For years the US yogurt market was dominated by Yoplait and Dannon. However, five years ago the US market was fundamentally changed with the emergence of Chobani, which helped usher in the Greek yogurt revolution.
As Greek yogurt mainstreamed growing from 4% of the US yogurt market in 2008 to nearly 45% in 2012, Chobani was transformed a small challenger brands into a $1 billion power-player that is giving Yoplait and Dannon a run for their money.
Dannon reacted with the 2011 launch of its Greek yogurt sub-brand Oikos. Oikos growth has been tremendous, surpassing over $400 million 2012, which is a ~45% growth from its first year sales. Not only was Dannon able to leverage the brand to grow the overall Greek Yogurt segment, but also start winning back some share from Chobani by advertising its superior taste behind a claim that Oikos is preferred 2 to 1 over the leading brand.
On the other hand, more than 2 years later Yoplait is still trying to figure out how to win in Greek yogurt. Yoplait's initial entry into Greek Yogurt was a bust...as was its first relaunch attempt in 2011. Now Yoplait, which is owned by General Mills, is hoping to make up for lost ground by relaunching its Yoplait Greek yogurt again, this time behind a new formula, packaging and advertising. In it's new TV ads, Yoplait declares that "it's time healthy gets a dose of happy" and carry the tag line "it's time to lick the lid again."
The insight Yoplait is basing its bet on is that American consumers will prefer a less sour Greek yogurt and fruit pre-blended into the yogurt, as opposed to being on the bottom of the container. I personally, don't buy that this positioning will be enough to catch up to Chobani and Dannon, but it will likely be sufficient to remain relevant in the category.
Meanwhile, as Yoplait focuses on and invests in getting its base Greek yogurt offering right, the yogurt market is about to take its next major transformation - adult yogurts with flavor enhancing add-in.
- First Pepsi's Quaker unit launched Muller (a new joint venture with a European based yogurt company) that features an extensive line of flavor add-ins. Expect major marketing pushes behind this product over the next several months
- Chobani's answer was to launch "Flip" and "Bite" sub-lines.
- Now Dannon is jumping into the game via its recent acquisition of YoCrunch, the market leader in yogurt mix-ins. YoCrunch features 27 different varieties of mix-ins (though most are geared at kids). Not only does the YoCrunch acquisition give Dannon instant market share in this segment, but more importantly instant access to critical packaging capabilities that will eventually allow Dannon to bring this innovation to their Dannon brands.
While Yoplait does have a mix-in granola offering...
...its already a step or two behind and is going to have to quickly invest in major innovation to keep its offering competitive. But in all likelihood, Yoplait will be spending the the next few years playing catch up again. Proof a market leader can never stop innovating or it risks being surpassed.
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