Yogurt Wars: Chobani steps up competition with General Mills for 'classic' consumers

As General Mills announced its financial results Wednesday, yogurt rival Chobani LLC unveiled its first non-Greek yogurt product.

The Norwich, N.Y.-based company is marketing Chobani Smooth as a classic-style yogurt with 25 percent less sugar than its competitors in the traditional space.

"We think there's a significant part of the population not being served," Tim Brown, Chobani's president and chief operating officer, said in an interview. "There hasn't been a lot of innovation in the traditional segment … and, unfortunately, nearly 1.8 million households have left the market."

The announcement comes two days after Golden Valley-based General Mills — a giant in the traditional yogurt segment with its flagship Yoplait brand — unveiled what it believes is the most innovative yogurt product in the past decade. The company calls the product Oui by Yoplait, labeling it a French-style yogurt that is created using an entirely different culturing process from either Greek or traditional yogurt. General Mills aims to create a new segment, not reinvent an existing style.

Chobani disrupted the entire industry a decade ago by helping introduce Americans to Greek-style yogurt, which is thicker and higher in protein than the yogurt American companies usually sold. In the past 10 years, Greek has gone from less than 1 percent of all yogurt sales to nearly one-third nationally, according to research firm NPD Group.

Consumers initially flocked to the new product for its perceived health benefits. But in the last four to five years, enthusiasm across the entire yogurt industry has waned. Food industry researchers blame the stagnant sales growth on a lack of true creativity in the space.

Chobani knocked General Mills out of the No. 2 spot among U.S. yogurt manufacturers in February for the first time in its history. By launching this new non-Greek product, Chobani is attempting to take an even bigger bite out of General Mills' and other competitors' market shares.

Oui by Yoplait seeks to satisfy consumers who are averse to high sugar content and additives often found in traditional yogurts but who also dislike the texture and tartness found in Greek yogurt.

And while Chobani proudly trumpets its success, Brown said the company is not ignorant of the potential in traditional yogurt that still attracts more than half of all yogurt consumers who prefer a smoother texture and taste. "The category needed a burst of life on that side," Brown said. "We believe people need to eat more yogurt. Americans are still eating less yogurt than people in Canada and Europe and we believe Americans haven't gotten the right products. We think this will give it the shot in the arm it needs."

Chobani Smooth appears on store shelves this week in 5.3-ounce, two-pack packages. One container has 14 grams of sugar. Oui by Yoplait will begin appearing on store shelves the week of July 10. Each of its 5-ounce glass containers has either 6 grams (for the plain) and 15 grams (for the flavored varieties) of sugar. Both will be distributed nationwide.

Kristen Leigh Painter • 612-673-4767