Yogurt Boom

‘Greek’ phenomenon achieving pacesetter status
Chobani greek yogurt

GLENDALE, Ariz.—From the yogurt category, a new David vs. Goliath story has emerged. Greek-yogurt brand Chobani has invigorated the once dormant category and is set to become a true industry “pacesetter,” according to a spokesperson for a Chicago-based research firm.

Larry Levin, executive general manager for consumer insights, SymphonyIRI Group Inc., told attendees of CSP’s Convenience Retailing University conference earlier this month that pacesetting new products—or “pacesetters” —typically outperform other product introductions to quickly become driving elements within the category. They can be new items or brand extensions, but in either case, a groundswell of support and an almost out-of-the-blue popularity are the common factors.

A Northeast retailer attending the conference in Glendale, Ariz., attested to the success of Chobani, saying growth in the category overall is up 400% at his stores. The retailer, who requested anonymity, said his chain is seeing related success with healthy snack bars dipped in a layer of yogurt. According to SymphonyIRI, c-store sales of yogurt rose nearly 22% in the 52 weeks ending Dec. 30, 2012, to reach $61.9 million.

The Chobani story goes back to 2005, when the company founder purchased a defunct Kraft yogurt factory in upstate New York. Two years later, his “Greek” style yogurt appeared on store shelves in Long Island, N.Y., then eventually at BJ’s Wholesale Club and Costco.

Meaning “shepherd” in Greek, Chobani has grown into a $1.5 billion business, holding the largest share of yogurt overall domestically (17%) and over 50% of the Greek yogurt market, according to SymphonyIRI. Other U.S. yogurt providers have yet to catch up with the Greek-style options that they’ve developed.

“It’s all about innovation—not imitation,” Levin said, noting how true pacesetters have unique qualities. SymphonyIRI data shows that an innovative new product will make $36 million as opposed to the $24 million an “imitation” product would bring in.

In the case of Chobani, a paltry $14,000 in marketing led to a whopping $47 million in first-year sales, Levin said, emphasizing the extraordinary nature of the pacesetting yogurt brand.

And c-stores are positioned to play an active role, not only in the yogurt category, but fueling the success of future pacesetters. “You guys are truly a great catalyst in bringing new products to market,” Levin told the crowd, later dubbing the industry as a “rock star” for innovation.

SymphonyIRI’s pacesetters report clearly shows the important role convenience stores play in successful product launches. For 13 years, the market-research company has tracked the most successful new product launches of new or extended brands with at least a 30% distribution rate and $7.5 million in first-year sales. During that time, c-stores have accounted for approximately $2.5 billion of the pacesetter new-product sales—more than two-thirds of all pacesetter dollars.

“C-stores are a great laboratory to breed successful launches, especially in alcohol, tobacco, sports and energy drinks,” Levin said. Not surprisingly, when Levin laid out the top 10 c-store new-product launches over the last 13 years (representing a whopping $1.4 billion in sales), all the top products fell into those four segments.

When data for 2012 arrives, Levin believes Chobani’s true success will have documentation. “Like the Beatles, it went from unknown treasure to creating a mania.”