US: Yogurt wars get serious
A shortage of liquidity has proven transformative not just for Greek banks, but also for Greek yogurt.
The thick, protein rich version of the North American breakfast staple, which is strained to remove excess liquid, has upended a previously stable segment of the food industry long dominated by a handful of conglomerates. Those companies are now scrambling to capture a piece of a rapidly expanding market, lest they land at the bottom in a swift rebalancing of the yogurt trade. And in both Canada and the United States, a niche Canadian brand, Liberté, is playing a pivotal role.
“I think it caught the entire world off guard,” Michael Harad, a marketing director at General Mills, says of dairy’s hottest trend. “The speed and height to which Greek yogurt has grown is unprecedented not only within yogurt, but within any food category in U.S. history.”
While General Mills’s Yoplait brand retains the top spot in overall US yogurt sales, it has been a distinct loser in the accelerating Greek yogurt trend and continues to give up market share at an alarming rate. To staunch the bleeding, the continent’s third-biggest food company has placed a bet on a niche Canadian yogurt brand, Liberté.
In July, General Mills took over US distribution and sales of Liberté’s Greek brands, including its fl agship Méditerranée product. The St-Hubert, Quebec-based dairy has already established itself as Canada’s top purveyor of Greek yogurt, which was a natural fit for its organic, natural brand identity. “Liberté is very much an artisan brand,” Harad says. “It appeals very much to foodies.”
So far, foodies have forsaken the Greek products General Mills offers under its Yoplait banner. They failed to attract customers suddenly convinced of the inferiority of traditional yogurt. “Traditional-looking packaging and a big-brand name” rendered a product that was “not authentic looking,” a UBS report said.
Yogurt didn’t always need to be “authentic looking.” Just three years ago, Greek yogurt represented only 3% of US yogurt sales. That share has since risen to 28%, with sales of about US$1.3 billion. That could increase to $3 billion in five years, UBS predicts.
The segment was practically created by Hamdi Ulukaya, a Turkish immigrant who founded the Chobani brand in 2007. Capitalizing on a changing palate and growing demand among health-conscious consumers, Chobani grew fast, and still commands more than half of US Greek yogurt sales, leaving the traditional leaders like Danone and General Mills stunned.
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