U.S. Yogurt Drink Sales Growth Slowing

After years of explosive growth, the yogurt drink market is showing signs of maturation and saturation in the U.S.

Equivalized unit volume (16-ounce basis) of refrigerated yogurt shakes and drinks in food/drug/mass merchandiser stores (excluding Wal-Mart) jumped nearly 104% in 2003 and 43% in 2004, but slowed to 13% in 2005 and to 3% for 2006, according to AC Nielsen.

Dollar sales followed the same curve: 103%, 46%, 8% and -0.4% for those respective years. Last year's dollar decline (sales in these outlets totaled $421.2 million), despite increased unit sales, reflected drops in price. Again, that was for the first 11 months of 2006.

MarketResearch.com's Packaged Facts division estimated 2006 yogurt drink sales across all sales channels at nearly $1 billion.

While Nielsen's latest global food and beverage report showed yogurt drinks growing 5.3% for the 12 months ending in mid-June 06, their popularity is rising much faster in other areas of the world. In fact, the drinks were the number one growth category, with an average increase of 18 percent, and jumps of 28% in Asia Pacific and 14% in Europe. Forty out of the 45 world markets studied showed growth in the category. (The exceptions were Belgium, Hungary, Lithuania, Netherlands and Vietnam.)



Mintel International Group's MindBranch service reports that last year, for the first time in its surveys, U.S. consumers "expressed a dislike of [yogurt drinks], rather than a lack of awareness."

These analysts also note that "after years of new-product proliferation, some makers are beginning to drop out."

However, several factors may push the growth needle back up in the U.S. over the next few years. These include new flavors and packaging, rising interest in probiotic health benefits and the extension of the category into new forms of hybrids (such as combinations with energy drinks), points out MindBranch.(See related story on the smoothie industry.)

Nielsen Monitor-Plus reports that the U.S. ad spend on yogurt drinks dropped from $44.7 million in 2005, to $15.5 million in the first 11 months of last year.

Meanwhile, while still a growth leader, the yogurt category as a whole is also slowing domestically. Nielsen reports that units grew by 4.2% and dollars by 5.7% last year, compared to 2005's figures of 8.5% and 6.9% (Information Resources, Inc. recently estimated 2006 total-category growth at 7.5%.)

Ad spend for the overall category increased to $174.5 million for the first 11 months of 2006, versus $121.5 million for the same period in 2005.

In 2005 (latest data available), 74.1% of U.S. households purchased refrigerated yogurt and/or refrigerated snacks and drinks at least once, reports Nielsen Homescan Consumer Facts.

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