For those of us close to the food and grocery business, there was little evidence in 2006 in the yogurt category of the massive disruption that was about to take place:
-the sector was growing consistently in line with other mature food categories
-the big players such as General Mills and Dannon were busy innovating at the edges, especially around healthier options and products targeted to kids
-store brands were still a distant threat in the category
Meanwhile, in New York and a few other urban areas, the Greek yogurt phenomenon was being trail-blazed by Fage (pronounced “fah-yeh”) but apart from a small fanatical fanbase, very few people took any notice. It just didn’t seem that important.
Fast forward to 2011 where the greek yogurt sector now represents about 25%…yes 25% of total yogurt sales in a category valued at $6.8 billion annually.
So what happened?
Well the Fage brand continues to be a major player in the category and sales continue to expand rapidly. And while all the big players were definitely caught off guard, they are now all busy launching and enjoying the rewards of new Greek-style products. But the real news surrounds the game-changing brand called Chobani which has built a $250 million business annually in less than four years and which now dominates the Greek yogurt sector.
So how did a brand that didn’t even exist 5 years ago leave both the authentic Greek innovator (Fage) and the mainstream American brands (Yoplait and Dannon) in the dust? The answer makes for interesting reading and is a wonderful example of brand-building at its best.
Like many innovations, Chobani’s success stems from a confluence of events:
-it took an entrepreneur (Hamdi Ulukaya, a descendant of a long line of dairy farmers in Turkey,), with no knowledge of the yogurt business to see the marketplace opportunity
-this coincided with a noticeable change in consumer behavior at breakfast with more and more yogurt being eaten at the expense of cereal
-in turn, this was further fueled by the need for a healthier breakfast option– And Greek yogurt with its winning combination of simple, pure flavors with high protein together with low fat easily won this battle against the incumbent brands with their sweetener, coloring and preservative-filled traditional yogurts
-Chobani’s product is high quality and provides real evidence that good-for-you products do not need to taste disgusting- in fact it tastes superb
-add to the brand a wide range of flavors, simple and optimistic packaging and some new kids products and you begin to understand why the brand has such extraordinary momentum
-from a communications point of view, word of mouth- not just digital but also family-to-family helped spread the word as the Chobani distribution in turn moved from regional to national.
A few further thoughts about this remarkable brand story. From my perspective, what Chobani managed to achieve was to simultaneously “American-ize” and “mainstream” the Greek yogurt category – in the process it left behind both the major established yogurt brands as well as the original authentic Greek brand. In itself, this is an unbelievable feat. Furthermore, it achieved this with consumer prices significantly higher than historical norms and all this was done in less than four years while we were all struggling with the toughest recession in living memory.
To me, Chobani is a wonderful example of where the combination of catalytic product and clear positioning in the marketplace is the killer app for brand success. Congratulations to all those Chobani-ans who have made this possible and for giving millions of us a daily yogurt moment to savor.
Simon Williams
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