Over the past six years, Chobani
has succeeded in becoming the dominator of the Greek Yogurt category, unseating the
supreme Yoghurt leader Danone. Chobani’s share of the U.S. Greek yogurt market
has fallen for 18 months in a row from roughly half to 39 percent, while
Danone’s has jumped to 29 percent. This shows the perseverance of Danone and
it’s abillity to react quickly. Indeed, Danone’s resurgence appears as a model
to beat back a younger, swifter rival. Its comeback consists in four
parts :
Danone has been making Greek yogurt for a while now, but until last fall it was called Danone Greek. To sound new and more exotic like Chobani, Danone smartly swift Oikos on its Greek yogurt, a term meaning household or family in Greek. And to really seem Greek & authentic to the American shoppers, Danone added sharp marble columns on its plastic yogurt cups.
Startups with a great idea are often said to have the inconvenient of being kind of locked in a « tunnel vision », when Giants have the advantage of having plenty of product-line managers, eager to get into a new hot trend. In that sense, Danone started last summer mixing its Greek yogurt into « dips » and launched a trial of frozen varieties. Indeed, who wants yogurt when they could have froz-yo?
In July, Danone struck a deal to pump its Greek yogurts into Starbucks cafes under the name “Evolution Fresh, Inspired by Dannon.” Danonn company offers A-level supply-chain confidence so that Chobani can’t do the same. Chobani, of course, has become a massive operation in its own right, but the young company is still dealing with expansion and recently had to build a $450 million plant in Idaho to make sure it had enough milk. Danonn has also bought Happy families brands and Yo crunch to reinforce its presence in the USA. This is clearly a way for Danone to reinforce its presence in the US, to gain in visibility in the minds of consumers.
This tackles the issue of brand loyalty, what we can call “sticky” yogurt fans, dedicated to their favorite brands. But Danone is cutting them a deal. Online grocer FreshDirect sells Oikos for about 12 percent less than Chobani on a per-ounce basis. As a response, Chobani has established with aggressive discounts of its own. Some 43 percent of its sales this year were marked down, according to a recent report from Sanford Bernstein. Price cuts hurt everyone, but they hurt small players more: By revenue, Danone remains more than 20 times bigger than Chobani...
As a Giant being threatened, Danone tries to kill Chobani using the power of Money.
Rebrand your rival product through a new packaging
Danone has been making Greek yogurt for a while now, but until last fall it was called Danone Greek. To sound new and more exotic like Chobani, Danone smartly swift Oikos on its Greek yogurt, a term meaning household or family in Greek. And to really seem Greek & authentic to the American shoppers, Danone added sharp marble columns on its plastic yogurt cups.
 |
| Danonn's new repack |
Expand the menu with dips & frozen yogurts
Startups with a great idea are often said to have the inconvenient of being kind of locked in a « tunnel vision », when Giants have the advantage of having plenty of product-line managers, eager to get into a new hot trend. In that sense, Danone started last summer mixing its Greek yogurt into « dips » and launched a trial of frozen varieties. Indeed, who wants yogurt when they could have froz-yo?
 |
| Danonn's froz-yo |
 |
| Tuscany harvest dip |
Partner up with others brands
In July, Danone struck a deal to pump its Greek yogurts into Starbucks cafes under the name “Evolution Fresh, Inspired by Dannon.” Danonn company offers A-level supply-chain confidence so that Chobani can’t do the same. Chobani, of course, has become a massive operation in its own right, but the young company is still dealing with expansion and recently had to build a $450 million plant in Idaho to make sure it had enough milk. Danonn has also bought Happy families brands and Yo crunch to reinforce its presence in the USA. This is clearly a way for Danone to reinforce its presence in the US, to gain in visibility in the minds of consumers.
Squeeze prices to relaunch consumption
This tackles the issue of brand loyalty, what we can call “sticky” yogurt fans, dedicated to their favorite brands. But Danone is cutting them a deal. Online grocer FreshDirect sells Oikos for about 12 percent less than Chobani on a per-ounce basis. As a response, Chobani has established with aggressive discounts of its own. Some 43 percent of its sales this year were marked down, according to a recent report from Sanford Bernstein. Price cuts hurt everyone, but they hurt small players more: By revenue, Danone remains more than 20 times bigger than Chobani...
As a Giant being threatened, Danone tries to kill Chobani using the power of Money.
Senior Analyst Andrew Wood said the market is big enough for at least two Greek yogurt "gods", which seems a reasonable expectation. With a rich taste from high protein and almost no fat, Greek-style offerings now account for almost half of America’s $7.6 billion yogurt market; sales have grown by an additional 44 percent this year. That’s far slower than growth over the past few years but it’s a trend most executives would kill for—or at least fight for.
The only loser, according to Wood, might be Fage, which has seen its share of the U.S. market decrease from 100 percent to less than 10 percent. Ironically, Fage is the only Greek company in the bunch…
Cécile Vendeville
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