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COO: 'We’re in a stable financial position both from an operating point of view and a capital point of view'

Chobani moves beyond Greek with Smooth launch: 'We're a yogurt company, not a Greek yogurt company'

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By Elaine Watson+

28-Jun-2017
Last updated on 07-Jul-2017 at 22:19 GMT2017-07-07T22:19:46Z

Chobani Smooth hits stores this month (MSRP $1.79 for a 2-pack) and is available in peach, strawberry, vanilla, blueberry, and black cherry flavors
Chobani Smooth hits stores this month (MSRP $1.79 for a 2-pack) and is available in peach, strawberry, vanilla, blueberry, and black cherry flavors

Chobani – which disrupted the US dairy category a decade ago with its Greek yogurt – is now aiming to do the same in the non-Greek segment with the launch of Chobani Smooth, a low fat, mild-tasting blended fruit yogurt with twice the protein, 25% less sugar and a cleaner label than other leading brands.

Chobani Smooth – which is rolling out this month (MSRP $1.79 for a 2-pack) - is lightly strained (some of the liquid/whey is removed), explaining its higher protein content, but has a different taste and mouthfeel to Greek yogurt (known for its tart taste and thick texture), president and COO Tim Brown told FoodNavigator-USA.

Speaking about the launch, which was announced two days after rival General Mills (Yoplait) unveiled its new yogurt brand Oui, to the US market, Brown said: “We’ve been growing at a CAGR [compound annual growth rate] in the double digits in the last three years and we’re outpacing the category.

"We also just reached the #2 position in overall yogurt [behind DanoneWave], so this is an opportunity for us to really take a leadership position and be a yogurt company, not just a Greek yogurt company,” added Brown,who joined Chobani in March 2017.

The feedback from Chobani’s key customers – most of whom are taking all five SKUs – has been extremely positive, claimed Brown, who said Smooth is being manufactured at Chobani’s factory in South Edmeston New York using existing yogurt making equipment, so has not involved a significant amount of capital expenditure.

“This is our most successful launch ever in terms of getting full listings of all the flavors from such a broad spectrum of retailers. This is the fastest start we’ve ever had.”

Chobani will be driving trial and awareness through targeted couponing, a digital and social campaign and in-store support, added Brown, who said he is focused on “the day to day, people, and running efficient and effective operations” while founder and chairman Hamdi Ulukaya is focused on “creativity and product development.”

He added: “It’s a fast-moving dynamic company, but we’ve always had a very clear idea of how we’d share responsibilities. It’s a real partnership.”

SKU proliferation:  I think retailers are looking to streamline the category

While there has been a lot of activity in the Greek segment and in other smaller sub-segments of the yogurt category lately, it has led to SKU proliferation in some stores, prompting retailers to re-think category management approaches, he said.

“I think retailers are looking to streamline the category some, to take out some of the complexity to make it easier for the shopper, and we fully support that.

There’s been a lot of volatility in the category lately and we’ve seen a lot of new things come in, but a lot of them have been very niche, so there’s been a proliferation [of SKUs].”

On the funding situation, IPO rumors: We’re in a stable financial position both from an operating point of view and a capital point of view. There is no need to do anything with the capital structure of the company. We are operating profitably and we can do the things we need to do to execute in the marketplace.”

On the whole milk trend: “We will be converting four of our traditional blended products to whole milk at the beginning of next year.”

On the plant-based trend in yogurt: We’ve seen more plant-based yogurts come out but the numbers don’t add up to a lot; I’ve not seen anyone that’s been able to match the texture of yogurt.”

On the trend of sourcing milk from cows fed non-GMO feed:  If the whole system starts to move, that’s something we’ll watch, but we want to make products that are accessible and affordable.”

$3bn+ non-Greek category ripe for innovation

On the traditional side of the category, however, “there’s been very little activity and it’s a more than $3bn part of the category that has seen very little innovation,” he claimed. “It’s also been declining, primarily because of the performance of one brand, so we wanted to inject some life into that side of the category and retailers have been very enthusiastic.”

He added: “With Smooth we knew we could deliver an excellent experience to people that want a more traditional yogurt, something a little thinner and a little sweeter than Greek, that was still high in protein and lower in sugar.”

Settling on the name ‘Smooth’ was easy “because it was just the first thing that almost everyone said when they tried it,” he added.

