Inside the Greek yogurt wars: Dannon taps predictive analytics

How one company was able to quickly capitalize on consumers' changing tastes using data analytics.

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Yogurt manufacturers are straining for more market share -- literally. Thick, strained Greek yogurt, a single-digit portion of the U.S. yogurt market in 2007, now accounts for 28% of today's $7 billion in U.S. yogurt sales. And sales are growing, while demand for non-Greek yogurt is declining.

But while slick ad campaigns and novelty products like Greek yogurt smoothies may pique the interest of consumers, not all yogurt manufacturers are banking on advertising savvy alone to help them capture more market share. For Dannon, a subsidiary of France's Groupe Danone, science is the secret weapon in the yogurt wars.

That wasn't always the case for the White Plains, N.Y.-based dairy behemoth. For years, Dannon's sales force relied "on a very manual, Excel spreadsheet-driven process" to forecast sales and manage inventory, says Dannon CIO Timothy Weaver.

"It was a very cumbersome process and not particularly accurate," he says. What's worse, drawn-out forecasting was leaving Dannon's sales reps with less time for the actual execution of sales plans and customer engagement. And attempts at forecasting that were only about 70% accurate were prompting production teams to side-eye sales reps' reports.

That is, until Dannon turned to IBM's predictive analytics tools, including the vendor's Strategic Trade Planning and Customer Trade Planning systems, in April 2010. Dannon won't disclose hardware and system costs, other than to note that its technology investment "returns significant business value."

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