Chobani CMO on Greek yogurt: ‘We think the category should be double what it is today’

By Mary Ellen Shoup contact

- Last updated on GMT

Chobani sees Greek yogurt as a young category with a lot of growth potential. Photo: Chobani
Chobani sees Greek yogurt as a young category with a lot of growth potential. Photo: Chobani
Greek yogurt accounts for about 54% of the overall yogurt category in the US, coming a long way from less than 1% of the market nine years ago when Chobani CEO and founder, Hamdi Ulukaya, first brought the Mediterranean dairy food to the US.

“I think it’s [Greek yogurt] totally underpenetrated in the US,”​ Chobani CMO, Peter McGuinness, told DairyReporter.

“Greek yogurt household penetration is right at 33-34%, which means two-thirds of the country hasn’t had a Greek yogurt in the last 52 weeks.”

McGuinness pointed to other developed markets as a benchmark of where US consumption of Greek yogurt could be.

“If we look at how we compare to Europe and Canada, we’re 25% less than Canada in terms of yogurt consumption and we’re half of Europe,”​ he said.

“We think the category should be double what it is today and that’s our three-year view.”

Category expansion through innovation

The only way to surpass Chobani’s No. 2 yogurt producer status​ with 20.4% share of the overall US yogurt category beating Yoplait, is through authentic innovation of the category and the company has its sights set on securing the No. 1 spot (currently held by Danone).

“Our goal and aspiration, squarely and simply, is to be the No. 1 yogurt brand overall,”​ McGuinness said.

“We want to do that in a quality way,” he said. “I’m not into desperation and discounting. We don’t want to irrationally under-price our products like some of our competitors do, we don’t want to buy share, and we don’t want to duplicate innovation.”

To drive authentic innovation of the yogurt category, Chobani launched its Flip yogurt in 2014 and Drink Chobani last year to penetrate an increasingly snack-centric consumer base with the goal of gradually shifting yogurt consumption beyond breakfast and into the afternoon.

The move has been met with significant sales success, according to McGuinness.

“50% of Flip sales are incremental to the category,”​ he said. “Out of that 50%, half are buying an additional yogurt product that they wouldn’t have bought.”

Drink Chobani to follow Chobani cups’ footsteps

Drinkable yogurt represents about 4% of total US yogurt consumption, a stark contrast to Mexico where more than 50% of yogurt sales come from yogurt drinks and 70% to 80% in Ulukaya’s home country of Turkey, McGuinness said.

Drink Chobani is a 10-ounce yogurt beverage with 14 to 15 grams of naturally-occurring protein, which fits squarely into the trend of convenient and portable protein consumption.

“We want to do drinkable yogurt what we did to Greek yogurt nine years ago,”​ McGuinness said. “If we develop a great product with great nutrition that’s delicious and accessible, that 4% we think can turn into 40% or 50%.”

Another priority for Chobani is developing a quality product from its inception and adhering to the company’s definition of “good food”​ being food that is made in a craftsmanship, natural, and socially responsible way.

“That’s why you’ll never see us reformulate,”​ he said. “It’s flattering that we see our competitors reformulating because it wasn’t made the right way to begin with.”

Shepherding innovation

Last week, Chobani announced its second annual Chobani Food Incubator program for small food companies, an initiative the company says will further develop the “good food revolution.”

“You can be both a winning, competitive, fierce company and also be magnanimous and do good to those in need,” ​McGuinness added.

The incubator program provides its selected six entrants with a $25,000 grant and access to Chobani’s professional network and resources, which includes mentorship from Ulukaya, without mandating equity in the company.

“A lot of times, companies try to tuck them [incubator participants] under the umbrella of themselves because their core business is in decline or their brands aren’t relevant,”​ he said.

“We do a no-strings attached incubator because our ultimate goal is better food, more people.”

Related topics: Manufacturers, Markets, Greek yogurt, Dairy

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