Friday, August 12, 2016

Yogurt in the U.S.: The Dairy Case is Evolving; Most New Innovations are Non-Greek

Pictured here is a yogurt case in a Western Michigan beach town, a community of less than 2,000 households and home to four supermarkets. This is quite the impressive spread with many varied options.

Granted, during the summer months (I took the picture yesterday), the population of this town jumps from about 5,000 to 20,000, and product moves off the shelf fast. But what is to be noted is that the size of this yogurt case has not changed in the past two years. Winter, spring, summer or fall, it holds a lot of SKUs.

What has changed in the past two years is the yogurt case’s composition, as this retailer continuously brings in new products and uses shelf tags to flag them. If they sell, they stay. If they don’t, room is made for something else new. And just yesterday while visiting the story, it was very noticeable that Greek yogurt no longer jumps out at you.

According to data from IRI provided to Dairy Management Inc., and courtesy of the Midwest Dairy Association, Greek currently maintains 38% share of volume sales of refrigerated yogurt. Non-Greek is the remaining 62%, with sales declining. However, I believe the non-Greek players (many of them are active in the Greek segment, yet believe in the power of their core yogurt franchise) are actively fighting back to regain control.

Data source: IRI provided to Dairy Management Inc., and courtesy of the Midwest Dairy Association

Let’s look at Dannon, the nation’s leading yogurt maker. Just a month ago, the company announced that in response to evolving consumer preferences, it is implementing the first of many major changes to provide more choice to consumers. To start, Dannon and Oikos branded products now include options labeled as being made with non-GMO ingredients.

Additionally, starting now and expected to be completed within several months, all Dannon products in the U.S. that have GMO ingredients will be clearly labeled as such. Further, starting in 2017 and completing the transformation by the end of 2018, Dannon will go one step further to ensure that the cows that supply Dannon’s milk for the company’s three flagship brands (Dannon, Danimals and Oikos) will be fed non-GMO feed, a first for a leading non-organic yogurt maker. This will involve the conversion of an estimated 80,000 acres of farmland to produce non-GMO crops.

“Shoppers are our main ingredient, and what is important to them drives what we do. For this reason, the range of products we make is evolving to provide even more choices,” says Mariano Lozano, CEO, Dannon. “Transparency is the key word for this shift. To show to our consumers that in order to make a real choice, we need clear labels. Today we are making a bold change and candidly discussing how transparency from brands is essential for shoppers to make real choices.”

This transparency includes clear packaging to see what’s inside. That’s what you get with the company’s new Activia Fruit Fusion line. This 1.5% milkfat probiotic yogurt is also fortified with a nutrient of concern: vitamin D. Most U.S. milk processors voluntarily fortify fluid milk with vitamin D. Adding it to yogurt is not common. Dannon is changing that.

The layered Activia Fruit Fusion product comes in four varieties. They are: Blueberry & Blackberry, Cherry & Vanilla, Peach & Mango and Strawberry & Raspberry. The yogurt is sold in four packs of 4-ounce cups.

Data source: IRI provided to Dairy Management Inc., and courtesy of the Midwest Dairy Association

“Choosing to purchase foods with fewer or more natural ingredients, or with or without GMO ingredients, is an important individual decision, and we feel strongly that people have the right to know how companies are making food,” he says. “This is just the first of many steps towards our continued transparency and one that we hope others will follow.”

The company is also jumping on the whole milk yogurt bandwagon. According to IRI data, whole milk yogurt is growing rapidly and currently has 10% volume share. (See graph.) Consumers are embracing the deliciousness and nutrient density of whole milk yogurt and it shows in sales and the number of products entering the category.

Dannon’s new whole milk offering is a blended product made with all-natural, non-GMO ingredients and fortified with vitamin D. The 5.3-ounce cups come in eight flavors. They are: Blueberry, Cherry, Mixed Berry, Peach, Raspberry, Strawberry, Strawberry Banana and Vanilla. Each single serving contains 140 calories, 4.5 grams of fat, 5 grams of protein and 15 to 16 grams of sugar.

Another area of activity is in yogurt drinks. I’ve commented on this segment numerous times throughout the years. In the past, it seemed as if all the major brands rolled out a drinkable yogurt at the same time and because U.S. consumers were not all on board, sales expectation were not met and the brands pulled out. Might the time finally be right for drinkable yogurt?

Dannon is now serving up two drinkable product lines designed for adult palates. Dannon Dairy Drink, a cultured milk formally sold exclusively through foodservice channels, is making its way into the retail sector. The 7-ounce bottles come in flavors that have a Hispanic-flavor edge to them, with the goal of attracting this demographic who has long been drinking yogurt, more so than spooning it. The flavors are: Mango, Peach, Pecan, Pina Colada, Strawberry and Strawberry Banana.

