The growth of Greek yoghurt may not last

Posted by AFN Staff Writers on 17th April 2013

While Greek-style yoghurt in the US will continue to set the direction for the overall yoghurt market, US market research organisation Packaged Facts does not believe the category will maintain its recent rapid rise or growth pace.

As of early 2013, Packaged Facts said price competition had caused some areas of sales growth in the US Greek yoghurt segment to slow, and that major players were beginning to “fight a zero sum game over market share”.

The yoghurt market in the US underwent a “sea change due to the Greek yoghurt counter-revolution”, according to Packaged Facts. The research Company estimated that the US retail market for yoghurt was valued at US$7.3 billion in 2012, up 6.6 per cent on the previous year – with the Greek yoghurt segment singlehandedly responsible for these sales gains in what is a very large and mature product category.

Packaged Facts said Greek yoghurt surged from being “just a sliver” of the yoghurt market in 2007, to being the most important trend in the industry – although this was at the expense of non-Greek yoghurt value and unit sales.

But despite the slowing of sales, Packaged Facts said many industry watchers have said there is still opportunity in the yoghurt market in the US, with a broad-ranging push for healthier eating and increased consumption of lean protein.

Yoghurt trends spilling into other segments

Greek yoghurt has also emerged as a platform for innovation in other product categories, according to Packaged Facts. The frozen yoghurt segment has become a big early adopter, with a plethora of new Greek yoghurt product introductions.

The yoghurt trend has simultaneously been picked up by the foodservice industry, with the overall penetration levels on restaurant menus nearing 18 per cent, a 20 per cent increase from five years ago. As part of this spill-over from retail, some yoghurt makers have begun to pay more attention to foodservice, with big players Chobani and Dannon opening up their own yoghurt shops.

Australian perspective

Greek-style yoghurt has also made a splash in the Australian market. Major US Greek yoghurt brand, Chobani, moved into the Australian market 18 months ago.

“Australia was the first venture outside the US for Chobani’s international expansion because we are passionate about good food and produce some of the best milk in the world,” Peter Meek, Managing Director for Chobani Australia, told Australian Food News.

“There is still a huge potential for yoghurt consumption here in Australia and our goal remains not only to grow the Chobani brand, but also to grow the yoghurt category by inspiring people to choose better options,” said Mr Meek. “Now that our $30million Dandenong [in the State of Victoria] manufacturing plant is fully operation, we have already expanded the Chobani line-up to 14 flavours, one of the biggest yoghurt ranges in Australia,” he added.

Chobani Australia’s General Sales Manager, Lyn Radford, told Australian Food News the Company is “thrilled” with the response from consumers and retailers to Chobani’s introduction to the Australian market in the last 18 months.

“Over 70 per cent of our volume is currently coming from repeat purchases, which is one of the highest repeat rates of any of the new yoghurt lines launched in 2012. Furthermore, our household penetration after just six months of national distribution is 8.4 per cent, which puts us in the top 25th percentile of all new line grocery launches,” said Ms Radford.

In Australia, the overall yoghurt market was worth AU$998.6 million in 2012, according to figures from market research organisation Nielsen’s ‘Retail World Grocery Guide 2012’, which represented a 6.9  per cent growth. Yoghurt’s grocery volume in 2012 was 163, 814.1 tonnes, a growth a 3.4 per cent.

The main players in the Australian yoghurt market have been dairy and beverage manufacturer Lion, which has a 35.6 value share and a 35.1 volume share, and New Zealand dairy company Fonterra, which has a 23.6 value share and a 26.5 volume share.

In 2012, the leading yoghurt brands were Yoplait, with a 19.8 per cent value share and a 21.7 per cent volume share; Ski, with a 14.6 per cent value share and a 17.6 volume share; Vaalia, with a 10.9 per cent value share and 10.1 per cent volume share; and Dairy Farmers, with a 10.7 per cent value share and 8.4 per cent volume share. These figures are quoted from the Nielsen market research grocery report.

‘Greek yoghurt’ concern in UK

Australian Food News recently reported that the High Court of Justice in England had banned Chobani from labelling its yoghurt as ‘Greek yoghurt’ in the UK, deeming the label ‘misleading’ because the yoghurt is actually made in the US.

Chobani has been a big player in the Greek-style yoghurt market