Chobani bets big on probiotics, expands oatmilk line with zero sugar option
While Chobani does not disclose the specific probiotics strains it is using in the new products (with the exception of LGG - Lactobacillus rhamnosus GG, one of the most widely used probiotic strains) and only lists the species (Casei, Bifidus, Acidophilus) on the front of pack, president Peter McGuinness said Chobani had selected strains with human clinical data behind them.
He told FoodNavigator-USA: “We’ve got clinical studies going on with two universities, one overseas and one domestically,” although he did not provide details.
The front of pack references immune health, digestive health, and gut health benefits, said McGuinness, who said COVID-19 had increased consumer interest in immunity, but that the products had been in development before the pandemic hit.
Although digestive health is mentioned on the label, the messaging around the products will not be around ‘regularity,’ said McGuinness, who said consumers were increasingly aware that there is a connection between the gut microbiome and overall health.
“We’ve all seen Jamie Lee Curtis talking about her bowel movements [Jamie Lee Curtis fronted high-profile ad campaigns for Activia between 2008-2014, although recent ads deploy different messaging connecting the gut to overall well-being].
"This will be a bigger play than digestion, or being reactive, I have a digestive problem, it’s about proactive holistic health.”
Chobani Oat Zero Sugar
Other new launches include Chobani Oat Zero Sugar Plain, a zero sugar version of Chobani’s new oatmilk range (the regular plain version contains 7g sugar from the oats - which for technical reasons is classified as added sugar - but sugar levels can be adjusted through the way enzymes are used to produced the oat base, noted McGuinness).
This will help further broaden the consumer base for oatmilk – which continues to grow in triple digits and is already the #2 player in the US retail plant-based milk category despite its relative infancy – said McGuinness.
“Oatmilk has just exploded, but the Achilles heel, if you can call it that for a category growing at almost 300%, is sugar, even though it’s naturally occurring, so we wanted to bring out a zero sugar version.
"Plain Zero Sugar will launch in two weeks, and other SKUs will follow.”
'Oat is the king of plant-based and will get into the billions of dollars'
Chobani is also launching oat-based creamers as well as some additional flavors to its new dairy creamer range (Almond Coco Loco and S’mores), he said.
“Plant-based in fluid milk will continue to get bigger, we think it’s just a bigger market than plant-based yogurt. I think plant-based milk could account for 20% [of US retail sales of fluid milk] in the short to medium term, and oat will continue to disproportionately grow because of its taste, texture, versatility [notably, oat performs better than most plant-based milks with coffee], and lower environmental impact.
“We think that oat is the king of plant-based and will get into the billions of dollars.”*
According to Nielsen data for the 52 weeks ending November 21, 2020 (total US xAOC), US retail sales of yogurt rose 3% to $7.663bn. Within that, Greek was up 5.2% and traditional dairy yogurt was up 0.3%. Icelandic yogurt was down -5.6% and non-dairy yogurt was up 22%, albeit off a small base.
‘We’re driving most of the growth in Greek, and Greek is driving a lot of the growth in the category’
So how is Chobani performing, and have recent launches met expectations?
Chobani’s overall portfolio is performing well, buoyed in part by a resurgence of growth in the yogurt category, which has been amplified by COVID-19 (as more food consumption has shifted towards the home) but was evident well before the pandemic hit, stressed McGuinness.
“The overall yogurt category was declining in 2017, 2018, most of 2019, and then it started to rebound in Q4 2019 and became flat to positive, and continued to grow in Q1, 2020 before the pandemic. Buyers took things out that were not working and Greek really came back as a lot of things they put in instead were not performing from a productivity perspective.
“We’re driving most of the growth in Greek, and Greek is driving a lot of the growth in the category. We’re also seeing a lot of growth in four-packs and multi-serve because the average consumer is spending half the time in the grocery store and spending twice as much. They’re going less frequently but spending more.”
Chobani Complete: Incremental growth
The new Chobani Complete lactose-free range – protein- and fiber-packed lactose-free Greek yogurt cups and shakes with no added sugar (3g fiber, 15g protein) – has performed well, and critically, driven incremental growth, he claimed.
“40-45% of all purchases of that product are incremental, so we’re very pleased, and we’re adding more SKUs.”
The Chobani Flip range, meanwhile, is growing at 22% year-on-year, he claimed. “It’s a fun, indulgent, but healthy snack, and who doesn’t need that right now?"
New look for non-dairy range
Chobani’s plant-based range - launched in early 2019 with green-hued packaging – has recently been refreshed with new paler packaging and fruit on the bottom, with the brand name ‘Chobani Coconut’ (instead of Chobani Non Dairy), said McGuinness.
“We’ve just brought in the same brand architecture, so we have Chobani Oat, and Chobani Coconut [now with Fair Trade Certified coconut], Chobani Complete and so on,” he explained. “Putting the fruit on the bottom was also based on feedback from consumers.”
COVID-19, demand forecasting, and inventory management
While consumer demand for Chobani's products is clearly driving sales, the company has also been able to capitalize on that with effective demand forecasting and inventory management, claimed McGuinness.
"We got caught with the panic surge like everyone did, but since then, our demand forecast accuracy is the highest it's ever been, and our customer service has been 98.5% or better every week. We also have a retail execution team that has been going into stores and helping pack outs, which has improved instock rates, so I'm very proud of our team."
*According to SPINS, oatmilk – a relative newcomer to the segment that barely registered in the data a couple of years ago – has already muscled into the #2 spot in the plant-based milk category, edging ahead of soy, with US retail sales in measured channels surging 303.7% to $213.35m in the 52 weeks to September 6.
The figures span the conventional multi-outlet (MULO) channel powered by IRI covering grocery and mass (including Walmart) club, dollar, and military; plus the natural enhanced channel.
They do not however, include data from e-commerce sales, convenience stores, or some key retailers in the plant-based milk segment including ALDI, Costco, Whole Foods and Trader Joe’s, so the actual numbers are likely to be substantially higher.
