It's OK to dance in the yogurt aisle

Articles
December 27, 2010

It's OK to dance in the yogurt aisle

Anthony Quinn, in his famous role of Zorba, would happily dance the Sirtaki to celebrate the robust sales surge of Greek yogurt in U.S. food, drug and mass merchandiser stores (including Walmart).

Anthony Quinn, in his famous role of Zorba, would happily dance the Sirtaki to celebrate the robust sales surge of Greek yogurt in U.S. food, drug and mass merchandiser stores (including Walmart).

Despite an average equivalized price for Greek yogurt that is 121% higher than non-Greek yogurt, its dollar sales rose 160% and unit sales soared 203% in the 52 weeks ended October 2, 2010 to far exceed 30 million units, Nielsen reported in a recent blog. These growth rates compare with a 3% bump up in dollar sales and 1% uptick in unit sales in non-Greek yogurt products over the same period.

Why the surge? Nielsen Buzz Metrics points to online discussions that focus on the product'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."

All these benefits weigh into the value equation consumers apply to purchases today. While the sales surge may seem counter-intuitive due to the item's high price, F3 agrees with Nielsen that in this case the benefits matter more to consumers than the price - often more than $4 per 16-ounce container.

Indeed, just as Greek yogurt burst onto the scene and commanded the merchandising revamp of dairy cases so stores could capture their fair share of the sales boom, other yogurt makers are trying to emulate the success of Greek with new introductions such as soy, coconut milk and goat's milk versions. Associated Press observed this is happening at Whole Foods Market, one of the channel's health leaders, with the hope of mainstream crossover.

The backdrop for all of this activity: Refrigerated yogurt dollar sales and equivalized unit volumes have breezed through the recession overall. According to Nielsen data covering prepackaged, UPC-coded products only in U.S. food stores that generate $2 million or more in yearly total volume, the category's dollar sales advanced for four straight years - by 6.1%, 10.8%, 4.1% and most recently 10.5% in the latest 52 weeks to $3.63 billion. By comparison, the EUV (16-ounce basis) trend was up less dramatically, by 2.4%, 1.5%, 3.4% and most recently 8.3% to 2.04 billion units.

Over this time frame, brand gains far exceeded those of private label, culminating in a 12.3% increase to $3.21 billion in the latest 52 weeks, the Nielsen data show. By contrast, PL shed 1.7% in dollar sales to $419.1 million in the latest 12 months.'

Other winning segments include:

  • Smaller-sized packages of 8 ounces or less already account for more than $3 billion in sales, and grew by 10.2% in the most recent 52 weeks. While dollar sales of larger packages advanced in double-digits each of the past four years, the segment is far smaller and absolute dollar gains are smaller as well.
  • Probiotics crossed the $1 billion threshold in the latest 52 weeks on the strength of four consecutive annual sales gains of 37.3%, 32.4%, 16.0% and most recently 5.8%.
  • Fruit presence yogurt dollar sales rose 15.1% this year to reach $463.9 million.
  • Organic yogurt dollar sales were up in each of the past four years, up 12.3% most recently to $240.9 million.