Danone makes a bold sales assumption — is yogurt the reason?

Hoard's Dairyman: 

Danone makes a bold sales assumption — is yogurt the reason?

Date: 
Wed, 08/04/2010

If you have a newly-found love or fascination with yogurt and yogurt drinks, you are not alone. It seems as if your neighbor has picked up on it too, as did European yogurt giant Danone. Earlier this year, we reported the results of Mintel research that sites sales of yogurt and yogurt beverages are on the rise — a jump of 32 percent was seen between 2004 and 2009, totaling $4.1 billion in sales. Recently, released statistics from the USDA add weight to that statistic: production of yogurt (plain and flavored) grew from 3.5 billion pounds in 2009 to 3.8 billion pounds in 2009. The number of plants decreased by one in 2009 with yogurt being produced at 109 U.S. locations.

Just recently, the french Danone company (parent company to what we know as Dannon yogurt), has raised its full-year sales outlook despite a 10 percent drop in the first half of the year's sales profits, as reported in the Wall Street Journal. The company now says they expect a 6 percent growth in sales through the end of 2010. Danone boasts roughly a one-third share of the U.S. yogurt market. The french company has a heavy dairy portfolio manufacturing yogurt and baby formula. Other products include bottled water and nutritional drinks.

It is clear to us that Americans are growing their fascination with nutrient-rich, low-fat foods like yogurt. Could it be that Danone is converting that fascination into consumer purchases?