Danone dwarfs “weak” General Mills in US probiotics market

08-Jun-2010 - Last updated on 10-Jun-2010 at 08:29 GMT

Sales of General Mills’ spoonable probiotic yogurt YoPlus fell 16 percent in 2009 to less than $44m for the year, while rival Danone Activia jumped 16 percentage points to record $383m in sales for the year.

Since following Danone into the US probiotic market in 2007 (Danone debuted in 2006), YoPlus has managed to gain about one percent of the total $4bn yogurt market, compared to 10.5 percent for Activia, according to IRI figures quoted in New Nutrition Business this week.

General Mills is criticized for a timid and confused marketing policy by the magazine and its inability to break out of “me-too” status after Danone beat it to market by a year. Its decision to add a bland of vitamins and minerals only confused the marketing message, compared to Activia’s preferred statement that it, “contributes to the improvement of digestive comfort”.

Danone's success is all the more remarkable given the class action it settled out of court in the US last year over misleading claims, and the removal of its health claim dossiers from the European health claims system this year and last.

Weak strategy and execution

“When a brand moves from a focused message to multiple messages it usually presages a period of trouble ahead – and there are plenty of examples in Europe of probiotic brands that tried multiple messages, only to give up on them and return to a focused message when they either didn’t increase sales or even contributed to a further decline,” the author of the article and editor of the magazine, Julian Mellentin, wrote.

He adds: “Yoplait’s lack of determination to lead and create a market and seeming inability to apply lessons from elsewhere in the world immediately condemned YoPlus to a me-too strategy. In most European countries the number two brand usually manages to give Activia a run for its money. Not so YoPlus. We are not aware of any second placed brand in Europe whose performance has been as weak as that of YoPlus in the US, which is the result, we think, of a combination of both Danone’s single-minded effectiveness and market know-how and Yoplait’s weak strategy and execution.”

He goes on to criticize General Mills for failing to understand the digestive health market or any other functional market.

“As European companies will testify, a strategy as timid as Yoplait’s runs the risk that it will leave all the profitable functional segments with growth potential to be dominated by Danone. And if that happens, the long-term outlook for the Yoplait brand is not good.”