Danone’s Too Good & Co. is expanding into creamers, the first time the low-sugar yogurt brand has entered a new category.
The dairy giant is introducing a line of coffee creamers containing about 3 grams of sugar per serving compared to about 5 grams in the leading coffee creamers. The launch features three options: sweet cream, roasted vanilla and a seasonal lavender flavor.
Danone chose Too Good because of its low sugar halo and use of real ingredients, said Olivia Sanchez, senior vice president of creamers for Danone North America. She pointed to the fact that 68% of consumers prefer creamers made with natural ingredients, while four out of 10 are looking to reduce their sugar intake, according to a survey by Kantar and Danone.
“We have all the expertise in the dairy yogurt aisle, and this expansion into coffee creamers was just a natural step for us,” Sanchez said in an interview. “We felt that it was a unique opportunity.”
Danone’s latest offering will put it in more direct competition with Chobani, which has found success with its creamers that include natural, non-GMO ingredients while eschewing artificial flavors, sweeteners or preservatives. Chobani has been quickly grabbing market share in the space and now makes up 11.5% of the $5 billion category, compared to 5.5% a year ago.
Sanchez said expanding Too Good into a dairy-adjacent space, such as creamers, was a natural move for the offering. Data from Circana IRI found 86% of refrigerated creamer buyers also purchase yogurt.
The launch of Too Good creamers taps into that overlap and helps keep more individuals in the fast-growing brand. Nearly 57% of Too Good shoppers buy refrigerated creamers, according to Circana IRI.
The yogurt was introduced by Danone in 2020 as Two Good to highlight that the products only contained 2 grams of sugar. The company tweaked the name last year to reflect its broader product line, with some items including more sugar.
The dairy brand “offers a great platform” to expand into other products that prioritize lower sugar and recognizable ingredients, Sanchez said. Too Good, for example, launched pouches in August as children were heading back to school.
Danone is no stranger to the creamer space, led by its International Delight brand. The French-based company also sells creamers under Dunkin’ and its plant-based Silk line. Danone North America is the second-largest manufacturer in the $4.9B refrigerated coffee creamer category, Circana IRI noted.
Earlier this year, Danone spent $65 million to expand a Jacksonville, Florida plant to help the company meet growing demand for International Delight, STōK Cold Brew and other coffee and creamer brands.
Creamers have surged in popularity as consumers, many of whom sought to replicate the premium coffeehouse experience at home during the pandemic, have continued to make their own drinks. In addition to creamers, Gen Z and millennial shoppers have embraced cold foams and unique flavors to personalize their own coffees – creating further growth opportunities for Danone and other companies.
As consumers look for more products that are better-for-you products, such as Too Good creamers, should find their niche in the marketplace despite an increasingly competitive landscape.
The lower sugar “is really the biggest point of difference in this creamer brand to be the best in the clean label dairy space, offering that big point of difference versus the leading competitive brands,” Sanchez said.
