The greek yoghurt’s battle !

 

Currently, food manufacturers bet on greek yoghurt segment !  Maybe because this particular yoghurt have a profitability which is 3 times more important than a regular yoghurt !

Today, distributors’ own brands are the leaders. Lactalis proposes greek yoghurt under the Nestle brand, Danone is coming on this segment with Ilios..

All these brands represent 65% of the market.

But, two brands arrive on the french market :

Chobani and the parisian brand Michel & Augustin.

Augustin Paluel-Marmont, the director of this last company observed how Chobani went from O to 5 billions of $. 

M&A decided to organize a charity sale and send aircrafts carrying yoghurts in order to help Greek economy.

A new funny buzz campaign to launch their greek yoghurt ! 

http://www.challenges.fr/entreprise/20130207.CHA5957/les-dessous-de-la-guerre-du-yaourt-a-la-grecque.html

http://www.dailymotion.com/video/xxh4fe_quand-michel-augustin-a-du-mal-a-reconnaitre-les-yaourts-a-la-grecque-blind-test_news

Cécile Vendeville

                         

                         

Is greek yoghurt destroying the environment ?

The greek yoghurt market is increasing in the USA. It is due to health and the diet trend. 

This yoghurt presents many advantages because is more nourishing, it contains twice more proteines than a classic yogourt and it is less caloric because it contains less lactose and less sugar. This product seducts american consumers ! This industry is 2 billions dollars per year.

                      

But this taste is not without consequences for the environment because the production of the yoghurt creates an acide residu. 

An article published  in the American magazine « Modern Farmer » reveals negative aspects of the production of greek yoghurt which is particularly concerned because it takes so much more milk to produce, about three cups of milk for every one cup of yoghurt.

The big question is « where does this waste go ? »

Chobani delivres the toxic greenish mess to local farms, where it is then mixed with live stock feed.

« Right now, we choose to return whey to farmers, most of whom use it as a supplement to their livestock feed. Some is used as a land-applied fertilizer but only at farms that have nutrient management plans in place with the state environmental conservation agency. A small percentage is also sent to community digesters, where the whey is used to produce energy. »

A photo of the digesters that Chobani is speaking of can be seen below:

                                  

                          Photo of an actual manure slurry of whey / Justin Ellion / Modern Farmer

Justin Elliott writes in the Modern Farmer that the acidic whey « cannot just be dumped » :

« It's a thin, runny waste product that can’t simply be dumped. Not only would that be illegal, but whey decomposition is toxic to the natural environment, robbing oxygen from streams and rivers. »

Whey is a disaster for biological systems and in recent years, whey accidents have resulted in the death of thousand of fish.

For example a factory that produces 26,500 gallons of milk per day creates the same amount of pollution as a city of 60 000 people.  

What are possible solutions for this?

First, whey can be used to produce energy like electricity.

Then, one of the solution consists in extract the milk sugar from the whey and use it for infant formula.

All these solutions are expensive, not very efficient and unfortunately not close to solve the problem.

Cécile Vendeville

http://www.slate.fr/lien/72901/yaourt-grec-pollution

Danio, Danone's new branding for 2014

"A super thick, super tasty yogurt over a layer of delicious fruit on the bottom".

Danio is a super thick, super tasty strained yogurt with a hidden layer of delicious fruit compote. Not only is it 0% fat and low fat and high in protein, each of the six fruit flavours comes in a generous 160g single pot. Danio's cup already exists in the UK and will come soon in France, in January 2014.

Danio looks like a Greek Yogurt, but presents no reference to the latter as you can see in the ad below:

http://www.youtube.com/watch?v=oxQzX5cvuwI#t=19

Indeed, in January, the British Justice condemned the american brand Chobani for using the umbrella "Greek yogurt".

If some brands have played till now on subtleties such as "Yogurt Greek Style" or "Yaourt à la grecque" as we say in French, the Greek yogurt producer Fage will thus be the only one from now allowed to use this umbrella. The question is, will Fage be able to take advantage of this...

