Siggi Hilmarsson essentially invented the Icelandic yogurt category with his recipe for skyr, a thick and less sweet yogurt, in 2004.
Fifteen years later, Siggi's is one of the top selling yogurt brands available in grocery stores nationwide. Skyr has taken off, with several competitors joining Siggi's products on shelves. In fact, as yogurt sales on the whole have dropped, Icelandic yogurt has grown at a 51.2% compound annual growth rate during the last four years, according to Nielsen.
Siggi's has seen impressive and exponential growth, many years in the double digits. French dairy company Lactalis took notice and acquired Siggi's last year for an undisclosed amount that Icelandic media estimated was near $300 million. CEO Carlos Altschul, who was hired last October, told Food Dive the New York-based Siggi's has doubled its employees in the last few years to around 60.
Altschul, who joined Siggi's from Lactalis-owned Stonyfield and previously worked at Danone, said it's rewarding to be at an entrepreneurial brand that has such a strong niche in health and wellness, as well as a devoted consumer following.
"Because of our success, others are trying to imitate us or also move their portfolios in the same direction," Altschul said. "Well, that keeps us on our toes, and keeps us focused on continuing to lead."
Altschul plans to keep leading the Icelandic yogurt segment through innovation, remaining true to wellness and transparency ideals, and improving distribution so that every potential customer can find Siggi's at the time or place they are interested in a healthy and spoonable snack.
It's in the ingredients
The origin of Siggi's is straight out of a marketing playbook. Hilmarsson, an Icelandic national who was studying business in New York, missed the thick, less-sweet yogurt he remembered at home. He got some recipes from his mother back at home, then experimented until he came up with what consumers now know and love.
Siggi's is a clean-label yogurt brand made from all natural ingredients and less sugar than competitors. Icelandic yogurt also is high in protein, adding to its wellness properties.
"We're seeing a significant transformation in terms of the offerings in yogurt," Altschul said. "So that's our Siggi's differentiation. These are the values that we've carried in food. But we see and we've heard from consumers that they want this same differentiation in other segments. So wherever we can bring our differentiation of simple ingredients, not a lot of sugar, no artificial to other segments, we will."
Altschul said the company is looking to push into adjacent segments with new ideas. He said Siggi's is gearing up for one of the biggest innovation windows in company history, and new products will start arriving on shelves near the end of the year. He hinted this could mean plant-based products, as well as kid-targeted skyr, saying the company is "exploring the places where consumers want the differentiation that we can bring."
"Because of our success, others are trying to imitate us or also move their portfolios in the same direction. Well, that keeps us on our toes, and keeps us focused on continuing to lead."
Simple ingredients and nutritious qualities are core to Siggi's mission and corporate philosophy, Altschul said. Not only does the company use those values to make all of its decisions, but it also dedicates funds and effort to nutrition entrepreneurs. Last month, the company gave a Cleveland registered dietitian a $10,000 grant to support her program connecting students and educators to nutrition experts through the Siggi Supports Entrepreneurs contest.
Altschul recently was at the Food & Nutrition Conference & Expo in Philadelphia to connect with dietitians. He said spreading the word about the company to these influencers in the nutrition segment is a way that Siggi's furthers its mission. This sort of connection answers one key question Altschul said he asks himself as CEO.
"How do we leverage [the company] to drive bigger, bigger impact — not only in our product," but in the larger community of nutritional professionals and target consumers, he said.
Yogurt in the future
The yogurt segment is dynamic and still growing, Altschul said. This is a big reason why he's been in the segment for so many years. After all, he said, a conversation about yogurt a decade ago would have been about probiotics transforming the category. A couple years later, the topic would have been how Greek yogurt is changing the segment.
"It's a category that continues to reinvent itself," he said. "You also see within that reinvention, that transformation, that players within the category change and evolve. So for me, I've always loved the opportunity to engage and make meaningful connections with consumers, to be able to do it in a category that's healthy."
The current reinvention is driven by companies such as Siggi's that focus on clean labels and more protein, Altschul said. The yogurt category is incredibly dynamic, with about 400 SKUs available. With two annual resets of grocers' yogurt cases, there are opportunities to change the entire balance twice a year, said Altschul.
Altschul said Siggi's is at the beginning of its current transformation, and the brand will continue to make improvements to its products. While consumer preferences are changing, Icelandic will remain a lucrative part of the yogurt space. He predicted sales for all yogurt could cross the $10 billion sales mark by 2024 as the segment adjusts to consumers' needs.
"We are very proud of the role that we are playing in this transformation that yogurt is undergoing, addressing more snacking needs and occasions," he said. "But I still see a ton of potential for yogurt. It's still a significantly under-developed category. And if we're able to position yogurt as a healthy snack that appeals to different occasions throughout the day, I think there's still a lot of room for the category to grow."
Correction: A previous version of this article was too specific about Altschul's prediction for yogurt sales. He believes all yogurt will cross the $10 billion sales mark by 2024.