The company’s expansion is driven by its mission of making more nutritious food accessible to more people and reflected in new products’ nutritional profiles and simple ingredient decks, but whether this is enough to distinguish the offerings from competitors in consumers’ eyes remains to be seen.
The entrance into the ultra-filtered milk segment, positions Chobani against heavy-hitters like Coca-Cola, which has early-mover advantage in the space with Fairlife, which was introduced in the US in late 2014 and saw sales surge 79% in 2016 as consumers became more familiar with its value proposition and associated its brand with the category.
Quickly following Coca-Cola’s launch, Organic Valley – another household name – brought the first organic ultra-filtered milk to the US in 2019 only to be chased two years later by Maple Hill Creamery which drilled down even further with the launch of an ultra-filtered milk that was 100% grass-fed, organic and zero sugar.
Other companies, like Lucerin, Joyya, Dairgold, Slate and more also are carving out their own piece of category with points of differentiation that will appeal to health-minded shoppers.
While this may be a daunting line-up to some, Chobani is well-versed in entering categories crowded with emerging and legacy brands and still managing to stand out, as illustrated by its rapid rise in the yogurt category.
And the potential prize is worth the fight with Nielsen reporting the ultra-filtered milk segment up 17.5% in the 52 weeks ending Jan. 15, and a primary growth driver in the $1.7 billion “easy-to-digest” milk segment, according to Chobani.
To set itself apart in the ultra-filtered milk segment, Chobani is calling out its 20 grams of protein as 35% higher than the market leader and 2.5 times more than traditional milk. It argues this makes it a “wholesome and convenient way to add more protein to recipes, like pancakes, smoothies, homemade ice cream and more.”
It also is touting its reduced sugar – a common callout among ultra-filtered offerings – as half that of traditional milk (6 grams versus 12 grams for plain and 12 g versus 24 grams for chocolate per 8 ounces).
Like other players in the space, Chobani says its Ultra-Filtered Milk is made a “special filtration process to help remove lactose and reduce sugar by half,” which results in a “rich and creamy texture, an excellent source of calcium and vitamin D, and … all nine essential amino acids.”
Also like other players, Chobani’s Ultra-Filtered Milk will sell at a premium with a scant half gallon (59 ounces) costing $5.09 through online retailer Fresh Direct compared to the average price of $3.82 per gallon of conventional whole milk and $4.26 per half gallon of organic whole milk, according to USDA.
This price point gives it a slight competitive edge for now over Fairlife, which Fresh Direct is selling for $5.29 per 52 ounce container. By pint, this breaks down to $1.63 for Fairlife and $1.38 for Chobani.
Building a presence in the coffee world
Chobani’s move into the smaller half-and-half segment, which it estimates at $1b based on Nielsen data, “continues to elevate the at-home coffee experience” with plain and lactose-free offerings that the company says are made “simply from farm fresh milk and cream.”
While simple, the ingredient deck is not a significant point of differentiation as Organic Valley, Horizon Organic, Land O Lakes and others offering half and half also only including milk and cream.
Still, it rounds out Chobani’s coffee routine offerings, complementing its recently expanded plant-based coffee creamer business to which it added four flavors earlier this month, including caramel macchiato, chocolate hazelnut, sweet & creamy and French vanilla. This built on Chobani’s non-GMO creamers that launched two years ago without artificial flavors, sweeteners or preservatives – a move that it pulled from the same playbook it used to build its yogurt business.
This further complements the company’s entry into the ready-to-drink coffee category last January, which Chobani at the time noted “pairs beautifully with yogurt as a morning combination.”
All of the new launches are further differentiated though their packaging – which is paper-based and widely recyclable across the US, the company says.