Growth culture

Growth culture

Sivak, Cathy

The Dannon Co. reveals larger-than-life plans to boost the U.S. yogurt category and the bottom line.

Good-for-you. Functional. Nutraceutical. The latest food trend has a cenfuries-old predecessor: yogurt. After all, The Dannon Co. has marketed the health connotations of yogurt to Americans since it introduced plain Dannon in the United States in 1942.

Nearly six decades later, Dannon is the most-distributed yogurt and dairy product in the country. The company continues to introduce Americans to new products – the newly national Dannon Danimals Drinkable line serves to introduce young consumers to yogurt while probiotic supplements such as Dannon Actimel create an entirely new category.

In 1942, the company processed 648 cups of yogurt per day for the New York metro area. In 1999, more than 300,000 cups are filled daily in Dannon’s three processing facilities and distributed nationally Tarrytown, N.Y.-based Dannon’s 1999 sales of $516 million make up a sizeable portion of overall yogurt category sales. But volume is not everything, says Thomas Kunz, Dannon president and chief executive officer.

“If we want to continue to be a leader, we have to lead not only in volume, but also in innovation. We have to lead in the area of quality and in the overall industry in a very global way,” Kunz says.

Dannon’s executive team believes that by 2005, the company can double its current sales. They should know; after all, Dannon vice presidents spend about 20 percent of their time handling international projects for the parent company, French-based Group Danone. A look at the mature yogurt industries in Europe reveals the opportunities in the U.S. yogurt category Per capita U.S. consumption of yogurt has grown to 5.1 pounds per person in 1998 from 2.5 pounds in 1978. Meanwhile, Dannon estimates that Europeans consume 10 times more yogurt on a per capita basis.

Such growth will not occur overnight. “I don’t even talk about timing. I’m talking about setting our sights as an industry on a course to achieve that kind of growth,” Kunz says.

One Dannon marketer notes that 65 percent of U.S. households that consume yogurt make up only 20 percent of the category’s volume, then asks the $64,000 question: What if you got those people to buy just one extra cup of yogurt a year?

Company leaders believe the prospects of the yogurt industry as a whole and of Dannon in particular are limited only by the imagination. That’s why development of consumption and frequency of use are top-of-mind issues for Dannon. The right formula of product innovation, marketing support and customer service could add up to opportunity for Dannon.

The company predicts its two newest products are the routes to growth in two areas: kids products and a probiotic supplement. Offerings in the children’s market such as the Dannon Danimals Drinkable line introduce kids to yogurt and encourage daily consumption. At the same time, Dannon Actimel, a dairy-based probiotic supplement, is designed with the functional-food savvy consumer in mind. The company also has plans to increase its mainstream business: Dannon Light, Dannon Fruit on the Bottom and Dannon Blended yogurts make up about 80 percent of company sales.

Yogurt is one of the biggest growth areas in the consumer goods food channel, Kunz says. “Innovation brings excitement to the category What’s good for the category is good for the company,” he says. “The industry is doing something right and the market is responding. The prospects of the U.S. yogurt industry are fascinating.”

No Kidding

When it comes to products designed for children, Dannon is very serious. The overall yogurt market has gained 10 percent in volume while the kids yogurt market segment is growing as much as 40 percent, Kunz says.

With 39 million children in the United States between the ages of 2 and 11, Dannon hopes to create early brand loyalty with its Dannon Danimals product line. Danimals had net sales of $32 million in 1999; its business was up 25 percent at the end of 1999.

“There’s a hope that as kids grow up with yogurt, they’ll eat more yogurt as adults,” Kunz says.

Introduced to select markets including Detroit and Florida in August 1999, Dannon rolled out Danimals Drinkable yogurt nationally in April. Its 3.1-ounce bubble-shaped bottle was designed to fit children’s hands. It contains what Dannon tags “fruitilicious” flavors of smooth, drinkable yogurt: Strawberry Explosion, Cherry Cool, Rockin’ Raspberry and Tropical Tidal Wave. The product is offered in four-packs for a suggested retail price of $1.99.

Product is filled at Dannon’s new facility in Utah(see accompanying Plant Profile, page 36). The company is prepared for the Drinkable to ew major hit. “The first signs are that the Danimals Drinkable line is going to be tremendously enriching for our company,” Kunz says.

