Mixed bag

Mixed bag

Cook, Julie

Yogurt continues to enjoy strong consumer demand, while cottage cheese struggles to stay afloat.

From kid-friendly products, like Yoplait’s Go-Gurt, Stonyfield Farm’s YoBaby and Dannon’s Danimals to such adult-oriented fare as Dannon’s la Creme, Yoplait’s Whips and Old Home Foods’ Velvet Delight, yogurt processors have been vigorously flexing their R&D muscles in recent years. And their efforts are paying offin spades. According to data from Chicago-based Information Resources Inc. (IRI) for the 52-week period ending April 20, 2003, dollar sales of refrigerated yogurt soared 10.7 percent, while unit sales kept pace, rising 9.7 percent in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart.

That dedication to innovation has proven key in driving year after year of growth, according to Gary Hirshberg, president and chief executive officer, Stonyfield Farm, Londonderry, N. H. With so many forms and flavors of yogurt on the market today, consumers find themselves fitting yogurt into more and more eating occasions.

“Whereas people previously might have had yogurt only a couple times a week, now they are having it a couple times a day,” says Hirshberg. “If you have yogurt with some granola or cereal in the morning or maybe i yogurt with a salad at lunch, now you’ve got a late night, kind of indulgent fix that’s not nearly as heavy as ice cream.”

The yogurt industry has also helped itself tremendously by improving the taste and mouth feel of the product over the years, points out Hirshberg, adding that such improve- ments have made the product more palatable to men and other non-traditional yogurt eaters. What’s more, medical professionals have begun recommending yogurt for s people with an assortment of health problems. “I remember the days when the only people really interested in yogurt were women because of yeast infection prevention,” Hirshberg recalls. “Now, athletes who are getting broken bones and stress fractures are being told to eat yogurt to get more calcium.”

That’s not to say that yogurt has reached its peak by any means. Across Canada and the United Kingdom, per capita consumption stands at 10 to 15 pounds, according to Mark Sugden, senior category business director, Kraft Foods, Northfield, III. In certain European countries, that number reaches as high as 30 pounds, while U.S. per capita consumption remains at just 5.4 pounds.

That could change in a hurry if American con- sumers warm up to smoothies and other drinkable yogurts the way their overseas counterparts have done. In Europe and Latin America, Hirshberg claims, yogurt drinks occupy as much as 50 percent of the category’s cooler space.

Numerous U.S.-based processors have tested the yogurt smoothie waters in years past, consumers never seemed to embrace pre-packaged, storebought smoothies, preferring freshmade product instead. Within the past couple of years, however, smoothies and drinkable yogurts have hit the retail dairy case with a vengeance, as a number of players, including Yoplait, Dannon, Stonyfield Farm and Old Home Foods, have rolled out such products. Early indications are that Americans are indeed responding to the latest wave of retail smoothies, as sales of refrigerated smoothies soared 51.8 percent in dollars and 65.9 percent in units this past year.

So why have retail smoothies taken off so well this time around when they proved to be a resounding failure just three or four years ago? Dave Holdsworth, vice president of sales and marketing for Old Home Foods, St. Paul, Minn., says it was a matter of adjusting the taste to please American consumers. “When the first smoothies started coming out, the European taste really didn’t play well with the American palate, and it really took a while to evolve,” he says. “Over the past few years, with the research and the testing, people started to hit on better tasting products that consumers like.”

Among those products has been the Old Home Smoothie, a yogurt-based product containing real fruit, rather than juice. Doug Pritchard, marketing manager for Minneapolis-based Yoplait USA, reports strong consumer response to his company’s Nouriche product, which he describes as “more than a smoothie” because it provides the nourishment of a full meal. Likewise, Hirshberg reports continued growth of its Drinkables yogurt, an organic product containing inulin, a natural dietary fiber clinically proven to help boost calcium absorption.

Among the top 10 yogurt processors, Stonyfield Farm experienced the strongest growth, rising 25.2 percent in dollars and 18.6 percent in units. Hirshberg hopes to further boost sales with the introduction of Moo La La, a line of dessert yogurts, this fall. Sold in four-packs of 4-ounce cups, Moo La La will be available in Chocolate Under Chocolate, Strawberry Cheesecake, White Chocolate Raspberry and Lemon Chiffon. According to Hirshberg, Stonyfield Farm has been extra vigilant in testing the product because it will be going up against Dannon’s popular la Creme product. “We have been testing the product a little bit more than usual to be sure that there was a unique taste delivery and that we succeeded in getting those benefits across,” he says. “I’m pleased to report that the consumer just gets it.”