There’s also a new drinkable yogurt under the Oikos brand. Oikos Yogurt Drink contains no fat, no added sugar and no artificial sweetener. It is sweetened with stevia, gets a boost of protein from milk protein concentrate and is a source of another nutrient of concern—fiber—thanks to the addition of chicory root fiber. Interestingly, the Oikos brand is all about “Greek,” yet the packaging does not promote the product as such. Each 7-ounce bottle contains 110 calories, 11 grams of inherent sugar, 10 grams of protein and 4 grams of fiber.

Not to be outdone, General Mills is upping its game in the yogurt case. The company is promising huge changes to get competitive again. During an investor day presentation held in mid-July, General Mills President and COO Jeff Harmening admitted that “right now our product portfolio is not aligned with the trends.”

He told investors that the company is planning to “renovate” 60% of the company’s yogurt business within the next year. This includes reinventing the company’s flagship Yoplait brand, as well as growing its Annie’s and Liberté offerings. Many of these new products complement the growing whole milk category.

For example, the Liberté brand now includes eight varieties of whole milk yogurt, including one unflavored variety. The Sweet Cream offering starts with pure, organic whole milk, sourced from a co-operative of family farms. It’s then lightly sweetened with organic cane sugar. A 5.5-ounce cup contains 190 calories, 13 grams of fat and 5 grams of protein.

The other seven flavorful offerings, made using the same local organic milk, come in an array of worldly flavors. They are: Californian Pomegranate, Baja Strawberry, Ecuadorian Mango, French Lavender, Lemon, Philippine Coconut and Washington Black Cherry. Each single-serve container, which is in clear plastic to showcase the layered ingredients, contains 210 to 220 calories, 11 to 13 grams of fat and 4 to 5 grams of protein.

To read a Fortune article on General Mills’ plan to renovate its yogurt offerings, link HERE.
Another comprehensive article was published in Food Business News. Link HERE to read it.

To appeal to youngsters, the company has aggressive plans for its recently acquired Annie’s brand. At the beginning of this year, General Mills introduced Annie’s Organic Whole Milk Yogurt. Sold in four-packs of 4-ounce cups, the yogurt comes in three varieties: Berry Patch, Summer Strawberry and Very Vanilla. The probiotic yogurt is described as being sweetened with organic fruit and a touch of cane sugar.

More recently, the company added 32-ounce tubs of Plain, Summer Strawberry and Vanilla whole milk yogurt to the Annie’s brand. There’s also eight-packs of 2-ounce tubes. The three varieties are: Berry Patch, Strawberry Banana and Summer Strawberry.

To appeal to older kids and adults, the company has plans to enter the yogurt-based smoothies sector, too. “We’ll introduce several Yoplait yogurt beverages in cities with large Hispanic populations,” Harmening told investors.

And because toddlers who grew up on tube yogurts continue to enjoy the interactivity of squeezing yogurt into their mouth (and probably on their siblings), the company now offers Yoplait Go Big. These 4-ounce tubes of low-fat, vitamin D-fortified yogurt come in four varieties. They are: Cherry, Mango, Mixed Berry and Strawberry.

What else is trending? It’s grass-fed milk yogurt.

Though still a small niche, a number of brands are trying to differentiate through the use of milk from grass-fed cows. Organic Valley has started offering 6-ounce cups of grassmilk yogurt in four varieties. They are: Plain, Strawberry, Vanilla and Wild Blueberry.

Dreaming Cow has redesigned its package to emphasize the grass-fed cows milk message. The whole milk, cream top yogurt now comes in eight dreamy flavors. They are: Blueberry Cardamom, Dark Cherry Chai, Honey Pear, Maple Ginger, Peach Mango, Plain, Strawberry Pomegranate and Vanilla Agave.

Dreaming Cows reside in Jumping Gully Dairy, one of three family-owned, grass-based, New Zealand-style rotational grazing dairies in Southern Georgia, according to the company. The climate here allows the cows to graze year round on lush green pastures, producing milk with a distinct taste that is naturally higher in healthful fatty acids, including omega-3s and conjugated linoleic acid.

I think you will agree that the refrigerated yogurt case is undergoing a major transformation. The focus is on simplicity and back to nature, with a delicious twist on flavors.

And, of course, protein remains a focus in the yogurt case. The Midwest Dairy Association is offering dairy foods processors, marketers and educators use of its Power of Dairy Protein online communications toolkit to help educate consumers about the importance of including 25 to 30 grams of protein in every meal, including breakfast, for best performance at school, at the office or during your daily activities.

Link HERE. This communications kit includes a variety of tools, including a customizable news release/newsletter article, blog postings, protein-related FAQs, recipes and recipe videos and suggested social media posts that can be customized for varied communications channels now and throughout the year.

Thanks to my friends at Midwest Dairy, who explain in the toolkit that yogurt is a flexible nutrient powerhouse that knocks out hunger throughout the day. It is extremely versatile and a smart choice for quick and easy meals and snacks, as well as a healthful base ingredient for making dips, sauces and smoothies. Yogurt is an excellent source of calcium and potassium and provides numerous vitamins and minerals. What’s more, research shows kids who eat yogurt have improved nutrition and weight status.

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