Not wanting to miss the start of something big, as it did with Greek-style yogurt, Danone is moving deeper into the world of plant-based products, adding milk-free ranges to its yogurts while boosting North American-produced vegan brands such as Silk in its DanoneWave business unit.
The Paris-headquartered global dairy giant doesn’t intend to keep vegan products on the fringes of its franchise line, so the world’s biggest yogurt-maker is adding milk-free ranges to some of its flagship dairy brands, including Activia in the U.S. and Actimel in Europe.
Danone has been competing head-to-head with Chobani for leadership in the Greek-yogurt market, but Chobani gets credit for taking that category mainstream well before the established, traditional-yogurt players did.
Danone, meanwhile, made up for lost ground with Greek-style offerings under its Dannon and Stonyfield Farm (which it sold a year ago) brands, but General Mills’ Yoplait brand is still lagging.
In one key advantage in the plant-based food race, Danone acquired the world’s biggest plant-based “milk” producer, WhiteWave Foods, for $12.5 billion last year—a deal that positions the company to better served the rising interest in vegan products by consumers, especially millennials.
WhiteWave is the parent company of plant-based brands such as Silk, So Delicious, Vega and Alpro.
Danone North America is now investing up to $60 million to upgrade its flagship facility in the state of Virginia to expand production of the Silk vegan brand.
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Soy, almond, coconut and cashew milks, among other products, are starting to boost revenues while satisfying the cravings for dairy-like taste and mouth feel of many consumers while promising fewer calories, less fat, more protein and a production process with a smaller carbon footprint than the cow’s milk that inspired them.
Dairy producers, meanwhile, are seeing a revival of milk-based products’ nutritional reputation with scientists vouching for the importance of nutrients such as protein, calcium and other minerals while downplaying past concerns about dairy fats. Many consumers also embrace dairy because, while animal in origin, they can purchase milk products that are simple, fresh and “whole.”
By creating vegan options for some of its major dairy brands, Danone could take advantage of both trends: rising interest in plant-based dairy, and the improved reputation of dairy itself.
As Francisco Camacho, executive vice president of Danone’s dairy and plant-based business, told Bloomberg, “We didn’t add plant-based to only have an offering on one side.”
Some of the brands could use help from a new plant-based constituency. Consumer interest in Activia has leveled off several years after Dannon was able to generate American interest in the probiotic bacteria that inhabit the dairy product and aid the digestive system.