Fredericka de Saint Perier, director of kids and health marketing, is the marketing force behind the Danimals line of kids’ multi-pack yogurts and the new Drinkable. “Our kid consumers of today will be our adult consumers of tomorrow,” de Saint Perier says. “If we are able to establish yogurt as something that naturally belongs in the everyday diet, we strongly believe it will grow the category. These kids will keep eating yogurt for the long term. We have decided to invest in the kids category and in the kids’ brand Danimals.”

Cementing the emotional bond between the child and the brand is a top priority for Dannon. In April, the company used the successful 1999 re-launch of its Danimals cup yogurt as a springboard to nationally introduce the new type of yogurt product to kids under a brand they understand.

Dannon Danimals Drinkable yogurt is designed for little hands and little taste buds. It is positioned as a product that is loved by kids and approved by mothers.

To increase yogurt consumption among children, Dannon is working on two marketing targets: moms and kids. “We consider our mix to be 80 percent kid-appeal, 20 percent mom-accepted. We like to make sure that we are in alliance with what moms want for their children, says de Saint Perier.

A $6 million advertising budget is backing the 2000 launch of Danimals Drinkable yogurt. Kids’ advertising, particularly in TV commercials, is designed to drive awareness and appeal for the Danimals brand and its product line of cup and drinkable yogurt. The key message is summarized in one tagline: “Fruity, fun and fast.” Dannon also strives to educate moms about drinkable yogurt with print advertising tagged “Tastebuds rule!”

Dannon’s main objective for the national Danimals Drinkable yogurt launch is to develop awareness and trial. In addition to print advertising, the product will also be featured in waves of instore sampling. “When you put this little bottle into the kids’ hands, it becomes obvious to moms that this product is a winner,” de Saint Perier says.

The uniquely shaped package features graphics of the main Danimals animated characters – Brown Bear, Polar Bear, Gorilla and Baby Triceratop. As if shelf-appeal isn’t enough, kids also like the taste. During focus groups, Dannon marketers spotted kids drinking two or three bottles in a row. “The kids are shaking the bottle to make sure they get the last drop,” de Saint Perier says. “They love the taste, it’s fun and they like the independent dimension.”

In March, the Danimals brand introduced its umbrella theme “Danimals is the Way to Grow.” The campaign positions the Danimals characters as growing partners. It targets kids ages 3 to 8, a group that wants to become what de Saint Perier calls “big guys.” The campaign also taps into the maternal need to feed children with an eye on the developmental process.

The initial marketing effort partnered Danimals cup yogurt with building set leader Lego. An under-the-lid winner program featured a one-in-10 chance to win Lego sets.

The Lego promotion is only the first of a series of promotional events designed to support the Way to Grow theme. Asummer re-launch of Danimals cup yogurt will feature new flavors as well as significantly improved taste and nutritional news for moms. “Whatever you do from an image standpoint, if they don’t like the taste, if they don’t like the flavors, they will not ask Mom to buy again, ‘ de Saint Perier says.

Marketing support for the Way to Grow campaign will include a new leg to the kids’ TV advertising campaign and will include back-to-school promotions. This will be the second re-launch for the line. In January 1999, the Danimals cup yogurt image was revamped and the flavor offering improved.

The 1999 re-launch saw a shift in Danimals character graphics from National Geographic-style animals to the animated, cuddly characters featured on Danimals Drinkable yogurt. The characters have become the pillar of the Danimals equity, says de Saint Perier. “The key communication message is to create a relationship between the kids and the Danimals characters. The Danimals are a group of fun friends. We want them to become friends and helpers to the kids, helping the kids to grow and to become independent,” she notes.

The brand’s first national TV campaign in 1999 played heavily in key markets at a cost of $4 million. Initial airing of the commercial last summer created 40 percent volume peaks, Dannon reports. As a result, the Danimals advertising budget has doubled.

“We believe yogurt is a very natural type of food for kids. It’s a very tasty, fun product. On the other hand, it’s very healthy. It combines the health of health food and the taste and fun of sweets,” Kunz says.

Moms and kids are not the only ones buying the Danimals product line, notes Jim Blakely, Dannon’s vice president of sales. “Products that appeal to the younger generation are a tremendous opportunity for us as a yogurt manufacturer and for all retail clients we serve in the United States,” Blakely says.

Given time, yogurt might just replace the afternoon snack of a candy bar, cookie or chips, Blakely says. “Mom and Dad typically feel pretty good when their kids are eating a yogurt as opposed to those other snack items.”

Beneficial Supplement

Focusing on healthy, convenient items is Dannon’s next target growth area.

