If we prove our relevance in the UK we can do it anywhere." These were the optimistic words of Stonyfield Farm CEO Gary Hirshberg just 10 months ago as he launched his £325m US yoghurt brand into the UK.

At the time, he predicted the brand would "blaze a trail as the UK's first healthy planet brand". Unfortunately, its health instead took a turn for the worse and from tomorrow the £1.7m brand that badged itself as "yoghurt on a mission" is being pulled from the UK after poor sales and a string of delistings. So what went wrong?

On the face of it, the brand - part of Stonyfield Farm, the world's largest organic yoghurt producer, and 80% owned by Danone - should have been a nailed on success. It tapped into the fast-growing £127m organic desserts and yoghurts category, had what it thought was a strong environmental message and was backed by a company growing 25% in value each year.

But it quickly became clear that some products - particularly its natural yoghurt in big pots - were, by Stonyfield Europe managing director Matt Elder's own admission, "a long way off pace".

Though it was given a longer grace period than many new brands when after 16 weeks sales weren't as impressive as expected, by January the gig was up, and Sainsbury's became the first to delist it. Stonyfield decided to cut its losses shortly after.

"Once we knew some retailers were taking us out, we saw the fragility of the situation and moved quickly to withdraw," says Elder. "Our manufacturing plant also makes Glenisk yoghurt, the number one organic dairy brand in the Republic of Ireland. We decided we could help accelerate Glenisk's growth rather than salvage the UK operation."

Elder is frank about Stonyfield's mistakes. "With hindsight we rushed our launch. We should have built brand awareness and rates of sale before going mainstream. Other new brands should take note and think small."

A range review early on with a big retailer gave it a window of opportunity it felt it couldn't miss. But more time should have been devoted to allowing the brand "to bed in and play with recipes".

"We were sponsoring the Live Earth concert last December, secured through Stonyfield in the US. All the publicity that went with that, plus the range review, offered huge potential for our launch. But it was a poisoned chalice. We would have loved to have made Stony work, but what doesn't kill you makes you stronger."

Rival operator Yeo Valley says it noted the brand's decline in the monthly market data, so news of its UK demise came as no surprise.

"We could see it going backwards not forwards," says Yeo Valley communications director Graham Keating. "We operate in a market where people have 'dark green' views and they need convincing. Consumers are looking for a real story. A French-US company with products manufactured in Ireland and trying to market itself with an environmental twist was always going to have difficulty with these savvy consumers."

Stonyfield is in good company. In 2001, Müller tried its hand at organic, but pulled out after about nine months when the range failed to take off.

But other new entrants should not be put off. Yeo Valley and Rachel's Organic continue to go from strength to strength, with sales up 4.1% to £73.3m and up 30.3% to £21.4m respectively [Nielsen 52 w/e October 6 2007].

"There are notable opportunities for other brands to come into the market and challenge Yeo Valley's dominance," says Mintel senior market analyst David Bird.

Topics