Chobani to launch organic Greek yogurt: ‘There was a gap in the market and we decided to act on it’

08-Mar-2014 - Last updated on 09-Mar-2014 at 05:37 GMT

Chobani will make its first foray into the organic market later this year with the introduction of 32oz grass-fed multi-serve packs of its Greek yogurt.

The move is part of its mission to provide options for all consumer segments, from those looking for a lower calorie, but all-natural, Greek Yogurt (Simply 100), to those seeking organic, said Chobani founder Hamdi Ulukaya.

“We’re committed to providing options for everyone, and we know that for some, organic is important.”

Organic milk is still not easy to come by and it’s dramatically more expensive

The new organic range, which will hit shelves in Q3 and features distinctive packaging to differentiate it from the rest of Chobani’s range, will include four varieties: three made with 4% fat whole milk (plain, madagascar vanilla and blueberry acai), plus a nonfat plain.

The price has not been finalized although it will be higher than regular Chobani yogurt, said chief marketing and brand officer Peter McGuinness, who was speaking to FoodNavigator-USA at the Natural Products Expo West trade show in Anaheim: “Organic milk is still not easy to come by and it’s dramatically more expensive.”

While Chobani already excludes ingredients from GM crops in its products, it has been under pressure from activist groups to go one step further and use milk from cows that have not been fed GM feed. The GM feed issue was also claimed to be a factor in Whole Foods’ decision to stop stocking Chobani’s products, although McGuiness queries this analysis.

Look at rBST-free milk. A few years ago there wasn’t even a market for it. Now it’s 37% of the milk supply

Offering an organic option - the milk for which has been sourced from new suppliers - is the best way to immediately meet the needs of organic shoppers, while in the longer-term, Chobani will work with its existing base of family farmers to explore non-GMO feed options for its broader portfolio, he said.

“The starting point is that we’re the best in class in the category, rBST-free, and we’re not loaded with chemicals and preservatives and thickeners. As market leader, we’re being open and honest about the challenges we face around animal feed.

“We want to shape the evolution of the nation’s milk supply. But change will not happen overnight. This is a food industry issue, not a Chobani issue. Look at rBST-free milk [milk from cows that have not been treated with synthetic hormone recombinant bovine somatotropin].

"A few years ago there wasn’t even a market for it. Now it’s 37% of the milk supply.”

Entering the organic arena with a 32oz pot makes sense in part because there is less competition in this segment of the organic Greek yogurt market, but also because Chobani is keen to promote the product for cooking, said McGuinness, who was showing visitors at the Chobani booth (#3756) how use Chobani in everything from soups to pesto- and hummus-based snacks.

Greek has 52% share of US yogurt retail market; we think it could get to 75%

So where is Chobani - and the Greek yogurt market - heading next?

While the category has become increasingly crowded lately with well-funded players from Yoplait (General Mills) to Dannon Oikos (Group Danone) bidding for a slice of the action, the pie they’re sharing right now is “still growing at a healthy clip”, said McGuinness.

“When we entered the market, Greek yogurt had around 1% of the market. From the latest Nielsen data I’ve seen it had 52% of dollar sales. That’s amazing. But I think it could get to 75% in 18 to 24 months. There is a younger generation of yogurt consumers that have grown up only knowing Greek.”

While there has been a lot of promotional activity in the Greek yogurt category over the past year or two as new players have entered and the leading players have been slugging it out to win share, the deals have not been “irrational”, said McGuinness.

Retailers, meanwhile, understand that Greek is a premium product, and that “nobody wins” if the focus is on driving down prices for short-term share gains, he said.

‘Unbelievable’ feedback for Simply 100

Chobani-Simply-100-range — New launch Simply 100 is sweetened with stevia, monk fruit and evaporated cane juice

On the p-roduct development front, Chobani has had a busy year, expanding its Bite range, launching new Flip Greek yogurt products and most recently unveiling a new 100-calorie Simply 100 range sweetened with monk fruit and stevia.

It is too early to provide sales data on Simply 100 - which has just been rolled out nationally and will be promoted later in Q1 - but initial feedback has been “unbelievable”, claimed McGuinness.

“Greek light is the fastest-growing segment in the Greek category, and we could have launched a product two years ago with aspartame or another artificial sweetener [rival Yoplait Greek 100 is sweetened with sucralose], but we wanted to spend the time getting it right with natural ingredients.”

Whole Foods de-listing was 'unfortunate'

Asked about the recent move by Whole Foods Market to ditch Chobani in order to make space for more exclusive flavors, non-GMO options and organic choices, McGuinness said:

"First we were told it was about GMOs, then about exclusive flavors, it keeps changing. It was unfortunate, as we felt we were a good brand fit for Whole Foods, which is a great retailer, but we're not going to offer exclusive products; Chobani's mission is to offer Greek yogurt to everyone. "