The executive team demurs when it comes to offering details on the various products in development, but Blakely offers this hint: “People will see in short order what Dannon’s response is to the on-the-go lifestyle trend.

Communicating the benefits of live and active cultures has historically played an important role in Dannon’s marketing strategy. The company utilizes the National Yogurt Association live and active cultures logo on-package. In addition, Dannon is moving to protect the standard of identity for yogurt. “When you call it yogurt, it has to have a certain quantity of live and active cultures. We believe that’s really what fundamentally makes this category different from other foodstuffs,” Kunz says.

“Great taste and yogurt can be a very pleasant taste experience. In the U.S. we have to become better at delivering great taste,” Kunz says. “But there’s a growing amount of evidence that live and active cultures are doing good for your body in terms of your immune system and all sorts of other benefits that are suspected, but not totally clinically proven yet. At the very least, yogurt is good for your digestive system.”

With the food industry and even consumers abuzz about probiotics, the timing seems right for the introduction of Actimel in select markets. Probiotics are defined as products containing living organisms that survive in the large intestine long enough and in large enough numbers to deliver health benefits beyond basic nutrition. Each 3.3-ounce bottle of Actimel contains standard yogurt cultures such as L. bulgaricus, S. thermophilus and 10 billion active L. casei cultures. “The idea of live and active cultures is pushed to the extreme with Actimel,” Kunz says.

Actimel, the probiotic supplement beverage, is the first at bat for Dannon’s supplement category in the United States. The product was introduced in Belgium in 1994: more than 1 million bottles of the supplement are consumed daily in Europe. Actimel is the first international brand for Dannon’s parent company.

Actimel is marketed internationally on a promise: “This product will help strengthen your natural defenses.” Positinned as a vitamin-type product for daily consumption, clinical studies undertaken by Dannon prove Actimel’s 10 billion live and active cultures have a positive impact on overall health when ingested on a daily basis.

Actimel is currently available in the Denver region. The suggested retail price is $2.19 per four-pack.

During test marketing of Originalflavored Actimel in late 1999, Dannon discovered a product taste profile that works well in one country or region might not in others. “People bought the promise. They wanted to make it a part of their daily habit, but desired a product with more flavor,” Blakely says.

The result is the new Orange-flavored Actimel, first available during the July re-introduction. The Original flavor will continue to be offered.

Positioned as a probiotic breakfast supplement to help people form a habit, Orange seemed like an appropriate new flavor choice. “To make sure that this category becomes a part of the everyday diet, we really have to help people incorporate it in their lifestyles and help them think about using it at a special time,” de Saint Perier says. “People want to do whatever they can to live longer, to be healthier overall. Actimel is a perfect product for that.”

Dannon will embark upon an July through October marketing plan to support Actimel; regional spending would translate into a national program of $40 million.

Marketing for Actimel will outline the benefits of probiotics as a dietary supplement. The regional introduction will showcase Actimel as a functional food that helps fortify the body’s natural defenses. A blitz support plan focusing on TV commercials debuts this month. The creative message utilizes the theme of a protective bubble to communicate the preventative benefits of Actimel. The ads feature a woman floating in a bubble above her daily routine, being protected from the aggravations of modern life by Actimel.

Dannon is positioning Actimel with its yogurt line at the retail level. “We have to help people understand what Actimel is. The awareness about probiotics is not top of mind in the United States,” de Saint Perier says. “So far it’s new. We want it to be next to the yogurt so the link with cultures is established.”

Back to Basics

While new propositions in kids and nutritional supplement areas are intriguing and considered a potential growth area, about 80 percent of Dannon’s sales volume falls under its base business: Dannon Light Nonfat yogurt, Dannon Fruit on the Bottom yogurt and various Dannon Blended yogurt products.

While advertising campaigns shift by product line, the overall goal of Dannon’ s base business marketing strategy is to stress that the Dannon brand offers a balance of rich taste and a way to improve overall health and well-being. When brand equity and convenience are added to the equation, Tim Hopkins, director of base business marketing, notes it is an “eye opener about just how high ‘up’ can be.”

Dannon mandates the involvement of all departments and all marketing support services in major marketing programs. The marketing team additionally works with and consults individual brand managers when it comes to media strategies and consumer promotion strategies. For instance, Ellen Rohrer, director of marketing services, counts her main responsibilities as supporting all marketing efforts developed by the individual brand marketing directors. Support includes broad consumer promotions, media planning and buying, public relations and consumer research.

“Everybody is challenged to grow their individual businesses, but we also need to have an overall umbrella look at the brand. It’s all brand Dannon,’ explains Rohrer.

