CPGmatters: Dannon Expands Dairy Space With Mobile Display Cooler

Discussion
Jan 26, 2009

By Dale Buss

Through
a special arrangement, presented here for discussion is an excerpt of a
current article from the monthly e-zine, CPGmatters.

To find shelf space for retailers
to sell its fast-selling DanActive and Activia brands, Dannon USA recently
formed what it calls a “Shelf Obsession Team” that came up with
a mobile cooler that organizes and promotes the health benefits of yogurt
products. The Proactive Health kiosk has already been rolled out to more
than 2,500 participating stores.

Both DanActive,
the probiotic yogurt-based “daily-shot” beverage, and Activia,
a probiotic yogurt, have been so strong, Michael Neuwirth, marketing communications
manager for Dannon USA, recalled, “that it was growing faster than
the linear footage of the shelves. So we were leaving uncaptured growth
in the stores – both us and the stores themselves.”

Dannon USA
constructed a shopper decision tree to identify the No. 1 drivers when
people shop, as well as what are the second-level decision-makers and the
third-level ones.

“With
yogurt,” Marc Jove, senior vice president of marketing for Dannon
USA, said, “consumers typically enter by benefit, sort of, ‘Help me
with my issues.’ Once you’re in the category, the next decision level is
brand, then flavor, then format.”

Because of
the capital involved in establishing and maintaining refrigerator space
in stores, the dairy sector tends to be one of the most fixed spaces in
any supermarket.

“But
we had to get some reallocation of space to faster-growing areas – yogurt – so
what loses?” Mr. Neuwirth said. “We helped stores to understand
that it didn’t have to be a single section as much as some from a combination
of categories, butter among them.”

Where retailers
agreed with their objective, however, Dannon USA still had to take maximum
advantage of the opportunity both for sales of their products and for their
retailer partners. The solution devised by the Shelf Obsession Team was
a dedicated, refrigerated display unit that it calls a Proactive Health
kiosk.

“These
go in or around the dairy section,” Mr. Neuwirth said. “They
help shoppers and become disruptive in the store from a traffic perspective.
They invite shoppers to stop and look inside.” And, he added, the
kiosks don’t necessarily have to take space away from other dairy categories;
they can be
“incremental” for the overall dairy segment.

But the kiosks
are reserved for dairy products that have promoted and acknowledged “functional
benefits.” Sections of the cooler are color-coded to help consumers
quickly identify the benefits provided by a given product: green for digestive
benefits, yellow for immunity benefits. “It helps the shopper understand
what’s in there,” Mr. Jove said.

Dannon has
been renting the coolers to retailers for “a limited period of time,” Mr.
Jove said, and the company moves some of them from one store to another. “If
the retailer decides that we’re there to stay, we end up reaching an agreement
with them,” he said. “It depends on the partnership you have
with your customer.”

Discussion Question:
What do you think of Dannon’s
Proactive Health kiosks?
How open do you think grocers will be to such kiosks? Can many
other categories benefit from educational/promotional kiosks in grocers?

Please practice The RetailWire Golden Rule when submitting your comments.

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9 Comments on "CPGmatters: Dannon Expands Dairy Space With Mobile Display Cooler"


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Len Lewis
Guest
Len Lewis
13 years 4 months ago

A good idea. But the question comes down to return on investment and how much Dannon may have to pay to keep those kiosks in stores.

And how often have you heard someone talk about dedicated space, only to go into the store in a couple of months and see all kinds of other products in a display that was supposed to be dedicated to one line?

Camille P. Schuster, Ph.D.
Guest
13 years 4 months ago

Innovative strategies and experimentation is important. A separate yogurt kiosk can certainly create more “shelf space” for a product. However, this product also probably requires connection to an electrical socket for the cooling, and takes aisle space.

Cost effectiveness needs to be considered but also the space consideration. Consumers like decent aisle space to get through the aisles without having to stop behind other consumers making considered decisions because they can’t get around them. There is a limit to the amount of kiosks that can be deployed in a given store and still be able to maintain maneuverability.

As long as cost and space work, without resorting to new financial problems, this idea certainly has potential.

Carol Spieckerman
Guest
Carol Spieckerman
13 years 4 months ago

Informational product kiosks are on fire right now, and not just in grocery. This is another example of how brands, and even retail marketing agencies, are taking control of their destiny on the floor and developing real estate beyond the shelf. A mini version of one’s own store front with the same story-telling and context-building benefits.

Another version of this concept has one company footing the bill for the kiosk then renting out sections of the kiosk to well-matched information and product providers. Placing these pre-funded kiosks in areas that retailers have identified as high potential yet low traffic (pharmacy’s a hot one in that category) ensures retailer buy-in and it’s a win-win for both sides of the table. It’s critical to engage the retailer early-on and to develop such concepts with their unique point of view and shopper goals in mind.

Gene Detroyer
Guest
13 years 4 months ago

The idea is good. But it is neither new nor innovative. This approach has been going on for 40 years or more. It will momentarily solve Dannon’s problems with these very successful products, but if we assume that the products will remain successful, Dannon better be finding a solution that they and the retailer can live with every day. This is no more than a short term display. The longer it is in the store, the more likely it will be filled with non-Dannon products. And, don’t be surprised to see both competitors and stockers steal some of Dannon’s current Dairy Case space while filling the kiosk.

Anne Bieler
Guest
Anne Bieler
13 years 4 months ago

Dannon has done a great job with these products. They have advanced the category and supported the campaign with TV, online and print marketing. The packaging differentiates well. The in-store kiosk should work for its target shoppers, who would be interested in learning more. Agree that this may be a unique solution–cost can be supported by this multi-level campaign. Key will be the retailer partnership as mentioned, positioning in the right store each time as it is relocated, and keeping the merchandising energy.

Mark Lilien
Guest
13 years 4 months ago

Maybe someday yogurt will be sold from vending machines as common as soda pop machines. Right now, yogurt isn’t as universally consumed, and the producer margins probably aren’t as high as soda pop. So Dannon put an extra frige in some supermarkets. Nestle sometimes installs free-standing ice cream freezers, and some other brands also have similar displays. Where’s the huge breakthrough?

Warren Thayer
Guest
13 years 4 months ago

Dannon’s taken a great leadership position here, getting there “firstest with the mostest,” as Civil War General Nathan Bedford Forrest famously said. I don’t see this spreading to a huge number of categories around the store; there just isn’t room. But yogurt is well known for its problems with the jumbled confusion in many stores, and out-of-stocks. Dannon did its homework, crunched the numbers, saw the opportunity and moved in quickly. Would that other vendor companies would be so proactive (DanActive?) and just “get it done.”

Dr. Stephen Needel
Guest
13 years 4 months ago

I’d love to see some data on payout–for the retailers who rent the kiosk and for Dannon who had to subsidize them. I’d also like to know what happens when the kiosk goes away–are we seeing meaningful consumer education that is sustained post-promotion or is this just another display effect that goes away when the display goes away?

Ryan Mathews
Guest
13 years 4 months ago

I agree with Warren; this isn’t a multi-category strategy. I wonder how much that extra display costs. If, in the end, it’s another pay to play scheme, I’d be really sad.

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