Although Greek yogurt sales are in decline in the U.S. – one of the largest markets – the long-term global outlook is positive, with new markets expected to offset some of the maturity. The U.S. will, however, remain key to fortunes of key players in the Greek yogurt market.
Greek yogurt, also known as strained yogurt, currently accounts for nearly half of all yogurt sales in the U.S. – an exponential rise considering in 2007, it accounted for only 1% of the U.S. yogurt market.
Since 2014, yogurt sales in the U.S. have witnessed a remarkable descent, prompting some of the market leaders to reassess their strategy. PepsiCo ended its joint venture with Theo Muller Group, citing that “the business was not meeting expectations.”
Chobani, the company that made Greek yogurt a staple item of U.S. breakfast, also faced a grim 2015, but it is hopeful that sales will pick up in 2016. Although companies are launching new flavours in the market, it seems as though yogurt is slowly losing its appeal, with consumers looking for new ‘fad’. Thankfully, there doesn’t seem to be an innovative category on the horizon that will catapult and receive the euphoric attention as Greek yogurt did a decade earlier. And, this is the opportunity that yogurt manufacturers need to capitalise on. Chobani is responding to the situation by launching ‘Flip’ – an innovative range of yogurts, while Yoplait now has 16 flavours in its Greek lineup.
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Launching new flavours with attractive packaging, and increasing promotional activities seems to be the way forward for yogurt companies. It’s a classic case of supply outstripping the demand, as many manufacturers are now stocked up with products, as retailers see sales dwindle.
Although demand for Greek yogurt has plateaued, the fact that it still makes up nearly 50% of all yogurt sales in the U.S. means there’s still a lot of potential in the market. “Greek yogurt, although witnessing a decline, is still consumed in millions of households across the U.S. It isn’t as if it’s going to disappear overnight. It’s just that after witnessing skyrocketing growth rates, the industry is waking up to the sad reality of market saturation”, said Pratima Maske, analyst at Future Market Insights.
Transition from Breakfast to All-Day Meal – The Future of Greek Yogurt
Sensing the slowdown in the market, Greek yogurt manufacturers are trying to break the ‘breakfast meal’ niche and make their offerings a part of lunches and dinners. All the leading companies in the Greek yogurt market are launching new products to cater to market demand.
The slowdown in the Greek yogurt market has also meant that the top 3 in the market, including Chobani, Dannon, and Yoplait are engaged in a fierce tussle to maintain and expand their market share. For instance, Yoplait is suing Chobani for an advertisement in which the latter compared Yoplait’s Greek yogurt to industrial waste. Earlier, Chobani had launched an advertisement which compared Dannon’s yogurt to a public swimming pool.
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The future of Greek yogurt in the U.S. will depend on how the market performs in 2016. After witnessing a decade of high growth, 2015 saw a decline in growth. If the pattern continues in 2016, then the slump in yogurt in general and its strained variant, may continue in the future as well. However, what can be heartening for Greek yogurt brands is that outside of the U.S. and Europe, there is a huge untapped market. Foraying into these markets can mean that exponential growth witnessed in the U.S. market in the last decade can be achieved again.