Yogurtlike soy products: a new subculture in store

The recent popularity of soy is making these products into big sellers.
LONDONDERRY, N.H. (AP) -- For 20 years, Gary Hirshberg's recipe for success has called for persistence, innovation and a lot of milk.
Now the CEO of Stonyfield Farm is changing the formula and gambling that one of the nation's top yogurt brands can milk more out of the market without the moo.
In a move aimed at tapping growing consumer demand for soy, Hirshberg's latest venture is a dairy-free yogurt produced with soy milk and the same live cultures as its cow-based cousin.
And so far, O'Soy -- properly called cultured soy, not soy yogurt -- appears to be paying off. Introduced in 2001 and revamped in December, O'Soy is carried in 70 percent of natural-food stores and 16 percent of mainstream grocers nationally, and accounts for $3.5 million in annual sales.
Hirshberg credits O'Soy's success more to the mainstreaming of soy than to any marketing miracles. "We're not talking about a bunch of barefoot hippies screaming for soy," he said. "This is a real marketing opportunity."
Health ruling
That opportunity has been expanding since the Food and Drug Administration cleared the way in 1999 for soy products to be labeled heart-healthy. Demand for the bean has grown steadily.
So has the variety of soy products. In 2001, sales of soy foods nationally totaled $3.2 billion, up 17 percent over the year before, according to a study by market research firms SPINS and Soyatech.
Linda Funk, executive director of the Soyfoods Council in Des Moines, Iowa, said growth is fed by conventional shoppers at mainstream grocers, not health-food aficionados at specialty shops.
She said companies like Stonyfield are smart not to view soy and dairy as an either-or proposition.
"Stonyfield is right where it belongs," she said. "It's absolutely wonderful and encouraging seeing a dairy company say, 'Wow, how do I work with soy protein? How do I reach consumers who are already buying my products?'"
Deanna Rose, spokeswoman for the National Dairy Council, the industry's nutrition and promotion arm, said dairy and soy are good companion products because both enjoy strong consumer demand and offer important health benefits.
"I wouldn't substitute one for the other, but having both in the diet is definitely beneficial," she said.
Acquisitions
Dallas-based Dean Foods, one of the nation's leading dairy product producers, paid about $204 million last year for White Wave. The Boulder, Colo., company makes Silk, the top-selling refrigerated soy milk, as well as its own cultured soy product.
The Coca-Cola Co. also is getting in on soy, paying $181 million in 2001 for Half Moon Bay, Calif.-based Odwalla, which produces a variety of fruit and soy drinks.
Founded by Hirshberg and Samuel Kaymen in 1983, Stonyfield distinguished itself early on by producing only live-culture yogurts. These cultures, called probiotics, digest the sugars in milk (and soy milk), turning it into yogurt with a distinct, tangy flavor and creamy consistency.
Since then, a two-man, five-cow business has become the nation's third-largest yogurt brand with annual sales of $130 million. It is surpassed only by Yoplait and Dannon.
Along the way, Stonyfield, like Vermont ice-cream maker Ben & amp; Jerry's, earned a reputation for blending business and social responsibility. Stonyfield gives 10 percent of profits to environmental causes, which also are promoted on its yogurt cup lids.
In 2001 Groupe Danone, a French consumer products company that owns Dannon, bought a 40 percent share in Stonyfield, and in December will buy an additional 30 percent. All remaining shares will stay with Hirshberg and his employees.