MD Marc Gosselin tells Liz Hamson that health needs a hard sell
Last year, a Morgan Stanley survey into obesity showed Danone had a whopping 80% of its portfolio in health. Putting all your eggs in one basket has its risks and not every gambit pays off, says Gosselin mindful of the fate of Activia Sensation, the yogurt pulled earlier this year after its healthy indulgence message failed to convince consumers.
There is no way to put it delicately, warns Danone Dairies UK MD Marc Gosselin as he leans over grinning conspiratorially. “It’s a difficult subject in this country. They help with your transits.”
We are sitting in the Wolseley Restaurant on Piccadilly drinking afternoon tea as the Frenchman launches into a voluble account of how the active ingredient in Activia Yogurts aids digestion. “Did you know 25% of the UK population is suffering from problems in that area, especially the over-35s?” he declares.
The mildly alarmed faces of those around us gives a clue as to how tricky it is going to be to convey this particular health merit to the general public - even in the light of its successful Inner Self ad campaign featuring the cuddly blue bear. But that is what the company has set out to do and what distinguishes its bid to hitch itself to the health bandwagon from other manufacturers’ is the fact that each one of its three key brands, Activia, Actimel and Shape, boast credible health benefits.
Health isn’t an important part of Danone’s agenda in the UK, says Gosselin: it is the only part. “We’re here to double the size of the dairy market using the health platform that we’ve had since day one. It’s not about medicine - it’s about healthy food.”
His task should be made easier by the fact that conveying the message to UK consumers does not challenge perceptions of the company’s brands. It is easy to forget, but five years ago Danone had virtually no presence in the major multiples and none of the products that were listed had been developed exclusively for the UK market - they had all been developed for continental Europe. Add to this the fact the Brits didn’t do yogurts like their European cousins, and it is not difficult to see why Danone’s UK turnover was a paltry £9m a year.
Cue a reassessment of the market. “This was a market of 60 million people but the per capita yogurt consumption was just 8kg per person in the UK where other Europeans were averaging at 18 to 20kg and the Dutch were on 31,” observes Gosselin.
“This was obviously a massive opportunity for us. We saw a lack of innovation and communication. The other point was that the whole market was geared towards indulgence and there was nothing in terms of top notch health products.”
Danone set about taking advantage of the relative inactivity of the UK’s established yogurt players to emulate Müller’s success and create new products specifically for the UK that delivered on taste - with additional health benefits. A health agenda instils more loyalty in customers, argues Gosselin. “There is a direct correlation between health and loyalty. A Danone a day is the healthy way.”
In 1999 it took the bold decision to withdraw everything from its UK portfolio except its Bio yogurts, rebadged as Activia, and launch Actimel probiotic drinks. The performance of the latter, which was in development for 15 years before it was launched on the UK, gives some indication of the phenomenal progress Danone has made since.
The probiotic drinks market is growing at about 50% a year, according to ACNielsen data, with Actimel the star performer enjoying 80% growth. The drink, which since last month has been available in fat-free pineapple flavour as well as original, orange and strawberry flavours, is now worth some £70m to Danone. Its household penetration has shot up from 11% to 17% over the past year and Gosselin hopes to see it rise to 25% to 30%.
Impressively, this is market share that has been created from scratch. “It’s not about stealing market share but growing the whole market,” says Gosselin. He sees no reason why the probiotic drinks category should not break the £200m barrier by 2006 and adds that Danone is currently working on new flavours and pack sizes of Actimel as well as talking to Asda and Tesco about dedicated Actimel fridges in the shape of Actimel bottles.
Even bigger developments are imminent for Shape, the ailing diet brand that the company bought from Uniq, then Unigate, two years ago. Gosselin reveals that next month a new 0.1% fat yogurt drink called the Refreshing Fruity Yogurt Drink is to be launched in strawberry & banana and peach & passionfruit flavours in a multipack of three bottles of 270g each. The move follows a relaunch of the yogurt range involving two packaging changes and a change in recipe to create a creamier taste.
Hinting at bigger developments to come in September, Gosselin says that it has taken two years to formulate a new strategy for the brand: “We bought a brand that was ill and damaged - it’s like an adopted child and it takes time to welcome him in. Step one was to halt the decline and that’s more or less what we’ve achieved. It’s been back to growth over the past four months.”
Now, the plan is to transform Shape into a powerful third string in Danone’s UK bow by continual brand extension and sending the message that “it’s not only about calories,” says Gosselin.
Further developments are also in the pipeline for Activia. Following the launch last month of two new varieties, rhubarb and pineapple and a new big pot format in strawberry & cereal, and apricot, a new advertising campaign that uses humour to convey its health benefits hits screens in September. “Advertising this is one of the toughest market challenges we’ve ever had,” admits Gosselin. “The health market is not easy, especially when the regulations are getting tougher and tougher. We can’t make any claims we can’t back and it is very expensive to develop healthy foods.”
However, retailers have been less sceptical since the company became number two in the UK yogurt market behind Müller. And Gosselin has no plans to stop there. “I’m here to build the company to be the Müller of the 21st century.,” he declares. After the successes of Activia and Actimel, who’s to argue?
