CHANGING CULTURES

LAURA KLEPACKI

The refrigerated yogurt category is being transformed by the nation's focus on low-fat eating.

The pattern is simple: low-fat and nonfat is in, while "fattier" whole milk yogurts are fading out.

Retailers and other dairy industry executives told SN that nonfat yogurts, particularly sugar-free varieties, are experiencing tremendous growth.

"Nonfat and sugar-free yogurts are the fastest growing segment of the yogurt category," said Denise Biencourt, dairy buyer at Waremart, Salem, Ore., an opinion reflected by other retailers across the country. "That segment is really huge and growing. That seems to be what everyone wants to eat."

Supermarket yogurt dollar sales grew a whopping 9.1% to $1.6 billion in 1994. Corresponding volume sales, measured in pints, grew 8% to 1.3 billion units, according to Information

Resources Inc., Chicago.

By year's end, low-fat yogurt sales represented 52% of all category sales, while nonfat accounted for 47%. Full-fat represented only 1%. Statistics showing change from the previous year were not available.

The trend in switching to lower fat items is apparent in scan data for the Boston market supplied to SN by an industry source.

The Food and Drug Administration has outlined definitions for the yogurt category as follows: Nonfat contains less than 1.5 grams of milk fat per 8-ounce serving; low-fat contains between 1.5 and 5.7 grams of milk fat per 8-ounce serving; whole milk contains about 10 grams of milk fat per 8-ounce serving.

Industry sources said that when it comes to assortments in most supermarkets, whole-milk yogurts are virtually nonexistent.

"Just go to any grocery store and you can see that nonfat is becoming a bigger and bigger section," said Chuck Timko, director of marketing research at Dairy Management Inc., a dairy trade group in Arlington, Va. "And three years ago, whole-fat yogurt was about 10% of the category; I would be surprised if whole-fat is greater than 5% these days."

It can still be had. Stonyfield Farm, Londonderry, N.H., a yogurt maker, still has a whole-milk product available in natural food markets in the New England, said Bob Burke, vice president of marketing and sales.

Burke said the market has been trending continually away from fat for years. "Ten years ago there was some full-fat or whole-milk products, and then came the low-fat. Nonfat wasn't very common then," he said.

Stonyfield's sales are in nonfat yogurts, aside from a very small percentage of sales from its limited whole-milk yogurt line, he added. The only low-fat item it offers is a seasonal low-fat eggnog yogurt during the holidays.

"The category is going to nonfat, with the increased awareness of fat and cholesterol, especially saturated fat in dairy products," said Burke. "Also with the improvement in things like stabilizers, you can get a full fat taste [in the nonfat products]. They are not as poor in texture as they used to be."

Robert Wallach, vice president of marketing for industry leader Dannon, Tarrytown, N.Y., said Dannon's sales of nonfat yogurt far exceed its low-fat sales. But he acknowledges Dannon's story "is a little different."

At year-end 1994, 63% of Dannon's sales were in nonfat products, compared with 37% for low-fat, said Wallach.

Whether low-fat or nonfat, "the market for yogurt is very, very healthy," said Wallach. "Dannon's sales have grown 53% since 1990; that averages to an 12% increase a year."

And he expects to see continued growth. The yogurt category, he said, "is nowhere near a peak."

Wallach said people are more aware today of the link between food choices and good health. Besides, he said, compared with yogurt consumption in other countries, the United States falls far behind. "In France, consumption is seven to eight times more than in the U.S. Yogurt sections in French supermarkets are the size of U.S. grocers' cereal aisles," Wallach said.

Meanwhile, Whitney Foods, Jamaica, N.Y., has just reformulated its yogurt line to reduce the fat. Its original product had 190 calories and 5 grams of fat per 6-ounce serving. The new low-fat product has 170 calories with 3 grams of fat.

"The only reason we changed the product is because consumers have a greater awareness of fat in foods today," said Tom Fuchs, general manager. "The market leaders are low-fat and nonfat."

Retailers said their store-level experience strongly concurs with what the suppliers see as the market's future.

George Wahl, buyer at Big Bear Stores, Columbus, Ohio, put it simply: "Fat-free yogurts are now outpacing the lower fat yogurts, and that has occurred over the past year."

For Genuardi's Family Markets, Norristown, Pa., "if nonfat are not surpassing low-fat yogurts, they are getting close," said Pete Marino, frozen food director, with responsibilities for dairy. "Of course, the whole health segment is really growing.

"We've allocated a little more space and we have added some yogurts. But we have discontinued some SKUs as well. You are so inundated with new yogurts, you have to do that."

Over the past few months, about 2 to 4 linear feet have been added to Genuardi stores' yogurt sections, which now average between 12 to 16 feet, said Marino.

Bob Annand Jr., frozen food and dairy buyer-merchandiser for Roche Bros. Supermarkets, Wellesley, Mass., said in his stores, "nonfat is definitely outselling the low-fat -- by about a 70-to-30 split.

"Yogurt sales are very strong and they are picking up," said Annand, who noted, however, that space has not been expanded recently. "I would allocate more space if I could, but I am still working in the same size sets that I did six years ago."

Smith's Food & Drug Centers, Salt Lake City, which operates its own dairy plant, is also experiencing a "move to nonfat," said Mike Jorgensen, who is in charge of yogurt production.

He said in the past Smith's had considered making a full-fat product, "a gourmet type item," but didn't "because the market is too small."

The stores' yogurt sections, which now average 6 feet by 6 feet high, haven't been significantly expanded, but additional SKUs have been added with the introduction of new flavors, said Jorgensen.

A dairy department assistant for a Midwestern chain said that while he hasn't analyzed the sales split between low-fat and nonfat yogurts, "anything low-fat or nonfat is doing better all the time.

"We certainly have seen growth in the amount of items in the category. I don't think anything in the dairy case has expanded with the sizes, varieties and options as in the yogurt category," said the retailer, who asked not to be named.

Jim Hayes, general buyer at Smith & Woods Food Center, Maryville, Tenn., said "the fat-free and low-fat yogurts are continuing to grow -- as in most other categories."

He said, "yogurt is just like all other categories, if a fat-free product or near-fat-free product tastes good, it will sell. But customers will only trade off so much as far as taste."

Hayes said sales of low-fat and the fat-free yogurts are running about even right now. He added that supplier promotions have probably helped boost the category. "I think a lot of advertisers and manufacturers are pushing yogurts as a healthy snack alternative."

And, he continued, "there is such a growing demand for fat-free products in general due to all the articles in health journals about the benefits of keeping your fat intake down."

Yogurt is an excellent source of protein and is also high in calcium, riboflavin and phosphorus, which makes it a very healthful food, according to the National Yogurt Association, McLean, Va.