Three Happy Cows: The party isn’t over for Greek yogurt; but the category is maturing

20-Jan-2015 - Last updated on 20-Jan-2015 at 15:56 GMT

"Our culture set produces a very mellow flavor so you don’t get a lot of the tart signatures you get in a lot of other Greek yogurts."

Are Americans falling out of love with Greek yogurt? No, says Three Happy Cows director of marketing Brian Twomey. But growth is slowing and space allocation in some stores is shrinking, so brands that want to stay on shelf need to “identify the white space” and carve out a niche so they are not slogging it out on price.

“Very few mainstream retailers are expanding their Greek offering and several are actually starting to shrink the shelf space they are giving to it,” said Twomey, who acquired the Dallas-based brand with two business partners three years ago.

“And as far as the natural channel goes, the Whole Foods of this world, the bar used to be that you had to be all-natural to play in that channel, but now we are seeing that in order to differentiate themselves these retailers want organic, or grass fed,” he told FoodNavigator-USA.

“It’s stunning how many retailers have asked us specifically about grass fed. We love that but it is incredibly difficult to source and two to three times the price.”

The big players are doing what they can to hold onto real estate

So how are manufacturers responding?

“The big players are doing what they can to hold onto real estate with line extensions and new products,” he said.

“But I think space allocation for Greek will probably continue to shrink as the category is definitely maturing, and the big three, Dannon, Yoplait and Chobani - which make up more than 70% of the market, are engaged in this bloody share battle. Some people are even forecasting negative growth for 2015, compared with growth that was forecast to be around 9% in 2014.

“As a smaller brand, we are trying to identify the white space, stay above the fray and not get sucked into that commodity spiral; we don’t want to give away our products to get retail space.”

You can literally can eat it with a fork it is so thick

And the USP at Three Happy Cows?

Taste, texture, nutrition and a cool brand, said Twomey: “We are a small brand and no matter how big we get we will still look at ourselves as a small brand, it’s kind of in our DNA. We take nutrition seriously but not ourselves... our logo is three cows riding a bike. It’s all about living a happy healthy lifestyle."

As for the product, it is thicker than a lot of other Greek yogurts on the market (four cups of milk go into each cup of yogurt), he said. “You can literally eat it with a fork it is so thick. And it doesn’t have that grainy texture that is pretty indicative of our category.”

Our culture set produces a very mellow flavor, so we add less sugar

As for the taste, he claimed: “Our culture set produces a very mellow flavor so you don’t get a lot of the tart signatures you get in a lot of other Greek yogurts so we don’t have to add as much sugar.”

“We have a best in class leanness ratio of protein to sugar; we have 15g of protein in every [5.3oz] cup [the price point around $1.75] and only 11-12g of sugar.”

Three Happy Cows strip — Three Happy Cows products are manufactured in upstate New York and Los Angeles

Culinary-inspired flavors: Strawberry Thai basil; raspberry green tea

However, where Three Happy Cows really hopes to carve out a niche is with its new culinary-inspired flavors, said Twomey.

“The growth opportunity is in continued flavor innovation, elevated flavor profiles you won’t see on shelf from our competitors. It’s a way to really carve out some space of our own, so we are launching six new flavors this year: Dark chocolate cherry; strawberry Thai basil; raspberry green tea; pineapple toasted coconut; peach mango; and lemon zest cream.

“Retailers that we have shown them to have been incredibly supportive and enthusiastic about what we are trying to do. We’re mostly concentrated in Texas - in around 400 stores like Randall's (Safeway) and Central Market (H-E-B), but we’ve just picked up a few chains in the Chicago market including Jewel Osco.

Three happy cows square — Brian Twomey: "You can literally eat it with a fork it is so thick."

“But we want to grow responsibly; we don’t want to grow so fast that we can’t adequately support the brand; getting on shelf is one thing, staying there is the hard part.”

Given that he doesn’t have a huge marketing budget (spoiler alert: You won't see Three Happy Cows at the Super Bowl), marketing dollars are focused on social media and local events (the brand recently sponsored the Dallas marathon, said Twomey, who also took part: “We finished the marathon, set up our booth and gave out samples.”).

“The best tool we have is being able to get our product into someone’s mouth; when we do that we convert them.”

Foodservice firms want high protein, low sugar, and healthy fats

Foodservice is also a potential growth opportunity for the brand, which many companies see as a good alternative to mayo or cream cheese when they are trying to develop healthier, more on-trend dips and dressings, he said.

“We actually went through a test last summer for a Greek yogurt parfait for Taco bell. It’s still under review but this indicates that even the big restaurant companies are interested in higher quality, better for you products like Greek yogurt. It’s no longer about low calorie high sugar; now they are interested in high protein, low sugar, and healthy fats.”