Danone explores kefir’s untapped potential with new Activia range
Available under the Activia gut health brand, the range comprises 280ml single-serve drinkable kefir in Natural and Strawberry flavors, and 150g two-packs of spoonable kefir in Natural and Strawberry & Raspberry. Both formats are rolling out in September 2024 across Waitrose, Tesco and Morrisons and will be available in other supermarkets and stores by the end of the year.
Kefir is new to Activia but not to Danone: the company’s founder Isaac Carasso first distributed the fermented dairy beverage in Catalonia more than a century ago as a remedy for gut disorders at the end of World War I.
“In 1919, Danone distributed kefir alongside yogurt to pharmacies in Barcelona [and] has been successfully tapping into the kefir trend in various regions outside the UK, including Italy, Spain, and France,” said Rachel Wright, head of marketing at Danone.
The range features a blend of 16 live culture strains as well as calcium – but besides nutrition, it’s taste what Danone has focused on to attract consumers still on-the-fence about trying kefir.
“We've observed that in all these markets, the primary motivation for purchasing kefir is its health benefits - particularly for digestive wellbeing - with taste being a secondary consideration,” Wright explained. “This insight has guided us in creating a product that balances gut health benefits, supported by a high diversity of live cultures, with a mild, enjoyable taste, ensuring it can be a part of consumers' daily routines.”
But low awareness of the milk beverage’s health benefits along with negative taste perceptions stand in the way of realizing the category’s full potential - according to Wright, only 13% of UK households currently purchase kefir versus around 20% in Europe.
Globally, the kefir market is poised for growth at a CAGR of 6.8% and is expected to reach a valuation of $2.44bn in 2027, according to market intelligence data cited by Danone. With Activia being the best-selling gut health brand in the chilled yogurts and desserts gut health category in the UK (based on value and volume sales, Circana All Outlets excl Discounters, Chilled Yogurts and Desserts Gut Health Segment, value and volume sales for 52 w/e 20 April 2024), Danone is hoping to drive both awareness and appeal by redefining kefir’s taste experience – with a ‘tasty, mild recipe that uses our signature velvety texture’ as Wright told us.
According to a 2020 consumer trial, knowledge of kefir’s health benefits alone did not entice participants to embrace the ‘unpleasant’ taste of yogurt with 50% kefir mixed in – but lowering that to 30% did the trick. Awareness of the beverage’s health benefits also improved participants’ emotional response.
“An Activia study revealed that while 70% of non-buyers are open to trying kefir, scepticism about its taste remains the biggest barrier. Our product release aims to address these key barriers and drive adoption into consumers’ diet by providing a great tasting product,” Danone’s head of marketing said.
“With 40% of kefir buyers already purchasing Activia, this release strategically addresses existing consumer needs and encourages trial among those yet to experience kefir's benefits.”
The main target market will be individuals looking to support their gut health while balancing convenience, taste and nutrition, while Danone’s chosen formats appeal to the active crowd, too.
“Our drink format caters to morning snacks and lunchtime needs, ideal for those on-the-go, while the 150g spoonable format is great as part of breakfast or as a portable snack,” Wright said.
“A 280ml bottle is perfect for consuming your kefir when you’re on-the-go. It’s also the optimal format for kefir-considerers who are open to trying kefir but they are not prepared to commit to a larger format purchase.”
How is the UK’s kefir category faring in 2024?
Until Danone’s entry with Activia Kefir, only a handful of players – Biotiful Gut Health, The Collective and Yeo Valley – competed in the UK kefir space, with products ranging from drinkable kefirs to yogurt and ice cream.
With around 70% share of the UK market, Biotiful Gut Health posted 22% increase in revenues in FY23 with a double-digit rise in volumes suggesting demand for kefir has been increasing. The company markets 250ml natural and flavored kefir drinks as well as oat-based and spoonable kefir. More recently, the company added a high-protein drinkable kefir range, aimed at athletes and active consumers.
The Collective launched a fermented milk product aimed at children in January 2019 and has since expanded into natural and flavored kefir yogurt; and organic dairy Yeo Valley has innovated in ice cream with its Frozen Kefir range and kefir shots with added fiber.
According to data provided by Kantar, the UK kefir market is in double-digit growth in both volume and sales terms.
Total kefir sales are up 33.37% YoY, with yogurt kefir up 27.48% and liquid kefir up 37.28%. In volume terms, the entire kefir category has grown 26% year on year, with liquid kefir volumes slightly ahead of yogurt (20% versus 18%).
Price per volume has increased 6.02% YoY with yogurt seeing 8.21% growth versus liquid, at 5.36%.
Price per pack has shifted upwards too, with 11.76% YoY change, with liquid kefir pricing growing nearly 14% while yogurt kefir is up 7.64%.
