Chobani looks beyond yogurt with its first plant-based product

Chobani is growing up from its scrappy startup days.This winter, the 10-year-old company launched 30 ...

Posted: Jan 9, 2019 11:58 AM
Updated: Jan 9, 2019 11:58 AM

Chobani is growing up from its scrappy startup days.

This winter, the 10-year-old company launched 30 new items, more than it ever has in one season. The products are spread across three new lines: A lower-sugar alternative to its flagship Greek yogurts, Gimmies for kids and its first-ever non-dairy Chobani retail product, which hits shelves on Wednesday.

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It's been an "unprecedented" period of expansion, said Peter McGuinness, Chobani's chief marketing and commercial officer. For now, Chobani is focused on filling the gaps in the yogurt aisle and encouraging more Americans to eat more yogurt.

Don't call it a yogurt

You may find Chobani's new product in the yogurt aisle, but you won't see "yogurt" on any of the packages.

The coconut-based products are available in single-serve cups and drinks. Cups come in vanilla, strawberry, blueberry, peach and slightly sweet plain, and drinks come in vanilla chai, strawberry, mango and slightly sweet plain. The company said that the coconut-based products contain about 25% less sugar than other plant-based yogurt alternatives. Coconut is the only base for now, but there may be others later.

The non-dairy yogurt alternative segment is still very small. But Chobani saw a parallel to its flagship product.

"Greek yogurt, ten years ago, was less than 1% of the market," McGuinness said. Now it's the most popular type of yogurt by far.

About 59% of yogurt shoppers said they bought Greek yogurt over a three-month period, according to a June survey conducted by the market research company Mintel and Lightspeed. Only 42% said they bought regular yogurt, and just 6% purchased non-dairy yogurt alternatives.

Mintel notes that non-dairy yogurt sales are growing, as are consumer interest and product development. And Chobani is entering into a competitive field. Danone's Silk makes almond milk yogurts and its So Delicious line include yogurt alternatives made from coconut milk. Stonyfield makes soy-based yogurt, and smaller companies like Kite Hill — which has funding from General Mills — also make artisanal plant- and nut-based yogurts.

But with its new products, Chobani hopes to grow the category, rather than take share from competitors.

Chobani's competitors use "yogurt" and "milk" to help customers understand the products. McGuinness said that Chobani's decision to avoid those words may put it at a disadvantage, at first, as customers figure out what dairy-free Chobani is.

"You can't call it a yogurt," McGuinness said. That's because yogurt is technically a dairy product. "We are being absolutely by the book because we think words matter," he said.

Plus, regulations may eventually require companies to stop referring to nut- and plant-based drinks as "milks," and non-dairy snacks as "yogurt," McGuiness said. If that happens, Chobani will be ahead of the game. And dairy products offer different health benefits than non-dairy ones. Chobani doesn't want to mislead customers with inaccurate comparisons.

Despite possible challenges, Chobani thinks people will prefer its product. When asked, consumers said they don't like the taste, texture or high sugar content of available plant-based products, McGuinness said.

Room to grow

Yogurt is an $8.5 billion sector in the United States, according to Mintel. Despite projections that the sector will shrink, McGuinness thinks the market could grow to between $12 and $13 billion. With the right products, advertising and pricing, that growth could take place over the next few years, he said.

To get there, Chobani and its competitors will have to educate the public on yogurt as a source of nutritional benefits, like calcium and probiotics. It also has to encourage US consumers to see yogurt in a new light: as a healthier alternative to sour cream or a base for dressings, soups and savory spreads. Chobani's cafes help "inspire" customers to think of creative ways to eat yogurt, McGuinness said.

"There's tons of growth to be had" in the yogurt sector, he noted. "You'll see us continue to innovate in the yogurt aisle."

Chobani has its eye on a number of emerging trends. "Probiotics are big, and I think they're going to be huge," McGuinness said. "Look to us to be championing probiotics ... there could be products that really specialize." Functional beverages, which may include probiotics, protein or vitamins, is another big trend.

The company is also looking at enhancing its line of Greek yogurts. "You'll have more fitness-oriented ones, you'll have more indulgent ones," he said. "It needs to be evolved."

And Chobani is looking beyond yogurt.

"Our founding vision was always better food for more people. It was never better yogurt for more people," McGuinness said. "I think that gives you all the clues you need."

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