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The Yogurt Business

MEMO

November 07, 1988

No, lactobacillus bulgaricus is not the name of a famous Roman gladiator. It is one of the two live active cultures--the other being the equally tongue-twisting Streptococcus thermophilus-- that helps ferment pasteurized milk into yogurt.

The National Yogurt Assn., a trade group of yogurt makers and retailers, says these cultures can help treat digestive tract infection and may stimulate the body's immune system. The cultures also produce an enzyme that allows many Americans who cannot digest dairy products without intestinal distress to consume yogurt without any problems, the association says.

Some yogurt products are heated after being fermented, increasing the shelf life of the product but also killing off the two cultures, according the association. Such products must be labeled "heat-treated after culturing."

Yogurt is believed to have originated about 3,000 years ago among nomads traveling around the desert areas of the Mediterranean. The nomads carried raw milk in bags constructed from the lining of sheep's stomachs. The combination of micro-organisms in the milk and bags as well as the desert heat transformed the milk into yogurt.

In Western societies, yogurt has been promoted as a health food for about a century. Illya Metchnikoff, head of the Pasteur Institute of Paris during the 1890s, studied the role of yogurt in the diet of the Balkans in Eastern Europe. Many Balkans lived well into their 80s and 90s, and Metchnikoff theorized that yogurt helped prolong life.

With yogurt parlors battling for customers in saturated markets in the United States, frozen yogurt chains are looking to Asia for growth. With less competition, the chains hope to take advantage of the fast-growing economies and wealth in the region, company officials say.

Higby's, a chain based in Rancho Cordova near Sacramento, recently opened stores in Seoul, South Korea, and Singapore, and is looking at opening stores in a luxury hotel in Thailand. Heidi's Frozen Yogurt Shoppes--which was recently combined with Johnston Foods, a major yogurt maker--is planning to open franchised stores in Japan as well as Europe.

Sales of frozen yogurt are booming in supermarkets. Sami/Burke, which tracks sales of consumer products, said $26.4 million worth of frozen yogurt was sold in 1987--up 185% from the previous year. Major yogurt makers are introducing new frozen products for the supermarket: Dannon has come out with frozen yogurt bars, and the Yoplait line now includes soft-frozen yogurt.

Despite the growth of frozen yogurt, refrigerated yogurt dominates the category with sales of about $1 billion in 1987, according to Sami/Burke.

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