The juice drink market looks set to be transformed, worldwide, by the
advent of probiotic products. One of the pioneers in the field is
innovative Finnish dairy company Valio, which has spent the past decade
turning its probiotic juice drink brand into a major success. Valio now
ready to use the same model which has proven so successful for the
company’s dairy probiotics, taking its technology to market through a
network of global partnerships.
First published in New Nutrition Business, November 2010 Newsletter, by Julian Mellentin
Far-sighted juice drink
producers are casting about to find whether they can get their own
probiotic fruit juice to market ahead of French dairy giant Danone. The
flurry in the world of juice drinks has come in the wake of Danone’s
announcement that it plans to commercialise, worldwide, a probiotic
juice using Swedish science company Probi’s L. plantarum 299v probiotic
strain and the successful fruit juice ProViva, marketed in Sweden since
1994 (see New Nutrition Business September 2010).
senior juice industry executives are rightly fearful that the French
dairy giant will redefine and dominate the chilled juice cabinet with
the same ruthless efficiency with which it has redefined the health
section of the dairy cabinet.
Looking for a rival probiotic
juice technology, companies have found that for credible, proven
products backed by clinical evidence the best – indeed only – place to
go is to Valio Dairy, the Finnish dairy company whose successful
technology innovations have helped make Finland the Silicon Valley of
Valio is one of the pioneers in probiotics
and has consistently proven itself to be farsighted – and successful –
in creating and commercialising new technologies. The achievement is
made all the more impressive by the fact that Valio is a farmer-owned
co-operative operating in one of the remotest corners of Europe in a
country with a population of just 5 million people. But on the other
hand, perhaps it isn’t surprising. Finland is also the country that
produced mobile phone giant Nokia, is a world leader in forestry and
paper technology, and in health ingredients also produced such global
successes as Xylitol and Benecol, to name just two. This small country’s
excellent education system – internationally ranked alongside Japan’s
as the best in the world – might help explain why one small country can
be so innovative.
In the early 1980s farsighted people in Valio
believed that probiotic bacteria offered considerable commercial
potential – a radical idea at the time. So the company started asking
around the dairy experts at Finland’s universities looking for
opportunities for co-operation. This route drew a blank, but Valio did
learn about a human probiotic strain that had been isolated in the US.
The strain was Lactobacillus rhamnosus GG ATCC 53103, which had been
isolated from a healthy human.
The scientific minds behind
Lactobacillus GG are two Americans, Dr Sherwood Gorbach and Dr Barry
Goldin (hence GG) both of Tufts University, who discovered the strain in
the early 1980s. In 1987 Valio signed a worldwide licensing agreement
for the rights of Lactobacillus GG with Gorbach and Goldin. LGG is the
trade mark of Valio for Lactobacillus GG, which is also a patented
strain. Valio holds world-wide commercial rights for LGG.
to heavy scientific investment by Valio in the years following,
Lactobacillus GG today has the most extensive scientific background of
all probiotics in the world, with over 500 clinical studies published.
LGG’s credibility got a significant early boost when, in 1996, a yogurt
brand based on LGG, called Onaka-He-GG!, produced by Takanashi Milk
Products, became the first probiotic food ever to be granted the FOSHU
seal of approval in Japan.
Valio launched the first LGG-based
dairy product in its domestic market in 1990. Called Gefilus, it was the
first clinicallybacked probiotic consumer product on the European
market – four years ahead of the debut of Danone and Yakult.
then the Gefilus brand has grown and grown and has been extended to a
wide range of products for almost every dairy consumption occasion, such
that per capita consumption of Gefilus in Finland is over 6kg –
arguably the highest per capita consumption of probiotic products in the
Gefilus products carry an immune health claim, which
translates as a “strong dose of immunity”. LGG’s claim will be reviewed
by the European health claim regulator in 2011, but with 518 clinical
studies, it would be surprising if even European regulators – who thus
far have rejected 90% of health claim petitions – can find fault.
when Finnish consumers are asked which brands do most to help daily
well-being, they rank Gefilus in fourth place – just behind Nivea face
cream, ibuprofen and the Lumene cosmetic brand and ahead of L’Oreal (and
far ahead of Danone Activia). Valio has not only commercialised LGG in
products in its domestic market but has excelled at commercialising its
technology globally – LGG can be found in dairy products in 35
countries, including some of the most successful probiotic brands, such
as Emmi Aktifit in Switzerland and Campina’s Vifit in the Netherlands,
the Unimilk brand in Russia, the Parmalat Vaalis brand in Australia
(that country’s biggest probiotic brand), as well as in supplements in
In fact, Valio is something of a role-model for
good technology commercialization: the company has also developed
patented true lactose-free milk (in response to the needs of the Finnish
market, where 15% of consumers are medically lactose intolerant) and
rolled out this technology globally too.
