Dannon hikes spending to regain yogurt lead

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In a push to regain its leadership position in yogurt, Dannon Co. will spend aggressively this spring to introduce an array of products that tap growing trends.

Dannon plans to up ad spending roughly 30% this year to support tween-targeted Danimals XL and a low-carb version of its Light `n Fit brand as well as the national rollout of Frusion smoothies and the relaunch of Actimel into mainstream outlets. Actimel, a "probiotic" product, includes 10 times more cultures than yogurt, which are said to help strengthen the immune system.

Dannon's secondary position behind General Mills' Yoplait was cemented with the phenomenal success in 1999 of Yoplait's Go-Gurt brand. Now, though, Dannon is catching up in the kids' business with its Danimals franchise, which grew 11% to $135 million in grocery stores for the 52 weeks ended Sept. 28, 2003 in large part due to the growth of Danimals Drinkables, according to Eric Leventhal, senior VP-marketing for Dannon.

Go-Gurt's sales grew a mere 1.7% to $125 million during that same period, he said, and now Dannon is looking to encroach on that business even further. This month, Dannon will launch Danimals XL, intended to expand the typically younger demographic of Danimals to the older 8-to-12 set that Go-Gurt has gone after so effectively.

"Kids 3 to 8 absolutely love Danimals Drinkables, but once they turn 8 or 9 they feel that they've outgrown the characters," he said. To bridge the gap between the younger-skewing Danimals and its adult yogurts, Dannon created XL, a drinkable yogurt line that features larger bottles and a wildcat character created especially for tweens.

just chillin'

The XL line will receive more than $10 million in advertising and promotion from WPP Group's Y&R Advertising, New York, that bows in mid-March, positioning the brand as the only drinkable snack that's satisfying enough to "chill" with. TV spots feature live-action kids kicking back with the animated XL wildcat spokescharacter, who is playing DJ in a cool after-school clubhouse.The spots, Mr. Leventhal said, are intended to draw a distinction between the on-the-go positioning for the Go-Gurt brand, offering kids an alternative for when they want to kick back and relax.

Dannon will also try to leverage the low-carb diet craze and counter what's expected to be a big influx of low-carbohydrate yogurt products such as Atkins Nutritionals' launch this month of Light `n Fit Carb Control. The four-variety line will be supported with a standalone ad effort in mid-March from Y&R.

The smoothie trend is one Dannon is jumping into in a bigger way with the extension of its Frusion fruit and yogurt smoothies beyond the 50% of the country it rolled out to last year. General Mills has done well with its own smoothie brand, Yoplait Nouriche.

Dannon will also relaunch Actimel, which has been sold mainly in Whole Foods stores and mom-and-pop natural-food stores in the U.S., under the DanActive name in mainstream grocery stores. Dannon hopes to drive sales beyond the current $3 million via TV and grass-roots efforts from public relations and professional health marketing agencies.

Dannon parent Group Danone recently raised its minority stake in No. 1 organic yogurt brand Stonyfield Farm, and Mr. Leventhal said the companies are still determining how best to "leverage their synergies."

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