Last year, a Morgan Stanley survey into obesity showed Danone had a whopping 80% of its portfolio in health. Putting all your eggs in one basket has its risks and not every gambit pays off, says Gosselin mindful of the fate of Activia Sensation, the yogurt pulled earlier this year after its healthy indulgence message failed to convince consumers.
There is no way to put it delicately, warns Danone Dairies UK MD Marc Gosselin as he leans over grinning conspiratorially. “It’s a difficult subject in this country. They help with your transits.”
We are sitting in the Wolseley Restaurant on Piccadilly drinking afternoon tea as the Frenchman launches into a voluble account of how the active ingredient in Activia Yogurts aids digestion. “Did you know 25% of the UK population is suffering from problems in that area, especially the over-35s?” he declares.
The mildly alarmed faces of those around us gives a clue as to how tricky it is going to be to convey this particular health merit to the general public - even in the light of its successful Inner Self ad campaign featuring the cuddly blue bear. But that is what the company has set out to do and what distinguishes its bid to hitch itself to the health bandwagon from other manufacturers’ is the fact that each one of its three key brands, Activia, Actimel and Shape, boast credible health benefits.
Health isn’t an important part of Danone’s agenda in the UK, says Gosselin: it is the only part. “We’re here to double the size of the dairy market using the health platform that we’ve had since day one. It’s not about medicine - it’s about healthy food.”
His task should be made easier by the fact that conveying the message to UK consumers does not challenge perceptions of the company’s brands. It is easy to forget, but five years ago Danone had virtually no presence in the major multiples and none of the products that were listed had been developed exclusively for the UK market - they had all been developed for continental Europe. Add to this the fact the Brits didn’t do yogurts like their European cousins, and it is not difficult to see why Danone’s UK turnover was a paltry £9m a year.
Cue a reassessment of the market. “This was a market of 60 million people but the per capita yogurt consumption was just 8kg per person in the UK where other Europeans were averaging at 18 to 20kg and the Dutch were on 31,” observes Gosselin.
“This was obviously a massive opportunity for us. We saw a lack of innovation and communication. The other point was that the whole market was geared towards indulgence and there was nothing in terms of top notch health products.”
Danone set about taking advantage of the relative inactivity of the UK’s established yogurt players to emulate Müller’s success and create new products specifically for the UK that delivered on taste - with additional health benefits. A health agenda instils more loyalty in customers, argues Gosselin. “There is a direct correlation between health and loyalty. A Danone a day is the healthy way.”
In 1999 it took the bold decision to withdraw everything from its UK portfolio except its Bio yogurts, rebadged as Activia, and launch Actimel probiotic drinks. The performance of the latter, which was in development for 15 years before it was launched on the UK, gives some indication of the phenomenal progress Danone has made since.
The probiotic drinks market is growing at about 50% a year, according to ACNielsen data, with Actimel the star performer enjoying 80% growth. The drink, which since last month has been available in fat-free pineapple flavour as well as original, orange and strawberry flavours, is now worth some £70m to Danone. Its household penetration has shot up from 11% to 17% over the past year and Gosselin hopes to see it rise to 25% to 30%.
Impressively, this is market share that has been created from scratch. “It’s not about stealing market share but growing the whole market,” says Gosselin. He sees no reason why the probiotic drinks category should not break the £200m barrier by 2006 and adds that Danone is currently working on new flavours and pack sizes of Actimel as well as talking to Asda and Tesco about dedicated Actimel fridges in the shape of Actimel bottles.
Even bigger developments are imminent for Shape, the ailing diet brand that the company bought from Uniq, then Unigate, two years ago. Gosselin reveals that next month a new 0.1% fat yogurt drink called the Refreshing Fruity Yogurt Drink is to be launched in strawberry & banana and peach & passionfruit flavours in a multipack of three bottles of 270g each. The move follows a relaunch of the yogurt range involving two packaging changes and a change in recipe to create a creamier taste.
Hinting at bigger developments to come in September, Gosselin says that it has taken two years to formulate a new strategy for the brand: “We bought a brand that was ill and damaged - it’s like an adopted child and it takes time to welcome him in. Step one was to halt the decline and that’s more or less what we’ve achieved. It’s been back to growth over the past four months.”
Now, the plan is to transform Shape into a powerful third string in Danone’s UK bow by continual brand extension and sending the message that “it’s not only about calories,” says Gosselin.
Further developments are also in the pipeline for Activia. Following the launch last month of two new varieties, rhubarb and pineapple and a new big pot format in strawberry & cereal, and apricot, a new advertising campaign that uses humour to convey its health benefits hits screens in September. “Advertising this is one of the toughest market challenges we’ve ever had,” admits Gosselin. “The health market is not easy, especially when the regulations are getting tougher and tougher. We can’t make any claims we can’t back and it is very expensive to develop healthy foods.”
However, retailers have been less sceptical since the company became number two in the UK yogurt market behind Müller. And Gosselin has no plans to stop there. “I’m here to build the company to be the Müller of the 21st century.,” he declares. After the successes of Activia and Actimel, who’s to argue?
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