Andreas Ostermayr, Dannon

Most of us would not think of yogurt as a life-altering product. Which is exactly why Dannon deserves so much credit for having the foresight to bring Activia, a familiar brand overseas, to the U.S. market in early 2006.

Dannon knew it had a hit on its hands last May when it heard about an emotional call to its consumer affairs hotline. The message came from a woman with crippling digestive problems who, after hearing about the relief offered by the probiotic cultures in Activia, decided to give the product a try. Choking back tears, she told a Dannon rep, “I know you’re going to think I’m crazy, but Activia has changed my life.”

Pretty big stuff for a little green container of yogurt.

“We were overwhelmed with the success we created,” said Andreas Ostermayr, 37, Dannon’s chief marketing officer and a Brandweek Marketer of the Year. “It’s one of the few stories where we created more demand than we could fulfill.”

By capitalizing on the functional foods craze that’s been sweeping across supermarket aisles in the U.S., Ostermayr and his cohorts at Dannon gave consumers an entirely new reason to eat yogurt-a proposition they wholeheartedly swallowed, judging by Activia’s impressive first-year sales, which continue to climb.

Activia generated $132 million at food, drug and mass outlets (excluding Wal-Mart) in 2006, per Information Resources Inc. Through Sept. 9, Activia sales jumped 44.25% to $124.9 million. The brand is currently No. 5 in the $3.3 billion yogurt category led by Yoplait. Sales of Activia Light, which launched in early 2007, have reached $38.9 million through Sept. 9, per IRI.

That success hasn’t gone unnoticed by competitors. In the wake of the Activia launch, several new probiotic products have been introduced in the U.S. market, including Yoplait’s Yo Plus yogurt with probiotics and prebiotics, and Breyers Light! Probiotics Plus Yogurt.

Clearly, Activia is stirring up a segment that, despite its recent growth, has not seen this kind of individual product success since the days of Yoplait Go-Gurt in a tube (an MOY back in 2000).

So how did Activia get there?

At its core, the brand had to persuade U.S. consumers, namely women, to think of yogurt in a new way. While Americans may view yogurt as a “healthy” food item, they are more prone to popping a tablet to soothe an upset stomach rather than grabbing a spoon. Plus,
Dannon had to overcome a stigma in talking about digestive health, an issue raised by focus group participants who initially assumed the product was a laxative (ouch).

Activia tackled the sensitivity issue head-on in taking its message to both doctors and consumers. For the former, the brand sponsored symposia and conventions on gastrointestinal health issues, and ran ads in various medical journals. Meanwhile, Dannon has shelled out considerable sums of money on Activia’s consumer ads (about $100 million from January 2006 through July ’07, per Nielsen Monitor-Plus). Its no-nonsense campaign, featuring college students and mature women having candid discussions about the product, spoke to consumers in a way that no other yogurt maker has dared to try.

“Dannon’s advertising for Activia was well-executed and highly effective,” said branding expert Eli Portnoy, who is based in Orlando, Fla. “This is a product that most Americans were not aware of, but Dannon is a brand consumers’ trust and their advertising was informative yet low-key. They didn’t hit consumers over the head with it.”

Much of the credit for that goes to Ostermayr, who CEO Juan Carlos Dalto said was the right man for the job. “He is one of a kind in terms of personality. He’s German, but from the South- almost like a Latin, and I’m Latin,” laughed Dalto, who is Argentinian. “He also has conviction, ambition and hunger.”