Dannon Yogurt Taps IBM Analytics to Find the Right Mix

IBM announced an agreement with The Dannon Company to provide analytics technology to help the yogurt maker maximize its position with consumers.

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NASHVILLE, Tenn.—When The Dannon Company needs to figure out the proper blend of yogurt products to increase its bottom line, it takes a big dip of IBM analytics technology.

At its Smarter Commerce Global Summit 2013 here, IBM announced that Dannon, one of the top-selling yogurt companies in the U.S., is using IBM's cloud-based predictive analytics to ensure it has the right product mix delivered at the right time to satisfy consumers in the highly competitive $7 billion U.S. yogurt market. Through the use of integrated analytics planning, Dannon is able in real time to improve forecasting abilities, IBM said.

Forecasing accuracy is crucial for The Dannon Company, which is based in White Plains, N.Y.; produces approximately 200 flavors, styles and sizes of cultured refrigerated and frozen dairy products; and operates under the Dannon and Danone brands.

Through IBM's trade and strategic trade planning solutions, Dannon analyzes shopper behavior through the use of big data and predictive analytics, to improve trade investment decisions and make more precise and accurate predictions on product volume and profitability. IBM helped Dannon's sales team streamline its forecasting and planning process.

According to IBM, Dannon's mission is to bring health through food to as many people as possible. To achieve this mission, Dannon needs to ensure product availability at the shelf at the right time and minimize waste through optimized forecasting. Dannon works with food retailers and other partners to maintain its competitive advantage in the dynamic and growing yogurt market, which includes rapidly expanding segments such as Greek yogurt.

Moreover, to meet continually changing consumer demand generated by promotions, Dannon must precisely anticipate how much additional yogurt is needed by its retailer customers, while also keeping in mind yogurt's limited shelf life. Empty shelves cannot be filled overnight and too much production can result in spoilage, both of which are losses for shoppers, retailers and Dannon.

The IBM tools and statistics help Dannon more accurately measure how much yogurt they will need through predictive analytics, which ensures enough yogurt is on the shelf, resulting in happier shoppers, less wasted product and a more profitable business for retailers.

"Our goal was to eliminate the time our sales team was spending on forecasting and instead focus their attention on executing their promotional plans, allowing them to work more closely with our retailer customers," Timothy Weaver, chief information officer at Dannon, said in a statement. "Through IBM's planning solutions, we not only streamlined the forecasting process for our sales team, but we increased our planning accuracy from 75 percent to 98 percent, helping us to further distinguish ourselves as the leading yogurt maker."

"Dannon works with retailers across the country to make sure their shelves are filled with the precise product volume and promotions for each store location to meet shopper demand," Craig Hayman, general manager of IBM Industry Solutions, said in a statement. "Through the use of predictive analytics, Dannon is able to understand, plan and predict their business in ways that were unimaginable a few years ago."

IBM's Smarter Commerce initiative features software and services that help companies transform their business processes to more quickly respond to shifting customer demands in today's digitally transformed marketplace. The initiative is driven by CMOs, CIOs and other C-suite executives who are increasingly looking for ways to bring new levels of automation to marketing, sales and fulfillment to secure greater customer loyalty.

Current IBM cloud-based software and services that Dannon is using include IBM Strategic Trade Planning and Customer Trade Planning solutions.