Beyond the overall goal to increase the brand equity of Dannon, one goal drives every decision of the marketing team: Drive frequency of use. The threepronged approach includes stressing the health benefits of yogurt, targeting diet-conscious consumers and a program that strives to continue taste improvements.

Emphasizing the core daily health benefits of yogurt and facilitating Dannon’s position is the first priority. “It’s reminding consumers about how important and relevant Dannon yogurt is in delivering that daily health benefit, Hopkins says. “Whether it’s made relevant by being the right-tasting product, by having the right size packages or by new innovation opportunities, we just have to figure out the right way to drive consumers to the shelf to purchase the product.”

With consumption increases in mind, a previously under-marketed Dannon unit size is slated for new attention in 2000. Recent category-wide emphasis on multi-packs and Dannon s own goal to increase frequency of use has the company placing new emphasis on its adult snack-pack product line. With virtually no marketing support, the line has grown “nicely” over the last five years, Hopkins says.

Indeed, Dannon holds 65 percent of the adult snack pack market. The flounce cups in a six-pack is offered in Light, Fruit on the Bottom and various Blended varieties. Dannon hopes to drive new occasions by emphasizing the snack pack portion’s ability to serve as a satisfying and healthy snack. Dannon consumer research indicates that increasing snack pack sales will not cannibalize the regular business, Rohrer says. “Instead, it increases Dannon’s market basket portfolio for the consumer.”

The first phase of multi-pack marketing is a TV advertising campaign starring Wendie Malick, who plays a former model turned fashion editor on NBC’s “Just Shoot Me.” Malick extols the Dannon yogurt snack pack’s ability to “fill that little space, for when you don’t have a big hunger, but just a little hunger.”

Making the yogurt category more profitable for retailers is an important goal for Dannon. The labor-intensive and thus costly pack-out process for literally hundreds of single cup units is one reason retailers are embracing multi-pack yogurt products. Thus Dannon is working to offer pack-out friendly case configurations. In addition to easing labor issues, quick pack-out ensures a reduction of out-of-stock merchandise incidents.

Continued growth of the Dannon Light business is the second priority for the base business group. The brand already comprises 27 percent of the company’s total U.S. volume. “It’s a big business, but I know it can be bigger,” Hopkins says with confidence, pointing to the woefully overweight state of the nation. Two-thirds of the population consider themselves overweight, he notes.

Three years ago, Dannon fortified its Light line with calcium, increasing the daily value from 25 to 35 percent. In 1999, the product formulation was tweaked to improve the taste profile. Fructose was added to eliminate aspartame aftertaste and to increase the creamy mouthfeel of the product.

The third and ongoing prong of the marketing plan is designed to crack taste perception. Dannon consumer research shows that “one of the key barriers to consumption revolves around the issue of taste barriers,” Hopkins says.

Enter the reformulation of Dannon Fruit on the Bottom. The new formula was rolled out in November 1999 and the brand is exhibiting 15 to 16 percent growth. “It’s tremendous growth in a business that’s been around for about as long as yogurt has been around in this country,” Hopkins says.

Hopkins describes the reformulation as “taking a quantum leap forward in taste improvement.” He reports that blind taste testing resulted in 80 percent of the tasters preferring the new formula to the old, the highest approval rating on the Dannon consumer panel books.

The cornerstone of the Dannon Fruit on the Bottom reintroduction was an aggressive TV marketing campaign utilizing prime time, early morning and cable with commercials focused on “dialing up the awareness of the new and improved taste of the product,” Hopkins says.

Commercials were accompanied by consumer promotions such as FSIs, onpackage banners proclaiming “great new taste” and localized programs to build on national promotions.

The strong advertising campaign behind the Fruit on the Bottom line program is serving as the anchor for other initiatives, says Rohrer.

Dannon launched its most ambitious consumer promotion in the history of the company in the first quarter of this year with an under-the-lid contest featuring Foot Locker as a partner. The instant win game ran from February through April; March proved to be the strongest month in the history of the company.

Because the image of a healthy, active lifestyle is associated with both Dannon yogurt and Foot Locker, the partnership benefited both companies. Communication efforts included radio, FSIs and promotional materials placed in the athletic shoe and apparel chain’s 700-plus stores. Foot Locker offered Dannon consumers one-in-seven odds of winning $5 and $10-coupons good for store purchases. With the help of local trade marketing representatives and members of the regional sales group, Foot Locker’s retailers got behind the program. “There was a tremendous amount of enthusiasm in the merchandising. That speaks to the right fit of the idea,” Rohrer says.

