A second co-branding agreement for Danisco's probiotic strain Howaru looks set to confirm the value of a more consumer-friendly approach to marketing bacteria.
The leading ingredients firm has reached a deal with Chile's biggest dairy processor Soprole, which currently holds 50 per cent of the yoghurt market. The agreement involves using the Howaru tradmark on a new yoghurt drink, being promoted by five national TV advertising spots.
The announcement follows recent news that the Danish firm had joined up with South African retailer Woolworths, in its biggest venture for Howaru to date.
"This gives us proof of concept," Danny O'Regan, cultures business director at Danisco, told NutraIngredients.com. "We think there will be a domino effect now. We have already seen strong interest from other key food businesses."
Howaru is the brand name for two strains of bacteria (one bifidus and one rhamnosus) licensed to Danisco in 2001 by New Zealand's Fonterra. Woolworths has included the Howaru bacteria in a number of dairy, soy and fruit juice products and has already seen unexpected sales growth.
The firm is also holding a series of conferences in South Africa next year to promote probiotics and particularly the Howaru brand to the medical community. Danisco scientists will also participate.
A recent report from market research firm Frost & Sullivan warned that limited consumer awareness threatens to restrain growth in the probiotics market. Danisco has clearly aimed for a consumer-friendly approach that makes marketing a live bacteria to consumers much easier for its customers.
O'Regan admits that Woolworths has launched an impressive campaign. And he adds that Danisco is not aiming to take on probiotic leaders such as Danone or Yakult, although it is significant that Danone's Actimel is not present in either the Chilean or South African markets.
"Marketing is key to probiotics. We're helping customers benefit from the growing awareness being created by the established brands and take a certain share of the market. There is certainly room for more players," he explained at FiE this week.
A deal in traditional western European markets could be more difficult to come by but the Danisco cultures unit, one of the smallest in the ingredients group, is aiming for one Howaru customer in each key market.
Howaru is also included in a dietary supplement developed by New Zealand firm Blis Technologies. The higher margin supplements segment presents bigger potential for probiotics. The European probiotics market is estimated to be worth $40.3 million in 2003, significantly smaller than in the US - $143.9 million - where sales are boosted by a much bigger role from supplements.
But probiotics in Europe are still set to more than triple in value over the next six years and while yoghurt cultures will remain the core business for Danisco's business, Howaru will add an innovative element to its portfolio.