Up another 3.3% last year, the category remains a major growth driver, but retailers and manufacturers need to stay on top of shifts in consumption.
Across Nielsen-measured retail channels, refrigerated yogurt sales topped $7.7 billion during the 52 weeks ended Dec. 26, ranking a very respectable 23rd out of 342 Nielsen-measured categories. In addition, yogurt delivered $1.47 billion in growth in the past four years, making it the 17th fastest-growing category in terms of absolute dollar sales growth. Year-over-year sales growth has slowed (+3.3% in 2015 versus +7.3% in 2012) as price pressures eased (unit prices were up just 2% in 2015 versus 8% in 2012) and promotional support remained flat — though high compared to other categories. In the past four years, between 39% and 41% of yogurt units were sold on promotion, ranking 22nd out of 342 Nielsen-measured categories.
Much of the category’s recent growth has been driven by national brands. To measure the aggregate performance of private label versus brands at the category level, I worked with Nielsen to create a scorecard that uses four metrics — share level, sales level, and short- and long-term sales growth — to create an overall score and rank. Of 342 branded categories, branded yogurt achieved the 13th best score. While branded yogurt share ranked only 108th, annual sales and both short- and long-term branded yogurt sales growth were quite impressive, ranking 18th, 16th and 10th, respectively.
The convenience (+7.4%) and drug (+6.4%) channels registered the strongest yogurt sales growth but accounted for just 1.3% and 0.4% of total measured retail sales, respectively. More than two-thirds (69%) of yogurt sales reside in the supermarket channel, where sales grew 3.0%, while 29.3% are in the value (club, dollar and mass merchandise) channel, where sales expanded 3.5%.
GREEK SEGMENT DELIVERS
Greek yogurt dollar sales ($3.7 billion) fell just short of non-Greek yogurt sales ($4.0 billion) in 2015, but the Greek segment is propelling both short- and long-term category growth. According to Nielsen, Greek yogurt sales grew 4.6% in the latest year while the four-year compound annual growth rate is a whopping 27.8%. In absolute dollars, Greek yogurt sales grew $2.3 billion in the past four years, while non-Greek yogurt sales declined $843 million, yielding a net gain of $1.47 billion for the category. However, the decline in non-Greek yogurt sales has flattened in the past few years, and in 2015 non-Greek sales actually grew 2.0%.
In terms of wellness-related marketing claims, fat-free/low-fat/reduced fat and gluten-free dominated yogurt sales in 2015, generating $6.3 billion and $3.4 billion, respectively. The next four most common wellness claims (probiotic/prebiotic, protein, fruit and natural) generated sales of $1.2 billion to $1.6 billion.
Of the nine most common wellness claims appearing on yogurt packaging, only one — organic (-2.1%) — didn’t ride the health and wellness growth wave by generating positive long-term sales growth. On the other hand, five wellness claims delivered double-digit long-term growth: protein (+20.8%), reduced sugar (mostly no sugar added but also less sugar and sugar-free, +17%), high fructose corn syrup (HFCS)-free (+16.5), gluten-free (+13.2%) and fruit (+12%).
Several of those same claims also saw double-digit short-term dollar growth, including reduced sugar (driven almost exclusively by no sugar added, +184%), HFCS-free (+19.3%) and gluten-free (+10.3%). Natural (+11.8%) and organic (+10%) also cracked the list. However, fat claims grew by only 1.8% in 2015, while probiotic/prebiotic (-2.7%), protein (-6.4%) and fruit (-16.3%) claims experienced declines.
THE YOGURT CONSUMER
More than eight out of every 10 U.S. households buy yogurt annually, spending an average of $58 a year. Non-Greek yogurt attracts more buyers (71% of households versus 55% for Greek), but Greek yogurt attracts bigger spenders: consumers spend $42 annually on Greek yogurt versus $34 on non-Greek yogurt.
In terms of generations, the yogurt category — and especially the non-Greek yogurt segment — really resonates with younger consumers. Yogurt sales per 1,000 households indexed 18% greater among Millennial households and 11% greater among Generation X households. While Greek yogurt sales indexed 7% greater among both of these groups, non-Greek yogurt sales are 29% greater among Millennial households and 15% greater among Generation X households. Unlike a number of edible categories, where sales are under-developed among Millennial households, the yogurt category provides a unique opportunity to capture trips and spending among the generational group that will yield sales growth opportunities in both the near- and long-term.
From a multi-cultural perspective, yogurt sales are under-developed only among African American households, likely due, at least in part, to a higher rate of lactose intolerance. Yogurt, and especially non-Greek yogurt, attracts the highest spending among Hispanic households. As a yogurt manufacturer, how are you planning on long-term sales declines from Caucasian households as their population importance declines in the future? Are you helping your retail partners engage with multi-cultural shoppers?
In terms of spending power, the yogurt category, and especially Greek, connects with more affluent households, particularly those with incomes above $100,000. However, sales rates for the category as a whole and for both segments are under-developed among households with incomes below $40,000.
GONE TO THE DOGS…
That’s all from me. It’s time to take the dogs out for a walk and then have a yogurt for my afternoon snack. I just picked up a few packages of Dannon’s OIKOS Triple Zero Blended Greek Yogurt with no added sugar, no artificial sweeteners and no fat. Not only that, but it contains vitamin D grade A K (whatever that is) — and the OIKOS brand is the official yogurt of the NFL. After the embarrassing loss by my Cincinnati Bengals versus the Pittsburgh Steelers in the playoffs, I’m not sure if that is a good thing or not!