What's Behind Dannon Greek's Oikos Rebranding?

by , Aug 11, 2011, 6:03 AM
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John-Stamos

Why rebrand Dannon Greek yogurt as Dannon Oikos Greek?

While the product's formula isn't being changed, with new branding -- or at least new primary branding -- new packaging and new marketing, it's not hard to understand why The Dannon Company is terming this a "launch."

The explanation takes a little background. In the early 2000's, Dannon Company parent Danone, the world's leading yogurt company, acquired 85% of Stonyfield Farm, the New Hampshire-based maker of organic yogurts, smoothies, ice cream and milk. Stonyfield Oikos Organic Greek Yogurt was launched in 2007; Dannon Greek was launched in 2010.

The Greek yogurt segment is, of course, one of the food industry's shining success stories of recent years. As the Wall Street Journal recently reported, in the U.S. alone, Greek yogurt -- which had a mere $60 million in sales just five years ago, now has sales of $6.8 billion, or nearly a quarter of the total U.S. yogurt market, per Euromonitor International.

Within the Greek yogurt segment, Symphony IRI data as of July, as supplied by Dannon, show Agro Farma Inc.'s Chobani by far the leader (with about a 40% share), with Fage in distant second place (about half Chobani's share), followed by Dannon Greek, Stonyfield Organic Oikos, and Yoplait Greek.

While Stonyfield Organic Oikos got a jump on the market, that brand and Dannon Greek each currently have under 2% shares of the Greek market, says Michael J. Neuwirth, senior director of public relations for The Dannon Company. In other words, the brands are basically the same size.

So is the unmistakably Greek name Oikos (meaning "house") the draw from Dannon's standpoint? Neuwirth says he doesn't have the data to speak to the name's marketing value, although "one could argue that [the name's] heritage is of benefit to Dannon -- that's obviously one reason that we licensed it" [from Stonyfield for the former Dannon Greek].

However, the primary reasons for the rebranding are to "simplify the shopper's experience" and "assist retailers in managing the explosive growth in Greek yogurt," stresses Neuwirth. Dannon, which represents Stonyfield in mainstream (as opposed to natural/organic) retail channels, is in part looking to make shelf management and product presentation easier for retailers, he says. The packaging of the sister brands complement one another, he notes. (Both are blue, with Dannon Oikos's a darker shade, for example.)

"The non-organic yogurt category is 10 times the size of the organic category, and we obviously envision Dannon Oikos becoming a significant brand in non-organic, and therefore in the overall market," says Neuwirth.

A key piece of the logic in consolidating Greek organic and non-organic lines under one brand relates to retailers' heavy focus on SKU "rationalization" -- honing product assortments within categories throughout their stores to realize maximum by-category profits and make room for private-label products. More than a handful of brands within a category is rare these days. Obviously, the plan is that Oikos in both regular and organic varieties will make the short list as the Greek category continues to expand.

Actually, Dannon will still have at least two brands in the Greek category, as it is currently introducing both Greek and French lines within its Activia brand. So perhaps, given the SKU rationalization scenario, three might have been a crowd? (An organic Activia product was also recently introduced under the Stonyfield brand, but that's another, non-Greek story.)

As the WSJ pointed out, Danone -- along with General Mills, which is launching its own campaign for Yoplait Greek -- are pushing to make up for late entries in the Greek category.

The intro campaign for Dannon Oikos, which launched this week, makes no mention of a name change, instead going directly after Chobani. The TV spot, featuring John Stamos, points out that Dannon Oikos "beat Chobani two to one in a national taste test," followed by the tagline "Possibly the Best Yogurt in the World." A callout at the bottom of the last frame encourages consumers to also try Stonyfield Oikos Organic Greek Yogurt.

The Stonyfield and Dannon Greek brands are sharing a Web site. In addition to television, Facebook/social media, couponing and in-store sampling are important elements in the new marketing campaign, reports Neuwirth.

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