How Chobani Surged to Growth and Lapped Yoplait For US Yogurt Crown

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Chobani flip

Chobani is coming up big all over. It has overtaken Yoplait as America’s most popular yogurt brand in just 12 years in business, and its innovative new products—such as the Flips line with add-ins—may presage a dominance of the category that could even grow over time.

While Danone Group’s US brands—including Dannon, Activia and Stonyfield Farm—collectively still far outsell Chobani, and has vanquished the once-proud General Mills brand, Yoplait. And with a new factory in Utah that has lots of capacity to spare, Chobani believes its conquest isn’t done yet.

Chobani, the New York-based company that was started by Hamdi Ulukaya, a Turkish immigrant,  reached about $1 billion in sales within five years. As he tweeted about being a disruptor in the food space: “Food startups can challenge the big guys and change the world for the better.”

Credit the strength of the brand and a product line that presented tart, Greek-style yogurt to Americans at a time when they were looking for new tastes. Chobani has now grown to almost $2 billion in sales and keeps upending the category.

For instance, even though sales of the mainstream Greek-style yogurt segment have leveled off after several years of spectacular growth, while Dannon and other brands jumped into Greek yogurt as well, Chobani introduced a new twist to the market.

Chobani flipYogurt brands have been trying to find ways for American consumers to get interested in yogurt “add-ins” for years, and have introduced various ways to package the extra ingredients with the yogurt.

But Chobani came up with a way to package the dry stuff with the yogurt in side-by-side compartments under a single lid —and consumers embraced it, with Almond Coco Loco (coconut low-fat yogurt with honey-roasted salted almonds and dark chocolate) the best-selling flavor in its Flip yogurt line. Competitors have been rushing to do something like it.

Bring ’em on, says Chobani chief marketing officer Peter McGuinness. Imitators “haven’t hurt our business,” he told Bloomberg, “because our food is better.”

“There’s a deer-in-the-headlights phenomenon,” said John Grubb, managing partner at Sterling-Rice Group, a food consulting firm, to Bloomberg. When big food companies try to match competitors’ fashionable new products, “they suffer from a lack of culinary distinction.”

As McGuinness told the 2016 CONSTRUCT Conference in Cincinnati, OH, Chobani has revolutionized the way people eat, talk about and experience Greek Yogurt through innovative product launches, marketing campaigns and partnerships with new customer touchpoints across America.

Yoplait, not content at #2 to Chobani, is among the brands trying to imitate Flips, but it would have been better if the brand had begun imitating Chobani about a decade ago instead. Once Greek-style caught on in the US, Dannon notably jumped on the bandwagon and has product lines and sub-brands that rival Chobani.

But Yoplait executives were asleep at the refrigerator case. General Mills had been the US licensee of France-based Yoplait since 1977 and then acquired a majority stake in the company in 2011. But even having control of the brand didn’t help General Mills recognize that Greek-style not only was here to stay but that it would take over the business that their brand had led for decades.

Yoplait accounted for 25 percent of the US yogurt market as recently as 2011, and as recently as 2015, it remained the country’s leading yogurt brand. But sales plunged 11 percent last year, reducing Yoplait’s market share to 19 percent—and opening the refrigerator door to Chobani to take top spot in US sales. Yoplait’s poor performance even hobbled giant General Mills, forcing the company to lower its profit forecast and acknowledge that, when it came to Greek-style, they’d blown it.

Of course, Yoplait is trying to recover, pushing harder in organic lines and panning to roll out Yoplait Dippers, its Flips imitator. Yoplait’s woes are illustrative of the problems that Big Food has been facing lately from startups and with American consumers who are turning their back on lots of processed fare. But it’s certainly a huge example of what’s gone wrong.

Chobani, meanwhile, is serious about staying on top. It’s a year into offering ready-to-drink beverages, and it’s expanding its retail presence by opening Chobani Cafes at Walmart and Target.

This week it also named Tim Brown as President and Chief Operating Officer, reporting to Ulukaya, who remains CEO & Chairman.

Brown, who joins the company from running Nestle Waters North America, will oversee Chobani’s operations, sales, marketing, legal and finance teams as the company looks to further increase its category leadership while continuing to deliver on its founding mission of making better food for more people.

 

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