As I noted in previous posts, the yogurt wars are on center stage. . .
If the Greek yogurt market was a boxing match, Yoplait would be badly blooding coming out of the first several rounds (with less than a 10% market share). However, now the brand has come out of its corner swinging for Chobani, the Greek yogurt heavy weight champion.
In a good old fashion Coke vs. Pepsi style rumble, Yoplait is challenging Chobani to a taste test to determine who has the best Greek-style yogurt in an effort to win over consumers.
The backbone of their fight is a national TV campaign ads that doesn't pull any punches. . .
Yoplait's is also making the fight personal by opening a pop-up store in New York City very close to where Chobani's SOHO flagship operations are located. In the meantime, Chobani is counterpunching with the recent launch of its 100-calorie line, Chobani Simply 100, to challenge Yoplait Greek 100 ($150 million in sales) as well as running a Super Bowl advertisement to drive national awareness.
At the very least, Yoplait's highly-competitive actions will force Chobani to decide if it should switch from offense (in support its own new product innovation) to defense (by double down support of its base business). My viewpoint is Chobani is the category leader and it has to stay the course of dictating the terms of competition in the category. This means fixing its GMO image and celebrating its "nothing but goodness heritage" in the core business and leading the evolution to adult mix-ins behind its newest product launches. Keep Yoplait chasing you.
Showing posts with label Yogurt. Show all posts
Showing posts with label Yogurt. Show all posts
Tuesday, January 28, 2014
Saturday, August 24, 2013
The Yogurt Wars Heat Up and YOPLAIT Appears One Step Behind . . . AGAIN
The US yogurt wars are heating up again and about to become even more intense...and Yoplait appears to be one step behind again.
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."
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.
Thursday, July 12, 2012
Is Pepsi the "next generation" of yogurt?
Early this week Pepsi announced it is entering the Yogurt market via a joint venture partnership with German dairy company Theo Müller. The joint venture will be run as the Müller Quaker Dairy and called Müller by Quaker and will begin by being sold in the northeast US. It appears that they will offer at least 3 different types of yogurt: conventional, Greek, and Fruit Up (fruit mousse in top of the yogurt that gets stirred in). The yogurt will be packaged in a square contained with one corner filled with an ingredient that the consumer can mix in; including caramelized almonds, tiny chocolate-covered crunch balls and granola.
Pepsi, which in addition to its traditional beverage business also owns Quaker, Gatorade, Tropicana, and Frito-Lay, is looking to diversify its portfolio as the soda category continues to be squeezed by health trends and the company looks to jump start long-term growth.
Why Yogurt?
Yogurt offers Pepsi three advantages. First, its a fast growing category (+9%) that outpaces traditional grocery categories as its alined with consumer health an wellness tailwinds. Second, it gets Pepsi into a new section of the store - the dairy aisle. And third, Pepsi could likely leverage its refrigerated Tropicana DSD network to capture significant cost scale.
Will it be successful?
Pepsi research suggests that Americans consume ~12 pounds of yogurt a year, which is half as much as Canadians and only a third the amount of Europeans. Pepsi attributes this gap to the US category offerings being boring vs. international offerings: “It’s been an ‘I gotta have it because it’s good for me’ kind of a product . . .The 'wanna have it' was missing” according to Dr. Mehmood Khan, who oversees PepsiCo’s global research and development and was interviewed in a recent New York Times article. According to that article, Müller by Quaker will fill the current product offering void by offering a a new variety yogurt with its own unique texture that is between Greek and conventional yogurts. The product will be marketed under the tagline "European for Yummy".
While General Mills (Yoplait) and Dannon make up 50% of category sales, much of the recent category growth has been driven by Greek yogurt brands Fage and Chobani. The fact that these smaller brands have gained traction and shelf space would suggest a brand backed by a CPG manufacturer with the clout and deep pockets of Pepsi would also be able to muscle its way into the category assuming the product is truly differentiated and delicious. It also wouldn't be surprising to see Pepsi bring its soda strategy to life in this category by supporting the brand launch with an enormous advertising budget as well as running a significant amount of promotions focuses on BOGO's and bulk discounts. The yogurt category has seen plenty of innovation over the past several years and I believe many category consumers are willing to experiment with new brands and flavors, but the category will remain highly competitive and unlike soda its wont just be a two horse race.
In conclusion, I believe Pepsi can clearly make a splash in the category and will help fuel overall growth. However, I have a hard time believing the brand will climb higher than a #4 share behind Dannon, Yoplait, and Private Label, and may even have a hard time in the short-term outselling some of the hot Greek Yogurt brands. One could see the brand, perhaps, ultimately reaching a 10-15% market share over the next 3 years.
Why Yogurt?
Yogurt offers Pepsi three advantages. First, its a fast growing category (+9%) that outpaces traditional grocery categories as its alined with consumer health an wellness tailwinds. Second, it gets Pepsi into a new section of the store - the dairy aisle. And third, Pepsi could likely leverage its refrigerated Tropicana DSD network to capture significant cost scale.
Will it be successful?
Pepsi research suggests that Americans consume ~12 pounds of yogurt a year, which is half as much as Canadians and only a third the amount of Europeans. Pepsi attributes this gap to the US category offerings being boring vs. international offerings: “It’s been an ‘I gotta have it because it’s good for me’ kind of a product . . .The 'wanna have it' was missing” according to Dr. Mehmood Khan, who oversees PepsiCo’s global research and development and was interviewed in a recent New York Times article. According to that article, Müller by Quaker will fill the current product offering void by offering a a new variety yogurt with its own unique texture that is between Greek and conventional yogurts. The product will be marketed under the tagline "European for Yummy".
While General Mills (Yoplait) and Dannon make up 50% of category sales, much of the recent category growth has been driven by Greek yogurt brands Fage and Chobani. The fact that these smaller brands have gained traction and shelf space would suggest a brand backed by a CPG manufacturer with the clout and deep pockets of Pepsi would also be able to muscle its way into the category assuming the product is truly differentiated and delicious. It also wouldn't be surprising to see Pepsi bring its soda strategy to life in this category by supporting the brand launch with an enormous advertising budget as well as running a significant amount of promotions focuses on BOGO's and bulk discounts. The yogurt category has seen plenty of innovation over the past several years and I believe many category consumers are willing to experiment with new brands and flavors, but the category will remain highly competitive and unlike soda its wont just be a two horse race.
In conclusion, I believe Pepsi can clearly make a splash in the category and will help fuel overall growth. However, I have a hard time believing the brand will climb higher than a #4 share behind Dannon, Yoplait, and Private Label, and may even have a hard time in the short-term outselling some of the hot Greek Yogurt brands. One could see the brand, perhaps, ultimately reaching a 10-15% market share over the next 3 years.
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