Dairy's diversity

Prepared Foods, March, 2005 by William A. Roberts, Jr.

* Health & wellness? Good!

* Carbs? Bad!

* Weight-loss? Well ...

With consumer interest in health and wellness products on the rise, it should come as no surprise that the dairy category followed suit, with a number of such introductions. Still, one of the more-notable pieces of business news in 2004 centered on a major company dropping a line of products tailored to the weight-conscious.

Dean Foods Co. (Dallas), citing poor sales, ceased production of weight-loss shakes and drinks. Sales of Healthy Shake Weight Loss Beverage and the Bonus Nutritional Supplement had diminished to the point that the company opted to close its nutritional drinks plant in Michigan. In its announcement, Dean noted that sales of nutritional drinks had "fallen significantly" in 2004, in volumes that "can't be replaced." Admittedly, the nutritional drinks category was but a small part of Dean's specialty business, but the exit from the segment is expected to lower Dean's earnings by about $10.2 million--not good news for a company that has revised its full-year expectations due to "competition," as well as higher fuel, resin and raw-milk costs.

The move was hardly Dean's only major piece of business maneuvering. In January of 2005, the company announced plans to spin-off its specialty foods group, whose products will include aseptic cheese sauces, puddings, peppers, dressings and egg substitutes, to name but a few. Also, Dean announced it will consolidate its three branded businesses: White Wave, Horizon Organic and the Dean National Brand Group. Headquartered in Boulder, Colo., the new group will be headed by Steve Demos when the consolidation is complete, expected to be in late 2005.

Likewise bidding adieu to a segment of the dairy category, Kraft Foods (Northfield, Ill.) is planning a sale of its Breyers yogurt brand. Breyers yogurt has annual sales of about $100 million but, as of yet, there has been no announcement about a buyer.

Watching

A lack of news was not an issue surrounding the rights to frozen novelties and ice cream under the Weight Watchers (New York) brand. Entering 2004, the Weight Watchers license was in the CoolBrands International (Markham, Ontario) stable. According to CoolBrands, it had the exclusive right to use the Weight Watchers trademark in ice cream and frozen novelties until September 28, 2004, and a "non-exclusive right to continue using that trademark in connection with ... ice cream and frozen novelty products until September 28, 2005." On July 28, the story became a bit more complicated.

That was the date when Weight Watchers and Wells' Dairy (Le Mars, Iowa) entered into an exclusive licensing agreement to commence on October 1,2004, making Wells the exclusive marketer, producer and distributor of Weight Watchers frozen novelties and ice cream. CoolBrands' lawsuit seeks compensatory and punitive damages of $360 million.

More-positive news from CoolBrands saw the company enter into four new brand licenses for frozen snacks, including Care Bears, Justice League (including Batman, Superman and Wonder Woman), No Pudge! and Snapple. In addition, CoolBrands capitalized on the Yoplait brand to launch a line of yogurt for breakfast.

Yoplait Frozen Breakfast Bars are handheld and combine yogurt, fruit and cereal in an easy-to-use form. The range received such a strong test response that the company accelerated its national rollout. Rich in calcium and a dozen vitamins and minerals, the product line features three flavors of frozen yogurt covered with fortified cereal; varieties include vanilla, strawberry and Vanilla Orange Swirl. With a number of U.S. schools seeking more-healthful snacks for their students, school administrators would be encouraged to note that the USDA approved the Yoplait bars for inclusion in the Child Nutrition Program.

Also capitalizing on the Yoplait brand, General Mills (Minneapolis) has responded to concerns about a lack of vitamin D, and fortified the yogurt. Each 6oz. cup contains 20% of the daily value of vitamin D, which, as the label attests, is "to help absorb calcium."

A number of drinkable yogurts have debuted over the past couple of years, each promising (whether expressly or not) to deliver a healthful benefit, but a product from Dannon (Allentown, Pa.) attempted to up the ante. DanActive Cultured Dairy Drink offers a "unique combination" of beneficial live cultures, including Lactobacillus casei, and boasts "10 times more cultures than yogurt." The four flavors include strawberry, vanilla, orange and original.

Fortified yogurt was not solely for adults, either. YoBaby Plus Fruit 8,: Cereal from Stonyfield Farm (Londonderry, N.H.) improves upon the already-healthful original by fortifying with iron, but it may have been even more notable for being the first yogurt to mix fruit puree and a blend of cereal grains. The organic apple puree is blended with organic cereal grains such as oats, flax, rice and bran. Furthermore, similar to the rest of Stonyfield's lineup, YoBaby Plus contains six live, active cultures.