Danone and Nestle grab yoghurt growth - Company News - Brief Article - Statistical Data Included - Industry Overview

Eurofood, May 23, 2002

Volume sales for yoghurt and chilled desserts grew by 18.4% and 19.1% respectively over the review period 1996-2000, according to the latest information from Euromonitor. Rising health awareness and the consumer trend towards snacking has driven volume sales to an all time high.

According to the Euromintor's Western European dairy products report "it's the usual suspects" who are reaping the profits. French giant Danone and Swiss rival Nestle are the only companies active in every sector within the Western European dairy products market, indicative of their comprehensive product range in packaged foods overall.

Both companies are strongest in branded snack foods, specifically potted desserts and chilled snacks, as opposed to generic staples like cream and butter, and it is the sales of such conveniently packaged, low-fat or otherwise healthy yoghurts and chilled desserts that is driving both companies market shares.

Value sales of yoghurt totalled US$10 819.5m (11 906m [euro]) in 2000, commanding a 14.8% share of the Western European dairy market. As the most valuable and mature sector it is prone to competition from the comparatively more novel fromage frais and chilled desserts, yet growth remained dynamic in a number of markets.

NEW PRODUCT DEVELOPMENTS

Growth was spurred by new product developments accentuating distinctive, value-added health benefits, including more functional products, such as Benecol, a yoghurt extension of the successful cholesterol-reducing margarine, and expansion of the underdeveloped probiotic yoghurt category.

Chilled desserts recorded US$3 304.2m in value sales taking 4.5% of the Western European dairy products market. Chilled deserts outperformed both fromage frais and yoghurts in the UK, where growth of 4.9% was underpinned by UK consumers' fondness for leading chocolate confectionery brands.

Danone is the clear leader in these key sectors. The Danone brand is the best selling yoghurt and chilled dessert in Western Europe and the company also owns the best selling fromage frais product Jockey with overall share augmented by many other successful potted desserts. Danone is also the third leading manufacturer of chilled snacks, with the Prince brand.

Nestle is the second leading manufacturer in yoghurts, chilled desserts and chilled snacks.

Nestle has a wide range of important brands in these sectors, not least La Latiere, otherwise known as Milkmaid or La Lechera, the second best selling chilled desserts brand and also a significant name in yoghurt. Nestle's market presence in yoghurt was also substantially increased by the acquisition of the Mis brand in 2000, the best selling yoghurt in Turkey and third most valuable yoghurt brand in Western Europe. Nestle's position in yoghurt is also underpinned by LC1, its foray into probiotic drinking yoghurt.

Western European company share in dairy products market (%)

Chilled desserts
Danone                    21.2%
Nestle                    18.2%

Chilled Snacks
Danone                     2.2%
Nestle                     7.5%

Fromage frais and quark
Danone                    25.5%
Nestle                     4.1%

Yoghurt
Danone                    16.5%
Nestle                     6.8%

Source: Euromonitor International