The Rise of the Greek Yogurt Industry in Central New York - NADO.org

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The Greek YogurtPhenomenonand New York’sDairy IndustryThe Rapid Ascent of Greek YogurtFirst, a word on the product: What has become brandedas “Greek” yogurt in this country is more widely known as“strained yogurt” in other parts of the world. This strainingprocess removes excess whey (the watery part of milk), resultingin a yogurt with a thicker texture that is low in fat and highin protein while retaining the distinctive yogurt taste. Strainedyogurt is common in many countries in the eastern Mediterraneanregion and other parts of Asia. 6What is perhaps most compelling about the rise of Greekyogurt is just how quickly it has come on to the scene. The storybegins in 1998 when FAGE began flying product from Greeceinto New York City to introduce its Greek brand to the Americanmarket, enjoyed impressive sales growth, and decided tobuild a U.S. facility. 7 The Chobani brand was subsequentlyrolled out to the U.S. market in 2007, and has since been thedriving force in taking Greek yogurt to a whole new level. 8With Greek yogurt rising on the radar screen, global financial services company UBS issued a research report in March 2011,providing an insightful “deep dive” into the Greek yogurt segment. 9 It notes, “Greek yogurt brands such as Chobani and FAGE havecaptured market share more quickly than almost any segment in a major food ever (13 points in the last 3 years).” The UBS reportgoes on to note that during the previous three years, Greek yogurt had “evolved from relative obscurity (and a 1 percent marketshare) to the segment driving the vast majority of category growth.” To put it in percentage terms, consumer tracker Nielson reportsthat sales of Greek yogurt have surged at an impressive rate of over 100 percent a year, while non-Greek yogurt sales grew in singledigits. 10In the report, UBS assigns Greek yogurt market share for Chobani and FAGE of 48 percent and 22 percent, respectively, for the12-week period leading up to the 2011 report, reflecting the role of the New York yogurt makers as the epicenter of this burgeoningindustry. While FAGE and Chobani pioneered the Greek yogurt revolution, the situation is not static. More recent data (2012)“Greek yogurt brands ... have captured market share morequickly than almost any segment in a major food ever...”UBS Investment Research4
indicate that global giant Danone (makerof Dannon yogurt) is capturing a largershare of the market (up to a 19.7 percentshare as of May 2012), and now holds thesecond position to Chobani, which sits at47.3 percent, with FAGE at 13.9 percent. 11Danone is aggressively marketingits Oikos Greek brand, includinga prominent TV spot during the 2012Superbowl with Greek-American actorJohn Stamos. 12 For its part, Chobani isdoing some high profile promotion ofits own, having signed on as an officialsponsor of the 2012 U.S. Olympic Team.Its first Olympic ad focused on the “Chobanistory,” and how the company with“massive support from our communityand fans” has in five short years grownto become the number one yogurt in thecountry. 13All competitors, however, have theopportunity to capitalize on a risingtide, as the proverbial pie is expected togrow bigger. The UBS report states, “Ouranalysis of Nielson data strongly suggeststhat Greek yogurt has sustainable growthahead from increasing shelf space at retail,geographic expansion (beyond thenortheast U.S.), and increased in-storepromotion activity.” While no one canpredict the future with absolute certainty,Greek yogurt appears to be here to stay.WHY Greek Yogurt?What is driving this “category killer” thatis taking up more and more shelf spacein the dairy section of the local market?Health and nutritional considerationsappear to be a major force behind theascent of Greek yogurt. The word hascertainly gotten around, as the healthbenefits of Greek yogurt have been frequentlytouted in the media as a smarteater’schoice, low in fat and more fillingdue to the high protein content.While many of these stories are directedto women, such as a feature inWomen’s Health that included FAGETotal 0% Nonfat Greek Style among the15 best snacks 100 calories or less, theproduct has a broader appeal. For example,Men’s Health featured Greek yogurt(displaying Danone’s Oikos brand) onits online list of “5 Protein-Packed GymSnacks,” calling it a “lifters dream.” Chobaniis also tapping into the children’smarket with Chobani Champions, thefirst Greek yogurt made with only naturalingredients that is marketed just forkids (and the adults who love them andmake the household purchases). 14This focus on health and nutritionis backed up by the UBS report, whoseanalysis indicates that consumers aredrawn to Greek yogurt as a “convenient,Photo courtesy: Times Union, Albany, NYHealth and nutritionbenefits top the list ofreasons that peopleconsume Greek yogurtfilling, and healthy meal.” The UBS reportnoted that while health and nutritionbenefits top the list of reasons thatpeople consume Greek yogurt, theirdata surprisingly indicated that taste wasnot a major motivator, nor was price, asconsumers were paying a premium comparedto non-Greek yogurt.It’s interesting to note that Greek yogurthas really come into its own over thelast five years, almost in lock-step withthe rise of social media, which togetherwith traditional print and television mediais spreading the word about the benefitsof the product to the American public.Today, word of mouth is leveragedmany times over by the loudspeaker ofsocial media outlets, and the New Yorkyogurt producers are making full useof these new-era marketing tools suchas Facebook and Twitter. Case in point,FAGE has nearly 1 million “likes” on itsFacebook page.5
Page 2 and 3: Greek Yogurt:An Economic Driver inC
Page 6 and 7: As for Chobani, it is winning someg
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Page 15 and 16: Connecting to Markets and Suppliers
Page 17 and 18: officials, planning and development
Page 19 and 20: About the NADO Research FoundationF

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