Yogurt makers want to grow beyond breakfast
What was once thought of as sourtasting glop is looking to position itself at the sweet spot of American dining trends.
As U.S. consumers demand healthier, better-tasting, natural foods with added benefits and perhaps a kick of protein, yogurt is poised to break out of the breakfast bowl and become a go-to favorite for snackers and occasional-treat seekers.
Total U.S. retail sales were $8.8 billion in 2017, up from $8 billion five years earlier, according to the market research firm Packaged Facts. It is forecast to leap to $9.8 billion by 2022.
“It’s one of the most flexible foods sold in stores. It can be breakfast. It can (be) a snack. It can be dessert. In a pinch, a whole meal replacement,” said grocery shopping analyst John
Karolefski, who blogs at www.grocerystories.com. “People can eat yogurt sitting at home at their table or on the go.”
That’s what the industry is banking on to change yogurt culture.
Much of the growth over the past decade was fueled by Greek yogurt, introduced by Chobani in 2007. For decades, traditional yogurt with roots in numerous ancient cultures around the world was thought of as a specialty item sold in health food stores. By the 1970s, it had become more mainstream, entering the purview of dieters, a position solidified the next decade with artificially sweetened and low-fat versions.
Yogurt wends its way from bowel-inspiring Activia and kids’ GoGurt tubes to bifurcated mix-in versions and premium dessert-esque Liberte. Yogurt serves as the base for ready-to-drink shakes, freezes into faux ice creams and stands in as a savory replacement for sour cream.
There is French-style yogurt, such as Yoplait’s glass-potted Oui, launched in the summer of 2017; Icelandic yogurt, such as Icelandic Provisions’ Skyr and siggi’s, which global dairy giant Lactalis bought in January; and even Australian yogurt – spelled with an H tucked between the G and the U – as fronted by noosa. Expect more change.
Greek yogurt is strained and contains more protein than traditional yogurt. French yogurt is known for its creaminess and is settled in small pots, rather than giant vats. Icelandic yogurt is heavily strained and made from more milk than usual. And Australian yogurt is not strained and noted for its sweet creaminess.
“Yogurt is not growing at the clip it was, a natural progression of a maturing category,” said Chobani’s chief marketing and commercial officer Peter McGuinness. “We’re still very bullish on yogurt.”
Yogurt consumption in America is lower than in Canada and Europe, but McGuinness said he envisions sales as high as $13 billion, “if consumers have the right options to eat throughout the day.” To many, yogurt remains an a.m. staple: 80 percent of it is consumed then, though that’s dropped from 93 percent three years ago.
“It can be breakfast. It can (be) a snack. It can be dessert. In a pinch, a whole meal replacement.” John Karolefski Grocery blogger
Recasting itself as a snack, not just part of breakfast, yogurt hitches itself to the growing grazing trend, which finds more people eating mini-meals and snacks throughout the day. To expand beyond dairy-case denizens, yogurt companies, both international heavy hitters and smaller niche brands, look beyond traditional supermarkets to capture potential yogurt eaters where they nosh – food services, convenience stores and airports. About 60 percent of yogurt sales in 2017 were from supermarkets and grocery stores, Packaged Facts found.
Another growing avenue is kid-centric yogurt, such as Chobani’s new Gimmies line. McGuinness said yogurt’s penetration among kids is a fraction of adults, a $1.5 billion market that’s growing in mid-single digits.
As millennials have children, the potential for this subcategory expands. This much-coveted demographic has turbocharged another auxiliary branch of the category – plant-based yogurt.
According to Danone North America CEO Mariano Lozano, this is one of the biggest growth areas. It is about 2 percent of the total yogurt category but could grow to as much as 10 percent. Danone’s dairy-free lineup includes Silk, made from soy; Vega, made from cashews; a coconut milk Oikos, that will debut in the USA in January; and a kids version coming at the end of the second quarter.
“It’s becoming hotter and hotter in the market. It’s very linked to the flexitarian trend,” Lozano said, referring to those who eat a mostly vegetarian diet but occasionally consume meat or fish.
Amid complaints about pricing and sugar content, the industry understands it must propel itself fast and soon. The global market research firm Mintel projects total yogurt sales will reach $8.2 billion by 2023, down
3.5 percent from this year “Yogurt companies are innovating their products to better appeal to changing consumer preferences,” the Mintel report says. “However, consumers are trading among yogurt brands/styles, not increasing their total yogurt consumption. The amount of yogurt consumers eat has fallen year-over-year.”
The company’s survey of adult yogurt buyers this past spring found that they consumed an average of
7.32 servings in the past 30 days, down from 7.45 in 2017.