General Mills optimistic on yogurt business as it eyes more markets
The mega food company’s core yogurt brand, Yoplait, has struggled in recent years, registering a roughly 20% sales dip between 2016 and 2017, according to IRI, losing its No. 2 spot in the US yogurt category to Danone and Chobani who have managed to steadily snatch share.
“As you well know, it’s been a rough ride for us in the yogurt business, but we’re competing more effectively,” Harmening said.
Total FY17 net sales of yogurt were $2.4bn and, while FY18 shares improved from the first quarter to the second, the company is falling behind last year’s performance.
Part of its improved quarterly performance in yogurt comes from the successful launch of Oui French-style yogurt line under the Yoplait brand last year.
“We launched Oui yogurt in July this past year in the US and it’s now 10% of our US business,” he said.
The company plans to launch Oui yogurt in the UK next, but with a few key marketing differences – Oui will be sold under the Liberté brand and come in packages of two glass ‘pots’ instead of single glass ‘jars’.
“Not only do our market campaigns work globally but so do new product ideas. We’re taking what we have done with Oui and applied it to the UK,” Harmening continued.
“But make no mistake, the stuff in the pot or the glass jar is the same.”
General Mills' yogurt sales are up double digits in China, which will remain a key geographic focus for the company as its yogurt market is roughly twice the size of the US ($15bn) and where regional flavor innovation will be a key product strategy, according to Harmening.
“We have a lot of room to grow in China,” he added.
General Mills also extended its presence in the Latin American market in 2015 through the acquisition of yogurt business, Carolina, in the $4bn yogurt market of Brazil.
In Europe, where General Mills-owned yogurt products are already sold, premiumization of those yogurt offerings will be a priority.
“We intend to compete effectively across every geography and every category,” Harmening said.
“We intend to do more reshaping both through acquisition and divestiture.”