Around the Net

Activia's Success Due To Danone's R&D Juggernaut

Bifidus animalis DN-173010--the key ingredient in Activia, a yogurt Danone's Dannon division is marketing as an aid to regularity--is responsible for one of the most successful product launches in recent food-industry history. Sales--$2 billion worldwide-- are expected to reach $300 million in the U.S. this year.

Activia exemplifies what Danone may do better than any other company in the world: Turn bacteria into bucks. By using sophisticated science to identify microbes that can make people feel and maybe even look better, Danone has become a leader in the fast-growing business of functional foods. And it has far outpaced competitors in persuading consumers to buy food enhanced with these bugs. It devotes about $240 million annually-- or 1.2% of revenues--to R&D.

In a bow to American sensitivities, Activia ads refer only obliquely to intestinal functions, using terms such as "discomfort" and "natural regularity." The plan has worked. Says Michelle Barry, a marketing consultant that advised the company on Activia's U.S. launch: "They got the message across without grossing consumers out."

advertisement

advertisement

Read the whole story at Business Week »

Next story loading loading..