Chobani is tapping into popular trends such as probiotics and better-for-you beverages in its latest offerings as the Greek yogurt giant doubles down on its signature product while expanding into new categories.
Chobani burst onto the yogurt scene more than a decade ago by popularizing the Greek variety — now the biggest subset in the broader $7.9 billion yogurt category. While the segment remains far and away the biggest revenue generator for the New York dairy giant, Chobani has moved aggressively in recent years to innovate by expanding into other fast-growing areas popular with consumers.
The newest offerings debuting nationwide this week include Chobani Probiotic, a fruity plant-based beverage, and Chobani Complete, lactose-free Greek Yogurt food and drinks filled with protein and amino acids that target an individual's on-the-go lifestyle.
"We want to be a modern food company. Our brand can stretch," Peter McGuinness, president of Chobani, told Food Dive. "We're going to continue to push like oats and creamers and functional beverages, but we're not going to lose sight of our core business because yogurt is a growth category and Greek is booming."
During the last few years, Chobani has accelerated its innovation by expanding beyond the Greek space into yogurts blended with nut butters, introducing a variety made from plants, a line specifically geared toward children, offering products made with oats and making its first foray into milks and creamers.
Chobani Complete hits on several burgeoning trends, including no added sugar, lactose-free, probiotics and high in fiber and protein. McGuinness said it was "tricky" for the company's R&D team to put so many attributes in one product, while still maintaining its natural characteristics and taste. "We didn't think we could pull it off," he said. "It's quite a high-wire act."
The Greek yogurt items are available in cups and shakes. It comes in several flavors, including blueberry, key lime, vanilla, strawberry, mixed berry, banana cream and peach.
A study from Kerry in 2019 said 65% of consumers seek functional benefits from their food and drink, a key reason why functional foods continue to be a growing business for big CPG companies looking for growth. According to Zion Market Research, the global functional ingredients market was worth $64.9 million in 2018, and is expected to reach nearly $100 million by 2025, increasing at a compound annual growth rate of 6.74%.
One of the most popular is probiotics. The use of probiotics and prebiotics is expected to significantly grow due to their reputation for relieving digestive issues, boosting the immune system and contributing to the maintenance of balanced gut microbiota, or "good" bacteria.
Chobani is one of many companies tapping into the popularity of probiotics. Danone uses them in its Activia yogurt. Kellogg incorporates them into its Special K Nourish line. And General Mills announced last summer it was partnering with GoodBelly on a probiotic-infused cereal.
Chobani Probiotics moves the company further into the better-for-you beverage category popularized by kombucha and kefir. The drinks, which are plant-based, organic, contain 11 grams of sugar and billions of probiotics, are available in Lemon Ginger, Pineapple Turmeric, Peach Mint, and Cherry Hibiscus. Chobani expects some retailers to carry the product adjacent to its yogurt section, while others could place it near more high-end drinks.
"The new-age beverage business, if you've been in the grocery store lately, is booming. It's absolutely crazy," McGuinness said.
He noted the company hasn't experienced any challenges getting the two new product lines into stores during the coronavirus pandemic. The offerings both fit into high-growing categories of healthy and Greek yogurt where retailers are routinely looking for new innovation.
Greek and the broader overall yogurt category have grown during the last 52 weeks after a lengthy period of declines.
Greek sales in the last year for the week ended July 11 totaled $3.4 billion, an increase of 3.3%, according to data provided by Nielsen. Overall, yogurt sales during the same period rose 1.9%. Chobani, citing information from Nielsen and Total US Food, said Greek yogurt has been especially popular recently, having risen 10% during the latest 13-week period ended July 4 compared to a year ago.
McGuinness declined to offer more specifics on future product launches but hinted more food offerings are in the works.
"We've got lot of plans to go beyond yogurt," he said. "We absolutely have accelerated [our innovation] and there is no turning back because you can't plateau or you go backward, which is why we're just continuing to set a higher bar. Expect us to continue this pace for quite a while."