The New Yogurt Culture
Walk down any dairy aisle and you’ll be struck by the ever-growing yogurt selection, from Greek-style and kefir to drinkable varieties. With consumers eagerly choosing yogurt for its healthful properties, versatility, good flavor and convenience, this powerhouse product translates to liquid gold on the shelves.
by Denise Shoukas
American consumers have cultivated a passion for yogurt in its many incarnations, from spoonable Greek to drinkable children’s varieties. And while the growth of other snack categories was stunted during the recession, yogurt has continued to grow and sees a bright future as a favorite better-for-you snack, with sales forecasted to reach $9.4 billion by 2017. Sales are expected to increase steadily each year between 2013 and 2017, at a rate of 5.4 percent to 7.3 percent per year (before adjusting for inflation), driven largely by strong demand for Greek yogurts and lowfat options, as well as by products with kid-friendly packaging.
Current retail sales of yogurt, including frozen products and yogurt drinks, reached nearly $6.4 billion in 2011 and an estimated nearly $7 billion in 2012. While demand for Greek yogurt will remain strong, growth in this key subcategory will slow as the market reaches saturation.
Mintel defines the category with the following segments: spoonable yogurt sold in cups or tubes, Greek-style yogurt, refrigerated, liquid yogurt drinks (including smoothies), kefir and frozen yogurt.
- Retail sales of spoonable yogurt, frozen yogurt and yogurt drinks reached nearly $7 billion in 2012, up 17 percent from 2010. While refrigerated spoonable yogurt sales account for 89.3 percent of that total, drinkable yogurt sales reached a healthy $422 million, followed by frozen yogurt sales of $323 million.
- The biggest driver of growth is spoonable Greek yogurt, which grew nearly 90 percent from 2009 to 2011. Currently accounting for approximately 20 percent of total retail sales and reaching nearly $4.5 billion in the 52 weeks ending May 13, 2012, Mintel expects sales of Greek yogurt line extensions to play a key role in driving gains in 2013, as well better-for-you options such as tasty, lowfat SKUs.
- Though new product introductions declined during the recession, more than 600 new spoonable and drinkable yogurt SKUs were introduced in the U.S. from 2010 to 2011. Preliminary data indicates that 2012 was another year of widespread innovation.
- Yogurt products that have the most potential to drive sales include those that have added probiotics or fiber fortification to appeal to the 24 percent of survey respondents who indicate buying yogurt at least in part for digestive-health reasons.
- Like Greek yogurt, the relative newcomer Australian yogurt is a premium variety that generally contains probiotics. It is less thick than Greek-style and has a milder flavor. While Australian yogurt could become more popular in the U.S. in the future, only 37 percent of yogurt purchasers surveyed indicate they have heard of it.
- Interest in dairy-alternative yogurts is growing. New Greek-style nondairy coconut- and almond-based products from Turtle Mountain grew 46 percent over 2009–2011, reaching $5.3 million in sales. Wholesoy grew 19 percent, earning $5.2 million in 2011; and 2010 newcomer Amande almond-milk yogurt earned $2 million in 2011 sales, according to SPINS. A large number of small dairies performed well over the same period, like goat’s milk leader Redwood Hill, growing 44 percent, as well as Bellwether, Grace Harbor, Nancy’s, Saint Benoit, Seven Stars and Straus Family Creamery.
Refrigerated and frozen yogurts continue to drive the most growth within the category. Within both segments, lowfat yogurt remains the preferred type, probably due to the fact that millions of Americans are aspiring to live a healthier lifestyle but don’t want to compromise on flavor and convenience. While sales of yogurt drinks declined slightly, they are expected to rebound as a result of the relatively strong performance of drinks with innovative flavors and kid-friendly packaging.
New product launches played a key role in the category growth seen through 2011. Leading manufacturers and smaller firms alike have introduced an array of drinkable and spoonable yogurts designed to appeal to those who prefer BFY products as well as others seeking indulgent options. The number of new launches in the first seven months of 2012 suggests that, as in 2010 and 2011, companies will continue to leverage innovation to gain share in a highly competitive market.
Sales of Greek yogurt—and the many products made with Greek yogurt as a main ingredient—are clearly playing a key role in driving overall category sales. Spoonable and frozen yogurts showed the largest number of introductions, with frozen considerably higher in 2012 than in 2011, and the burgeoning Greek frozen yogurt category is slated to drive impressive gains in 2012 and 2013. This is a subcategory that retailers and manufacturers will want to give attention to as they consider how to optimize their yogurt offerings.
