Greek Yogurt – Far From a Tragedy

Apr 14, 2011
Tom Ryan

Greek yogurt, which has been creating quite a stir in the dairy
aisle, is about to become quickly crowded with a heap of well known and lesser
known names joining the category leaders, Fage and Chobani.

The launches come
as Greek yogurt sales soared 160 percent in the 52-weeks ending October 2,
according to The Nielsen Company. According to Mintel, Greek yogurt has exploded
from a $33 million category in 2007 to $469 million as of late last year, or
12 percent of all yogurt sales.

Among the new entrants:

  • The Dannon Greek brand launched nationally in January.
  • Kraft, which exited the yogurt category seven years ago, started selling
    its Athenos brand at Walmart late last year.
  • General Mills, whose Yoplait is the leading seller among regular yogurts,
    is reformulating its Greek yogurt with a thicker texture and hired TV personality
    Maria Menounos as a spokeswoman.

Others aiming at the category include The Greek Gods; Columbia-based dairy-giant
Alpina; Cabot Creamery, which recently introduced Cabot Greek; and Stonyfield
with its Oikos Organic Greek yogurt line.

Fage, credited with launching the trend
with its entry in 2008, accounted for 25 percent share of Greek yogurt, according
to Mintel. But Chobani’s growth has accelerated and it now claims roughly 45
percent share, according to Advertising
. Market watchers said it’s rare that two obscure brands can have
such an influence on eating habits.

"It wasn’t as if there was an obvious sort of marketing push," Bill
Patterson, a Mintel analyst, told Ad Age. "Greek yogurt just kind
of leapt on the scene. It truly was consumer-driven, which is really quite

With many competitors coming in, observers are exploring not
only what launched the trend but its potential size.

Ad Age said Greek yogurt has grown in the U.S. "as health-conscious
consumers gravitate toward products with simple ingredients." The thick,
creamy yogurt also touts twice the protein as ordinary brands. Some see the
growth potential as evident because American consumption of yogurt is less
than a third of European consumption.

Greek yogurt this year is also expected
to be bolstered by the promotion of yogurt overall as a substitute,
snack dessert and cooking ingredient. A recent Nielsen Buzz Metrics report,
according to Frozen & Dairy Buyer,
stated, "Dieters,
health seekers and athletes recommend eating Greek yogurt across all meal occasions
particularly as a satisfying on-the-go or evening snack and a more nutritious
base for homemade salad dressings and mayonnaise."

Mr. Neuwirt said the
biggest opportunity for yogurt overall is targeting women between the ages
of 25 to 54.

"They are infrequent customers," he said. "They eat yogurt
periodically, but it’s not top of mind."

Amy Levine, director of
marketing at Cabot Creamery, believes the target demographic is much broader. "There
are athletes, different ethnic groups and men as well as women, many of which
are higher income. We’re also seeing
a lot of younger people more interested in yogurt because of the protein content," she
told F&D Buyer.

Discussion Questions: What do you see as the biggest driver of the popularity of Greek yogurt? How should major CPG companies such as Dannon and Kraft approach the opportunity kick-started by smaller brands?

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9 Comments on "Greek Yogurt – Far From a Tragedy"

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Ron Margulis
10 years 27 days ago

It all comes down to taste and value. I used to eat yogurt in high school and college because my coaches told me it was good for athletic performance. It wasn’t my favorite thing, but I didn’t mind it. After my college athletic career was done I stopped eating it. Several years and pounds later, I thought I’d take it up again as part of a “get back into shape” regimen, but found the offerings too sweet or too bland. Greek yogurt addresses both those issues, so I am back to a few servings a week. The value is right in terms of both the cost of the product and the results for my body, and it tastes good. It’s apparent there are a lot of consumers that feel the same way.

John Boccuzzi, Jr.
John Boccuzzi, Jr.
10 years 27 days ago

I thought Bill Patterson’s comment that the growth of Greek Yogurt was consumer driven and that was “quite unusual” as strange. We need to give brand people credit for seeing and taking advantage of a trend, but I like to think that consumers almost always drive the direction of what they want. Brand people that can see a trend and quickly react are the ones that win at shelf.

Amy Levine at Cabot Creamery had it right. The demographic for Greek yogurt is far broader than women between 25-54. I am really surprised none of the brands have picked up on the “consumer-driven” trend of adding more protein rich items to their diet to stay healthy and in fact lose weight. Greek yogurt is a perfect food for male and female athletes, people on Nutrisystem or another weight lose program that promotes a higher percent of protein.

Anne Bieler
Anne Bieler
10 years 27 days ago

Taste, nutrition, natural, many locally owned brands…the taste is superior, naturally thicker and creamier, and double the protein, too.

Many of the “healthy” and probiotic yogurts contain sugar, fructose, gelatin, cornstarch, and more to sweeten and thicken the product

Yes, consumers know!

Paula Rosenblum
10 years 27 days ago

I LOVE Greek yogurt. Tastes richer, twice the protein, feels healthier, and I really like buying the “niche” brands. Fage is my favorite.

I actually avoid the national brands because I’m not convinced they are as authentic.

Greek yogurt is a winner because it’s just a better yogurt.

Roger Saunders
10 years 26 days ago

Month after month in the Consumer Intentions & Actions (CIA)Survey, fully 32% to 38% of Adults in the U.S. point to the fact that for Health Reasons, they are monitoring Calories, Fats, and Salt/Sodium. An added 20% to 23% report watching carbohydrate intake, and 12% say they are eating less meat.

Yogurt helps consumers like these. Providing them with a product that taste good, and is easy to digest on a regular basis makes for a beautiful story. Yogurt holds appeal across all age groups, income levels, and ethnic backgrounds. The CIA report shows that better than 10% of the population has it in their diet every single week.

The upside for continued growth looks promising, based on consumer demand. And, the retail stores I visit, clearly appear to be providing expanded shelf space to meet that demand–that only serves to drive numbers higher.

Craig Sundstrom
10 years 26 days ago

I agree with John: I thought Mr. Patterson’s remark was the most remarkable part of the story (I’m sure PR departments everywhere are hanging him in effigy).

As for the yogurt itself, I dunno…I don’t believe the goldfish swallowing fad of the 50s was ever fully explained either.

Gene Detroyer
10 years 26 days ago

The first question to be asked is what “Greek” product the CPG companies will introduce. Is it possible for them to actually introduce a pure Greek yogurt? Not likely. The will change, add, modify, include strange chemicals all in the name of making a “better” product. Then they will call it “Greek,” advertising it to the hilt and introduce Americans to a new bastardized product.

I believe Activia is the largest selling yoghurt in Europe. It was introduced in 2004. It is a very pure product with only basic ingredients. But, the American marketers could not keep their hands off. They had to add something. Cornstarch, not a bad additive, but they couldn’t leave the successful formula alone.

Bernice Hurst
10 years 26 days ago

Paula said it–“Greek yogurt is a winner because it’s just a better yogurt.” But I also think, sadly, Gene is right as well. His expectation of the bastardization process will likely be a response to Mr Patterson’s remark about growth being consumer driven. After all, we can’t really let consumers decide for us what they want to eat, now can we?

Tonia Key
Tonia Key
10 years 26 days ago

FYI–Most women like myself who eat yogurt do not eat it periodically. We eat it daily. Yogurt helps in maintaining our “womanly” internal balance. And yes, it is top of mind, that’s why we switched to Greek yogurt when it became widely available in our areas. That’s why the growth was so explosive. Duh!


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