- Popular Greek yogurt brand Chobani overtook General Mills' Yoplait, the segment's long-established leader, to become the U.S.'s largest yogurt brand in 2016, according to Bloomberg. Chobani grew into a $1 billion juggernaut just five years after coming onto the market.
- This kind of disruption is a growing trend across the food industry. Legacy brands are losing market share to smaller, trendy upstart companies — Special K bars, for example, saw sales slip 39% since 2011, while newcomer Kind Bars have secured 10% of the market in just five years.
- Major food companies can try to mimic the innovative new products these upstart brands are pushing, but Euromonitor International analyst Jared Koerten said they may be late to the game.
Legacy is no longer enough to ensure food market dominance. Consumers are looking for innovative product formulations that reflect current flavor trends, better ingredients, mission-based brands and niche offerings — a tall order for giant brands that rely on tried-and-true product favorites. The sluggishness of legacy brands has allowed trendy food and beverage start-ups to carve up a healthy portion of market share for themselves. Major companies are starting to feel the heat.
Analysts said these upstarts are finding success because they are appealing to consumers who are looking for something new and in most cases, healthier. The marketing campaigns also seem to be millennial-friendly, and new generations of consumers are making these products a regular part of their shopping lists.
Some of these companies may be ripe for acquisition, but if their success continues, they may choose not to align themselves with a major brand. For instance, last year Chobani rejected PepsiCo’s takeover attempt, an action justified by its increasing sales. Being independent is part of the lure for upstart brands and many consumers who buy their products; a tie-up with a big food manufacturer could sour that appeal for shoppers.