Chobani secures 20% share of US spoonable yogurt category: ‘We’re back on the front foot and playing offense’

Chobani says it has been steadily increasing its share of the total US refrigerated spoonable yogurt market over the past 16 months, moving up from 16.5% in February 2015 to 20% in May 2016 according to the latest Nielsen data*, while Yoplait-brand owner General Mills admits it is has been “disappointed” by its lackluster performance in the category.

Chobani - which currently has a 36.7% share of the Greek yogurt category according to Nielsen data - was speaking to FoodNavigator-USA as it unleashed a flurry of new products - including new whole milk Flip varieties with fruit compotes, savory meze dips and a drinkable yogurt.

Chief marketing and brand officer Peter McGuinness said Chobani had delivered solid growth in its core cup portfolio, but had also generated substantial incremental business via the Flip ‘mix-in’ platform.

“Flip is still a very young platform so I still see huge runway with this as we continue to invest and innovate," he told FoodNavigator-USA.

"Revenues are up dramatically, more than 100% in 2016, and it has a high repeat level and relatively low household penetration. It’s also bringing new people into the category.

“There’s no secret sauce here. We’re investing in innovation and it’s paying off; we’re back on the front foot and playing offense. We’re really bullish about yogurt in America because there is tremendous growth here that is yet to be realized, especially in drinks.”

Dips: A lot of people that buy yogurt also buy hummus, so we think the Chobani name will play quite well

Chobani is also excited about its first move outside the dairy case with meze dips (which are rolling out now at grocery deli counters next to hummus), he said.

We’ve only been in store with the dips for three and half weeks, but we see synergies between dips, hummus and yogurts – a lot of people that buy yogurt also buy hummus, so we think the Chobani name will play quite well, and we have unbelievable nutritionals. We’ll also have a big campaign in the next month or two as we reach national distribution.”

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Chobani meze dips are rolling into stores now, and should go nationwide by August

Drink Chobani: Drinkable yogurt is huge in Europe, Mexico and the Middle East, but in America, it’s under 5%

As for Drink Chobani - a protein-packed yogurt beverage featuring fruit and probiotics that is rolling out next month - the market potential was significant, predicted McGuinness, who noted that the size of the prize was likely far greater than some estimates given how under-developed and fragmented the category is.

“You see people saying well the market’s $300m so if you get a third of that, it’s $100m. But that’s just where the market is right now; in future we predict it will be way bigger than that. Drinkable yogurt is huge in Europe, Mexico and the Middle East, but in America, it’s under 5% of the yogurt category, and no major player has really come in and owned it – yet, so there is so much potential.

“Drink Chobani is portable protein, has far less sugar than smoothies, which can just be sugar bombs, and it tastes amazing. We spent a lot of time getting the mouthfeel just right and there's no added milk protein powders. It’s sippable and chuggable and drinks a little thicker than whole milk.”

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Drink Chobani, which has 14g protein per 10oz bottle, will start rolling out next month

Savory yogurt, a small but exciting category offering incremental growth opportunities

As for savory yogurt, an emerging category in which Chobani has dipped its toes via two novel sweet & spicy lines (pineapple chipotle, and mango sriracha), it is still early days, but the products are performing well, he said. “They are not our top velocity skus or the bottom – more in the middle of the pack –which is encouraging, since all of our Flips are outperforming everything else in yogurt, but again, it’s incremental business.”

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New products include four whole milk varieties of Chobani Flip

Asked about FAGE USA, which recently brought out a range of savory Greek yogurt mix-ins called ‘Crossovers’ with flavors such as olive thyme and almonds, and carrot ginger with pistachios, he said: “They are doing some pretty hard core, high-falutin flavors, not mainstream. They also talk about chef-level snacking, but I don’t even know what that means. I’m a consumer, not a chef.”

Organic: It’s not on or off the table

Asked about organic yogurt, a category in which Chobani does not yet play, he said: “At the end of the day organic milk is expensive, and while interest in organic hasn’t waned, we always go back to our mission of better food for more people, and our brand DNAA – delicious, nutritious, natural, affordable/accessible.

“It’s not on or off the table. If we can make it in a way that fits with our food philosophy and distribution strategy then we could potentially do it.”

New products this summer include:

  • Chobani Flip (Pure Blueberry, Pure Raspberry, Pure Cherry, Pure Pear & Honey - with whole milk Greek yogurt; plus Peanut Caramel Satisfaction, Apple Crisp Twist, and Honey - with low fat Greek yogurt).
  • Chobani Simply 100 Crunch (Black Cherry Pie, Lemon Meringue Crisp, Mixed Berry Crumble, and Raspberry Chocolate Twist).
  • Chobani Kids Tubes (Strawberry-­Banana).
  • Chobani Meze Dips (Roasted Red Pepper, Three Pepper Salsa, Chilli Lime, and Smoked Onion Parmesan).
  • Drink Chobani (Strawberry Banana, Apple Cucumber Spinach, Mango, and Mixed Berry).

General Mills: Fiscal 2016 was a disappointing year for our US yogurt topline and share

His comments came as General Mills CEO Ken Powell told analysts on the firm’s Q4, 2016 earnings call that the firm’s US yogurt business had underperformed: “Fiscal 2016 was a disappointing year for our US yogurt topline and share.

“Dairy deflation sparked increased competition and we were not as aggressive in reinvesting this favorability. In addition, our marketing and innovation efforts underperformed our expectations. However, we were able to improve our profitability.”

He added: “This month we're rolling out new Greek Whips, a full calorie version of our successful Greek 100 Whips product; we’ll expand our presence in the fast-growing organic segment by launching Annie’s Tubes and large sized yogurts, and by converting Liberté to a premium organic line...

“We will also improve the effectiveness of our consumer messaging by refocusing on all-family snacking and we’ll increase our merchandising competitiveness in 2017 securing more display at competitive price points. Some of this will be funded by shifting dollars out of consumer investment where we have by far the highest share of voice in the category.”

Dannon: We're still #1

Dannon, in turn, told FoodNavigator-USA that it continues to lead the US yogurt market, with Michael J. Neuwirth, senior director of public relations, adding: "Our growth has been above the rate of market growth over the past year, resulting in our increased lead in market share.

"[According to] IRI all measured retail channels data, the 12-week period ending June 12, 2016 shows total Danone share of the US market at 35.6%, at Yoplait 20% and Chobani at 18.1%"

*Nielsen, xAOC data, four weeks to Feb 28, 2015 vs four weeks to May 21, 2016.