PG Web Extra: Aspirants to Greek Yogurt’s Throne

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PG Web Extra: Aspirants to Greek Yogurt’s Throne

By Bridget Goldschmidt, EnsembleIQ - 07/31/2015

Greek yogurt is riding high now in dairy departments across America, but what will be the next trend to take the category by storm, and why?

One possibility is that it may not be yogurt at all, technically speaking. "We … recognize that while some consumers want the health benefits of Greek yogurt, they may not enjoy the tarter taste," notes Liza Dube, director of PR and digital marketing at Stonyfield Organic, a Londonderry, N.H.-based maker of yogurt and other dairy products. "We tempt those customers to 'Cheat on Greek' with Petite Crème – a creamy and light, sweet fresh cheese, similar to fromage blanc, that is eaten as a yogurt and contains the same protein as Greek.” Petite Crème comes in Vive la Vanilla, La Vie en Strawberry, Belle Blueberry, Mon Cherry Amour, Ooh lala Peach, Plain & Simple, and Strawberry-Banana Ménage varieties.

Cindy Sorensen, VP business development at the St. Paul, Minn.-based Midwest Dairy Association, similarly points to a cheese product as a potential usurper of Greek yogurt's supremacy. "There is much speculation around cottage cheese," she observes. "Cottage cheese fulfills the consumer needs [of healthy indulgence], and it is a category that is ripe for innovation [in terms of] packaging, flavors, marketing [and attracting] new consumers. We have already seen many new product introductions in this category."

Dube also sees "great new yogurt trends around whole-milk dairy and decadent flavors – like in our new Oh My Yog! yogurt line – growing in popularity as consumers recognize its place in a balanced diet and want something that’s delicious and satisfying." Described by Stonyfield as "a tri-layer, full-fat yogurt with a delicious fruit bottom, honey-infused yogurt center and decadent cream top," Oh My Yog! comes in Wild Quebec Blueberry, Apple Cinnamon, Gingered Pear, Orange Cranberry, Madagascar Vanilla Bean, Pacific Coast Strawberry flavors. Norwich, N.Y.-based Chobani, maker of the No. 1 Greek yogurt brand in the United States, and Müller Yogurt USA, in Batavia, N.Y., have introduced similarly indulgent products to the market.

Elsewhere in the organic segment, citing "exploding" consumer demand for organic grass-fed yogurt, Organic Valley has introduced Grassmilk Yogurt in plain and vanilla flavors, which the La Farge, Wis.-based cooperative says "will appeal to consumers who are looking for exceptional 'beyond organic' taste." The small-batch, minimally processed, non-homogenized product features "higher levels of naturally occurring omega-3 and CLA" and a "more healthful ratio of omega-3 to omega-6 fatty acids," according to Organic Valley.

International Contenders

Just as Bellvue, Colo.-based Noosa Yoghurt has detected an opening for its full-fat Australian-style yogurt in the wake of Greek yogurt's success in the United States, products from other countries have a chance to make a bid for greater popularity. One such contender is Siggi's Icelandic-style yogurt, known as skyr, which recently introduced a line of whole-milk yogurt featuring "a touch of cream," which the New York-based company says provides "a richer taste experience than [Siggi's] 0% and 2% milkfat varieties."

There's also kefir, a probiotic, fermented milk beverage hailing originally from the Caucasus Mountains. Recent product rollouts from Morton Grove, Ill.-based Lifeway Foods, the leading kefir supplier in the United States, in this segment include a no-sugar-added ProBugs probiotic smoothie for kids, a limited-edition Lowfat Watermelon Kefir for summer, and a 16-ounce size for nine standard kefir and organic kefir flavors.

More niche international items include tart, unstrained Bulgarian-style yogurt from such brands as Trimona, and light, custard-like French-style yogurt, crafted by purveyors like San Benoit Creamery.

