- Danone has rebranded and reformulated Oikos yogurt with 50% more fruit and a creamier taste.
- The company is looking to reignite the Greek yogurt category, which hasn't been growing as quickly as other segments of yogurt.
- North America has become an increasingly important part of Danone's overall business after the French company bought WhiteWave in 2017, roughly doubling its U.S. business.
Oikos Greek yogurt is starting off this summer with a new look and formula as Danone North America aims to reignite the category.
As of last year, the total U.S. market was worth $10.1 billion, according to Euromonitor International. With more than a third of the total market share, Danone is the top yogurt maker. Chobani, which helped make Greek yogurt a household name but has since branched into other food categories, falls in a distant second place with 19.1% of the market. (Chobani is considering going public later this year.)
"The category itself, pre-pandemic, has been relatively flat overall for a number of years. It did see some acceleration during the pandemic, sort of mid-single digit growth rates, but I think it's fair to say that it did not accelerate to the degree that some of our other segments did," said Shane Grant, chief executive of Danone North America.
Grant took the reins at the division last year after serving as the head of Coca-Cola's non-carbonated beverages business unit. North America has become an increasingly important part of Danone's overall business after the French company bought WhiteWave in 2017, roughly doubling its U.S. business.
Danone's strong grip on the U.S. yogurt consumer is mostly due to its success in the wellness category, with its probiotic yogurt Activia, and the plant-based segment, which is far and away the fastest growing part of yogurt right now. Danone sells dairy-free yogurts under its Silk brand.
However, Greek yogurt, which is the largest segment of the yogurt category, has seen much slower growth, although sales have risen due to the pandemic. In the 52 weeks ended May 29, total U.S. retail sales of Greek yogurt were up 4.6%, according to Nielsen. Two years prior, Greek yogurt sales had fallen 7.4% in the same timespan.
"Greek, while it's been fairly consistent, has not really been one of the real growth engines in yogurt, at least not in the last few years, and it hasn't made it, from what we saw, with enough excitement from millennial consumers," Grant said.
Through several rounds of consumer feedback, Danone landed on a reformulation of Oikos blended nonfat yogurt with 50% more fruit and a creamier taste. It also ditched the fruit at the bottom in favor of blending it throughout the yogurt. The new packaging features a white background with bold lettering.
Oikos blended yogurt started hitting grocery store shelves in June. By July, it will be available nationwide, with a big marketing push from Danone.
And the timing is no coincidence either. Grant said that a "good portion" of yogurt consumption comes from consumers who take their yogurt cups from home while they're on the go. During the pandemic, those occasions largely disappeared but were replaced by breakfast, as many consumers worked remotely and began making their own breakfasts for the first time in years. Now, however, consumers are more mobile as states roll back restrictions, and many employers are preparing to call back their workforce to the office, if they haven't already.
The rebrand and reformulation is the third step in Danone's plan to bolster the Oikos brand as part of its broader strategy to revive yogurt demand. It's been reinvesting in Oikos Triple Zero, which contains zero fat, zero percent added sugars and no artificial sweeteners. Last year, it launched Oikos Pro, which contains 20 grams of protein.
"We saw an opportunity here — because Greek is big, clearly the biggest component of yogurt — to bring action to the market that we think can really reignite that component of the yogurt market," Grant said.