PROBIOTIC JUICE INNOVATION
many dairy companies have limited their innovation to dairy products,
Valio has always been more open-minded and – along with Swedish company
Skåne Dairy – was one of the first to spot the potential of probiotic
Valio launched its Gefilus probiotic juice in
Finland in 1997. Well-supported with advertising and promotions – and
delivering an effective benefit – by 2010 Gefilus juice had taken an
impressive 32% share of Finland’s chilled juice market, becoming the
country’s biggest chilled juice brand. “In value terms Gefilus juice has
become the market leader,” explains Kalle Leporanta, export manager at
Valio Dairy Innovative Concepts & Technologies. “In ten years
Gefilus changed the structure of the market, becoming the leading brand
despite being a premium juice in a premium market. The effect has been
to increase the value of the chilled juice market in Finland.”
ascent to market leadership was achieved despite selling at a premium.
Regular juices, such as Valio Orange juice, typically retail for around
€1.09 per litre ($1.51). Valio Gefilus sells at a hefty 100% premium, at
€2.05 ($2.83) per litre, although this is still a much lower price than
a super-premium brand such as Pepsi-owned Tropicana, whos regular
orange juices retail for around €2.95 a litre ($4.07).
Finnish chilled juice market has a volume of approximately 30 million
litres and a retail sales value of around €45 million. The ambient
market is much larger, with a volume of 80 million litres and a retail
value of €120 million. Taking the two together Gefilus probiotic juice
has a 10% value share of the entire Finnish juice market.
you consider that Finland has a population of just 5 million, you
realise that if Finnish per capita consumption of Gefi lus Juice was
translated pro rata into a larger country, such as the US, it would be a
$800 million (€600 million) annual-sales brand. Gefi lus comes in
multiple fl avour variants, of which the best-selling are Five Fruits
and Pineapple-Carrot (see picture on page 10).
The juice range
was extended in September of this year with the launch of a 100ml fruit
shot, sold in a 4-pack priced at €2.60 ($3.59) per pack, equivalent to
€6.50 per litre. It is available in banana-applepassionfruit-
The idea for the product was stimulated to
an extent by the relative success in Finland of Danone’s Actimel 100ml
dairy drink for immunity.
“As we have a lot of technology and
knowhow in the company it made sense,” says Leporanta. “We are trying to
make a point of difference from Actimel with probiotic fruit shot and
there is also the logic of an alternative to dairy.”
of the shot – sales of which are reportedly going to plan so far – gives
another string to Valio’s bow when it comes to commercialising its
probiotic fruit juice technology internationally.
that suddenly there’s a lot going on in this field,” observes Leporanta.
“For ten years we have been proving the concept in the Finnish market
and we have kept a low profile. But now we are activating ourselves. We
have learnt many valuable lessons from building up the international
network of licensing agreements for LGG in dairy and that puts us in a
good position to work with the juice drink companies and bring them a
related but different area of expertise.”
COMMENT: PROBIOTIC FRUIT JUICE THE NEXT NEW CATEGORY
clear that Danone intends to make a major success of probiotic juice
drinks. Juice companies face the real possibility that Danone, with its
track-record of excellent execution, will redefine the juice market just
as it has redefined the dairy market with brands like Activia and
As we have also said before in New Nutrition Business,
it’s our belief that probiotic fruit juice is one category that can
provide consumers with a viable alternative to dairy. Fruit juice is
consumed everywhere, appeals to all types of consumers, has little or no
negatives associated with it – especially now that product developers
are so focused on lowering the calorific value and have an increasing
arsenal of ingredients to enable them to do so – and it can be delivered
in highly convenient packages. Its convenience and taste appeal are
advantages that few other categories can match. Moreover, in consumers’
minds fruit is a natural and credible vehicle for health messages.
an opportunity that’s so-far underexploited but, like all good ideas,
the idea of probiotic juice drinks for digestive health is a very simple
one and it is well-proven and has already been around for a long time –
and as Gefilus has shown in Finland and ProViva has shown in Sweden,
well-executed it can be very successful.
For every beverage
company there is now a narrow window of opportunity to get its own,
scientifically credible, probiotic juice to market – and possibly the
only place to find that technology is Valio. Happily, Valio’s 20 years
of experience of partnering with companies worldwide to roll out its LGG
technology in dairy means that the company is well set-up to guide
partners in the new probiotic juice market. The next two-tothree years
will reveal which juice companies are truly innovative and willing to
create this new market – and which are going to be the also-rans in
health. It will be a crucial test of managements’ commitment to
innovation and their ability to take innovation to market.
About New Nutrition Business
New Nutrition Business is a London-based
research, publishing and consulting company which specialises in
researching, analysing and forecasting developments in the business of
food, nutrition and health around the world.
strategies and success factors it has identified in the 1990s have
become the benchmarks for strategy development and brand positioning in
the worldwide nutrition business. It works with companies all around the
world, from the United States to Australia and from Sweden to South
New Nutrition Business is headed by executive director
Mellentin, one of the world’s very few global specialists in the
business of food, nutrition and health.
He is the
editor-in-chief of New Nutrition Business and Kids Nutrition Report, the
only industry journal in the world on the rapidly developing kids’
Julian Mellentin can be reached at