Bold Moves

While yogurt continues to grow share of stomach through innovative new products and targeted marketing efforts, cottage cheese remains on the downward spiral that has defined the category for much of the last 15 years. Both dollar and unit sales fell 1.2 percent last year with private label hanging onto the top spot with a 38.3 share.

Greg Hansen, vice president of marketing for Fargo, N.D.-based Cass-Clay Cooperative Creamery Association, blames the category’s struggles on some dairies’ attempts to “take the easy route trying to find a cost-effective cottage cheese.” Such products failed to perform up to expectations, he claims, leaving consumers dissatisfied and damaging the category’s overall reputation. “They weren’t very good, so they turned a lot of people off from cottage cheese,” Hansen explains. “It’s hard to get Generation X to eat cottage cheese, for example, because they remember it as being some pretty nasty stuff.”

As a result of the category’s lackluster performance of late, Old Home Foods discontinued its single-serve cottage cheese line last year in order to concentrate on traditional tubs. Although the products had a loyal consumer base, the single-serve line represented a very small part of the company’s total cottage cheese volume. From a financial standpoint, therefore, continuing to produce’it “just didn’t make sense,” says Holdsworth.

The move proved to be a wise decision, according to Holdsworth, who says that Old Home’s cottage cheese volume has not only maintained steady, but has actually risen since the single-serves became history. All in all, however, cottage cheese remains far from a priority for the company. “We will continue to make cottage cheese, but it’s not something we are spending a lot of time developing new products for,” says Holdsworth. “Unless there’s a new innovation for the near future, you are probably going to see a continued slow decline in the category.”

That being said, Hansen believes the industry has risen to the challenge in recent years and begun producing better tasting products. Although he says it’s going to be difficult to bring any real excitement to the category, Hansen does reveal that Cass-Clay has considered fruit-flavoring the dressing, rather than putting actual fruit in the product. “Because the fruit tends to bleed in the product anyway, it ends up not being very eye appealing,” he explains. “If it’s going to turn color, do it big, make it a color. It’s a bold move.”

Meanwhile, Wendy Ossenberger, director of product development for Phoenix-based Shamrock Farms, points to her company’s 5.5-ounce single-serve cottage cheese cups with mix-in fruits as a successful innovation. Available in Peach, Strawberry, Pineapple, Apple Cinnamon, Mixed Berry and Chive & Onion, the cups have proven particularly popular with female consumers seeking a sweet treat that won’t make them feel guilty, according to Ossenberger. She adds that they are typically consumed at different usage occasions than multi-serve units, allowing traditional tubs to maintain their value with the consumer. “With the new product innovations, such as fruit mix-in, single-serve cottage cheese cups, taste is not compromised,” says Ossenberger. “These cups are a good example of how cottage cheese can be a food that is simple, easy and tasty for kids and mom.”

HP Hood, meanwhile, produces a line of tub-size flavored cottage cheese, including Pineapple, Black Pepper & Herbs, Chive, Pineapple & Cherry, and Chive & Toasted Onion. The Chelsea, Mass.-based company also offers a full array of cottage cheese recipes on its Web site. They include Baked Noodles and Cottage Cheese Casserole, Garden Quiche, Spinach Stuffed Shells and Strawberry Parfait, among dozens of others.

Making cottage cheese-friendly recipes readily available at the click of a mouse may help boost sales, as more consumers begin to see the product as an ingredient, rather than just a snack or side dish. However, far greater efforts are going to have to take place if cottage cheese is ever going to develop the kind of following that most other dairy categories enjoy. “More work needs to be done to effectively communicate the health benefits of cottage cheese and promote early product trial by the consumer,” says Ossenberger. “As with any category, getting children involved early helps grow the overall category and product innovations, making them lifelong users.”

So are kids the answer to cottage cheese’s woes? After all, heavily targeting children worked for yogurt. Not only did it boost consumption significantly, but it also served to raise a whole generation of dedicated yogurt-eaters. Holdsworth, for one, believes the idea of kid-oriented cottage cheese products has potential. In fact, he reveals that Old Home has actually looked at some prototypes for kids’ cottage cheese, but has not taken matters further yet. As for when consumers might see such a product in their grocer’s dairy case, he has his reservations. “If you give them cottage cheese nowadays, a lot of kids turn up their nose,” he says. “They’d rather get something else, something more fun.”

What’s more, says Ossenberger, parents typically view cottage cheese as more expensive than other healthy options, such as yogurt. Still, she believes that educating consumers about the health benefits of cottage will prove instrumental in boosting consumption and getting sales figures back in the black. “You can never have too much education on this category as a whole and how it fits in with a healthy lifestyle,” she says. “Consumers have an idea that cottage cheese is good for them, so if it’s promoted properly, we have every expectation that we will experience an increase as different diets emerge touting cottage cheese.”

