Word: yogurts
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Danone, which had $19.6 billion in sales last year, is the world leader in yogurt and fresh-dairy sales and, with bottled-water brands like Evian and Volvic, No. 2 in the packaged-water industry, behind Nestlé. Danone was also No. 2 in world cookie sales until July 3, when it sold its cookie division to Kraft Foods Inc. for $7.4 billion. Six days later, Danone bought Royal Numico, a Dutch company that makes hospital meals and baby food, for $17.2 billion...
...There are cookies in every household in France," says Sacchi. "The only way to grow is to make every household eat more and more every year." Or grab more market share, which is often difficult and expensive. By contrast, Danone's fresh-dairy-product line (yogurt and milk-based desserts) grew 9.2% last year, with growth as high as 20% in Argentina, Mexico and Brazil, and 35% in Russia. Bottled water showed similarly high growth, at 14.8% in 2006. Numico grew nearly 12% last year...
Danone has been one of the few companies to create "active" foods like yogurt touted as having health benefits thanks to the addition of patented probiotic bacteria. Activia, a yogurt with a strain of Bifidus bacteria, marketed as aiding digestion and eliminating bloating, accounts for $1.8 billion in sales worldwide...
...yogurt, on the European market since 1987, sold $130 million in its first year on the U.S. market, 2006--a breakout hit in a country where people don't eat that much yogurt and are more accustomed to treating health problems by popping a pill than changing their diet. Actimel, sold in the U.S. as DanActive, which claims to strengthen the body's natural defense system with Lactobacillus casei, has sales of more than $1.4 billion...
Danone is tailoring the active blueprint by mapping diet deficiencies by region and designing products accordingly. Danonino, a yogurt product for children, is enriched with vitamin A and zinc in Brazil, calcium and vitamin D in Poland, and iron and vitamin C in Mexico. "People are ready to pay a bit more" for a product that does something for their health, says Sacchi, who contends that the active health brands still carry mainstream prices...