Lower in sugar, higher in protein, with a cleaner label

While some leading brands in the non-Greek sector use modified corn starch, carrageenan and gelatin to stabilize fruit yogurts and maintain a creamy texture throughout shelf life, Chobani uses guar gum and pectin, which are perceived to be cleaner label ingredients, said Brown.

“The way we make it also takes a little longer and costs more but the net result is more in tune with where consumers are in terms of ingredients.”

From a nutritional perspective, Chobani Smooth – which is produced in the company’s New York factory – has 25% less sugar (14g vs 19g per 5.3 oz. serving) and two times more protein (11g vs 5g per 5.3 oz serving) than other traditional yogurts, claimed the company.

"Chobani Smooth is intended to capture the 1.8 million households who left category last year because they couldn't find an option they were looking for--an accessibly-priced product with great taste, less sugar and only natural ingredient."

Chobani Smooth (strawberry) ingredients: Lowfat yogurt (cultured pasteurized nonfat milk, cream), evaporated cane sugar, water, strawberries, natural flavors, fruit pectin, guar gum, fruit and vegetable juice concentrate (for color), lemon juice concentrate. contains live and active cultures: S. Thermophilus, L. Bulgaricus, L. Acidophilus, bifidus and L. Casei.

 

Formerly CEO at Nestlé Waters North America, Tim Brown joined Chobani as president and chief operating officer on March 20, 2017.

Brown spent three years at Procter & Gamble after graduating before moving to Nestlé Waters North America, where he steadily moved up the ranks until he became president in 2013.

Tim and I clicked the moment we met,” said Ulukaya in March.

He's an amazing leader with views and values I really respect and believe in. With his deep experience in consistently delivering quality growth, he's the perfect person to partner with me in continuing to lead the new wave of better food for more people. Chobani’s in a very strong position with greater potential than ever before and now with Tim joining we'll grab it.”

In the wake of press reports  that the company had been looking for a new boss, Chobani told reporters  in early 2015 that it was looking for an "operationally oriented" CEO to complement the skill-set of its more "brand and innovation oriented" founder, but later stressed that Ulukaya (founder, chairman and CEO) was remaining in charge.

Brown oversees Chobani’s operations, sales, marketing, legal and finance teams, and reports directly to Ulukaya.

 

By packaging Smooth in a two-pack, the product stands out more on shelf, said Brown

FOOD VISION USA 2017

Hear more from Tim Brown at FOOD VISION USA 2017 , where he will join a glittering line up of speakers from Sir Kensington's (Unilever), Miyoko's Kitchen, PeaPod, Chef'd, Terra's Kitchen, The Good Food Institute, VMG Partners, Maple Hill Creamery, Campbell Soup, Good Karma Foods, Geltor, CircleUp, Mattson, Hartman Group, Ketchum, Food Future Co, Suncrest USA, Sun Basket, and Farmer's Fridge.

Themes we'll address at this year's event include: 

  • Where is the plant-based food movement heading?
  • What does 'clean label' really mean? 
  • What's the connection between the gut microbiome and human health?
  • Who is winning in the direct to consumer meal kit/meal delivery space and why?
  • How will Amazon's deal with Whole Foods change the food e-commerce landscape?
  • Big food? Small food? Or smarter food?
  • From grass-fed to hydroponics: Food and farming… where next?
  • Can we make gelatin without animals?
  • Will consumers embrace 'clean' (a.k.a. cultured) meat?

Check out the full list of speakers  and Register HERE .

Calling all food and beverage entrepreneurs:

Do you want a FREE place at FOOD VISION USA ?

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1 comment

Innovation Trailblazer

Having watched and marveled as Chobani came to re-invent the yogurt market and the subsequent developments of his Food Incubator program in creating and marketing food, dips and beverages. I have no doubts Chobani will again dominate the traditional yogurt offerings with it's new Smooth offering. Chobani's Ulukaya has proven to be a genius and very unrelenting.

His selection of Tim Brown as President & COO further solidifies a 10 year record of solid success.

To go from zero to over a billion in sales is astonishing by itself. Yet Ulukaya's other passions, philanthropy and charity are equally noteworthy. Read on http://www.tent.org/organization/

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Posted by Andre Leonard
03 July 2017 | 21h312017-07-03T21:31:52Z

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