With sales topping £1bn, yogurts and pot desserts has all the attributes of the perfect category. Not only is the market in strong growth ­ a rise of nearly 7% overall is recorded by Taylor Nelson Sofres Superpanel ­ it is packed with innovation and interest, making it one of the most important destination categories for consumers in grocery retailing. It also reflects all the major lifestyle trends that are driving growth across the food market, namely convenience, snacking and healthy eating. Increasingly, it has become a frontrunner in the multiples' price war, with the category packed with multi buy promotions invariably running for four week slots to boost weight of purchase. In the last year things have changed, however. Managing director Ken Wood of Müller, one of the most heavily promoted brands, says the major multiples are now adopting a different promotional strategy. "Up to about 18 months ago, they were doing a large number of on/off four week promotions with a variety of brands. "Now what they're doing is concentrating on the major brands, promoting them on permanently low prices. Ours is three for 99p. It is retailer driven. Asda has been the key driver, the concept being brought over here from the US with Wal Mart's acquisition. "Overall, I don't think the amount of promotional activity is less than it was a couple of years ago, but the nature of it has changed fundamentally. And it would appear to be a better way of doing it. Too many different promotions can cause confusion. And it has certainly made a real difference to the retail scene." Onken general manager Julie Plant takes a similar view, but with some reservations. "Retailers are going for fewer but stronger offers. For example, Sainsbury used to do 16-20 promotions at a time, but now you won't see more than eight. The result of this is that consumers aren't shopping for offers so much, so you are getting less brand promiscuity and retailers are getting greater volume sales. "But on the negative side, the weaker brands aren't getting an opportunity to be promoted, so they're achieving fewer sales and getting delisted. There are fewer lines on shelves now. It also means we have to invest more heavily in our brands to make them grow." One side effect of this strategy, says Plant, is that brands are growing in strength at the expense of own label which isn't being promoted and is declining. Hand in hand with this new promotional strategy, retailers are trying to make the category less confusing to consumers by reducing duplication and installing clearer signposting. This is an issue close to Wood's heart. "The category management exercises we and other people have done with retailers to make the category easier to shop are now beginning to have an impact. The sections are quite clearly defined in Tesco and Sainsbury stores now, resulting in incremental sales. "There's no ideal way of laying out the category, but we reckon there should be six clear sections covering natural, luxury, fruit, light, children's and desserts. Desserts should be grouped into chocolate and others. Where we've tested this, we've seen over 5% sales uplift. That's significant," says Wood. Müller remains the undisputed leader of the £612m yogurt market, with a 30% value share that's 18% ahead of its nearest competitor [ACNielsen]. Its strength is the £100m Corners range which has changed the yogurt market's flavour profile from tart to mild in the 13 years since its launch. Corners has just been relaunched with new packaging. "It had to be done because it hadn't been touched since it first appeared, and it's dangerous to leave something that long with so many innovations taking place all around us," says Wood. Two flavours, peach and passionfruit, have been introduced which bring a more tart fruit taste to the range. "We listen to consumers and they told us this is the way flavours are going," adds Wood. A significant development, which started this year, is the exclusive usage of the National Osteoporosis Society's bone friendly' logo on the yogurts' and desserts' packaging. It promotes the role that yogurt can play to benefit health by reducing the risk of osteoporosis ­ and provides Müller with an entrée into the burgeoning functional foods market. Whether Müller will go further and move into organics is a question Wood won't discuss. "It remains to be seen if we take that route," he says guardedly. One of the most significant trends in yogurt at the moment is the growth of virtually fat free. Sales of Müllerlight, the brand leader, are up 30.5% year on year. Wood says he expects sales of the range to rise 50% this year. Unsurprisingly, the low fat sector is now attracting a spate of product innovation. St Ivel is spending £10m on a relaunch of its low fat Shape brand, with fresh packaging, range extensions and new formulations. "Consumers have emphasised the importance of great taste," says marketing director Dave Hall, "so we improved flavour, texture and combinations of the two." Eden Vale has introduced a 99% fat free mousse to its Ski Light range and Yoplait Dairy Crest's Weight Watchers from Heinz has brought out a four pack of fat free confectionery yogurts in toffee and vanilla flavours. Each pot contains less than 55 calories. Weight Watchers from Heinz manager Mathilde Azalbert says the key to driving growth in this sector is to meet consumers' need for an increasingly wide choice of flavours. "They particularly like indulgent flavours at the moment," says Azalbert. Other products performing well in this sector are Total 0%, the fat free variant of the Total Greek yogurt, which achieved 49% sales rise last year according to distributor Gordon Conrad. With the increasing focus on healthy eating, live culture yogurts are attracting greater consumer interest. Danone says the natural health sector in which its Bio brand is positioned is now showing 36% sales growth. Bio, which has a culture unique to Danone, is claimed to have beneficial effects on the digestive system. Everyone is watching the next stage ­ functionally enhanced yogurts ­ to see whether these products will fulfil their promise as the next big area of growth. Certainly Nestlé is putting a lot of promotional effort behind its LC1 brand, which includes two yogurt style desserts containing a probiotic ingredient claimed to help the body to maintain its natural balance. The main thrust of its current campaign is to raise awareness. Chilled foods senior brand manager Karen Jenkins recommends creating a special section devoted to health promoting' products alongside standard yogurts to increase accessibility. A recent entrant to this sector is Benecol which introduced three fruit yogurts with a cholesterol lowering claim last autumn. The children's sector, covering yogurts, fromage frais and desserts, is another fast growing area. Driven by fromage frais, it grew nearly 11% last year, with Yoplait Dairy Crest setting the pace with its Petit Filous brand. To capitalise on the popularity of hand held Frubes, the company brought out a pouch version of its Wildlife yogurt range last year which it says has achieved sales of more than £2m. Its latest development is a custard style fromage frais which new product development manager Virginia Mitchell says has a custard flavour combined with fruit purée and is aimed at older children. Available in a four pack, it is being promoted as part of a £2m Petit Filous TV campaign this month. MD Foods has just researched the children's sector and says growth is attributable to innovative packaging formats, such as Frubes, and character licensing which accounts for £66m of sales. As a result it is repackaging its Thomas the Tank Engine yogurts and fromage frais this summer to give greater emphasis to the characters. Onken's Plant has misgivings about character licensing. "Children grow out of it so quickly, it's a risk. We've believe the toy collectability element of our Frufroo range is the reason why it's lasted for five years and done so well." The company's frontrunner is its fruit mousse, a product that's helped to drive significant growth in the desserts market. Chocolate desserts dominate this area, led by St Ivel's Cadbury confectionery brands. Lower fat alternatives are now being developed to meet the demand for these kind of products which St Ivel expects to grow by nearly 30% over the next four years. {{FOCUS SPECIALS }}