal function, immune function, and maintenance of oral health in children.

Danimals also now has 25 percent less sugar. Reduced sugar seems to be the name of the game for kids’ yogurts these days. Yoplait’s new Kids Yogurt Drink not only contains omega-3 DHA, it also has 25 percent less sugar than other kids’ yogurts. Stonyfield also recently reduced the sugar in all of its kids’ yogurts. According to Hirshberg, the move came in direct response to consumer requests.

Wells Dairy recently transitioned its Blue Bunny Lite 85 line to Blue Bunny Light No Sugar Added. According to Baumgartner, the name change is intended to help consumers quickly recognize the product’s key attribute: no added sugar. Wells has also added several new product lines to its arsenal of better-for-you yogurts; they include Blue Bunny Light Yogurt and Light Omega 3.

“By nature, consumers think of yogurt as a better-for-you product,” Baumgartner says. “If we can continue to raise the bar on health and wellness, consumers have shown that they are willing to jump in with both feet and try the new benefits.”

WhiteWave Foods, a subsidiary of Dallas-based Dean Foods Co., recently introduced Rachel’s Wickedly Delicious Yogurt, boasting a vegetarian form of DHA omega-3. Likewise, Breyers Yogurt just released Smart! yogurt, a line of fruit-on-the-bottom yogurt enhanced with life’sDHA, also a vegetarian source of DHA omega-3. Said to be Breyers “most ambitious and health-focused product to date,” Smart! is available in strawberry, blueberry, mixed berry, peach, black cherry, red raspberry, pineapple and strawberry-banana varieties.

With sales boosting, makers of kefir, the eastern European cultured drink containing 10 live and active probiotic bacteria, have extended their lines as well. Last summer, Morton Grove, Ill.-based Lifeway Foods Inc. unveiled ProBugs, an organic kefir product geared toward kids age 2 to 9 years old. Packaged in a patented no-spill 5-ounce pouch, ProBugs are available in Sublime Slime Lime, Orange Creamy Crawler and GooBerry Pie flavors.

Recognizing the popularity of Greek style yogurt, Lifeway also rolled out Greek Style Kefir, a product that Lifeway president Julie Smolyansky says mimics old-world Mediterranean kefir through the addition of cream and sour cultures.

Stonyfield also recently introduced a Greek yogurt dubbed Oikos. Developed through a partnership with Euphrates Inc., a maker of Greek feta cheese, Oikos has great potential, Hirshberg says.

“It’s indulgence without guilt,” he says. “It’s one of those ‘I can’t believe there’s no fat in this’ because it’s a very creamy yogurt with an incredible mouthfeel.”

While refrigerated yogurt continues to enjoy healthy increases year after year, cottage cheese is still struggling just to stay afloat. Once again this past year, category sales experienced a decline — down 1.6 percent in dollars and 2.0 percent in units during the 52-week period ending June 17, 2007, according to IRI.

Even in the organic segment, where many dairy categories have experienced demand so high that it outstrips the supply, cottage cheese continues to falter, according to Theresa Marquez, chief marketing executive for Organic Valley Family of Farms, La Farge, Wis. Citing company research into the matter, Marquez says mass-market cottage cheese consumers clearly have exhibited that there’s somewhat of a price barrier when it comes to paying more for an organic option.  

“People have shown that they are willing to step up and pay the premium for fluid milk, but in the mass market, we’ve yet to see them willing to go the extra step to pay the premium for cottage cheese,” she says. “There seems to be a price barrier where they say, ‘Hey, I’m willing to pay for the milk, but that’s where it ends.”

In Phoenix, Shamrock Farms’ director of marketing Sandy Kelly blames the flatness of the cottage cheese category on product inconsistency. Cottage cheese is an art, she says, and many manufacturers don’t take the time to ensure they are churning out a product that is essentially the same day in and day out.

“It’s not an exact science where you push a button and it comes out the same every time,” Kelly says. “You have to make sure you have the product quality steps in play.”

