- In a move that reflects its entrepreneurial culture, Chobani is restructuring traditional sales, marketing, insights, product innovation and commercial finance functions to instead create what the company’s chief marketing and commercial officer Peter McGuinness calls a “demand” department, according to FoodNavigator-USA.
- The realignment is seen as a way to break down organizational silos, increase integration and awareness across functions, and make the company more responsive to changes in consumer demand and an evolving retail customer base.
- “There’s been a convergence of sales and marketing in this industry for some time … but in order to identify opportunities, you have to have visibility across all parts of the demand department. …To have a separate sales department is archaic; it certainly shouldn't be a department unto itself, it has to be integrated,” McGuinness told FoodNavigator-USA. “In the same way, we don’t have a sales budget and a marketing budget, we have a demand budget.” He said it’s a way to eliminate the usual jostling over trade versus media spending.
For years, consultants and other experts have preached the benefits of demand versus supply driven organizations. Demand-driven organizations are all about growth expansion by creating more need for products: in other words, building the top line. Chobani’s realignment under a demand approach is refreshing and something not often seen among CPG companies.
Most big food manufacturers remain largely supply driven. They historically have focused on re-engineering production and supply chain processes, cutting out costs in order to reduce operating expenses and improve bottom-line results. The emphasis on cost-cutting measures often comes at the expense of demand creation and revenue growth.
“If you look around at some of the companies [in our industry], they are happy with 1% growth. We’re not,” McGuinness told FoodNavigator-USA. He went on to say that Chobani, in comparison, is recording double-digit growth, expanding staff and has every intention of continuing on its growth course.
Ten years ago, Greek yogurt represented less than 1% of U.S. yogurt sales. Today, it's almost half of the total market, thanks to Chobani. The company now controls 38% of the Greek category, significantly outpacing heavyweights like Yoplait and Dannon.
This kind of out-of-the-box thinking and entrepreneurial spirit obviously works for Chobani. It couldn't hurt other CPGs to take notice and perhaps instill a bit of demand-driven culture within their own firms.