BRAND IN TROUBLE: Dannon struggles against Go-Gurt's market incursions

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dannon co. doesn't plan to give up its longtime leadership position in the yogurt category without a fight.

Since the serious sock in the stomach it received from a little product called Go-Gurt, Dannon has gone full speed ahead developing new products and reformulating old ones for its various lines. Fresh advertising has focused on communicating new and improved products.

Even so, Dannon conceded that General Mills' Yoplait has it bested, if only by a narrow margin of 2.5 share points.

"What's happened in the last year in a nutshell is that General Mills came out with Go-Gurt, which has a 5.5% share of the category right now," said Tim Hopkins, Dannon marketing director. "We applaud the innovation because it's done a lot of positive things for the category and it's provided added incentive for us to innovate."


Much of Dannon's efforts have been focused around the kids segment, which was hit hardest by Go-Gurt's success. In response to the portability of General Mills' tube yogurt, Dannon came out with its own portable version of the kid-targeted Danimals line called Drinkables. The creamy yogurt comes in bottles easily gripped by little hands. Rolled national in June, Drinkables has more than doubled Danimals' business, giving it a 4.9% share of the total category for the four weeks ended Aug. 13. That puts it ahead of Yoplait's kid-targeted Trix brand, according to Chrys Tsilibes, director of kids existing businesses at Dannon.

"The powerhouse we have here at Dannon is the Danimals franchise, and we want to develop it for anytime, anywhere," Ms. Tsilibes said.


Dannon tripled spending for Danimals this year over 1999, to $12 million. Of that, $6 million is going to support Drinkables. TV spots tout the new portable drink to kids as, "Fun, fruity and fast," while print launched in June magazines reassures moms of the great taste of the product with the tag, "Taste buds rule!" Y&R Advertising, New York, handles.

In addition to Drinkables, Dannon has tried to drive its Danimals cup business, improving the product with a fruitier taste and more vibrant colors as well as adding vitamin D. Danimals brand advertising, themed, "In the animal kingdom, kids rule," got new tags touting the addition of watermelon and banana flavors in July. Print ads targeted to moms in September magazines also illustrate the bone-building potential of the reformulated product by featuring an elephant foot being supported by a human one.


Another kids' line, Sprinklin's, also has been reinvigorated by a new Mystery Surprise line. The launch in June has increased weekly shipments as much as 20%, Ms. Tsilibes said.

Dannon data for the four weeks ended Aug. 13 show that the marketer's efforts toward the kids businesses are paying off, driving the total share of combined Danimals and Sprinklin's to 5.7%. But 52-week sales figures for the period ended Aug. 13 show total sales for the two brands at $59 million, giving Dannon a 3.2% share. That's well below General Mills' sales tally of $140 million for Go-Gurt and Trix combined.

While it is No. 2 in total yogurt, with a share of 26% compared to General Mills' 33%, Dannon is pushing forward with initiatives in the adult segment where it still prevails with a 23% share. In January, Dannon launched a TV campaign to kick off a newly reformulated version of its Fruit on the Bottom brand, which sung the praises of a "Tastier, creamier Dannon." Dannon also introduced a new Dannon Natural plain yogurt in 50% of the U.S., a less tart product that has grown its plain yogurt sales 13%, Mr. Hopkins said.


Lastly, Dannon launched a TV campaign to leverage its strength among adults, supporting multipacks of 4 ounce cups featuring "Just Shoot Me" actress Wendie Malick and running in 25% of the U.S. The spots resulted in a 25% lift in sales for the products in the markets where the ad ran, Mr. Hopkins said.

Dannon also has a new marketing VP at the helm. Eric Leventhal, former category business director of beverages at Campbell Soup Co., took the reins in August. His mission going forward? "Since yogurt has a 70% household penetration, our challenge is to drive consumption and frequency and find new ways to get our products into consumers hands and mouths," he said.

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