At Cabot Creamery Cooperative in Cabot, Vt., director of marketing Jed Davis cites an image problem as being at the heart of cottage cheese’s woes. “Cottage cheese has the perception of being something you eat when you’re on a diet or later in life when you are not up to chewing through a steak to get your protein,” he says. “I’ve actually heard people say, ‘I just can’t bring myself to eat cottage cheese.’ It’s the kind of response you would expect people to have to Brussels sprouts or something!”

With that kind of reputation, it’s no wonder cottage cheese hasn’t been able to garner much attention from younger consumers. Across the board, cottage cheese makers are confident they could rapidly increase cottage cheese’s fan base if only they could get more people to try the product in the first place.

“Cottage cheese is an outstanding product,” says Jim Lesser, director of marketing, Oakhurst Dairy, Portland, Maine. “It’s just maybe not sexy enough or glamorous enough, and we’re going to have to do something as an industry to figure out a way to get consumers more excited about something that’s really good for them.”

Two major brands believe they have done just that — figured out how to make cottage cheese relevant to today’s health-conscious consumers. Taking a page from the yogurt category, both Dean and Northfield, Ill.-based Kraft Foods Inc. recently rolled out cottage cheese boasting the added benefits of probiotics or prebiotics.

Dean’s new probiotic cottage cheese was introduced this spring in the upper Midwest under Dean’s three flagship brands: Dean Foods, Country Fresh and Land O’Lakes. Each serving provides the consumer with a number of friendly bacteria, specifically Lactobacillus acidophilus, Bifidobacterium and Lactobacillus casei.

According to Dave Haley, regional director of marketing, Dean Dairy Group, the product was developed in response to specific consumer trends. “Our research revealed that probiotics are one of the major new trends emerging in the food industry,” Haley says. “We are excited to introduce a great tasting cottage cheese that is on target for today’s consumer who has an ever increasing preference for healthy food products.”

Kraft, meanwhile, rolled out Breakstone’s and Knudsen’s LiveActive Cottage Cheese for Digestive Health in April. Boasting 3 grams of prebiotic dietary fiber in each 4-ounce serving, LiveActive is the first cottage cheese product to contain inulin, a prebiotic fiber source derived from the chicory root. In addition to helping alleviate common digestive troubles, such as bloating, gas and irritability, inulin has been shown to aid in calcium absorption.

Shamrock’s Kelly is watching such activities closely. Adding probiotics and prebiotics to cottage cheese definitely presents an opportunity, she says, but cautions that great taste must remain a manufacturer’s top concern. “You have to make sure that the product meets consumers’ taste expectations,” Kelly says. “It can be as healthy as can be, but if it doesn’t taste good, I’m not going to eat it.”

At Cabot, Davis says the dairy’s new closed-vat cottage cheese system has improved the quality and consistency of its product. While he maintains that the new equipment gives Cabot “additional incremental flexibility,” including the ability to make flavored cottage cheese, Davis concedes there really isn’t anything noteworthy in the works yet.

“If we saw the flavored side of the business was just going gangbusters, we would probably be rushing along on that a little bit more,” he says. “But for the time being, cottage cheese just keeps chugging along. It doesn’t seem to be going away, but it doesn’t seem to be doing anything spectacular either.”

Those same words could apply to the sour cream category, which couldn’t be much flatter. According to IRI, dollar sales rose a meager 1.1 percent, while unit sales flat-lined.

To increase consumer awareness of the category, Shamrock embarked on an extensive marketing campaign that includes outdoor advertising, television and radio spots, featuring company “spokescow” Roxie (voiced by actress Kathy Najimy) “chewing the cud” about sour cream. “Organic presents an excellent opportunity for sour cream,” Kelly says, revealing that Shamrock’s new organic venture will extend to sour cream later this year.

Des Moines, Iowa-based Anderson Erickson Dairy Co., meanwhile, is targeting its sour cream business to ethnic stores in its Midwestern markets. Miriam Erickson Brown, president and chief executive officer, says sour cream consumption has increased as the Hispanic population has grown in AE’s marketing area. To further expand usage of sour cream, particularly in cooking applications, the company posts recipes and serving suggestions on its Web site. Posted alongside them are serving suggestions for the company’s growing line of refrigerated dips.

