One of every eight Spanish dairy companies is exploring the functional yogurts market as the sector's sales are forecast to grow 17% annually from $437.0 million in 2004, outstripping growth in all other yogurt categories, industry observers say. Spanish yogurt output grew 13% in the first half of 2004, led by functional products, according to Spain's national dairy federation Fenil, which says the category-comprised mostly of drinkable, rather than spoonable, products, should continue to grow sharply in the future.

France's Danone leads the Spanish fermented milks market with more than 50% of sales and an 80% foothold in liquid probiotics. Spanish Ebro Puleva is also muscling in on the market. It recently launched two liquid yogurts under its Omega 3 functional portfolio. Spain is Europe's fifth-largest food market.