Speaking at FoodNavigator-USA’s Food Vision USA conference last week, Chobani’s chief marketing and brand officer Peter McGuinness said Flip - launched in 2013 - was delivering incremental growth both to Chobani and to the yogurt category overall by attracting new consumers to the yogurt aisle, and encouraging existing consumers to buy more yogurt by opening up new day parts in which to enjoy it.
“This platform had 5% trial and 50% repeat when we soft launched it, because it’s delicious food. We did a big campaign, and the thing just took off,” said McGuinness, who noted that Chobani had gone from zero to generating revenues of $1.5bn in less than a decade.
“We’re now number one in the mix in segment which is growing at around 30% year on year in yogurt.”
Asked if all the new SKUs were just cannibalizing sales of its existing lines, McGuinness claimed that Flip was doing “three times the velocity of its two other primary competitors” and that retailers quickly saw the value proposition:
“The really interesting thing about this [Flip’s sales] is that it’s 42% incremental, and half of that 42% is people that never had a yogurt, and the other half is people that are buying a second or third yogurt incrementally - so they are eating yogurt for breakfast and now they are eating one as an afternoon snack as well.”
He added: “80% of yogurt in America is still consumed in the morning, so we set out to develop a new platform - a highly thoughtful, highly-curated highly delicious afternoon snack. We wanted to create a 3pm yogurt ritual, when you’re bored at work, or coming home from school or soccer practice, something that bridges the gap between lunch and dinner.
“It’s called Chobani Flip, and we think it’s the future of snacking, and the next billion-dollar brand in yogurt.”
Savory innovation: Sweet and spicy Flip products to launch in January 2016
The most successful product in the Flip lineup to date - almond coco loco, a coconut Greek yogurt with honey-roasted salted almonds and dark chocolate - is already outselling Chobani’s core cup flavors such as strawberry and blueberry, and is the “number one single serve SKU in the yogurt category right now”, claimed McGuinness. “It’s unbelievable.”
Several new Flip products will hit shelves in the coming months, including new 100-calorie variants and novel sweet & spicy lines including pineapple chipotle and mango sriracha (debuting in January), he said.
Chobani also plans to launch more whole milk-based products; new packaging formats; and new "fruit and veg" combinations, revealed McGuinness.
As for the move into savory, he said: "This whole sweet and spicy thing, it’s a really exciting direction for yogurt. Yes it’s a risk, but I’ve lobbied really hard for this. It’s highly curated, culinary, with lots of nuts and spices and fruits, and interesting flavor combinations. Consumers are bore beyond belief by current flavors, they want flavor and texture, sweet, spicy, crunchy, nuts, seeds, grains, coconut, chocolate… Yogurt is low interest, let’s make it high interest."
Asked why Flip was performing better than Muller Quaker Dairy’s mix-in products, McGuinness said he didn’t think the brand resonated with US consumers, and that Chobani’s mjx-in products were superior, adding: “We’re talking about high quality Greek yogurt and really interesting side car ingredients, not just chocolate balls.”
Growth potential in yogurt
While more Americans are eating yogurt than ever before, he added, there are still significant growth opportunities in the US market, given that consumption is still significantly below that of many other markets. “Yogurt is young in this country.”
"The yogurt aisle is cold and foreboding and incredibly congested, confusing, and hard to navigate… it’s a mess, so we’ve got to divide it by day part and need state." Peter McGuinness
Chobani is therefore going after new consumer segments; new geographies (yogurt still over-indexes in the Northeast and the rest of the country is still catching up); and new day-parts and eating occasions such as the mid-afternoon snack, an evening indulgence, or an alternative to toast, cereal or muffins at breakfast, he added.
The US yogurt aisle: It’s a mess, so we’ve got to divide it by day part and need state
However, the category was becoming confusing to shoppers, he said: “In the last 12 months there were 800 new yogurt SKUs introduced - that’s crazy - I don’t know of a single category that has had that kind of proliferation.
“It’s confusing since the average consumer spends 13 seconds in the dairy aisle and it’s cold and foreboding and incredibly congested, confusing, and hard to navigate… it’s a mess, so we’ve got to divide it by day part and need state.”
The mission: Better food for more people
While Whole Foods’ decision to delist Chobani a while back prompted some reporters to wonder whether the brand had lost its cool image, or had become “too mainstream” for the retailer, McGuinness said he wouldn’t apologize for making a product that was designed to be enjoyed by everyone.
“Our DNNA is delicious, nutritious, natural, and accessible/affordable. There is a lot of delicious out there that is not nutritious or natural, and there’s a ton of natural and nutritious out there that is definitely not affordable.
“There is a lot of better food out there that’s on the coasts and in specialty stores, all these great cold pressed juices, I love them - don’t get me wrong - but it doesn’t work for mass America. And there’s a lot of people food out there that is frankly crap.
“Our mission is to make better food for more people, food that’s delicious, nutritious, natural and affordable. if you can do both, that’s the future of food.”
With that in mind, Chobani is also looking to expand into “adjacent categories”, said McGuinness, although the company is not providing any further details at this stage: “We don’t just want to be a company that sells yogurt; we want to be a belief-driven company that sells natural foods.”
Admitting when you’re wrong
The challenge for Chobani - which has had its fair share of challenges over the past couple of years, from social media storms over its marketing campaigns and lawsuits over its food labels to a recall over mold and questions about its leadership and strategy - has been trying to maintain its ‘challenger brand mentality’ as it has become a mainstream player, said McGuinness.
“We’ve made a lot of mistakes. And you’ve got to admit when you’re wrong - this [marketing campaign in which Chobani adopted the ill-advised phrase on its Simply 100 cups: ’Nature got us to 100 calories, not scientists’] went bonkers online - we screwed up, the play on words was a dumb play on words.”
He added: “The mold thing hit in the second week of the job so I rapidly became the chief mold officer (CMO). It happened, we made a mistake, we found the root cause and it never happened again, but at no point did any one say the answer is to put potassium sorbate in our products.
“Staying ahead starts with staying true to yourself. Never ever change your ideals and beliefs and your values.
“How do you take on an outside investor and hire people from the outside and not lose your spirit and soul? You need the discipline and rigor of the big guys but you can’t lose your creativity, your agility and your entrepreneurialism because that’s what got your there in the first place.”