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Danone Expands Protein Strategy to Meet Rising Demand for High-Protein Dairy Products

France 03.07.2024
Source: The DairyNews
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French dairy giant Danone is intensifying its focus on the protein segment, responding to growing consumer preferences for high-protein dairy products. The company has unveiled a comprehensive plan to enhance and expand its protein offerings, capitalizing on the increasing demand for nutritious, protein-rich foods.
Danone Expands Protein Strategy to Meet Rising Demand for High-Protein Dairy Products
Since the beginning of the year, Danone has observed substantial growth in yogurt sales across Europe and the US, both in volume and value terms. Protein has emerged as the primary growth driver, with high-protein yogurts and desserts outpacing the broader protein-rich segment. Danone’s low-sugar brand, Too Good, has become its most successful new brand in the US over the past decade, highlighting consumer demand for low-sugar, high-protein dairy products.

At a recent capital market event, Shane Grant, Group Deputy CEO, and Pablo Perversi, President of Europe, discussed the company’s strategies and consumer trends. Grant noted that Danone’s Essential Dairy and Plant-based (EDP) portfolio has returned to growth, with protein-rich products being a significant contributor.

The high-protein dairy category represents a €60 billion ($64.4 billion) opportunity, growing at high single-digit rates. Within this, protein-rich yogurt and desserts are a €9 billion ($9.6 billion) segment experiencing double-digit growth. Consumer interest in protein remains strong, with 84% of health-conscious shoppers considering protein important in their diet, and 64% actively incorporating more protein into their diets.

“More than eight out of ten health-conscious consumers are interested in the quantity and quality of proteins in their diets,” Grant said. “This marks a 10% increase compared to 2021. Protein addresses a wide array of needs, from proactive health, like fitness and performance, to reactive health, like weight management and wellness, across all life stages and lifestyles.”

Identifying Untapped Opportunities

Danone is already established in the high-protein consumer, lifestyle, and performance dairy segments but sees potential to fine-tune its offerings further. Grant emphasized the demand for products that provide satiety, balanced nutrition, and clean ingredients. The company aims to deepen and expand its protein strategy to meet these specific consumer needs.

One notable area is low-sugar, high-protein formulations. Danone’s Too Good brand in the US, known for its low sugar content, has been a major success. Grant announced that a differentiated and expanded Too Good line will be launched to tap into unmet consumer demands for low-sugar offerings. The new range will include zero-sugar options, mix-ins, fruit-on-the-bottom, smoothies, and yogurt pouches for kids.

In Europe, particularly France, the Skyr product range is experiencing a resurgence. Danone plans to scale up this range with a comprehensive marketing campaign timed with the Olympic Games in Paris. The Skyr products, marketed as fat-free and protein-rich, will include a variety of fruit-flavored and plain options in both drinkable and spoonable formats.

Enhancing Performance Portfolio

Danone’s high-protein performance portfolio has more than doubled in net sales over the past three years, from €400 million in FY21 to over €1 billion. This category has driven significant growth for Danone, particularly through the Oikos Pro yogurt line, which has been a top performer.

Perversi attributed this growth to shifting consumer attitudes towards health and wellness and Danone’s strategic shift to a regional approach, allowing for more effective deployment of initiatives. Danone plans to optimize and grow its Oikos Triple Zero and Pro offerings in the US, enhancing recipes and strengthening Pro’s messaging on boosting strength. The company also sees potential in its snacking yogurt range, Remix, to increase consumption occasions.

Shane Grant concluded by emphasizing the potential of Danone’s protein platform: “This is about execution fundamentals and broadening the reach of our protein platform into new segments and propositions. In the last 18 months alone, we have added 13 new countries to our Pro platform. This model will drive new protein platforms to scale faster and with more impact.”
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