Cultivating yogurt culture

Innovations, including Greek yogurt, packaging and digital media are spurring consumer interest.

Dairy products continue to play a bigger role in the American diet. As they do, consumers are demanding high-quality, all-natural products that have only a few key ingredients. Based on these attributes, it is not surprising that industry observers are calling yogurt the food trend of the decade.

This is an impressive accolade when considering the evolution of yogurt consumption. Historically yogurt has been consumed primarily by those who used it on a daily basis; including consumers that also use yogurt as a milk alternative.

FAGE USA, based in Johnstown, N.Y., is responding to this demand with its FAGE Total Greek yogurt line. Company officials say more consumers are reaching for Total, which is available in whole, 2% or fat-free versions, as an alternative for milk with their breakfast cereal, as well as a replacement for certain dairy products such as sour cream, mayonnaise and cream cheese. As more shoppers incorporate yogurt into their well-being regime, they are more demanding than ever.

“Consumers in America are moving away from the typical style of American yogurt filled with artificial colors, fillers and sugar,” says Russell Evans, director of marketing for FAGE USA.

Then there is the episodic consumer. This consumer may be starting a diet and eager to change all consumption and buying habits. Observers say this is when yogurt becomes part of consumers’ everyday food staples.

“However, these shoppers’ buying patterns are always changing,” says Michael Neuwirth, spokesman for Dannon Co., a White Plains, N.Y.-based division of Danone. “There are also 85% of households that infrequently or never purchase yogurt. That means this is a great opportunity for the category.”

No matter the type of shopper, it seems purchases are leaning toward more natural or organic options, which puts additional pressure on manufacturers. “Companies that claim their yogurt consists of natural ingredients had better stick to that path,” says Kyle O’Brien, executive vice president of sales for Chobani, a brand manufactured by Argo Farma, based in Norwich, N.Y. “When you add ingredients, you are altering the flavor and not sticking to the true natural message.”

Consumers also expect yogurt options to be healthy and nutritious, and they keep a keen eye on new introductions that will keep their daily diets and consumption interesting. By focusing on these trends, suppliers are primed to deliver more innovative product that will appeal to fickle shoppers. FAGE keeps innovation at the core of its business, focusing first “on providing the highest quality and most innovative product possible to our consumers,” says Evans. “For example our new 0% raspberry, strawberry, blueberry and peach flavors are defiantly rich and creamy but surprisingly fat- free, and do not compromise on quality or taste.”

Observers say retailers have been quick to adapt and capitalize on changes in consumer behavior, particularly the speedy expansion of the Greek yogurt subcategory. While more consumers are adding the tart-tasting yogurt to their shopping lists, consumption in the U.S. still remains only a fraction of consumption in Europe.

“Greek yogurt has tremendous potential, and we are seeing extraordinary growth in all regions of the country,” says Evans.

As popularity continues to grow, consumers have been adopting the taste and versatility of Greek yogurt. In its simplest terms, Greek yogurt is described as all-natural—containing no artificial sweeteners, flavors, colors or preservatives.

“Because of the straining process that removes excess water, dissolved salts and sugars, Greek yogurt has a naturally thick and creamy consistency that is low in calories, fat, cholesterol and sodium, but delivers high protein,” says Mary Kozanian, marketing assistant, Voskos Greek Yogurt, a brand produced by Sun Valley Dairy, based in Sun Valley, Calif.

Bringing its taste of Greece to American shoppers is Olympus Dairy USA. Created by Stergios ‘Sarantis near Mt. Olympus in 1965 under the TYRAS name, in 2009 the company, now based in Little Ferry, N.J., established its American roots. “While shoppers are looking for nutritional value, they are also intrigued by the fact that Greek yogurt, which is an integral part of the Mediterranean diet, can be a meal within itself,” says Nikos Nikolaou, the company’s operations manager. “People are looking for healthier alternatives, and we are satisfying that with our products that feature lots of protein, probiotics, organic elements and quality raw materials, including milk.”

