Proud of its 75-year history in America, Dannon resides at the top of the $8.5 billion U.S. yogurt business and has every intention of staying there. The U.S. subsidiary of France’s Danone, recently rebranded as DanoneWave North America with the acquisition of WhiteWave Foods, helped introduce Americans to yogurt, proving its chops as an innovator in the category with brands such as Activia and Danimals.
It’s intent on expanding its marketshare as yogurt consumption by Americans continues to expand and supermarket yogurt sections keep getting bigger.
The Dannon brand’s 34% share of the U.S. yogurt market makes it the anchor for a family of brands including Activia, Light & Fit plus its Oikos Greek yogurt franchise. It all started with Daniel Carasso, part of the founding Carasso family in Spain — and namesake for the Danone brand. He launched the Paris branch of the family business in 1929. Carasso also arrived in New York in 1942 wanting to make yogurt as popular in the U.S., where it was virtually unknown before his arrival, as it was in Europe.
Legendary graphic designer Raymond Loewy helped with the visual design, and advised Carasso to use the spelling “Dannon” to make the French product easier to pronounce than Danone. Loewy created a wordmark logo, incorporating the phrase “real yogurt,” with three stars over the N’s in Dannon.
Fruit on the bottom came to Dannon in 1947 as the brand sought to disguise some of the natural acidity of yogurt that Americans weren’t used to. This innovation propelled the company to growth, along with flavors including raspberry, blueberry, orange and lemon. In 1973, Dannon launched the memorable “Soviet Georgian” ad campaign in which fit seniors credited yogurt for their longevity and vitality.
With its Fort Worth, Texas, plant opening Dannon became the first branded perishable dairy product to be sold coast to coast in the United States. By the late 1980s, Dannon was bringing more innovation to the growing U.S. yogurt market with Dannon Light (1988) for the weight-conscious and Danimals for kids (1994). Dannon scored another hit in 2006 with the introduction of probiotic yogurt in the Activia brand.
While Chobani helped make Greek yogurt mainstream in the U.S., Dannon launched Oikos in 2010 and has managed to fight Chobani for leadership in the U.S. It has also refined its purpose—parent DanoneWave is the largest public benefit corporation in the U.S., and Danone corporate is seeking a global B Corp certification.
— DanoneWave (@DanoneWave) November 6, 2017
We spoke with Michael Neuwirth (right), senior director of external communications for DanoneWave and Danone North America, about Dannon’s past and future.
Looking back over Dannon’s 75 years, people may be surprised to learn it launched in New York City, and didn’t really take off until fruit was added in 1947 and marketing started in the 1970’s. Any other surprising facts you tell people who think they know their yogurt?
I love meeting people who are fans of their favorite yogurt brand and they say, “I love this product Activia, you guys should make that.” Or Light & Fit Greek-style. It’s surprising to people to learn that those and many other brands are part of the Dannon family. A lot of people don’t associate those brands—which are leaders in their segments—with Dannon. Our family is bigger than the sum of its parts.
Let’s talk about product innovation, which consumers expect today, such as unusual flavors and savory yogurt. Do you see the focus going back on the yogurt itself?
Yogurt began years ago with a simple accident: the mixing of milk with cultures. The power of that mixture is still the basic formula recipe of how it’s made. There is a focus back on yogurt itself and also fermented foods and these cultures, and how they can benefit consumers’ health and enjoyment of them. It’s not just yogurts. The rise of interest in—and continued quick growth of—plant-based yogurt and almond- and soy-based products are also a bright and growing spot in the yogurt category.
Consumers want sustainability in their food products, and Dannon has been active in the Non-GMO Project, announcing the Dannon Pledge in 2016 as well as the new DanoneWave’s promise to make sustainability and transparency central to your brands. Can you update us on that front?
About a month ago we finished a conversion of Danimals drinkables to being Non-GMO Project Verified as well as select varieties of the Dannon brand—and more to come on that. We’ve evolved, and basically this means that not only are the ingredients that we use to make the product non-GMO-verified but also the feed for the cows is Non-GMO Project-verified.
It’s the first time a large yogurt company—or any yogurt company—has made such a conversion, because we believe, and we hear from our shoppers, that they want those choices and expect them from companies and brands that they trust.
— The Dannon Company (@Dannon) September 25, 2017
We’re now able to start telling the stories about our farmers. We’ve posted our first video from our farmers about why this is important to them on the Dannon Pledge website. It’s unparalleled in the yogurt space and brings the product back to its roots.
When we made this pledge a year and a half ago we didn’t know exactly how we’d accomplish it or realize our ambitions, and a year and a half later we’re ahead on total volume of product that’s been converted to Non-GMO Project-verified, and farming partners are thrilled to be on the journey with us and they believe in this and are wonderfully supportive.
— Activia US (@Activia) April 12, 2017
Health and wellness is another driving force for consumers over the years with yogurt, and Dannon was early in the game with probiotics and Activia. How do consumers regard probiotics now?
The proliferation of probiotics and their benefits has been remarkable in 12 years since we launched Activia in the U.S. But shoppers are increasingly savvy about claims on products and are doing their homework. “How has this been studied? Is this a claim that holds up?” Activia had its challenges years ago [in legal language over its health claim], but the claim is fundamentally the same as it’s always been: a clear and well-defined digestive well-being benefit. What has changed is the expectation for great taste and convenience for probiotics. The introduction of smoothies for Activia is an indication of that.
To all of our plant-based eaters and flexitarians, this one’s for you. https://t.co/GaDkLeMko3
— DanoneWave (@DanoneWave) October 27, 2017
When you think about growth in the industry and for Dannon, where do you see the brand’s position in the next 5 years?
We will see continued market leadership because of the strategy we’ve pursued. We make products for all the different need states for yogurt, and there are many. We will see the versatility of yogurt continue to amaze us with ranges for weight management, digestive well-being, kids, snacking, protein. These different need states will continue to grow and new ones will be added over time.
My personal belief is that over time you will see more usage occasions in cooking and light meal preparation—dips, sauces, smoothies, things like that—and about the health-related benefits of nutrient-dense foods like yogurt. Plus the obesity issue hasn’t gone away and yogurt continues to score so highly on the nutrient-rich foods index. As the role of diet continues to grow in managing health, yogurt is well-positioned and Dannon is the best-positioned company based on the breadth of offerings in our portfolio.
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