General Mills is to expand its manufacturing capacity for its Yoplait Greek yogurt line to cash in on surging demand.
Demand for thick, high-protein Greek-style yogurt has soared in popularity over the past couple of years, with rival Dannon recently upping production capacity and ingredients firms from DSM to Corn Products International launching new ingredients to help firms create a creamy texture while keeping production costs down.
General Mills, which entered the market in January 2010 with a blended fruit Greek yogurt under its Yoplait brand, reformulated the product in February 2011 so that the fruit sat on the bottom. It also had a packaging refresh.
We are selling all we can make now
Speaking to analysts at an investor day last week, General Mills’ US retail chief Ian Friendly said mistakes had been made, but that bosses now had a product they were happy with.
“It’s still early days but we’re seeing good results. We are selling all we can make right now. Additional manufacturing capacity will be coming online in late summer. At this point, we’ll turn on advertising support for the product for the very first time.”
He added: “We’ve got work to do here for sure, but we see no reason why we cannot capture our fair share of the Greek yogurt segment…If you look at the numbers virtually all of the growth [in the US retail yogurt category] is in Greek; the rest of the market is flat.”
Asked whether Yoplait was the right brand for the Greek category given that smaller players such as Chobani were currently driving category growth, he said: “We believe that the Yoplait brand name can carry this now we have the right product; we think there is a place for a mainstream high quality Greek-style yogurt.”
But bosses would also consider whether there was any mileage in introducing Greek products under other more niche brand names as well, he added.
Dannon also strengthens Greek offer
Rival Dannon recently revealed it had added a manufacturing line at its Minster yogurt factory in Ohio to meet growing demand for Greek yogurt.
Speaking to analysts in April, Pierre-Andre Terisse -chief finance officer at Dannon’s parent company Danone - said: “What’s driving the [US yogurt] category up today is Greek. We see Chobani being up, we are essentially stable and somebody else is a bit under pressure for the time being.
“Our ambition is basically to grow between 10% and 20%. 10% is what we have been delivering over the past seven or eight years as an average growth. That's what we are growing at the moment. It's obvious that our ambition is to grow faster than that. But for this we'll need to adjust a bit the offer, strengthen the Greek offer, and that's going to be the target for the rest of the year.”
Suddenly Greek took off
Sales of Greek-style yogurt, which can be eaten as a dessert or as an accompaniment, have recently surged, said National Starch Food Innovation’s global marketing director for texture Paul Petersen.
Petersen, who was speaking to FoodNavigator-USA.com at last month’s IFT show in New Orleans, added: “Suddenly Greek took off. Some people like it because of its texture, some people like it because of the protein content, and some like it for both.”
National Starch’s new Novation Indulge texturizing tapioca starch ingredient enabled manufacturers to make thick, creamy, Greek-style yogurt without the need for straining, which was typically needed to achieve a thick texture but could be costly, he said.
Sharon Gerdes from the US Dairy Export Council, who was also at the IFT show, said: “Greek yogurt is higher in protein and lower in sugar and consumers are looking for healthier products.”