• Ad Age, Monday, September 25, 2006 12:15 PM

Fresh off of its successful launch of Activia, Dannon Co. is testing several "probiotic" yogurt products in the U.S. that that do everything from manage weight to fuel metabolism, thanks to live bacteria cultures. The goal is to push the average American's consumption of seven pounds of yogurt per year toward the 50 pounds consumed annually by the Finns. Dannon is testing Light & Fit Crave Control yogurt and immunity-boosting DanActive, but that's just the starting point, according to Andreas Ostermayr, Dannon svp-marketing. "The U.S. market is ready for innovations in yogurt beyond just basic taste," he says. To bring Americans' consumption up to Finnish levels, Dannon is aware it will have to spend big. Ostermayr promises a dramatic increase in the brand's ad budget to explain the benefits of probiotics to consumers. Dannon spent $55 million in measured media last year and $40 million in the first half of 2006--some $31 million of that on Activia alone. The launches not only could provide a boon for Dannon's margins--since probiotic varieties are priced 20 percent to 25 percent more than regular yogurt--but could also help the company regain leadership in the $3 billion category commanded by General Mills' Yoplait.

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