Greek stirs the yogurt case

There’s little need for mythology around Greek yogurt. It’s all true – the sales surge, the nutritional profile. And the way it has captivated U.S. consumers to the point where supermarkets struggle to keep up with demand on busy days and sometimes merchandise Greek yogurt apart from dairy so it can be seen earlier in the traffic flow and closer to healthy produce and organic foods displays.

There’s little need for mythology around Greek yogurt. It’s all true – the sales surge, the nutritional profile. And the way it has captivated U.S. consumers to the point where supermarkets struggle to keep up with demand on busy days and sometimes merchandise Greek yogurt apart from dairy so it can be seen earlier in the traffic flow and closer to healthy produce and organic foods displays.

Why not? Depending on the trading area, health-driven shoppers can be accustomed to paying premiums for products they believe in.  Greek yogurt certainly fits that price mold.  Its average equivalized price per 16 ounces is $3.52, reports Nielsen. That’s 117% higher than the $1.62 of non-Greek yogurt.  It commonly sells for more than $4 per container in stores observed by F3.

Whether in dairy or another high-profile spot, supermarkets aren’t the only ones following the money with this unqualified hit.  Manufacturers are too. The two leading Greek yogurt brands, already in a pitched share battle, increasingly cross spoons with other yogurt makers belatedly bringing out their own Greek versions.  The segment’s SKU growth seems bound to pressure other segments in the refrigerated case.

Retailers might not mind if the new items aren’t copycats and don’t pull prices down – because the segment continues to soar on the products’ merits and commands its price.  Nielsen Buzz Metrics points to online discussions that focus on Greek yogurt’s health benefits and rich, creamy texture. “Dieters, health seekers and athletes recommend eating Greek yogurt across all meal occasions – particularly as a satisfying on-the-go or evening snack,” wrote Nielsen, noting that cooks claim it is “a more nutritious base for homemade salad dressings and mayonnaise….The healthy benefits of the more expensive variety justify the higher cost in the minds of consumers.”

What they see in Greek yogurt is a filling, high-protein, low-fat, low-carbohydrate food that helps them attain better health and better diet control.  So credit consumer pull for the segment’s health surge.  Two years ago, Greek yogurt accounted for just 2.8% of total refrigerated yogurt sales in U.S. food, drug and mass merchandiser stores (including Walmart), according to Nielsen data that tracks prepackaged, UPC-coded products only.  In the latest 52 weeks ended February 19, 2011, that share has grown to 13.2%.

Greek yogurt is carving out a bigger space for itself, even as the entire refrigerated yogurt category makes gains.  But the refrigerated case is like two different worlds:  The non-Greek varieties sold $4.09 billion worth of product in the most recent 52 weeks, on 1.3% dollar sales growth and a 2.0% equivalized unit volume (16-ounce basis) rise, says Nielsen.  

By comparison, Greek yogurt followed a 117.6% dollar sales jump a year ago with a 156.1% surge this past year to reach $623.8 million.  For the comparable periods, EUV gains were 147.8% and 187.4%, Nielsen reports.

These non-Greek and Greek sales trends combined to lift the overall yogurt category by 10.1% to $4.71 billion this past year, the Nielsen data show.