Say hello to Yolado

Danone’s dairy innovation gives birth to a clever new category, says Julian Mellentin of New Nutrition Business

Danone is giving Europe’s embryonic frozen-yogurt market a shake-up with the launch in Spain of Yolado, the first yogurt specifically created to be sold fresh, and then frozen at home by the consumer to be eaten frozen. It is the first time in over a decade that a major dairy brand has launched a frozen yogurt for in-home consumption and it represents a major innovation.

Marketed with the tagline “Your Danone made frozen”, Yolado was created with the aim of offering a new eating experience, combining the health benefits of yogurt with the appeal of ice cream. Frozen yogurts are usually merchandised in the freezer section alongside ice cream, and in the past this has proven to be a challenge for frozen yogurt brands to sufficiently differentiate themselves – resulting in a high failure rate.

Combination

Yolado is an innovation in that it is merchandised alongside other yogurts in the chiller cabinet and is designed so that the consumer can freeze it at home.

Yolado – a compound of the Spanish words yoghourt and helado (the Spanish word for ice cream) – was developed by a multi-disciplinary innovation team, based in Barcelona, over a period of two years. The company says it has invested a total of €10 million over that time in product development, packaging development, engineering and in the marketing investment in developing and launching the brand.

The patent-pending production process for Yolado is designed to deliver a refreshing and creamy texture but with the benefits of yogurt – Yolado is made from fresh milk, contains beneficial bacteria, natural fruit and has no preservatives or artificial colours. With around 100 calories in each 125ml pack it has approximately half the calories of traditional ice cream.

It comes in 125ml tubs and 500ml packs and in a wide range of flavours. Danone says that with Yolado it is presenting a new product, new brand and new category simultaneously.

At first sight it might seem extraordinary to launch an innovative new product in a country whose financial and banking crisis is constantly in the news and in which unemployment has hit 24%.

However, Danone has several advantages on its side. One is that Danone is one of the best-known and most trusted brands in Spain, where it has been marketing its yogurt since 1919. Of Spain’s 16.6 million households, 12 million consume a Danone product every day. Today Danone is the clear market leader in yogurt, with a 54% market share and its Activia probiotic brand, for digestive health, is the market leader and sells better in Spain than any other European country, despite being premium-priced. And Spain has the top per capita consumption of yogurt in the world, which represents a unique platform to launch a product like Yolado.

Spanish consumers have also proven themselves, over the past 15 years, to be willing to experiment with new foods and flavours and are arguably the most open-minded and experimental consumers in the western world.

Cracking frozen yogurt

Frozen yogurt has stood out for several years as one of biggest under-developed opportunities in the dairy industry. Thus far it has really only been successful in foodservice and largely in the US and Asia, with brands like Pinkberry and Red Mango. In Europe no one has succeeded in making frozen yogurt work in supermarket distribution as a take-home product. Even in the US it is something of a niche.

One major challenge is frozen yogurt is usually merchandised alongside ice cream in the freezer cabinet. This means that it’s hard for brands to achieve stand-out – and ice cream shoppers find that frozen yogurt is less satisfying than ice cream.

Danone has taken a total innovative approach to merchandising, positioning the product in the chilled cabinet, alongside yogurts. This is where Danone’s brands already dominate – and where committed yogurt consumers will shop, many of them already buying yogurt as a dessert option. Many of them are health-conscious shippers who don’t frequently visit the ice-cream aisle. This means Danone can use its existing chilled distribution without taking on all the additional costs and logistical challenges of frozen distribution.

Moreover, Danone has one big card up its sleeve that will play particularly well in a recession-hit economy, which is its pricing of Yolado. As Yolado is basically yogurt and Danone has both world-leading technical know-how in producing yogurt as well as production scale economics, Yolado is priced similar to a yogurt – and far below the price of ice cream. For the health-conscious shopper who is cost-conscious in a weak economy, Yolado has become an attractively priced dessert option.

If it works in Spain, Danone’s Yolado will look like a stroke of strategic genius and will open the door to another yogurt market transformation by the world’s most innovative yogurt producer.