Nikolaou adds that the company continues to innovate with new flavors, yet it stays true to its heritage. “One of our newest introductions is our Greek yogurt with Greek honey on the side,” he says. “However, we only have it separate as when ingredients such as honey are mixed in prior it alters the goodness.”

The Greek segment has also recently seen the entrance of many new brands into the category. Sun Valley Dairy made its debut into the category only a few years ago, and currently has two brands of Greek yogurt. Voskos features organic and non-fat options, as well as products flavored with fruit, vanilla or honey. The company’s YoGreek line is marketed in a dual container that has either plain or fruit-blended yogurt, as well as a serving of granola. “YoGreek is marketed to people on the go,” Kozanian says. “The container is a meal within itself, since it contains enough protein to keep consumers satisfied for a good part of the day.”

Even well recognized brands, such as Dannon, are jumping into the Greek yogurt game. To stand out, the company has renamed its Dannon Greek line, Dannon Oikos. It is available in strawberry, blueberry, honey, vanilla and plain flavors.

Dannon’s Activia line was developed with the Probiotic culture Bifidus Regularis, which naturally helps to regulate the digestive system. Using the same ingredient in its Selects Greek line, officials say consumers can experience the thick, creamy taste of Greek yogurt, and still benefit from the elements that Activia has built its success on.

Argo Farma’s Chobani line is also upping the innovation ante with Chobani Champions, the first Greek yogurt made for kids. Launched in April, Chobani Champions is made with only natural ingredients, packs 9 grams of protein per serving, and is a good source of vitamin D and calcium. If parents are attracted to bright, sustainable packaging, kids will notice the Verry Berry and Honey-Nana flavors.

“If you can educate a child about the taste and benefits of Greek yogurt at age 6, you can win a customer for life,” O’Brien says.

With so many brands jumping into the segment, and competing for attention and market share, consumers and retailers have their work cut out for themselves. “Demand for cheaper prices will create fraudulent-style yogurts that don’t strain, use preservatives to achieve thickness, or don’t use the traditional way to create Greek yogurt,” says Nikolaou.

We will continue to bring every day excellent quality dairy products for all our partners and our ambassadors.”

The category will eventually see consolidation, predict observers. “Those that are eager to make the shopping experience more convenient for shoppers and help grocers manage the complexity of the category on store shelves will be the companies that stand out, and help consolidate the segment over time,” Neuwirth says.

Inspiring Innovation

While innovation abounds, the category is not without its share of challenges. As more consumers transition to healthier choices, the yogurt category still struggles to be a top snacking choice, especially among consumers who reach for salty snacks.

Also, the fact that yogurt must be refrigerated and maintained for freshness puts pressure on manufacturers to create products that can be easily consumed in its cooled format, but without using a spoon. Across its Danimals line, Dannon has broken the mold with its drinkable bottles, crush cups that can be squeezed, and Coolision dual chamber tubes that can be squeezed separately or together to create a new flavor.

Retail space is another challenge. Some retailers are realigning their refrigerated section, and decreasing the size of the margarine and butter section to increase space for the growing yogurt category. Until this becomes an industry priority, some manufacturers are offering other packaging options to maximize space, as well as fight potential out-of-stocks.

Multi-packs is one way to combat both issues. Four-packs, for example, “require three less touches than individual cups, per hand,” explains Neuwirth.

One of the biggest innovations boosting the category is the integration of digital media. Chobani, for example, is using social media to give its shoppers a place to “talk about Chobani, the quality of the product and how it has become a part of their day,” O’Brien says.

Similarly, smartphone users now have a mobile application that can help them to integrate yogurt into their eating habits. The brainchild of Voskos Greek Yogurt, the company’s free mobile app features approximately 100 recipes that center on Voskos yogurt; product information; downloadable mobile coupons and a product locator.

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