For years for Americans, buying yogurt meant buying Yoplait or Dannon.
That all changed in 2007 when a tiny company called Chobani entered the market with a new, old product: Greek yogurt. Instead of a snack or side item at breakfast, the higher protein levels in Greek yogurt made it a worthy meal. Chobani quickly grew while the incumbent yogurt giants, skeptical of the new product's staying power, were slow to react.
Yoplait's maker, General Mills, was exceptionally slow.
The Golden Valley-based packaged foods giant went from 30 percent of the yogurt segment five years ago to about 20 percent as of May, with the last 10 months seeing sharp declines, according to Nielsen data provided in a Bernstein Research report.
Executives acknowledged the difficulties of its yogurt business at its last earnings call in March. With the company set to release its year-end results for the 2016 fiscal year on Wednesday, investors are looking for signs that the worst is behind for Yoplait.
"General Mills is a vaunted marketer of foods," said David Palmer, an analyst with RBC Capital Markets. "We want them to fix this. That's their job."
At 13 percent of company sales, yogurt is General Mills' second-largest business behind cereal. The business peaked in 2010 at just over $1.5 billion in revenue. It dropped to $1.3 billion in fiscal 2014, then climbed to $1.4 billion last year. But its yogurt sales fell again last fall, and investors this week will learn how the company finished the full fiscal 2016.
General Mills declined to discuss yogurt this close to its year-end earnings report. Jeff Harmening, General Mills' COO of U.S. Retail and incoming president, said in March on its third-quarter earnings call that dairy costs, which are at a 20-year low, have created opportunities for new brands and allowed its competitors to make greater investments. Competitors are spending heavily on advertising and on deals with retailers to get shelf space for their product.