Chobani moves to #2 spot in oatmilk (Nielsen US food, week to 3/21) three months into launch, sees significant rise in core yogurt sales amid coronavirus
“Chobani Oat [which hit stores in January] is going through the roof, and we overtook Oatly and Silk to become #2 in the category with an 18.9% dollar share of the oatmilk market in the Nielsen data [US food*] for the week to March 21 behind Planet Oat, and Planet Oat has lost 10 points of market share since we started [from beginning of the year to March 21**],” he claimed.
To place this in context, rivals HP Hood (Planet Oat) and Oatly noted that total xAOC data - Nielsen's expanded all outlets combined data, which includes everything except convenience store data (eg. drug stores, mass merchandizers etc); and IRI multi-outlet data - paint a slightly different picture.**
“From February to March, Chobani Oat grew 87%, double the category’s growth over that period," McGuinness told FoodNavigator-USA.
He added: “Plant-based milk is up generally but oatmilk is now bigger than soy, so clearly there is something going on there. People are using it in coffee, they are starting to drink it [as a standalone] as out of all the plant-based milks, it tastes pretty darn good, and they are also using it in cereal. We’re also seeing a high percentage of repeat [purchasing] as people are settling into a routine [that now includes oatmilk].
“Oat is the fastest-growing alt-milk category and has surpassed soy in volume and dollars to be the second largest non-dairy milk after almond.”
Core yogurt business up 48% YoY in week to March 22, ‘but no one is doing victory laps here…’
As for the core yogurt business, he said: “We were growing at close to 10% in yogurt pre-coronavirus, but in the last Nielsen week to March 22, we were up in the mid to high 40s [48%], against a category that was up in the low 30s, so we hit a [market] share record [20.4%].
“These figures reflect a lot of panic and surge buying, so we think that will settle down to about 15% growth, but that is huge growth when you think about where the category has been in the past couple of years [flat or declining].
“We’re seeing sales of staple products go way up, plain, Flip, multipacks, fruit on the bottom, and we broke production and shipment records. But these are extraordinary times, so no one is doing victory laps here."
He added: “I’ve talked to a lot of consumers when I go to stores and see them buying yogurt in bulk, and they say, I have my kids home, a kid in college that’s come home, my husband is working from home, and we’re eating all day, but I’m trying to keep my family healthy so I’m getting a bunch of different snacks... and we think protein and probiotics are important.”
‘We are slated to launch 40+ items this July and they are ready to go’
Asked how the lockdown had impacted Chobani’s innovation activities, he said: “One foot is firmly planted in the now, but you still need to put one foot forward into the future.
“We’re hearing indications that the July resets will still happen, and we’re slated to launch 40+ items this July and they are ready to go, and we’ve not stopped any initiatives. Our R&D department is still working, they are just working from home; anyone not making products in the plant is now working from home.
“We’re still shipping products back and forth and trying things, all the packaging is being ordered and all the designs and graphics are getting done, so we have not stopped any of that.”
‘Even though demand is up, we’ll probably promote more, the opposite of price gouging’
So how might a prolonged recession impact the yogurt category – sales of which had plateaued prior to coronavirus?
“It’s going to be really important going forward to offer value and deals to the consumers and keep up trade spending in future,” said McGuinness. “We’ve always talked about our brand ‘DNAA’ – delicious, nutritious, natural, affordable – and the ‘affordable and accessible’ thing is going to become even more important.”
That said, yogurt provides a lot of nutrition for a low-ticket item, he said. “We believe there will be an elongated recession coming out of this, and as an industry, it’s really a time to make products more accessible, so even though demand is way up, we’ll probably promote more, the opposite of price gouging.”
Supply chain: ‘Our in-stock rates are higher than others in the category at the moment’
As for the supply chain, he said, “We did a lot of modeling early on and were able to procure what we need, so from a raw materials perspective our positions are strong, and currently we don’t have any supply challenges. We’re also lucky enough to have a lot of capacity [at facilities in Twin Falls, Idaho, and upstate New York] and our in-stock rates are higher than others in the category at the moment.
“We also have our in-house retail execution team hitting stores every day packing out shelves, and also a lot of people that are working from home are hitting stores as well so we probably have a few hundred people out there helping pack out so we can keep in-stocks up.”
Manufacturing safety protocols
In its manufacturing operations, Chobani is “segmenting the workforce into small clusters,” with shift change meetings now “done virtually or in small groups with maximum separation,” said McGuinness.
“We’re cleaning common surfaces three or four more times every day than we’ve done in the past and we’ve got mandatory hand cleaning and hand sanitizing and mandatory temperature checks at every shift change before you go into the plant... something we instituted two weeks ago.
“We’ve also stopped visitors and closed the gym and cafeteria, so now we’re giving out free boxed lunches and dinners that people can take away and eat individually.”
But there’s no room for complacency, he added: “We live in a fragile world and it’s rapidly changing and ever evolving.”
Supporting staff
As for supporting staff, he said, “We are doing paid testing and [sick] leave in full and we launched a childcare subsidy two weeks ago. We’ve also modified our absentee policy to give people more flexibility and increased bonuses for plant workers significantly.”
Should employees get sick, he said, “We’ve got redundancy throughout key positions and shifts, and we can also flex from a temp perspective, although we’ve not seen any en masse absenteeism as our plants are in rural areas and we were very early with temperature checking.”
Giving back
Asked about giving back, Chobani has partnered with multiple organizations from Save the Children and Feeding America to local organizations working in Idaho and New York (where it operates plants), providing more than one million products to people in need since the pandemic hit, with millions more to come, said a spokesman.
“We’ve also donated $750,000 of television advertising time, including premium placements like the Today Show, to Feeding America, so they can continue spreading the word about how we all can support their mission during these challenging times.
“Across the nation, Chobani employees have been armed with VIP coupons for free products and have been encouraged to share them with the grocery store workers they encounter while stocking up.”
*Nielsen US Food includes all grocery stores with $2 million+ annual ACV, and includes natural foods retailers and discount grocers. It does not include foodservice sales
**HP Hood (Planet Oat) notes that, "According to IRI point of sale data, Planet Oat is down -3.6 points of market share from the beginning of 2020 through March 29 (Total US Multi Outlet). In Total US Food, Planet Oat is down -8.8 points of share from the beginning of 2020 through March 29. Planet Oat owns the #1 share position in the oatmilk segment at 36.3% of all retail oatmilk dollar sales from the beginning of 2020 through March 29.
"While we understand Chobani has made an impact since their launch, and their data was provided by Nielsen which may be cause for the differentiation, here is what we’re seeing on our end for week ending March 29: In US Food, Chobani is the #3 brand in dollar sales and unit sales as well as volume sales; in US Multi Outlet they are #4 in volume and dollars and #3 in units."
