Danone’s Brand “Resets” Are Driving Sales Growth Around The World

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Groupe Danone – which owns the Dannon brand popular in the US – seems to be leading the worldwide food industry in figuring out how to make its brands grow amidst a global recession. It also has consumers everywhere being more careful in how they spend their grocery dollars.

Danone’s strategy involves cutting some prices, providing more volume for the same price, and coming up with innovative extensions on successful brands.

“Everyone was saying that ‘brands are dead’ and the hard discounters are gaining share,” Franck Riboud, Danone’s CEO, said in announcing the company’s 2009 financial results earlier this week, according to Warc. “Brands are gaining market share.”[more]

In fact, Riboud said, Danone saw volume sales improve by more than 5 percent in 2009, with an uptick of almost 9 percent in the final quarter.

New products have been important parts of what Danone calls brand “resets” that are kindling continued growth in many markets. The new items include Eco Yoghurt in Russia, Danonino Yoghurt for kids in Portugal and other markets, Activia breakfast mix-it-yourself kits of yogurt and cereal in Bulgaria, Argentina, and Brazil.

In the United States, helpful new products have included a single-serve pack of Light & Fit yogurt and, especially, Activia Fiber. Introduced just last year, the Fiber version already accounts for an estimated 20 percent of US sales of the entire Activia brand. It includes inulin, a “prebiotic” ingredient that helps beneficial bacteria grow in the gut, as well as cereal pieces.

“The cereal pieces aren’t the source of fiber, but they are a taste cue,” Michael Neuwirth, senior spokesman for Dannon USA, told brandchannel. “But with the addition of fiber, we thought it was important to provide a … cue that helps to reinforce with consumers the fact that the product has fiber.”

Another brand innovation for Dannon is Danino, a kid-oriented product that it is just now launching across the United States after a successful test market last year and after earlier introduction in Mexico and Canada.

Danino is especially thick, so it stays on a spoon – and cuts the mess that young eaters usually create. And, Neuwirth explained, Danino doesn’t have the tart taste that turns off many children to yogurt. That’s because Danino lacks certain bacteria cultures.

The down side of the Danino recipe is that Dannon can’t legally call it “yogurt” in this country. “It’s a dairy snack,” Neuwirth said. “But the product has performed very well in test markets, and we have high hopes for it.”

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