The Chobani brand Yogurt Coup: Reinvent the Category

We applaud Chobani‘s explosion to +$900 million in annual sales since its 2007 startup by attacking the yogurt category with a truly differentiated and superior brand.    Not only have they catapulted to stardom, they’ve even beat the brilliant, entrenched competitors, like Yoplait (General Mills) and Dannon.    They’re among the elite brands, like WhiteStrips, Swiffer, Apple, and Dyson who invent and dominate new category segments by reinventing their category.   

First, Chobani designed a much better product.    Their CEO and founder, Hamdi Ulukaya, thought American yogurt was horrible and developed a premium, Greek-style yogurt, which is thicker, creamier, more protein, less sweet, and has a healthier perception.   They challenged many of the conventional approaches of what product design seemed to drive the category.

They also rethought pricing and price/value.    They thought consumers would love and be willing to pay for a much better product.    Their pricing is nearly double that of Yoplait and Dannon, defying generally accepted industry pricing.    A brave and entrepreneurial approach that paid off.

Chobani’s marketing was a critical tool to reinvent the category as well.   The brand name, distinct packaging, and brand positioning cohesively communicated ‘we’re different.’    And they recognized that they had to define Greek yogurt and educate consumers.   They swung for the fences by making smart investments in building awareness (traditional advertising and social media) and trial (sampling and couponing).

Sure, Yoplait, Oikos and Athenos are scrambling to catch up with their respective later Greek yogurt offers.    But Chobani was first, best, and showed a keen ability to understand what consumers ‘could want’ and delivered something far superior and beloved.

Lessons Learned:
1)  You can win big by looking at your category differently and identify unmet needs and underserved niches.    Start by understanding the benefits consumers seek (e.g. in yogurt, it’s taste, texture, and nutrition), where your category under-delivers on these benefits, what irritates consumers about the category and build something that truly delights them.
2)  Start innovation efforts with what the consumer does, or could want, and optimize your brand proposition around this.    Don’t work within far more limited parameters of what you can produce today or pre-set pricing and cost assumptions.
3)   Make good ideas great, by continuously challenging the idea to be even more unique, better-performing, and more superior to competition.
4)  Customers are not mind readers.   Plan and spend enough on marketing to educate your trade customers and consumers about what your innovation is, how it solves their problems, why they need it, and a low-risk way to entice them to try it.

by Tammy Katz