Maintaining the Mainstays

Sour cream continues to experience modest gains, rising 2.3 percent in dollars and 1.2 percent in units this past year. Teresa Marquez, marketing sales executive, Organic Valley, La Farge, Wis., credits the growing popularity of Mexican foods, as well as the increasing affluence of the burgeoning Hispanic-American population for boosting consumption of sour cream. Marquez also says cooking show host and author Rick Bayliss has raised awareness of Mexican cuisine, particularly among young people in search of a quick and tasty home-cooked meal. “That kind of interest in ethnic cooking, particularly Southwestern Mexican, is growing,” she says. “It’s the ultimate 20-minute meal.”

While a number of manufacturers have developed squeezable sour cream in order to make dining occasions that much more convenient, Marquez advises consumers not to hold their breath when it comes to an Organic Valley version of that particular variety. Shamrock Farms, however, reports continued success with its Squeeze Sour Cream, which is available in traditional and Chive and Onion varieties. Ossenberger says that the convenient packaging and superior product performance fit a definite consumer need and have consequently brought new users to the category.

Northfield, Ill.-based Kraft Foods Inc. introduced a Knudsen brand of Squeezable Sour Cream on a regional basis last year, while Minneapolis-based Marigold Foods Inc. continues to produce its Kemps Easy to Squeeze sour cream in Traditional, Light and Potato Topper varieties. While squeeze-bottle sour creams may be a handy alternative for special occasions, they are not exactly “jumping off the shelf,” according to Molly Murphy, marketing director, Quality Chek’d Dairy Association, Naperville, Ill. “People stick with the normal tub,” she says. “They may use the squeezable as a convenience while on-the-go, at a picnic or throwing a party, but for day-to-day use, they stick with the tub.”

Likewise, Ossenberger reports that Shamrock has witnessed a growing trend towards larger tub sizes of sour cream, as value-conscious consumers are constantly on the lookout for the best deal. In addition to traditional sour cream, Shamrock also produces low-fat and fat-free varieties, as do many other dairies. Despite the widely publicized move towards indulgent, full-fat dairy products, there still remains a strong demand for reduced-fat sour cream. According to Marquez, that’s because such products are still available to deliver on consumers’ expectations, while others cannot. “It’s not like some products where you take the fat out and you take the flavor along with it,” she explains. “It’s a popular item and it tastes really good.”

Likewise, consumers are embracing healthier alternatives when it comes to dips, which have traditionally been considered highly indulgent. Carla Laylin, senior marketing manager for T. Marzetti Co., Columbus, Ohio, says a growing number of people are seeking a small container of low-fat dip that can be used for dipping fruit or vegetables while on the run. “People aren’t sitting down and eating dinner as much as they used to, so the dips and vegetables come into play for minimeals or healthful snacks,” she explains. “They’ve become more like, ‘Let me grab a handful of carrots and my little container of dip.'”

Despite her enthusiasm for the category, Laylin concedes that the category has experienced some softening recently, primarily due to the nation’s current state of affairs. Between the economy and the uncertainty of living under a continual terrorist threat, Americans have cut back in many areas, including dips. Her observation bears out in IRI figures, which show refrigerated dip dollar sales rising 3.2 percent in dollars over the past year, while unit sales fell 0.2 percent.

Despite the relative flatness of the category, dip manufacturers don’t seem to have cut back on their R&D efforts. Marzetti recently added a Light Ranch variety to its line of single-serve Veggie Dip, while Buffalo, N.Y.-based Upstate Farms introduced Nacho Jalapeno dip under its Bison brand. According to Mark Serling, director of marketing, the company is also working on developing a line of junior dip flavors.

Meanwhile, Old Home Foods rolled out Old Home’s Pride Smoked Salmon Dip in an 8-ounce resealable container and Five-Layer Party Dip in a 16-ounce party size. Holdsworth says the products are part of Old Home’s plan to focus on new tastes in order to offer some excitement that will revitalize the category. So far, he adds, both products have lived up to their expectations to do well, especially around the holidays.

Unique flavors and highly seasoned dips are experiencing strong growth, according to Laylin, but she stresses that nothing will ever overtake such mainstays as ranch or French onion. She believes the dip category is similar to salad dressings in that people prefer to have an array of choices. “Everybody has several varieties of salad dressing in the refrigerator,” she says. “If one night you are having pasta, you want an Italian; another night you may want a blue cheese. People are eating dips more often and may not want to have the same one every night either.”

Copyright Stagnito Publishing Aug 2003

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