- When it comes to preferences, 58 percent of yogurt consumers indicate that they have purchased lowfat while 50 percent have bought regular, and one in four have bought light, sugar-free or nonfat SKUs.
- When asked why they purchase Greek yogurt, 58 percent of users cite taste as a driver, while 45 percent say they do so because it is “healthier than regular yogurt.” Another 44 percent are motivated to purchase for its high protein content.
- Some 62 percent of yogurt purchasers buy single-serve (4- to 6-ounce) containers, while 45 percent buy single-serve multipacks and 30 percent use family-size packaging. Single-serves appeal to shoppers from households with kids and multiple adults that have varying taste preferences.
- Women and households with children tend to consume more yogurt per month than other segments. This indicates that mothers are an especially important segment to market to, especially for BFY products housed in kid-friendly packaging.
- Low/no/reduced fat, kosher, vitamin/mineral fortified and low/no/reduced calorie are the claims most often associated with new yogurt launches. This reflects the fact that many firms are working to frame their products as BFY to maximize consumer appeal.
- Among yogurt purchasers surveyed, 16 percent indicate using yogurt on the go, and 35 percent use it at work. These findings—as well as the finding that many kids bring yogurt to school as part of a lunch or snack—imply that manufacturers can benefit by developing more highly portable packaging, such as insulated containers.
Greek yogurt—tangy, thick and packed with protein—has changed the face of this segment. Close to 60 percent love it for its taste and don’t shy away from the modest price premium. Healthfulness and protein content is another key driver, and many varieties also have live and active cultures including probiotics that are said to aid digestion. Note that 26 percent of users, (including 30 percent of those ages 65 and older) state they believe Greek yogurt has more cultures than regular yogurt. This helps position Greek yogurt to command price premiums and compete with brands that feature probiotics.
Certain properties make yogurt appealing to consumers. Nearly two-thirds say they buy yogurt for its calcium and vitamin D content, and 24 percent purchase for digestive health reasons. Manufacturers could add vitamin/calcium fortification and/or probiotics to products that do not have those ingredients to drive sales. Interestingly, Mintel’s research revealed that 21 percent of yogurt purchasers view yogurt drinks as more expensive than yogurt. This may help explain why sales have been lagging in recent years. Competitive pricing and messaging that calls attention to ingredients could help to revive the category and drive future sales growth.
While sales of premium-priced yogurts are serving to drive sales growth, 41 percent of yogurt shoppers are quite frugal, often gravitating toward bargain or discount pricing. The survey also showed that more than a third of yogurt buyers are brand loyal and 26 percent typically decide what to buy before they go to the store. Marketers can drive sales with modest discounts and shelf talkers or other in-store signage designed to draw attention to a bargain. Additionally, companies could offer “carton deal” promotions to provide a modest discount on single-serve cups while ensuring those who get a discount purchase several SKUs at a time. New and lesser-known brands will need enticing prices and/or products that are an ideal fit with consumer preferences to win over new customers.
Recent Product Introductions
- Ciao Bella Adonia Greek Frozen Yogurt
- Coach Farm Goat Milk Yogurt
- Easiyo Yogurt Maker Starter Kit
- Eat Well Enjoy Life Hummus with Greek Yogurt
- Illios Greek Yogurt Butter
- Jeni’s Splendid Ice Cream Lemon Frozen Yogurt, Pink Grapefruit Frozen Yogurt
- Karoun Dairies Greek-Style Honey Yogurt, Lite Kefir Cheese Labne
- Lifeway Organic ProBugs Kefir Cultured Milk Smoothie, Lowfat Mango Kefir Cultured Milk Smoothie
- Otria Greek Yogurt Veggie Dip
- Stonemill Kitchens Greek Yogurt Dips
- Stonyfield Organic Oikos Super Fruits Organic Greek Yogurt, Organic Drinkable Greek Lowfat Yogurt
- Wallaby Organic Mango Lime Nonfat Yogurt, Joey Strawberry Yogurt
Editor’s Note: Specialty Food Magazine is pleased to be working with Mintel on Research Spotlight. Mintel is a leading supplier of competitive media, product and consumer data. A 33-year reputation for delivering dependable and original market information has allowed Mintel to maintain Business Superbrand status in the U.K. Mintel’s product line includes: Mintel Reports, a renowned market intelligence report series, publishing more than 600 reports annually covering the U.S. and Europe; and Mintel’s GNPD, the Global New Products Database, which monitors worldwide product innovation in consumer packaged goods markets. For more information call 312.943.5250 or visit www.mintel.com. Specialty Food Association members may purchase Mintel’s “Yogurt and Yogurt Drinks” report at a 10 percent discount.
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