Yogurt Nation

It wasn't the spider that scared Miss Muffet--it was that stuff in her bowl. White, clumpy, sour, often runny, yogurt did not inspire children to plead with their mothers at the supermarket. Nor did it get much closer to American mouths than arm's length, from which those mothers could read the list of ingredients to be reminded that yogurt is animated by at least two types of live bacteria: Lactobacillus bulgaricus and Streptococcus thermophilus. Pudding, anyone? Aisle 3.

But since the 1970s, yogurt has emerged from its former sour self into the lid-lickable treat that helps us lose weight, feel better about being parents and indulge without guilt. The brand we buy might even improve our digestion and the environment simultaneously. Try that with prune juice.

Unlike nearly every other grocery product, yogurt has charged ahead, having grown 10% annually for the past three decades, meaning that consumption has doubled every 7.2 years. What's the appeal? Like spackle for the diet, marketed to the soul, it increasingly fills the holes in our nutritional and daily eating habits. Yogurt is shape-shifting into ever more unlikely forms and flavors--squeezable, drinkable, chai, cappuccino and black currant--while nailing three major food trends: convenience, portion control and health. "Give it a few more generations, and this could be the No. 1 food," says Harry Balzer, vice president of the NPD Group, a firm that tracks America's eating habits. "This is where the country is heading."

And it's being led by kids, who, having picked up the habit from Mom, are taking it with them as they grow up--the way boomers did soda for breakfast. In the driver's seat is the French brand Yoplait, which has gone from $3 million in sales to more than $1.1 billion since General Mills acquired the U.S. licensing rights to the brand in 1977. Over 10 years, Yoplait, with sister brand Colombo, has jumped from 23% of the $3 billion U.S. yogurt market to about 38%. A powerhouse for General Mills, based in Minneapolis, Minn., Yoplait is rivaled only by the cereal unit (22% of Big G's $11 billion in sales, with such brands as Cheerios and Cocoa Puffs), but yogurt is growing faster. Sales of Yoplait's Whips! line alone are up 30% and will exceed $100 million this year.

Paris-based Groupe Danone's Dannon, with 29% of the market, is leading the charge in the even hotter probiotic segment, the part of the yogurt category that uses bacterial cultures for specific health benefits. Dannon's Activia, launched in January, is the first yogurt in the U.S. to use probiotics via a trademarked culture, Bifidus Regularis, which aids digestion after two weeks of regular use, according to studies conducted by Dannon. (Oh, Dannon vs. Danone? The yogurt brand was Americanized when it arrived here.) On the organic side, Stonyfield Farm, in which Groupe Danone holds a majority stake, has run out of cows before it has run out of customers. Stonyfield is the third largest player in the category, with 90% of the $155 million organics segment and 6% of overall yogurt sales, but it has been forced to scramble to find more organic milk as sales outrun its supply.