Greece-based dairy processor KRI KRI looks set to challenge Fage for a share of the “authentic” Greek yogurt market in the UK after agreeing a deal to supply major British retailer Waitrose.
The company - the third largest Greek yogurt manufacturer in Greece - announced earlier this week that it had entered into trade agreement with Waitrose to supply its 300 stores with private label Greek yogurt.
The deal marks KRI KRI’s entry into what it describes as “the most promising Greek yogurt market in Europe.”
The company has estimated that the UK market for Greek yogurt is worth more than €200m (£170m $270m). However, more than 80% of this market is made up of Greek-style yogurt rather than “authentic” Greek yogurt, the company added.
KRI-KRI export manager, Andreas Mylonas, told DairyReporter.com that as the UK Greek yogurt market becomes more competitive, it will be increasing important to differentiate “authentic” from Greek-style.
“Following recent developments and market acceptance in many international markets, it has been proved that it is indeed important to claim the product as authentic Greek,” said Mylonas.
“This differentiates the product from Greek-style yogurts.”
Authentic claims create “added value”
“Furthermore, according to the regulations, one needs to produce a yogurt in Greece in order to call it Greek yogurt. This is the only requirement but it is a prerequisite too,” said Mylonas, referring to a recent legal victory by Fage.
Earlier this year, the UK High Court issued New York-based Greek yogurt manufacturer, Chobani, with a permanent injunction restraining it from marketing its products as ‘Greek yogurt’ in England and Wales unless it is, or contains a yogurt product, produced in Greece.
The legal case centred on claims by rival Greek yogurt manufacturer, Fage, that only yogurt made in Greece should be marketed as ‘Greek yogurt’.
As a result of the High Court decision, Chobani and a number of other Greek yogurt manufacturers have been forced to adapt their labelling and market their products as ‘Greek-style’ and ‘Strained’ yogurt.
“Since we are producing our yogurt in Greece, with Greek milk, and our factory is situated in the centre of the biggest milk zone of Greece, our authentic Greek yogurt can make these claims that create the added value demanded by the local UK consumer," said Mylonas.
0% and 10% fat variants “most popular"
According to Mylonas, KRI KRI currently holds a “double-digit” share of the yogurt market in Greece – where it produces more than 70% of private label yogurt for retailers.
As well as Greece, the company has a presence in 15 other countries across Europe, the Balkans and the Middle East. Its deal with Waitrose marks its first steps in the UK.
Mylonas believes that its Greek yogurt product portfolio, which includes 2% and 10% fat variants, will meet the demands of UK consumers.
“The UK is the biggest market in Europe for authentic Greek strained yogurt,” he said.
“The most popular items in the UK market are plain Greek 0% fat and 10% fat yogurt. The various fruit varieties are much smaller than the plain yogurt. This is why we initially focus on the plain yogurt,” he said.
Production capacity expansion
Alongside news of its deal with Waitrose, KRI KRI has also announced plans for a €8m (£6.8m, $10.7m) yogurt production capacity expansion.
The investment will enable the company to keep up with increasing demand for its Greek yogurt products in Greece and abroad, said Mylonas.
“Our current and future investment plans are being done in order to reassure that we will be able to continue to service all the markets that we are action in - providing the volumes needed, which are constantly increasing, but also preserving the highest possible quality,” he said.
KRI KRI expects to complete the expansion next summer.