Can Activia Survive FTC Punch to the Gut?

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Dannon USA’s brandmeisters are maintaining a stiff upper lip in the wake of the $21-million settlement with the Federal Trade Commission and state attorneys general over health claims for Activia and DanActive.

But this reversal — added to a class-action settlement last year in which Dannon agreed to stop making immunity-system claims for the product — may become an existential threat to the brand.

Indeed, the combined impact of these stunning legal settlements threatens the very foundation of probiotic-based brands that have become remarkably successful in just a few years.

“Millions of people firmly believe in, benefit from and enjoy these products, and Dannon will continue to research, educate and communicate about the benefits of probiotics on the digestive and immune systems,” Dannon USA said in a prepared statement. “The essence of Dannon’s advertising remains unchanged and will continue to be truthful and in compliance will all laws and regulations.”[more]

Yet by Dannon’s own admission, what the settlement has left it able to do for Activia is only “more clearly convey that Activia’s beneficial effects on irregularity and transit time are confirmed on three servings a day.”

Which leaves open the question: What? And it seriously suggests that Dannon may have to water down its assertions of digestive efficacy for Activia and DanActive to the extent that their once-robust brand promise is, well, gutted.

When they decided to introduced probiotic yogurts to the U.S. market several years ago after they were successful in Europe and elsewhere, executives of Paris-based parent Groupe Danone were concerned that squeamish American consumers wouldn’t want to hear about “gut health.” In fact, their results from a long-running test market in Colorado weren’t all that encouraging.

But partly with the help of commercials starring Jamie Lee Curtis, Dannon USA quickly established a strong market for Activia that is still growing and also opened up the American marketplace for a slew of other probiotic products. Now, probiotic fare is one of the fastest-growing types of better-for-you foods and beverages.

If the Obama administration meant to send a message to food and beverage marketers that they’d better be more careful about health claims for their products, this was the clearest missive yet.

And for Activia, working around these new obstacles may require the best acting that Ms. Curtis has ever done.

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