Greek yogurt on a growth spurt - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Greek yogurt on a growth spurt

Print
Font Size:
Default font size
Larger font size

Related Stories

Posted: Wednesday, February 1, 2012 5:00 pm

Chobani is making Greek yogurt as fast as Americans are eating it.

Its plant in upstate New York farm country already pumps out 1.5 million cases of the thick yogurt every week, and pallets are stacked four stories high in the chilled warehouse.

But like other Greek yogurt makers, Chobani is expanding.

Greek yogurt now accounts for a quarter of the total yogurt market after a dizzying growth spurt that is especially apparent in the heart of upstate New York. The nation's No. 1 and No. 2 Greek yogurt brands - Chobani and Fage, respectively - are both expanding plants within 60 miles of each other, and another company is building a plant in western New York. The expansions come as the big U.S. yogurt makers are focusing on Greek products, too.

Greek yogurt is made a bit differently than the thinner, more watery product that dominated U.S. supermarket shelves for decades. The whey is strained off, leaving a creamier yogurt high in protein and low in fat.

While the quick growth has some hallmarks of a food fad - think cupcakes or bubble tea - the long-term investments point to a widespread industry belief that many Americans will continue to like their yogurt a bit richer.

"I personally do not believe that the yogurt story has started yet. I believe the yogurt story in this country is about to start," Chobani's founder, Hamdi Ulukaya, said during an interview in his office. "The magnitude hasn't started yet."

Ulukaya has harnessed the Greek yogurt boom more successfully than anyone. In 2005, he bought an old Kraft Foods plant southeast of Syracuse with plans to make the kind of yogurt common in his home country of Turkey. He believed the standard yogurt found on many supermarket shelves "wasn't made right."

His company, Agro-Farma, started by making yogurt for Stonyfield Farm other companies before launching Chobani in 2007 with limited runs to stores in the New York City area.

The Chobani plant today bustles with 14 production lines mechanically squirting yogurt into plastic cups that zip down conveyor belts.

The company said production will increase from 1.5 million cases a week to more than 2 million when the current $134 million expansion is completed this year. Another $128 million Chobani plant being built 2,000 miles west in Twins Falls, Idaho, will add still more.

About 60 miles northeast, the Greek company Fage (pronounced FA'-yeh) is in the early stages of doubling the capacity of its 3-year-old plant in Johnstown, N.Y., to about 160,000 tons of yogurt annually.

By multiple accounts, the seeds of the Greek yogurt boom were planted years ago through Fage imports to New York City. Fage opened its U.S plant in 2008 to keep up with growing demand. Russell Evans, Fage's marketing director, said sales have grown on average of 50 percent a year for a decade.

"It's going up exponentially every year," he said. "It's constantly expanding."

Though often pricier, Greek yogurt is increasingly becoming a refrigerator staple as consumers seek healthy, "authentic" foods. Kate Winnebeck, a 30-year-old Rochester, N.Y., resident, likes its tanginess, but said it was nutrition that initially attracted her.

"I was looking for ways to get even more protein into my diet," she said. "And I didn't want to, at the time, eat a lot of eggs in the morning. I don't have time for that. I work full time."

The NPD Group, a consumer marketing research firm, reports that Greek yogurt appeals most to adult females and that it's more popular in smaller and higher-income households.

The Chobani and Fage two plants are a boon to upstate New York's ailing economy, not only for the more than 1,240 full-time jobs combined, but because of their voracious demand for milk from New York's dairy farmers (it takes roughly four gallons of milk to make one gallon of Greek yogurt). Fifty or more tanker trucks make daily deliveries to the Chobani plant alone.

Little wonder Gov. Andrew Cuomo's administration chipped in $16 million in state incentives for the Chobani expansion, and the governor became personally involved in ironing out a local intra-community dispute that was holding up the Fage expansion.

"It's been very good for the dairy industry," said Greg Wickham, chief executive officer of Dairylea Cooperative Inc., which supplies milk for Chobani.

Another manufacturer, Alpina, plans to open a plant to the west in Batavia this summer that will make both Greek and Swiss-style for a yogurt and granola product.

At least initially, Greek yogurt zoomed to popularity without a lot of attention from the major yogurt makers. Citigroup Global Markets in an analyst report last month said its growth to $1 billion in annual sales - out of total yogurt sales of $4.1 billion - caught the major U.S. yogurt makers "flat-footed." The result: Chobani had 53 percent of the Greek yogurt market, followed by Fage with 17 percent, France's Danone (its subsidiary Dannon makes Oikos) with 14 percent and General Mills (Yoplait Greek) with 5 percent, according to Citigroup.