While acknowledging the influx of yogurt products from other parts of the world following Greek yogurt's success, Sorensen says, "I don’t think we will see these segments be as big as Greek yogurt. Interestingly, they are maintaining their premium pricing position in the category at the moment, which is bringing some profitability back into the department."

Savory Specialties

In step with rising consumer interest in the savory side of yogurt, including Blue Hill's offerings, and traditional sauces and dips like cucumber-flavored tzatziki from Greece, Karoun Dairies, a San Fernando, Calif.-based maker of Mediterranean-style yogurt, cheese, sour cream and other products, offers an award-winning line of Blue Isle Mediterranean Yogurt Spreads in such flavors as French Onion and Spicy Vegetable, as well as sweet Honey, Blueberry and new Strawberry varieties. The tangy spread can be used like cream cheese.

Evolving Greek

Alongside the emergence of other types of yogurt, Greek yogurt itself will keep evolving through inventive tweaks. To that end, Minneapolis-based General Mills has come up with Yoplait Greek Whips!, "which offers many of the benefits of Greek yogurt while offering a lighter, fluffier texture," explains Susan Pitt, Yoplait marketing manager. "There are consumers who don't care for the thick texture of traditional Greek yogurts and Yoplait Greek Whips! solves that problem."

In a similar spirit, White Plains, N.Y.-based Dannon and aptly named juice/smoothie maker Evolution Fresh, a subsidiary of Seattle-based Starbucks, worked for two years to develop their new Fruit on the Bottom Greek Yogurts, made from a proprietary mild and creamy Greek nonfat yogurt and high-quality fruits, and sold in clear packaging enabling consumers to see the ingredients. A digital ad campaign launched in July support of the line, which arrives on shelves nationwide this summer.

General Mills' Pitt believes that "Greek yogurt is absolutely here to stay; however, we think it will continue to take on new forms and products. Drinkable products, pouch products, products with mix-ins and products that help with on-the-go snacking will continue to be introduced. Innovation will continue to be a key growth driver for the category." The company's new Plenti line, featuring Greek yogurt blended with whole grain oats, flax seeds and pumpkin seeds, is definitely part of this wave of inventive products, as are Stonyfield's Organic Super Grains Greek and Organic Super Seeds Greek items, along with a wealth of new offerings from Chobani. Lifeway's contribution to the prevailing yogurt trend is a whole-milk Greek Style Kefir in Plain and Strawberry varieties.

Whatever comes next, Pitt is of the opinion that current yogurt trends will influence future eating habits across the entire category, observing, "The rise of Greek yogurt has made Americans more evolved yogurt consumers in general, extending yogurt eating occasions beyond breakfast to lunch, snack time and even dinner."

Yogurt Performance

It may be a long-established dairy staple, but yogurt has its ups and downs, like any other category. "Depending on the class of trade, we are seeing anywhere from -5.5 percent to 2.4 percent in change versus year to date a year ago," notes Cindy Sorensen, VP business development at the St. Paul, Minn.-based Midwest Dairy Association. "The largest classes of trade for yogurt sales, food and all other, which includes supercenter and mass, have seen yogurt sales flat to 2.4 percent, respectively. The year-to-date data shows that food class of trade has seen higher price increases versus all other, with 2.8 percent in food and 0.6 percent in all other. The price increase in food has driven down units by 0.7 percent, but dollar sales are up 2.4 percent."

As for the currently popular Greek segment, Sorensen describes it as "maturing," adding that Greek yogurt "represents about 36 percent of all yogurt sales, but has seen moderate growth, with a 1.5 percent increase in volume year to date. The price per volume is virtually flat versus prior [year], while traditional yogurt has had a 3.1 percent price per volume increase versus prior year. This has resulted in traditional yogurt experiencing a decline [in] unit sales, while Greek yogurt unit sales are up. This pricing scenario could impact Greek's image as premium and result in more commodity pricing of this segment."

