General Mills claims it has overtaken Dannon Co. in the $1.78 billion yogurt market, a feat unthinkable five years ago.
But Dannon insists it remains at the top, and cites a different source of supermarket data to back its position.
Still, the U.S. unit of the French marketer is having to fight back in the marketplace, with the launch of a major assault later this month that involves a strategic shift in advertising. It begins with a reformulated, repackaged Dannon Light and breaks July 26.
The marketer also is about to test two new products, a drinkable yogurt for kids and a dairy-based nutritional supplement.
DANNON: 'WHOLE NEW LOOK'
"It's the start of a whole new look and feel for Dannon," said VP-Marketing James Taylor of the campaign from Y&R Advertising, New York. He wouldn't describe creative, but said the strategy marks Dannon's return to a focus on the health benefits of yogurt.
"I think our advertising has been less than stellar," he said, noting that "we'd walked away from our nutritional positioning."
That and other missteps are what have allowed General Mills -- largely behind its Yoplait and Colombo brands -- to encroach deeply on Dannon's territory, industry observers said.
Dannon was distracted from its U.S. business by management churn and a reorganization that left it without a VP-marketing for two years. It lagged in new products, chasing new flavors rather than innovative platforms, and came belatedly to kids' yogurts, a niche exploited by Big G with Trix yogurt, an extension of its children's cereal brand; Yoplait Adventure Pack; and the recent Go-Gurt yogurt-in-a-tube.
A global agency shift for Dannon, from Grey Advertising to Y&R, also contributed to the marketing turmoil.
The upshot is that General Mills claims its combined Yoplait and Colombo juggernaut overtook Dannon on a volume basis in fiscal year 1999. The marketer cited ACNielsen Corp. figures, but did not disclose details.
Dannon, which subscribes to Information Resources Inc., takes issue with that assessment.
"IRI indicates we are the leader," Mr. Taylor said, noting the statement that General Mills leads in unit sales "is totally irrelevant" since its products are packaged in different size packages. He also said Yoplait sells at a lower price than Dannon.
For the 52 weeks ended March 28, IRI data show Dannon's units at 579 million, down 13.2%, and Big G at 713 million units, up 7.1%. On a dollar basis, Dannon comes in with $552.2 million, down 6.9%; its rival has $533 million, up 17%.
PROMOTIONS, NEW PRODUCTS
Mr. Taylor attributed General Mills' volume gains to heavy promotional spending.
Pat Simmons, director of marketing for General Mills' Yoplait/Colombo division, said the key reasons for the growth are the national rollout of Colombo, formerly an eastern regional brand; consistent ad spending; and a stream of new products, particularly for kids.
"Meaningful innovation is important," he said.
Big G's latest product is a portable version of Colombo with a snap-in spoon in the lid. The company breaks a TV campaign this week for the entry from DDB Worldwide, Chicago; the theme: "The yogurt that could."
General Mills last week started a new ad for Yoplait from DDB that tries to elevate the brand's taste experience by putting the woman eating it into a French painting. The theme: "The art of Yoplait."
QUALITY VS. TASTE
"Yoplait has consistently focused on quality and Dannon has underestimated that," said an executive familiar with the category, who noted that Dannon erred in focusing on taste rather than health. "They shouldn't try to fight Yoplait on their own taste turf."
According to Competitive Media Reporting, Dannon's media spending in 1998 dropped to $17 million, from $26 million in '97. General Mills' rose from $19 million in 1997 to $22 million last year.
Mr. Taylor said new products will help build the category as well as Dannon. "We're looking for great success in the coming year."
Its new dietary supplement, Actimel, will be shipped to retailers in Arizona and Denver later this month. The supplement is clinically proven to "fortify your body's natural defenses," said Mr. Taylor.
The product, designed to be consumed every morning, already is marketed in Europe. Ads from Y&R will start in mid-August.
Dannon also is testing a drinkable version of Danimals kids' yogurt in Florida