The big players have clearly taken steps to grab some of the market back. General Mills added capacity and Dannon is in the process now, according to representatives of the two companies. General Mills this winter will introduce Yoplait Greek Parfaits with granola and new flavors of Yoplait Greek yogurt in multi-packs.

"I think that you're going to see a very high level of innovation in the yogurt category generally and in Greek yogurt specifically over the next 6 to 12 months," General Mills chief executive officer Kendall J. Powell told a conference call with analysts last month.

General Mills and Dannon also began TV advertising this past summer. Oikos took direct aim at Chobani with a TV ad claiming their Greek yogurt was preferred 2-to-1 in a taste test.

UBS analyst David Palmer said Greek yogurt's momentum continues and the market shift to Chobani has accelerated.

Still unclear is where the Greek market will top out, or whether it will crash back to earth like the old low-carb craze. Few expect a drop off anytime soon.

"We believe it is not a fad but rather a part of the market that is here to stay," said Dannon spokesman Michael Neuwirth said. "At what level, I can't predict."

One note of caution comes from one of Greek yogurt's U.S. pioneers, outgoing Stonyfield CEO Gary Hirshberg, who said he's noticed "a little bit of a rebound" for regular yogurt recently. He said just recently some supermarkets that swapped out regular Stonyfield yogurt for its Greek Oikos yogurt (Danone owns a majority share of Stonyfield) have asked to swap back.

"It's hard to tell where this is going," Hirshberg said.

© 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More about

  • Discuss

Arizona says it has run out of drugs for executions

Arizona has run out of execution drugs, including a sedative implicated in botched lethal injections, according to a filing on Friday in a cou…

Published: June 25, 2016 - 11:20 pm @ http://www.reuters.com/article/us-arizona-deathpen…

AZ State Lottery chief speaks to Rotary Club of Scottsdale

Gregory R. Edgar, executive director of the Arizona State Lottery, was the guest speaker at the June 20 meeting of the Rotary Club of Scottsda…

Published: June 25, 2016 - 10:32 pm @ http://www.scottsdaleindependent.com/neighbors/az-…

Do you know her? Glendale police looking for toddler's parents

GLENDALE, AZ - Officials are looking for the parents of a toddler in Glendale. Glendale police said they received a call at 8 a.m. of a toddle…

Published: June 25, 2016 - 10:18 pm @ http://www.abc15.com/news/region-west-valley/glend…

Phoenix Children's Hospital ranked nationally in 10 different specialties

PHOENIX — For the first time ever, Phoenix Children’s Hospital has made it into the top rankings of the best children’s hospitals nationwide f…

Published: June 25, 2016 - 9:49 pm @ http://ktar.com/story/1138469/phoenix-childrens-ho…

Film Guide: What Movie Should I Watch This Weekend? (June 24, 2016)

To help sift through the increasing number of new releases (independent or otherwise), the Weekly Film Guide is here! Below you’ll find basic …

Published: June 25, 2016 - 9:45 pm @ http://www.indiewire.com/2016/06/movies-opening-ju…

How To Boost Your Motivation To Ride

Spruce up your bike. I love how a replacement chain feels so smooth that even my legs seem to get a boost. Along with a couple of brand-new ch…

Published: June 25, 2016 - 8:48 pm @ http://www.bicycling.com/training/motivation/how-t…

Here's What's the Matter With Kansas

font size decrease font size increase font size Print The verdict is in, and it's time for conservatives to face the cold hard facts. Right-wi…

Published: June 25, 2016 - 8:47 pm @ http://www.truth-out.org/opinion/item/36569-here-s…

Phoenix Storyteller Rachel Egboro on How to Find Stories Everywhere

Becky Bartkowski A A Every other year, New Times puts the spotlight on Phoenix's creative forces — painters, dancers, designers, and actors. L…

Published: June 25, 2016 - 8:47 pm @ http://www.phoenixnewtimes.com/arts/phoenix-storyt…

Mesa woman plans changes after Airbnb squatters vandalize home, steal belongings

MESA, AZ - With online services like Airbnb and HomeAway Family, it's never been easier or more common to rent your home as a vacation rental.…

Published: June 25, 2016 - 8:28 pm @ http://www.abc15.com/news/region-southeast-valley/…

Supreme Court ruling could impact another federal immigration case involving Arizona

PHOENIX - Attorney General Mark Brnovich thinks it could make it to the nation's highest court.

Published: June 25, 2016 - 8:18 pm @ http://www.abc15.com/news/state/supreme-court-ruli…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…