Dannon responds to the U.S. yogurt boom
Dannon is committed to bringing products to market quickly. Fostering internal communication and outside collaboration with suppliers helps the yogurt processor achieve that goal.
When European food makers speak about the potential for their products in the United States, their pupils dilate, they salivate and their hearts race. Take yogurt, for example. Here, we eat 12.8 pounds per person per year. In parts of Europe, annual consumption is as high as 60 pounds per person. Canadians also eat more yogurt than Americans. Per capita consumption was about 22.2 pounds in 2011. If the U.S. just reached Canadian proportions, it would mean nearly doubling the category, which today is valued at approximately $5.5 billion, according to Dannon.
As it is, yogurt consumption in the United States is growing. It was up 8.3% in 2010 compared to 2009, according to U.S. Department of Agriculture data published in Dairy Facts by the International Dairy Foods Association. Only flavored milk showed a greater increase (13.5%). Third was frozen yogurt, increasing 7.2% to 0.64 pounds per person.
Dannon, the U.S. division of international food giant Danone, and the largest yogurt maker already, is doing all it can to promote yogurt. It wants more Americans to start putting yogurt cups into their shopping carts. Then Dannon will happily fight for its share of wallet (and stomach). A rising tide of yogurt lifts all processors, so to speak.
Dannon has been doing business in the United States since 1942 and is the market leader in both refrigerated and frozen yogurt. It popularized the health benefits of yogurt in the 1960s and ’70s with television advertisements featuring long-lived citizens of the then-Soviet Republic of Georgia.
Knocking down silos
To grow the yogurt category in general and its brands in particular, Dannon’s executives realize they need to bring new products to market quickly. Central to that is communication. The office layout in its corporate headquarters building in White Plains, N.Y., facilitates communication and collaboration. No one has a hard-wall office; it’s all open plan cubicles and desks. Not even CEO and president Gustavo Valle has an office with a door. He sits in an area where he can see his executive team, including senior vice president of marketing Sergio Fuster, senior vice president of sales Luciano Lopez-May and vice president of finance/chief financial officer Antoine Remy. Valle told me that the conference room where we met was his former office. He did not like the feeling of being closed off and unapproachable.
Other employees work in low-walled spaces arranged by function (finance, purchasing, legal and regulatory, and human resources). One result of the arrangement has been fewer emails sent back and forth, said Michael Neuwirth, the senior director of public relations. When a meeting is required, team members meet in conference rooms. London-style red telephone booths placed throughout the floor give employees a space to make private phone calls.
Dannon also welcomes outside collaboration. It has offices on its first floor where suppliers can set up camp. Flavor or culture vendors might work in White Plains for a day or for weeks, depending on the nature of their project. These offices are in a 15,000-square-foot innovation center on the first floor that includes a pilot plant and quality laboratory overseen by Albe Wendt, the head of research and development.