Dannon is making incremental strides in improving the taste and shelfappeal of its products. The reformulations of both Fruit on the Bottom and Light lines were accompanied by graphic redesigns. While each previously featured white, almost clinical packaging, the lines now sport an energetic motif.

The Light design features a blue background and a flavor moniker graphic. The design incorporates energetic figures behind the logo to communicate the image of vitality.

The Fruit on the Bottom line was redesigned to communicate vitality via its sun design. A green pasture showcases fruit graphics “to dial up the naturalness,” Hopkins says.

Dannon also works to keep its packaging fresh and to drive home its nutritional message with rotating taglines on its foil seals. Messages include “Excellent source of calcium,” “Good source of protein” and “Contains live and active cultures including L. acidophilus.”

While Dannon continues to monitor the organic yogurt arena, its test market product was taken off the market due to poor performance.

Meanwhile, Dannon Double Delights has proven to be more of a niche business dessert item than anticipated. The dual-compartment product line’s growth has stabilized, but Double Delights continues to offer unique variety for retailer and consumer alike, Hopkins says.

When it comes to marketing, Dannon’s biggest challenge might be to avoid becoming too sophisticated of a brand. “We want to make sure we look at the simple things we can do every day to grow our brand,” Blakely says. “We don’t ever want to get so self-absorbed with whatever successes that we have had that we take it for granted that we are going to be successful.”

Choice of Channels

Dannon is well established in the traditional grocery channel and is enjoying “tremendous growth” in mass merchandising and away-from-home markets such as schools, airports, convenience stores and drug stores, Blakely says. “All accounts are growth accounts. We are excited about the opportunities in certain channels to expand consumption and penetration of yogurt.”

When the Dannon sales team hits the streets, it has plenty to talk about. “We go through a litany of different things that we do to try to bring value-addedness in our business proposition,’ Blakely says. “We have to keep track of why we’re here and why they re here and increase values for our respective shareholders.”

First is Dannon’s ability to deliver a No. 1 nationally branded item. Second is the brand’s reputation for quality and product innovation. “We always talk about the power of the brand, but it’s the imagery that goes with it too. Our imagery is one of health, consistent quality and a premium pricing position,” Blakely says. “If you’re looking to bring people in the door that have disposable income, which is normally going to be used for impulse purchases which carry higher margins, you want our brand to help draw them into your store.”

The third component of any sales pitch is the company’s category management and activity-based costing programs, which offer retailers an optimum mix of products based on linear feet allowed. When Dannon customers need information or to improve a business proposition, Blakely wants his sales team to be preferred over the competition.

“We are trying to sell more than boxes of yogurt. We’re trying to sell business processes that help people make better business decisions and at the end of the day, more profits, ‘ Blakely says. “People in the dairy industry sometimes lose sight that making profits is what we’re all here for. People get too caught up in talking about unit movement and pounds consumed, when they should be talking about how many dollars were exchanged and how much money will they make off of that exchange.”

Blakely oversees the Dannon sales team, made up of three regional retailoriented divisions based in Texas, Utah and the Northeast and a national, awayfrom-home channel division serving schools, airports and other foodservice accounts.

The three retail sales divisions encompass 14 regions with a sales staff of more than 100. In addition, in January 1999, Dannon became one of the first consumer packaged goods companies in the world to appoint one national broker in the United States, Blakely reports. A total of 3,000 people in the brokerage community sell the line.

At Dannon, the overall sales effort is considered commercial development. “The way we want to develop business with our clients is to always be valueadded in what we bring to the marketplace, be that with our people, our processes or our intellectual properties,” Blakely says.

With commercial development in mind, over the last five years Dannon has made it a goal to develop business managers who interface with all U.S. clients. The managers have a background and knowledge in marketing, logistics, trade marketing, category management, and of course, sales. “They’ve got the ability to command specified resources to come into that account and focus on whatever needs that account might have,” Blakely says.

When it comes to the foodservice arena, branded foods are a rarity. But Dannon’s customers seem to go out of their way to showcase Dannon yogurt, Blakely says. “That speaks volumes about what people think of the quality of our product. In many of the away-from home markets, the power of the Dannon brand sends a strong health signal to the rest of the food that they’re serving,” Blakely says. “When you put Dannon on a product, that is an insurance policy that it is the best quality product in the marketplace.”

