Greek yogurt is slowly taking over the yogurt segment, and with consistent double-digit growth retailers should be making room.
Somewhere out there Aegle, the Greek goddess of good health, is smiling down on the yogurt category. And retailers are smiling back up at her—at least those who have welcomed the surge of Greek yogurt into their stores are.
Not too long ago shoppers seeking out Greek yogurt had to visit specialty stores that stocked Mediterranean-specific products. There, they were met with one, maybe two, flavors and had to pay close to twice the price of regular yogurt.
This is clearly no longer the case. Greek yogurt has outgrown its niche consumer base and has earned itself dedicated shelf space in mainstream supermarkets. According to industry observers, the trend is showing no signs of slowing down either.
There is still a lot of room for growth, says Kyle O’Brien, executive vice president of sales for Norwich, N.Y.-based Chobani. “U.S. yogurt consumption per capita is far below other countries—up to four to six times. We believe the yogurt story is just getting started in the U.S. As more people begin to focus on eating nutritious, clean, simple foods, we expect the demand to only grow.”
The health benefits of Greek yogurt appeal to consumers, but they are not the only driver. According to Dawn Jackson Blatner, a Chicago-based registered dietician, Greek yogurt satisfies the four factors that drive consumer purchases—taste, convenience, health and cost. “It is a no-brainer that it tastes great; it is obviously convenient; and people like the health benefits because it is low in sugar but high in protein. The only thing not necessarily on its side is cost, but the other three drivers are so strong, people will pay for it.”
Manufacturers know that the nutrition factor is only as influential as the “next healthy thing.” To maintain excitement for Greek yogurt, many manufacturers are expanding their line-ups with creative new flavors and novelty snacks that combine yogurt with add-ins.
Chobani, a company that observers say worked its way into household refrigerators by offering innovative flavors, is targeting snackers this year with Chobani Bite. The snack will be available in four unique flavor combinations: Fig with Orange Zest, Caramel with Pineapple, Coffee with Dark Chocolate Chips and Raspberry with Dark Chocolate Chips.
“Innovation isn’t just a department at Chobani. It’s at the core of what we do, from R&D to our products all the way to building our plants and cultivating our employees,” says O’Brien. “We function more like a tech company than a CPG company in the way we work. As a market leader, it is extremely important that our collective team thinks about great ideas and how to best bring them to life.”
Other manufacturers are expanding Greek yogurt’s reach to outside the refrigerator aisle. Numerous lines of Greek frozen yogurt have been popping up marketed as an ice cream substitute. Yasso Frozen Greek Yogurt, an Apollo Food Group Co. brand, took it a step further and launched Greek yogurt bars. With the same ingredients as Greek yogurt, the bars grab-and-go format adds a layer of convenience and the bonus of portion-control.
Amanda Klane, co-CEO of Boston-based Yasso, says that the bars have become popular as an after-meal dessert, midday snack and even breakfast. “Each bar has the same amount of protein as an egg so you can eat it for breakfast and get the same nutritional benefits. We don’t target it for a specific occasion; we like to say ‘you can eat it whenever you want, wherever you want.’”
With the category’s double-digit growth, and a wide range of products on tap for a 2013 debut, the largest obstacle for retailers may be finding space. There has been some SKU rationalization, says Dave Freeman, vice president of sales for FAGE USA Dairy Industry; and retailers are reassigning shelf space from regular yogurt as well as other dairy categories, such as butter or margarine.
With annual sales growth of at least 50% since its arrival in the U.S. in 1998 according to Freeman, FAGE USA recognizes the importance of getting sufficient shelf space. The Johnstown, N.Y.-based manufacturer is introducing four new cup flavors this month, as well as a new brand, FAGE Fruyo, which is strained Greek yogurt with blended fruits. This line-up will be available in Vanilla, Pineapple, Blueberry, Strawberry, Raspberry, Cherry and Peach.
Some industry observers suggest retailers can be picky about the Greek yogurt brands they feature in their store. Many are looking to manufacturers that are going to support products at the store level. Olympus Dairy USA Corp., for example, manufactures its product in Greece and therefore targets stores that attract consumers willing to pay a higher price point.
“Not every Greek yogurt product in the store is a good product,” says Nickolas Nikolaou, sales and operations manager, for the Little Ferry, N.J.-based company. “Retailers should seek to include products that will bring new groups of health consumers into their stores.”
Figuring out what products to carry is as simple as sampling, say industry observers. Manufacturers agree that sampling in-store—and out—always receives a positive response. Yasso Frozen Greek Yogurt took their product on a nationwide van tour handing out samples and coupons on top of in-store promotions. It was about informing consumers that they existed, says Klane.
While taste and nutrition may be the strongest selling points, it will not convince everyone, says Blatner. She adds that retailers should point out Greek yogurts wide range of uses to convince consumers teetering on the edge of making a purchase. “Step one is to slam dunk consumers on the taste with samples, but step two is to highlight all the uses beyond the traditional parfaits, such as using it as a sour cream substitute in taco dip, adding it to tomato soup for cream of tomato soup, using it as a topping on French fries or making ranch dip or dressing with it,” she says. “People will then realize that it will not spoil in the fridge because there are a lot of things they can do with it. They like the taste and there will be no waste.”
A new twist on Greek
Greek yogurt has found its way into the frozen dessert case, with frozen Greek yogurt and frozen Greek yogurt bars replacing ice cream as a healthy anytime treat. The Rickland Orchards Co. however, has taken it a step further with its latest addition—Frozen Greek Yogurt Gelato.
According to Jason Cohen, co-founder and CEO of the Fairfield, N.J.-based company, the Greek yogurt gelato combines the goodness of Greek yogurt with the creaminess of gelato. Available in Vanilla Blueberry and Vanilla Raspberry—there are chocolate-based flavors in the development—the company achieves the gelato-like texture by infusing the dense base with fruit purees resulting in only 150 calories per serving.
“It adds a unique characteristic unlike other competitors in the set. It offers the best of both worlds,” says Cohen. “The phenomenon of Greek yogurt has spread across all consumer groups and the brand plans to stay ahead of the curve by discovering non-traditional ways in which to enjoy Greek yogurt.”