The fresh dairy products' market has gone from strength to strengthin recent years as consumers are increasingly choosing health-boosting orlow-fat foods, writes Colm Ward.

Do you want to live longer, lose weight, boost your immune system, improve your complexion and lower cholesterol? Well, now you need look no further than your local supermarket, the aisles of which are packed with products that promise to do wonders for your health.

In recent years there has been a staggering increase in the variety of health products aimed at the Irish consumer. The producers have realised that there is a market there to be exploited and they are investing huge resources in the promotion of health-boosting products.

The yoghurt market in particular has benefited enormously from this surge of interest in healthy eating. Irish people eat less yoghurt than their counterparts in other western European countries, such as France and Spain, with many regarding yoghurt primarily as a dessert food.

However, over the past five years, more and more Irish people are buying fresh dairy products such as yoghurts and chilled desserts. The market has grown at a rate of more than 20 per cent every year and it is currently estimated to be worth more than €150 million per annum.

One of the biggest factors in this expansion has been the introduction of yoghurts that, their producers claim, not only taste good but offer health benefits too. For example, probiotic yoghurts contain special cultures, or bacteria, which are said to aid digestion or help boost the body's immune system.

Similarly, with more and more people trying to lose weight, low-fat and diet products are becoming increasingly popular.

Until 1997, the fresh dairy market in the Republic was dominated by the Yoplait brand, owned by Glanbia. That year saw the introduction of competition in the form of Danone, the world leader in the dairy products market.

The result of the arrival of the French multinational in the Irish market was interesting. Rather than eating into Yoplait's market share, Danone's arrival has led to an overall increase in the sales of fresh dairy products.

Before entering the Irish market, Danone conducted extensive research to find out what potential existed for new products. The results showed that there was "huge potential" for development, according to Ms Fiona Mulcahy, marketing director with Danone Ireland.

For example, the research revealed that per capita consumption of fresh dairy products in Ireland was less than one-third of that in France.

"There was a huge opportunity to drive the perception of yoghurts," says Ms Mulcahy.

The introduction of a range of probiotic yoghurts and yoghurt drinks aimed at various segments of the market was the first step in creating the perception that yoghurt products could offer additional health benefits.

This was complemented by an extensive marketing campaign, which set out to explain the benefits of the different cultures used in the products. "Very uniquely, we were the first to talk about cultures," says Ms Mulcahy.

The company has also invested heavily in television advertising, which uses science references to explain how these cultures work.

"We are the biggest investor in advertising. It is very important that we communicate well and keep in touch with our consumers' tastes and needs."

Consumers who look for additional health benefits from dairy products are known to marketers as the "natural health" segment of the market and now account for about 25 per cent of sales of fresh dairy products.

Danone also examined the other market segments to help them target different groups of consumers. Following on from this, it introduced a range of products designed to appeal to the various groups, such as yoghurt drinks, fromage frais and low-fat yoghurts.

The aim was to maximise sales by having products that appealed to people of all ages and lifestyles.

The strategy has proved very successful and Danone has been the fastest-growing player in the market since 1997. It now commands more than 25 per cent of the total market and 74 per cent of the natural health sector.

"Danone is very good competitors," says Mr Aidan Magennis, marketing director for chilled foods with Glanbia, whose Yoplait brand remains the leader in the fresh dairy market in the Republic.

Yoplait responded to the challenge posed by Danone by introducing its own probiotic yoghurt drink as well as expanding its existing range of fruit yoghurts and fromage frais. Like Danone, it backed this up with an extensive advertising campaign on television and radio.

Probiotic products are now one of the fastest-growing sectors of the market, with 75 per cent year-on-year growth, according to Mr Magennis. Yoplait's products account for about 17 per cent of sales.

"We still see sustained growth within probiotics and bio pots," he says. He believes that good promotion and good advertising have led to the recent growth in the overall fresh dairy market and is confident that it will be sustained. Rather than "cannibalising" the market by eating into the existing customer base, the introduction of new product ranges by Danone, as well as other competitors such as Müller, has led to "phenomenal growth" in sales, he says.

Mr Magennis predicts that 2003 will be a busy year for Yoplait, with plans to re-launch some of its bio and diet brands soon. "We have very aggressive plans for the market," he says.

Another beneficiary of the growth in the yoghurt market is Glenisk, a family-run business based in Tullamore, Co Offaly. The company, which makes yoghurt using only Irish organic milk, was formed in 1987.

In 1994, a decision was made to focus on the organic sector and the company has been doubling in size every two years since, according to Mr Vincent Cleary, joint managing director. It now accounts for between 8 and 10 per cent of the yoghurt market with turnover in excess of €4 million last year, he says.

Glenisk was the first company to introduce probiotic yoghurts on the Irish market in the mid-1990s, a move inspired by their popularity on the continent. It subsequently benefited from the growth in popularity of probiotic products following Danone's entry to the market. "We have sat on the coat- tails of the rising star, Danone, and as it grew, we grew too," says Mr Cleary.

He believes that Glenisk's use of Irish organic ingredients gives it a distinct identity and distinguishes it from its larger competitor. "We are seen as the Irish alternative to Danone," he says.

With Yoplait, Danone and Glenisk all planning product launches or relaunches in the next few weeks, it looks 2003 will be another big year in the world of health cultures.