Consumers souring on Greek yogurt? PepsiCo’s bid for Chobani may indicate otherwise

Consumers souring on Greek yogurt? PepsiCo’s bid for Chobani may indicate otherwise

Take a proactive approach to your market research needs. PurchaseThe Yogurt Market and Yogurt Innovation, 2nd Editionand save 10% using promo code PFSAVE10 at checkout.

Feb. 10 - The reports of Greek yogurt’s death may have been greatly exaggerated. Last December the article “Goodbye, good old Greek yogurt” by The Washington Post detailed the apparent wane in consumer interest in Greek yogurt. Sales have noticeably begun to mature after Greek yogurt spent much of the past decade hailed as a nutrient-potent megastar of the food and beverage industry. Nevertheless, interest in the Greek yogurt market seemingly remains strong even among companies not traditionally associated with dairy products.

One of the more recent-and perhaps surprising-developments on this front involved PepsiCo. The beverage industry powerhouse announced interest in acquiring a majority share in Greek yogurt titan Chobani. It’s been less than three months since PepsiCo ended its U.S. joint venture with German yogurt brand Müller due to disappointing sales. Müller was known in part for its Greek yogurt offerings. PepsiCo’s apparent renewed interest in the yogurt segment is likely both a testament to Chobani’s reputation and an indicator that there is optimistic room for the Greek yogurt market to reach even higher heights albeit through innovation and clever marketing.

PepsiCo is actually one of multiple companies who have propositioned Chobani in the past several months. Other notable pursuers have included organic foods producer White Wave Foods and PepsiCo rival Coca-Cola, who eventually ended its pursuit last October.

Unfortunately for PepsiCo, any potential deal with Chobani collapsed due to PepsiCo’s insistence on purchasing a majority stake instead of settling for the minority stake the yogurt maker made avaiable. While it remains to be seen what potential deals lie ahead for Chobani in the future, one thing is clear: the brand’s primary objective is to retain its independence.

As arguably the best known Greek yogurt brand, the extensive outside interest in Chobani is understandable, according to Packaged Facts, which published the report The Yogurt Market and Yogurt Innovation, 2nd Edition in 2015. Chobani has led the Greek yogurt revolution.  The company owned an overwhelming majority of the market just a few years ago, and remains the industry’s crème de la crème even as competitors have fought tooth and nail for market share. To an extent Dannon has closed the gap across its portfolio of Greek brands.  And other marketers such Yoplait, Muller Quaker Dairy and YoCrunch have made inroads as well. Nevertheless, Chobani has not easily relinquished its dominance.

Despite the anticipated market stagnation, it’s difficult to overlook the role Greek varieties have played in resuscitating the overall U.S. yogurt market. According to Packaged Facts, one major factor is responsible for yogurt’s dollar sales increase: Greek yogurt.  The Greek yogurt subcategory has gone from being practically nonexistent more than half a dozen years ago - it was only about 1% of overall sales as recently as 2007, the year Chobani shipped its first products - to being the most important force shaping the industry.  Greek yogurt accounts for more than half the industry’s dollar sales.

-- Daniel Granderson