UN-SWEET DEAL
As sales for Greek-style yogurt slow, the search is on for the next trend to drive growth
General Mills hopes a move to yogurt with less sugar can spur a turnaround,
NEW YORK— General Mills Inc. is betting that less sugar will help spark growth in the company’s slumping yogurt unit.
Called “YQ by Yoplait,” the new variety is made with socalled ultra-filtered milk and is less sweet than many popular products in the category. That includes the company’s own traditional Yoplait brand, which has seen its sales and market share plummet in recent years as U.S. consumers embraced Greek-style yogurt.
But as Greek sales slow, the search is on for the next trend that will drive growth in the yo- gurt case. A year ago, General Mills released Oui, a yogurt with French heritage, and the product is on track to reach $100 million (U.S.) in annual sales, making it one of the topperforming new product launches in the past few years, according to the company.
Even so, that hasn’t been enough to turn the tide for General Mills’ yogurt unit, which saw U.S. sales slide 8 per cent in the most recent quarter. While that was the third consecutive quarter of declining performance for the unit, the Minneapolis-based food giant is hoping YQ can help stabilize and turn the division around.
“There are a lot of people who are dissatisfied with the taste of Greek yogurt,” said Doug Martin, who leads yogurt innovation at the company. “Greek is not the end point for healthiness or tastiness.”
U.S. consumers essentially didn’t eat Greek yogurt before Chobani burst onto the scene in 2007, rocketing to $1 billion in sales in its first five years.
For years, Yoplait was the topselling brand in the U.S., and as recently as 2012, it accounted for about 24 per cent of the U.S market. Dannon is the top seller of yogurt in the U.S. with 37 per cent of the market when accounting for all the compa- ny’s brands, including Oikos and Activia. The hemorrhaging sales prompted General Mills to review its yogurt business about two years ago. And while Oui has helped, the company is facing an uphill battle as the overall yogurt market wanes.
Yogurt with less sugar is nothing new. Light varieties have been around for decades, but those products are typically sweetened artificially. YQ uses cane sugar, and ultra-filtered milk has less lactose. The plain variety has one gram of sugar per serving, with nine grams in the flavoured versions. Yoplait’s original fruit yogurts can contain about twice that amount.
“Every day, more and more people are focused on reducing sugar,” Martin said. “The question is how you do that without doing the things people don’t want you to do.”