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Diving overview:
- Danone said it was having difficulty meeting demand for high-protein yogurt due to a lack of production capacity in the United States.
- Juergen Esser, Danone Group’s vice chairman and chief financial, technology and data officer, told investors that the owners of Activia and Oikos are “remaining very serious about their production capacity” as high-protein yogurt “continues to soar.”
- Supply constraints have prevented Danone from introducing new innovations across the rest of its yogurt portfolio. “We were particularly shy because there was no capacity available,” Esser said.
Dive Insights:
Protein has become a staple in America, and food companies are adding it to everything from water to desserts. As health concerns grow and the use of GLP-1 drugs for weight loss increases, consumers crave convenient and delicious options for consuming protein.
Yogurt manufacturers have been one of the biggest beneficiaries of surging protein demand. Danone, the world’s largest dairy maker, said it had seen a surge in sales among people taking weight-loss drugs. Dairy giants are rushing to meet demand, including by launching high-protein shakes.
But as consumer appetite for protein-packed yogurt reaches a fever pitch, Danone and other dairy companies are struggling to secure enough manufacturing capacity to meet demand. Esser said the supply situation for the third quarter was “really tight,” but noted that more capacity would come online in the coming months.
In the U.S., half of Danone’s portfolio is Greek yogurt, mostly high-protein products, Esser said. Danone recently launched a high-protein Oikos yogurt shake targeting consumers taking GLP-1. The company is selling its products to a few retailers to build awareness before deciding on an “acceleration level” for 2026, Esser said.
Last September, Esser said Danone’s emphasis on high protein created a “trade-off” and the company was “unable to meet all of our demand for the rest of our yogurt product portfolio.”
The company is expanding production capacity at several plants across the United States to meet demand. In August, Danone said it would invest millions of dollars to expand and upgrade its Minster, Ohio, facility amid explosive growth in yogurt.
Capacity constraints slowed Danone’s growth in North America in the third quarter. The company reported a 4.8% increase in like-for-like sales across its businesses, with North America growing the slowest of all regions at 1.5%.
According to Mintel, the protein market is worth $114.4 billion in 2024 and is expected to grow at an average annual rate of 1.9% until 2028.
