The firm’s US yogurt sales were down -6% YoY in Q4 (three months to May 30, 2021) lapping the panic-buying phase of the pandemic, but were up 1% YoY in the full year, with core Yoplait Original sales up 4% vs two years ago, Hamacher told FoodNavigator-USA (according to SPINS data, the overall yogurt category incl drinks was up 2.2% to $8.43bn in the 52 weeks to July 11).
“Yoplait is really focused on taking the natural goodness of dairy and turning it into a joyful experience the whole family will love… we’ve added more fruit to every cup, increased our vitamin D and calcium, and made sure we had sizes everybody would love, and we've seen that business really start to turn around.”
‘The :ratio keto business in particular has been very incremental to the category’
As for category dynamics, she said, the kids’ segment is growing, presenting opportunities for GoGurt, especially as parents look for more on the go options as kids go back to school, “but the biggest growth is in what we call simply better health, which is really low sugar alternatives to traditional yogurt, so that is roughly a half a billion dollar section of the category and it's growing very strongly.
“So we launched the ratio keto-friendly products a year ago [15g fat, 15g protein, 1g sugar], that was the largest launch in the category and continues to perform quite nicely, and then we have the new :ratio high protein line, which was just launched this past spring [25g protein, 3g sugar].”
She added: “The :ratio keto business in particular has been very incremental to the category. Keto is a distinct diet, but it’s also code for ‘low carb,’ which is a kind of broader diet some consumers are following than [strict] keto [staying in a state of ketosis requires considerable discipline]. If you look at online searches, keto is among the top three [in] yogurt searched on almost every platform.
“What we’ve learned is that for this subset of consumers, they're looking for macros they can feel good about, the right balance of fat, protein and carbohydrates that meets their dietary goals, and they really like the fact that :ratio is doing the math for them.”
When it comes to sweeteners, both :ratio lines keep sugar down by using ultra-filtered milk (with most of the lactose/milk sugar removed) and sucralose, which is an ‘artificial’ sweetener, but not a deal-breaker for shoppers looking for a very low sugar positioning, she said (:ratio protein also features erythritol).
For consumers spurning products featuring anything you won’t find in Grandma’s kitchen, meanwhile, Yoplait’s Oui line ticks the right boxes, she said: “The category is very bifurcated in terms of consumer preferences, so we know there's a group of consumers who are really looking for that superior protein and low sugar options. There's also a group of consumers that are purchasing Oui, which is about finest crafted, premium ingredients in a glass pot with no sugar alternatives.”
YQ: ‘We are in the midst of exiting that business’
YQ – a line of high protein, moderate sugar yogurts [15g protein, 9-11g sugar] launched in 2018 – is being withdrawn, meanwhile: “We are in the midst of exiting that business,” said Hamacher.
“What we were able to learn about that is that this ultra-filtered milk technology really allowed us to get to high protein and low sugar, but we were able to take that, add avocado oil and launch the :ratio keto friendly option, which has performed much better with a much more distinct benefit in the marketplace and a clearer consumer communication.”
Yogurt buying trends in the pandemic: ‘Consumers turned to brands they knew and trusted…’
Typically, about 10% of dollar sales in the yogurt category come from innovation, said Hamacher: “It's a high trial category for new items, but over the last year and a half, that figure has only been 5% although we anticipate levels of innovation will spring back to historic levels.
“During the pandemic consumers really turned to brands they knew and trusted; they were more risk averse, taking fewer trips to the grocery store and ensuring that if they bought something, it was something their whole family would like and enjoy. So for us, Yoplait original, GoGurt, and our Oui business continued to grow share, and compete and accelerate.
“They also purchased a lot of larger pack sizes and bought more online. Over 10% of [our] yogurts are now sold online and as consumers continue to migrate to online shopping, having the right pack sizes becomes incredibly important and we also make sure that each piece of our media is shoppable, so if you see something online if you're interested, it'll direct you to the retailer site where you can buy it.”
New plant-based yogurt in the pipeline?
As for plant-based yogurt – a $354m category in US retail in measured channels (excluding yogurt drinks) that grew +14.6% in the 52 weeks to July 11 according to SPINS data, with several offerings from rivals Danone and Chobani – Yoplait has dairy-free products under its Oui and GoGurt brands, said Hamacher.
She did not provide any details when quizzed about a new Yoplait plant-based product that North America retail president Jon Nudi teased during the Q4 earnings call in late June, but said, “We’re continuing to try to evaluate options that we think will meet consumers needs and that there's enough of a kind of distinct benefit.”
Incremental growth: New formats/occasions, new benefits
So what is going to drive per capita yogurt consumption in the US, which grew steadily until around 2013/14 and then dropped off somewhat?
“About 50% of yogurts are consumed in the morning, 50% in the afternoon and as we think about what has really changed the trajectory of this category, it's been two things over time,” said Hamacher: “Incremental formats and incremental benefits.
“So with formats, on a brand such as GoGurt, for example we put yogurt in a tube and kids can take it on the move, and we’ll continue to look at what are the convenient ways to eat yogurt, not just with a spoon but in other formats and other locations.
“And then I think incremental benefits will continue to drive this category, lower sugar, higher protein.”
To tap into interest in growing interest in immune health accelerated by the pandemic, General Mills is also launching a new product (10g protein, 17 sugar) called Yoplait Power featuring chia seeds and overt messaging about immunity on the front of pack: 'With vitamins D, A, C, E, and zinc that may support your immune system.'