Marketing Probiotics: From Past to Present, the Market Has Been Friendly to Friendly Bacteria

April 11, 2012

From past to present, the market has been friendly to friendly bacteria.

The market for probiotic-fortified food and drink products has grown increasingly mainstream. More consumers have come to understand the link between probiotics and digestive and gut health.

Accordingly, the number of food and drinks launches marketed specifically on a probiotic platform has climbed consistently over the past five years-in fact more than doubling over that period, according to research by Innova Market Insights. In 2011, dairy products dominated the market, accounting for nearly two-thirds of probiotic launches recorded. Dietary supplements came in second, with a share of nearly a quarter of the market.

Let’s look back at how the probiotics category has grown.
 

Europe

Historically, in the European market, probiotic yogurts were the first functional dairy products. Primarily these featured bifidus cultures (Bifidobacterium strains), but as the market has developed, it has grown increasingly sophisticated with the use of different, more specialized, and often branded cultures and blends. Probiotic yogurts were followed by the launch of a totally new type of product: dose-delivery active health drinks, also featuring a range of single and blended probiotic cultures that did not even exist in the European market until the 1990s.

Much of the early probiotic product research and development was done in Scandinavia. One of the pioneering probiotic brands, Valio Gefilus, celebrated 20 years on the market in 2010, having initially introduced itself in Finland in 1990 (which was at least four years before the probiotic market really took off in Europe). The LGG probiotic strain first used by Valio is now used under licence in more than 50 countries. Recent new product development activity featuring LGG in the dairy sector included extensions to the Dukat b’Aktiv brand in Croatia, the Biola Pluss range from Tine in Norway, the Maeil Dairy Pure range in South Korea, and Vaalia from Parmalat in Australia. Last year in Finland, Valio launched its new OLO Digestion yogurt targeting digestive health more specifically and featuring the LGG Extra multispecies probiotic combination plus vitamin D, galactooligosaccharide, and polydextrose fiber.

Another market pioneer, the Japanese dose-delivery probiotic drink Yakult, which has been available in its home market since the 1930s, has now been producing in Europe for more than 15 years. Over that period, the company’s Dutch factory increased production capacity from 2.1 million bottles per week to 10 million bottles per week. European consumption is now equivalent to 5.5 million bottles per week. Yakult is now available in 32 markets internationally, including nine in Europe: the Netherlands, Belgium, Luxembourg, the UK, Ireland, France, Germany, Austria, and Italy.
 

United States

One of the most successful probiotic brands in the West has undoubtedly been Danone’s Activia yogurt, which began as Danone Bio in France in the 1980s. Activia largely pioneered the probiotic spoonable yogurt market.

Sales of Activia, with its patented Bifidus Actiregularis probiotic cultures, are reported to have reached €2.6 billion globally in 2009, with key markets in Europe and the United States. Activia has been credited with kick-starting the U.S. probiotic yogurt market, which has trailed Europe’s for many years. Launched in the United States nationally in early 2006, the brand virtually single-handedly moved probiotics out of the specialized dietary supplements market and into the mainstream U.S. yogurt market.

By the middle of last year, sales of the Activia brand and its Activia Light extension brand were worth approximately $400 million per year in food, drug, and mass merchandisers-equivalent to nearly 9% of the $4.4 billion yogurt market. Sales of Activia grew ahead of the yogurt market as a whole. Dannon has since expanded with the launch of its Activia Selects premium range, including French, French Fruit on the Bottom, Greek, Parfait, and Parfait Crunch options, reflecting rising U.S. demand for more value-added and specialty yogurt options.

Meanwhile, although it was first tested on the U.S. market in 1999, Dannon’s Actimel probiotic drink (whose name was changed to DanActive Immunity in early 2004), marketed as naturally strengthening the body’s defense system, has failed to replicate the success of its newer stablemate, Activia. Despite ongoing initiatives, sales have remained very limited.

Yakult, Danone’s global archrival in terms of probiotic drinks, is also available on the U.S. market but likewise has yet to make a significant impression with U.S. consumers. It was first launched in the U.S. mainstream sector in 2007 after a test period and is now available in California, Nevada, Arizona, Texas, Colorado, and New Mexico. The company plans to open its first U.S. production facility this year.
 

Looking Forward

The European market has been somewhat complicated in recent years by the ongoing refusal of the European Food Safety Authority (EFSA; Parma, Italy) to approve probiotic health claims-despite extensive scientific dossiers presented by a number of major multinationals, including Danone and Yakult. This has not really held back the probiotic market in the region, however. It remains the largest sector of the functional dairy market, well ahead of the market for cholesterol-reducing dairy products using plant sterols/stanols, which did gain EFSA approval to use claims with little apparent difficulty.

In the United States, the probiotic yogurt market is also now well established. In the yogurt market, consumer interest has turned to Greek yogurts, which now lead sector growth.

The probiotic trend has been well and truly set. Expect to see many new products also using probiotic bacteria, although each brand may place different emphasis on their inclusion. 

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