The advent of yogurt’s status as a protein under federal guidelines allows school foodservice directors to secure government subsidies for use of the product; that, in turn, allows them to meet target financial guidelines. The ongoing growth of yogurt sales in school channels is an exciting prospect, Blakely says. “We’re introducing millions of young consumers to yogurt. Those consumers are going to be with us for as long as they live.”

In addition to his responsibilities in sales and marketing, Blakely also oversees the logistics of Dannon’s distribution transportation. Dannon’s distribution system is made up of independent haulers and is managed through the corporate office. Having a close relationship between sales and distribution eliminates situations in which the salesperson wants to ship no matter what the cost, while the transportation group says it’s not a good business decision, Blakely says.

At best, distribution of finished Dannon goods is complicated; at worst, it is costly, says Rene-Charles Coumes, vice president of manufacturing. “We try to optimize transportation vs. manufacturing efficiency ” Coumes says. “That’s a tricky equation.”

Coumes oversees operations Dannon’s three U.S. production facilities as well as its Canadian plant. With a team of senior-level plant managers in place, Coumes is focused on continuous corporate-wide improvements in quality, productivity and the capital investments required by increased capacity needs. “We want to produce high-quality products with the lowest cost possible every day,” Coumes says. “Our first objective, quality and safety for consumers, is designed to minimize and eliminate all the risks in terms of consumer food safety.”

In order to minimize the complexity of the processing facilities, the company does not try to produce every product in every plant. As a result, Dannon immediately ships finished product to one of its five distribution centers. About 75 percent of its customers are within a 12hour range of a Dannon distribution center, while 95 percent are within a 24hour range. Dannon additionally delivers to customer distribution centers and third-party distributors. Some customers, particularly in California, pick up directly from Dannon distribution centers.

While Dannon products have a typical shelf life that ranges between 30 and 45 days, the company guarantees its customers delivery of product with a certain number of available days until the code date.

While Dannon’s water business allows a long warehousing period between production and delivery, only one to three days of customer yogurt orders are kept on-hand. Dannon holds product for a maximum of 10 days between production and delivery. “Lack of inventory puts a lot of pressure on production. We have to make sure that we don’t have glitches, because as soon as we have one, we may be short for customer delivery,” Coumes says.

In the coming years, Coumes will continue to build the flexibility of Dannon s production team when it comes to product changeovers and capacity increases. It’s a trait that will be necessary in light of ongoing requests for custom product development for customers such as Wal-Mart, he says.

“In production, we need to realize and ensure that everyone understands that we are a marketing-led company Manufacturing strategy is not going to lead the company,” Coumes says. “Our mission is to bring a competitive advantage to the company.”

Growth Culture

Appointed in early 1999 as Dannon’s new leader, Kunz is enthusiastic about the potential of both the yogurt category and the company he heads up. Kunz, a Swiss citizen, joined parent company Groupe Danone as a director of marketing in the Munich, Germany division in 1990. Today his duties include responsibility for Group Danone North America, which includes The Dannon Co. in the U.S. as well as in Canada. He also has overall responsibility for Group Danone’s international dairy dessert category.

“It’s all about preparing for the future of the company What I’m trying to instill in the company are the priorities that we have to enforce and follow through on,” he says.

For instance, the company is taking steps to determine how the Internet and the accompanying new communication age will change, Kunz says.

Looming large are the questions about the Internet. How will it evolve, how can it replace the advertising and marketing strategies of today and how will it help companies communicate with consumers 10 years from now? “It’s going to change in all facets of our business and the way we communicate with consumers,” Kunz predicts. “If I want to have product innovation, I have to find a way to communicate with the consumer that I have something new.”

Meanwhile, Dannon will concentrate on today’s methods of reaching 260 million people. Having such a large customer base more than compensates for having to comprehend distribution in a country larger than the entire European Union. “America is such a huge country and yogurt is a comparatively small food category,” Kunz says.

Dannon faces many future challenges, but making the category more attractive to consumers remains the largest hurdle. “We’ve got to continue to look at how we can improve our products through the eyes of the consumers, understand those needs and tastes are going to change over time and respond to them in the same way we do with our clients,” Blakely says.

The Dannon team understands that the competition will continue its own program of innovation. “That’s why I have such great faith in the future of this industry in the United States,” Kunz says. “We have two very active companies who fight to be leaders in the more holistic sense. That can only be great. Great for the consumers, great for the industry and great for us!”

Copyright Stagnito Publishing Jun 2000

Provided by ProQuest Information and Learning Company. All rights Reserved