The category is still on fire, and you can max out your sales and profits by planning carefully now.
Yogurt — already a star in the dairy case — is poised for another strong year in 2014. Greek varieties and multi-packs are key drivers.
Total category dollars across all outlets jumped 7.7% to $1.825 billion in the 13 weeks ended Oct. 26 versus the same period a year ago, according to Nielsen. Brands accounted for 90.1% of dollar sales, up from 89.6% last year. Units rose by 4.0% to 1.309 billion, and volume also pushed ahead.
So how are your plans coming along? By now you should have received all of your new item presentations for yogurt in anticipation of January-February rollouts. You should also have your list of deletions to make room for the new items.
THE MULTI-PACK MIX
Have you increased your mix of multi-packs in your shelf sets? Multi-packs are continuing to pick up momentum, which doesn’t surprise me in the slightest. Four years ago I predicted that single-serves would eventually start to be phased out. It’s happening, slowly but surely. I’m also seeing more Greek yogurt multi-packs than I did a year ago.
Single-serves are generally overstocked with a lot of duplication. Realistically, how many brands of strawberry single-serves do you need? (One key exception would be college campuses, where kids eat on the fly and don’t want a multi-pack.) If you go to four-packs, you can stock the yogurt case a lot faster and save labor.
Trouble is, suppliers force you to buy four strawberries, four cherries and so on. But many shoppers want two different flavors because they don’t want to eat the same thing for four days. Why not offer four-packs with two different flavors? !at will please the customers and help grow the category. !ese blended multi-packs would be additional SKUs, not replacing anything. And if I were doing it, I’d mix it up with the No. 1 flavor and the No. 5 flavor — not the top two.
Let’s go back to single-serves for a minute. Singleserves of traditional yogurt routinely sell at 10 for $6 or $5. Now, when you put them on sale, be careful not to undercut the price-per-item on multi-packs. Watch your ordering and promotion plans.
While you’re at it, do your vendors justice and promote one brand at a time. During my store visits I see a lot of brands on sale at the same time, which makes no sense. I can see promoting a Greek yogurt and a conventional yogurt at the same time, but not more than one brand of each variety.
When I started in the business, there were only 10 yogurt items. Today, you find more than 300 SKUs in large retailers. That’s huge, but there’s potential for even more. Average yogurt consumption in the United States is about 15 pounds per consumer. In the United Kingdom, it’s more than 70 pounds. We talk about how big the yogurt category has become here, but in the U.K., you see 80 to 100 feet of yogurt. Over there, people eat yogurt at breakfast, lunch and dinner — as well as for snacks.
Segmenting out products and pushing yogurt for different eating occasions would help drive growth, along with innovative items, such as Chobani Flips. !e more yogurt you get into consumers’ refrigerators, the more they are going to eat or at least buy.
Greek yogurt continues to fly off the shelf. Just two years ago, it accounted for about 30% of total yogurt poundage. !is past January, it was up to 40% and by September, it had hit 50%. I wouldn’t be surprised to see it at 60% a year from now. Light Greek yogurt is growing rapidly and adding incremental sales, as consumers watch their weight.
SETTING THE SHELF
As for setting the shelf, I’d start with probiotics like Activia, then regular light followed in order by Greek light, regular, Greek, kids’ yogurt/puddings and organic. Regular organics are fading both because of its higher price and the shift to Greek yogurts. But there’s still room for testing Greek organics, to see how they fly.
Finally, consider paring down the number of brands you carry. You’ll have better holding power and a planogram that will be easier for consumers to shop. Good luck with yogurt next year — if you plan right, you can really cash in.
– By Johnny Harris
Johnny L. Harris, president of Johnny L. Harris Consulting LLC, Fort Mill, S.C., can be reached at 803-984-2594 or firstname.lastname@example.org.