When asked to account for Greek yogurt's current ubiquity across categories, Sorensen noted: "A recent study of consumers’ perceptions of 'Greek' indicated that they did not realize that Greek was a processing method, but rather they associated 'Greek' with the benefits that it delivered, specifically [that] it meant 'energy, satiety, healthy and muscle strength.' As a result, manufacturers have by responded by incorporating Greek yogurt into a variety of other products to capitalize on this consumer trend."

Further, many of the products now rolling out, particularly the "dessert-style" varieties, are full-fat rather than reduced-fat or nonfat options, reflecting a consumer shift toward whole-milk dairy products. "While there is an increase is consumption of low-fat and fat-free yogurt, we are also seeing whole fat increase as well," affirms Sorensen. "It's only about 10 percent of the category, but it has had a 8.6 percent increase year to date. This is result of new yogurt product introductions which are made with whole-fat milk. Consumers are concerned about weight management, but still want to indulge themselves. Yogurt made with whole milk is a happy medium of an indulgent yet healthy snack or dessert. [R]esearch is emerging about the benefits of dairy fat, and this could also be driving product introductions of whole-milk yogurt, which is a trend we are also seeing in fluid milk – whole-fat milk is increasing as a segment as well."

End Yogurt Confusion

How can retailers take their yogurt sales to the next level? They might try simplifying their yogurt sections.

"In research conducted by Dairy Management Inc., consumers told us that they found the yogurt category very confusing to shop," notes Cindy Sorensen, VP business development at the St. Paul, Minn.-based Midwest Dairy Association. "It’s a very long stretch of products, which are not organized based on their needs. As a result, we tested a concept to reinvent not only the yogurt category, but [also] the entire dairy department. The specific yogurt reinvention included segmenting the types of yogurt based on what consumers’ needs are. Those segments included Greek, low-fat, fat-free, probiotic, kids, on the go, and could now also include whole-fat and snack/indulgent yogurts."

Susan Pitt, Yoplait marketing manager at Minneapolis-based General Mills, agrees that segmentation of products is a key component of a successful yogurt merchandising strategy. "Yogurt is merchandised every week at most retailers, so it is important to focus on the quality of your executions," she says. “Brands see the highest lifts when there is quality merchandising, including ad feature and display elements. Category performance is further optimized when an ad features multiple segments, specifically Greek, traditional and kid, in order [to] bring in different yogurt consumers. Inclusion of yogurt in events across categories has also been successful for Yoplait."

What's more, Pitt notes the product's between-meals potential. "Communicating yogurt’s role as a snack is key to unlocking continued growth in the category," she asserts. "There is opportunity to expand consumption by making yogurt a top-of-mind snack throughout the day. In fact, 47 percent of yogurt occasions are snacking occasions – but yogurt only comprises 4 percent of snacking."

Retailers don't have to stop at snacks, however. "Yogurt is unique in that it is consumed across all dayparts: breakfast, lunch, dinner, snacking and now dessert," asserts Sorensen. "As such, this allows for many cross-merchandising opportunities. Consumers can purchase food in many retail classes of trade today, [but] what they are really looking for are solutions to their time-starved schedules. A few suggestions might include merchandising meal opportunities, which include not only yogurt, but [also] other complementary food options to make a meal."

This approach can be adopted beyond the dairy case. "A breakfast solution center might be a yogurt/breakfast bar (yogurt, granola, fruit, oatmeal) utilizing the salad bar island, which is unused in the morning hours," recommends Sorensen. "Hy-Vee does a great job with a yogurt bar in their deli area. … Many retailers are looking to win back the breakfast meal occasions which have been lost to quick-serve restaurants; a yogurt bar for a breakfast on the go might be one way to do that. Another breakfast solution center might have items to purchase for breakfast at home, including yogurt, granola, fruit, and, of course, milk and cereal, too. Yogurt also works well on a healthy snacking solution center or 'healthy checkout' fixture."