While the category has long struggled with seasonality — that is, strong demand for dips around the holidays, as well as football season — Brown says her company has made inroads into the off-season by encouraging consumers to try different flavors and use dips in ways they might not have considered, such as on a sandwich.

“It has its spikes, but it’s not like it just falls off the face of the Earth during the summer months,” Brown says. “During that time, we have targeted consumer messaging encouraging people to expand their flavor preferences and try some different ways to use it.”

TOP 10 INDIVIDUAL YOGURT/YOGURT DRINK BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$3,359.3	4.6%	100.0%	3,720.6	2.3%
Private Label	373.6	-2.1	12.7	650.0	-3.4
Yoplait Original	369.5	3.5	12.6	548.4	3.5
Yoplait Light	289.3	10.5	9.9	464.1	12.8
Dannon Light ’n Fit	225.5	3.0	7.7	289.6	7.4
Dannon Activia	161.4	213.1	5.5	60.4	171.3
Stonyfield Farm	142.8	18.3	4.9	101.8	9.4
Yoplait Go-Gurt	106.0	-3.0	3.6	37.7	-3.5
Dannon Danimals	90.9	-13.3	21.5	33.8	-11.4
Yoplait Trix	90.2	1.1	3.1	35.9	2.3
Yoplait Whips	89.3	-8.8	3.0	147.8	-7.2
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc.

TOP 10 INDIVIDUAL COTTAGE CHEESE BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$869.1	-1.6%	100.0%	414.3	-2.0%
Private Label	315.0	-1.2	36.3	161.0	-1.6
Breakstone	92.6	4.3	10.7	34.8	2.8
Knudsen	72.3	-4.6	8.3	26.6	-5.2
Breakstone Cottage Doubles	37.5	8.6	4.3	35.3	9.8
Friendship	27.1	-2.5	3.1	13.0	-5.1
Dean’s	26.8	-5.6	3.1	11.7	-6.5
Hood	23.6	-1.7	2.7	10.0	-6.7
Prairie Farms	17.2	-8.7	2.0	8.6	-4.4
Knudsen Cottage Doubles	15.3	14.5	1.8	12.5	16.3
Darigold	12.4	1.6	1.4	6.0	-5.7
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc.

TOP 10 individual refrigerated DIP BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$428.0	1.3%	100.0%	190.0	-1.1%
T. Marzetti	84.1	-0.7	19.7	27.3	-2.0
Private Label	83.8	1.8	19.6	40.1	-2.5
Dean’s	47.5	-1.0	11.1	27.8	-0.1
Heluva Good	31.9	1.1	7.5	17.8	5.2
Kraft	24.6	-4.5	5.8	14.8	-9.5
Classic Guacamole	17.0	-4.8	4.0	4.1	-7.9
Calavo	9.1	21.6	2.1	2.2	18.3
Santa Barbara Bay	5.2	36.4	1.2	1.3	35.6
Litehouse	5.1	-5.3	1.2	1.7	-20.0
Salads of the Sea	5.0	1.6	1.2	1.5	6.1
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc.

TOP 10 INDIVIDUAL SOUR CREAM BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$716.5	1.1%	100.0%	455.2	0.0%
Private Label	199.1	-1.2	27.8	154.5	0.0
Daisy	171.7	16.2	24.0	96.3	15.7
Breakstone	102.3	-1.2	14.3	66.8	-4.1
Knudsen Hampshire	52.4	-1.8	7.3	23.5	-2.8
Cacique	13.9	8.5	2.0	4.0	11.1
Friendship	12.1	-13.3	1.7	9.6	-16.9
Knudsen	11.6	2.0	1.6	5.7	-0.4
Tillamook	9.8	10.9	1.4	5.3	5.1
Dean’s	8.0	-12.9	1.1	5.3	-12.1
Hood	7.6	3.8	1.1	5.2	0.9
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc.