Dive Brief:
- Chobani made its name in Greek-style yogurts, disrupting the traditional low-fat yogurt category along the way. Now the company is entering the traditional low-fat yogurt space, according to Fortune.
- The newly launched classic low-fat yogurt called Chobani Smooth is made with all-natural non-GMO ingredients. It offers twice the amount of protein and 25% less sugar than competitive brands. A two-pack retails for $1.79, and it comes in six flavors.
- The company’s target market for Chobani Smooth is shoppers who prefer traditional yogurt over Greek-style. Chobani founder and CEO Hamdi Ulukaya told Fortune, "Thinking that everybody who is a yogurt eater is going to eat Greek is unrealistic."
Dive Insight:
Chobani is hitting while the competitive chips are down. The yogurt maker's new low-fat product is intended to challenge category brand stalwarts General Mills’ Yoplait — which has had its fair share of struggles as of late — and DanoneWave’s Dannon.
In 2016, Chobani overtook General Mills’ Yoplait — the segment's long-established leader — to become the U.S.'s largest brand. Earlier this week, General Mills reported that its U.S. yogurt business recorded a steep double-digit decline in its latest quarter, which ended May 28.
So why is Chobani entering an area that has seemingly fallen out of consumer favor? Simply put, the yogurt maker is looking to take a bigger bite out of the category.
Despite struggles in the traditional low-fat yogurt segment, the overall U.S. yogurt business continues to grow. A study by Transparency Market Research showed the North American yogurt market was valued at $11.18 billion in 2015 and is projected to reach $14.59 billion by 2024, increasing at a compound annual growth of 3% from 2016 to 2024. Consequently, Chobani has an opportunity to not only fortify, but grow its position in the category.
Chobani also has some advantages that its rivals lack. For one, it has a highly recognizable brand name. On its product packaging, the yogurt maker plays up the fact that new Chobani Smooth packs a lot more protein and less sugar than competitive products. All-natural ingredients and three different types of probiotics definitely put it in the growing “healthy snack” category.
The company can also leverage its loyal customer following and its ability to bring new customers who prefer traditional yogurts into the fold. And timing couldn’t be better, since new scientific evidence was recently released supporting claims that natural ingredients in probiotic yogurt help maintain a healthy immune system and fight viral infection.
At a time when many big brands are losing retail shelf space to healthier products and up-and-coming food startups, Chobani — which was founded in 2005 and can still be considered a healthy, innovative upstart — is taking much-needed steps to capture more shelf space and steal share away from competitors. Time will tell if the new Chobani Smooth has what it takes to resurrect a slumping traditional yogurt market.