ome say yogurt is a practically perfect food.
It boasts a velvety-smooth texture, sweet
and savory flavor profiles, and countless
health benefits that leave the consumer feeling full and satisfied, all at a remarkably low price—and
yet sales are sour.
In the last year, yogurt sales declined 2.7% in the 52
weeks ending Oct. 28, according to New York-based
research firm Nielsen. The $7.5 billion category has been
plagued with oversaturation as brands have imitated the
same yogurt styles, flavors, packaging and marketing
approaches, making it nearly impossible for consumers
to differentiate their products.
“It’s not the first time the yogurt category has stalled,”
says industry expert Gary Stibel, CEO of the New England
Consulting Group (NECG), based in Norwalk, Conn.
“What’s needed here is innovation and fresh thinking,
and we see several of the players here are doing that.”
While the yogurt category has experienced several periods of slower growth in the past, there has always been a
major brand that’s emerged at the forefront, Stibel says.
Chobani revolutionized the category over the past 10
years with its push for Greek yogurt, but new category
entrants following its lead have led to saturation, resulting in Greek yogurt dollar sales declining 4.4% as of Aug.
27, per Nielsen.
Combatting Category Confusion
Repetition and confusion in the yogurt aisle have caused
consumers to base their purchases on price alone. “
Everything was on sale,” Stibel says. “So people started making
decisions based on price—because when you’re confused,
price is a common denominator.” The weighted average
price of 4- to 6-ounce yogurt and Greek yogurt was 49
cents and 95 cents, respectively, for the period ending
Jan. 5-11, according to the USDA’s National Retail Report-Dairy, with conventional yogurt ad numbers increasing
62% during that time. For a competitive category in which
brands distinguish themselves solely on price, this has left
little room for profitability. “It’s the worst thing that can
happen to a category that’s growing,” Stibel says.
To combat consumer confusion in the yogurt aisle,
retailers must simplify the shopping experience by reducing the number of repetitive products, managing shelf
space more effectively and clearly communicating product attributes and differentiations to the consumer.
In 2014, Whole Foods Market took a stance against
redundancy on its yogurt shelves. The retailer stopped
selling Chobani yogurt to reportedly make more room for
smaller brands and organic and non-GMO options, while
also challenging its remaining suppliers to create distin-
guishable yogurt varieties. And though Whole Foods wel-
comed Chobani back to its shelves last summer, the yogurt
company has since reinvented itself with a new packaging
redesign and product offerings, including its new Smooth
yogurt line, appealing to consumers who have abandoned
the Greek-style variety. “They had to do something to stay
ahead of the curve,” says Stibel, “because to not do that
allows the brand to be commoditized.”
Nonetheless, conventional yogurt companies remain
vulnerable as smaller yogurt brands such as Noosa
Yoghurt continue to gain traction among consumers.
Based in Bellvue, Colo., Noosa touts itself as an artisanal,
small-batch yogurt producer with unique flavors and textures. To break through the category’s clutter, the company heavily invests in grass-roots sampling programs to
ensure shoppers can differentiate its product from others.
“The yogurt category is … highly promoted, and it’s tough
to find a yogurt aisle that isn’t full of shelf tags pointing
to a discount,” says co-founder Koel Thomae. “We find
unique ways to run promotions to connect our marketing
communication all the way down to store level.”
Foreign-Inspired Yogurts Invade U.S. Shelves
While Chobani had Americans going Greek for years,
there’s a new wave of foreign yogurts causing a stir. General Mills’ Yoplait brand introduced its French-style Oui
by Yoplait line over the summer, providing a necessary
breath of fresh air to the cluttered category. “It had been
10 years since the last major disruption in the category,
Decline in Greek
yogurt dollar sales in
the 52 weeks ending
Aug. 27, 2017.
It had been 10 years since
the last major disruption in
the category, and consumers
are looking for something
new in yogurt.” —Kris Patton, General Mills
Center Store Fridge & Frozen