Several years of high single and double-digit growth helped the retail sales of yogurt reach $8.9 billion in 2014, according to a new report from Packaged Facts. But unlike from 2010 through 2013 when sales grew 7.8% to 10% year over year, the increase from 2013 to 2014 was only 3.4%.
A projected 3% year over year growth of U.S. retail sales in the category likely will be the new normal in 2015 through 2019, at which point sales should reach $10.3 billion, predicts George Puro, principal for the Puro Research Group and author of the Packaged Facts report.
“Greek yogurt has injected a lot of new excitement and activity in the industry,” in the last several years, accounting for most of the yogurt industry’s growth, Puro writes in the report. “Greek yogurt went from being just 1% of the market in 2007 to becoming the most important trend shaping the industry.”
The higher price point of Greek yogurt compared to other yogurt products also helped sales climb, Puro notes. Citing IRI-tracked sales data, the report found sales increased 4% to $7.2 billion in the year ending Sept. 7, 2014, while unit and volume numbers for the overall category remained much lower or flat at 1.3% and -0.1% respectively.
“While Packaged Facts does not expect these sales to go away, yogurt makers will need to find other ways to keep the market growing,” as “it appears that sales of Greek yogurt have begun to mature,” Puro notes in the report.
Target new consumer segments for growth
Recognizing Greek yogurt might not be the powerhouse it once was, marketers are now focusing on segments with growth potential, such as infants, toddlers and children, Puro said. “Concentrating on this segment, the thinking goes, should help generate future adult yogurt buyers.”
Players in this space include Stonyfield, which markets Yobaby yogurt made with whole milk and organic, real fruit in 4-ounce containers, and Happy Family, which markets Greek yogurt blended with fruit and vegetables in pouches that it claims “will make little tummies happy.”
Men are another consumer segment increasingly targeted by yogurt marketers that could help the overall category grow.
A Packaged Facts’ survey revealed “80% of women personally eat yogurt, compared to 66% of men,” but “among those who personally buy yogurt, there is little difference in the percentage of men verses women who buy yogurt at least once a month,” according to the report.
One of the most recent yogurts targeted at men is Dannon’s protein-packed Oikos Triple Zero Greek-yogurt, which prominently displays the National Football League’s shield on packages as a way to attract men’s attention. (Read more about the launch HERE.) Powerful Yogurt, which launched in March 2013, also targets men. (Read more HERE.)
Expand packaging, platforms for growth
Beyond Greek yogurt, the category “has no shortage of creative new products and packaging” that can help the category grow, according to the report. “These have included exotic, indulgent and savory flavors, limited-edition products, mix-ins, superfoods, grass-fed and whole milk, stand-up pouches, edible packaging and others,” the report adds.
The food’s success also is boosting adjacent categories, which are growth opportunities for yogurt makers, but are not the main focus of the Packaged Facts report, which mostly is limited to refrigerated yogurt and drinkable yogurt. These include breakfast cereal bars, salad dressing and frozen desserts, according to the report.
Expanding when consumers eat yogurt also could boost category sales, according to the report.
“Breakfast, not surprisingly, is the leading daypart for yogurt consumption,” but if marketers want to expand the amount of yogurt consumed in the U.S. to the same levels as in Europe, they will need to convince Americans “to fundamentally change the way they eat breakfast, snack and dine at lunch and dinner,” according to the report.
The report found the U.S. per capital yogurt consumption was about 14.9 pounds in 2013, compared to 70 pounds per capital in some European countries.
An early response to this challenge is positioning yogurt as a snack food, according to the report. Increased promotions also will help convince consumers to try new yogurt products, Puro notes.