Growth Strategies Case Study

Case Title:

Danone’s Probiotic Yogurt Activia : Latching on to the Health Bandwagon

Abstract:
French food giant, Danone Group, is a world leader in bottled water by volume and fresh dairy products and second in biscuits and cereals, with presence in over six continents. Group’s sales growth increased 8.1% from euro 13,024 million in 2005 to euro 14,073 million of which Europe contributed 60.98% in 2006. Danone decided to roll-out its tried-and-tested product named “Activia”-yogurt with an active probiotic culture in US in 2006.

Americans ate less yogurt compared to Europeans and preferred fruits and vegetables and relied mainly on the tablets, piles syrups etc. Dannon Inc. (US subsidiary of Danone group) faced a great challenge as Americans’ food habits resulted into a cultural battle and minimal awareness about probiotics. Dannon invested heavily to create awareness and generate positive response to such cultural foods, educate them about health benefits offered by Activia. They initialized many promotional activities like direct mailing, advertising on TV, radio, sponsored survey, internet marketing, free samples, etc. It had also faced difficulties in designing the packaging and making the advertisement in line with the FDA (Food and Drug Administration) and FTC (Federal Trade Commission) guidelines.

The case also discusses American food culture, their foods, shifting of eating habits and impact of FDA and FTC guidelines. But analysts were debating whether the tried-and-tested product rollouts really work, all times? Would it be possible for Danone to cultivate success based on probiotics targeting niche market?

Pedagogical Objectives:

• To discuss American food culture, shifting of eating habits and impact of FDA and FTC guidelines
• To discuss the challenges faced by Danone in America
• To discuss whether Danone continue to win the hearts of consumers through their troubled stomachs in future?.

Keywords :  Danone Group; Dannon Inc.; Probiotic foods; Activia; functional foods; Growth Strategies Case Study; US yogurt market; cultural shift; American food culture; shifting food habits; acculturation; product roll-out; launching strategies; changing customer needs

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