DanoneWave’s Secret To Making Foods Healthier: Stealth
DanoneWave says it has hit long-term targets intended to ensure that the French multinational food giant’s portfolio is packed with less fat and sugar, while also providing more nutrient density.
Among the reformulation and portfolio makeover changes DanoneWave announced on Thursday: a 10% improvement in nutrient density via boosted protein, fiber, and vitamin D, and decreasing levels of sugar and fat. The makeover is part of DanoneWave’s 2014 commitment to the Partnership for a Healthier America, a nonprofit that works with the private and public sectors with the aim to address childhood obesity.
“The most important thing for us is staying true to our mission: bring health through food to as many people as possible,” said Philippe Caradec, vice president of corporate affairs at DanoneWave, in an interview with Fortune.
DanoneWave—with brands including Dannon, Danimals and Activia yogurt—said that 87% of products sold by the U.S. arm Dannon are now nonfat or low in fat. That’s up from 83% a year ago and easily topped the 75% goal set in 2014. Dannon also successfully reduced sugar levels so that all products sold to children (and 70% of the overall portfolio) now contain total sugar of 23 grams or less per six-ounce serving. Dannon also said it improved nutrient density by 10.06%, more than the 10% improvement target.
Many of the largest food and beverage manufacturers—an industry collectively known as Big Food—have been remaking their portfolios through either product reformulations, acquisitions of healthy startups, or by launching new products that consumers deem healthier. These changes are necessary to address a consumer-led preference to eat more healthier foods. The changing portfolio can bee seen in the results of major manufacturers like PepsiCo (PEP), Coca-Cola (KO) and Campbell Soup (CPB). Executives at those companies praise their efforts to sell more bottled water, milk, and juices.
DanoneWave, which is the new company name after it acquired organic food and beverage purveyor WhiteWave for $10.4 billion, says it has been on this health food journey longer than most. The company unloaded assets it felt no longer fit into the mission for a healthy portfolio of foods, selling off businesses like beer and cookies over the past couple of decades. What’s left is a portfolio that essentially is a big bet on wellness: bottled waters, yogurts, and baby nutrition items.
“This isn’t a fad for us,” Caradec said, when addressing the transformation at DanoneWave. “We think millennials are very interested in better-for-you foods.”
DanoneWave says much of the transformation that occurred was a form of “stealth health.” What it means by that is that generally, it made changes to food without loudly boasting about it via a marketing campaign or by changing the front labels to shout “lower sugar!” or “less fat!” When it reduced the sugar count for the company’s children-focused Danimals Smoothies brand, for example, it didn’t share the change with the public until after the product had been in the market and almost no one noticed the changing formula. The only way a customer would have known there was less sugar in those smoothies were if they were to compare nutritional labels.
DanoneWave says it thinks stealth is the best way to approach reformulations. The goal is that consumers still think the yogurts packed with less sugar still taste great and that purchasing patterns aren’t influenced by labeling. Caradec says highlighting sugar reduction could actually have a diminishing effect on sales: some people might think the taste may be less appealing. But data implies that changes in sugar levels don’t move the sales needle—and that’s a good thing. Other improvements have been made to Activia, a yogurt brand that saw a reduction in sugar during the past two years.
Sometimes, new product launches have helped remake the portfolio and DanoneWave isn’t shy about marketing the health benefits. An example: the Greek-style Oikos Triple Zero (this item is specifically marketed as having zero fat, added sugar and artificial sweeteners). It has been a strong seller in the competitive Greek yogurt aisle.