The Dannon Co., White Plains, N.Y., produces approximately 200 types of flavors, styles and sizes of cultured refrigerated and frozen dairy products. The dairy processor needs to ensure product availability at the shelf at the right time and minimize waste through optimized forecasting.
At the Smarter Commerce Global Summit in Nashville, Tenn., in May, IBM announced that Dannon is using IBM’s cloud-based predictive analytics to ensure it has the right product mix delivered at the right time to satisfy consumers in the $7 billion U.S. yogurt market. Through the use of integrated analytics planning, Dannon is able in real-time to improve forecasting abilities.
Dannon works with food retailers and other partners to maintain its competitive advantage in the dynamic and growing yogurt category, in which segments such as Greek yogurt are rapidly increasing.
Through IBM’s trade and strategic trade planning solutions, Dannon analyzes shopper behavior through the use of big data and predictive analytics to improve trade investment decisions and make more precise and accurate predictions on product volume and profitability. IBM stated it was instrumental in helping Dannon’s sales team to streamline the forecasting and planning process.
How Dannon balances demand for yogurt with shelf-life limits
To meet continually changing consumer demand generated by promotions, Dannon must precisely anticipate how much additional yogurt is needed by its retailer customers, while also keeping in mind yogurt’s limited shelf life. Empty shelves cannot be filled overnight and too much production can result in spoilage, both of which are losses for shoppers, retailers and Dannon. By utilizing these tools and statistics, Dannon is able to more accurately measure how much yogurt they will need through predictive analytics, which ensures enough yogurt is on the shelf, resulting in happier shoppers, less wasted product and a more profitable business for retailers.
“Our goal was to eliminate the time our sales team was spending on forecasting and instead focus their attention on executing their promotional plans, allowing them to work more closely with our retailer customers,” said Dannon Chief Information Officer Timothy Weaver. “Through IBM’s planning solutions, we not only streamlined the forecasting process for our sales team, but we increased our planning accuracy from 75% to 98%, helping us to further distinguish ourselves as the leading yogurt maker.”
“Dannon works with retailers across the country to make sure their shelves are filled with the precise product volume and promotions for each store location to meet shopper demand,” said Craig Hayman, General Manager, IBM Industry Solutions. “Through the use of predictive analytics, Dannon is able to understand, plan, and predict their business in ways that were unimaginable a few years ago.”
IBM's Smarter Commerce initiative features software and services that help companies transform their business processes to more quickly respond to shifting customer demands in today's digitally-transformed marketplace. The initiative is driven by CMOs, CIOs, and other C-suite executives who are increasingly looking for ways to bring new levels of automation to marketing, sales and fulfillment to secure greater customer loyalty.
Current IBM cloud-based software and services being used by The Dannon Company include IBM Strategic Trade Planning and Customer Trade Planning solutions.
The information in this article was supplied on behalf of IBM Industry Solutions.