As consumers gravitate toward yogurt loaded with protein or probiotics, Danone is finding a lucrative market in the category for a “more traditional offering” through its Dannon brand.
Dannon was created in 1942 and is the first product Danone offered in the U.S. market for yogurt. It has since grown its American yogurt portfolio to 20 brands.
While Dannon lacks many of the trendy, better-for-you attributes found in some of the company’s other brands — Activia, for example, prioritizes probiotics and gut health; Two Good, low sugar; and Oikos, high protein — the yogurt plays an equally valuable role for the France-based food giant.
Dannon was created in 1942 and is the first product Danone had in the U.S. market for yogurt that has grown to include 20 brands today. While Dannon lacks many of the trendy, better-for-you attributes found in some of the company’s other brands — Activia, for example, prioritizes probiotics and gut health; Two Good, low sugar; and Oikos, high protein — the yogurt plays an equally valuable role for the France-based food giant.
Dannon’s biggest attribute is its ability to bring “everyday nutrition” to the consumer, according to Danone. It also has a lower price point than other yogurts on the market, including many made by Danone, which makes it an attractive option for cash-strapped consumers.
“There is a segment of consumers that are looking for more traditional yogurt,” Rafael Acevedo, president of Danone’s North American yogurt business, said in an interview. “We see the brand as playing a very, very clear role in the portfolio.”
Less is more
Unlike some of Danone’s other yogurt brands, Dannon’s creamy and fruit on the bottom lines each have four flavors in the U.S. This is fewer than the 10 offerings in Activia for its 4-ounce servings, and just under a dozen for Two Good’s 5.3-ounce cups. Dannon’s nonfat and whole milk versions are each sold in only 32-ounce containers. Fat-free is available in plain, while whole milk has plain and vanilla.
The yogurt also provides new usage occasions for Danone’s products. Dannon is often a popular additive for recipes made at home, including foods like pancakes, muffins and guacamole.
Sales during the 52 weeks ended Oct. 22 were $65 million, including Dannon drinks, according to IRI data provided by the company. The brand had a 1.4% market share in the regular yogurt segment (including Skyr while excluding Greek.)
Dannon also has an enviable level of awareness in the market, with 82% of consumers recognizing the brand.
During the last few months, Danone has been “on a journey to modernize” the brand by introducing new packaging designed to stand out on the shelf and better communicate its nutritional attributes.
The dairy giant has also improved Dannon by enhancing its yogurt cultures to create a creamier taste and increasing the shelf life by more than five additional days. It also offers less sugar than the average brand in its category.
Danone’s non-yogurt portfolio extends into other categories as well, such as Silk in plant based, International Delight in creamers and iced coffee, and Evian in bottled water. But yogurt remains a hugely important category for the company.
Yogurt sales at Danone jumped 5% in the third quarter ending Oct. 26, IRI data showed, with the broader category as a whole posting strong growth.
“We expect the category to continue to do well. There’s very high demand,” he added. “Consumers want to consume products that they really relate to and that really connect to who they are.”