I think this extremely changes the order of things in terms of Branding. Indeed, how to play on the wave of "Greek yogurt" hot tendency if the consumer can't figure out any longer at first glance thier stars products are actually still the "Greek yogurts" they used to have?

What about the new look of Chobani's consumers on the new cup, deprived of any Greek reference? Chobani's cup refer to the umbrella but the package doesn't play on Greek references but the fruits. In that sense, I think for Chobani it won't change that many things.

However, for Danone there is more risks: Oikos's brand new package clearly invests in Greek references!

We can wonder if Danio a good Branding in that sense. It seems Danone is taking some risks, even if the product's description clearly shows the characteristics of what we know as a Greek Yogurt. Though Danio is branded as being produced by Danone's yogurt experts in Poland.

Danio is branded as an innovation on the new segment of "Hyperproteinated yogurts".

But considering the "Commoditization" we can talk about between Greek yogurt and Hyperproteinated yogurt, one could think this "new innovative segment" is just a Marketing's strike to counter the new law in favor of Fage. 

To comfort this idea, a special facebook page & twitter account have been developed for this special product and prove to be very active & successful.

A follower's picture on Twitter

Is the new law about Greek umbrella going to increase Fage's market share?

One thing is sure, Chobani & Danone are at the same level now and with Danio that will be sold 1euro a cup, the price war is getting even harsher...


Cécile Vendeville

Danonn’s Plot to take Revenge on Chobani

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 : 

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

Strategy of Dannon

Dannon's Oikos is now capturing back sales from Chobani ¹.  They are now using strategies only a big, established player in a market can use. This has proven to be effective: Dannon’s market share is now gone up to 30% (from basically nothing), while Chobani has lost about 10%. Danone is also trying to expand the category by partnering up with Starbucks. Starbucks will start to offer Dannon’s Greek yoghurt soon in their cafes . "Yogurt has the healthy halo that everyone is looking for these days," says Mintel researcher John Frank. "The competition for Greek yogurt right now is fruits and vegetables. And it’s more fun than eating vegetables." ².

The effectiveness of Dannon’s strategy of fusing John Stamos in their commercials can be discussed. I am reading that some consumers automatically connected the Greek yoghurt to Chobani – not realizing it was a commercial for Oikos. Chobani has without a doubt had a great advantage being the first on the market: some people do automatically connect the Greek yoghurt to Chobani because this is the brand they know. Like Courtney Bosch writes: “if someone doesn’t even remember the name of your product—or confuses your product with another brand—then how effective was it to shell out big bucks on a big name celebrity?” ³.  Connecting Stamos more to the brand Dannon is maybe a thing they could have done better.

However, today, Chobani represents the Nike of the yoghurt category in the U.S for most consumers ². This means that Dannon has to use their size to their advantage and win back customers by cutting prices. Price is the most important factor, ahead of flavor, when purchasing Greek yogurt, according to Mintel. As it stands today, Oikos is the fastest-growing brand in the Greek segment, and there is still enormous growth-potential ⁴. Dannon is now also using MIcheal Symon on the Food Network to promote the yogurt as a cooking-ingredient. Dannon is also doing test publications in Mens Health magazine to promote the high protein message.

Cécile Vendeville

1: http://www.brandchannel.com/home/post/2013/08/28/Danone-Greek-Yogurt-Resurgence-082813.aspx

2: http://www.bloomberg.com/news/2013-08-26/danone-finds-yogurt-s-all-greek-as-oikos-chases-chobani.html
3: http://www.mpdailyfix.com/john-stamos-or-a-greek-yogurt-brand-name-which-one-did-i-remember/

4: http://www.foodnavigator-usa.com/Manufacturers/Dannon-Oikos-still-fastest-growing-brand-in-Greek-yogurt-segment-with-sales-topping-400m-in-2012